Suppose the regression equation output is

Coefficient Standard error

intercept 39 3

Price 4 2

Price2 -0.2 1

So the regression equation is

Profit = 39 + 4 price-0.2 price2

Predict profit if the price is $8

A link to notes that are NOT examinable

Link to a file that finds the linear and nonlinearregression equations of best fit

2.Suppose the regression equation output is

Coefficient Standard error

intercept 37 3

Advertising 4 2

Advertising2 -0.3 1

So the regression equation is

Profit = 37 + 4 Advertising-0.3 Advertisng2

Predict profit if the Advertising is $9

3.Suppose the return on a diverse investment is normally distributedhas a mean of 4.2 and standard deviation 5.3.

What is the 75th percentile of return ?

Note that 75% of returns are below the 75th percentile, so if return is normally distributed it must

be abovethe mean, Using the properties of the normal distribution the 75th percentile is 0.674 standard deviations ABOVE the mean

4.Suppose the return on a diverse investment is normally distributedhas a mean of 5.6 and standard deviation 9.4.

What is the 25th percentile of return ?

Note that 25% of returns are below the 25th percentile, so if return is normally distributed it must

be below the mean, Using the properties of the normal distribution the 25th percentile is -0.674 standard deviations fromthe mean (so it is 0.674 standard deviations below the mean)

5.Suppose the return on a diverse investment is normally distributedhas a mean of 7.2 and standard deviation 2.5.

What is the 50th percentile of return ?

Note that based on the shape of the normal distribution the 50th percentile is the mean.

(the 50th percentile is clearly z=0, so it is 0 standard deviations from the mean)

6.Consider the following sample

6.1, 16, 21, 30.9, 1421.5

Be careful with this question select every correct answer.

optional:For a long set of notes about why assumptions are important in hypothesis testing

click here

a.

The average of the sample is 300.7

b.

themedian of the sample (the 50th percentile) is25.0

c.

The average of the sample is 299.1

d.

The mean is not close to the median so it isreasonable to assume the data is normally distributed

e.

The mean is not close to the median so it is NOT reasonable to assume the data is normally distributed

f.

themedian of the sample (the 50th percentile) is21.00

7.It is often said that the return from investing in gold is negatively correlated with the return of share price

What does this tell you?

optional click here for an explanation of investing

Select one:

a.

When the profit from investing in shares is low the profit from investing in gold is low

b.

When the profit from investing in shares is low the profit from investing in gold is high

Clear my choice

8.If the return from investing in coal mining company A

is positively corelated to the

return from investing in coal mining company B

What does this tell you

optional click here for an explanation of investing

Select one:

a.

When the profit from investing incompany Ais low the profit from investing in company B is high

b.

When the profit from investing incompany Ais low the profit from investing in company B is low

Clear my choice