Ac - Ct3 - P Mas - 18: Mock Exam A Solutions

AC – CT3 – P MAS – 18
Mock Exam A Solutions
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Subject CT3
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Mock Exam A Solutions
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CT3: Mock Exam A – Solutions Page 1
Mock Exam A – Solutions
Markers: This document sets out one approach to solving each of the questions. Please
give credit for other valid approaches.
Exact figures have been used for intermediate calculations. If rounded values are used
then slightly different answers may be obtained.
Solution 1
Course reference: Chapter 12 Section 1.5.
A Type I error occurs when H 0 is rejected when it is true. The test is of the form
“Reject H 0 if X  25 ”. So we want:
P  X  25 when   20  0.02 [½]
X 
Now X ~ N (  ,  2 n) and  2  100 . Hence Z  ~ N  0,1 [½]
100 n
 25  20   n
P  X  25 when   20  P  Z    PZ  2  [½]
 100 n   
Setting this probability equal to 0.02 and using page 162 of the Tables, we get:
n
 2.0537 [½]
2
Solving this we get n  16.87 . So the required minimum sample size is 17. [1]
[Total 3]

Page 2 CT3: Mock Exam A – Solutions
Solution 2
Course reference: Chapter 9 Section 5.
(i) Definition
Fn1 , n2 is defined to be the distribution of the ratio:
U n1
V n2
where U ~  n21 and V ~  n22 and U and V are independent random variables. [1]
(ii) Two sample distribution
Since S12 and S 22 are the sample variances, we have:
(n1  1) S12 (n2  1) S 22

~  n21 1 and ~  n22 1
 12  22
Dividing by the degrees of freedom and then dividing the random variables, we get:
(n1  1) S12
(n1  1)
 12 S12  12
 ~ Fn1 1, n2 1 [1]
(n2  1) S 22 S22  22
(n2  1)
 22
We have achieved the desired result since this corresponds to the definition of the F
(n1  1) S12 (n2  1) S 22
distribution in part (i), with U  ,V  and n1 and n2 replaced by
 12  22
n1  1 and n2  1 .
(iii) Probability
We have n1  11 , n2  19 ,  12   22   2 , so:
S12
~ F10,18 [1]
S 22

We can then calculate the probability:
 S2 
P  12  2.9  P( F10,18  2.9)
 S2 
which (from page 173 of the Tables) is just less than 2.5% (by interpolation it is
approximately 2.4%). [1]
[Total 2]
Solution 3
Course reference: Chapter 11 Section 4.2.
We require:
P ( X  2)  0.05  P( X  1)  0.95 under Poi ( 1 ) [½]

P ( X  2)  0.05 under Poi ( 2 ) [½]
For 1 we can see from page 175 of the Tables:
P ( X  1)  0.96306 if X ~ Poi (0.3)
P ( X  1)  0.93845 if X ~ Poi (0.4) [1]
So, by interpolation:
1  0.3 0.95  0.96306

  1  0.353 [½]
0.4  0.3 0.93845  0.96306
For 2 we can see from page 177 of the Tables:
P ( X  2)  0.05362 if X ~ Poi (6.2)
P ( X  2)  0.04985 if X ~ Poi (6.3) [1]
So, by interpolation:
2  6.2 0.05  0.05362

  2  6.296 [½]
6.3  6.2 0.04985  0.05362
[Total 4]

The confidence interval is (0.353,6.296) .
Alternatively, we could solve equations numerically to get the confidence interval.

From the first equation:
0.95  P( X  0)  P( X  1)  e  1  1e  1
Solving this numerically we get 1  0.36 . [1]
From the second equation:
0.05  P( X  0)  P( X  1)  P( X  2)
22
 e  2   2 e  2  e  2
2
Solving this numerically we get 2  6.3 . [1]
So the confidence interval for  is (0.36, 6.3) . [1]

Solution 4
Course reference: Chapter 6 Sections 1.3 and 1.4 and Chapter 7 Section 1.
(i) Independent
If U and V are independent, then:
fU ,V (u, v)  fU (u ) fV (v) [½]
ie the joint density function factorises. This is clearly not the case and so U and V are
not independent. [½]
Alternatively, E (UV ), E (U ) and E (V ) could be calculated and it could be shown that

