Modern Business Statistics with Microsoft Excel (MindTap Course List)
5th Edition
ISBN: 9781285433301
Author: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams
Publisher: Cengage Learning
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Textbook Question
Chapter 5.4, Problem 26E
A person is interested in constructing a portfolio. Two stocks are being considered. Let x = percent return for an investment in stock 1, and y = percent return for an investment in stock 2. The expected return and variance for stock 1 are E(x) = 8.45% and Var (x) = 25. The expected return and variance for stock 2 are E(y) = 3.20% and Var (y) = 1. The
- a. What is the standard deviation for an investment in stock 1 and for an investment in stock 2? Using the standard deviation as a measure of risk, which of these stocks is the riskier investment?
- b. What is the expected return and standard deviation, in dollars, for a person who invests $500 in stock 1?
- c. What is the expected percent return and standard deviation for a person who constructs a portfolio by investing 50% in each stock?
- d. What is the expected percent return and standard deviation for a person who constructs a portfolio by investing 70% in stock 1 and 30% in stock 2?
- e. Compute the
correlation coefficient for x and y and comment on the relationship between the returns for the two stocks.
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(a) In each Australian capital city, a large retail chain has several stores, including in Brisbane and Perth. An analysis of the variations in profits from each of these cities indicates that the variance of monthly profits in Brisbane is about 2570(k$)^2 and the variance of monthly profits in Perth is about 1789(k$)^2 . A comparison of the difference in profits between the two cities indicates that the variance of the monthly difference in profits between these cities is about 1253(k$)^2 .
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Chapter 5 Solutions
Modern Business Statistics with Microsoft Excel (MindTap Course List)
Ch. 5.1 - 1. Consider the experiment of tossing a coin...Ch. 5.1 - 2. Consider the experiment of a worker assembling...Ch. 5.1 - 3. Three students scheduled interviews for summer...Ch. 5.1 - Prob. 4ECh. 5.1 - 5. To perform a certain type of blood analysis,...Ch. 5.1 - 6. Listed is a series of experiments and...Ch. 5.2 - 7. The probability distribution for the random...Ch. 5.2 - 8. The following data were collected by counting...Ch. 5.2 - Prob. 9ECh. 5.2 - 10. The percent frequency distributions of job...
Ch. 5.2 - 11. A technician services mailing machines at...Ch. 5.2 - 12. Time Warner Cable provides television and...Ch. 5.2 - 13. A psychologist determined that the number of...Ch. 5.2 - Prob. 14ECh. 5.3 - 15. The following table provides a probability...Ch. 5.3 - 16. The following table provides a probability...Ch. 5.3 - Prob. 17ECh. 5.3 - 18. The American Housing Survey reported the...Ch. 5.3 - 19. West Virginia has one of the highest divorce...Ch. 5.3 - 20. The probability distribution for damage claims...Ch. 5.3 - 21. The following probability distributions of job...Ch. 5.3 - 22. The demand for a product of Carolina...Ch. 5.3 - 23. In Gallup’s Annual Consumption Habits Poll,...Ch. 5.3 - Prob. 24ECh. 5.4 - 25. Given below is a bivariate distribution for...Ch. 5.4 - 26. A person is interested in constructing a...Ch. 5.4 - 27. The Chamber of Commerce in a Canadian city has...Ch. 5.4 - 28. PortaCom has developed a design for a...Ch. 5.4 - 29. J.P. Morgan Asset Management publishes...Ch. 5.4 - 30. In addition to the information in exercise 29...Ch. 5.5 - 31. Consider a binomial experiment with two trials...Ch. 5.5 - Prob. 32ECh. 5.5 - 33. Consider a binomial experiment with n = 20 and...Ch. 5.5 - 34. For its Music 360 survey, Nielsen Co. asked...Ch. 5.5 - 35. The Center for Medicare and Medical Services...Ch. 5.5 - 36. When a new machine is functioning properly,...Ch. 5.5 - Prob. 37ECh. 5.5 - 38. Military radar and missile detection systems...Ch. 5.5 - Twelve of the top 20 finishers in the 2009 PGA...Ch. 5.5 - 42. A Gallup Poll showed that 30% of Americans are...Ch. 5.5 - Prob. 43ECh. 5.6 - 44. Consider a Poisson distribution with μ =...Ch. 5.6 - 45. Consider a Poisson distribution with a mean of...Ch. 5.6 - 46. Phone calls arrive at the rate of 48 per hour...Ch. 5.6 - 47. During the period of time that a local...Ch. 5.6 - In 2011, New York City had a total of 11,232 motor...Ch. 5.6 - 49. Airline passengers arrive randomly and...Ch. 5.6 - 50. According to the National Oceanic and...Ch. 5.6 - The National Safety Council (NSC) estimates that...Ch. 5.7 - Prob. 52ECh. 5.7 - Prob. 53ECh. 5.7 - 54. A recent survey showed that a majority of...Ch. 5.7 - 55. Blackjack, or twenty-one as it is frequently...Ch. 5.7 - 56. Axline Computers manufactures personal...Ch. 5.7 - 57. The Zagat Restaurant Survey provides food,...Ch. 5.7 - Prob. 58ECh. 5 - 59. The U.S. Coast Guard (USCG) provides a wide...Ch. 5 - 60. The Car Repair Ratings website provides...Ch. 5 - 61. The budgeting process for a midwestern college...Ch. 5 - 62. A bookstore at the Hartsfield-Jackson Airport...Ch. 5 - 63. The Knowles/Armitage (KA) group at Merrill...Ch. 5 - Prob. 64SECh. 5 - 65. The following table shows the percentage of...Ch. 5 - Prob. 66SECh. 5 - Prob. 67SECh. 5 - Prob. 68SECh. 5 - Arrivals to a Car Wash. Cars arrive at a car wash...Ch. 5 - Prob. 70SECh. 5 - Prob. 71SECh. 5 - Prob. 72SE
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