2.7 In a given population of two-earning male-female couples, male earnings have a mean of $50,000 per

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2.7 In a given population of two-earning male-female couples, male earnings have a mean of $50,000 per year and a standard deviation of $15,000.

Female earnings have a mean of $48,000 per year and a standard deviation of $13,000. The correlation between male and female earnings for a couple is 0.90. Let C denote the combined earnings for a randomly selected couple.

a. What is the mean of C?

b. What is the covariance between male and female earnings?

c. What is the standard deviation of C?

d. Convert the answers to

(a) through

(c) from U.S. dollars ($) to euros (:).

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Introduction To Econometrics

ISBN: 9781292071367

3rd Global Edition

Authors: James Stock, Mark Watson

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