Between 1896 when the Dow Jones Index was created and 2009, the index rose in 64% of
Question:
Between 1896 when the Dow Jones Index was created and 2009, the index rose in 64% of the years. Sample size is 5 years. Based on this information and assuming a binomial distribution, answer the following questions
Build the probability distribution
Build the cumulative distribution
Graph the probability and cumulative distribution
Find the probability the stock market will rise one year in the next five years?
Find the probability the stock market will rise in three years of the next five years?
Find the probability the stock market will rise in at 3 or less years of the next five years?
Find the probability the stock market will rise in at 3 or more years of the next five years?
Find the mean number of stock market rises on the sample of 5 years?
Find the standard deviation of stock market rises on the sample of 5 years?
For this situation, what assumption of the binomial distribution might not be valid?
Basic Business Statistics Concepts and Applications
ISBN: 978-0132168380
12th edition
Authors: Mark L. Berenson, David M. Levine, Timothy C. Krehbiel