Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please show the step clearly Question 7 (Bonus 1pt: Variance estimate) Let ri for i=1,,n be independent sample of return r, a random variable with

Please show the step clearly

image text in transcribed

Question 7 (Bonus 1pt: Variance estimate) Let ri for i=1,,n be independent sample of return r, a random variable with mean r and variance 2. Define the estimates r^=n1i=1nri,s2=n11i=1n(rir^)2. Show that E[s2]=2, i.e. s2 is an unbiased estimate of 2. Note that you should calculate E[n11i=1n(rir^)2] with r^=n1i=1nri being random. Question 7 (Bonus 1pt: Variance estimate) Let ri for i=1,,n be independent sample of return r, a random variable with mean r and variance 2. Define the estimates r^=n1i=1nri,s2=n11i=1n(rir^)2. Show that E[s2]=2, i.e. s2 is an unbiased estimate of 2. Note that you should calculate E[n11i=1n(rir^)2] with r^=n1i=1nri being random

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance Operations

Authors: Charles Finley

1st Edition

1491292423, 978-1491292426

More Books

Students also viewed these Finance questions

Question

Which metal fluorides might be glass-forming?

Answered: 1 week ago