**Understanding Risk Aversion in Investment Decisions**Risk-taking is a crucial aspect of investing. To make appropriate investment decisions for their clients, portfolio managers often assess new customers' willingness to take financial risks. This is done through a questionnaire, and the scores from this questionnaire are typically normally distributed with a mean of 49.5 and a standard deviation of 14.Customers scoring in the bottom 10% are identified as "risk-averse." The task is to determine the questionnaire score that distinguishes risk-averse customers from those who are not. This involves calculating the score threshold that corresponds to the lower 10% of the distribution, following a normal distribution curve.The calculations should be carried to at least four decimal places, with the final answer rounded to one decimal place.

Given : Mean = 49.5 Standard deviation = 14

Answered: Risk taking is an important part of…

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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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.
4.38 Statistics for Investing. A mutual funds company’s newsletter says “A well-diversified portfolio includes assets with low correlations.” The newsletter includes a table of correlations between the returns on various classes of investments. For example, the correlation between municipal bonds and large-cap stocks is 0.50, and the correlation between municipal bonds and small-cap stocks is 0.21. Rachel invests heavily in municipal bonds. She wants to diversify by adding an investment whose returns do not closely follow the returns on her bonds. Should she choose large-cap stocks or small-cap stocks for this purpose? Explain your answer. If Rachel wants an investment that tends to increase when the return on her bonds drops, what kind of correlation should she look for?
Based on predictive modeling, this upcoming Winter is going to have very unpredictable weather. The National Weather service is considering abolishing specific long-term forecasts, and instead will utilize a statistical model that predicts a mean of six significant snowfalls per month. Use this information to answer the following question correctly: Trying to be forward-thinking, I'm going to try planning my one month long Winter Break based around this model's predictions. I will only travel for the holidays if there is at most one significant snowfall over winter break. What is the probability of this happening? O 0.0174 O 0.0149 O 0.0025 O 0.0542
You hypothesize that people in stats classes are happier than people in all other classes. You compare happiness scores in three of your classes: Statistics, Developmental Psychology, and Social Psychology. In Statistics there are 15 students and the mean happiness rating is 23.1 with a standard deviation of 9.78. In Developmental Psychology there are 15 students and the mean happiness rating is 24.4 with a standard deviation of 2.92. In Social Psychology there are 15 students with a mean rating of 17.7 and standard deviation of 8.46. The sum of squares between groups is equal to 384. The sum of squares within groups is equal to 2461. Use the One-Way ANOVA calculation table to help calculate. What is the degrees of freedom within samples?
4. Straight As now, healthy later A study by Pamela Herd of the University of Wisconsin-Madison found a link between high-school grades and health. Analyzing data from the Wisconsin Longitudinal Study, which has tracked the lives of thousands of Wisconsin high-school graduates from the class of 1957, Herd found that students with higher grade-point averages were more likely to say they were in excellent or very good health in their early 60s. Does this mean people will live healthier lives if they increase their GPA? Explain.47
(See photo) The data set on the left represents the annual rate of return (in percent) of eight randomly sampled bond mutual funds, and the data set on the right represents the annual rate of return (in percent) of eight randomly sampled stock mutual funds. What proportion of the observations is within one standard deviation of the mean for each data set?
3. ACT scores are roughly Normal with mean 20.8 and standard deviation 4.8, and SAT scores are roughly Normal with mean 1026 and standard deviation 209. Some students take both. For those students, the correlation between the two scores is 0.72. a. What's the equation of the straight line that you'd use to predict ACT scores based on SAT scores? b. I got a 1300 on the SAT, and I'm planning to take the ACT. Predict what I might get, c. What's the equation of the straight line that you'd use to predict SAT scores based on ACT scores? d. My friend got a 27 on the ACT, and she's planning to take the SAT. Predict what she might get. e. How come you're predicting both that I'll do worse than her on the ACT and that she will do worse than me on the SAT? 4. Draw a simple random nlc of size 15 from the labels 40os01, 402.
A successful basketball player has a height of 6 feet 11 inches, or 211 cm. Based on statistics from a data set, his height converts to the z score of 5.17. How many standard deviations is his height above the mean?
The picture is attached. If it is not clear, the shaded region of the graph represents 5%. Thanks in advance.
Estimating income tax based on dividends is also not straightforward, due in part to Australia’s franking credit scheme. Mike is looking to simplify total annual tax projections for a share portfolio based simply on the share portfolio's current value. To do this, he wishes to determine if there is any statistically significant linear relationship between the two. Mike has randomly sampled 30 individuals with share portfolios over AUD$100,000 and mapped the assessed value of the portfolio (in AUD $1000) to the total taxes paid on that amount (in AUD$1). Mike's data is in the table below. Assessed Value Taxes 426.1 5014 368.8 3698 309.8 3691 373.9 5189 445.7 4455 505.1 5189 342.3 3416 343.6 3931 432.3 4393 329.2 3267 291.2 2871 399.3 4013 392.7 4728 482.2 4885 480.6 4888 390.8 3917 371.6 3738 311.9 3098 343.7 3633 304.7 3538 274.6 3427 457.1 4633 231.5 4009 450.5 4565 510.1 5946 308.4 3045 348.8 3504 410.4 3375…
A researcher is studying psychological factors in artistic achievement among teenage girls. One variable he is particularly interested in is perseverance. What information does a measure of variability for the variable perseverance convey? Check all that apply. What is the central tendency for the variable perseverance among teenage girls? What is the most common value for the variable perseverance among teenage girls? How spread out are the values for perseverance amoung teenage girls? Do all teenage girls have the same amount of perseverance?

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