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    Business Statistics Topic 3 Tutorial Solutions (Q1-Q10)

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    Beryl Chan
    This document contains solutions to 10 questions about discrete and continuous probability distributions. Question 1 provides the solutions to parts a-e calculating probabilities from given distributions. Question 2 solves parts a and b for expected values and standard deviations. Question 3 compares the means, variances, and shapes of two different distributions. The remaining questions involve calculating probabilities for binomial, normal, and other distributions.

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    Business Statistics Topic 3 Tutorial Solutions (Q1-Q10)

    Uploaded by

    Beryl Chan
    59 views4 pages
    This document contains solutions to 10 questions about discrete and continuous probability distributions. Question 1 provides the solutions to parts a-e calculating probabilities from given distributions. Question 2 solves parts a and b for expected values and standard deviations. Question 3 compares the means, variances, and shapes of two different distributions. The remaining questions involve calculating probabilities for binomial, normal, and other distributions.

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    Business Statistics Topic 3 Tutorial Solutions (Q1-Q10)

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    This document contains solutions to 10 questions about discrete and continuous probability distributions. Question 1 provides the solutions to parts a-e calculating probabilities from given distributions. Question 2 solves parts a and b for expected values and standard deviations. Question 3 compares the means, variances, and shapes of two different distributions. The remaining questions involve calculating probabilities for binomial, normal, and other distributions.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    59 views4 pages

    Business Statistics Topic 3 Tutorial Solutions (Q1-Q10)

    Uploaded by

    Beryl Chan
    This document contains solutions to 10 questions about discrete and continuous probability distributions. Question 1 provides the solutions to parts a-e calculating probabilities from given distributions. Question 2 solves parts a and b for expected values and standard deviations. Question 3 compares the means, variances, and shapes of two different distributions. The remaining questions involve calculating probabilities for binomial, normal, and other distributions.

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    © All Rights Reserved
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    You are on page 1of 4

    Topic 3: Discrete and Continuous Probability Distributions Solutions

    Q1
    a)   1  0.02  0.09  0.09  0.01  0.02  0.06  0.15  0.05  0.03
     0.02  0.06  0.11  0.04  0.05
     0.2

    b) Probability distribution of weight


    Weight 100 110 120 130 140
    Probability 0.1 0.3 0.4 0.1 0.1

    c) Expected Weight = 100  0.1  110  0.3  120  0.4  130  0.1  140  0.1 =118 lb

    d) Standard deviation = (100  118) 2  0.1  ...  (140  118) 2  0.1 = 10.77lb

    e) Take Age= 21 and Weight= 110 lb as example,


    P (Age=21 and Weight = 110) =0.06
    P (Age=21) = 0.02+0.06+0.11+0.04+0.05 = 0.28
    P (Weight=110) = 0.3
    P (Weight=110)  P (Age=21)  0.3  0.28  0.084 0.06
     Age and Weight are not independent.

    Q2

    a) Mean = 0  0.07+1  0.15+2  0.1+3  0.05 =0.5


    Standard Deviation = 0.7(0  0.5) 2  0.15(1  0.5) 2  0.1(2  0.5) 2  0.05(3  0.5) 2
    = 0.8660

    b) Expected total number = n  p = 100  0.5 = 50

    Q3
    a) Distribution A:
    N
      E( X )   X i P( X i )
    i 1
     ( 0 )( 0.5 )  (1 )( 0.2 )  ( 2 )( 0.15 )  ( 3 )( 0.1)  ( 4 )( 0.05 )  1

    Distribution B:
    N
      E( X )   X i P( X i )  ( 0 )( 0.05 )  ( 1 )( 0.1 )  ( 2 )( 0.15 )  ( 3 )( 0.2 )  ( 4 )( 0.5 )  3
    i 1
    b) Distribution A:

     
    N
     2   X i  E( X ) 2 P( X i )
    i 1
     ( 0  1 ) 2 ( 0.5 )  ( 1  1 ) 2 ( 0.2 )  ( 2  1 ) 2 ( 0.15 )  ( 3  1 ) 2 ( 0.1 )  ( 4  1 ) 2 ( 0.05 )  1.5
      1.2247

    Distribution B:

     
    N
     2   X i  E( X ) 2 P( X i )
    i 1
     ( 0  3 ) 2 ( 0.05 )  ( 1  3 ) 2 ( 0.1 )  ( 2  3 ) 2 ( 0.15 )  ( 3  3 ) 2 ( 0.2 )  ( 4  3 ) 2 ( 0.5 )  1.5
      1.2247

    c) Distribution A and B has the same spread but locate at different position. The center of
    Distribution A is on the left-hand-side of that of Distribution B.

