Econ 4002 Assignment 02

Assignment 2 Please write your name here ECON 4002 Please submit your answers by 4:00 P.M. on Friday, March 04, 2011 by leaving them in the Drop Box on the door of C876 Loeb. Note tha t the Dr op Box will be empti e d at exact ly 4:00 P.M. on that date; and that the deadline is firm. 1. Question 1: A business sc hool placemen t director wants to be est ima te the mean annual salar ies five years after students graduate. A random sample of 25 suc h graduates found a sample mean of $42,740 and a sample standard deviation of $4,780. (a) Derive the formula of the 1 − α confidence interval for the population mean. (b) Find a 90% confidenc e interv al for the population mean, assuming that the population distr ibution is normal . 2. Question 2: Lecture 6 ga ve the definit ion of a consistent est ima tor . It can be sho wn that , for a random sample of independent and identically distributed random variables, the sample mean will converge to the population mean as the sample size goes to infinity. In this exercise, you will conduct a computing experiment to demonstrate the idea of a consistent estimation rule. The steps in the computing experiment are as follows: For the daily closing prices, pretend that your data set represents the complete population so that the mean of the closing prices is the true popul ation mean. Tak e a random sample of 20 daily closing prices and calculate the sample mean from the 20 observations. It is clear 1

Econ 4002 Assignment 02

Documents

Transcript of Econ 4002 Assignment 02