Statistics

Team Assessment Week #6

Name: Fatorma Bolley,
Course: QRB 501

Topic 18 Exploration #3:

Age | Younger than18 years old | 18 to 24 years old | 25 to 44 Years old | 45 to 64 years old | 65 years And older |
Number inThousands | 1,207,208 | 452,196 | 1,270,419 | 106,243 | 588,542 |

a. Probability of age 25 to 44 is 0.2832 - 1270419/4486508

b. Probability of older than 24 is 0.6524 - (1270419 + 1068243 + 588542)/4486508

c. Median Age falls in the 45 to 64 category - 1068243

Ch. 6 #A6, #B6, 3B10 (a only):

| Musumeci Capital Management  |   |   |
|   | Probability | Return |   |   |
| MMK | 0.10 | 4% | 0.004 |   |
| Corp Bond | 0.20 | 8% | 0.016 |   |
| Eq | 0.70 | 12% | 0.084 |   |
| Expected Rate of Return | 0.104 |   |
|   |   |   |   |   |
| Expected Rate of Return | 10.4% |   |
|   |   |   |   |   |
|   |   |   |   |   |
A6.              rp = w1r1 + w2r2 + w3r3
rp = 0.10 x 4% + 0.20 x 8% + 0.70 x 12% = 10.4%

B6.              a.              Project 1:
Expected Return = 0.10 x 9% + 0.70 x 13% + 0.20 x 17% = 13.4%
σ2 = 0.10 x (9% - 13.4%)2 + 0.70 x (13% - 13.4%)2 + 0.20 x (17% - 13.4%)2 = 4.64
σ = 4.641/2 = 2.15%
Project 2:
Expected Return = 0.10 x 3% + 0.70 x 10% + 0.20 x 22% = 8.9%
σ2 = 0.10 x (3% - 8.9%)2 + 0.70 x (10% - 8.9%)2 + 0.20 x (22% - 8.9%)2 = 4.49
σ = 4.491/2 = 2.12%
Project 3:
Expected Return = 0.10 x 15% + 0.70 x 11% + 0.20 x 5% = 10.2%
σ2 = 0.10 x (15% - 10.2%)2 + 0.70 x (11% - 10.2%)2 + 0.20 x (5% - 10.2%)2 = 8.16
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