UNIVERSITY OF HOUSTON-VICTORIA

SCHOOL OF BUSINESS ADMINISTRATION

Solution of Assignment #2 (QMSC 6351)

Chapter 5: Questions 15,17,29,45

15. a.
x
3
6
9

f (x)
.25
.50
.25
1.00

x f (x)
.75
3.00
2.25
6.00

E(x) = = 6
b.
x
3
6
9

x-
-3
0
3

(x - )2
9
0
9

f (x)
.25
.50
.25

(x - )2f (x)
2.25
0.00
2.25
4.50

Var(x) = 2 = 4.5
c.
17. a.

= 4.50 = 2.12
Total Student = 1,518,859
x=1
x=2
x=3
x=4
x=5

b.

f(1) = 721,769/1,518,859 = .4752

f(2) = 601,325/1,518,859 = .3959
f(3) = 166,736/1,518,859 = .1098
f(4) = 22,299/1,518,859 = .0147
f(5) =
6730/1,518,859 = .0044

P(x> 1) = 1 f(1) = 1 - .4752 = .5248

Over 50% of the students take the SAT more than 1 time.

c. P(x>3) = f(3) + f(4) + f(5) = .1098 + .0147 + .0044 = .1289

d./e.
x
f (x)
x f (x)
x-
(x - )2
(x - )2f (x)
1
.4752
.4752
-.6772
.4586
.2179
2
.3959
.7918
.3228
.1042
.0412
3
.1098
.3293
1.3228
1.7497
.1921
4
.0147
.0587
2.3228
5.3953
.0792
5
.0044
.0222
3.3228
11.0408
.0489
1.6772
.5794

E(x) = x f(x) = 1.6772

The mean number of times a student takes the SAT is 1.6772, or approximately
1.7 times.

22 ==
()().5794
xfx

===
29. a.

n
fxpp
()()(1)
=
x

.5794.7612

xnx

10!
f (3)(.30)(1.30)
=
3!(103)!

3103

10(9)(8)
37
f (3)(.30)(1.30).2668
==
3(2)(1)
b.

P(x> 3) = 1 - f (0) - f (1) - f (2)

10!
010
f (0)(.30)(1.30).0282
==
0!(10)!
10!
19
f (1)(.30)(1.30).1211
==
1!(9)!
10!
28
f (2)(.30)(1.30).2335
==
2!(8)!
P(x> 3) = 1 - .0282 - .1211 - .2335 = .6172
45. a.

fx() =

x e
x!

303e
===
fe(0).0498
0!
b.

P(x> 2) = 1 - f (0) - f (1)

P(x> 2) = 1 - POISSON.DIST(1,3,TRUE) = .8009

c.

= 3 per year
= 3/2 = 1.5 per 6 months

d.

1.501.5e
==
f (0).2231
0!

Chapter 6: Questions 1, 5, 7, 13, 15, 17

1.

a.
f (x)
3
2
1
x
.50

5.

1.0

1.5

2.0

b.

P(x = 1.25) = 0. The probability of any single point is zero since the area under the curve above
any single point is zero.

c.

P(1.0 x 1.25) = 2(.25) = .50

d.

P(1.20 <x< 1.5) = 2(.30) = .60

a.

Length of Interval = 310.6 - 284.7 = 25.9

1
x
for 284.7310.6

fx() = 25.9
0 elsewhere

b.

Note: 1/25.9 = .0386

P(x< 290) = .0386(290 - 284.7) = .2046

c.

P(x 300) = .0386(310.6 - 300) = .4092

d.

P(290 x 305) = .0386(305 - 290) = .5790

e.

P(x 290) = .0386(310.6 - 290) = .7952

Rounding up, we conclude that 80 of the top 100 golfers drive the ball this far.

7.

a.

P(10,000 x< 12,000) = 2000 (1 / 5000) = .40

The probability your competitor will bid lower than you, and you get the bid, is .40.

b.

P(10,000 x< 14,000) = 4000 (1 / 5000) = .80

c.

A bid of $15,000 gives a probability of 1 of getting the property.

d.

Yes, the bid that maximizes expected profit is $13,000.

The probability of getting the property with a bid of $13,000 is
P(10,000 x< 13,000) = 3000 (1 / 5000) = .60.

The probability of not getting the property with a bid of $13,000 is .40.
The profit you will make if you get the property with a bid of $13,000 is $3000 = $16,000 - 13,000.
So your expected profit with a bid of $13,000 is
EP ($13,000) = .6 ($3000) + .4 (0) = $1800.
If you bid $15,000 the probability of getting the bid is 1, but the profit if you do get the bid is only
$1000 = $16,000 - 15,000. So your expected profit with a bid of $15,000 is
EP ($15,000) = 1 ($1000) + 0 (0) = $1,000.

13.

These probabilities can be obtained using Excels NORM.S.DIST function or the standard normal
probability table in the text.
a.

P(-1.98 z .49) = P(z .49) - P(z< -1.98) = .6879 - .0239 = .6640

b.

P(.52 z 1.22) = P(z 1.22) - P(z< .52) = .8888 - .6985 = .1903

c.

