stock prices has a 0.6 probability of rising in any year. The change in the value of the index in any given year is not affected by whether it rose or fell in earlier years. You plan to record the value for the index in each of the next eight years. Let the random variable, X, represent the number of years (out of the next 8 years) in which the value of the index rises. a) If X is distributed according to the binomial probability distribution, what are the values for n and p?.. b) What are the possible values X can take, or equal? i QMETH 201, Homework 3 c) Calculate the probability X = 3
stock prices has a 0.6 probability of rising in any year. The change in the value of the index in any given year is not affected by whether it rose or fell in earlier years. You plan to record the value for the index in each of the next eight years. Let the random variable, X, represent the number of years (out of the next 8 years) in which the value of the index rises. a) If X is distributed according to the binomial probability distribution, what are the values for n and p?.. b) What are the possible values X can take, or equal? i QMETH 201, Homework 3 c) Calculate the probability X = 3
Chapter8: Sequences, Series,and Probability
Section8.7: Probability
Problem 50E: Flexible Work Hours In a recent survey, people were asked whether they would prefer to work flexible...
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Transcribed Image Text:A believer in the "random walk" theory of stock markets thinks the value of an index of
stock prices has a 0.6 probability of rising in any year. The change in the value of the index
in any given year is not affected by whether it rose or fell in earlier years. You plan to
record the value for the index in each of the next eight years. Let the random variable, X,
represent the number of years (out of the next 8 years) in which the value of the index
rises.
a) If X is distributed according to the binomial probability distribution, what are the
values for n and p?o
b) What are the possible values X can take, or equal?
QMETH 201, Homework 3
c) Calculate the probability X = 30
d) Calculate the expected value for X.
e) Calculate the standard deviation for X.
4
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