The probability that a year will end with an “up” market when January ends with an “up” market.

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Answer 1

Question

Chapter 6, Problem 68CE

(a)

To determine

To find: The probability that a year will end with an “up” market when January ends with an “up” market.

(b)

To determine

To find: The probability that the market would be up 29 or more years and the mean number of years that the market is “up”.

(c)

To determine

To write: The conclusion regarding the “January theory.

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Many investors and financial analysts believe the Dow Jones Industrial Average (DJIA) gives a good barometer of the overall stock market. On January 31, 2006, 9 of the 30 stocks making up the DJIA increased in price (The Wall Street Journal, February 1, 2006). On the basis of this fact, a financial analyst says that maybe we can assume that 30% of the stocks traded on the New York Stock Exchange (NYSE) went up the same day. You have decided to do your own test. A sample of 78 stocks traded on the NYSE that day showed that 15 went up. You are going to complete your test to see if the proportion stocks that went up is significantly less than 0.3. You use a significance level of a = 0.001. What is the test statistic for this sample? (This is called the Z-Stat in your StatCrunch output. Report answer accurate to three decimal places.) test statistic = What is the p-value for this sample? (Report answer accurate to four decimal places.) p-value =

Many investors and financial analysts believe the Dow Jones Industrial Average (DJIA) gives a good barometer of the overall stock market. On January 31, 2006, 9 of the 30 stocks making up the DJIA increased in price (The Wall Street Journal, February 1, 2006). On the basis of this fact, a financial analyst claims we can assume that 30% of the stocks traded on the New York Stock Exchange (NYSE) went up the same day A sample of 55 stocks traded on the NYSE that day showed that 22 went up. You are conducting a study to see if the proportion of stocks that went up is is significantly more than 0.3. You use a significance level of a =0.02. What is the test statistic for this sample? (Report answer accurate to three decimal places.) test statistic= What is the p-value for this sample? (Report answer accurate to four decimal places.) p-value =

Suppose the following table shows the approximate price of a certain stock in December of each year from 2005 through 2014, as well as the 4-year moving averages for 2005 through 2007.† Complete the table by computing the remaining 4-year moving averages. (Note the peak in 2007 and the drop in subsequent years.) Round each average to the nearest dollar.

Answer 2

Question

Chapter 6, Problem 68CE

(a)

To determine

To find: The probability that a year will end with an “up” market when January ends with an “up” market.

(b)

To determine

To find: The probability that the market would be up 29 or more years and the mean number of years that the market is “up”.

(c)

To determine

To write: The conclusion regarding the “January theory.

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Answer 3

Question

Chapter 6, Problem 68CE

(a)

To determine

To find: The probability that a year will end with an “up” market when January ends with an “up” market.

(b)

To determine

To find: The probability that the market would be up 29 or more years and the mean number of years that the market is “up”.

(c)

To determine

To write: The conclusion regarding the “January theory.

Expert Solution & Answer

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Answer 4

Question

Chapter 6, Problem 68CE

(a)

To determine

To find: The probability that a year will end with an “up” market when January ends with an “up” market.

(b)

To determine

To find: The probability that the market would be up 29 or more years and the mean number of years that the market is “up”.

(c)

To determine

To write: The conclusion regarding the “January theory.

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 68CE

(a)

To determine

To find: The probability that a year will end with an “up” market when January ends with an “up” market.

(b)

To determine

To find: The probability that the market would be up 29 or more years and the mean number of years that the market is “up”.

(c)

To determine

To write: The conclusion regarding the “January theory.

Answer 6

Chapter 6, Problem 68CE

(a)

To determine

To find: The probability that a year will end with an “up” market when January ends with an “up” market.

Answer 7

Chapter 6, Problem 68CE

(a)

To determine

To find: The probability that a year will end with an “up” market when January ends with an “up” market.

Answer 8

(b)

To determine

To find: The probability that the market would be up 29 or more years and the mean number of years that the market is “up”.

Answer 9

(b)

To determine

To find: The probability that the market would be up 29 or more years and the mean number of years that the market is “up”.

Answer 10

(c)

To determine

To write: The conclusion regarding the “January theory.

Answer 11

(c)

To determine

To write: The conclusion regarding the “January theory.

Answer 12

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Answer 13

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Answer 14

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Answer 15

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The probability that a year will end with an “up” market when January ends with an “up” market.

To find: The probability that a year will end with an “up” market when January ends with an “up” market.

To find: The probability that the market would be up 29 or more years and the mean number of years that the market is “up”.

To write: The conclusion regarding the “January theory.

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Chapter 6 Solutions