Essentials of Modern Business Statistics with Microsoft Office Excel (Book Only)
7th Edition
ISBN: 9781337298353
Author: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams
Publisher: South-Western College Pub
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Chapter 5.4, Problem 26E
(a)
To determine
To find: The standard deviations for the investments in stock 1 and stock 2. And, identify the stock that is the riskier investment using the standard deviation.
(b)
To determine
To find: The expected return and standard deviation for a person who is investing $500 in stock 1.
(c)
To determine
To find: The expected percent return and standard deviation for an individual who is constructing a portfolio by having 50% in both the stocks.
(d)
To determine
To find: The expected percent return and standard deviation for an individual who is constructing a portfolio by having 70% in stock 1 and 30% in stock 2.
(e)
To determine
To find: The value of the
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PEER REPLY 1:
Choose a classmate's Main Post and review their decision making process.
1. Choose a risk level for each of the states of nature (assign a probability
value to each).
2. Explain why each risk level is chosen.
3. Which alternative do you believe would be the best based on the maximum
EMV?
4. Do you feel determining the expected value with perfect information
(EVWPI) is worthwhile in this situation? Why or why not?
Questions
An insurance company's cumulative incurred claims for the last 5 accident years are given
in the following table:
Development Year
Accident Year 0
2018
1 2 3 4
245 267 274 289 292
2019
255 276 288 294
2020
265 283 292
2021
263 278
2022
271
It can be assumed that claims are fully run off after 4 years. The premiums received for
each year are:
Accident Year Premium
2018
306
2019
312
2020
318
2021
326
2022
330
You do not need to make any allowance for inflation.
1. (a) Calculate the reserve at the end of 2022 using the basic chain ladder method.
(b) Calculate the reserve at the end of 2022 using the Bornhuetter-Ferguson method.
2. Comment on the differences in the reserves produced by the methods in Part 1.
You are provided with data that includes all 50 states of the United States. Your task is to draw a sample of: o 20 States using Random Sampling (2 points: 1 for random number generation; 1 for random sample) o 10 States using Systematic Sampling (4 points: 1 for random numbers generation; 1 for random sample different from the previous answer; 1 for correct K value calculation table; 1 for correct sample drawn by using systematic sampling) (For systematic sampling, do not use the original data directly. Instead, first randomize the data, and then use the randomized dataset to draw your sample. Furthermore, do not use the random list previously generated, instead, generate a new random sample for this part. For more details, please see the snapshot provided at the end.) Upload a Microsoft Excel file with two separate sheets. One sheet provides random sampling while the other provides systematic sampling. Excel snapshots that can help you in organizing columns are provided on the next…
Chapter 5 Solutions
Essentials of Modern Business Statistics with Microsoft Office Excel (Book Only)
Ch. 5.1 - Three students scheduled interviews for summer...Ch. 5.2 - The following data were collected by counting the...Ch. 5.2 - Employee retention is a major concern for many...Ch. 5.2 - Prob. 10ECh. 5.2 - Prob. 11ECh. 5.2 - Prob. 13ECh. 5.3 - During the summer of 2014, Coldstream Country Club...Ch. 5.3 - Prob. 21ECh. 5.4 - Prob. 26ECh. 5.4 - The Chamber of Commerce in a Canadian city has...
Ch. 5.5 - Prob. 32ECh. 5.5 - Prob. 37ECh. 5.5 - Prob. 40ECh. 5.6 - Consider a Poisson distribution with a mean of two...Ch. 5.6 - Prob. 47ECh. 5.6 - Prob. 50ECh. 5.7 - Prob. 52ECh. 5.7 - Prob. 56ECh. 5 - The U.S. Coast Guard (USCG) provides a wide...Ch. 5 - Prob. 62SECh. 5 - Grievance Committee at Tuglar Corporation Several...Ch. 5 - Sagittarius Casino The Sagittarius Casino's...Ch. 5 - Sagittarius Casino The Sagittarius Casino's...
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