Distributions Using the methods of this chapter, identify the distribution that should be used for testing a claim about the given population parameter. a. Mean b. Proportion c. Standard deviation

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Answer 1

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Chapter 8, Problem 1CQQ

Distributions Using the methods of this chapter, identify the distribution that should be used for testing a claim about the given population parameter.

a. Mean

b. Proportion

c. Standard deviation

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

a.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population mean.

Answer to Problem 1CQQ

The distribution that is used for testing a claim about given population mean is the t distribution.

Explanation of Solution

The t test is used for smaller sample sizes and when the population standard deviation is not known. T test is used for testing the mean of the population with the sample or for comparing the differences of means of two samples. The t test consists the t statistic that follows student’s t distribution.

b.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population proportion.

Answer to Problem 1CQQ

The distribution that is used for testing a claim about given population proportion is the normal distribution.

Explanation of Solution

The z test is used for larger sample sizes and when the population standard deviation is known. z test is used for testing the proportion of the population with the sample or for comparing the differences of proportion of two samples. The z test consists the z statistic that follows normal distribution.

c.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population standard deviation.

Answer to Problem 1CQQ

The distribution that is used to test a claim about population standard deviation is χ2-distribution.

Explanation of Solution

The χ2 test is used for testing the standard deviation of the given population or comparing two standard deviations. Thus, the distribution that is used to test a claim about population standard deviation is χ2-distribution.

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What is the standard scores associated to the left of z is 0.1446

Note: The purpose of this problem below is to use computational techniques (Excelspreadsheet, Matlab, R, Python, etc.) and code the dynamic programming ideas seen inclass. Please provide the numerical answer to the questions as well as a sample of yourwork (spreadsheet, code file, etc.).We consider an N-period binomial model with the following properties: N = 60, thecurrent stock price is S0 = 1000; on each period, the stock price increases by 0.5% whenit moves up and decreases by 0.3% when it moves down. The annual interest rate on themoney market is 5%. (Notice that this model is a CRR model, which means that thebinomial tree is recombining.)(a) Find the price at time t0 = 0 of a (European) call option with strike price K = 1040and maturity T = 1 year.(b) Find the price at time t0 = 0 of a (European) put option with strike price K = 1040and maturity T = 1 year.(c) We consider now, that you are at time t5 (i.e. after 5 periods, which represents 1month later). Assume that the stock…

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Answer 2

Textbook Question

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Chapter 8, Problem 1CQQ

Distributions Using the methods of this chapter, identify the distribution that should be used for testing a claim about the given population parameter.

a. Mean

b. Proportion

c. Standard deviation

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

a.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population mean.

Answer to Problem 1CQQ

The distribution that is used for testing a claim about given population mean is the t distribution.

Explanation of Solution

The t test is used for smaller sample sizes and when the population standard deviation is not known. T test is used for testing the mean of the population with the sample or for comparing the differences of means of two samples. The t test consists the t statistic that follows student’s t distribution.

b.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population proportion.

Answer to Problem 1CQQ

The distribution that is used for testing a claim about given population proportion is the normal distribution.

Explanation of Solution

The z test is used for larger sample sizes and when the population standard deviation is known. z test is used for testing the proportion of the population with the sample or for comparing the differences of proportion of two samples. The z test consists the z statistic that follows normal distribution.

c.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population standard deviation.

Answer to Problem 1CQQ

The distribution that is used to test a claim about population standard deviation is χ2-distribution.

Explanation of Solution

The χ2 test is used for testing the standard deviation of the given population or comparing two standard deviations. Thus, the distribution that is used to test a claim about population standard deviation is χ2-distribution.

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Answer 3

Textbook Question

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Chapter 8, Problem 1CQQ

Distributions Using the methods of this chapter, identify the distribution that should be used for testing a claim about the given population parameter.

a. Mean

b. Proportion

c. Standard deviation

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

a.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population mean.

Answer to Problem 1CQQ

The distribution that is used for testing a claim about given population mean is the t distribution.

Explanation of Solution

The t test is used for smaller sample sizes and when the population standard deviation is not known. T test is used for testing the mean of the population with the sample or for comparing the differences of means of two samples. The t test consists the t statistic that follows student’s t distribution.

b.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population proportion.

Answer to Problem 1CQQ

The distribution that is used for testing a claim about given population proportion is the normal distribution.

Explanation of Solution

The z test is used for larger sample sizes and when the population standard deviation is known. z test is used for testing the proportion of the population with the sample or for comparing the differences of proportion of two samples. The z test consists the z statistic that follows normal distribution.

c.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population standard deviation.

Answer to Problem 1CQQ

The distribution that is used to test a claim about population standard deviation is χ2-distribution.

Explanation of Solution

The χ2 test is used for testing the standard deviation of the given population or comparing two standard deviations. Thus, the distribution that is used to test a claim about population standard deviation is χ2-distribution.

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Answer 4

Textbook Question

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Chapter 8, Problem 1CQQ

Distributions Using the methods of this chapter, identify the distribution that should be used for testing a claim about the given population parameter.

a. Mean

b. Proportion

c. Standard deviation

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

a.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population mean.

