Investigating Trading Practices. The 10 most active stocks...

Investigating Trading Practices. The 10 most active stocks on the New York Stock Exchange for a given week, are shown here. $$ \begin{array}{lllll} \text { AT\&T } & \text { Alcatel Lucent } & \text { Exxon Mobile } & \text { Petrobras } & \text { Vale SA } \\ \text { Pfizer } & \text { Verizon } & \text { Gen. Elect. } & \text { Citigroup } & \text { Ford } \end{array} $$ Exchange authorities decided to investigate trading practices using a sample of three of these stocks. a. Beginning with the first random digit in column 6 of Table 7.1, read down the column to select a simple random sample of three stocks for the exchange authorities. b. Using the information in the third Note and Comment, determine how many different simple random samples of size 3 can be selected from the list of 10 stocks.

Investigating Trading Practices. The 10 most active stocks on the New York Stock Exchange for a given week, are shown here.
$$
\begin{array}{lllll}
\text { AT\&T } & \text { Alcatel Lucent } & \text { Exxon Mobile } & \text { Petrobras } & \text { Vale SA } \\
\text { Pfizer } & \text { Verizon } & \text { Gen. Elect. } & \text { Citigroup } & \text { Ford }
\end{array}
$$
Exchange authorities decided to investigate trading practices using a sample of three of these stocks.
a. Beginning with the first random digit in column 6 of Table 7.1, read down the column to select a simple random sample of three stocks for the exchange authorities.
b. Using the information in the third Note and Comment, determine how many different simple random samples of size 3 can be selected from the list of 10 stocks.

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Key Concepts

Simple Random Sampling

Simple random sampling is a fundamental sampling method where every possible subset of a given size from the population has an equal chance of being selected. This method ensures that the sample represents the overall population without bias, and is commonly used in statistics to avoid systematic errors in the selection process.

Random Number Table

A random number table is a tool used to generate non-biased and unpredictable sequences of digits, which can then be mapped onto a list of items to select a sample. By reading the table in a systematic manner (e.g., down a specific column), one can assign randomness to the selection process, making the sample selection process both replicable and free from personal influence.

Combinatorics (Combination Calculations)

Combinatorics, specifically the calculation of combinations, is used to determine the number of possible ways to select a subset from a larger set when the order of selection does not matter. The combination formula, often expressed as 'n choose k', calculates how many unique groups of size k can be formed from a total of n items, which is critical for understanding the total number of possible simple random samples.

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