## inferential statistics

Project 3 instructions

Based on Larson & Farber: sections 5.2-5.3

Go to

http://www.google.com/finance/historical?q=NASDAQ:GOOGthis 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.

Please set the date range to be: 10/1/2012 – 10/1/2013

Your dates will be going back exactly 1 year. Assume that the closing prices of the stock form a normally distributed data set.

Project 3 instructions

Based on Larson & Farber: sections 5.2-5.3

Go to

http://www.google.com/finance/historical?q=NASDAQ:GOOGthis 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.

Please set the date range to be: 10/1/2012 – 10/1/2013

Your dates will be 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. (Now will be a good idea to review the definition and properties of a normal distribution on p236) Complete this assignment within a single Excel file. Show your work where possible. (You may want to review how to find mean and standard deviation given a data set. It will also help to review how to use Excel to find those quantities. Please refer to the Excel file I posted on DB>>Useful files)

If a person bought one 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: Hint: use property #2 on p236- the normal curve is bell-shaped and is symmetric about the mean. In other words, half of the data is above mean, and half of the data is below mean.

If a person bought one 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.

Hint: To find that, you will need to find: a) the mean and standard deviation, b) find z score (let’s call it z1) that corresponds to x = 500, c) find P(z z1) = 1 – P(z