**Question 11:**If the daily, 95% confidence level value at risk (VaR) of a portfolio is correctly estimated to be USD 10,000, which of the following statements are correct:I. In 1 out of 20 days, the portfolio value will decline by USD 10,000 or less. II. In 1 out of 20 days, the portfolio value will decline by USD 10,000 or more. III. In 19 out of 20 days, the portfolio value will decline more than USD 10,000. IV. In 19 out of 20 days, the portfolio value will *not* decline by USD 10,000 or more.- (a) I - (b) II - (c) I and III - (d) II and IV **Question 12:**Assume that portfolio daily returns are independently and identically normally distributed with mean zero. A new quantitative analyst has been asked by the portfolio manager to calculate portfolio VaRs for 10-, 15-, 20-, and 25-day periods. The portfolio manager notices something amiss with the analyst’s calculations. Assuming the annualized volatilities of daily returns for the four periods are equal, which of the following VaRs on this portfolio is inconsistent with the others?- (a) VaR(10-day) = USD 316 million - (b) VaR(15-day) = USD 426 million - (c) VaR(20-day) = USD 447 million - (d) VaR(25-day) = USD 500 million **Question 13:**A (possibly biased) coin is tossed twice. If the outcome is two heads, $5 is received. If *any* tail occurs a consolation prize of $1 is received. The fair price to play this game is $4. What is the implied probability of heads?- (a) 0.87 - (b) 0.61 - (c) 0.71 - (d) 0.80

Answered: 11. If the daily, 95% confidence level…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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4. One technique to help people deal with phobias is to have them counteract the feared objects by using imagination to move themselves to a place of safety. In an experimental test of this technique, patients sit in front of a screen and are instructed to relax. Then, they are shown an image of the feared object. The patient signals the researcher as soon as feelings of anxiety reach a point at which viewing the image can no longer be tolerated. The researcher records the amount of time that the patient was able to endure looking at the image. The patient spends 2 minutes imaging a “safe scene” such as a tropical beach or a familiar room before the image is presented again. As before, the patient signals when the level of anxiety becomes intolerable. If patients can tolerate the feared object longer after the imagination exercise, it is viewed as a reduction in the phobia. The data in the table below summarize the times recorded for a sample of n-7 patients. Do the data indicate that…
Given the following investment returns from two stocks:Stock A: 5%,6%,7%,9%,23% (mean = 10% and standard deviation = 7.416%)Stock B: 50%,60%,70%,90%,230% (mean = 100% and standard deviation = 74.16%).Which stock has the greatest relative risk? Which stock should a risk seeking investor choose? Two correct answers 1. Stock A has the greatest relative risk. 2. Stock B has the greatest relative risk. 3. Both stocks have the same amount of relative risk. 4. A risk seeking investor should invest in Stock A. 5. A risk seeking investor should invest in Stock B. 6. A risk seeking investor should invest in either of the two stocks since they are equally attractive.
In case-crossover studies, all fixed individual characteristics that might confound the association of interest are controlled for. A. True B. False C.Neither
5. You have a sample of 19 students and plan to determine if a linear relationship can be used to predict the SAT score as a function of the high school GPA. What value does the correlation coefficient need to exceed, according to the r√n> 3 rule, in order for you to be able to say that the correlation between the SAT score and the high school GPA is significant, instead of it having occurred by random chance? Write your answer as a decimal correctly rounded to three decimal places.
Please let me know if I calculated relative risk correctly. Thank you for your assistance.
Under what circumstances would the trendline be significantly deviated by an outlier?
Consider a population of 1024 mutual funds that primarily invest in large companies. You have determined that u, the mean one-year total percentage return achieved by all the funds, is 9.80 and that o, the standard deviation, is 0.50. Complete (a) through (c). a. According to the empirical rule, what percentage of these funds is expected to be within +2 standard deviations of the mean? 95 % b. According to the Chebyshev rule, what percentage of these funds are expected to be within +2 standard deviations of the mean? 75 % (Round to two decimal places as needed.) c. According to the Chebyshev rule, at least 88.89% of these funds are expected to have one-year total returns between what two amounts? Between and (Round to two decimal places as needed.)
9. According to a poll, eighty seven percent (87%) of California adults (440 out of 506 surveyed) feel that education is one of the top issues facing California. We wish to construct a ninety percent (90%) confidence interval for the true proportion of California adults who feel that education is one of the top issues facing California.What is a point estimate for the true population proportion?
1. The data in Table 7–6 were collected in a clinical trial to evaluate a new compound designed to improve wound healing in trauma patients. The new compound was com- pared against a placebo. After treatment for 5 days with the new compound or placebo, the extent of wound healing was measured. Is there a difference in the extent of wound healing between the treatments? (Hint: Are treatment and the percent wound healing independent?) Run the appropriate test at a 5% level of significance. Use the data in Problem 1. Pool the data across the treatments into one sample of size n = 250. Use the pooled data to test whether the distribution of the percent wound healing is approximately normal. Specifically, use the following distribution 30%, 40%, 20%, and 10% and a = 0.05 to run the appropriate test. Percent Wound Healing Treatment 0-25% 26-50% 51-75% 76-100% New compound (n=125) 15 37 32 41 Placebo (n=125) 36 45 34 10
Suppose the returns of a particular group of mutual funds are normally distributed with a mean of 9.9% and a standard deviation of 3.7%. If the manager of a particular fund wants his fund to be in the top 10% of funds with the highest return, what return must his fund have?
3. Scenario It is believed that large doses of acetaminophen (the active ingredient in over the counter pain relievers like Tylenol) may cause damage to the liver in nearly half of those tested. A researcher wants to conduct a study to estimate if the proportion of acetaminophen users who have liver damage is the same as previously reported. For participating in this study, he will pay each subject $20 and provide a free medical consultation if the patient has liver damage. Part A If he wants to limit the margin of error of his 98% conﬁdence interval to 2%, what is the minimum number of subjects he needs? (answer should be in the form of x,xxx) the minimum amount of money he needs to set aside to pay his subjects? $ (answer should be in the form of $xx,xxx) Part B The amount you calculated in Part A is substantially over his budget so he decides to use fewer subjects. Will this change increase or decrease the width of his conﬁdence interval? Will this new confidence interval be…

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