QUESTION 1Elizabeth has decided to form a portfolio by putting 30% of her money into stock 1 and 70% into stock 2. She assumes that the expected returns will be 10% and 18%, respectively, and that the standard deviations will be 15% and 24%, respectively. Compute the standard deviation of the returns on the portfolio assuming that the two stocks' returns are uncorrelated.17.4%.27.4%.7.4%.11.4%.QUESTION 2Elizabeth has decided to form a portfolio by putting 30% of her money into stock 1 and 70% into stock 2. She assumes that the expected returns will be 10% and 18%, respectively, and that the standard deviations will be 15% and 24%, respectively. Describe what happens to the standard deviation of the portfolio returns when the coefficient of correlation ρ decreases.The standard deviation of the portfolio returns decreases as the coefficient of correlation decreases.The standard deviation of the portfolio returns increases as the coefficient of correlation increases.The standard deviation of the portfolio returns decreases as the coefficient of correlation increases.The standard deviation of the portfolio returns increases as the coefficient of correlation decreases.Question 3A remedial program evenly enrolls traditional and non-traditional students. If a random sample of 4 students is selected from the program to be interviewed about the introduction of a new online class, what is the probability that all 4 students selected are traditional students?0.06250.05250.04250.0325QUESTION 5The weighted average of the possible values that a random variable X can assume, where the weights are the probabilities of occurrence of those values, is referred to as the:variance.standard deviation.expected value.None of these choices. QUESTION 6The Poisson probability distribution is a continuous probability distribution. True FalseQUESTION 7The variance of a binomial distribution for which n = 100 and p = 0.20 is:100802016 QUESTION 8For a random variable X, E(X + 2) − 5 = E(X) − 3, where E refers to the expected value. True FalseQUESTION 9A table, formula, or graph that shows all possible values a random variable can assume, together with their associated probabilities, is called a(n):probability distribution.discrete random variable.expected value of a discrete random variable.None of these choices. QUESTION 10The number of customers making a purchase out of 30 randomly selected customers has a Poisson distribution. True FalseQUESTION 11On average, 1.6 customers per minute arrive at any one of the checkout counters of Sunshine food market. What type of probability distribution can be used to find out the probability that there will be no customers arriving at a checkout counter in 10 minutes?Poisson distributionNormal distributionBinomial distributionNone of these choices. QUESTION 12Elizabeth's Portfolio Elizabeth has decided to form a portfolio by putting 30% of her money into stock 1 and 70% into stock 2. She assumes that the expected returns will be 10% and 18%, respectively, and that the standard deviations will be 15% and 24%, respectively.Compute the standard deviation of the returns on the portfolio assuming that the two stocks' returns are perfectly positively correlated21.3%19.3%29%33% QUESTION 13In a Poisson distribution, the:mean equals the standard deviation.median equals the standard deviation.mean equals the variance.None of these choices. QUESTION 14Elizabeth has decided to form a portfolio by putting 30% of her money into stock 1 and 70% into stock 2. She assumes that the expected returns will be 10% and 18%, respectively, and that the standard deviations will be 15% and 24%, respectively. Find the expected mean of the portfolio.15.6%19%13.5%11%QUESTION 15If X and Y are random variables, the sum of all the conditional probabilities of X given a specific value of Y will always be:01the average of the possible values of X.the average of the possible values of Y. QUESTION 16The number of accidents that occur at a busy intersection in one month is an example of a Poisson random variable. True FalseQUESTION 17The amount of milk consumed by a baby in a day is an example of a discrete random variable. True False QUESTION 18A portfolio return, Rp, of two stocks with individual returns, R1 and R2, is, in general, given by Rp = R1 + R2. True FalseQUESTION 19A function or rule that assigns a numerical value to each outcome of an experiment is called:a sample space.a probability distribution.a random variable.None of these choices. QUESTION 20Given a binomial random variable with n = 20 and p = 0.60, find the following probabilities using the binomial table.P(11 ≤ X ≤ 14)0.62970.52970.22970.1297QUESTION 22In the notation below, X is the random variable, c is a constant, and V refers to the variance. Which of the following laws of variance is not true?V(c) = 0V(X + c) = V(X) + cV(cX) = c2 V(X)None of these choices.

