BMW E46 M3 - Legend Eternal
BMW Garage BMW Meets Register Search Today's Posts Mark Forums Read
home
BIMMERPOST Universal Forums Off-Topic Discussions Board

Post Reply
 
Thread Tools Search this Thread
      03-30-2011, 09:49 PM   #1
silvergray545
Skittles, OT OG
silvergray545's Avatar
Lebanon
2337
Rep
649
Posts

Drives: Lots of M cars
Join Date: Aug 2008
Location: Cleveland, OH

iTrader: (1)

Garage List
2016 BMW M3 ZCP  [0.00]
2000 BMW M Roadster  [0.00]
2004 BMW M3  [0.00]
2014 VW GLI  [0.00]
Anyone good at Statistics?

I've run into a problem that I can't seem to figure out. I'm working on a case study that deals with normal distribution. Our professor wants us to use excel to get our answers but when I put the formula in excel, I get a different answer than I do by doing it by hand. I'll explain.

The mean and standard deviation are already given. There are a few numbers that you need to plug in for X. The excel command is =NORMDIST(x,mean,standard deviation,1)

To solve it by hand, you need to find the z score with the given values. The formula for that is z = (x-mean)/standard deviation then you take the z score and look it up on the chart to find the percentage.

With that being said, I'll give you an example of one of the problems. x = 20%, mean = 8.8% and the standard deviation = 5.98%.

Plug the values into excel and the answer is 0.969459572.

Do the math by hand (.2-.088)/.0598 which gives you a z score of 1.87. Then look it up on the chart and it is .4693

.97 and .47 are two completely different numbers. Anybody know what I'm doing wrong?

Below is the assignment if you need further clarification. Thanks

"Question One (twenty points)
You are hired as a consultant by the Alliance Financial Company. Alliance’s chief financial officer (CFO), Ms. Gail Roberts, has asked you to aid her in determining the appropriateness of a number of different investment categories for several Alliance customers. The table below shows the mean return and the standard deviation for nine different investment classes of investments sold by Alliance over the last 10 years. It is known that the returns follow a normal distribution.

Investment class Mean Return (%) Standard Deviation (%)
Fixed annuities 8.31 0.54
Cash equivalents 7.73 0.81
U.S. Treasury bonds 8.80 5.98
U.S. Investment-grade corporate bonds 9.33 7.92
Non-U.S. government bonds 10.95 10.47
Domestic large cap stocks 11.71 15.30
International equities 14.02 17.16
Domestic mid-cap stocks 13.64 18.19
Domestic small cap stocks 14.93 21.82

(i) Ms. Roberts has asked you to develop a table with some information that could be used in generating recommendations for different customers. Specifically, what she would like to know for each investment class is: what is the probability of a return for
(1) Greater than 5%,
(2) Greater than 20%,
(3) Greater than 50%,
(4) A loss (a return of less than 0)
(5) A loss of more than 10%, and
(6) A loss of more than 20%

Summarize the results in a table format"
Appreciate 0
      03-30-2011, 09:50 PM   #2
BTM
Banned
United_States
479
Rep
10,309
Posts

Drives: A///MERICAN!!!
Join Date: Mar 2010
Location: A///MERICA!!!

iTrader: (11)

Garage List
If this can wait until tomorrow morning when my wine blood content isn't what it currently is I can probably help you on this.
Appreciate 0
      03-30-2011, 09:52 PM   #3
silvergray545
Skittles, OT OG
silvergray545's Avatar
Lebanon
2337
Rep
649
Posts

Drives: Lots of M cars
Join Date: Aug 2008
Location: Cleveland, OH

iTrader: (1)

Garage List
2016 BMW M3 ZCP  [0.00]
2000 BMW M Roadster  [0.00]
2004 BMW M3  [0.00]
2014 VW GLI  [0.00]
It's due tomorrow at 5 lol
Appreciate 0
      03-30-2011, 09:53 PM   #4
BTM
Banned
United_States
479
Rep
10,309
Posts

Drives: A///MERICAN!!!
Join Date: Mar 2010
Location: A///MERICA!!!

iTrader: (11)

Garage List
PM right
Appreciate 0
      03-30-2011, 09:54 PM   #5
silvergray545
Skittles, OT OG
silvergray545's Avatar
Lebanon
2337
Rep
649
Posts

Drives: Lots of M cars
Join Date: Aug 2008
Location: Cleveland, OH

iTrader: (1)

Garage List
2016 BMW M3 ZCP  [0.00]
2000 BMW M Roadster  [0.00]
2004 BMW M3  [0.00]
2014 VW GLI  [0.00]
Yes
Appreciate 0
      03-30-2011, 09:55 PM   #6
BTM
Banned
United_States
479
Rep
10,309
Posts

Drives: A///MERICAN!!!
Join Date: Mar 2010
Location: A///MERICA!!!

iTrader: (11)

Garage List
OK. I'll see what I can do tomorrow
Appreciate 0
      03-30-2011, 09:58 PM   #7
ghosthi32
Banned
37
Rep
2,504
Posts

Drives: Water camel
Join Date: Dec 2009
Location: strait of hormuz

iTrader: (0)

you would btm
Appreciate 0
      03-30-2011, 09:59 PM   #8
silvergray545
Skittles, OT OG
silvergray545's Avatar
Lebanon
2337
Rep
649
Posts

Drives: Lots of M cars
Join Date: Aug 2008
Location: Cleveland, OH

iTrader: (1)

Garage List
2016 BMW M3 ZCP  [0.00]
2000 BMW M Roadster  [0.00]
2004 BMW M3  [0.00]
2014 VW GLI  [0.00]
Thanks.

Also, for anyone else that wants to try, when I do a lot of the functions in excel, I'm getting a lot of 1's and 0's as answers. Not sure why.
Appreciate 0
      03-30-2011, 10:04 PM   #9
BTM
Banned
United_States
479
Rep
10,309
Posts

Drives: A///MERICAN!!!
Join Date: Mar 2010
Location: A///MERICA!!!

iTrader: (11)

Garage List
Quote:
Originally Posted by silvergray545 View Post
Thanks.

Also, for anyone else that wants to try, when I do a lot of the functions in excel, I'm getting a lot of 1's and 0's as answers. Not sure why.
Are they supposed to be yes or no answers?
Appreciate 0
      03-30-2011, 10:29 PM   #10
silvergray545
Skittles, OT OG
silvergray545's Avatar
Lebanon
2337
Rep
649
Posts

Drives: Lots of M cars
Join Date: Aug 2008
Location: Cleveland, OH

iTrader: (1)

Garage List
2016 BMW M3 ZCP  [0.00]
2000 BMW M Roadster  [0.00]
2004 BMW M3  [0.00]
2014 VW GLI  [0.00]
Quote:
Originally Posted by BTM View Post
Are they supposed to be yes or no answers?
No, you have to find the probability the x values.
Appreciate 0
      03-30-2011, 10:33 PM   #11
BTM
Banned
United_States
479
Rep
10,309
Posts

Drives: A///MERICAN!!!
Join Date: Mar 2010
Location: A///MERICA!!!

iTrader: (11)

Garage List
In the meantime check your decimal places (simple stuff has confounded me before as well)...this week has been slow I'll take a look tomorrow
Appreciate 0
      03-30-2011, 10:55 PM   #12
DougLikesBMW
Fapmin
DougLikesBMW's Avatar
399
Rep
2,660
Posts

Drives: '03 E46 330Ci
Join Date: Mar 2007
Location: Plano, Texas

iTrader: (0)

Check www.khanacademy.org
Appreciate 0
      03-30-2011, 10:56 PM   #13
Buegie
Captain
Buegie's Avatar
United_States
48
Rep
714
Posts

Drives: 330xi
Join Date: Feb 2008
Location: CT/DC

iTrader: (2)

the .47 number only represents the area to the right of the mean, you need to add .5 to it if you want the cumulative percentage (note: .47+.5=.97). Excel returns the whole thing, but with the formula, you need to "finish it off" so to speak. See if the graph below makes it clear, if not I'll try to explain more tomorrow.

__________________
Black Dakota | Aluminum | Sport | Premium | Cold | iDrive | CA
Appreciate 1
mdf278.50
      03-30-2011, 11:02 PM   #14
Buegie
Captain
Buegie's Avatar
United_States
48
Rep
714
Posts

Drives: 330xi
Join Date: Feb 2008
Location: CT/DC

iTrader: (2)

Quote:
Originally Posted by silvergray545 View Post
Thanks.

Also, for anyone else that wants to try, when I do a lot of the functions in excel, I'm getting a lot of 1's and 0's as answers. Not sure why.
that could just be due to excel not displaying enough figures. If I know what you're talking about, excel is just rounding the number for display purposes to either 0 or 1. Try adding decimal points w/ this button w/ arrow pointing to left:

__________________
Black Dakota | Aluminum | Sport | Premium | Cold | iDrive | CA
Appreciate 0
      03-30-2011, 11:13 PM   #15
Quick6EF
Lieutenant
Quick6EF's Avatar
84
Rep
489
Posts

Drives: E92 Space Gray
Join Date: Apr 2010
Location: Boston

iTrader: (0)

im 23 and graduated college wat is this
__________________
Appreciate 0
      03-30-2011, 11:23 PM   #16
silvergray545
Skittles, OT OG
silvergray545's Avatar
Lebanon
2337
Rep
649
Posts

Drives: Lots of M cars
Join Date: Aug 2008
Location: Cleveland, OH

iTrader: (1)

Garage List
2016 BMW M3 ZCP  [0.00]
2000 BMW M Roadster  [0.00]
2004 BMW M3  [0.00]
2014 VW GLI  [0.00]
Ok, here's a more detailed post. I think I figured out the problem. You need to subtract 1 from the equation on excel to get the probability. But I still don't understand why I'm getting 1's, 0's and other weird numbers. Doing it by hand doesn't work either. The z scores are completely off the chart. I'll incude the case study and the work I've done.

I appreciate the responses guys. Thanks
Attached Images
  
Appreciate 0
      03-30-2011, 11:26 PM   #17
silvergray545
Skittles, OT OG
silvergray545's Avatar
Lebanon
2337
Rep
649
Posts

Drives: Lots of M cars
Join Date: Aug 2008
Location: Cleveland, OH

iTrader: (1)

Garage List
2016 BMW M3 ZCP  [0.00]
2000 BMW M Roadster  [0.00]
2004 BMW M3  [0.00]
2014 VW GLI  [0.00]
Quote:
Originally Posted by Buegie View Post
the .47 number only represents the area to the right of the mean, you need to add .5 to it if you want the cumulative percentage (note: .47+.5=.97). Excel returns the whole thing, but with the formula, you need to "finish it off" so to speak. See if the graph below makes it clear, if not I'll try to explain more tomorrow.
Ahh you can just add .5 to .47 to get the answer! My prof wants us to subtract .47 from .5 which gives us .03 and then subtract that from 1, which then gives us .97 lol. I can't believe I didn't notice the shortcut.
Appreciate 0
      03-30-2011, 11:32 PM   #18
silvergray545
Skittles, OT OG
silvergray545's Avatar
Lebanon
2337
Rep
649
Posts

Drives: Lots of M cars
Join Date: Aug 2008
Location: Cleveland, OH

iTrader: (1)

Garage List
2016 BMW M3 ZCP  [0.00]
2000 BMW M Roadster  [0.00]
2004 BMW M3  [0.00]
2014 VW GLI  [0.00]
Quote:
Originally Posted by DougLikesBMW View Post
Thanks for that site! I bookmarked it!
Appreciate 0
      03-30-2011, 11:49 PM   #19
fdsasdasdf
Captain
fdsasdasdf's Avatar
125
Rep
778
Posts

Drives: 330Ci ZHP 6sp
Join Date: Apr 2009
Location: Raleigh, NC

iTrader: (0)

Statistics major here. PM me with your questions in the future, I can always use practice to not forget the beginning stuff.

"You never know if you really know something unless you can successfully teach it to someone that really doesn't want to be there."
- Some grad student in the stats department
Appreciate 0
      03-30-2011, 11:57 PM   #20
silvergray545
Skittles, OT OG
silvergray545's Avatar
Lebanon
2337
Rep
649
Posts

Drives: Lots of M cars
Join Date: Aug 2008
Location: Cleveland, OH

iTrader: (1)

Garage List
2016 BMW M3 ZCP  [0.00]
2000 BMW M Roadster  [0.00]
2004 BMW M3  [0.00]
2014 VW GLI  [0.00]
Quote:
Originally Posted by Zell View Post
Statistics major here. PM me with your questions in the future, I can always use practice to not forget the beginning stuff.

"You never know if you really know something unless you can successfully teach it to someone that really doesn't want to be there."
- Some grad student in the stats department
Really? Thanks a lot man. I'm gonna send you a friend request. Does that chart that I created look right to you?
Appreciate 0
      03-31-2011, 08:00 AM   #21
BTM
Banned
United_States
479
Rep
10,309
Posts

Drives: A///MERICAN!!!
Join Date: Mar 2010
Location: A///MERICA!!!

iTrader: (11)

Garage List
Looks like you got this figured out. Zell is much better at statistics than I am...more of an occasional dorky hobby for me and took a fair amount in undergrad...but yea I've seen some of Zell's posts and he knows whats up.
Appreciate 0
      03-31-2011, 08:01 AM   #22
NYCGP
WTF are you looking at?
NYCGP's Avatar
228
Rep
1,560
Posts

Drives: Bandwagon
Join Date: Jan 2011
Location: Jungle

iTrader: (0)

B's pants shrink when he sees statistics...
__________________
"It is better to be hated for what you are than loved for what you are not."
-André Gide
Appreciate 0
Post Reply

Bookmarks

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off



All times are GMT -5. The time now is 11:25 AM.




e46m3
Powered by vBulletin® Version 3.8.11
Copyright ©2000 - 2024, vBulletin Solutions Inc.
1Addicts.com, BIMMERPOST.com, E90Post.com, F30Post.com, M3Post.com, ZPost.com, 5Post.com, 6Post.com, 7Post.com, XBimmers.com logo and trademark are properties of BIMMERPOST