Page 1 of 1
6. The daily changes in the price of the stock of a company can be modelled as independent with a N(μ, o²) distribution,
Posted: Wed May 04, 2022 12:57 pm
by answerhappygod
- 1 (56.93 KiB) Viewed 36 times
6. The daily changes in the price of the stock of a company can be modelled as independent with a N(μ, o²) distribution, where o² is known to be equal to 4. The daily changes in price were collected for twenty days, the average is x = 0.286 and standard deviation is s = 1.757. An investor wants to determine if μ = 0 or not. (a) Derive a 95% confidence interval for µ. (b) Derive the form of the likelihood ratio test for this problem What can the investor conclude about the value of μ?