E (UV )  E (U ) E (V ) which would also tell us that they were not independent.
However, the question is only worth one mark and does say “State whether…”, which
should alert us to the fact that it is a very quick result!
Do be aware that whilst we can use E (UV )  E (U ) E (V ) to show that random variables
are not independent, the converse result E (UV )  E (U ) E (V ) does not necessarily
imply that U and V are independent (it is a necessary not a sufficient condition – they
could be just uncorrelated). [Total 1]
(ii) Conditional density
To obtain the conditional density function, we use:
fU ,V (u , v)
fU |V  v (u , v)  [½]
fV (v)
To obtain the marginal function f (v) we must “integrate out” u:
fV (v)   fU ,V (u, v) du
1
1
  (3u  5v) du
0
4
1
1 3 2 
  u  5uv 
4 2 0
13  3 5
   5v    v [1]
4 2  8 4
Note to markers: if this was determined in part (i) full credit should be given.

Therefore:
1 (3u  5v )
fU |V  v (u, v)  4

1 3  5v
4 2 
3u  5v 6u  10v
 3  5v
or 0  u 1 [½]
2
3  10v
[Total 2]
(iii) Conditional expectation
E (U | V  v)   u fU |V  v (u , v) du
1
3u  5v
 u 3  5v
du [1]
0 2
1
1
 3 
 5v 0
3u 2  5uv du
2
1  3 5 2 1 1  52 v 2  5v
 3  5v 
u  2u v  3  [1]
0  5v 3  10v
2 2
[Total 2]

Solution 5
Course reference: Chapter 1 Sections 2.1, 3.1 and 4.1.
(i) Mean and standard deviation
For our data, we have:
 x  (30  8)  (20  12)  480 [½]
 x 2  (30  82 )  (20  122 )  4,800 [½]
Hence:
480
x  9.6 [½]
50
1  2 1
s2  4,800  50  9.6  49  192  3.9184
 [1]
49 
 s  3.9184  1.979 [½]
[Total 3]
(ii) New mean, standard deviation and skewness
The mean would decrease as we have added lower values to the data set. [½]
The standard deviation would increase, as the data set is now spread out over a wider
range (3 to 12 instead of 8 to 12). [½]
The data set will become more negatively skewed as more of the data values are on the
negative (left) side of the mode (or median or mean). [1]
[Total 2]
For comparison:
Original data set New data set

Mean 9.6 8.5
Standard deviation 1.98 3.07
Coefficient of skewness 0.41 0.48

Solution 6
Course reference: Chapter 11 Sections 3.1 and 3.2.
(i) Confidence interval for 
From page 22 of the Tables, we have:
X 
~ tn 1
S n
Since we have n  20 , it follows that:
 X  
P  2.093   2.093  0.95
 S 20 
Rearranging the inequality:
S S
X  2.093    X  2.093
20 20
So a 95% confidence interval for  is given by:
s
x  2.093 [1]
n
We have:
52 48.2
x  2.6 and s 2   2.5368 [1]
20 19
So our 95% confidence interval is:
2.6  2.093 2.5368 20  (1.85,3.35) [1]

[Total 3]

(ii) Confidence interval for ²
(n  1) S 2
2
~  n21

Again, since n  20 , it follows that:
 19S 2 
P  8.907  2  32.85  0.95 [1]
  
19S 2 19S 2
 2 
32.85 8.907
So our 95% confidence interval is:
 19s 2 19s 2   48.2 48.2 

 32.85 , 8.907    32.85 , 8.907   (1.47, 5.41) [1]
 
[Total 2]

Solution 7
Course reference: Chapter 4 Section 1.3 and Chapter 8 Section 2.1.
(i) Probability the sample contains 2 or more boys
Let X denote the number of boys in a sample of 4 children from the population. Then
X ~ Bin  4,½  and:
P  X  2  P  X  2  P  X  3  P  X  4
2 2 3 1 4 0
 4  1   1   4  1   1   4  1   1 
                      0.6875 [1]
 2  2   2   3  2   2   4  2   2 
Alternatively, you could calculate this as 1  P  X  0  P  X  1 . Students may also

make use of the Binomial tables on Page 186.
(ii) Probability of at least 60 samples containing 2 or more boys
Now let Y denote the number of samples out of 100 with at least 2 boys. Then
Y ~ Bin 100, 0.6875 and this distribution can be approximated by the normal
distribution with the same mean and variance. We have:
E  Y   100  0.6875  68.75 [½]
and: var  Y   100  0.6875  1  0.6875  21.484375 [½]
So: Y  N  68.75, 21.484375 [1]


Incorporating the continuity correction, we get:
 59.5  68.75 
P  Y  60  P  N  0,1   [1]
 21.484375 
 P  N  0,1  1.99563
 P  N  0,1  1.99563
 0.977 [1]
[Total 4]
Markers: please deduct a mark if the continuity correction has not been used. Without
the correction, the answer is (1.88776)  0.970 .

