Making sense of . . . LogNormal stock-price models in Exams MFE/3 and C/4 James W. Daniel Austin Actuarial Seminars http://www.actuarialseminars.com June 26, 2008 c Copyright 2007 by James W. Daniel; reproduction in whole or in part without the express permission of the author is forbidden. Foreword This document briefly describes the ideas behind the use of LogNormal models for stock prices in some of the material for Exams MFE and C of the Society of Actuaries and Exams 3 and 4 of the
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Statistic- is a number computed from a sample of data. It is characteristic of a sample. A summary measure that is computed from a sample to describe a characteristic. (Numerical summary of the population) (Ex. The proportion of females randomly selected from the registered voters of a county or the average time it takes for the first 5 students to complete an exam) Parameter- A characteristic (numerical summary) of the entire population. A number computed from the entire population usually unobservable
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|[pic] |Course Syllabus | | |College of Natural Sciences | | |MTH/233 Version 2 | |
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(B) 7 – 9 (C) 10 – 12 (D) 13 – 15 8. [1.1.3] Which of the following statements is correct? (A) The range is a measure of central tendency. (B) The median is a measure of dispersion. (C) For a symmetric distribution, the mean is equal to the median. (D) For a skewed distribution, the variance is a negative number. (E) The variance is a measure of central tendency. 9. [1.3.2] After a test, John found out that she scored in the 80th percentile. This means (A) John scored as high or higher
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variations from part to part or measure to measure. If you were to acquire metrics on features of 100 "identical" parts and plot the values relative to frequency, you would be plotting a histogram. For stable processes, the curve would most likely be a normal, or bell-shaped, curve. The analysis of the data in this fashion is called descriptive statistics. Data about the entire population is not usually studied. It is more useful to study a sample of that population and infer from the analysis what the
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regular-coffee drinkers showed a mean of 4.35 cups per day, with a standard deviation of 1.2 cups per day. A sample of 40 decaffeinated coffee drinkers showed a mean of 5.84 cups per day, with a standard deviation of 1.36 cups per day. What is your computed z-statistic? 5. You perform a hypothesis test at the .05 level of significance. Your computed p-value turns out to .042. What is your decision about the hypothesis? 6. In a distribution, the second quartile corresponds with the __________. 7. The
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Probability & Statistics for Engineers & Scientists This page intentionally left blank Probability & Statistics for Engineers & Scientists NINTH EDITION Ronald E. Walpole Roanoke College Raymond H. Myers Virginia Tech Sharon L. Myers Radford University Keying Ye University of Texas at San Antonio Prentice Hall Editor in Chief: Deirdre Lynch Acquisitions Editor: Christopher Cummings Executive Content Editor: Christine O’Brien Associate Editor: Christina Lepre Senior
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skills. Session Lecture Outline Learning Objectives 01 Basic Probability and Discrete Probability Distributions Simple Probability To develop an understanding of basic probability concepts To introduce conditional probability To use Bayes’ Theorem to revise probabilities in light of new information To provide an understanding of the basic concepts of discrete probability distributions and their characteristics To develop the concept of mathematical expectation for a discrete random
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QNT/351 Final Examination Study Guide This study guide prepares you for the Final Examination you complete in the last week of the course. It contains practice questions, which are related to each week’s objectives. Highlight the correct response, and then refer to the answer key at the end of this Study Guide to check your answers. Use each week’s questions as a self-test at the start of a new week to reflect on the previous week’s concepts. When you come across concepts that you are unfamiliar
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upgraded engines in an attempt to improve the miles per gallon (mpg) rating. A random sample of 100 trial runs of cars with the upgraded engine, travelling at 56 miles per hour on a motorway, returned an average mpg of 29.8, with a (sample) standard deviation of 6.6 mpg. Using a 5% level of significance, determine whether or not the mpg for the upgraded engine is different from the cars using the ‘old’ engine. You may assume the average mpg rating for the cars using the ‘old’ engine
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