1.

The Acme Widget Company claims that their widgets last 5 years, with a standard deviation of 1
year. Assume that their claims are true.

If you test a random sample of 9 Acme widgets, what is the probability that the standard
deviation in your sample will be less than 0.95 years?

Solution:

We know the following:

o The population standard deviation is equal to 1.

o The sample standard deviation is equal to 0.95.
o The sample size is equal to 9.
o The degrees of freedom is equal to 8 (because sample size minus one = 9 - 1 = 8).

Given these data, we compute the chi-square statistic:

Χ2 = [(n - 1) * s2 ] / σ2

Χ2 = [ ( 9 - 1 ) * (0.95)2 ] / (1.0)2 = 7.22

Where σ is the standard deviation of the population, s is the standard deviation of the sample,
and n is the sample size.

Now, using the Chi-Square Distribution table, we can determine the cumulative probability for the
chi-square statistic. We check the degrees of freedom (8) and the chi-square statistic (7.22) in the
table. The report is that the P (Χ2 < CV) is 0.49. Therefore, there is a 49% chance that the sample
standard deviation will be no more than 0.95.

2. Find the chi-square critical value, if the P (Χ2 < CV) is 0.75 and the sample size is 25.

Solution:

We know the following:

 The P(Χ2 < CV) is 0.75.

 The sample size is 25.
 The degrees of freedom is equal to 24 (because sample size minus one = 25 - 1 = 24).
Given these data, we compute the chi-square statistic, using the Chi-Square Distribution table. We
check the degrees of freedom (24) and the cumulative probability (0.75) in the table, and we
compute that the chi-square critical value is 28.2.

This means that if you select a random sample of 25 observations, there is a 75% chance that the
chi-square statistic from that sample will be less than or equal to 28.2.