BSTAT 3321 Test 2

According the empirical rule for normally distributed variables, 75% of the values fall within one standard deviation of the mean.

False

Central Limit Theorem Normal Distribution

N more than or equal to 30 N less than 30

Normal Distribution

N*P= more than 5, Yes N*P= less than 5, No

The exponential distribution is based entirely on one parameter called the ______ parameter.

Rate

Which of the following can be represented by a continuous random variable?

The time of a flight between Chicago and New York

A Poisson random variable counts the number of successes (occurrences of a certain event) over a given interval of time or space.

True

A risk-neutral consumer ignores risk and makes his or her decisions solely on the basis of expected value.

True

The expected value of a random variable X can be referred to as the population mean.

True

The mean of a continuous uniform distribution is simply the average of the upper and lower limits of the interval on which the distribution is defined.

True

The standard normal distribution is a normal distribution with a mean equal to zero and a standard deviation equal to one.

True

the normal distribution is ______ in the sense that the tails get closer and closer to the horizontal axis but never touch it

asymptotic

The risk of the portfolio depends not only on the individual risks of the assets but also on the ________ between the asset returns.

correlation

Exponential Formula to Find Probability

e^(-10)*(prob)

We can think of the expected value of a random variable X as ________.

the long-run average of the random variable values generated over infinitely many independent repetitions