Solution Found!
Stock market participation and IQ. Refer to The Journal of
Chapter 3, Problem 65E(choose chapter or problem)
Stock market participation and IQ. Refer to The Journal of Finance (December 2011) study of whether the decision to invest in the stock market is dependent on IQ, Exercise 3.42 (p. 153). The summary table giving the number of the 158,044 Finnish citizens in each IQ score/investment category is reproduced below. Again, suppose one of the citizens is selected at random.
Source: Based on Grinblatt, M., Keloharju, M., & Linnainaa, J. “IQ and Stock Market Participation,” The Journal of Finance, Vol. 66, No. 6, December 2011 (data from Table 1 and Figure 1).
a. Given that the Finnish citizen has an IQ score of 6 or higher, what is the probability that he/she invests in the stock market?
b. Given that the Finnish citizen has an IQ score of 5 or lower, what is the probability that he/she invests in the stock market?
c. Based on the results, parts a and b, does it appear that investing in the stock market is dependent on IQ? Explain.
Questions & Answers
QUESTION:
Stock market participation and IQ. Refer to The Journal of Finance (December 2011) study of whether the decision to invest in the stock market is dependent on IQ, Exercise 3.42 (p. 153). The summary table giving the number of the 158,044 Finnish citizens in each IQ score/investment category is reproduced below. Again, suppose one of the citizens is selected at random.
Source: Based on Grinblatt, M., Keloharju, M., & Linnainaa, J. “IQ and Stock Market Participation,” The Journal of Finance, Vol. 66, No. 6, December 2011 (data from Table 1 and Figure 1).
a. Given that the Finnish citizen has an IQ score of 6 or higher, what is the probability that he/she invests in the stock market?
b. Given that the Finnish citizen has an IQ score of 5 or lower, what is the probability that he/she invests in the stock market?
c. Based on the results, parts a and b, does it appear that investing in the stock market is dependent on IQ? Explain.
ANSWER: