Please explain what a binomial distribution is. What is the symmetry property of this distribution? How do you find the mean, the variance and the standard deviation of this distribution? Provide a simple example of binomial distribution.
Answer the following questions. Provide detailed answers:
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Please explain what a binomial distribution is. What is the symmetry property of this distribution? How do you find the mean, the variance and the standard deviation of this distribution? Provide a simple example of binomial distribution.
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Explain the sign nonparametric test. What is the objective of this test and how the corresponding hypotheses are formulated? What is the approach to test the hypotheses using the binomial distribution for both non-directional and directional cases?
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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 |
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Test the hypothesis that the median price in the metropolitan is $200,000
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Test the hypothesis that the median price in the metropolitan is more than $200,000
ɑ = 0.05 in both cases. Include hypothesis formulation, use the binomial approach, and explain your calculations in detail. Include p values in both cases.
4. It can be conjectured that the annual return a security and the market return are related by the following regression model
y=mx+b+ε
Where y is the annual return of the security, x is the annual return of the market, b is the intercept, Ɛ 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
Please help me answer Q4. Thanks!
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