Solution 8
Course reference: Chapter 2 Section 4.
(i) Probability of catching late train
Let E be the event “catch the early train”.
Let L be the event “catch the late train”.
Let T be the event “arrive on time for work”.
Let NT be the event “do not arrive on time for work”.
P( L  T )
We want P( L | T )  . Drawing a probability tree:
P(T )
T
0.6
E
0.7
0.4 NT
T
0.55
0.3
L
0.45
NT
We have:
P ( L  T )  0.3  0.55  0.165 [1]
P (T )  0.7  0.6  0.3  0.55  0.42  0.165  0.585 [1]
0.165
 P( L | T )   0.282 [1]
0.585
[Total 3]
Alternatively, we could do this directly using Bayes’ Theorem:
P(T | L) P( L) 0.55  0.3

P( L | T )    0.282
P(T | L) P( L)  P(T | E ) P( E ) (0.55  0.3)  (0.6  0.7)

(ii) Probability of catching mid-morning train
Let M be the event “catch the mid-morning train”.
The probabilities of catching each of the trains are:
P( E )  0.7 , P ( M )  0.2 and P ( L)  0.1
The probabilities of getting to London on time for work given the trains are:
P(T | E )  0.6 , P (T | M )  0.57 and P (T | L)  0.55
Since the tree diagram would be messy, it would be quicker to use Bayes’ Theorem.
We require P (T | M ) so using the formula from page 5 of the Tables, we get:
P(T | M ) P( M )
P(M | T )  [1]
P(T | E ) P( E )  P(T | M ) P( M )  P(T | L) P ( L)
0.57  0.2
 [1]
(0.6  0.7)  (0.57  0.2)  (0.55  0.1)
 0.194 [1]
[Total 3]

Solution 9
Course reference: Chapter 7 Section 5.2 and Chapter 5 Section 3.
We have S  X1  X 2    X N where X is the claim size and N is the number of

claims.
(i) Cumulant generating function
From page 16 of the Tables:
M S (t )  M N  ln M X (t ) 
Since:
M N (t )  exp   (et  1)   exp  204(et  1)  [½]
and:

 t
M X (t )  1    (1  2t ) 74 [½]
 
we have:
  
M S (t )  M N  ln M X (t )   exp  204 (1  2t ) 74  1 

[½]
Hence:

CS (t )  ln M S (t )  204 (1  2t ) 74  1  [½]
[Total 2]

(ii) Coefficient of skewness
We first need to find the skewness, since, by definition, the coefficient of skewness is:
skew[ S ]
[½ ]
 var[S ]1.5
Differentiating the cumulant generating function:
CS (t )  204  74(1  2t ) 75  2  30,192(1  2t ) 75 [½ ]
CS(t )  30,192  75(1  2t ) 76  2  4,528,800(1  2t ) 76 [½ ]
CS(t )  4,528,800  76(1  2t ) 77  2  688,377,600(1  2t ) 77 [½ ]
Hence:
var( S )  CS(0)  4,528,800 [½]

skew( S )  CS(0)  688,377,600 [1]
and the coefficient of skewness is:
skew[ S ] 688,377,600
  0.0714 [½ ]
 var[S ]1.5
4,528,8001.5
[Total 4]

Solution 10
Course reference: Chapter 6 Section 4.4, Chapter 4 Sections 3.2 and 2.2.
(i) Distribution of sum of random variables
From the Tables:
1
 t
M X i (t )  1   [½]
 
n
Consider the MGF of  Xi :
i 1
M  X i (t )  E et ( X1  X 2  X n )   E etX1 etX 2  etX n  [½]

   
But since the random variables are independent:
E etX1 etX 2  etX n   E etX1  E etX 2   E etX n  [1]

       
The expressions in the product are the individual MGFs, so:
M  X i (t )  E etX1  E etX 2   E etX n   M X1 (t ) M X 2 (t ) M X n (t )

     
1 1 1 n
 t  t  t  t
 1   1    1    1   [½]
       
Since this is the MGF of a gamma (n,  ) random variable, by the uniqueness property of
n
MGFs, we can say that  X i ~ gamma(n,  ) . [½]
i 1
[Total 3]