P(-1.75 z -1.04) = P(z -1.04) - P(z< -1.75) = .1492 - .0401 = .1091

= 10

70

15.

80

90

100

110 120 130

These z values can be obtained using Excels NORM.S.INV function or by using the standard
normal probability table in the text.
a.

The z value corresponding to a cumulative probability of .2119 is z = -.80.

b.

Compute .9030/2 = .4515; z corresponds to a cumulative probability of .5000 + .4515 = .9515. So z

= 1.66.

c.

Compute .2052/2 = .1026; z corresponds to a cumulative probability of .5000 + .1026 = .6026. So z

= .26.

d.

The z value corresponding to a cumulative probability of .9948 is z = 2.56.

e.

The area to the left of z is 1 - .6915 = .3085. So z = -.50.

17.

Let x = debt amount

= 15,015, = 3540
a.

18,00015,015

z ==
3540

.84

P(x> 18,000) = 1- P(z .84) = 1 - .7995 = .2005

Using Excel: 1-NORM.DIST(18000,15015,3540,TRUE) = .1996
b.

10,00015,015

z ==
3540

1.42

P(x<10,000) = P(z< -1.42) = .0778

Using Excel: NORM.DIST(10000,15015,3540,TRUE) = .0783
c.

At 18,000, z = .84 from part (a)

12,00015,015

3540

At 12,000, z ==

.85

P(12,000 <x< 18,000) = P(-.85 <z< .84) = .7995 - .1977 = .6018

Using Excel: NORM.DIST(18000,15015,3540,TRUE)
NORM.DIST(12000,15015,3540,TRUE) = .6033
d.

14,00015,015

z ==
3540

.29

P(x 14,000) = P(z -.29) = .3859

Using Excel: NORM.DIST(14000,15015,3540,TRUE) = .3872

Chapter 7: Questions 7,11,15,17

7.

a.

x = xi / n =

54
=9
6

b.

s=

( xi x ) 2
n 1

( xi x ) 2 = (-4)2 + (-1)2 + 12 (-2)2 + 12 + 52 = 48

48
= 31
.
6 1
$45,500
xxn
===i /$4,550
10

s=
11. a.

b.
15. a.

()xx 2
s === i
n 1101

9,068,620

$1003.80

The sampling distribution is normal with

E()x

= = 200

x ===/50/1005
n
For 5, 195205
x
Using Standard Normal Probability Table:

x
x

5
5

Atx = 205, z ===

At x = 195, z ===

Px(195205)

Pz(1)

= .8413

Pz(1)<

= .1587

= .8413 - .1587 = .6826

Using Excel:NORM.DIST(205,200,5,TRUE)-NORM.DIST(195,200,5,TRUE)=.6827
b.

For 10, 190210

x
Using Standard Normal Probability Table:
Atx = 210, z =

x 10
=
= 2 Pz(2)
x
5

10

Atx = 190, z ===

Px(190210)

= .9772

Pz(2)<

= .0228

= .9772 - .0228 = .9544

Using Excel: NORM.DIST(210,200,5,TRUE)-NORM.DIST(190,200,5,TRUE)=.9545

17. a.

.
x = / n = 10 / 50 = 141

b.

n / N = 50 / 50,000 = .001
Use x

c.

n / N = 50 / 5000 = .01
Use x

d.

= / n = 10 / 50 = 141
.

= / n = 10 / 50 = 141
.

n / N = 50 / 500 = .10

Use x =

500 50 10
N n
.
=
= 134
500 1 50
N 1 n

Note: Only case (d) where n /N = .10 requires the use of the finite population correction factor.

Chapter 8: Questions 1, 3, 5,9,11, 25, 27

1.

3.

a.

x ===/5/40.79
n

b.

At 95%,

a.

80 1.96 (15 /

z / n = 196
. (5 / 40 ) = 155
.

60 )

80 3.8 or 76.2 to 83.8

b.

80 1.96 (15 /

120 )

80 2.68 or 77.32 to 82.68

5.

9.

c.
a.

Larger sample provides a smaller margin of error.

b.

24.80 1.40 or 23.40 to 26.20

x z.025 (/) n

n ==
1.96/1.96(5/49)1.40

33.5 1.96(9/40)
33.5 2.8 or 30.7 to 36.3 hours

11. a.

.025

b.

1 - .10 = .90

c.

.05

d.
e.

.01
1 2(.025) = .95

f.

1 2(.05) = .90
22
(1.96)(6.84)
nn===
(1.5)2

25.

22
(1.645)(6.84)
nn===
22

79.88 Use 80

31.65 Use 32

45,00030,000
Planning value ==
4

27.

3750

a.

22
z.025

nn====
E 22

b.

22
(1.96)(3750)
nn===
(200) 2

1350.56 Use 1351

c.

22
(1.96)(3750)
nn===
(100)2

5402.25 Use 5403

d.

22
(1.96)(3750)
(500)

216.09 Use 217

Sampling 5403 college graduates to obtain the $100 margin of error would be viewed as too
expensive and too much effort by most researchers.