QUESTION 11Ar An investor becomes interested in the stock of ABC Corp through a television program. She is a conservative investor (and statistician), and marked byprevious experience, she wants to make sure the volatility in her stock investments is sufficiently low. As a personal guideline, she has established therule to only invest in stocks where the population standard deviation of the daily price changes is less than 1[%]. Daily price changes of stocks are wellmodeled as independent random variables with a nomal distribution.To determine if the stock of ABC Corp meets her guideline, she collects daily prices for the preceding quarter, with the following results:DaysSample MeanSample Standard DeviationDaily Price Change610.05[%]0.9[%]If she is willing to accept a probability of Type l error of 0.05, should she buy the stock? Motivate your answer. DaysSample MeanSample610.05[%]0.91%Daily Price ChangeIf she is willing to accept a probability of Type I error of 0.05, should she buy the stock? Motivate your answer.O p-value3D0.000<0.05%30→ Reject Ho: She should buy the stockO p-value=D0.292>0.05=a Fail to reject Ho: She should NOT buy the stockO p-value=0.011<0.05-a Reject Ho She should buy the stockO p-value=0.146>0.05%3Da Fail to reject Ho: She should NOT buy the stock

Answered: Image /qna-images/answer/477f610f-1ceb-46cc-8159-8a489f56453f.jpg

Answered: If she is willing to accept a…

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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