Fundamentals of Statistics (5th Edition)
5th Edition
ISBN: 9780134508306
Author: Michael Sullivan III
Publisher: PEARSON
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Chapter 10.2, Problem 40AYU
Explaining the Concepts
40. Explain what a P-value is. What is the criterion for rejecting the null hypothesis using the P-value approach?
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You have been hired as an intern to run analyses on the data and report the results back to Sarah; the five questions that Sarah needs you to address are given below.
Does there appear to be a positive or negative relationship between price and screen size? Use a scatter plot to examine the relationship.
Determine and interpret the correlation coefficient between the two variables. In your interpretation, discuss the direction of the relationship (positive, negative, or zero relationship). Also discuss the strength of the relationship.
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Question 1: Determine and interpret the correlation coefficient between the two variables. In your interpretation, discuss the direction of the relationship (positive, negative, or zero relationship). Also discuss the strength of the relationship.
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Direction of the relationship (positive, negative, or zero relationship):
Strength of the relationship (strong/moderate/weak):
Question 2: Estimate the relationship between screen size and price using a simple linear regression model and interpret the estimated coefficients. In your interpretation, tell the dollar amount by which price will change for each unit of increase in screen size. (The answer for the…
In this problem, we consider a Brownian motion (W+) t≥0. We consider a stock model (St)t>0
given (under the measure P) by
d.St 0.03 St dt + 0.2 St dwt,
with So 2. We assume that the interest rate is r = 0.06. The purpose of this problem is to
price an option on this stock (which we name cubic put). This option is European-type, with
maturity 3 months (i.e. T = 0.25 years), and payoff given by
F = (8-5)+
(a) Write the Stochastic Differential Equation satisfied by (St) under the risk-neutral measure
Q. (You don't need to prove it, simply give the answer.)
(b) Give the price of a regular European put on (St) with maturity 3 months and strike K = 2.
(c) Let X =
S. Find the Stochastic Differential Equation satisfied by the process (Xt)
under the measure Q.
(d) Find an explicit expression for X₁ = S3 under measure Q.
(e) Using the results above, find the price of the cubic put option mentioned above.
(f) Is the price in (e) the same as in question (b)? (Explain why.)
Chapter 10 Solutions
Fundamentals of Statistics (5th Edition)
Ch. 10.1 - A _____ is a statement regarding a characteristic...Ch. 10.1 - _____ _____ is a procedure, based on sample...Ch. 10.1 - The _____ _____ is a statement of no change, no...Ch. 10.1 - The _____ _____ is a statement we are trying to...Ch. 10.1 - If we reject the null hypothesis when the...Ch. 10.1 - If we do not reject the null hypothesis when the...Ch. 10.1 - The _____ _____ _____ is the probability of making...Ch. 10.1 - True or False: Sample evidence can prove a null...Ch. 10.1 - In Problems 914, the null and alternative...Ch. 10.1 - In Problems 914, the null and alternative...
