Assuming that your data set is the population of the daily returns is normally distributed, draw the normal distribution graph of the random variable X 2 - What is the probability that if you randomly select any trading day its return is less than 0.2%? Draw the question on a normal curve and also screenshot the formula you use in SPSS to calculate the probability. 3-What is the probability that if you randomly select any 30 trading days that the sample mean daily return is less than 0.2%? Draw the question on a normal curve and also screenshot the formula you use in SPSS to calculate the probability. 4- If you randomly select 5 trading days, calculate the probabily that the sample mean daily return will be negative? Draw the question on a normal curve and also screenshot the formula you use in SPSS to calculate the probability. 5-If you randomly select 10 days, calculate the probability that your sample mean daily return of the S&P500 will fall between -1% and 1%? Draw the question on a normal curve and also screenshot the formula you use in SPSS to calculate the probability. 6-Plot a line graph of daily returns over the last seven years. Do you notice anything interesting about this variable? Discuss briefly why financial markets exhibit the behavior of volatility clustering - discuss how this phenomenon is linked with human emotions. Try to identify the reasons behind any clusters of volatility on your graph. 7-Assuming that your data set from 2011 is a random sample of 7 years data from a population of 120 years worth of data. Estimate the population mean daily return using a point estimate? What signal is this sending to investors? What is the weakness of using this method? 8-Estimate the popluation mean daily return using a 90% confidence interval - what signal is this sending to you as an investor? Should you buy or sell? Does the signal change if you use a 99% confidence interval? Explain

Answer rating: 100% (QA)

1 The probability ... View the full answer