Elementary Statistics: Picturing the World (6th Edition)
6th Edition
ISBN: 9780321911216
Author: Ron Larson, Betsy Farber
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 3CT
a.
To determine
To identify: The claim.
To state: The hypothesis
b.
To determine
To find: The critical value.
To identify: The rejection region.
c.
To determine
To obtain: The test statistic.
d.
To determine
To check: Whether the null hypothesis is rejected or fails to reject.
e.
To determine
To interpret: The decision in the context of the original claim.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Problem 3. Pricing a multi-stock option the Margrabe formula
The purpose of this problem is to price a swap option in a 2-stock model, similarly as
what we did in the example in the lectures. We consider a two-dimensional Brownian
motion given by W₁ = (W(¹), W(2)) on a probability space (Q, F,P). Two stock prices
are modeled by the following equations:
dX
=
dY₁ =
X₁ (rdt+
rdt+0₁dW!)
(²)),
Y₁ (rdt+dW+0zdW!"),
with Xo
xo and Yo =yo. This corresponds to the multi-stock model studied in class,
but with notation (X+, Y₁) instead of (S(1), S(2)). Given the model above, the measure
P is already the risk-neutral measure (Both stocks have rate of return r). We write
σ = 0₁+0%. We consider a swap option, which gives you the right, at time T, to
exchange one share of X for one share of Y. That is, the option has payoff
F=(Yr-XT).
(a) We first assume that r = 0 (for questions (a)-(f)). Write an explicit expression for
the process Xt.
Reminder before proceeding to question (b): Girsanov's theorem…
Problem 1. Multi-stock model
We consider a 2-stock model similar to the one studied in class. Namely, we consider
=
S(1)
S(2)
=
S(¹) exp (σ1B(1) + (M1 - 0/1 )
S(²) exp (02B(2) + (H₂-
M2
where (B(¹) ) +20 and (B(2) ) +≥o are two Brownian motions, with
t≥0
Cov (B(¹), B(2)) = p min{t, s}.
"
The purpose of this problem is to prove that there indeed exists a 2-dimensional Brownian
motion (W+)+20 (W(1), W(2))+20 such that
=
S(1)
S(2)
=
=
S(¹) exp (011W(¹) + (μ₁ - 01/1) t)
롱)
S(²) exp (021W (1) + 022W(2) + (112 - 03/01/12) t).
where σ11, 21, 22 are constants to be determined (as functions of σ1, σ2, p).
Hint: The constants will follow the formulas developed in the lectures.
(a) To show existence of (Ŵ+), first write the expression for both W. (¹) and W (2)
functions of (B(1), B(²)).
as
(b) Using the formulas obtained in (a), show that the process (WA) is actually a 2-
dimensional standard Brownian motion (i.e. show that each component is normal,
with mean 0, variance t, and that their…
The scores of 8 students on the midterm exam and final exam were as follows.
Student
Midterm
Final
Anderson
98
89
Bailey
88
74
Cruz
87
97
DeSana
85
79
Erickson
85
94
Francis
83
71
Gray
74
98
Harris
70
91
Find the value of the (Spearman's) rank correlation coefficient test statistic that would be used to test the claim of no correlation between midterm score and final exam score. Round your answer to 3 places after the decimal point, if necessary.
Test statistic: rs =
Chapter 10 Solutions
Elementary Statistics: Picturing the World (6th Edition)
Ch. 10.1 - Prob. 1TYCh. 10.1 - Prob. 2TYCh. 10.1 - Prob. 3TYCh. 10.1 - What is a multinomial experiment?Ch. 10.1 - What conditions are necessary to use the...Ch. 10.1 - Finding Expected Frequencies In Exercises 36, find...Ch. 10.1 - Finding Expected Frequencies In Exercises 36, find...Ch. 10.1 - Finding Expected Frequencies In Exercises 36, find...Ch. 10.1 - Finding Expected Frequencies In Exercises 36, find...Ch. 10.1 - Prob. 7E
Ch. 10.1 - Prob. 8ECh. 10.1 - Performing a Chi-Square Goodness-of-Fit Test In...Ch. 10.1 - Prob. 10ECh. 10.1 - Prob. 11ECh. 10.1 - Prob. 12ECh. 10.1 - Performing a Chi-Square Goodness-of-Fit Test In...Ch. 10.1 - Performing a Chi-Square Goodness-of-Fit Test In...Ch. 10.1 - Performing a Chi-Square Goodness-of-Fit Test In...Ch. 10.1 - Prob. 16ECh. 10.1 - In Exercises 17 and 18, (a) find the expected...Ch. 10.1 - In Exercises 17 and 18, (a) find the expected...Ch. 10.2 - Prob. 1TYCh. 10.2 - Prob. 2TYCh. 10.2 - Prob. 3TYCh. 10.2 - Prob. 1ECh. 10.2 - Explain the difference between marginal...Ch. 10.2 - Prob. 3ECh. 10.2 - Prob. 4ECh. 10.2 - Prob. 5ECh. 10.2 - True or False? In Exercises 5 and 6, determine...Ch. 10.2 - Finding Expected Frequencies In Exercises 712, (a)...Ch. 10.2 - Finding Expected Frequencies In Exercises 712, (a)...Ch. 10.2 - Prob. 9ECh. 10.2 - Prob. 10ECh. 10.2 - Prob. 11ECh. 10.2 - Prob. 12ECh. 10.2 - Performing a Chi-Square Independence Test In...Ch. 10.2 - Performing a Chi-Square Independence Test In...Ch. 10.2 - Performing a Chi-Square Independence Test In...Ch. 10.2 - Prob. 16ECh. 10.2 - Prob. 17ECh. 10.2 - Performing a Chi-Square Independence Test In...Ch. 10.2 - Prob. 19ECh. 10.2 - Prob. 20ECh. 10.2 - Prob. 21ECh. 10.2 - Prob. 22ECh. 10.2 - Prob. 23ECh. 10.2 - Prob. 24ECh. 10.2 - Prob. 25ECh. 10.2 - Prob. 26ECh. 10.2 - Prob. 27ECh. 10.2 - Prob. 28ECh. 10.2 - Prob. 29ECh. 10.2 - Prob. 30ECh. 10.2 - Prob. 31ECh. 10.2 - Prob. 32ECh. 10.2 - Prob. 33ECh. 10.2 - Prob. 34ECh. 10.2 - Prob. 35ECh. 10.2 - In your opinion, how safe is the food you buy? CBS...Ch. 10.2 - In your opinion, how safe is the food you buy? CBS...Ch. 10.2 - In your opinion, how safe is the food you buy? CBS...Ch. 10.2 - In your opinion, how safe is the food you buy? CBS...Ch. 10.2 - In your opinion, how safe is the food you buy? CBS...Ch. 10.2 - In your opinion, how safe is the food you buy? CBS...Ch. 10.3 - Prob. 1TYCh. 10.3 - Prob. 2TYCh. 10.3 - Prob. 3TYCh. 10.3 - Prob. 4TYCh. 10.3 - Explain how to find the critical value for an...Ch. 10.3 - List five properties of the F-distribution.Ch. 10.3 - List the three conditions that must be met in...Ch. 10.3 - Explain how to determine the values of d.f.N and...Ch. 10.3 - Prob. 5ECh. 10.3 - Prob. 6ECh. 10.3 - Prob. 7ECh. 10.3 - Finding a Critical F-Value for a Right-Tailed Test...Ch. 10.3 - Prob. 9ECh. 10.3 - Finding a Critical F-Value for a Right-Tailed Test...Ch. 10.3 - Finding a Critical F-Value for a Right-Tailed Test...Ch. 10.3 - Finding a Critical F-Value for a Right-Tailed Test...Ch. 10.3 - In Exercises 1318, test the claim about the...Ch. 10.3 - In Exercises 1318, test the claim about the...Ch. 10.3 - Prob. 15ECh. 10.3 - Prob. 16ECh. 10.3 - Prob. 17ECh. 10.3 - In Exercises 1318, test the claim about the...Ch. 10.3 - Performing a Two-Sample F-Test In Exercises 1926,...Ch. 10.3 - Prob. 20ECh. 10.3 - Prob. 21ECh. 10.3 - Performing a Two-Sample F-Test In Exercises 1926,...Ch. 10.3 - Performing a Two-Sample F-Test In Exercises 1926,...Ch. 10.3 - Prob. 24ECh. 10.3 - Prob. 25ECh. 10.3 - Performing a Two-Sample F-Test In Exercises 1926,...Ch. 10.3 - Prob. 27ECh. 10.3 - In Exercises 27 and 28, find the right- and...Ch. 10.3 - In Exercises 29 and 30, construct the confidence...Ch. 10.3 - In Exercises 29 and 30, construct the confidence...Ch. 10.4 - Prob. 1TYCh. 10.4 - Prob. 2TYCh. 10.4 - Slate the null and alternative hypotheses for a...Ch. 10.4 - What conditions are necessary in order to use a...Ch. 10.4 - Describe the difference between the variance...Ch. 10.4 - Prob. 4ECh. 10.4 - Performing a One-Way ANOVA Test In Exercises 514,...Ch. 10.4 - Prob. 6ECh. 10.4 - Prob. 7ECh. 10.4 - Prob. 8ECh. 10.4 - Prob. 9ECh. 10.4 - Prob. 10ECh. 10.4 - Prob. 11ECh. 10.4 - Prob. 12ECh. 10.4 - Prob. 13ECh. 10.4 - Prob. 14ECh. 10.4 - Prob. 15ECh. 10.4 - Prob. 16ECh. 10.4 - Prob. 17ECh. 10.4 - Prob. 18ECh. 10.4 - The Scheff Test If the null hypothesis is rejected...Ch. 10.4 - Prob. 20ECh. 10.4 - Prob. 21ECh. 10.4 - Prob. 22ECh. 10 - In Exercises 14. (a) identify the claim and state...Ch. 10 - Prob. 10.1.2RECh. 10 - In Exercises 14, (a) identify the claim and state...Ch. 10 - Prob. 10.1.4RECh. 10 - Prob. 10.2.5RECh. 10 - Prob. 10.2.6RECh. 10 - Prob. 10.2.7RECh. 10 - Prob. 10.2.8RECh. 10 - Prob. 10.3.9RECh. 10 - Prob. 10.3.10RECh. 10 - Prob. 10.3.11RECh. 10 - Prob. 10.3.12RECh. 10 - Prob. 10.3.13RECh. 10 - Prob. 10.3.14RECh. 10 - Prob. 10.3.15RECh. 10 - Prob. 10.3.16RECh. 10 - Prob. 10.3.17RECh. 10 - Prob. 10.3.18RECh. 10 - Prob. 10.3.19RECh. 10 - Prob. 10.3.20RECh. 10 - Prob. 10.4.21RECh. 10 - Prob. 10.4.22RECh. 10 - Prob. 1CQCh. 10 - Prob. 2CQCh. 10 - Prob. 3CQCh. 10 - Prob. 4CQCh. 10 - Prob. 1CTCh. 10 - Prob. 2CTCh. 10 - Prob. 3CTCh. 10 - Prob. 4CTCh. 10 - Prob. 5CTCh. 10 - Prob. 6CTCh. 10 - Prob. 1RSRDCh. 