It has been suggested that an investment portfolio selected randomly by throwing darts at the stock market page of The Wall Street Journal may be a sound (and certainly well-diversified) investment. Suppose that you own such a portfolio of 16 stocks randomly selected from all stocks listed on the New York Stock Exchange (NYSE). On a certain day, you hear on the news that the average stock on the NYSE rose 1.5 points. Assuming that the standard deviation of stock price movements that day was 2 points and assuming stock price movements were normally distributed around their mean of 1.5, what is the probability that the average stock price of your portfolio increased?
Answer to relevant QuestionsAn advertisement for Citicorp Insurance Services, Inc., claims "one person in seven will be hospitalized this year." Suppose you keep track of a random sample of 180 people over an entire year. Assuming Citicorp's ...Three random samples of sizes, 30, 48, and 32, respectively, are collected, and the three sample means are computed. What is the total number of degrees of freedom for deviations from the means? When sampling is for a population proportion from a population with actual proportion p = 0.5, using a sample of size n = 120, what is the standard deviation of our estimator P-hat? Searches at Switzerland's 406 commercial banks turned up only $3.3 million in accounts belonging to Zaire's deposed president, Mobutu Sese Seko. The Swiss banks had been asked to look a little harder after finding nothing at ...When sampling is from a normal population with an unknown variance, is the sampling distribution of the sample mean normal? Explain.
Post your question