30 Questions
What is the mean of the Poisson distribution?
λ
What is the formula to calculate the variance of the Poisson distribution?
E[(X − μ)²] = λ
What is the probability of X = 2 if λ = 0.50?
0.0758
What is the standard deviation of the Poisson distribution?
√λ
What is the purpose of the Poisson tables?
To find the probabilities of different values of X
What is the formula to calculate the probability of X?
e^(-λ) (λ^X) / X!
What is the expected return of the portfolio composed of 40% of Investment X and 60% of Investment Y?
77
What is the standard deviation of the portfolio composed of 40% of Investment X and 60% of Investment Y?
133.04
What is the relationship between the expected returns of Investments X and Y?
μx < μy
What is the relationship between the standard deviations of Investments X and Y?
σx < σy
What is the correlation coefficient (ρ) if there is a perfect positive linear dependency between X and Y?
1
What is the meaning of ρ = 0?
There is no linear relationship between X and Y
What does the covariance of 8250 between Investments X and Y indicate?
The investments are positively correlated
If X is the price for stock A and Y is the price for stock B, what is the market value, W, for the portfolio?
W = aX + bY
What statistical concept was reviewed in Chapter 4?
All of the above
What is the formula for the variance of W (σ²W)?
σ²W = a²σ²X + b²σ²Y + 2abCov(X, Y)
What is the meaning of ρ < 0?
There is a perfect negative linear relationship between X and Y
What is the formula for the mean value of W (μW)?
μW = E[W] = E[aX + bY]
What is a random variable?
A numerical value from a random experiment
What type of random variable can only take on a countable number of values?
Discrete random variable
In a random experiment, what does the number of times 4 comes up represent?
A discrete random variable
What is the chapter goal of interpreting the mean and standard deviation for a discrete random variable?
To understand the mean and standard deviation for a discrete random variable
What is the probability distribution used to find probabilities in an experiment where a coin is tossed 5 times?
Binomial distribution
What is the name of the distribution used to find probabilities when there are a fixed number of trials and the probability of success remains constant?
Binomial distribution
What is the mean of a Bernoulli distribution?
P
What is the formula for the number of sequences with x successes in n independent trials?
n! / (x! * (n - x)!)
What is a characteristic of a binomial probability distribution?
Two mutually exclusive and collectively exhaustive categories
What is the formula for the variance of a Bernoulli distribution?
P(1 - P)
What is a requirement for a binomial probability distribution?
The probability of success is constant for each observation
What is the formula for the probability of success in a Bernoulli distribution?
P
Learn about discrete random variables and probability distributions in this chapter. Understand the mean and standard deviation, binomial probability distribution, and when to apply it. Also, explore the hypergeometric and Poisson distributions.
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