Question

QUESTION 1Elizabeth has decided to form a portfolio by putting 30% of her money into stock 1 and 70% into stock 2. She assumes that the expected returns will be 10% and 18%, respectively, and that the standard deviations will be 15% and 24%, respectively. ​ ​Compute the standard deviation of the returns on the portfolio assuming that the two stocks' returns are uncorrelated.17.4%.27.4%.7.4%.11.4%.QUESTION 2Elizabeth has decided to form a portfolio by putting 30% of her money into stock 1 and 70% into stock 2. She assumes that the expected returns will be 10% and 18%, respectively, and that the standard deviations will be 15% and 24%, respectively. ​ ​ Describe what happens to the standard deviation of the portfolio returns when the coefficient of correlation ρ decreases.The standard deviation of the portfolio returns decreases as the coefficient of correlation decreases.The standard deviation of the portfolio returns increases as the coefficient of correlation increases.The standard deviation of the portfolio returns decreases as the coefficient of correlation increases.The standard deviation of the portfolio returns increases as the coefficient of correlation decreases.Question 3A remedial program evenly enrolls traditional and non-traditional students. If a random sample of 4 students is selected from the program to be interviewed about the introduction of a new online class, what is the probability that all 4 students selected are traditional students?0.06250.05250.04250.0325QUESTION 5The weighted average of the possible values that a random variable X can assume, where the weights are the probabilities of occurrence of those values, is referred to as the:variance.standard deviation.expected value.None of these choices.   QUESTION 6The Poisson probability distribution is a continuous probability distribution. True FalseQUESTION 7The variance of a binomial distribution for which n = 100 and p = 0.20 is:100802016   QUESTION 8For a random variable X, E(X + 2) − 5 = E(X) − 3, where E refers to the expected value. True FalseQUESTION 9A table, formula, or graph that shows all possible values a random variable can assume, together with their associated probabilities, is called a(n):probability distribution.discrete random variable.expected value of a discrete random variable.None of these choices.   QUESTION 10The number of customers making a purchase out of 30 randomly selected customers has a Poisson distribution. True FalseQUESTION 11On average, 1.6 customers per minute arrive at any one of the checkout counters of Sunshine food market. What type of probability distribution can be used to find out the probability that there will be no customers arriving at a checkout counter in 10 minutes?Poisson distributionNormal distributionBinomial distributionNone of these choices.   QUESTION 12Elizabeth's Portfolio ​ Elizabeth has decided to form a portfolio by putting 30% of her money into stock 1 and 70% into stock 2. She assumes that the expected returns will be 10% and 18%, respectively, and that the standard deviations will be 15% and 24%, respectively.Compute the standard deviation of the returns on the portfolio assuming that the two stocks' returns are perfectly positively correlated21.3%19.3%29%33%   QUESTION 13In a Poisson distribution, the:mean equals the standard deviation.median equals the standard deviation.mean equals the variance.None of these choices.   QUESTION 14Elizabeth has decided to form a portfolio by putting 30% of her money into stock 1 and 70% into stock 2. She assumes that the expected returns will be 10% and 18%, respectively, and that the standard deviations will be 15% and 24%, respectively. ​Find the expected mean of the portfolio.15.6%19%13.5%11%QUESTION 15If X and Y are random variables, the sum of all the conditional probabilities of X given a specific value of Y will always be:01the average of the possible values of X.the average of the possible values of Y.   QUESTION 16The number of accidents that occur at a busy intersection in one month is an example of a Poisson random variable. True FalseQUESTION 17The amount of milk consumed by a baby in a day is an example of a discrete random variable. True False   QUESTION 18A portfolio return, Rp, of two stocks with individual returns, R1 and R2, is, in general, given by Rp = R1 + R2. True FalseQUESTION 19A function or rule that assigns a numerical value to each outcome of an experiment is called:a sample space.a probability distribution.a random variable.None of these choices.   QUESTION 20Given a binomial random variable with n = 20 and p = 0.60, find the following probabilities using the binomial table.P(11 ≤ X ≤ 14)0.62970.52970.22970.1297QUESTION 22In the notation below, X is the random variable, c is a constant, and V refers to the variance. Which of the following laws of variance is not true?V(c) = 0V(X + c) = V(X) + cV(cX) = c2 V(X)None of these choices.

Accepted Answer

Standard deviation: It means a measure of how spread out numbers are