Question 1

TABLE 5-8
Two different designs on a new line of winter jackets for the coming winter are available for your manufacturing plants. Your profit (in thousands of dollars) will depend on the taste of the consumers when winter arrives. The probability of the three possible different tastes of the consumers and the corresponding profits are presented in the following table.
 
-Referring to Table 5-8, if you decide to choose Design A for 30% of the production lines and Design B for the remaining production lines, what is the coefficient of variation of your investment?

Accepted Answer

The answer of TABLE 5-8
Two different designs on a new...

Question 2

The number of 911 calls in Butte, Montana, has a Poisson distribution with a mean of 10 calls a day. The probability of 2 or more 911 calls in a day is ________.

Accepted Answer

The answer of The number of 911 calls in Butte,...

Question 3

A lab orders 100 rats a week for each of the 52 weeks in the year for experiments that the lab conducts. Suppose the mean cost of rats used in lab experiments turned out to be $13.00 per week. Interpret this value.

Accepted Answer

A)  Most of the weeks resulted in rat costs of $13.00. 
B)  The median cost for the distribution of rat costs is $13.00. 
C)  The expected or average cost for all weekly rat purchases is $13.00. 
D)  The rat cost that occurs more often than any other is $13.00.

Question 4

The number of customers arriving at a department store in a 5-minute period has a binomial distribution.

Accepted Answer

A) True 
 B)False

Question 5

TABLE 5-3
The following table contains the probability distribution for X = the number of retransmissions necessary to successfully transmit a 1024K data package through a double satellite media.
 
-In a game called Taxation and Evasion, a player rolls a pair of dice. If on any turn the sum is 7, 11, or 12, the player gets audited. Otherwise, she avoids taxes. Suppose a player takes 5 turns at rolling the dice. The expected number of times she will be audited is ________.

Accepted Answer

The answer of TABLE 5-3
The following table contains the probability...

Question 6

Suppose that a judge's decisions follow a binomial distribution and that his verdict is incorrect 10% of the time. In his next 10 decisions, the probability that he makes fewer than 2 incorrect verdicts is 0.736.

Accepted Answer

A) True 
 B)False

Question 7

TABLE 5-4
The following table contains the probability distribution for X = the number of traffic accidents reported in a day in Corvallis, Oregon.
 
-Referring to Table 5-4, the variance of the number of accidents is ________.

Accepted Answer

The answer of TABLE 5-4
The following table contains the probability...

Question 8

The connotation "expected value" or "expected gain" from playing roulette at a casino means

Accepted Answer

A)  the amount you expect to "gain" on a single play. 
B)  the amount you expect to "gain" in the long run over many plays. 
C)  the amount you need to "break even" over many plays. 
D)  the amount you should expect to "gain" if you are lucky.

Question 9

TABLE 5-9
A major hotel chain keeps a record of the number of mishandled bags per 1,000 customers. In a recent year, the hotel chain had 4.06 mishandled bags per 1,000 customers. Assume that the number of mishandled bags has a Poisson distribution.
-A certain type of new business succeeds 60% of the time. Suppose that 3 such businesses open (where they do not compete with each other, so it is reasonable to believe that their relative successes would be independent). Which of the following distributions would you use to determine the probability that all of them will fail?

Accepted Answer

A)  Binomial distribution 
B)  Poisson distribution 
C)  Normal distribution 
D)  Hypergeometric distribution

Question 10

The variance of the sum of two investments will be equal to the sum of the variances of the two investments when the covariance between the investments is zero.

Accepted Answer

A) True 
 B)False

Question 11

TABLE 5-3
The following table contains the probability distribution for X = the number of retransmissions necessary to successfully transmit a 1024K data package through a double satellite media.
 
-Referring to Table 5-3, the variance for the number of retransmissions is ________.

Accepted Answer

The answer of TABLE 5-3
The following table contains the probability...

Question 12

TABLE 5-9
A major hotel chain keeps a record of the number of mishandled bags per 1,000 customers. In a recent year, the hotel chain had 4.06 mishandled bags per 1,000 customers. Assume that the number of mishandled bags has a Poisson distribution.
-Referring to Table 5-9, what is the probability that in the next 1,000 customers, the hotel chain will have less than two or more than eight mishandled bags?

