Math Problem Statement
The stock prices of a company over five consecutive days are $150, $155, $148, $152, and
$149.
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What is the average stock price over this period?
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Calculate the sample variance, variance, and standard deviation of the stock prices.
Solution
Let's solve the two parts of your question:
1. Average Stock Price:
The average (mean) stock price over the five days can be calculated using the formula for the mean:
Given the stock prices are $150, $155, $148, $152, and $149:
Let's compute this.
2. Variance, Sample Variance, and Standard Deviation:
- Sample Variance ():
For the sample variance, we use:
where are the individual stock prices, is the mean stock price, and is the number of stock prices (5 in this case).
- Population Variance ():
If we consider this a population, the variance formula is:
- Standard Deviation (both sample and population):
The standard deviation is the square root of the variance.
Let's calculate these values step-by-step.### Results:
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Average Stock Price:
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Sample Variance ():
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Population Variance ():
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Sample Standard Deviation ():
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Population Standard Deviation ():
These values summarize the spread and variability of the stock prices over the given period.
Would you like to dive deeper into any of these calculations or explore related topics?
5 Related Questions:
- How do you interpret variance and standard deviation in a stock market context?
- What is the difference between sample variance and population variance?
- How does one use standard deviation to measure stock volatility?
- How do changes in stock prices affect the standard deviation?
- How can one calculate the moving average for stock prices?
Tip:
Understanding the difference between sample and population statistics is crucial for analyzing real-world data accurately!
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Math Problem Analysis
Mathematical Concepts
Statistics
Mean
Variance
Standard Deviation
Formulas
Mean formula: Mean = sum of values / number of values
Sample Variance formula: s^2 = sum((x_i - mean)^2) / (n - 1)
Population Variance formula: sigma^2 = sum((x_i - mean)^2) / n
Standard Deviation formula: s = sqrt(sample variance)
Population Standard Deviation formula: sigma = sqrt(population variance)
Theorems
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Suitable Grade Level
Advanced High School
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