Visit the NASDAQ historical prices weblink. First, set the date range to be for exactly 1 year ending on the Monday that this course started. For example, if the current term started on April 1, 2018, then use April 1, 2017 – March 31, 2018. (Do NOT use these dates. Use the dates that match up with the current term.) Do this by clicking on the blue dates after “Time Period”. Next, click the “Apply” button. Next, click the link on the right side of the page that says “Download Data” to save the file to your computer.
This project will only use the Close values. Assume that the closing prices of the stock form a normally distributed data set. This means that you need to use Excel to find the mean and standard deviation. Then, use those numbers and the methods you learned in sections 6.1-6.3 of the course textbook for normal distributions to answer the questions. Do NOT count the number of data points.
Complete this portion of the assignment within a single Excel file. Show your work or explain how you obtained each of your answers. Answers with no work and no explanation will receive no credit.
1. a) Submit a copy of your dataset along with a file that contains your answers to all of the following questions.
b) What the mean and Standard Deviation (SD) of the Close column in your data set?
c) If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed at less than the mean for that year? Hint: You do not want to calculate the mean to answer this one. The probability would be the same for any normal distribution. (5 points)
2. If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed at more than $950? (5 points)
3. If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed within $50 of the mean for that year? (between 50 below and 50 above the mean) (5 points)
4. If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed at less than $800 per share. Would this be considered unusal? Use the definition of unusual from the course textbook that is measured as a number of standard deviations (5 points)
5. At what prices would Google have to close in order for it to be considered statistically unusual? You will have a low and high value. Use the definition of unusual from the course textbook that is measured as a number of standard deviations. (5 points)
6. What are Quartile 1, Quartile 2, and Quartile 3 in this data set? Use Excel to find these values. This is the only question that you must answer without using anything about the normal distribution. (5 points)
7. Is the normality assumption that was made at the beginning valid? Why or why not? Hint: Does this distribution have the properties of a normal distribution as described in the course textbook? Real data sets are never perfect, however, it should be close. One option would be to construct a histogram like you did in Project 1 to see if it has the right shape. Something in the range of 10 to 12 classes is a good number. (5 points)
There are also 5 points for miscellaneous items like correct date range, correct mean, correct SD, etc.
Use the dates October 23, 2017 – October 22, 2018.
Be sure to save the file as .xls or .xlsx. These are the only extensions I am able to open. (NOTE: Files with a .csv extension will NOT show your cell formulas. If you upload a file with this extension, you will receive point deductions for no work shown.)
2. Now is a good time to review the instructions on how to use Excel to find the mean and standard deviation. For the mean, choose the =AVERAGE command and use the parentheses to indicate the range of cells where your data can be found in your Excel column. The command for the standard deviation is =STDEV with the range of data cells in parentheses.
3. Do not be alarmed because the project involves a large set of data. Most questions amount to finding the z-scores and then the probability associated with that z-score.
4. The command to find the quartile in Excel is =quartile(array,1) for Q1, =quartile(array,2) for Q2, and =quartile(array,3) for Q3.
5. We will only be using the CLOSE values (column E). You can delete the other columns (except the dates column) after you download the data.
6. Show your work either in formulas in the Excel file or verbally show how you arrived at your answers.