(ii)(a) Waiting time distribution
The waiting time in days, T , has an Exp(10) distribution. [1]
(ii)(b) Waiting time to the fourth claim
The waiting time in days to the fourth claim is T1  T2  T3  T4 , where the Ti ’s are
independent and Ti ~ Exp (10) .
From part (i), we know that S  T1  T2  T3  T4 ~ gamma (4,10) . [1]
We require P ( S  0.5) . Using the fact that if X ~ gamma ( ,  ) then 2 X ~  22 : [½]
P ( S  0.5)  P(20S  10)  P ( 82  10) [½]

 1  0.735  0.265 [1]
[Total 4]
Alternatively, we could calculate the probability that there are fewer than 4 claims in
half a day. N ~ Poi (5) is the number of claims in half a day. Hence, using the Poisson
tables:
P ( S  0.5)  P( N  4)  P( N  3)  0.265

Solution 11
Course reference: Chapter 3 Sections 3.1 and 3.2. Chapter 10 Sections 1.1 and 2.1.
(i) Obtain the PDF
The density function is a straight line. The area under the line must be equal to 1. So if
it crosses the vertical axis at (0, h ), we have:
½   h  1
2
which gives h  . Since the line goes through the points (0, 2  ) and ( , 0) , the

gradient of the line is:
2 0 2
 2 [1]
0  
Using the equation y  mx  c (the equation of a straight line with gradient m and
y -intercept c ), we have:
2 2 2  2 x 2(  x)
f ( x)   x   , 0  x  [1]
 2   2
2
[Total 2]
(ii) Mean and variance of X
We have:
 
2(  x) 1  2 2 x3  
E( X )   x dx  2  x    [1]
0
2   3 0 3
and:
 
2(  x) 1  2 x3 2 x 4  2
E( X )   x
2 2
dx  2     [1]
0
2   3 4 0 6
2 2 2
 var( X )    [1]
6 9 18
[Total 3]

(iii) Method of moments estimate
Equating the sample and population means:
ˆ
 3.04 [1]
3
which gives ˆ  9.12 . [1]

[Total 2]
(iv) Difference between method of moments and ML estimates
If the actual value of  was 9.12, this would give a probability of zero of obtaining a
sample value of 10. [1]
The maximum likelihood estimate is always a feasible value of  . [1]

[Total 2]
(v) Maximum likelihood estimate
The likelihood function for  is:

5
32 (  xi )
2(  x1 ) 2(  x5 ) i 1
L( )  2
 2
 [1]
   10
Taking logs:
log L  log32   log(  xi )  10log [½]
Differentiating with respect to  :
d 1 10
log L    [1]
d   xi 
Evaluating this derivative at the points   12 and   12.5 we get:
 d  1 1 1 1 1 10
 d log L  12  11.2  10.7  10.6  10.3  2  12  0.0408 [½]
 d  1 1 1 1 1 10
 d log L  12.5  11.7  11.2  11.1  10.8  2.5  12.5  0.0426 [½]

So there is a value for  between 12 and 12.5 for which the derivative of the log of the
likelihood function is zero. [½]
Using interpolation gives:
0  0.0408
  12  (12.5  12)  12.2 [½]
0.0426  0.0408
Now checking the second derivative:
d2 1 10
log L    2 [½]
d 2
  xi  
2
and:
 d2   1 1 1 1 1  10
 2 log L    2
 2
 2
 2
 2

 d  12.2  11.4 10.9 10.8 10.5 2.2  12.22
 0.173 [½]
Since the first derivative is zero and the second derivative is negative when   12.2 ,
the maximum likelihood estimate of  is 12.2. [½]
[Total 6]

Solution 12
Course reference: Chapter 13 Sections 1, 3.2, 3.5, 3.3, 2.2 and 3.6, respectively.
(i) Comment
The scores look like they follow a reasonably straight line, so the model appears
suitable. [1]
(ii) Intercept and gradient parameter estimates
2
 639 
s xx   x 2  nx 2  45,507  10   4,674.9 [½]
 10 
 639   622 
s xy   xy  n x y  43, 205  10   3, 459.2 [½]
 10   10 
Using the formulae for ˆ and ̂ given on page 24 of the Tables:
s xy 3, 459.2
ˆ    0.740 [1]
s xx 4,674.9
ˆ  y  ˆ x  62.2  0.740  63.9  14.9 [1]

[Total 3]

