Statistics for Business and Economics (13th Edition)
13th Edition
ISBN: 9780134506593
Author: James T. McClave, P. George Benson, Terry Sincich
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 7.2, Problem 7.1LM
Which hypothesis, the null or the alternative, is the status-quo hypothesis? Which is the research hypothesis?
Expert Solution & Answer
Trending nowThis is a popular 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 7 Solutions
Statistics for Business and Economics (13th Edition)
Ch. 7.2 - Which hypothesis, the null or the alternative, is...Ch. 7.2 - Which element of a test of hypothesis is used to...Ch. 7.2 - What is the level of significance of a test of...Ch. 7.2 - What is the difference between Type I and Type II...Ch. 7.2 - List the four possible results of the combinations...Ch. 7.2 - We reject the null hypothesis when the test...Ch. 7.2 - If you test a hypothesis and reject the null...Ch. 7.2 - For each of the following rejection regions,...Ch. 7.2 - Use the applet Hypothesis Test for a Mean to...Ch. 7.2 - Americans favorite sport. The Harris Poll...
Ch. 7.2 - Play Golf America program. The Professional Golf...Ch. 7.2 - Student loan default rate. The national student...Ch. 7.2 - A border protection avatar. The National Center...Ch. 7.2 - Calories in school lunches. A University of...Ch. 7.2 - Libor interest rate. The interest rate at which...Ch. 7.2 - Prob. 7.15ACICh. 7.2 - Authorizing computer users with palm prints....Ch. 7.2 - Jury trial outcomes. Sometimes, the outcome of a...Ch. 7.2 - Intrusion detection systems. The Journal of...Ch. 7.3 - Consider the test of H0: = 7. For each of the...Ch. 7.3 - If a hypothesis test were conducted using = .05,...Ch. 7.3 - For each and observed significance level...Ch. 7.3 - In a test of the hypothesis H0: = 50 versus H0: ...Ch. 7.3 - In a test of H0: = 100 against Ha: 100 the...Ch. 7.3 - In a test of the hypothesis H0: = 10 versus Ha: ...Ch. 7.3 - In a test of H0: = 100 against Ha: 100, the...Ch. 7.3 - In a test of H0: = 75 performed using the...Ch. 7.3 - An analyst tested the null hypothesis that 20...Ch. 7.4 - Consider the test H0: = 70 versus Ha: 70 using...Ch. 7.4 - Suppose you are interested in conducting the...Ch. 7.4 - A random sample of 100 observations from a...Ch. 7.4 - A random sample of 64 observations produced the...Ch. 7.4 - Use the applet Hypotheses Test for a Mean to...Ch. 7.4 - Use the applet Hypotheses Test for a Mean to...Ch. 7.4 - Use the applet Hypotheses Test for a Mean to...Ch. 7.4 - Corporate sustainability of CPA firms. Refer to...Ch. 7.4 - Packaging of a childrens health food. Can...Ch. 7.4 - Stability of compounds in new drugs. Refer to the...Ch. 7.4 - Facial structure of CEOs. Refer to the...Ch. 7.4 - Trading skills of institutional investors. The...Ch. 7.4 - Producers and consumers risk. In quality-control...Ch. 7.4 - Unethical corporate conduct. Refer to the...Ch. 7.4 - Time required to complete a task. When a person is...Ch. 7.4 - Tipping points in daily deal transactions. Refer...Ch. 7.4 - Point spreads of NFL games. During the National...Ch. 7.4 - Revenue for a full-service funeral. According to...Ch. 7.4 - Buy-side vs. sell-side analysts earnings...Ch. 7.4 - Solder-joint inspections. Current technology uses...Ch. 7.4 - Prob. 7.45ACACh. 