PROJECT 3 INSTRUCTIONS Based on Larson & Farber: sections 5.2–5.3

Project 3 instructions
Based on Larson & Farber: sections 5.2–5.3
We will use march 20th 2017 as our start date
Note that you must do this project on your own—you may not work with other students. You are always welcome to ask your instructor for help.

Visit the NASDAQ historical prices weblink. First, set the date range to be for exactly 1 year ending on the Monday that this course started. For example, if the current term started on April 1, 2014, then use April 1, 2013 – March 31, 2014. Next, click the link on the right side of the page that says Download to Spreadsheet to save the file to your computer.
This project will only use the Close values. Assume that the closing prices of the stock form a normally distributed data set. This means that you need to use Excel to find the mean and standard deviation. Then, use those numbers and the methods you learned in sections 5.2–5.3 of the course textbook for normal distributions to answer the questions. Do NOT count the number of data points.

Complete this portion of the assignment within a single Excel file. Show your work or explain how you obtained each of your answers. Answers with no work and no explanation will receive no credit.

  1. a) Submit a copy of your dataset along with a file that contains your answers to all of the following questions.
  2. b) What the mean and Standard Deviation (SD) of the Close column in your data set?
  3. c) 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? Hint: You do not want to calculate the mean to answer this one. The probability would be the same for any normal distribution. (5 points)
  4. 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 $750? (5 points)
  5. 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 $75 of the mean for that year? (5 points)
  6. Suppose a person within the last year claimed to have bought Google stock at closing for $650 per share. Would such a price be considered unusual? Use the definition of unusual from the course textbook. (5 points)
  7. At what prices would Google have to close in order for it to be considered statistically unusual? You will have a low and high value. Use the definition of unusual from the course textbook that is measured as a number of standard deviations. (5 points)
  8. What are Quartile 1, Quartile 2, and Quartile 3 in this data set? Use Excel to find these values. This is the only question that you must answer without using anything about the normal distribution. (5 points)
  9. Is the normality assumption that was made at the beginning valid? Why or why not? Hint: Does this distribution have the properties of a normal distribution as described in the course textbook? Real data sets are never perfect, however, it should be close. One option would be to construct a histogram like you did in Project 1 to see if it has the right shape. Something in the range of 10 to 12 classes is a good number. (5 points)

There are also 5 points for miscellaneous items like correct date range, correct mean, correct SD, etc.

Project 3 is due by 11:59 p.m. (ET) on Monday of Module/Week 5.


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