(iii) Test gradient
We are carrying out a test of:
H 0 :   0.5 vs H1 :   0.5
We know that:
ˆ  
~ tn  2
ˆ 2 S xx
We need to calculate ˆ 2 :
1 
2 
s xy 1 3, 459.22 
ˆ2
   s yy     4,669.6   263.74 [1]
n 2 s xx  8  4,674.9 
2
 622 
where s yy  43,358  10   4,669.6 .
 10 
The value of the test statistic is:
0.740  0.5
 1.01 [1]
263.74
4,674.9
From page 163 of the Tables, P (t8  1.01)  15% , so we have insufficient evidence to
reject H 0 at the 5% level. So it is reasonable to assume that the gradient parameter is
0.5. [1]
Alternatively, the value of the test statistic is less than the 5% critical value of 1.86, so
we have insufficient evidence to reject H 0 at the 5% level.
[Total 3]

(iv) Coefficient of determination
The coefficient of determination gives the proportion of variability explained (or

determined) by the model and hence measures how good the fit of the model is. A
value close to 100% tells us the model is a good fit to the data. [1]
The proportion of variability explained by the model here is:
2
2 s xy 3, 459.22
R    0.548  54.8% [1]
s xx s yy 4,674.9  4,669.6
This value is low which indicates that the model is not a good fit to the data. This is due
to the large spread of the scores around the regression line. [1]
[Total 3]
(v) Correlation coefficient and test
Since we have linear regression, r  R 2  0.740 . [1]
We are testing the hypotheses:
H 0 :   0.9 vs H1 :   0.9
zr  z 
~ N (0,1)
1 n3
1 
where zr  tanh 1 r  12 ln 11 rr and z   tanh 1   12 ln 1  .
Our test statistic is:
tanh 1 0.740  tanh 1 0.9

 1.38 [1]
17
This is greater than the 5% critical value of 1.960 , so we have insufficient evidence to
reject H 0 at the 5% level. Therefore we conclude that   0.9 . [1]
[Total 3]

Alternatively, we can calculate the probability value as follows:
P ( Z  1.378)  1  0.91590  0.08410
This means we have a p -value of 2  8.41%  16.82% , which is clearly not significant.
(vi) Individual response confidence interval
This part of the question uses the “individual response” section of the notes. From the
notes:
yˆ0  y0
~ tn  2 [1]
 1 ( x0  x ) 2  2
1  n  S  ˆ
 xx 
(Markers, please award ½ for recognising the “individual response” and ½ for the
t distribution.)
where x0  50 and yˆ0  14.9  0.740  50  51.9 . [1]
This gives us a confidence interval of:
 1 (50  63.9) 2 
51.9  2.306 1   263.74 [1]
 10 4, 674.9 
51.9  2.306  17.35  (11.9,91.9) [1]

[Total 4]

Solution 13
Course reference: Chapter 14 Sections 1.2, 1.3, and 2.3. Chapter 11 Section 3.2.
(i) Least squares estimates
We have:
1 1
ˆ  y   yij
n i j
 ˆ 
18
 117  6.5 [1]
1 1
ˆi  yi   y 
ni
 yij  n  yij
j i j
So:
27
ˆ1   6.5  0.25 [½]
4
15
ˆ2   6.5  1.5 [½]
3
34
ˆ3   6.5  0.83 [½]
6
41
ˆ4   6.5  1.7 [½]
5
[Total 3]
(ii) ANOVA
We assume the observations are from normal populations with the same variance. [1]
We are testing the hypotheses:
H0 : Each company has the same mean number of claims per month
H1 : There are differences between the mean numbers of claims received per month
by the different companies [½]

We have:
1 2 117 2
SST   yij2  y  843   82.5 [1]
n 18
1 2 1 2  27 2 152 342 412  117 2

SS B   yi   y        25.62 [1]
ni n  4 3 6 5  18
SS R  SST  SS B  82.5  25.62  56.88 [½]
The ANOVA table is:
Source of variation DF Sum of squares Mean squares
Between treatments 3 25.62 8.54

Residual 14 56.88 4.06
Total 17 82.44
[1 for mean squares]
8.54
The variance ratio is F   2.10 . [1]
4.06
Under H 0 , this has an F3,14 distribution. The 5% critical point is 3.344, so we have no
evidence to reject H 0 , and we conclude that there is no difference between the mean
number of claims received by each company. [1]
[Total 7]
(iii) Confidence interval for variance
The unbiased estimate of  2 is given by:
SS R 56.88
ˆ 2    4.063 [1]
nk 14
In other words, the estimate of the error variance is the residual mean square. This is
an entry in the ANOVA table, so we could just write it down from there.

