Quiz 1: Section I (A) Name :

Roll No:

1. A multiple choice quiz has five questions, each with five answers, a through e. If you just guess on all of the questions, what is the probability that you get them all right? a.) 0.0003 b.) 0.20 c.) 0.33 d.) 0.52 2. The probability that an employee at a company eats lunch at the company cafeteria is 0.23. The probability that an employee is female is 0.52. The probability than an employee eats lunch at the employee cafeteria and is female is 0.11. What is the probability that a randomly chosen employee either eats at the cafeteria or is female? a.) 0.18 b.) 0.86 c.) 0.44 d.) 0.64 3.Your have inherited a marvelous racing horse named By A Nose. The trainer of the horse tells you that the odds in favor of you winning the Kentucky Derby are 1 to 9. That means that the probability of the horse actually winning is: a.) 0.11. b.) 0.90. c.) 0.10. d.) 0.89. 4. Which of the following is an example of a continuous random variable? a.) The number of cars in a parking lot. c) The weight of a bag of potatoes. b.) The number of repairs at a computer shop over the course of the week. d) The total runs scored in a baseball game. 5. On average, there are 3.2 defects in a sheet of rolled steel. Assuming that the number of defects follows a Poisson distribution, what is the probability of a roll having exactly 3 defects? a.) 0.412 b) 0.223 c) 0.318 d) 0.335 6. The probability that a person has an Internet connection at home is 34%. The probability that they have access to the Internet at work is 40%. The probability that a person who has access to the Internet at work also has access at home is 55%. What is the probability that a person with an Internet connection at home also has one at work? a.) 0.55 b.) 0.65 c.) 0.41 d.) 0.58

7. The probability that a person catches a cold during the cold and flu season is 0.4. If 10 people are chosen at random, on average, how many of these ten people would you expect to catch a cold? a.) 4 b) 3 c) 2 d) 5

8. The stamping machine on a production line periodically is taken off-line for maintenance. Assume that the amount of time the machine is off-line is uniformly distributed between 15 and 30 minutes. What is the probability that the machine is off-line for more between 21 and 27 minutes? a.) 0.40 b) 0.60 c) 0.70 d) 0.30

9. An auditor reviewing the invoices of a small company finds that there are errors in 1.5% of them. If the auditor looks at 500 invoices, what is the probability that he finds more than 3 invoices with errors? Use the Poisson approximation to the binomial distribution. a.) 0.76 b) 0.95 c) 0.82 d) 0.68 10. A wire-spinning machine will spin, on average, 12.3 miles of wire before needing maintenance. If the time between maintenance is exponentially distributed, what is the probability that a spinning machine just placed back in service will need maintenance before it produces 4 miles of wire? a.) 0.278 b) 0.231 c) 0.263 d) 0.242

Quiz 1: Section I (B) Name : Roll No: 1. Suppose you know that the number of complaints coming in to a phone center averages 4.2 every ten minutes. Assume that the number of calls follows the Poisson distribution. What is the probability that there are three or fewer calls during the next ten minutes? a.) 0.413 b) 0.372 c) 0.395 d) 0.425

2. Suppose you know that the number of complaints coming in to a phone center averages 4.2 every ten minutes. Assume that the number of calls follows the Poisson distribution. What is the probability that there are exactly four calls during the next ten minutes? a.) 0.194 b) 0.172 c) 0.156 d) 0.134

3. A multiple choice quiz has five questions, each with five answers, a through e. If you just guess on all of the questions, what is the probability that you get at least one right? a.) 0.20 b.) 0.67 c.) 0.34 d.) 0.61 4. The probability that an employee at a company uses illegal drugs is 0.08. The probability that an employee is male is 0.62. Assuming that these events are independent, what is the probability that a randomly chosen employee is a male drug user? a.) 0.64 b.) 0.70 c.) 0.05 d.) 0.07 5. In a survey of top executives, it was found that 17% had traveled internationally on business. The probability of one of these executives fluently speaking a foreign language was found to be 10%. The probability that one of these executives neither spoke a foreign language nor had traveled internationally was 0.81. What is the probability that an executive who speaks a foreign language has traveled internationally? a.) 0.02 b.) 0.08 c.)0.32 d.) 0.80 6. Which of the following is an example of a discrete random variable? a.) How far you can drive in a car with a full tank of gas. b.) The number of cows on a cattle ranch. c.) The weight of a package at the post office. d.) The amount of rain that falls over a 24-hour period. 7. On average, there are 3.2 defects in a sheet of rolled steel. Assuming that the number of defects follows a Poisson distribution, what is the probability of a roll having more than 3 defects? a.) 0.354 b) 0.398 c) 0.412 d) 0.442

