ECON 250 Midterm: ECON 250 Pastmidterm2 Econ250midterm2W11AnswerGuide

• School: Queen's University
• Department: Economics
• Course: ECON 250
• Professor: All

Document Summary

Economics 250 midterm test 2: answer guide: (a) the standard error is 0. 045825 so using the normal approximation to the binomial: z = From table 1 the probability of a value above this is 0. 1379 or 13. 79%. (b) the formula is: = 0. 8 0. 0784 = (0. 7216, 0. 8784: from table 8 the cuto point for the t distribution with df = n 1 = 19 is 1. 729; that leaves 5% in each tail. 13 1. 729 6/ 20 = 13 2. 3196 = (10. 68, 15. 32: (a) the covariance is 12 = 0. 5(2)(1) = 1, so for the portfolio return the mean is: and the variance is: (b) the z-statistic is: For non-graduates, the probability of income being above 40 is 0. 334, using the uniform density. Next, the probability of being a graduate and above 40 is 0. 8 0. 3 = 0. 24 and the similar joint probability for non-graduates is 0. 333 0. 7 = 0. 2331.