(Pokhara University Affiliate)

END-TERM EXAMINATION
Level: Masters

Year: 2014

Programme: MBA(Finance)

Full Marks: 100

Trimester: I

Pass Marks: 60

Course: STT501: Business Statistics

Time: 3 hrs.

Candidates are expected to answer the question in their own words as far as practicable. The
figures in the margin indicate full marks.
Attempt all questions
1. The figures given below show the number of graduates employed in different Commercial Banks of
Nepal during 2011-2012 from fifty colleges.

[20]

3
15 28
2
8
26 40 37 43
7
19 34 43 17 21 15 23 16 15 45
20 22 32 41 11
5
18 34
9
13
22 25 13 35 25 29 24 19 48 18
39
4
33 22 32 26 45 37 35 26
a) Prepare an ordered array and Stem-leaf plot of data.
b) Present the data in five classes of equal interval indicating frequency and relative frequency.
c)

Calculate mean and standard deviation of (b)

d) Prepare the box and whisker plot of this data set and interpret it.
e)

Plot the histogram and frequency polygon from the data.

2. Before constructing a dam on the Colorado River, the U. S. Army Corps of Engineers performed a
series of tests to measure the water flow past the proposed location of the dam. The results of the
testing were used to construct the following frequency distribution:
[15]
River Flow (Thousands of Gallons per Minute) Frequency
1001-1050
7
1051-1100
21
1101-1150
32
1151-1200
49
1201-1250
58
1251-1300
41
1301-1350
27
1351-1400
11
Total
246
a) Use the data given in the table construct a more-than cumulative frequency distribution and
ogive.
b) Use the data given in the table to construct a less-than cumulative frequency distribution and
ogive.

c) Estimate the count River Flow between 1130 to 1240 thousands of gallons per minute.
3. a) Rob Rales is preparing a report that his employer, the Titre Corporation, will eventually deliver to
the Federal Aviation Administration. First, the report must be approved by Robs group leader,
department head, and division chief (in that order). Rob knows from experience that three managers
act independently. Further, he knows that his group leader approves 80 percent of the reports written
by Rob that reach him, and his devision chief approves 82 percent of Robs work.
i) What is the probability that the first version of Robs report is submitted to the FAA?
ii) What is the probability that the first version of Robs report is approved by his group leader and
department head, but is not approved by his division chief?

[5]

b) Factory produces electric bulbs by three machines. First, second and third machine produces 3000,
2500 and 4500 bulbs respectively. According to past experience, it is known that the defective bulbs
produced by the three machines are 30, 45, and 50 respectively. One bulb is drawn at random from a
days total production and found to be defective. Find the Probability that the defective bulb is from
machine (i) first

(ii) second and

(iii) third.

[10]

c) A physical therapist at enormous State University knows that the football team will play 40 percent
of its games on artificial turf this season. He also knows that a football players chances of incurring a
knee injury are 50 percent higher if he is playing on artificial turf instead of grass. If a players
probability of knee injury on artificial turf is 0.42, what is the probability that
i) A randomly selected football player incurs a knee injury?
ii) A randomly selected football player with knee injury incurred the injury playing on grass? [5]
4. a) Kathmandu Metropolitan Police Department has implemented seatbelt laws for drivers and
passengers for safety measure. It is known that 70% of the drivers wear their seatbelts when they
drive. A police on duty selects a random sample of five drivers and counts the number who is wearing
seatbelts. The number of drivers who wear seatbelts in the sample of five is a binomial random
variable. Find the probability that
i)
Exactly three wearing seatbelts.
ii)
At three wearing seatbelts
iii)
At the most two wearing seatbelts
[5]
b) It is known that 0.5per cent tuberculosis patients die every year. Sixty patients are admitted in a
hospital suffering from tuberculosis. What is the probability that
i) three patients will die,
ii) at least five patients will die,
iii) all patients will cured
5 a) If the amount of cosmic radiation to which a person is exposed while flying by jet across the United
States is a random variable having the normal distribution with = 4.35 mrem and = 0.59 mrem,
find the probabilities that the amount of cosmic radiation to which a person will be exposed on such
a flight is

(i) Between 4.00 and 5.00 mrem;

(ii) at least 5.50 mrem.
(iii) range for middle 80% of cosmic radiation.

[5]

b) Fund Info provides information to its subscribers to enable them to evaluate the performance of
mutual funds they are considering as potential investment vehicles. A recent survey of funds whose
stated investment goal was growth and income produced the following data on total annual rate of
return over the past five years;
Annual return (%)

11-11.9

Frequency

Annual return (%)

15-15.9

Frequency
i)

12-12.9
2

13-13.9
8

14-14.9
10

16-16.9

17-17.9

18-18.9

11

According to Chebyshevs theorem, between what values should at least 75% of the sample
observations fall? What percentages of the observations actually do fall in that interval?

ii) Because the distribution is roughly bell-shaped, between what values would you expect to
find 68 percent of the observations fall? What percentages of the observations actually do
fall in that interval?

[5]

6. Clara Voyant, whose job is predicting the future for her venture capital company, has just received
the statistics describing her companys performance on 1,800 investments last year. Clara knows
that, in general, investments generate profits that have a normal distribution with mean $7,500 and
standard deviation $3,300. Even before she looked at the specific results from each of the 1,800
investments from last year, Clara was able to make some accurate predictions by using her
knowledge of sampling distributions. Follow her analysis by finding the probability that the sample
mean of last years investments
i. Exceeded $7,700.
ii. Was less than $7,400.
iii. Was greater than $7,275, but less than $7,650.
[5]
b) An auditor for the state insurance department wants to determine the proportion of claims that are
paid by a health insurance company within two months of receipt of the claim. A random sample of
200 claims is selected, and it is determined that 80 were paid within two months of the receipt of
the claim.
(i)
Set up a 99% confidence interval estimate of the population proportion of the claims paid
within two within two months.
(ii)

Set up 95% confidence interval estimate if 90% claims are supposed to be paid within
two months of their receipt.

[5]

c) BullsEye Discount store has always prided itself on customer service. The store hopes that all
BullsEye stores are providing the same level of service from coast to coast, so they have surveyed

some customers. In the Southeast region, a random sample of 97 customers yielded an average
overall satisfaction rating of 8.8 out of 10 and the sample standard deviation was 0.7. Construct 98
percent confidence limits estimate of the true mean.

[5]

7 Students in a large accounting class were asked to rate the course by assigning a score of 1, 2, 3, 4, and
5 to the course. A high score indicates that the students received greater value from the course. The
accompanying table shows proportions of students rating the course in each category.
Rating

SectionA

SectionB

SectionC

(Probability)
(Probability)
(Probability)
1
0.07
0.09
0.15
2
0.19
0.16
0.26
3
0.28
0.29
0.18
4
0.30
0.26
0.30
5
0.16
0.20
0.11
Find the mean and standard deviation of the rating. Compare the rating of the three sections based
on the risks.

[10]
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