If you turn the chart 90 degrees clockwise you will see the vertical bell curve (with the bottom cut off) where the current share price is where the average should be.

What this diagram is saying is that as time goes on the chance of a wider dispersion of possible share prices increases . It's currently set to 70%. I'm just trying to understand how the Y axis (time) comes into this? Can this be done or is it a misuse of the bell curve? Please see the diagram below.

Attachment 6013

Hi guys,

I' prepping for exams with old exam questions and I'm stuck on the following:

More and more hotel guests are using apps to determine which hotel to stay at, and the most popular app was App X.

A sample from 2014 showed that 125 of 200 hotel guests used App X to determine

which hotel to stay at.

Test on a 5% level (alpha = 0.05), if above half of the hotel guests in 2014 used App X to pick a hotel.

My proposed solution:

H0 : µ ≤ 0.5

H1 : µ > 0.5

α = 0.05

n = 200

k = 101

p = 125 / 200 = 0.625

If p-value is ≤ α, then the null-hypothesis is rejected.

If p-value is > α, then the null-hypothesis is accepted.

0.0002 < 0.05, so we reject the null hypothesis and say with 95% confidence that above half of the hotel guests in 2014 used App X to pick their hotel.

Is this solution above correct?

(Less significant question): Given that the solution above is correct, can I with 99,9% confidence say that above half of the hotel guests in 2014 used App X to pick their hotel?

I wrote with 95% confidence in the solution because the way I understand that question, 95% confidence is what they asked for, so I should only mention that.

Then there is the follow-up question that really has me in doubt about what and which approach to use to solve it.

A similar study was done in 2012, where the sample showed that 77 out of 145 used App X to pick their hotel.

Test on 5% level, if the number of hotel guests using App X to pick their hotel has increased with more than 5% during those two years.

What approach should I use?

I am guessing that I can use hypothesis testing of two proportions, but I am in doubt about which proportions to use and how to write the null and alternative hypothesis.

- And whether or not it is correct to use hypothesis testing of two proportions to solve the question.

So I'm stuck and any hints or solutions is greatly appreciated. ]]>

I have been working on this question for a few days and I am completely lost on how to solve it. Any suggestions, comments, hints are greatly appreciated.

Quote:

Participants are competing in a competition where only the best 3 products will be chosen and awarded in the amount of R.

Each participant has a cost function c with parameter \theta. This parameter \theta is uniformly distributed between 0 and 1. Participants know their own \theta but do not know others. Although, they know the distribution of \theta.

To produce a product, each participant picks an effort level e. The quality of the product q is a concave, increasing function of e. Each participant can produce one and only one product.

Assuming that participants can observe others' effort, what is the probability that a participant who spend an effort e wins a competition (his product quality is among the top 3)