8. In a box of 16 chocolates, there are four chocolates with coconut filling. What is the probability of choosing four chocolates, none of which have coconut fillings? a.) 0.272 b) 0.264 c) 0.248 d) 0.216 actual answer 0.316 9. The number of accidents on a particular highway average 4.4 per year. Assuming that the number of accidents follows a Poisson distribution, what is the probability that there are more than three accidents next year? a.) 0.30 b) 0.41 c) 0.32 d) 0.36 actual answer 0.64

10. The probability that a person catches a cold during the cold and flu season is 0.4. If 10 people are chosen at random, what is the probability that exactly four of them will catch a cold? a.) 0.75 b) 0.50 c) 1.00 d) 0.25

Quiz 1: Section I (C) Name :

Roll No:

1. The probability that a new small business closes before the end of its first year is 42%. In addition, 37% of all new businesses are started by women. The probability that a new business is either owned by a woman or goes out of business is 62%. Your sister wants to start a new business. What is the probability she is still open at the end of the year? a.) 0.17 b.) 0.54 c.) 0.63 d.) 0.58 answer =0.20 2. In a survey of top executives, it was found that 46% had either traveled internationally on business or could fluently speak a foreign language. The probability that an executive who had not traveled internationally could speak a foreign language was 10%. It was found that only 4% of the executives had traveled internationally and could speak a foreign language. What is the probability that an executive who speaks a foreign language has not traveled internationally? a.) 0.60 b.) 0.06 c.) 0.36 d.) 0.53 3. The probability that a person catches a cold during the cold and flu season is 0.4. If 10 people are chosen at random, what is the probability that four or more of them will catch a cold? a.) 0.50 b) 0.62 c) 0.54 d) 0.58 4. It has been estimated that 30% of all farms are family-owned. In a sample of 12 farms, what is the probability that exactly three farms are family owned? a.) 0.33 b) 0.30 c) 0.36 d) 0.24 5. The number of accidents on a particular highway average 4.4 per year. Assuming that the number of accidents follows a Poisson distribution, what is the probability that there are exactly four accidents next year? a.) 0.50 b) 0.19 c) 0.37 d) 0.28 6. Investment A has an expected return of 10% with a standard deviation of 3.5%. Investment B has an expected return of 6% with a standard deviation of 1.2%. If you invest equally in both investments, what is the expected return of your portfolio? a.) 11.3% b) 16% c) 8% d) 10%

7. The average amount of time between a score by either team in college soccer games is 15.2 minutes. Suppose that the time between scores follows an exponential distribution. What is the probability that a soccer game goes for 45 minutes without either team scoring? a.) 0.95 b) 0.05 c) 0.87 d) 0.13 8. The number of orders that come into a mail-order sales office each month is normally distributed with a mean of 298 and a standard deviation of 15.4. The probability is 0.3 that the sales office receives less than how many orders? a.) 310.9 b) 285.1 c) 290.0 d) 306

9. The average amount of time between a score by either team in college soccer games is 15.2 minutes. Suppose that the time between scores follows an exponential distribution. The probability is 50% that we would have to wait how long to see a score by either team? a.) 16.4 minutes. b) 15.2 minutes c) 13.7 minutes d)10.5 minutes

10. The stamping machine on a production line periodically is taken off-line for maintenance. Assume that the amount of time the machine is off-line is uniformly distributed between 15 and 30 minutes. What is the probability that the machine is off-line for more than 18 minutes? a.) 0.80 b) 0.20 c) 0.75 d) 0.25

Quiz 1: Section I (D) Name : Roll No: 1. The probability that a person catches a cold during the cold and flu season is 0.4. If 10 people are chosen at random, on average, what is the standard deviation for the number of people catching a cold? a.) 0.155 b) 0.04 c) 0.62 d) 0.43 but should be 1.55 decimel wrong

2.Investment A has an expected return of 10% with a standard deviation of 3.5%. Investment B has an expected return of 6% with a standard deviation of 1.2%. If you invest equally in both investments, what is the standard deviation of the return on your portfolio? Assume that the returns on the two investments are independent. a.) 2.35 b) 4.7 c) 3.7 d) 2.17

3. The number of orders that come into a mail-order sales office each month is normally distributed with a mean of 298 and a standard deviation of 15.4. What is the probability that in a particular month the office receives more than 310 orders? a.) 0.782 b) 0.282 c) 0.718 d) 0.218

4. A computer store receives a shipment of 14 computers, 5 of which already have modem installed. Unfortunately, the boxes are not labeled so you are unsure which computers are which. If you select 4 computers, what is the probability that no more than two of them have modems? a.) 0.802 b) 0.871 c) 0.834 d) 0.905

