## Questions and Answers

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?

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What is the purpose of the Poisson tables?

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What is the formula to calculate the probability of X?

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What is the expected return of the portfolio composed of 40% of Investment X and 60% of Investment Y?

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What is the standard deviation of the portfolio composed of 40% of Investment X and 60% of Investment Y?

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What is the relationship between the expected returns of Investments X and Y?

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What is the relationship between the standard deviations of Investments X and Y?

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What is the correlation coefficient (ρ) if there is a perfect positive linear dependency between X and Y?

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What is the meaning of ρ = 0?

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What does the covariance of 8250 between Investments X and Y indicate?

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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?

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What statistical concept was reviewed in Chapter 4?

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What is the formula for the variance of W (σ²W)?

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What is the meaning of ρ < 0?

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What is the formula for the mean value of W (μW)?

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What is a random variable?

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What type of random variable can only take on a countable number of values?

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In a random experiment, what does the number of times 4 comes up represent?

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What is the chapter goal of interpreting the mean and standard deviation for a discrete random variable?

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What is the probability distribution used to find probabilities in an experiment where a coin is tossed 5 times?

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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?

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What is the mean of a Bernoulli distribution?

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What is the formula for the number of sequences with x successes in n independent trials?

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What is a characteristic of a binomial probability distribution?

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What is the formula for the variance of a Bernoulli distribution?

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What is a requirement for a binomial probability distribution?

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What is the formula for the probability of success in a Bernoulli distribution?

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