 # Quant drill

By far my weakest point is quantitative methods. All that feel the same should post here questions, maybe we can solve them together.Don’t feel bad posting really easy ones since we need the practice and for example I might have a problem with them

Quant is not my weakest area (I suck on derivatives), but here’s a super easy one to get the ball rolling: ----------------- Which of the following is least likely to be an example of a discrete random variable? A) Quoted stock prices on the NASDAQ. B) The number of days of sunshine in the month of May 2006 in a particular city. C) The rate of return on a real estate investment. D) The number of shareholders of General Electric common stock.

One of my weak points as well… good idea to work it out in this thread.

b?

I would go with C, she wrote least likely.

reread the Q. It’s asking for LEAST likely.

gj, trek7000.

I’m pretty sure that “rates of return” are not discrete random variables

C. The rate of return is a continuous number. I want to be a Quant developer some day. So I am supposed to be strong in these 2 areas. But I did not spend enough time on these 2 areas. Could still do bad.

you’re right. Returns are continuous random variables because the possible outcomes are infinite; i.e., 1.0%, 1.01%, 1.001%, etc.

oaw just demonstrates what I ment

I say it C…it seems to be the only one that could take infinte values…

The appropriate teste statistic for constructing confidence intervals for the population mean of a non normal distribution when the population variance is unknown and the sample size is large >30 is: a. z statistic or t statistic b. z statistic at alpha with n degrees of freedom c. t statistic at alpha with 29 degrees of freedom d. t statistic at alpha/2 with n degrees of freedom

Question #2 C?

Another easy one, but takes a bit of thinking: A normal distribution has a mean of 10 and a standard deviation of 4. Which of the following statments is most accurate? A) 50% of the observations will fall between 6 and 14 B) The probability of finding an observation below 2 is 5% C) 81.5% of all the observations will fall between 6 and 18 D) The probability of finding an observation at 22 or above is 1%

I think we’ll have to number them sowe don’t get confused so next question posted please number it with 4.

of these choices I guess: c a: not a because you wouldn’t use Z statistic with unknown population variance b: not b again because you wouldn’t use Z with unknows pop variance c: Yes, use t with (n-1) degrees of freedom d: I don’t know what “alpha/2” means

budfox c?

Your answer: C was correct! 68 percent of all observations will fall in the interval plus or minus one standard deviation from the mean (6 to 14). 95 percent will fall in the interval plus or minus two standard deviations from the mean (2 to 18), so 2.5 percent will fall below 2. 99 percent will fall in the interval plus or minus three standard deviations from the mean (-2 to 22), so 0.5 percent will fall above 22.

response to Budfox it must be: C 10 - 14 = .5(95%) 6 - 10 = .5(68%) add em up, you get 81.5%