8. Similar to Question 6, consider a portfolio with w invested in asset X and 1- w invested in assetY for w€ (0,1). The volatilities of asset X and Y are 0.2 and 0.3, respectively. Suppose that thecorrelation coefficient between the two assets is zero. Express the portfolio variance as a functionof w and find the value w* that yields the minimum portfolio variance, i.e. o(w*). Select the bestanswer that corresponds to the minimum portfolio volatility, op(w*):(a) 16.64%(b) 2%(c) 2.77%(d) 14.14%9. Stock J has a beta of 1, an expected return of 15%. The equity risk premium is 10%, and therisk-free rate is 2.5%. Calculate Jensen's alpha measure for Stock J.(a) -2.5%(b) 0%(c) 2.5%(d) -7.5%10. Currently, shares of MJ Corp. trade at $100. The probability of the price increasing by $10 in oneday is 30% and the probability of the price decreasing by $10 in one day is 70%. Let R₂ denotelog-return on the asset over two days, i.e.R₂ = In(a) 12.96%(b) 13.69%(c) 7.69%(d) 20.96%(²)(1)with Sa denoting the stock price at day d. Given that So= 100, what is the volatility of R₂?Choose the best answer.

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Answered: 8. Similar to Question 6, consider a…

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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In the simple linear model Y = Bo + B1X+ ɛ, what is the interpretation of Betal_hat = 8.5? The point at which the line crosses the x-axis in 8.5 The point at which the line crosses the y-axis is 8.5 O The mean value of Y increases 8.5 units for every 1 unit increase X O The mean value of Y decreases 8.5 units for every 1 unit increase X
The least-squares regression equation is y=761.7x+13,208 where y is the median income and x is the percentage of 25 years and older with at least a bachelor's degree in the region. The scatter diagram indicates a linear relation between the two variables with a correlation coefficient of 0.7483. Predict the median income of a region in which 20% of adults 25 years and older have at least a bachelor's degree.
Q2. Given that the means of X and Y are 65 and 67, their standard deviations are 2.5 and 3.5 respectively and the coefficient of correlation between them is 0.8: (Write down the regression lines. (ii) Obtain the best estimate of X when Y = 70 (ii) Using the estimated value of X as the given value of X, estimate the corresponding value of Y.
Suppose that Dr. Grandtete does some measurements and states that there is a correlation (r) of +1.2 between head circumference and 1.Q. What can you conclude from this result? That head circumference and IQ are very strongly and positively related That head circumference and IQ are weakly, but positively, related That there is a mistake because r cannot equal +1.2 That there is a mistake becauser can only be used to measure psychological variables, not physical ones like head circumference.
69 Q1. [6 points] :From the following data set 3\ 9. 1 6. 5. 4 11 16 1.find correlation coefficients 2. Estimate the simple linear regression model 3. Find the predicted value of y when x-10
A regression and correlation analysis resulted in the following information regarding a dependent variable (y) and an independent variable (x). Σx = 90 Σ(y - )(x - ) = 466 Σy = 170 Σ(x - )2 = 234 n = 10 Σ(y - )2 = 1434 SSE = 505.98 The least squares estimate of the slope or b1 equals a. .923. b. 1.991. c. -1.991. d. -.923.
8/20 Compute the correlation coefficient and determine whether there is a linear relation between X and Y.
In a sample there are 3 male dogs and 3 female dogs. These dogs are couples such that the weight of the ith dog, and the Fi measures the weight of the ith dogs girlfriend. The correlation between M and F is exactly 1 and when the data points are graphed the slope of them are 1. Is it possible for some of these dogs to weight more than their female couple, while other dogs weight less then their female couple? And is it possible that all of the male dogs have couple female dogs that are all shorter than them?
Consider a two-dimensional scatterplot representing the relationship between two continuous variables. If the correlation coefficient is -1, then: a. All points lie in a straight line with a slope of -1. b. All points lie in a straight line with an unknown negative slope. c. All points do not lie in a straight line but the best fitting regression line has a slope of -1 d. There is a strong positive relationship between the two variables.
11.
The following table shows retail sales in drug stores in billions of dollars in the U.S. for years since 1995. Year03691215 Retail Sales85.851108.426141.781169.256202.297222.266 Let y be the retails sales in billions of dollars in x years since 1995. A linear model for the data is y=9.44x+84.182 A) Use the above scatter plot to decide whether the line of best fit, fits the data well. The function is a good model for the data.The function is not a good model for the data B) To the nearest billion, estimate the retails sales in the U. S. in 2011. billions of dollars. C) Use the equation to find the year in which retails sales will be $240 billion. .
18. Because ethanol contains less energy than gasoline, a researcher wants to determine if the mileage of a car (y) is affected by the percent ethanol in the gasoline (x). The true population regression line relating the mean mileage y for a given ethanol content x (in percent) is μy|x = β0 + β1x. In a controlled environment, the mileage of a car is recorded when refueled 7 times using between 0% and 10% ethanol. The least squares regression line was found to be yˆ = βˆ0 + βˆ1x = 32.96 − 0.250x. We wish to test H0 : β1 = 0 versus Ha : β1 < 0 at the α = 0.05 significance level (i.e. we want to determine if the addition of ethanol significantly decreases mean gas mileage). What is the p−value for this test? What is your conclusion? Note: s?e(βˆ1) = 0.0485. Which of the following is/are true? (A) In reference to question (18), it would be appropriate to approximate the mean mileage when the car is using 85% ethanol (B) In reference to question (18), a 95% confidence interval for β1…

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