PROJECT 3 INSTRUCTIONS: Probability & Stastics

Based on Larson & Farber: sections 6.1–6.3

Go to this website. Click the link on the right that says, “Download to Spreadsheet.” Set the date range to end on the first day (Tuesday) of Module/Week 5 and 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. Answer the following:

1. If a person bought 1 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?

2. If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed at more than $500?

3. If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed within $45 of the mean for that year?

4. Suppose a person within the last year claimed to have bought Google stock at closing at $400 per share. Would such a price be considered unusual? Explain.

5. At what price would Google have to close at in order for it to be considered statistically unusual? You should have a low and high value.

6. What are Q1, Q2, and Q3 in this data set?

7. Is the assumption that was made at the beginning valid? Why or why not?