Statistics (13th Edition)
13th Edition
ISBN: 9780134080215
Author: James T. McClave, Terry T Sincich
Publisher: PEARSON
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Chapter 8.6, Problem 76LM
a.
To determine
State whether the value of
b.
To determine
Test the hypothesis that the population proportion is 0.75 using large-sample z-test at the level of significance
Compare the result obtained using the test with the result states in Part (a).
c.
To determine
Find the observed significance level, and also interpret the value.
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We consider the one-period model studied in class as an example. Namely, we assumethat the current stock price is S0 = 10. At time T, the stock has either moved up toSt = 12 (with probability p = 0.6) or down towards St = 8 (with probability 1−p = 0.4).We consider a call option on this stock with maturity T and strike price K = 10. Theinterest rate on the money market is zero.As in class, we assume that you, as a customer, are willing to buy the call option on100 shares of stock for $120. The investor, who sold you the option, can adopt one of thefollowing strategies: Strategy 1: (seen in class) Buy 50 shares of stock and borrow $380. Strategy 2: Buy 55 shares of stock and borrow $430. Strategy 3: Buy 60 shares of stock and borrow $480. Strategy 4: Buy 40 shares of stock and borrow $280.(a) For each of strategies 2-4, describe the value of the investor’s portfolio at time 0,and at time T for each possible movement of the stock.(b) For each of strategies 2-4, does the investor have…
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Chapter 8 Solutions
Statistics (13th Edition)
Ch. 8.2 - Prob. 1UPCh. 8.2 - 7.2 Which element of a test of hypothesis is used...Ch. 8.2 - 7.3 What is the level of significance of a test of...Ch. 8.2 - 7.4 What is the difference between Type I and Type...Ch. 8.2 - Prob. 5UPCh. 8.2 - We (generally) reject the null hypothesis when the...Ch. 8.2 - 7.7 If you test a hypothesis and reject the null...Ch. 8.2 - Consider a test of H0: μ = 4. In each of the...Ch. 8.2 - 7.8 For each of the following rejection regions,...Ch. 8.2 - Use the applet Hypothesis Test for a Mean to...
Ch. 8.2 - Walking to improve health. In a study...Ch. 8.2 - Americans’ favorite sport. The Harris Poll (Dec....Ch. 8.2 - Infants’ listening time. Researchers writing in...Ch. 8.2 - 7.10 Play Golf America program. The Professional...Ch. 8.2 - Effectiveness of online courses. The Sloan Survey...Ch. 8.2 - DNA-reading tool for quick identification of...Ch. 8.2 - Calories in school lunches. The U.S. Department of...Ch. 8.2 - 7.12 A border protection avatar. The National...Ch. 8.2 - Virtual reality hypnosis for pain. The...Ch. 8.2 - Mercury levels in wading birds. According to a...Ch. 8.2 - 7.17 Jury trial outcomes. Sometimes, the outcome...Ch. 8.2 - Prob. 21ACACh. 8.3 - 7.19 Consider the test of H0: μ = 7. For each of...Ch. 8.3 - 7.20 If a hypothesis test were conducted using α =...Ch. 8.3 - 7.21 For each α and observed significance level...Ch. 8.3 - 7.22 In a test of the hypothesis H0: μ = 50 versus...Ch. 8.3 - 7.23 In a test of H0: μ = 100 against Ha: μ > 100...Ch. 8.3 - Prob. 27LMCh. 8.3 - Prob. 28LMCh. 8.3 - Prob. 29LMCh. 8.3 - 7.27 An analyst tested the null hypothesis that μ...Ch. 8.4 - What conditions are required for a valid...Ch. 8.4 - For what values of the test statistic do you...Ch. 8.4 - 7.30 A random sample of 100 observations from a...Ch. 8.4 - 7.31 A random sample of 64 observations produced...Ch. 8.4 - Suppose you are interested in conducting the...Ch. 8.4 - Use the applet Hypotheses Test for a Mean to...Ch. 8.4 - Use the applet Hypotheses Test for a Mean to...Ch. 8.4 - Use the applet Hypotheses Test for a Mean to...Ch. 8.4 - Stability of compounds in new drugs. Refer to the...Ch. 8.4 - Corporate sustainability of CPA firms. Refer to...Ch. 8.4 - Speeding and young drivers. Psychologists...Ch. 8.4 - Emotional empathy in young adults. According to a...Ch. 8.4 - Prob. 40ACBCh. 8.4 - 7.35 Facial structure of CEOs. Refer to the...Ch. 8.4 - 7.33 Packaging of a children’s health food. Can...Ch. 8.4 - Prob. 43ACICh. 8.4 - Birth order and IQ. An international team of...Ch. 8.4 - Prob. 45ACICh. 8.4 - Cooling method for gas turbines. A popular cooling...Ch. 8.4 - Irrelevant speech effects. Refer to the Acoustical...Ch. 8.4 - 7.39 Time required to complete a task. When a...Ch. 8.4 -
