In a large Business Statistics class, the professor has each person select stocks by throwing 16 darts at pages of the Wall Street Journal. They then check to see whether their stock picks rose or fell the next day and report their proportion of “successes.” As a lesson, the professor has selected pages of the Journal for which exactly half the publicly traded stocks went up and half went down. The professor then makes a histogram of the reported proportions.
a) What shape would you expect this histogram to be? Why?
b) Where do you expect the histogram to be centered?
c) How much variability would you expect among these proportions?
d) Explain why a Normal model should not be used here.

  • CreatedMay 14, 2015
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