project 3

Project 3 instructions

 

Based on Larson & Farber: sections 5.2-5.3

 

Go to

this website

. Click the link on the right that says Download to Spreadsheet. Set the date range according to the dates given in the Project 3 opening announcement posted by your instructor. Your dates will going back exactly 1 year. Assume that the closing prices of the stock form a normally distributed data set. Do not manually count values in the data set, but use the ideas found in sections 5.2–5.3. Complete this assignment within a single Excel file. Show your work where possible.

 

1.     
If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed at less than the mean for that year? Hint: Use the Empirical Rule; do not calculate the mean. The answer is easy.

2.     
If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed at more than $500? Hint: Use Excel to find the mean and standard deviation. Then find the z score.

3.     
If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed within $45 of the mean for that year? Hint: Find two z scores and use the Standard Normal Table.

4.     
Suppose a person within the last year claimed to have bought Google stock at closing at $700 per share. Would such a price be considered unusual? Explain by using the Empirical Rule, do not find the max or min values of the daily closing prices.

5.     
At what prices would Google have to close at in order for it to be considered statistically unusual? You should have a low and high value. Use the Empirical Rule.

6.     
What are Q1, Q2, and Q3 in this data set? Use Excel to find these values.

 

7.     
Is the normality assumption that was made at the beginning valid? Why or why not? Hint: Construct a histogram.