An investor buys a stock and keeps it for 12 months. At the end of each month, he records whether it went up or down that month. Define a random variable X; = 1 if the stock went up in the i-th month and X; = 0 if it did not go up. Suppose the probability that this stock goes up in a month is 0.75. Show your work for the following questions. 1. What is the mean (expected value) of X1? 2. What is the standard deviation of X1? 3. Find the mean of Y = X1 + X2 + ...+ X12. Use the rules for means.
An investor buys a stock and keeps it for 12 months. At the end of each month, he records whether it went up or down that month. Define a random variable X; = 1 if the stock went up in the i-th month and X; = 0 if it did not go up. Suppose the probability that this stock goes up in a month is 0.75. Show your work for the following questions. 1. What is the mean (expected value) of X1? 2. What is the standard deviation of X1? 3. Find the mean of Y = X1 + X2 + ...+ X12. Use the rules for means.
Chapter8: Sequences, Series,and Probability
Section8.7: Probability
Problem 11ECP: A manufacturer has determined that a machine averages one faulty unit for every 500 it produces....
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Recommended textbooks for you