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# Review Test Submission: Quiz 2

Content
Question 1
2 out of 2 points

Seventy two percent of all observations fall within 1 standard deviation of the mean if
the data is normally distributed.

False
False

Question 2
2 out of 2 points

If two events are not mutually exclusive, then P(A or B) = P(A) + P(B)

False
False

Question 3
2 out of 2 points

Probability trees are used only to compute conditional probabilities.

False
False

Question 4
2 out of 2 points

The maximin approach involves choosing the alternative with the highest or lowest
payoff.

False
False

Question 5
2 out of 2 points

The minimin criterion is optimistic.

True
True

Question 6
0 out of 2 points

Using the minimax regret criterion, we first construct a table of
regrets. Subsequently, for each possible decision, we look across the states of
nature and make a note of the maximum regret possible for that decision. We
then pick the decision with the largest maximum regret.

True
False

Question 7
2 out of 2 points

Both maximin and minimin criteria are optimistic.

False
False

Question 8
2 out of 2 points

The chi-square test is a statistical test to see if an observed data fit a _________.

All of the above

All of the above

Question 9
2 out of 2 points

Assume that it takes a college student an average of 5 minutes to find a parking spot in
the main parking lot. Assume also that this time is normally distributed with a standard
deviation of 2 minutes. Find the probability that a randomly selected college student will
take between 2 and 6 minutes to find a parking spot in the main parking lot.

0.6247

0.6247

Question 10
2 out of 2 points

The metropolitan airport commission is considering the establishment of limitations on
noise pollution around a local airport. At the present time, the noise level per jet takeoff
in one neighborhood near the airport is approximately normally distributed with a mean
of 100 decibels and a standard deviation of 3 decibels. What is the probability that a
randomly selected jet will generate a noise level of more than 105 decibels?

0.0475

0.0475

Question 11
2 out of 2 points

A business owner is trying to decide whether to buy, rent, or lease office space and has
constructed the following payoff table based on whether business is brisk or slow.

The maximin strategy is:

Lease

Lease

Question 12
2 out of 2 points

A business owner is trying to decide whether to buy, rent, or lease office space and has
constructed the following payoff table based on whether business is brisk or slow.

The maximax strategy is:

Question 13
2 out of 2 points

A group of friends are planning a recreational outing and have constructed the following
payoff table to help them decide which activity to engage in. Assume that the payoffs
represent their level of enjoyment for each activity under the various weather
conditions.

Weather
Cold Warm Rainy
S1 S2 S3

Bike: A1 10 8 6
Hike: A2 14 15 2
Fish: A3 7 8 9

What is the conservative decision for this situation?

A3

A3

Question 14
0 out of 2 points

The maximin criterion results in the

maximum of the maximum payoffs

maximum of the minimum payoffs

Question 15
2 out of 2 points

A brand of television has a lifetime that is normally distributed with a mean of 7 years and a
standard deviation of 2.5 years. What is the probability that a randomly chosen TV will last
more than 8 years? Note: Write your answers with two places after the decimal,
rounding off as appropriate.

0.34
Evaluation Method Correct Answer Case Sensitivity
Exact Match 0.34

Exact Match .34

Question 16
2 out of 2 points

A life insurance company wants to update its actuarial tables. Assume that the probability
distribution of the lifetimes of the participants is approximately a normal distribution with a
mean of 71 years and a standard deviation of 3.5 years. What proportion of the plan
participants are expected to see their 75th birthday? Note: Write your answers with two
places after the decimal, rounding off as appropriate.

0.13
Evaluation Method Correct Answer Case Sensitivity

Exact Match 0.13

Exact Match .13

Question 17
0 out of 2 points

A manager has developed a payoff table that indicates the profits associated with a set of
alternatives under 2 possible states of nature.

Alt S1 S2
1 10 2
2 -2 8
3 8 5
Compute the expected value of perfect information assuming that the probability of S2 is equal
to 0.4.

6.8
Evaluation Method Correct Answer Case Sensitivity
Exact Match 2.4

Question 18
2 out of 2 points

A group of friends are planning a recreational outing and have constructed the following
payoff table to help them decide which activity to engage in. Assume that the payoffs
represent their level of enjoyment for each activity under the various weather
conditions.

Weather
Cold Warm Rainy
S1 S2 S3
Bike: A1 10 8 6
Hike: A2 14 15 2
Fish: A3 7 8 9

If the probabilities of cold weather (S1), warm weather (S2), and rainy weather (S3) are 0.2,
0.4, and 0.4, respectively what is the EVPI for this situation?

2.8
Evaluation Method Correct Answer Case Sensitivity
Exact Match 2.8

Question 19
2 out of 2 points

Consider the following decision tree.

What is the expected value for the best decision? Round your answer to the nearest whole
number.

2100
Evaluation Method Correct Answer Case Sensitivity
Exact Match \$2100

Exact Match \$2,100

Exact Match 2100

Exact Match 2,100

Question 20
2 out of 2 points

The quality control manager for ENTA Inc. must decide whether to accept (a1), further
analyze (a2) or reject (a3) a lot of incoming material. Assume the following payoff table is
available. Historical data indicates that there is 30% chance that the lot is poor quality (s1), 50
% chance that the lot is fair quality (s2) and 20% chance that the lot is good quality (s3).

What is the numerical value of the minimax regret?