5. On average, an RV sales lot sells 6 RVs per month. If the number of sales of RVs per month follows the Poisson distribution, what is the probability that exactly 6 RVs are sold next month? a.) 0.26 b) 0.50 c) 0.23 d) 0.16

6. On average, you receive 2.6 pieces of junk mail a day. Assuming that the number of pieces of junk mail you receive each day follows the Poisson distribution, what is the probability that you receive exactly three pieces of junk mail today? a.) 0.198 b) 0.233 c) 0.217 d) 0.176 7.Let the random variable X follow a normal distribution with a mean of 61.7 and a standard deviation of 4.2. What is the value of k such that P(59<X<k) = 0.54? a.) 65.2 b) 64.8 c) 64.4 d) 64.0

8. The stamping machine on a production line periodically is taken off-line for maintenance. Assume that the amount of time the machine is off-line is uniformly distributed between 15 and 30 minutes. What is the probability that the machine is off-line for more between 21 and 27 minutes? a) 0.40 b) 0.60 c) 0.70 d) 0.30

9. A wire-spinning machine will spin, on average, 12.3 miles of wire before needing maintenance. If the time between maintenance is exponentially distributed, what is the probability that a spinning machine just placed back in service will need maintenance before it produces 4 miles of wire? a) 0.278 b) 0.231 c) 0.263 d) 0.242

10 Let the random variable Z follow a standard normal distribution. Find the value k, such that P(-k<Z<k) = 0.78. a.) 1.42 b) 1.23 c) 1.37 d) 1.14

Quiz 1: Section I (E) Name :

Roll No:

1. In a set of 15 aluminum castings, two castings are defective (D), and the remaining thirteen are good (G). A quality control inspector randomly selects three of the fifteen castings without replacement, and classifies each as defective (D) or good (G). The sample space for this experiment contains ____________ elementary events. a) 3,375 b) 2,730 c) 455 d) 15 e) 3 2. If X and Y are mutually exclusive, then _______. a) the probability of the union is zero b) P(X) = 1 - P(Y) c) the probability of the intersection is zero d) the probability of the union is one

e) P(Y) = P(X)

3. Let A be the event that a student is enrolled in an accounting course, and let S be the event that a student is enrolled in a statistics course. It is known that 30% of all students are enrolled in an accounting course and 40% of all students are enrolled in statistics. Included in these numbers are 15% who are enrolled in both statistics and accounting. Find P(S). a) 0.15 b) 0.30 c) 0.40 d) 0.55 e) 0.60 4. A fair coin is tossed 5 times. What is the probability that exactly 2 heads are observed? a) 0.313 b) 0.073 c) 0.400 d) 0.156 e) 0.250 5. The number of cars arriving at a toll booth in five-minute intervals is Poisson distributed with a mean of 3 cars arriving in five-minute time intervals. The probability of 5 cars arriving over a five-minute interval is _______. a) 0.0940 b) 0.0417 c) 0.1500 d) 0.1008 e) 0.2890 6. Assume that a random variable has a Poisson distribution with a mean of 5 occurrences per ten minutes. The number of occurrences per hour follows a Poisson distribution with equal to _________ a) 5 b) 60 c) 30 d) 10 e) 20 7. If x is uniformly distributed over the interval 8 to 12, inclusively (8 x 12), then the standard deviation of this distribution is __________________. a) 4.00 b) 1.33 c) 1.15 d) 2.00 e) 1.00 8. Suppose x is a normal random variable with mean 60 and standard deviation 2. A z score was calculated for a number, and the z score is 3.4. What is x? a) 63.4 b) 56.6 c) 68.6 d) 53.2 e) 66.8 9. Let z be a normal random variable with mean 0 and standard deviation 1. The 90th percentile of z is ____________. a) 1.645 b) -1.254 c) 1.960 d) 1.280 e) 1.650 10. Suppose you are working with a data set that is normally distributed with a mean of 400 and a standard deviation of 20. Determine the value of x such that 60% of the values are greater than x. a) 404.5 b) 395.5 c) 405.0 d) 395.0 e) 415.0

Quiz 1: Section II (A) Name :

Roll No:

Q1. An investment broker reports that the yearly returns on common stocks are normally distributed with a mean return of 12.4 % and a standard deviation of 20.6%. On the other hand, the firm reports that the yearly returns on tax free bonds are normally distributed with a mean return of 5.2% and a standard deviation of 8.6%. Find a) Probability that a common stock gives a positive return. b) Probability of incurring a loss in the tax free bonds. Solution: a) Z = 0-12.4 / 20.6 = 0.601 area = 0.2257 Hence total probability = 0.5 + 0.2257 = 0.8257 b) Prob of loss = 0.5-0.2257 = 0.2753 Q2. The manager of a restaurant knows from experience that 70% of the people who make reservations for the evening show up for dinner. The manager decides one evening to overbook a and accept 20 reservations when only 15 tables are available. What is the probability that more than 15 parties will show up? Solution: Use normal approximation to binomial distribution. Hence mean = 15x 0.7 = 10.5 standard deviation = 1.77 Hence P( X >=15) = Z= 15 10.5 / 1.77 = 2.54. for Z z=2.54 area = 0.4945 Hence prob = 0.5-0.4945 = 0.0055

