Sta 2100 Probability-And-Statistics I April 2012

STA 2100 W1-2-60-1-6
JOMO KENYATTA UNIVERSITY

OF
AGRICULTURE AND TECHNOLOGY
UNIVERSITY EXAMINATIONS 2012/2013
FIRST YEAR SECOND SEMESTER EXAMINATIONS FOR THE DEGREE OF
BACHELOR OF SCIENCE IN ACTUARIAL SCIENCE
STA 2100: PROBABILITY AND STATISTICS I
DATE: DECEMBER 2012 TIME: 2 HOURS

INSTRUCTIONS: Attempt question ONE and any other TWO questions .
QUESTION ONE (30 MARKS)
(a) What do you understand about the following terms.

i) Nominal and Ordinal data.
ii) Skewness and Kurtosis .
iii )Probability and Statistics.
[6 marks]
(b) In the claims department of an insurance office various quantities are computed at
the end of each day’s business. On Monday 10 claims are received for a particular
class of policy. The mean claim amount is calculated to be KSh. 426 and the
standard deviation to be KSh. 112.
On Tuesday it is found that one of Monday’s claims for KSh. 545, was classified
wrongly and it is removed from the set of 10 claims. Calculate the resulting mean
and standard deviation of the reduced set of 9 claims.
[4 marks]
(c) A random discrete variable Y has the following probability distribution. Calculate
variance of Y, given that b is a constant.
Y 1 2 3 4 5
6 5 1 3
Pr(Y = y) 20
b 20 10 20
[3 marks]
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STA 2100 W1-2-60-1-6
(d) In a group of 24 actuaries, 20 have worked for company A and 12 have worked for
company B. Everyone in the group has worked for at least one of the two companies.
An actuary picked at random has worked for;
(i) Company A and Company B.
(ii) Company B given that that they have worked for company A [4 marks]
(e) A coin is selected at random from a pair of coins and tossed. Coin 1 is a double
headed coin and coin 2 is a standard unbiased coin. The result of the toss is a
head. What is the probability that it was coin which was tossed? [2 marks]
(f) Construct and describe a stem and leaf display for the following data set.
8.4, 32.5, 17.6, 33.9, 20.6, 16.2, 12.0, 9.4, 42.2, 19.5, 29.7, 28.2, 24.3, 20.7, 29.1,
10.3, 23.9, 22.1, 21.5, 52.8, 32.5
[4 marks]
(g) In a study that was carried out in Nairobi about the level of a awareness of life
insurance policy. The following figures were obtained for various age groups.
Age group 30 − 32 33 − 35 36 − 38 39 − 41 42 − 44
F requency 5 18 42 27 8
(i) Determine the exact age that was common

(ii) Find the average age of all individuals that were contacted
(iii) Use appropriate graph to find the age at which 20 elderly individuals falls
above.
[7 marks]
QUESTION TWO (20 MARKS)
(a) In a certain insurance company the amount claimed for two policies for the first 6
months during the year 2011 were
M onths 1 2 3 4 5 6
P olicy 1 1400 2400 9800 4000 4300 7100
P olicy 2 2800 2300 2900 2200 6000 900
Calculate the combined mean and variance for the two policies.
[8 marks]
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STA 2100 W1-2-60-1-6
(b) Suppose that the number of claim arrival for the first 5 months of last year from
two policies X and Y of insurance company A, are as follows
M onth 1 2 3 4 5
P olicy X 10 20 30 40 50
P olicy Y 28 23 29 22 60
(i) Find the slope and Y-intercept of the best line of fit for this data. [3 marks]
(ii) Find the least squares regression line of Y on X. [4 marks]
(iii) Compare your answers in parts (i) and (ii) above and comment on the results.
[1 mark]
(iv) Calculate the correlation coefficient and coefficient of determination for the
data and comment on your result. [4 marks]
QUESTION THREE (20 MARKS)
(a) Suppose you have 12 actuaries and you wish to assign 3 to claim department, 4 to
sales department and 5 to underwriting department. In how many different ways
can you make this assignment? [3 marks]
(b) If the first 4 moments of a set of numbers about the number 3 equal to -2, 10,
-25 and 50. Determine and interpret the meaning of the corresponding central
moments. [12 marks]
(c) A box of Cookies contains 10 milk cookies and 6 chocolate cookies. A child eats 4
cookies, calculate the probability that
(i) All the four are milk cookies
(ii) Exactly 2 are chocolate cookies [5 marks]
QUESTION FOUR (20 MARKS)
(a) Five Soldiers are to be chosen for a dangerous mission in Somalia from a squadrum
of 100 men. In how many ways can groups of five men be formed?
[2 marks]
(b) The following are the marks of 50 students in basic Actuarial test.
3
STA 2100 W1-2-60-1-6
31, 51, 37, 41, 68, 50, 52, 38, 44, 72

32, 60, 53, 45, 64, 54, 61, 54, 55, 64
53, 83, 52, 55, 73, 65, 83, 56, 58, 74
66, 75, 57, 59, 48, 70, 76, 62, 46, 49
71, 41, 76, 67, 49, 36, 48, 47, 63, 40
(i) Construct a frequency distribution. [3 marks]

(ii) Present this data on a frequency polygon. [2 marks]
(iii) Determine the first 4 central moments. Interprete yuor results using graph-
ical sketches where possible. [13 marks]

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STA 2100 W1-2-60-1-6

JOMO KENYATTA UNIVERSITY

DATE: DECEMBER 2012 TIME: 2 HOURS

QUESTION ONE (30 MARKS)

(a) What do you understand about the following terms.

(i) Determine the exact age that was common

QUESTION TWO (20 MARKS)

QUESTION THREE (20 MARKS)

QUESTION FOUR (20 MARKS)

31, 51, 37, 41, 68, 50, 52, 38, 44, 72

(i) Construct a frequency distribution. [3 marks]

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