Confused As To How You Derived The Case Study

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¶ … confused as to how you derived the population mean of 1 +/- .010, as the population mean (not the sample average mean) is given as 1.008. Also, the customer needs the sample mean to be within 90% of one inch (1 +/- .1, not 1 +/- .01); a simple analysis of the normal distribution based around a mean of 1.008 inches shows that this would easily be accomplished, as more than 90% of the data would be within two standard deviations, which is within the acceptable range. At least, this is how I interpret the question. Your answer doesn't seem to be wrong, mathematically speaking, although I think your calculation of P. is too high (it's above 90%, but I'm not sure it's above 95% and certainly not above 99%).

Case 2,

This math seems to check out, but again you're using a population mean of 1 +/- .010 and I'm not sure why. Not only is the population mean given as 1.008, but this problem specifically asks that you reset the population mean to the optimal value you came up with in Question 2. In other words, this question is asking you to calculate the standard deviations and the costs of production with a population mean of 1 at 90%, 95%, and 99% success rates.

Case 3, Question 2

You definitely seem to have understood the question, and yes, 1.167 is definitely higher than 1.1, so the stock does have a higher-than-average risk assuming your calculation of the slope was correct.

Case 3, Question 4

If I'm understanding the previous work correctly through a cursory glance, the substitution of 10 for x doesn't really make sense, as x is not the market portfolio rate in equation 1 (at least, it is not explicitly defined as such in anything you've sent me), yet this is what 10% is in the description for this question. Again, your math seems correct at a glance, but this question is asking you to calculate the expected return of the specific stock in question given an average market (or market portfolio) return of 10%. If x in Question 1 is the market portfolio rate of return, then this substitution is fine.

You have typed the word "stuck" instead of "stock" every time. The correct word is "stock."

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