Please help with these questions. Show work so I can follow along and understand
ID: 2949559 • Letter: P
Question
Please help with these questions. Show work so I can follow along and understand them. Thank you!
Problem Set #1 Instructions: You may work ??1th up to 3 other o your classmates on this project. All calculations should be shown by 1. You are saving money for 3 years before you build a house. You have two investment hand or in Exel or Word. So show your work. options available to help you save. The first option, Plan A, produces a return of 8% a year, with a standard deviation of 1%. The second option, Plan B, also produces a return of 8% a year, but the standard deviation is 4%. Which plan do you choose? Why? [5 points] You are given the follo 2. wing two series on income and credit scores. Income FICO 625 600 710 595 610 840 726 710 635 560 39 27 57 31 34 50 38 62 43 49 (A) Find the covariance and the correlation coefficient. (B) Do credit scores increase, decrease, stay the same, with Income? (C) Create a scatter plot with Income and credit score. What do you see? [20 points] Suppose you flip a fair coin four time. (A) What is the probability you will get all four heads? (B) All four tails? (C) Either all four heads or four tails? (D) Anything but four heads or four tails? [5 points Crime and Punishment. In a study of pleas and prison sentences, it is found that 45% of the subjects studied were sent to prison. Among those sent to prison, 40% chose to plead guilty. Among those not sent to prison, 55% chose to plead guilty. (A) If one of the study subjects is randomly selected, find the probability of getting someone 3. 4. who was not sent to prison. (B) If a study subject is randomly selected and it is then found that the subject entered a guilty plea, find the probability that this person was not sent to prison. [20 points]Explanation / Answer
1)
In this case, we need to compute Coefficient of variation(CV) for both the data sets.
CV =100 * ( standard deviation / Mean)
CV for plan A = 100 * (1/8) = 12.5%
CV for plan B = 100 * (4/8) = 50%
Here CV for plan A < CV for plan B
It does mean less variations or fluctions occur in plan A.
so Plan A is more consistent than plan B
Therefore Plan A would be best.