Explanation Given info: The applet Simulating the Stock Market is run repeatedly for n = 2 , in order to record the number of up’s each time. Calculation: Answers may vary. Simulating the Stock Market : Applet procedure: Step-by-step procedure to obtain the number of stock market up’s using the Applet application: Go to Pearson Applets and Choose Simulating the Stock Market . Click the box 1 day twice. Click the box Reset . Repeat 2 times. Outputs using the Applet application are given below: The output shows that out of the 2 times the simulation is repeated, the event “2 up’s” occurs once. As a result, the proportion of times “2 up’s” occurs is: 1 2 = 0.5 . Thus, the estimate of the probability that the stock market will go up each of the 2 days is 0.5. Binomial Distribution: A random variable X is said to follow Binomial distribution if X has only two outcomes “success” and “failure” and the mass function of X is, p ( x ) = ( n x ) p x q n − x , x = 0 , 1 , 2 , ... , n , Where n is the number of trials and p is the probability of success, q = 1 − p . The mean is μ = n p and the standard deviation is σ = ( n p q )

13th Edition

ISBN: 9780134080215

Author: James T. McClave, Terry T Sincich

Publisher: PEARSON

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Chapter 4.4, Problem 4.5AE

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To estimate: The probability that the stock market will go up each of the next 2 days.

To compare: The results with the binomial probability where x=2 , n=2 and p=0.5 .

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Chapter 4.4, Problem 4.4AE

Chapter 4.4, Problem 68ACB

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To estimate: The probability that the stock market will go up each of the next 2 days. To compare: The results with the binomial probability where x = 2 , n = 2 and p = 0.5 .

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To estimate: The probability that the stock market will go up each of the next 2 days. To compare: The results with the binomial probability where x=2 , n=2 and p=0.5 .

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To estimate: The probability that the stock market will go up each of the next 2 days.

To compare: The results with the binomial probability where x=2 , n=2 and p=0.5 .