You would like to characterize the randomness of daily S&P 500 returns using a probability distribution and assess thepossibility of assuming a normal distribution. Which of the following is correct regarding your approach?O A. The daily returns are well characterized with a normal distribution that inherits the historical mean and standard deviationof daily returns.B. The normal distribution assumption will imply excess kurtosis but zero skewness.C. Under your assumption, the probability of observing a daily return that is more than two standard deviations higher thanthe mean is 10%.D. Events such as the 1987 stock market crash will be essentially impossible driving a discrepancy between realized data andyour assumption.

From the given information, In theory,there is no doubt daily S$P 500 returns are well behaved that…

Answered: You would like to characterize the…

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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Business Weekly conducted a survey of graduates from 30 top MBA programs. On the basis of the survey, assume the mean annual salary for graduates 10 years after graduation is $178,000. Assume the standard deviation is $39,000. Suppose you take a simple random sample of 36 graduates. Round all answers to four decimal places if necessary. a. What is the distribution of X? X - N( b. What is the distribution of I? I - N( c. For a single randomly selected graduate, find the probability that her salary is between $173,350 and $181,100. d. For a simple random sample of 36 graduates, find the probability that the average salary is between $173,350 and $181,100. e. For part d), is the assumption of normal necessary? O NoO Yes o
The average student loan debt for college graduates is $25,850. Suppose that that distribution is normal and that the standard deviation is $14,000. Let X = the student loan debt of a randomly selected college graduate. Round all probabilities to 4 decimal places and all dollar answers to the nearest dollar. %3D a. What is the distribution of X? X N( b Find the probability that the college graduate has between $21,400 and $34,250 in student loan debt. c. The middle 10% of college graduates' loan debt lies between what two numbers? Low: $ High: $
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Business Weekly conducted a survey of graduates from 30 top MBA programs. On the basis of the survey, assume the mean annual salary for graduates 10 years after graduation is $178,000. Assume the standard deviation is $39,000. Suppose you take a simple random sample of 36 graduates. Round all answers to four decimal places if necessary. a. What is the distribution of X? X - N( 178000 39000 b. What is the distribution of ? T - N( 178000 c. For a single randomly selected graduate, find the probability that her salary is between $173,350 and $181,100. 0.0791 6500 d. For a simple random sample of 36 graduates, find the probability that the average salary is between $173,350 and $181,100. e. For part d), is the assumption of normal necessary? NoO Yes o

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