
Concept explainers
(a)
To find out what is the
(a)

Answer to Problem 12RE
The correlation between the scores of Monday and Friday is
Explanation of Solution
It is given in the question that researchers gave students enrolled in a section of basic Spanish a set of vocabulary words to memorize. Thus, the tests were conducted on Monday and Friday and the scores are given in the table given in the question as:
Friday | Monday |
42 | 36 |
44 | 44 |
45 | 46 |
48 | 38 |
44 | 40 |
43 | 38 |
41 | 37 |
35 | 31 |
43 | 32 |
48 | 37 |
43 | 41 |
45 | 32 |
47 | 44 |
50 | 47 |
34 | 34 |
38 | 31 |
43 | 40 |
39 | 41 |
46 | 32 |
37 | 36 |
40 | 31 |
41 | 32 |
48 | 39 |
37 | 31 |
36 | 41 |
Thus, to find the correlation between the scores of Monday and Friday we will use the Excel
Thus, the result will be as:
Correlation= | =CORREL(Q45:Q69,R45:R69) |
Correlation= | 0.473 |
Thus, the correlation between the scores of Monday and Friday is
(b)
To find out what does a
(b)

Explanation of Solution
It is given in the question that researchers gave students enrolled in a section of basic Spanish a set of vocabulary words to memorize. Thus, the tests were conducted on Monday and Friday and the scores are given in the table given in the question. Thus, the scatterplot show about the association between the scores that the better they got on Friday they would also probably have a higher score on Monday too. The scatterplot is as follows:
(c)
To find out what does it mean for a student to have a positive residual.
(c)

Explanation of Solution
It is given in the question that researchers gave students enrolled in a section of basic Spanish a set of vocabulary words to memorize. Thus, the tests were conducted on Monday and Friday and the scores are given in the table given in the question. Thus, for a student to have a positive residual means that the student did better on Monday test than predicted by the model.
(d)
To explain what would you predict about a student whose Friday score was one standard deviation below average.
(d)

Explanation of Solution
It is given in the question that researchers gave students enrolled in a section of basic Spanish a set of vocabulary words to memorize. Thus, the tests were conducted on Monday and Friday and the scores are given in the table given in the question. Thus, we predict about a student whose Friday score was one standard deviation below average that they would probably have a Monday score one standard deviation below average.
(e)
To write the equation of the regression line.
(e)

Answer to Problem 12RE
Explanation of Solution
It is given in the question that researchers gave students enrolled in a section of basic Spanish a set of vocabulary words to memorize. Thus, the tests were conducted on Monday and Friday and the scores are given in the table given in the question. Thus, to find the equation of the regression line we will select the data in Excel and then go to the insert tab and select the scatterplot from it. Then when the scatterplot is plotted we will go to the quick layout option to select the layout of the equation line and the regression line will appear on the scatterplot as:
Thus, the regression line is as:
(f)
To predict the Monday score of a student who earned a
(f)

Answer to Problem 12RE
The Monday score is
Explanation of Solution
It is given in the question that researchers gave students enrolled in a section of basic Spanish a set of vocabulary words to memorize. Thus, the tests were conducted on Monday and Friday and the scores are given in the table given in the question. And the regression line is as:
Thus, to predict the Monday score of a student who earned a
Chapter PII Solutions
Stats: Modeling the World Nasta Edition Grades 9-12
Additional Math Textbook Solutions
Basic Business Statistics, Student Value Edition
Introductory Statistics
A Problem Solving Approach To Mathematics For Elementary School Teachers (13th Edition)
A First Course in Probability (10th Edition)
Elementary Statistics: Picturing the World (7th Edition)
Algebra and Trigonometry (6th Edition)
- 1 No. 2 3 4 Binomial Prob. X n P Answer 5 6 4 7 8 9 10 12345678 8 3 4 2 2552 10 0.7 0.233 0.3 0.132 7 0.6 0.290 20 0.02 0.053 150 1000 0.15 0.035 8 7 10 0.7 0.383 11 9 3 5 0.3 0.132 12 10 4 7 0.6 0.290 13 Poisson Probability 14 X lambda Answer 18 4 19 20 21 22 23 9 15 16 17 3 1234567829 3 2 0.180 2 1.5 0.251 12 10 0.095 5 3 0.101 7 4 0.060 3 2 0.180 2 1.5 0.251 24 10 12 10 0.095arrow_forwardstep by step on Microssoft on how to put this in excel and the answers please Find binomial probability if: x = 8, n = 10, p = 0.7 x= 3, n=5, p = 0.3 x = 4, n=7, p = 0.6 Quality Control: A factory produces light bulbs with a 2% defect rate. If a random sample of 20 bulbs is tested, what is the probability that exactly 2 bulbs are defective? (hint: p=2% or 0.02; x =2, n=20; use the same logic for the following problems) Marketing Campaign: A marketing company sends out 1,000 promotional emails. The probability of any email being opened is 0.15. What is the probability that exactly 150 emails will be opened? (hint: total emails or n=1000, x =150) Customer Satisfaction: A survey shows that 70% of customers are satisfied with a new product. Out of 10 randomly selected customers, what is the probability that at least 8 are satisfied? (hint: One of the keyword in this question is “at least 8”, it is not “exactly 8”, the correct formula for this should be = 1- (binom.dist(7, 10, 0.7,…arrow_forwardKate, Luke, Mary and Nancy are sharing a cake. The cake had previously been divided into four slices (s1, s2, s3 and s4). What is an example of fair division of the cake S1 S2 S3 S4 Kate $4.00 $6.00 $6.00 $4.00 Luke $5.30 $5.00 $5.25 $5.45 Mary $4.25 $4.50 $3.50 $3.75 Nancy $6.00 $4.00 $4.00 $6.00arrow_forward
- Faye cuts the sandwich in two fair shares to her. What is the first half s1arrow_forwardQuestion 2. An American option on a stock has payoff given by F = f(St) when it is exercised at time t. We know that the function f is convex. A person claims that because of convexity, it is optimal to exercise at expiration T. Do you agree with them?arrow_forwardQuestion 4. We consider a CRR model with So == 5 and up and down factors u = 1.03 and d = 0.96. We consider the interest rate r = 4% (over one period). Is this a suitable CRR model? (Explain your answer.)arrow_forward
- Question 3. We want to price a put option with strike price K and expiration T. Two financial advisors estimate the parameters with two different statistical methods: they obtain the same return rate μ, the same volatility σ, but the first advisor has interest r₁ and the second advisor has interest rate r2 (r1>r2). They both use a CRR model with the same number of periods to price the option. Which advisor will get the larger price? (Explain your answer.)arrow_forwardQuestion 5. We consider a put option with strike price K and expiration T. This option is priced using a 1-period CRR model. We consider r > 0, and σ > 0 very large. What is the approximate price of the option? In other words, what is the limit of the price of the option as σ∞. (Briefly justify your answer.)arrow_forwardQuestion 6. You collect daily data for the stock of a company Z over the past 4 months (i.e. 80 days) and calculate the log-returns (yk)/(-1. You want to build a CRR model for the evolution of the stock. The expected value and standard deviation of the log-returns are y = 0.06 and Sy 0.1. The money market interest rate is r = 0.04. Determine the risk-neutral probability of the model.arrow_forward
- Several markets (Japan, Switzerland) introduced negative interest rates on their money market. In this problem, we will consider an annual interest rate r < 0. We consider a stock modeled by an N-period CRR model where each period is 1 year (At = 1) and the up and down factors are u and d. (a) We consider an American put option with strike price K and expiration T. Prove that if <0, the optimal strategy is to wait until expiration T to exercise.arrow_forwardWe consider an N-period CRR model where each period is 1 year (At = 1), the up factor is u = 0.1, the down factor is d = e−0.3 and r = 0. We remind you that in the CRR model, the stock price at time tn is modeled (under P) by Sta = So exp (μtn + σ√AtZn), where (Zn) is a simple symmetric random walk. (a) Find the parameters μ and σ for the CRR model described above. (b) Find P Ste So 55/50 € > 1). StN (c) Find lim P 804-N (d) Determine q. (You can use e- 1 x.) Ste (e) Find Q So (f) Find lim Q 004-N StN Soarrow_forwardIn this problem, we consider a 3-period stock market model with evolution given in Fig. 1 below. Each period corresponds to one year. The interest rate is r = 0%. 16 22 28 12 16 12 8 4 2 time Figure 1: Stock evolution for Problem 1. (a) A colleague notices that in the model above, a movement up-down leads to the same value as a movement down-up. He concludes that the model is a CRR model. Is your colleague correct? (Explain your answer.) (b) We consider a European put with strike price K = 10 and expiration T = 3 years. Find the price of this option at time 0. Provide the replicating portfolio for the first period. (c) In addition to the call above, we also consider a European call with strike price K = 10 and expiration T = 3 years. Which one has the highest price? (It is not necessary to provide the price of the call.) (d) We now assume a yearly interest rate r = 25%. We consider a Bermudan put option with strike price K = 10. It works like a standard put, but you can exercise it…arrow_forward
- MATLAB: An Introduction with ApplicationsStatisticsISBN:9781119256830Author:Amos GilatPublisher:John Wiley & Sons IncProbability and Statistics for Engineering and th...StatisticsISBN:9781305251809Author:Jay L. DevorePublisher:Cengage LearningStatistics for The Behavioral Sciences (MindTap C...StatisticsISBN:9781305504912Author:Frederick J Gravetter, Larry B. WallnauPublisher:Cengage Learning
- Elementary Statistics: Picturing the World (7th E...StatisticsISBN:9780134683416Author:Ron Larson, Betsy FarberPublisher:PEARSONThe Basic Practice of StatisticsStatisticsISBN:9781319042578Author:David S. Moore, William I. Notz, Michael A. FlignerPublisher:W. H. FreemanIntroduction to the Practice of StatisticsStatisticsISBN:9781319013387Author:David S. Moore, George P. McCabe, Bruce A. CraigPublisher:W. H. Freeman





