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] = 3.2% and Var(y) = 1. The covariance between the returns is σXY = -3. (Hint: in this problem all numbers

Q: Use the following information to answer the next three (3) questions. Regression analysis can be…

A: Provided that the R2 value for the unrestricted model is RUnrestricted2=0.0395 and that for…

Q: Find: a. E(XY) b. Covariance (XY)

A:

Q: Milaaaaaa.mk

A: Creating a scatter diagram with Admit Rate (%) as the independent variable involves several steps,…

Q: The​ least-squares regression equation is y=728.0x+14,705 where y is the median income and x is the…

A: From the given information, the regression equation is y=728.0x+14,705.Here, y represents the median…

Q: We included the variable X₁ in a linear model that explains the variable Y, but we did not include…

A: Omitted-variable bias (OVB) occurs when a statistical model leaves out one or more relevant and…

Q: b) Find the variance Var(X) of X.

A:

Q: Let a stochastic signal have an expected value, E[x] = 3, and variance o? = 0.5. This signal is…

A:

Q: You are considering the relationship between annual returns on the S&P 500 index (January 31 to…

A: Given, The slope of the regression line (b1) can be calculated by dividing the covariance of X and Y…

Q: Let X be a random variable with mean 6.1 and variance 2.4. Let Y be a random variable with mean 7.5…

A: We have given that, E(x)=5.1 , Var(X)=2.4 E(Y)=7.5 , Var(Y)=3.2 , Cov(x,y)=0.65

Q: Give the null and alternative hypotheses for testing whether there exists a positive linear…

A: Hypothesis : H0 : β1 ≤ 0 , i.e. there is no positive linear relationship between y and x H0 : β1…

Q: Suppose that X and Y are unknown with E(X) = 20, Var (X) = 4 , E(Y) = 12, and Var (Y) = 16. In…

A: It is given that, E(X) = 20, Var (X) = 4 and E(Y) = 12, and Var (Y) = 16 and E(XY) = 248

Q: 4. Calculate the probability of a type II error for the following test of hypothesis, given that H =…

A: Given: μGiven=37 α=0.15σ=5n=25 Null and Alternative hypothesis μ=40μ<40

Q: Compute the correlation between the random variables Y1 and Y5 = 1+ X1 + X2.

A:

Q: (x2) = 375 and (x) = 17; find variance in x (x2) = 1721 and (x) = 31, find variance in (xy) = 27,…

A: Introduction: Variance and covariance are two mathematical terms that are commonly used in…

Q: Which investment has the highest expected return?  Which is the safest investment and why?  Which…

A: In (b) expected value is the highest.  E(X)= 1200000 So this (b) investment has the safest…