Ch. 10.1 - In Problems 914, the null and alternative...Ch. 10.1 - In Problems 914, the null and alternative...Ch. 10.1 - In Problems 914, the null and alternative...Ch. 10.1 - In Problems 914, the null and alternative...Ch. 10.1 - In Problems 1522, (a) determine the null and...Ch. 10.1 - In Problems 1522, (a) determine the null and...Ch. 10.1 - In Problems 1522, (a) determine the null and...Ch. 10.1 - In Problems 1522, (a) determine the null and...Ch. 10.1 - In Problems 1522, (a) determine the null and...Ch. 10.1 - In Problems 1522, (a) determine the null and...Ch. 10.1 - In Problems 1522, (a) determine the null and...Ch. 10.1 - In Problems 1522, (a) determine the null and...Ch. 10.1 - In Problems 2334, state the conclusion based on...Ch. 10.1 - In Problems 2334, state the conclusion based on...Ch. 10.1 - In Problems 2334, state the conclusion based on...Ch. 10.1 - In Problems 2334, state the conclusion based on...Ch. 10.1 - In Problems 2334, state the conclusion based on...Ch. 10.1 - In Problems 2334, state the conclusion based on...Ch. 10.1 - In Problems 2334, state the conclusion based on...Ch. 10.1 - In Problems 2334, state the conclusion based on...Ch. 10.1 - In Problems 2334, state the conclusion based on...Ch. 10.1 - In Problems 2334, state the conclusion based on...Ch. 10.1 - Prob. 33AYUCh. 10.1 - Prob. 34AYUCh. 10.1 - Quality Control A can of soda is labeled as...Ch. 10.1 - Popcorn Consumption According to popcorn.org, the...Ch. 10.1 - E-Cigs According to the Centers for Disease...Ch. 10.1 - Migraines According to the Centers for Disease...Ch. 10.1 - Prob. 39AYUCh. 10.1 - Refer to Problem 18. Researchers must choose the...Ch. 10.1 - Retirement Savings Designed by Bill Bengen, the 4...Ch. 10.1 - If the consequences of making a Type I error are...Ch. 10.1 - What happens to the probability of making a Type...Ch. 10.2 - When observed results are unlikely under the...Ch. 10.2 - True or False: When testing a hypothesis using the...Ch. 10.2 - True or False: When testing a hypothesis using the...Ch. 10.2 - Determine the critical value for a right-tailed...Ch. 10.2 - Determine the critical value for a left-tailed...Ch. 10.2 - Determine the critical value for a two-tailed test...Ch. 10.2 - In Problems 712, test the hypothesis using (a) the...Ch. 10.2 - In Problems 712, test the hypothesis using (a) the...Ch. 10.2 - In Problems 712, test the hypothesis using (a) the...Ch. 10.2 - Prob. 10AYUCh. 10.2 - In Problems 712, test the hypothesis using (a) the...Ch. 10.2 - In Problems 712, test the hypothesis using (a) the...Ch. 10.2 - You Explain It! Stock Analyst Throwing darts at...Ch. 10.2 - Prob. 14AYUCh. 10.2 - Applying the Concepts 15. Cramer Correct Less Than...Ch. 10.2 - Political Pundits In his book, The Signal and the...Ch. 10.2 - NW Lipitor The drug Lipitor is meant to reduce...Ch. 10.2 - Nexium Nexium is a drug that can be used to reduce...Ch. 10.2 - Fatal Traffic Accidents According to the National...Ch. 10.2 - Eating Together In December 2001, 38% of adults...Ch. 10.2 - NW Taught Enough Math In 1994, 52% of parents with...Ch. 10.2 - Living Alone? In 2000, 58% of females aged 15 and...Ch. 10.2 - Prob. 23AYUCh. 10.2 - Prob. 24AYUCh. 10.2 - Accuracy of the Drive Thru According to QSR...Ch. 10.2 - Prob. 26AYUCh. 10.2 - NW Small-Sample Hypothesis Test Professors Honey...Ch. 10.2 - Small-Sample Hypothesis Test In 1997, 4% of...Ch. 10.2 - Statistics in the Media A headline read, More Than...Ch. 10.2 - Prob. 31AYUCh. 10.2 - Political Philosophy According to Gallup, 21% of...Ch. 10.2 - Prob. 33AYUCh. 10.2 - Accept versus Do Not Reject In the United States,...Ch. 10.2 - Prob. 35AYUCh. 10.2 - Putting It Together: Lupus Based on historical...Ch. 10.2 - Putting It Together: Naughty or Nice? Yale...Ch. 10.2 - Explaining the Concepts 40. Explain what a P-value...Ch. 10.2 - Prob. 41AYUCh. 10.2 - Suppose we are testing the hypothesis Ho : p =...Ch. 10.2 - Discuss the advantages and disadvantages of using...Ch. 10.2 - The headline reporting the results of a poll...Ch. 10.2 - Explain what statistical significance means.Ch. 10.3 - a. Determine the critical value for a right-tailed...Ch. 10.3 - a. Determine the critical value for a right-tailed...Ch. 10.3 - To test H0 : = 50 versus H1 : 50, a simple...Ch. 10.3 - Prob. 4AYUCh. 