Econ 2310 Business Statistics: Problem Set #1 Instructions: You may use Excel and/or a calculator to...

Econ 2310

Business Statistics: Problem Set #1

Instructions: You may use Excel and/or a calculator to complete this assignment. Please show work or reference what Excel commands you used to solve the problems.

You are given the following two series on income and credit scores.

Income	FICO
39	625
27	600
57	710
31	595
34	610
50	840
38	726
62	710
43	635
49	560

Find the covariance and the correlation coefficient. (B) Do credit scores increase, decrease, stay the same, with Income? (C) Create a scatter plot with Income and credit score. What do you see?

Suppose you flip a fair coin four time. (A) What is the probability you will get all four heads? (B) All four tails? (C) Either all four heads or four tails? (D) Anything but four heads or four tails?

Crime and Punishment: In a study of pleas and prison sentences, it is found that 45% of the subjects studied were sent to prison. Among those sent to prison, 40% chose to plead guilty. Among those not sent to prison, 55% chose to plead guilty.

If one of the study subjects is randomly selected, find the probability of getting someone who was not sent to prison.
If a study subject is randomly selected and it is then found that the subject entered a guilty plea, find the probability that this person was not sent to prison.

In the BS Lottery (which stands for “Business Statistics”, of course), players choose 5 numbers out of 30. They win if they choose the same 5 numbers as our machine, which selects the numbers randomly. (A) How many permutations are possible? (B) How many combinations are possible?

Below is a table of X and its frequency. What is the mean of X? What is the standard deviation of X? What is the variance of X?

X	Frequency
2	20%
5	10%
8	15%
10	30%
12	25%

Solutions

Expert Solution

A. Find the covariance and the correlation coefficient.

	X	Y*	X*Y	X^2	Y^2
	39	625	24375	1521	390625
	27	600	16200	729	360000
	57	710	40470	3249	504100
	31	595	18445	961	354025
	34	610	20740	1156	372100
	50	840	42000	2500	705600
	38	726	27588	1444	527076
	62	710	44020	3844	504100
	43	635	27305	1849	403225
	49	560	27440	2401	313600
Sum =	430	6611	288583	19654	4434451

Credit Score increases with income.

milcah answered 8 months ago

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