4. A survey of 40 home prices in a metropolitan area has the following results. Price Less than $200,000 Equal to $200,000 More than $200,000 Number of homes 13 27 1. Test the hypothesis that the median price in the metropolitan is $200,000

Algebra & Trigonometry with Analytic Geometry
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ISBN:9781133382119
Author:Swokowski
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Chapter10: Sequences, Series, And Probability
Section10.8: Probability
Problem 32E
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4. A survey of 40 home prices in a metropolitan area has the following results.
Price
Less than $200,000
Equal to $200,000 .
More than $200,000
Number of homes
13
1
27
1. Test the hypothesis that the median price in the metropolitan is $200,000
2. Test the hypothesis that the median price in the metropolitan is more than $200,000
a = 0.05 in both cases. Include hypothesis formulation, use the binomial approach, and explain your calculations in detail. Include p values in both cases.
5. It can be conjectured that the annual return a security and the market return are related by the following regression model
y=mx+b+e
Where y is the annual return of the security, x is the annual return of the market, b is the intercept, E is the normally distributed noise, and
Return = value at end of the year • received dividends during the year - value at the beginning of the year.
Test this model by retrieving annual data on a security of your choice. Choose a financial index such as S&P 500 as the indicator of the market, and retrieve the data. Use
the most recent 20 years as the time span of the data. Perform regression analysis and make sure to include the hypothesis in your study. Provide your results and write
your conclusions. Include all relevant information and conclusions, significances, the final regression model, coeficient of determination, graph of the regression line
accompanied in the scatterplot, extent of residuals, and normality of residuals. Does the model seem to be valid according to your study? If so, is the influence positive or
adverse? If you conclude influence, then your regression model indicates outperformance or underperformance of the market? Explain all your work in detail.
Transcribed Image Text:4. A survey of 40 home prices in a metropolitan area has the following results. Price Less than $200,000 Equal to $200,000 . More than $200,000 Number of homes 13 1 27 1. Test the hypothesis that the median price in the metropolitan is $200,000 2. Test the hypothesis that the median price in the metropolitan is more than $200,000 a = 0.05 in both cases. Include hypothesis formulation, use the binomial approach, and explain your calculations in detail. Include p values in both cases. 5. It can be conjectured that the annual return a security and the market return are related by the following regression model y=mx+b+e Where y is the annual return of the security, x is the annual return of the market, b is the intercept, E is the normally distributed noise, and Return = value at end of the year • received dividends during the year - value at the beginning of the year. Test this model by retrieving annual data on a security of your choice. Choose a financial index such as S&P 500 as the indicator of the market, and retrieve the data. Use the most recent 20 years as the time span of the data. Perform regression analysis and make sure to include the hypothesis in your study. Provide your results and write your conclusions. Include all relevant information and conclusions, significances, the final regression model, coeficient of determination, graph of the regression line accompanied in the scatterplot, extent of residuals, and normality of residuals. Does the model seem to be valid according to your study? If so, is the influence positive or adverse? If you conclude influence, then your regression model indicates outperformance or underperformance of the market? Explain all your work in detail.
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