QUESTION 1 (7 points) 1. Fresh fruit price and quantity data for the years 2000 and 2010 follow.

Quantity data reflect per capita consumption in kilograms and prices are in RM. Type of Fruit Watermelon Bananas Papayas Pineapples a. b. 2000 per capita Consumption (kg) 24.3 19.9 13.9 3.2 2010 per capita Consumption (kg) 28.5 21.7 18.1 6.6 2000 Price (RM/kg) .41 .71 .56 .64 2010 Price (RM/kg) .51 .85 .61 .98

Compute the price relative for each product. Compute a Laspeyres index for fruit products. Comment on the change in fruit prices over the 10-year period. Answers: a. Fruit Price Relatives Watermelon (.51/.41) (100) = 124.4 Bananas (.85/.71) (100) = 119.7 Papayas (.61/.56) (100) = 108.9 Pineapples (.98/.64) (100) = 153.1 b.
I 4091.8649 120.6 33.924

Fruit prices have increased by 20.6% over the 10-year period according to the Laspeyres index. QUESTION 2 (6 points) In a large corporation, 60% of the employees are male. Suppose a random sample of five employees is selected. a. b. c. d. e. What probability distribution does this follow? What is the probability that the sample contains exactly three male employees What is the probability that the sample contains no male employees? What is the probability that the sample contains more than three female employees? What is the expected number of female employees in the sample?

Answers: a. Binomial b. 0.346 c. 0.010 1

d. 0.077+0.01=0.087 e. 2 QUESTION 3 (7 points) Only 0.02% of credit card holders of Bank Islam report the loss or theft of their credit cards each month. This percent of credit card loss or theft is the same for any other month and all the months are independent intervals. The bank has 15,000 credit cards in the city of Kuala Lumpur. What is the probability that during the next month in the city of Kuala Lumpur a. no one reports the loss or theft of their credit cards? b. every credit card is lost or stolen? c. six people report the loss or theft of their cards? d. at least nine people report the loss or theft of their cards? e. Determine the expected number of reported lost or stolen credit cards. f. Determine the standard deviation for the number of reported lost or stolen cards. Answers: a. 0.0498 b. 0.0000 c. 0.0504 d. 0.0038 e. 3 f. 1.73 QUESTION 4 (7 points) Z is a standard normal variable. Find the value of Z in the following. a. The area between 0 and Z is 0.4678. b. The area to the right of Z is 0.1112. c. The area to the left of Z is 0.8554 d. The area between -Z and Z is 0.754. e. The area to the left of -Z is 0.0681. f. The area to the right of -Z is 0.9803. Answers: a. 1.85 b. 1.22 c. 1.06 d. 1.16 e. -1.49 f. -2.06 QUESTION 5 (10 points) The life expectancy of Al-Asr brand watches is normally distributed with a mean of four years and a standard deviation of eight months. 2

a. What is the probability that a randomly selected watch will be in working condition for more than five years? b. The company has a three-year warranty period on their watches. What percentage of their watches will be in operating condition after the warranty period? c. What is the minimum and the maximum life expectancy of the middle 95% of the watches? d. Ninety-five percent of the watches will have a life expectancy of at least how many months? Answers: a. 0.0668 b. 93.32% c. Min = 32.32 months d. 34.88 months QUESTION 6 (10 points) EON Servicenter, an automotive repair shop has determined that the average service time on an automobile is 2 hours with a standard deviation of 32 minutes. Historically, the proportion of clients who is satisfied with the service is 72%. A random sample of 64 services is selected. a. Show the sampling distribution of the sample mean. b. What is the probability that the sample of 64 will have a mean service time greater than 114 minutes? c. What is the probability that a sample proportion from a simple random sample of 64 services will be within of .05 of the population proportion? d. Assume the population consists of 400 services. Determine the standard error of the mean and standard error of proportion. Answers: a. Shape: Normally distributed Location: E ( x ) 2 and 32 Variability: x 4 n 64 b. 0.9332 c. 0.6266 d. x 3.67 , p 0.515

Max = 63.68 months

QUESTION 7 (7 points) A company's human resource department was interested in the average number of years that a person works before retiring. The sample of size 11 follows: 10 16 18 19 20 21 21 22 24 24 24 3

a. What is the mode? What does it signify? b. What is the arithmetic mean? Interpret its meaning. c. What is the median? Provide an interpretation to this value. d. Based on the values of the arithmetic mean, median, and mode, what is the most likely shape of the distribution? Answer: a. 24 : the most frequent number of years a person work before retiring is 21 years b. 19.91: the average number of years that a person works before retiring is 20.4 years c. 21 : 50% of the workers work less than 21 years before retiring and 50% of the workers work more than 21 years before retiring. d. Since mean<median<mode, thus this is a negatively skewed distribution QUESTION 8 (6 points) Reed Auto periodically has a special week-long sale. As part of the advertising campaign Reed runs one or more television commercials during the weekend preceding the sale. Data from a sample of 5 previous sales are shown below: Number of TV Ads 1 3 2 1 3 a) Number of Cars Sold 14 24 18 17 27

b)

Decide which variable on the vertical axis (dependent) and which variable on the horizontal axis (independent). Plot a scatter diagram to show the relationship of these two variables. Does there seem to be a relationship between these variables? Is the relationship direct or inverse?

Answer: Dependent variable: number of cars sold Independent variable: number of TV advertisements Direct relationship