Question

Finally, he believes that the correlation between imports and exports will be -0.63. Define the trade balance as exports minus imports. Find the mean and the standard deviation of the trade balance (in millions of dollars).

Answer 1

Question;

In the next year, an economist in a particular nation believes that exports will have a mean of 295 and a standard deviation of 12 (in millions of dollars). In addition, he believes that imports will have a mean of 70 and a standard deviation of 14 (in millions of dollars). Finally, he believes that the correlation between imports and exports will be -0.63. Define the trade balance as exports minus imports. Find the mean and the standard deviation of the trade balance (in millions of dollars) ROUND YOUR ANSWERS TO TWO DECIMAL PLACES

Answer:

Mean = mean exports - mean imports = 295 - 70 = 225.00

Standard deviation = 12 - 14 = -2( in million dollars)