10.3 - To test H0 : = 100 versus H1 : 100, a simple...Ch. 10.3 - Prob. 6AYUCh. 10.3 - Prob. 7AYUCh. 10.3 - To test H0 : = 4.5 versus H1 : 4.5, a simple...Ch. 10.3 - To test H0 : = 105 versus H1 : 105, a simple...Ch. 10.3 - To test H0 : = 45 versus H1 : 45, a simple...Ch. 10.3 - You Explain It! ATM Withdrawals According to the...Ch. 10.3 - You Explain It! Are Women Getting Taller? In 1990,...Ch. 10.3 - NW Ready for College? The ACT is a college...Ch. 10.3 - SAT Verbal Scores Do students who learned English...Ch. 10.3 - Effects of Alcohol on the Brain In a study...Ch. 10.3 - Effects of Plastic Resin Para-nonylphenol is found...Ch. 10.3 - Credit Scores A Fair Isaac Corporation (FICO)...Ch. 10.3 - TVaholics According to the American Time Use...Ch. 10.3 - Age of Death-Row Inmates In 2002, the mean age of...Ch. 10.3 - Energy Consumption In 2001, the mean household...Ch. 10.3 - NW Waiting in Line The mean waiting time at the...Ch. 10.3 - Reading Rates Michael Sullivan, son of the author,...Ch. 10.3 - Prob. 23AYUCh. 10.3 - Filling Bottles A certain brand of apple juice is...Ch. 10.3 - Starbucks Stock The volume of a stock is the...Ch. 10.3 - Study Time Go to...Ch. 10.3 - Prob. 27AYUCh. 10.3 - Prob. 28AYUCh. 10.3 - Problem 25 25. Starbucks Stock The volume of a...Ch. 10.3 - Problem 26 24. Filling Bottles A certain brand of...Ch. 10.3 - Statistical Significance versus Practical...Ch. 10.3 - Statistical Significance versus Practical...Ch. 10.3 - Accept versus Do Not Reject The mean IQ score of...Ch. 10.3 - Reading at Bedtime It is well-documented that...Ch. 10.3 - Whats the Problem? The head of institutional...Ch. 10.3 - Prob. 38AYUCh. 10.3 - Prob. 39AYUCh. 10.4 - Prob. 1AYUCh. 10.4 - A simple random sample of size n = 200 individuals...Ch. 10.4 - Prob. 3AYUCh. 10.4 - Prob. 4AYUCh. 10.4 - Prob. 5AYUCh. 10.4 - Prob. 6AYUCh. 10.4 - Prob. 7AYUCh. 10.4 - The Atomic Bomb In October 1945, the Gallup...Ch. 10.4 - Course Redesign Pass rates for Intermediate...Ch. 10.4 - Number of Credit Cards According to the Federal...Ch. 10.4 - Prob. 11AYUCh. 10.4 - Prob. 12AYUCh. 10.4 - Prob. 13AYUCh. 10.4 - Prob. 14AYUCh. 10.4 - Prob. 15AYUCh. 10.4 - Prob. 16AYUCh. 10.4 - Prob. 17AYUCh. 10.4 - Confidence Intervals Suppose you wish to determine...Ch. 10.4 - Prob. 19AYUCh. 10.4 - In Problems 1925, decide whether the problem...Ch. 10.4 - In Problems 1925, decide whether the problem...Ch. 10.4 - In Problems 1925, decide whether the problem...Ch. 10.4 - Prob. 23AYUCh. 10.4 - Prob. 24AYUCh. 10.4 - Prob. 25AYUCh. 10 - For Problems 1 and 2, (a) determine the null and...Ch. 10 - Prob. 2RECh. 10 - Prob. 3RECh. 10 - Prob. 4RECh. 10 - Prob. 5RECh. 10 - To test H0 : = 50 versus H1 : 50, a simple...Ch. 10 - In Problems 7 and 8, test the hypothesis at the =...Ch. 10 - In Problems 7 and 8, test the hypothesis at the =...Ch. 10 - Prob. 9RECh. 10 - Emergency Room The proportion of patients who...Ch. 10 - Linear Rotary Bearing A linear rotary bearing is...Ch. 10 - Prob. 12RECh. 10 - Conforming Golf Balls The U.S. Golf Association...Ch. 10 - Studying Enough? College mathematics instructors...Ch. 10 - Prob. 15RECh. 10 - Prob. 16RECh. 10 - Prob. 17RECh. 10 - Prob. 18RECh. 10 - Explain the difference between accepting and not...Ch. 10 - Prob. 20RECh. 10 - Prob. 21RECh. 10 - Prob. 22RECh. 10 - Prob. 1CTCh. 10 - The trade magazine QSR routinely examines...Ch. 10 - Did you get your 8 hours of sleep last night? is a...Ch. 10 - The outside diameter of a manufactured part must...Ch. 10 - Prob. 5CTCh. 10 - Prob. 6CTCh. 10 - Prob. 7CTCh. 10 - CASE STUDY How Old Is Stonehenge? Approximately...
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