Answer to Problem 1CQQ

The distribution that is used for testing a claim about given population mean is the t distribution.

Explanation of Solution

The t test is used for smaller sample sizes and when the population standard deviation is not known. T test is used for testing the mean of the population with the sample or for comparing the differences of means of two samples. The t test consists the t statistic that follows student’s t distribution.

b.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population proportion.

Answer to Problem 1CQQ

The distribution that is used for testing a claim about given population proportion is the normal distribution.

Explanation of Solution

The z test is used for larger sample sizes and when the population standard deviation is known. z test is used for testing the proportion of the population with the sample or for comparing the differences of proportion of two samples. The z test consists the z statistic that follows normal distribution.

c.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population standard deviation.

Answer to Problem 1CQQ

The distribution that is used to test a claim about population standard deviation is χ2-distribution.

Explanation of Solution

The χ2 test is used for testing the standard deviation of the given population or comparing two standard deviations. Thus, the distribution that is used to test a claim about population standard deviation is χ2-distribution.

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Answer 5

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Answer 6

Textbook Question

100%

Answer 7

a.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population mean.

Answer to Problem 1CQQ

The distribution that is used for testing a claim about given population mean is the t distribution.

Explanation of Solution

The t test is used for smaller sample sizes and when the population standard deviation is not known. T test is used for testing the mean of the population with the sample or for comparing the differences of means of two samples. The t test consists the t statistic that follows student’s t distribution.

b.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population proportion.

Answer to Problem 1CQQ

The distribution that is used for testing a claim about given population proportion is the normal distribution.

Explanation of Solution

The z test is used for larger sample sizes and when the population standard deviation is known. z test is used for testing the proportion of the population with the sample or for comparing the differences of proportion of two samples. The z test consists the z statistic that follows normal distribution.

c.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population standard deviation.

Answer to Problem 1CQQ

The distribution that is used to test a claim about population standard deviation is χ2-distribution.

Explanation of Solution

The χ2 test is used for testing the standard deviation of the given population or comparing two standard deviations. Thus, the distribution that is used to test a claim about population standard deviation is χ2-distribution.

Answer 8

a.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population mean.

Answer to Problem 1CQQ

The distribution that is used for testing a claim about given population mean is the t distribution.

Explanation of Solution

The t test is used for smaller sample sizes and when the population standard deviation is not known. T test is used for testing the mean of the population with the sample or for comparing the differences of means of two samples. The t test consists the t statistic that follows student’s t distribution.

Answer 9

a.

Expert Solution

Answer 10

a.

Expert Solution

Answer 11

Expert Solution

Answer 12

To determine

To identify: The distribution that is used for testing a claim about given population mean.

Answer 13

Answer to Problem 1CQQ

The distribution that is used for testing a claim about given population mean is the t distribution.

Answer 14

Explanation of Solution

The t test is used for smaller sample sizes and when the population standard deviation is not known. T test is used for testing the mean of the population with the sample or for comparing the differences of means of two samples. The t test consists the t statistic that follows student’s t distribution.

Answer 15

b.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population proportion.

Answer to Problem 1CQQ

The distribution that is used for testing a claim about given population proportion is the normal distribution.

Explanation of Solution

The z test is used for larger sample sizes and when the population standard deviation is known. z test is used for testing the proportion of the population with the sample or for comparing the differences of proportion of two samples. The z test consists the z statistic that follows normal distribution.

Answer 16

b.

Expert Solution

Answer 17

b.

Expert Solution

Answer 18

Expert Solution

Answer 19

To determine

To identify: The distribution that is used for testing a claim about given population proportion.

Answer 20

Answer to Problem 1CQQ

The distribution that is used for testing a claim about given population proportion is the normal distribution.

Answer 21

Explanation of Solution

The z test is used for larger sample sizes and when the population standard deviation is known. z test is used for testing the proportion of the population with the sample or for comparing the differences of proportion of two samples. The z test consists the z statistic that follows normal distribution.

Answer 22

c.

Expert Solution

To determine

To identify: The distribution that is used for testing a claim about given population standard deviation.

Answer to Problem 1CQQ

The distribution that is used to test a claim about population standard deviation is χ2-distribution.

Explanation of Solution

The χ2 test is used for testing the standard deviation of the given population or comparing two standard deviations. Thus, the distribution that is used to test a claim about population standard deviation is χ2-distribution.

Answer 23

c.

Expert Solution

Answer 24

c.

Expert Solution

Answer 25

Expert Solution

Answer 26

To determine

To identify: The distribution that is used for testing a claim about given population standard deviation.

Answer 27

Answer to Problem 1CQQ

The distribution that is used to test a claim about population standard deviation is χ2-distribution.

Answer 28

Explanation of Solution

The χ2 test is used for testing the standard deviation of the given population or comparing two standard deviations. Thus, the distribution that is used to test a claim about population standard deviation is χ2-distribution.