7.4 - Salaries of postgraduates. The Economics of...Ch. 7.5 - a. Consider testing H0: = 80. Under what...Ch. 7.5 - For each of the following rejection regions,...Ch. 7.5 - A random sample of n observations is selected from...Ch. 7.5 - A sample of five measurements, randomly selected...Ch. 7.5 - Suppose you conduct a 1-test for the null...Ch. 7.5 - Performance-based logistics. Refer to the Journal...Ch. 7.5 - Accidents at construction sites. In a study...Ch. 7.5 - Lobster trap placement. Refer to the Bulletin of...Ch. 7.5 - Radon exposure in Egyptian tombs. Refer to the...Ch. 7.5 - Performance of stock screeners. Recall, from...Ch. 7.5 - Oxygen bubble velocity in a purification process....Ch. 7.5 - Shopping vehicle and judgment. Refer to the...Ch. 7.5 - Minimizing tractor skidding distance. Refer to the...Ch. 7.5 - Crude oil biodegradation. Refer to the Journal of...Ch. 7.5 - Increasing hardness of polyester composites....Ch. 7.5 - Arsenic in smelters. The Occupational Safety and...Ch. 7.6 - Suppose a random sample of 100 observations from a...Ch. 7.6 - Suppose the sample in Exercise 7.64 has produced...Ch. 7.6 - A statistics student used a computer program to...Ch. 7.6 - Refer to Exercise 6.441 (p. 332), in which 50...Ch. 7.6 - For the binomial sample sizes and null...Ch. 7.6 - Use the applet Hypotheses Test for a Proportion to...Ch. 7.6 - Use the applet Hypotheses Test for a Proportion to...Ch. 7.6 - Customer participation in store loyalty card...Ch. 7.6 - Fraud survey of Asia-Pacific firms. The opinions...Ch. 7.6 - TV subscription streaming. Streaming of television...Ch. 7.6 - Gummi Bears: Red or yellow? Companies that produce...Ch. 7.6 - Toothpaste brands with the ADA seal. Consumer...Ch. 7.6 - Vacation-home owners. The National Association of...Ch. 7.6 - Organic-certified coffee. Coffee markets that...Ch. 7.6 - Dehorning of dairy calves. For safety reasons,...Ch. 7.6 - Effectiveness of skin cream. Ponds Age-Defying...Ch. 7.6 - Prob. 7.78ACICh. 7.6 - Prob. 7.79ACICh. 7.6 - Prob. 7.80ACACh. 7.6 - Prob. 7.81ACACh. 7.7 - Let X02 be a particular value of X2 Find the value...Ch. 7.7 - A random sample of n observations is selected from...Ch. 7.7 - A random sample of seven measurements gave x=9.4...Ch. 7.7 - Refer to Exercise 7.841. Suppose we had n = 100,...Ch. 7.7 - A random sample of n = 7 observations from a...Ch. 7.7 - Trading skills of institutional investors. Refer...Ch. 7.7 - Lobster trap placement. Refer to the Bulletin of...Ch. 7.7 - Prob. 7.89ACBCh. 7.7 - Oil content of fried sweet potato chips. Refer to...Ch. 7.7 - Strand bond performance of pre-stressed concrete....Ch. 7.7 - Drug content assessment. Refer to the Analytical...Ch. 7.7 - Jitter in a water power system. Refer to the...Ch. 7.7 - Cooling method for gas turbines. During periods of...Ch. 7.7 - Why do small firms export? The Journal of Small...Ch. 7.8 - a. List three factors that will increase the power...Ch. 7.8 - Prob. 7.97LMCh. 7.8 - Prob. 7.98LMCh. 7.8 - Prob. 7.99LMCh. 7.8 - Refer to Exercise 7.99. a. Find for each of the...Ch. 7.8 - Prob. 7.101LMCh. 7.8 - Prob. 7.102ACICh. 7.8 - Prob. 7.103ACICh. 7.8 - Prob. 7.104ACICh. 7.8 - Prob. 7.105ACICh. 7.8 - Prob. 7.106ACICh. 7.8 - Prob. 7.107ACICh. 