The nation of Moldovia has recently created an economic development plan that in
ID: 3358339 • Letter: T
Question
The nation of Moldovia has recently created an economic development plan that includes expanded exports and imports. It has completed a series of extensive studies of the world economy and Moldovia’s economic capability, following Moldovia’s extensive 10- year educational-enhancement program. The resulting model indicates that in the next year exports will be normally distributed with a mean of 80 and a variance of 900 ( in billions of Moldovian dollars). In addition, imports are expected to be normally distributed with a mean of 100 and a variance of 625 in the same units. The covariance between exports and imports is expected to be + 0.50 Define the trade balance as exports minus imports. The mean of the trade balance ( exports minus imports) if the model parameters given above are true is
Explanation / Answer
mean of the trade balance =E(export)-E(import)=80-100=-20
and variance =Var(export)+Var(Import)-2*Cov(import,export) =900+625-2*0.50=1524
therefore std deviation=(1524)1/2 =39.0384
please revert for any other subparts