aianjie

 

If you know that X is equal to 1, the probability that Y is equal to 2 is closest to:

A) 0.50

B) 0.15

C) 0.38

D) 0.30

aianjie

 

The correct answer is C

p(Y = 2|X = 1) = 0.15/(0.05 + 0.15 + 0.20) = 0.375.

aianjie

 

The variance of Y is closest to:

A) 2.27

B) 0.61

C) 1.51

D) 0.76

aianjie

 

The correct answer is D

p(Y = 1) = 0.05 + 0.15 = 0.20, p(Y = 2) = 0.15 + 0.15 = 0.30, and p(Y = 3) = 0.20 + 0.30 = 0.50. Thus, the mean of Y is equal to μ = 0.20(1) + 0.30(2) + 0.50(3) = 2.3, and the variance is calculated as 0.20(1 – 2.3)2 + 0.30(2 – 2.3)2 + 0.50(3 – 2.3)2 = 0.61.

aianjie

 

4、The characteristic function of the product of independent random variables is equal to the:

A) square root of the product of the individual characteristic functions.

B) exponential root of the product of the individual characteristic functions.

C) product of the individual characteristic functions.

D) sum of the individual characteristic functions.

aianjie

 

The correct answer is C

The characteristic function of the sum of independent random variables is equal to the product of the individual characteristic functions. E(XY) = E(X) × E(Y).

aianjie

 

AIM 5: List and discuss the properties of variance.

1、Use the following probability distribution to calculate the standard deviation for the portfolio.

State of the Economy	Probability	Return on Portfolio
Boom	0.30	15%
Bust	0.70	3%

A)  6.0%.

B)  6.5%.

C)  7.0%.

D)  5.5%.

aianjie

 

The correct answer is D

[0.30 × (0.15 ? 0.066)2 + 0.70 × (0.03 ? 0.066)2]1/2 = 5.5%.

aianjie

The correct answer is A

p(Y=1)=0.05+0.05+0.15=0.25, p(Y=2)=0.05+0.10+0.15=0.30, and p(Y=3)=0.10+0.15+0.20=0.45, so E(Y)=0.25(1)+0.30(2)+0.45(3)=2.20.

aianjie

If you know that Y is equal to 2, the probability that X is equal to 1 is closest to:

A) 0.05.

B) 0.25.

C) 0.17.

D) 0.20.