Quiz 1: Section II(B) Name :

Roll No:

Q1. Suppose that yearly health care expenses for a family of four are normally distributed with a mean expense of $3000 with a standard deviation of $500. An insurance company has decided to offer a health insurance premium reduction if a policy holders health care expenses do not a specified dollar amount. What dollar amount should be established if the insurance company wants families having lowest 33% of yearly health care expenses to be eligible for the premium reduction? Solution: Area required = left most 33% hence Z = -0.44 = x-3000/500 or x= 2780 Q2. A bank manager wishes to provide prompt service for customers at the banks drive-up window. The bank currently serve upto 10 customers per 15 minute period without significant delay. The average arrival rate is 7 customers per 15 minute period. Let x denote the number of customers arriving per 15 minute period and assume x follows a Poisson distribution. Find the probability that there will be a significant delay at the drive up window. Solution. Mean = 7, P( X >10) = 1-P(X ,=10) = 1- 0.9014 = 0.0986

Quiz 1: Section II (C) Name :

Roll No:

Q1. A department store will place a sale item in a special display for a one-day sale. Previous experience suggests that 20% of all customers who pass such a special display will purchase the item. If 2000 customers will pass the display on the day of the sale, and if one item per customer limit is placed on the sale item, how many units of the sale item should the store stock in order to have at most a 1% chance of running short of the item on the day of the sale. Assume that customers make independent purchase decisioms, Solution: Use normal approx to binomial = mean = 2000 x 0.20 = 400 standard deviation= 17.88 Hence z = 2.33 = x-400/17.88 hence x = 441.68 Q2. The maintenance department in a factory claims that the number of breakdowns of particular machine follows a Poisson distribution with a mean of two breakdowns every 500 hours. Assuming that the maintenance departments claim is true, find the probability that the time between successive breakdowns is between 100 and 300 hours. P( 100< x < 300 ) = e-2/5 - e-6/5 = 0.67-0.30= 0.37

Quiz 1: Section II (D) Name :

Roll No:

Q1. Assume that the ages for first marriages are normally distributed with a mean of 26 years and a standard deviation of 4 years. What is the probability a) a person getting married for the first time is in his or her twenties? b) a person is married below the permissible age of marriage which is 18 years of age. Solution: a) Z = 20-26/4 = 1.5 Area = 04332 Z = 30-26/4 = 1 area = 0.3413 hence total 0.7745 b) Z 18-26/4 = -2 area 0. 4772 hence required area = 0.5-0.4772 = 0.0228 Q2. Suppose a software company finds that the number of errors in its software per 1000 lines of code is described by a Poisson distribution. Furthermore, it is found that there is an average of four errors per 1000 lines of code. Let x denote the number of lines o f code between successive errors: a) Find the probability that there will be at least 400 lines of code between successive errors in the companys software. b) Find the probability that there will be no more than 100 lines of code between successive errors in the companys software. Solution: a) P( X > 400 ) = e-1.6 = 0.2018 b) P( < 100 ) 1- e0.4 = 1-0.67032 =0.329

Quiz 1: Section II (E) Name :

Roll No:

Q1. Net interest margin often referred to as spread is the difference between the rate banks pay on deposits and the rate they charge for loans. Suppose the rate banks pay interest on deposits is normally distributed with a mean of 6% with a standard deviation of 2.5% and the rate they charge their customers is normally distributed with a mean of 10% with a standard deviation of 3%. Find the probability that the net interest margin for the bank exceeds 5.5%. Solution: first find the difference 10-6 = 4 is the mean net interest margin. Standard deviation = sqrt of the sum of the variances = 2.5^2 + 3^2 = 15.25 Hence standard deviation = sqrt of 15.25 = 3.9 Hence z = 5.5 -4 / 3.9 = 0.38 area = 0.148 Hence required area = 0.5 0.148 = 0.352 Q2. The amount of sales tax paid on a purchase is rounded to the nearest rupee. Assume that the rounding off error is uniformly distributed in the interval -0.50 to +0.50 Rupee. Find the mean and standard deviation of the round off error. Solution: Mean for uniform = a+b /2 = 0.5 -0..5 / 2 = 0 Standard deviation = sqrt ( b-a)^2/12 = sqrt (1/12) = 0.2886