10 - Independence The contingency table below shows the...Ch. 10 - Prob. 1TCh. 10 - Prob. 2TCh. 10 - Prob. 3TCh. 10 - Prob. 4TCh. 10 - Prob. 5TCh. 10 - Prob. 1CRCh. 10 - Prob. 2CRCh. 10 - Prob. 3CRCh. 10 - Prob. 4CRCh. 10 - Prob. 5CRCh. 10 - Reviewing a Movie The contingency table shows how...Ch. 10 - Prob. 7CR
Knowledge Booster
Similar questions
- Business discussarrow_forwardBusiness discussarrow_forwardI just need to know why this is wrong below: What is the test statistic W? W=5 (incorrect) and What is the p-value of this test? (p-value < 0.001-- incorrect) Use the Wilcoxon signed rank test to test the hypothesis that the median number of pages in the statistics books in the library from which the sample was taken is 400. A sample of 12 statistics books have the following numbers of pages pages 127 217 486 132 397 297 396 327 292 256 358 272 What is the sum of the negative ranks (W-)? 75 What is the sum of the positive ranks (W+)? 5What type of test is this? two tailedWhat is the test statistic W? 5 These are the critical values for a 1-tailed Wilcoxon Signed Rank test for n=12 Alpha Level 0.001 0.005 0.01 0.025 0.05 0.1 0.2 Critical Value 75 70 68 64 60 56 50 What is the p-value for this test? p-value < 0.001arrow_forward
- ons 12. A sociologist hypothesizes that the crime rate is higher in areas with higher poverty rate and lower median income. She col- lects data on the crime rate (crimes per 100,000 residents), the poverty rate (in %), and the median income (in $1,000s) from 41 New England cities. A portion of the regression results is shown in the following table. Standard Coefficients error t stat p-value Intercept -301.62 549.71 -0.55 0.5864 Poverty 53.16 14.22 3.74 0.0006 Income 4.95 8.26 0.60 0.5526 a. b. Are the signs as expected on the slope coefficients? Predict the crime rate in an area with a poverty rate of 20% and a median income of $50,000. 3. Using data from 50 workarrow_forward2. The owner of several used-car dealerships believes that the selling price of a used car can best be predicted using the car's age. He uses data on the recent selling price (in $) and age of 20 used sedans to estimate Price = Po + B₁Age + ε. A portion of the regression results is shown in the accompanying table. Standard Coefficients Intercept 21187.94 Error 733.42 t Stat p-value 28.89 1.56E-16 Age -1208.25 128.95 -9.37 2.41E-08 a. What is the estimate for B₁? Interpret this value. b. What is the sample regression equation? C. Predict the selling price of a 5-year-old sedan.arrow_forwardian income of $50,000. erty rate of 13. Using data from 50 workers, a researcher estimates Wage = Bo+B,Education + B₂Experience + B3Age+e, where Wage is the hourly wage rate and Education, Experience, and Age are the years of higher education, the years of experience, and the age of the worker, respectively. A portion of the regression results is shown in the following table. ni ogolloo bash 1 Standard Coefficients error t stat p-value Intercept 7.87 4.09 1.93 0.0603 Education 1.44 0.34 4.24 0.0001 Experience 0.45 0.14 3.16 0.0028 Age -0.01 0.08 -0.14 0.8920 a. Interpret the estimated coefficients for Education and Experience. b. Predict the hourly wage rate for a 30-year-old worker with four years of higher education and three years of experience.arrow_forward