Accepted Answer

The answer of TABLE 5-9
A major hotel chain keeps a...

Question 13

In a Poisson distribution, the mean and variance are equal.

Accepted Answer

A) True 
 B)False

Question 14

TABLE 5-8
Two different designs on a new line of winter jackets for the coming winter are available for your manufacturing plants. Your profit (in thousands of dollars) will depend on the taste of the consumers when winter arrives. The probability of the three possible different tastes of the consumers and the corresponding profits are presented in the following table.
 
-Referring to Table 5-8, if you decide to choose Design A for 10% of the production lines and Design B for the remaining production lines, what is the coefficient of variation of your investment?

Accepted Answer

The answer of TABLE 5-8
Two different designs on a new...

Question 15

TABLE 5-8
Two different designs on a new line of winter jackets for the coming winter are available for your manufacturing plants. Your profit (in thousands of dollars) will depend on the taste of the consumers when winter arrives. The probability of the three possible different tastes of the consumers and the corresponding profits are presented in the following table.
 
-Referring to Table 5-8 if you decide to choose Design A for 90% of the production lines and Design B for the remaining production lines, what is the risk of your investment?

Accepted Answer

The answer of TABLE 5-8
Two different designs on a new...

Question 16

TABLE 5-10
An accounting firm in a college town usually recruits employees from two of the universities in town. This year, there are fifteen graduates from University A and five from University B and the firm decides to hire six new employees from the two universities.
-Referring to Table 5-10, what is the probability that all six of the new employees will be from University A?

Accepted Answer

The answer of TABLE 5-10
An accounting firm in a college...

Question 17

The covariance

Accepted Answer

A)  must be between -1 and +1. 
B)  must be positive. 
C)  can be positive or negative. 
D)  must be less than +1.

Question 18

TABLE 5-9
A major hotel chain keeps a record of the number of mishandled bags per 1,000 customers. In a recent year, the hotel chain had 4.06 mishandled bags per 1,000 customers. Assume that the number of mishandled bags has a Poisson distribution.
-Referring to Table 5-9, what is the probability that in the next 1,000 customers, the hotel chain will have fewer than eight mishandled bags?

Accepted Answer

The answer of TABLE 5-9
A major hotel chain keeps a...

Question 19

TABLE 5-7
There are two houses with almost identical characteristics available for investment in two different neighborhoods with drastically different demographic composition. The anticipated gain in value when the houses are sold in 10 years has the following probability distribution:
 
-Referring to Table 5-7, if you can invest 30% of your money on the house in neighborhood A and the remaining on the house in neighborhood B, what is the portfolio expected return of your investment?

Accepted Answer

The answer of TABLE 5-7
There are two houses with almost...

Question 20

Whenever π = 0.5, the binomial distribution will

Accepted Answer

A)  always be symmetric. 
B)  be symmetric only if n is large. 
C)  be right-skewed. 
D)  be left-skewed.

Exam 5: Discrete Probability Distributions

The number of 911 calls in Butte, Montana, has a Poisson distribution with a mean of 10 calls a day. The probability of 2 or more 911 calls in a day is ________.

A lab orders 100 rats a week for each of the 52 weeks in the year for experiments that the lab conducts. Suppose the mean cost of rats used in lab experiments turned out to be $13.00 per week. Interpret this value.

The number of customers arriving at a department store in a 5-minute period has a binomial distribution.

Suppose that a judge's decisions follow a binomial distribution and that his verdict is incorrect 10% of the time. In his next 10 decisions, the probability that he makes fewer than 2 incorrect verdicts is 0.736.

TABLE 5-4 The following table contains the probability distribution for X = the number of traffic accidents reported in a day in Corvallis, Oregon. -Referring to Table 5-4, the variance of the number of accidents is ________.

The connotation "expected value" or "expected gain" from playing roulette at a casino means

The variance of the sum of two investments will be equal to the sum of the variances of the two investments when the covariance between the investments is zero.

TABLE 5-3 The following table contains the probability distribution for X = the number of retransmissions necessary to successfully transmit a 1024K data package through a double satellite media. -Referring to Table 5-3, the variance for the number of retransmissions is ________.

In a Poisson distribution, the mean and variance are equal.

The covariance

Whenever π = 0.5, the binomial distribution will