7 - Specify the differences between a large-sample and...Ch. 7 - Complete the following statement; The smaller the...Ch. 7 - Which of the elements of a test of hypothesis can...Ch. 7 - If you select a very small value for when...Ch. 7 - If the rejection of the null hypothesis of a...Ch. 7 - A random sample of 20 observations selected from a...Ch. 7 - A random sample of 175 measurements possessed a...Ch. 7 - A random sample of n = 200 observations from a...Ch. 7 - A t-test is conducted for the null hypothesis H0 :...Ch. 7 - A random sample of 41 observations from a normal...Ch. 7 - Effectiveness of online courses. The Survey of...Ch. 7 - Prob. 7.119ACBCh. 7 - Latex allergy in health care workers. Refer to the...Ch. 7 - Latex allergy in health care workers (contd)....Ch. 7 - Made in the USA survey. Refer to the Journal of...Ch. 7 - Beta value of a stock. The beta coefficient of a...Ch. 7 - Accuracy of price scanners at Walmart. Refer to...Ch. 7 - Paying for music downloads. If you use the...Ch. 7 - Prob. 7.126ACBCh. 7 - Prob. 7.127ACBCh. 7 - Prob. 7.128ACICh. 7 - Prob. 7.129ACICh. 7 - Drivers use of the Lincoln Tunnel. The Lincoln...Ch. 7 - Prob. 7.131ACICh. 7 - Prob. 7.132ACICh. 7 - Prob. 7.133ACICh. 7 - Prob. 7.134ACICh. 7 - Prob. 7.135ACICh. 7 - Prob. 7.136ACICh. 7 - Prob. 7.137ACICh. 7 - Prob. 7.138ACICh. 7 - Prob. 7.139ACICh. 7 - Prob. 7.140ACICh. 7 - Prob. 7.141ACICh. 7 - Prob. 7.142ACICh. 7 - Prob. 7.143ACICh. 7 - Ages of cable TV shoppers. Cable TVs Home Shopping...Ch. 7 - Factors that inhibit learning in marketing. What...Ch. 7 - Prob. 7.146ACACh. 7 - The hot tamale caper. Hot tamales are chewy,...
Additional Math Textbook Solutions
Find more solutions based on key concepts
First Derivative Test a. Locale the critical points of f. b. Use the First Derivative Test to locale the local ...
Calculus: Early Transcendentals (2nd Edition)
Reading, Writing, and Rounding Whole Numbers Write in words. 357
Mathematics for the Trades: A Guided Approach (11th Edition) (What's New in Trade Math)
For Problems 23-28, write in simpler form, as in Example 4. logbFG
Finite Mathematics for Business, Economics, Life Sciences and Social Sciences
1. How is a sample related to a population?
Elementary Statistics: Picturing the World (7th Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, statistics and related others by exploring similar questions and additional content below.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
Holt Mcdougal Larson Pre-algebra: Student Edition...AlgebraISBN:9780547587776Author:HOLT MCDOUGALPublisher:HOLT MCDOUGAL
Glencoe Algebra 1, Student Edition, 9780079039897...AlgebraISBN:9780079039897Author:CarterPublisher:McGraw Hill
College Algebra (MindTap Course List)AlgebraISBN:9781305652231Author:R. David Gustafson, Jeff HughesPublisher:Cengage Learning
Big Ideas Math A Bridge To Success Algebra 1: Stu...AlgebraISBN:9781680331141Author:HOUGHTON MIFFLIN HARCOURTPublisher:Houghton Mifflin Harcourt
Holt Mcdougal Larson Pre-algebra: Student Edition...
Algebra
ISBN:9780547587776
Author:HOLT MCDOUGAL
Publisher:HOLT MCDOUGAL
Glencoe Algebra 1, Student Edition, 9780079039897...
Algebra
ISBN:9780079039897
Author:Carter
Publisher:McGraw Hill
College Algebra (MindTap Course List)
Algebra
ISBN:9781305652231
Author:R. David Gustafson, Jeff Hughes
Publisher:Cengage Learning
Big Ideas Math A Bridge To Success Algebra 1: Stu...
Algebra
ISBN:9781680331141
Author:HOUGHTON MIFFLIN HARCOURT
Publisher:Houghton Mifflin Harcourt
Type I and II Errors, Power, Effect Size, Significance and Power Analysis in Quantitative Research; Author: NurseKillam;https://www.youtube.com/watch?v=OWn3Ko1WYTA;License: Standard YouTube License, CC-BY