Introduction to Econometrics (Global Edition) 4e James Stock, Mark Watson (Test Bank)
Introduction to Econometrics (Global Edition) 4e James Stock, Mark Watson (Test Bank)
Introduction to Econometrics (Global Edition) 4e James Stock, Mark Watson (Test Bank)
Introduction to Econometrics (Gl...
Introduction to Econometrics (Global Edition) 4e James
Stock, Mark Watson (Test Bank)
Introduction to Econometrics, 4e (Stock/Watson)
Chapter 2 Review of Probability
2.1 Multiple Choice Questions
1) The probability of an outcome:
A) is the number of times that the outcome occurs in the long run.
B) equals M × N, where M is the number of occurrences and N is the population size.
C) is the proportion of times that the outcome occurs in the long run.
D) equals the sample mean divided by the sample standard deviation.
Answer: C
2) The probability of an event A or B (Pr(A or B)) to occur equals:
A) Pr(A) × Pr(B).
B) Pr(A) + Pr(B) if A and B are mutually exclusive.
C)
.
D) Pr(A) + Pr(B) even if A and B are not mutually exclusive.
Answer: B
3) The cumulative probability distribution shows the probability:
A) that a random variable is less than or equal to a particular value.
B) of two or more events occurring at once.
C) of all possible events occurring.
D) that a random variable takes on a particular value given that another event has
happened.
Answer: A
4) The expected value of a discrete random variable:
A) is the outcome that is most likely to occur.
B) can be found by determining the 50% value in the c.d.f.
C) equals the population median.
D) is computed as a weighted average of the possible outcome of that random variable,
where
the weights are the probabilities of that outcome.
Answer: D
5) Let Y be a random variable. Then var(Y) equals:
A)
.
B) E
.
C) E
, B)
+ 2ab
+
.
C)
+
.
D) a
+b
.
Answer: B
16) To standardize a variable you:
A) subtract its mean and divide by its standard deviation.
B) integrate the area below two points under the normal distribution.
C) add and subtract 1.96 times the standard deviation to the variable.
D) divide it by its standard deviation, as long as its mean is 1.
Answer: A
17) Assume that Y is normally distributed N(μ, σ2). Moving from the mean ( μ) 1.96
standard
deviations to the left and 1.96 standard deviations to the right, then the area under the
normal
p.d.f. is:
A) 0.67
B) 0.05
C) 0.95
D) 0.33
Answer: C
18) Assume that Y is normally distributed N(μ, σ2). To find Pr( ≤ Y ≤ ), where < and di =
, you need to calculate Pr(
≤Z≤
)=
A) Φ(
) - Φ(
)
B) Φ(1.96) - Φ(1.96)
C) Φ(
) - (1 - Φ(
))
D) 1 - (Φ(
) - Φ(
))
Answer: A
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