Concept explainers
a.
Find the population standard deviation for the prices in May.
a.
Answer to Problem 37E
- The population standard deviation for the prices in May is 18.52.
Explanation of Solution
Calculation:
The closing prices of google stock in May and June are given.
Standard deviation:
Let
Population standard deviation:
Finding mean:
Software procedure:
Step-by-step procedure to find mean using the MINITAB software:
- Choose Stat > Basic Statistics > Display
Descriptive Statistics . - In Variables enter the columns May.
- Choose option statistics, and select N total, Mean.
- Click OK.
Output using the MINITAB software is given below:
- From the MINITAB output the mean is 872.51.
The deviation, deviation’s squares are calculated below:
x | ||
880.37 | 7.86 | 61.7796 |
877.07 | 4.56 | 20.7936 |
873.65 | 1.14 | 1.2996 |
866.2 | –6.31 | 39.8161 |
869.79 | –2.72 | 7.3984 |
829.61 | –42.9 | 1840.41 |
880.93 | 8.42 | 70.8964 |
884.74 | 12.23 | 149.5729 |
900.68 | 28.17 | 793.5489 |
900.62 | 28.11 | 790.1721 |
886.25 | 13.74 | 188.7876 |
820.43 | –52.08 | 2,712.326 |
875.04 | 2.53 | 6.4009 |
877 | 4.49 | 20.1601 |
871.98 | –0.53 | 0.2809 |
879.81 | 7.3 | 53.29 |
890.22 | 17.71 | 313.6441 |
879.73 | 7.22 | 52.1284 |
864.64 | –7.87 | 61.9369 |
859.7 | –12.81 | 164.0961 |
859.1 | –13.41 | 179.8281 |
867.6 | –4.91 | 24.1081 |
Total |
Substituting
- Hence, the population standard deviation for the prices in May is 18.52.
b.
Find the population standard deviation for the prices in June.
b.
Answer to Problem 37E
- The population standard deviation for the prices in June is 18.48.
Explanation of Solution
Calculation:
Population standard deviation:
Finding mean:
Software procedure:
Step-by-step procedure to find mean using the MINITAB software:
- Choose Stat > Basic Statistics > Display Descriptive Statistics.
- In Variables enter the columns June.
- Choose option statistics, and select N total, Mean.
- Click OK.
Output using the MINITAB software is given below:
- From the MINITAB output the mean is 881.8.
The deviation, deviation’s squares are calculated below:
x | ||
871.22 | –10.58 | 111.9364 |
870.76 | –11.04 | 121.8816 |
868.31 | –13.49 | 181.9801 |
881.27 | –0.53 | 0.2809 |
873.32 | –8.48 | 71.9104 |
882.79 | 0.99 | 0.9801 |
889.42 | 7.62 | 58.0644 |
906.97 | 25.17 | 633.5289 |
908.53 | 26.73 | 714.4929 |
909.18 | 27.38 | 749.6644 |
903.87 | 22.07 | 487.0849 |
915.89 | 34.09 | 1162.128 |
887.1 | 5.3 | 28.09 |
877.53 | –4.27 | 18.2329 |
880.23 | –1.57 | 2.4649 |
871.48 | –10.32 | 106.5024 |
873.63 | –8.17 | 66.7489 |
857.23 | –24.57 | 603.6849 |
861.55 | –20.25 | 410.0625 |
845.72 | –36.08 | 1,301.766 |
Total |
Substituting
- Hence, the population standard deviation for the prices in June is 18.48.
c.
Find the month when the price of Google stock more volatile.
c.
Answer to Problem 37E
- The spreads for the prices in May has increased in 2013.
Explanation of Solution
- The financial analysts use the term “volatility” for referring the price variation of assets as stocks.
- From part (a), the population standard deviation for the prices in May is 18.52.
- From part (b), the population standard deviation for the prices in June is 18.48.
- The standard deviation for the prices in May is slightly more than the population standard deviation for the prices in June.
- Thus, it can be concluded that the spreads for the prices in May is more volatile than June.
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Chapter 3 Solutions
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