Now:
(n  k )ˆ 2 SS R
2
~  n2 k or 2
~  n2 k [½]
 
2
We have a 14 distribution, so:
 SS 
P  5.629  2R  26.12  0.95 [½]
  
SS R SS R
 2 
26.12 5.629
So a 95% confidence interval for  2 is:
 56.88 56.88 
 ,    2.18,10.10 [1]
26.12 5.629 
[Total 3]
(iv) Comparison of treatment means
The treatment means are:
27
y1   6.75
4
15
y2  5
3
34
y3   5.6
6
41
y4   8.2 [½]
5

So we have:
y2  y3  y1  y4 [½]
Comparing y2 and y3
The least significant difference between treatment means 2 and 3 is:
 1 1  1 1
t14, 2.5% ˆ 2     2.145 4.063     3.057
 n2 n3   3 6
Since y3  y2  0.6 , there is no significant difference between 2 and 3 . [1]
We show this by underlining as follows:
y2  y3  y1  y4
Comparing y2 and y1
 1 1  1 1
t14, 2.5% ˆ 2     2.145 4.063     3.302
 n2 n1   3 4
Since y1  y2  1.75 , there is no significant difference between 2 and 1 . [1]
So the diagram becomes:
y2  y3  y1  y4
Comparing y2 and y4
 1 1  1 1
t14, 2.5% ˆ 2     2.145 4.063     3.157
 n2 n4   3 5
Since y4  y2  3.2 , there is a significant difference between 2 and 4 . [½]

Comparing y3 and y4
1 1  1 1
t14, 2.5% ˆ 2     2.145 4.063     2.618
 n3 n4   6 5
Since y4  y3  2.53 , there is no significant difference between 3 and 4 . [½]
So the final diagram is:
y2  y3  y1  y4 [1]
___________
[Total 5]
Markers: a complete list of the various values is given below.
Least significant
Mean Absolute difference Not significant
difference
y2 y3 0.6 3.057 
y2 y1 1.75 3.302 
y2 y4 3.2 3.157 
y3 y1 1.083 2.791 
y3 y4 2.53 2.618 
y1 y4 1.45 2.900 
Award 1 mark for the first two tests and ½ mark for the next two tests.

Ac - Ct3 - P Mas - 18: Mock Exam A Solutions

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AC – CT3 – P MAS – 18

Mock Exam A Solutions

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Mock Exam A Solutions

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Mock Exam A – Solutions

Course reference: Chapter 12 Section 1.5.

P  X  25 when   20  0.02 [½]

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Course reference: Chapter 9 Section 5.

Fn1 , n2 is defined to be the distribution of the ratio:

(ii) Two sample distribution

Since S12 and S 22 are the sample variances, we have:

(n1  1) S12 (n2  1) S 22

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We can then calculate the probability:

Course reference: Chapter 11 Section 4.2.

P ( X  2)  0.05  P( X  1)  0.95 under Poi ( 1 ) [½]

For 1 we can see from page 175 of the Tables:

P ( X  1)  0.96306 if X ~ Poi (0.3)

P ( X  1)  0.93845 if X ~ Poi (0.4) [1]

1  0.3 0.95  0.96306

For 2 we can see from page 177 of the Tables:

P ( X  2)  0.05362 if X ~ Poi (6.2)

P ( X  2)  0.04985 if X ~ Poi (6.3) [1]

2  6.2 0.05  0.05362

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The confidence interval is (0.353,6.296) .

Alternatively, we could solve equations numerically to get the confidence interval.

Solving this numerically we get 1  0.36 . [1]

From the second equation:

Solving this numerically we get 2  6.3 . [1]

So the confidence interval for  is (0.36, 6.3) . [1]

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If U and V are independent, then:

fU ,V (u, v)  fU (u ) fV (v) [½]

Alternatively, E (UV ), E (U ) and E (V ) could be calculated and it could be shown that

(ii) Conditional density

To obtain the conditional density function, we use:

To obtain the marginal function f (v) we must “integrate out” u:

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(iii) Conditional expectation

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Course reference: Chapter 1 Sections 2.1, 3.1 and 4.1.

(i) Mean and standard deviation

For our data, we have:

 x  (30  8)  (20  12)  480 [½]

 x 2  (30  82 )  (20  122 )  4,800 [½]

(ii) New mean, standard deviation and skewness

Original data set New data set

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Course reference: Chapter 11 Sections 3.1 and 3.2.

(i) Confidence interval for 

From page 22 of the Tables, we have:

Since we have n  20 , it follows that:

Rearranging the inequality: