The editor of a textbook publishing company is trying to 2018 Instructor C busin

Question

The editor of a textbook publishing company is trying to 2018 Instructor C business statistics textbook. Information on prev huge successes, 20% decide whether to publish a are modest successes, 40% break even, and 30% are proposed stextbooks published indicates that 10% e before a publishing decision is made, the book will be reviewed. In the successes received favorable reviews, 70% of the moderate and 40% of the break-even books received favorable reviews, favorable reviews (a) Wha (b) If the proposed textbook received favorable reviews t proportion of textbooks receive favorable reviews? receives a favorable review, how should the editor revise the probabilities of the various outcomes to take this information into account? The increase in the price of a stock between the beginning and the end of a trading day is assumed to be a random event with the probability of 0.5S, while the decrease in the price is assumed with the probability of 0.45. (a) What is the probability that the stock will show an increase in its closing price on four days 60 out of five days? (b) During five days, what are the mean and standard deviation of the number of the days that. 12 24 110 show an increase in the stock price?

Explanation / Answer

Data given:

P(increase) = 0.55

P(decrease) = 0.45

(a)

P(stock will increase on four out of five days) = 5C4*0.554*0.451 = 0.206

(b)

This is a Binomial distribution with the parameters:

n = 5, p = 0.55

So,

Mean, m = n*p = 5*0.55 = 2.75

Standard Deviation, S = (n*p*(1-p))0.5 = 1.112

Hope this helps !

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