FINC 7301 Research and Quantitative Methods | Exam
Added on 2022-09-02
3 Pages820 Words18 Views
FINC 7301 Research and Quantitative Methods
Midterm Examination
8pm – 11pm
40 marks
Instructions:
1. Answer all questions.
2. Show all the mathematical workings so marks can be given accordingly.
3. You may answer using Microsoft Word or even using pen and paper. However,
submission must be in PDF format.
4. Submit your answer at iTa’leemc course page > Assignment, Project, and Examination
> Midterm Examination Submission. Should the server of iTa’leemc is down, you may
submit your answers to azniza_azrai@iium.edu.my.
Question 1
Pyramidia Sdn. Bhd. provides a return of 30% per share. According to historical data, the share
price return follows the normal distribution and the standard deviation of the share price is 8%.
At the end of the trading day, Chandra calculates the sample mean of the share price. The
sample returns of the share price are 10%, 20%, 30%, 40%, 45%, and 50%. Using the 0.1
significance level, can Chandra conclude that the mean of the share price return is more than
30%? [13 marks]
Step 1:
H0: μ ≤ 0.3 [1 mark]
H1: μ > 0.3 [1 mark]
Step 2:
α = 0.1 [1 mark]
Step 3:
Test statistic used is z [1 mark]
Step 4:
One-tailed test (right tail) [1 mark]
Using the t-test table, at α = 0.1, the critical value is 1.282 [1 mark]
Step 5:
Midterm Examination
8pm – 11pm
40 marks
Instructions:
1. Answer all questions.
2. Show all the mathematical workings so marks can be given accordingly.
3. You may answer using Microsoft Word or even using pen and paper. However,
submission must be in PDF format.
4. Submit your answer at iTa’leemc course page > Assignment, Project, and Examination
> Midterm Examination Submission. Should the server of iTa’leemc is down, you may
submit your answers to azniza_azrai@iium.edu.my.
Question 1
Pyramidia Sdn. Bhd. provides a return of 30% per share. According to historical data, the share
price return follows the normal distribution and the standard deviation of the share price is 8%.
At the end of the trading day, Chandra calculates the sample mean of the share price. The
sample returns of the share price are 10%, 20%, 30%, 40%, 45%, and 50%. Using the 0.1
significance level, can Chandra conclude that the mean of the share price return is more than
30%? [13 marks]
Step 1:
H0: μ ≤ 0.3 [1 mark]
H1: μ > 0.3 [1 mark]
Step 2:
α = 0.1 [1 mark]
Step 3:
Test statistic used is z [1 mark]
Step 4:
One-tailed test (right tail) [1 mark]
Using the t-test table, at α = 0.1, the critical value is 1.282 [1 mark]
Step 5:
End of preview
Want to access all the pages? Upload your documents or become a member.