In: Statistics and Probability
Visit the NASDAQ historical prices weblink. First, set the date
range to be for exactly 1...
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 April
1, 2018, then use April 1, 2017 – March 31, 2018. (Do NOT use these
dates. Use the dates that match up with the current term.) 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 the 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.
- a) Submit a copy of your dataset along with a file that
contains your answers to all of the following questions.
b) What the mean and Standard
Deviation (SD) of the Close column in your data set?
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.
- 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 $950?
- 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? (between 50 below and 50
above the mean)
- 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 $800 per share. Would this be considered unusal? Use the
definition of unusual from the course textbook that is measured as
a number of standard deviations
- 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
- 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 like 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.