Question

Visit the NASDAQ historical prices weblink. First, set the date range to be for exactly 1 year ending on the Monday that this course started. For example, if the current term started on 3.18.2018-3.17.2019. Do this by clicking on the blue dates after “Time Period”. Next, click the “Apply” button. Next, click the link on the right side of the page that says “Download Data” to save the file to your computer.

This project will only use Close values. Assume that the closing prices of the stock form a normally distributed data set. This means that you need to use Excel to find the mean and standard deviation. Then, use those numbers and the methods you learned in sections 6.1-6.3 of the course textbook for normal distributions to answer the questions. Do NOT count the number of data points.

Complete this portion of the assignment within a single Excel file. Show your work or explain how you obtained each of your answers. Answers with no work and no explanation will receive no credit.

1. a) Submit a copy of your dataset along with a file that contains your answers to all of the following questions. – COPIED SUBMITTED

b) What is the mean and Standard Deviation (SD) of the Close column in your data set? –

• Standard Deviation – 1112.1782
• Mean –    67.239

c) If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed at less than the mean for that year? Hint: You do not want to calculate the mean to answer this one. The probability would be the same for any normal distribution. (5 points) – PROBABILITY IS .5. This is because there is a 50/50 chance that the stock is above or below the mean. – (1112.2-1112.2)/67.4 = 0(0.5000) 1-.5000 = 0.5

2. If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed at more than $1150? (5 points):

3. If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed within $50 of the mean for that year? (Hint: this means the probability of being between 50 below and 50 above the mean)
4. If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed at less than $900 per share? Would this be considered unusual? Use the definition of unusual from the course textbook that is measured as a number of standard deviations
5. At what prices would Google have to close in order for it to be considered statistically unusual? You will have a low and high value. Use the definition of unusual from the course textbook that is measured as a number of standard deviations.
6. What are Quartile 1, Quartile 2, and Quartile 3 in this data set? Use Excel to find these values. This is the only question that you must answer without using anything about the normal distribution.

Is the normality assumption that was made at the beginning valid? Why or why not? Hint: Does this distribution have the properties of a normal distribution as described in the course textbook? Real data sets are never perfect, however, it should be close. One option would be to construct a histogram as you did in Project 1 to see if it has the right shape. Something in the range of 10 to 12 classes is a good number.

Answer 1

First download data from NASDAQ historical prices weblink.

The CSV file contains data from column A through G.

Delete last two columns because we need closing price only.

In excel, apply these formulae:

For histogram, select all close values.

Click on Insert->Recommended charts and click on Histogram.

The output is shown below: