aianjie

 

3、In a multivariate normal distribution, a correlation tells the:

A) strength of the linear relationship between two of the variables.

B) overall relationship between all the variables.

C) relationship between the means and variances of the variables.

D) relationship between the means and standard deviations of the variables.

aianjie

 

The correct answer is A

This is true by definition. The correlation only applies to two variables at a time.

aianjie

 

AIM 9: Explain the difference between statistical independence and statistical dependence.

1、If X and Y are independent events, which of the following is most accurate?

A) P(X or Y) = P(X) + P(Y).

B) X and Y cannot occur together.

C) P(X | Y) = P(X).

D) P(X or Y) = (P(X)) × (P(Y)).

aianjie

 

The correct answer is C

Note that events being independent means that they have no influence on each other. It does not necessarily mean that they are mutually exclusive. Accordingly, P(X or Y) = P(X) + P(Y) ? P(X and Y). By the definition of independent events, P(X|Y) = P(X).

aianjie

 

The correct answer is A

Even though normal curves have different sizes, they all have identical shape characteristics. The kurtosis for all normal distributions is three; an excess kurtosis of three would indicate a leptokurtic distribution. The other choices are true.

aianjie

 

AIM 7: Distinguish between univariate and multivariate probability density functions.

1、Which of the following would least likely be categorized as a multivariate distribution?

A) The days a stock traded and the days it did not trade.

B) The return of a stock and the return of the DJIA.

C) The days a stock traded and the days the DJIA went up.

D) The returns of the stocks in the DJIA.

aianjie

 

The correct answer is A

The number of days a stock traded and did not trade describes only one random variable. All the other cases involve two or more random variables

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2、A multivariate distribution:

A) gives multiple probabilities for the same outcome.

B) applies only to normal distributions.

C) applies only to binomial distributions.

D) specifies the probabilities associated with groups of random variables.

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AIM 6: Discuss the implications the normal probability density function has.

1、A normal distribution can be completely described by its:

A) skewness and kurtosis.

B) mean and mode. 

C) mean and variance. 

D) standard deviation.

aianjie

 

The correct answer is C

The normal distribution can be completely described by its mean and variance.