Question

Q2. The underlying principle of all statistical inference is one that uses sample statistics to learn something (that is to infer) about population parameter. Convince me that you understand this statement by writing a short paragraph describing an example in which you might use a sample estimate to infer about a population parameter. Clearly identify and define the terms: population, parameter, sample, sample-estimate and sample error in your example. Be as specific as possible. You may make up numbers. [8 points] Attempt both questions: Maximum Points: 20 Q1. You are to calculate the mean and standard deviation for the rate of returns for MET, MACY, and AMAZON. Use MONTHLY VALUES for the period August 31, 2008 through August [12 points] 31, 2018. 1. Go to http:www.yahoo.com. Select the Finance option 2. Enter your stock's symbol (MET, MACY and AMAZON) one by one. Use the symbols in parentheses below to retrieve the particular set of listings for example MACY-M 3. Under the Summary tab select "Historical Data" Enter the dates correctly under the 'set date range' for the selected stock. Make sure 4. the time period covered is August 31, 2008 through August 31, 2018. 5. Select "Historic Prices and select correct frequency (in this case monthly)". Further, click "Apply" tab. on 6. Then just below Apply tab is download the spreadsheet. Download the spreadsheet as an excel file and save it. 7. Delete all the columns except "Date" and "Adjusted close" columns for all three stocks. Keep only one column of "Date". 8. Make sure the data is in ascending order (by date) (i.e. old date on the top and most recent date on the bottom of the "Date" column) 9. Calculate the Rate of Returns (Xt - Xt-1) / Xt-1 for all three stocks Determine the means and standard deviations for the rate of returns of all three stocks. You should use Excel to do this. In Excel use the functions (Fx) Average and STDEV Average Standard Deviation MET (METLIFE, Inc.) MACY (M) AMAZON (AMZN) Which stock will you invest your money? Explain why?

Answer 1

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