- 1. If a firm spends more on advertising, is it likely to increase sales? Data on annual sales (in $100,000s) and advertising expenditures (in $10,000s) were collected for 20 firms in order to estimate the model Sales = Po + B₁Advertising + ε. A portion of the regression results is shown in the accompanying table. Intercept Advertising Standard Coefficients Error t Stat p-value -7.42 1.46 -5.09 7.66E-05 0.42 0.05 8.70 7.26E-08 a. Interpret the estimated slope coefficient. b. What is the sample regression equation? C. Predict the sales for a firm that spends $500,000 annually on advertising.arrow_forwardCan you help me solve problem 38 with steps im stuck.arrow_forwardHow do the samples hold up to the efficiency test? What percentages of the samples pass or fail the test? What would be the likelihood of having the following specific number of efficiency test failures in the next 300 processors tested? 1 failures, 5 failures, 10 failures and 20 failures.arrow_forward
- The battery temperatures are a major concern for us. Can you analyze and describe the sample data? What are the average and median temperatures? How much variability is there in the temperatures? Is there anything that stands out? Our engineers’ assumption is that the temperature data is normally distributed. If that is the case, what would be the likelihood that the Safety Zone temperature will exceed 5.15 degrees? What is the probability that the Safety Zone temperature will be less than 4.65 degrees? What is the actual percentage of samples that exceed 5.25 degrees or are less than 4.75 degrees? Is the manufacturing process producing units with stable Safety Zone temperatures? Can you check if there are any apparent changes in the temperature pattern? Are there any outliers? A closer look at the Z-scores should help you in this regard.arrow_forwardNeed help pleasearrow_forwardPlease conduct a step by step of these statistical tests on separate sheets of Microsoft Excel. If the calculations in Microsoft Excel are incorrect, the null and alternative hypotheses, as well as the conclusions drawn from them, will be meaningless and will not receive any points. 4. One-Way ANOVA: Analyze the customer satisfaction scores across four different product categories to determine if there is a significant difference in means. (Hints: The null can be about maintaining status-quo or no difference among groups) H0 = H1=arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
MATLAB: An Introduction with ApplicationsStatisticsISBN:9781119256830Author:Amos GilatPublisher:John Wiley & Sons Inc
Probability and Statistics for Engineering and th...StatisticsISBN:9781305251809Author:Jay L. DevorePublisher:Cengage Learning
Statistics for The Behavioral Sciences (MindTap C...StatisticsISBN:9781305504912Author:Frederick J Gravetter, Larry B. WallnauPublisher:Cengage Learning
Elementary Statistics: Picturing the World (7th E...StatisticsISBN:9780134683416Author:Ron Larson, Betsy FarberPublisher:PEARSON
The Basic Practice of StatisticsStatisticsISBN:9781319042578Author:David S. Moore, William I. Notz, Michael A. FlignerPublisher:W. H. Freeman
Introduction to the Practice of StatisticsStatisticsISBN:9781319013387Author:David S. Moore, George P. McCabe, Bruce A. CraigPublisher:W. H. Freeman
MATLAB: An Introduction with Applications
Statistics
ISBN:9781119256830
Author:Amos Gilat
Publisher:John Wiley & Sons Inc
Probability and Statistics for Engineering and th...
Statistics
ISBN:9781305251809
Author:Jay L. Devore
Publisher:Cengage Learning
Statistics for The Behavioral Sciences (MindTap C...
Statistics
ISBN:9781305504912
Author:Frederick J Gravetter, Larry B. Wallnau
Publisher:Cengage Learning
Elementary Statistics: Picturing the World (7th E...
Statistics
ISBN:9780134683416
Author:Ron Larson, Betsy Farber
Publisher:PEARSON
The Basic Practice of Statistics
Statistics
ISBN:9781319042578
Author:David S. Moore, William I. Notz, Michael A. Fligner
Publisher:W. H. Freeman
Introduction to the Practice of Statistics
Statistics
ISBN:9781319013387
Author:David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:W. H. Freeman