MATH 201 Project 3 Instructions Based on Larson & Farber: Sections 5.2-5.3
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MATH 201 P ROJECT 3 INSTRUCTIONS Based on Larson & Farber: sections 5.2 - 5.3 Go to this website . First, set the date range to be for exactly 1 year ending with the Monday that this class started . For example, if the current term started on 04/01/2014, then use 04/01/2013 – 03/31 /201 4 . Your dates will going back exactly 1 year. Next, c lick the link on the right that says Download to Spreadsheet and then save the file to your computer. This project will only use the Closing 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 and then use those numbers and the methods you learned in sections 5.2 and 5.3 of our text book for Normal distributions to answer the questions. Complete this 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. 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. (4 points) The normal distribution is symmetric about the mean so, P(X < mean) = P(X> Mean) = 0.5, implying that the probability that the stock on that day closed at less than the mean for that year is 0.5 2. If a person bought one share of Google stock within the last year, what is the probability that the stock on that day closed at more than $ 400 ? (6 points) From the collected closing prices for a year, Mean = 550.5616 Standard Deviation = 23.8304 Sample Size = 251 Now, Z score for $400 = ସ − ହହ . ହ616 ଶ3 . 83ସ = − 6 . 318 Required probability = P(X > $400) = P(Z > - 6.318) = 1 - P(Z < - 6.318) = 1 - 0.0000 = 1 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 $45 of the mean for that year? (6 points) Z score for upper value = ହହ . ହ616 ା ସହ − ହହ . ହ616 ଶ3 . 83ସ = 1 . 89Page 2
MATH 201 P ROJECT 3 INSTRUCTIONS Based on Larson & Farber: sections 5.2 - 5.3 Go to this website . First, set the date range to be for exactly 1 year ending with the Monday that this class started . For example, if the current term started on 04/01/2014, then use 04/01/2013 – 03/31 /201 4 . Your dates will going back exactly 1 year. Next, c lick the link on the right that says Download to Spreadsheet and then save the file to your computer. This project will only use the Closing 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 and then use those numbers and the methods you learned in sections 5.2 and 5.3 of our text book for Normal distributions to answer the questions. Complete this 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. 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. (4 points) The normal distribution is symmetric about the mean so, P(X < mean) = P(X> Mean) = 0.5, implying that the probability that the stock on that day closed at less than the mean for that year is 0.5 2. If a person bought one share of Google stock within the last year, what is the probability that the stock on that day closed at more than $ 400 ? (6 points) From the collected closing prices for a year, Mean = 550.5616 Standard Deviation = 23.8304 Sample Size = 251 Now, Z score for $400 = ସ − ହହ . ହ616 ଶ3 . 83ସ = − 6 . 318 Required probability = P(X > $400) = P(Z > - 6.318) = 1 - P(Z < - 6.318) = 1 - 0.0000 = 1 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 $45 of the mean for that year? (6 points) Z score for upper value = ହହ . ହ616 ା ସହ − ହହ . ହ616 ଶ3 . 83ସ = 1 . 89