    Q4
    a) Stock X:
    expected return = (-50)(0.1)+(20)(0.3)+(100)(0.4)+(150)(0.2)= 71
    s.d.of return = ( 50  71) 2 (0.1)  ...  (150  71) 2 (0.2) = 61.88

    Stock Y:
    expected return = (-100)(0.1)+…+(200)(0.2) = 97
    s.d. of return = (( 100  97 ) 2 (0.1)  ...  ( 200  97 ) 2 (0.2) = 84.27

    b) Stock Y gives investor higher expected return than stock X., but also a higher standard
    deviation. Thus, a risk-averse investor should invest in stock X, while investor who is
    willing to take a higher risk can expect a higher return from stock Y.

    Q5
    a) X = no. of customers that the AIS detects as having exceeded their credit limit
    π = success probability = 0.05
    n = 20

    ∵ X is binomial distribution X ~B(n=20, π =0.05)


    mean = n π = 20(0.05) = 1
    variance = n π (1 - π ) = 20(0.05)(0.95) = 0.95
    standard deviation = 0.95 = 0.9747

    20!
    b) P(X = 0) = ( 0.05 )0 ( 0.95 )20 = 0.3585
    0! ( 20  0 )!

    20!
    c) P(X = 1) = ( 0.05 )1 ( 0.95 )19 = 0.3774
    1! ( 20  1 )!
    d) P(X ≥ 2) = 1 – P(X =0) – P(X = 1) = 1 – 0.3585 – 0.3774 = 0.2642

    Q6
    Let X be the number of customers who will leave the site without completing a transaction.
    X~B(20, 0.88)
    P(X=20) = 20 C 20 (0.88) 20 (1-0.88) 0 = 0.0776

    Q7
    90  70  30 190
    a) P(did well or went shopping) =   0.95
    200 200

    b) Binomial distribution is used since


    1. no. of trials is fixed
    2. two mutually exclusive outcomes
    3. independent trials
    4. probability of success is constant

    Let Y be the no. of students did well on mid-term test and studied for mid-term test the
    weekend before the mid-term test out of the selected 10 students
    Y ~ B(n = 10, π = 0.45)
    10!
    P (Y  2)  0.452 (1  0.45)10 2  0.0763
    2!(10  2)!

    Q8
    a) P(wine) = 1 – 0.7 = 0.3

    b) P(beer and male) = 0.8 *0.6 = 0.48


    => P(wine and male)= 0.6- 0.48 = 0.12
    => P(wine and female) = 0.3-0.12 = 0.18

    c) P(male | wine) = P(male and wine) / P(wine) = 0.12/0.3 = 0.4

    d) Define X be the number of patrons prefer beer in the 5 selected patrons,


    X~B(5, 0.7) Binomial: n=5, π=0.7

    P (at least 4 patrons) = P (x=4) + P(x=5)


    = 5!/(4! 1!) 0.740.31 + 5!/(5! 0!) 0.750.30
    = 0.36015 + 0.16807
    = 0.52822
    Q9

    X is the number of passengers responded to the survey


     is the population proportion of passenger responded to the survey
     = 1 - 0.87 = 0.13
    X ~ B(15, 0.13)

    P(X  2) = 1 – P(X=0) – P(X=1)


    15! 15!
    =1– (0.13) 0 (0.87 )15 – (0.13)1 (0.87 )14
    0!15! 1!14!
    =1 – 0.1238 – 0.2275
    =0.5987

    Q10
    a) P(x<2) = 0.0102+0.0768 = 0.087

    b) E(X) = 0*0.0102+1*0.0768+2*0.2304+3*0.3456+4*0.2592+5*0.0778 = 3.0002


    It means, on average, among 5 dentists 3 of them will use “laughing gas”.

    c) V(X) = (0-3)2*0.0102+(1-3) )2*0.0768+(2-3) )2*0.2304++(3-3) )2*0.3456


    +(4-3) )2*0.2592+(5-3) )2*0.0778
    = 1.1998
    Thus, SD(x) = 1.1998  1.0954

    d) Define “success” = use laughing gas, “failure” = not use laughing gas, then X represents
    the number of “success” in n independent trials and the probability of success in each
    trial is p. According to results of b and c, we have n = 3 and n (1-) = 1.1998. Solve
    the equations, we have n = 5 and  = 0.6.

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