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Question: httpswwwwolframalphacominputibinomialdistributioncalculator...

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3 Much is made of the fact that certain mutual funds outperform the market year after ye ar that is, the return from holding shares in the mutual fund is higher than the return from holding a portfolio suh a the S&P 500). For concreteness, consider a 10-year period and let the population be the 4,170 funds reported in The Wall Street Journal on January 1, 1995. By saying that performance relative to the market is random, we mean that each fund has a 50-50 chance of outperforming the market in anv year and that performance is independent from year to year. (i) If performance relative to the market is truly random, what is the probability that any particular mu tual (ii) of the 4,170 mutual funds, what is the expected number of funds that will outperform] the market (ii) Find the probability that at least one fund out of 4,170 funds outperforms the market in all 10 (iv) If you have a statistical package that computes binomial probabilities, find the probability that at fund outperforms the market in all 10 years? in all 10 years? years. What do you make of your answer? least five funds outperform the market in all 10 years.8 pts] Do problem 3 from Wooldridge Appendix B (HINT: for the last part use the following online binomial probability calculator and input the correct number of trials, input your answer from the first part for the success probability, and input 4 for the endpoint. The software will then output the probability of at least 5 funds outperforming the market. http://www.wolframalpha.com/input/?i-binomial+distribution+calculator


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