Empirical research on stock market data for two consecutive trading days indicates that 60% of the stocks that went up on the first day also went up on the second day. Yesterday, 600 stocks went up. (a) Find the mean of p̂, where p̂ gives the proportion of the 600 stocks that went up yesterday that will go up today. (b) Find the standard deviation of p̂ (c) Compute an approximation for P (p̂ < 0.64), which is the probability that fewer than 64% of the stocks that went up yesterday will go up again today. Round your answer to four decimal places.
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
Empirical research on stock market data for two consecutive trading days indicates that 60% of the stocks that went up on the first day also went up on the second day. Yesterday, 600 stocks went up.
(a) Find the mean of p̂, where p̂ gives the proportion of the 600 stocks that went up yesterday that will go up today.
(b) Find the standard deviation of p̂
(c) Compute an approximation for P (p̂ < 0.64), which is the
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