Trade Speed of Satisfaction Brokerage Price Execution Electronic Trades Scottrade, Inc. 3.4 3.4 3.5 Charles Schwab 3.2 3.3 3.4 Fidelity Brokerage 3.1 3.4 3.9 Services TD Ameritrade 2.9 3.6 3.7 E*Trade Financial 2.9 3.2 2.9 (Not listed) 2.5 3.2 2.7 Vanguard Brokerage 2.6 3.8 2.8 Services USAA Brokerage 2.4 3.8 3.6 Services Thinkorswim 2.6 2.6 2.6 Wells Fargo 2.3 2.7 2.3 Investments Interactive Brokers 3.7 4.0 4.0 Zecco.com 2.5 2.5 2.5 Firstrade Securities 3.0 3.0 4.0 Banc of America 4.0 1.0 2.0 Investment Services
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
The American Association of Individual Investors (AAII) On-Line Discount Broker Survey polls members on their experiences with electronic trades handled by discount brokers. As part of the survey, members were asked to rate their satisfaction with the trade price and the speed of execution, as well as provide an overall satisfaction rating. Possible responses (scores) were no opinion (0),unsatisfied (1), somewhat satisfied (2),satisfied (3),and very satisfied (4).For each broker, summary scores were computed by computing a weighted average of the scores provided by each respondent. A portion of the survey results follows (AAII website, February 7,20 12).
a. Develop an estimated regression equation using trade price and speed of execution to predict overall satisfaction with the broker.
b.Finger Lakes Investments has developed a new electronic trading system and would like to predict overall customer satisfaction assuming they can provide satisfactory levels of service levels (3}for both trade price and speed of execution Use the estimated repression equation developed in part (a) to predict overall satisfaction level for Finger Lakes Investments if they can achieve these performance levels.
c. Develop a 95 6 confidence
d. Develop a 95% prediction interval of overall satisfaction for Finger Lakes Investments assuming they achieve service levels of S for both trade price and speed of execution.
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