Social interaction of mental patients. The...Ch. 8.4 - Instructing English-as-a-first-language learners....Ch. 8.5 - In what ways are the distributions of the...Ch. 8.5 - Under what circumstances should you use the...Ch. 8.5 - For each of the following rejection regions,...Ch. 8.5 - For each of the rejection regions defined in...Ch. 8.5 - A random sample of n observations is selected from...Ch. 8.5 - The following sample of six measurements was...Ch. 8.5 - 7.50 A sample of five measurements, randomly...Ch. 8.5 - Prob. 58LMCh. 8.5 - Prob. 59ACBCh. 8.5 - Prob. 60ACBCh. 8.5 - Dental anxiety study. Refer to the BMC Oral...Ch. 8.5 - Crab spiders hiding on flowers. Refer to...Ch. 8.5 - Prob. 63ACBCh. 8.5 - Radon exposure in Egyptian tombs. Refer to the...Ch. 8.5 - Prob. 65ACICh. 8.5 - Pitch memory of amusiacs. Amusia is a congenital...Ch. 8.5 - Free recall memory strategy. Psychologists who...Ch. 8.5 - Prob. 68ACICh. 8.5 - Prob. 69ACICh. 8.5 - Prob. 70ACICh. 8.5 - Prob. 71ACICh. 8.5 - Prob. 72ACACh. 8.6 - What type of data, quantitative or qualitative, is...Ch. 8.6 - What conditions are required for a valid...Ch. 8.6 - For the binomial sample sizes and...Ch. 8.6 - Suppose a random sample of 100 observations from a...Ch. 8.6 - Suppose the sample in Exercise 8.76 has produced ...Ch. 8.6 - A random sample of 100 observations is selected...Ch. 8.6 - Refer to Exercise 7.58 (p. 342). in which 50...Ch. 8.6 - Use the applet Hypotheses Test for a Proportion to...Ch. 8.6 - Use the applet Hypotheses Test for a Proportion to...Ch. 8.6 - Paying for music downloads. If you use the...Ch. 8.6 - Underwater sound-locating ability of alligators....Ch. 8.6 - Gummy bears: red or yellow? Chance (Winter 2010)...Ch. 8.6 - 7.76 Dehorning of dairy calves. For safety...Ch. 8.6 - Teenagers’ use of emoticons in school writing....Ch. 8.6 - 7.71 TV subscription streaming. “Streaming” of...Ch. 8.6 - Underwater acoustic communication. Refer to...Ch. 8.6 - Identifying organisms using a computer. National...Ch. 8.6 - 7.75 Organic-certified coffee. Coffee markets that...Ch. 8.6 - Detection of motorcycles while driving. The...Ch. 8.6 - Defensibility of a landscape. Settlers often chose...Ch. 8.6 - Astronomy students and the Big Bang Theory....Ch. 8.6 - Prob. 92ACACh. 8.6 - Prob. 93ACACh. 8.7 - Define the power of the test.
Ch. 8.7 - Prob. 95UPCh. 8.7 - Prob. 96UPCh. 8.7 - Prob. 97LMCh. 8.7 - Refer to Exercise 8.97.
If μ = 1,040 instead of...Ch. 8.7 - Prob. 99LMCh. 8.7 - Refer to Exercise 8.99.
Find β for each of the...Ch. 8.7 - Prob. 101LMCh. 8.7 - Prob. 102ACICh. 8.7 - Prob. 103ACICh. 8.7 - Gas mileage of the Honda Civic. According to the...Ch. 8.7 - Prob. 105ACICh. 8.7 - Prob. 106ACICh. 8.7 - Prob. 107ACICh. 8.8 - What sampling distribution is used to make...Ch. 8.8 - Prob. 109UPCh. 8.8 - Prob. 110UPCh. 8.8 - Prob. 111UPCh. 8.8 - Prob. 112LMCh. 8.8 - Prob. 113LMCh. 8.8 - Prob. 114LMCh. 8.8 - Prob. 115LMCh. 8.8 - Prob. 116LMCh. 8.8 - Prob. 117ACBCh. 8.8 - Prob. 118ACBCh. 8.8 - Characteristics of a rockfall. Refer to the...Ch. 8.8 - Prob. 120ACBCh. 8.8 - Prob. 121ACBCh. 8.8 - Oil content of fried sweet potato chips. Refer to...Ch. 8.8 - Prob. 123ACICh. 8.8 - Prob. 124ACICh. 8.8 - Prob. 125ACICh. 8.8 - Prob. 126ACICh. 8.8 - Prob. 127ACICh. 8.8 - Motivation of drug dealers. Refer to the Applied...Ch. 8 - Prob. 129UPCh. 8 - Prob. 130UPCh. 8 - Prob. 131UPCh. 8 - Prob. 132UPCh. 8 - Prob. 133UPCh. 8 - Prob. 134LMCh. 8 -
A random sample of n = 200 observations from a...Ch. 8 - Prob. 136LMCh. 8 - Prob. 137LMCh. 8 - Prob. 138LMCh. 8 - Prob. 139ACBCh. 8 - Prob. 140ACBCh. 8 - Prob. 141ACBCh. 8 - Prob. 142ACBCh. 8 - Accounting and Machiavellianism. Behavioral...Ch. 8 - Prob. 144ACBCh. 8 - Prob. 145ACBCh. 8 - Prob. 146ACBCh. 8 - Prob. 147ACBCh. 8 - Prob. 148ACBCh. 8 - Prob. 149ACBCh. 8 - Prob. 150ACICh. 8 - Prob. 151ACICh. 8 - Prob. 152ACICh. 8 - Prob. 153ACICh. 8 - Prob. 154ACICh. 8 - Single-parent families. Examining data collected...Ch. 8 - Prob. 156ACICh. 8 - Prob. 157ACICh. 8 - Prob. 158ACICh. 8 - Prob. 159ACICh. 8 - Prob. 160ACICh. 8 - Prob. 161ACICh. 8 - Prob. 162ACICh. 8 - Prob. 163ACICh. 8 - Prob. 164ACICh. 8 - Prob. 165ACACh. 8 - Parents who condone spanking. In Exercise 4.138...Ch. 8 - Prob. 167ACACh. 8 - Prob. 168ACACh. 8 - Prob. 169CTCCh. 8 - Prob. 170CTC
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