Compare your bar graph with the graph of the cauchy density

Reference no: EM13970343

Let Z = X/Y where X and Y have normal densities with mean 0 and standard deviation 1. Then it can be shown that Z has a Cauchy density.

(a) Write a program to illustrate this result by plotting a bar graph of 1000 samples obtained by forming the ratio of two standard normal outcomes. Compare your bar graph with the graph of the Cauchy density. Depend- ing upon which computer language you use, you may or may not need to tell the computer how to simulate a normal random variable. A method for doing this was described in Section 5.2.

(b) We have seen that the Law of Large Numbers does not apply to the Cauchy density (see Example 8.8). Simulate a large number of experi- ments with Cauchy density and compute the average of your results. Do these averages seem to be approaching a limit? If so can you explain why this might be?

Reference no: EM13970343

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