Kristin Fridgeirsdottir Data Analytics for Leaders

Break-Out Session 1a

Descriptive Statistics and the Normal Distribution

Exercise 1
Which of the following statements about the mean is not always correct?
a) The sum of the deviations from the mean is zero
b) Half of the observations are on either side of the mean
c) The mean is a measure of the middle (centre) of a distribution
d) The value of the mean times the number of the observations equals the sum of
all of the observations

Exercise 2
Choose the correct statement.
In a probability distribution, the proportion of the total area, which must be to the left
of the median is:
a) Exactly 0.50
b) Less than 0.50 if the distribution is skewed to the left
c) More than 0.50 if the distribution is skewed to the right
d) Between 0.25 and 0.60 if the distribution is symmetric and unimodal

Exercise 3
Financial return: Risk analysis
The financial return of a commodity is estimated to be normally distributed with a
mean of 1% and standard deviation of 1.5%. Find the probabilities that the return will
be
a) at least 2.5%
b) between –0.5% and 4%
c) less than -1%
d) between 0% and 2%

Exercise 4
Inventory control: Newspaper demand
The demand for newspapers each morning at newsstand is normally distributed with a
mean of 85 and a standard deviation of 20. What is the probability that the
newspapers will sell out if 105 copies are ordered?

Exercise 5
True or false:
a) If we know the mean of the normal distribution we know its shape
b) In the normal distribution, the mean, median, mode, and standard deviation are
all at the same position on the horizontal axis since the distribution is
symmetric.
c) Normal distribution that is wide has a high standard deviation

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Exercise 6
The web publisher www.exploreiceland.is provides information on travelling to
Iceland. Access to the website is free but revenues are generated by selling ads that
are posted on the website. In the following month, the website has committed to
displaying ads to 650,000 viewers, i.e., 650,000 impressions. Based on data from
previous months the traffic to the website is estimated to be normally distributed with
a mean of 850,000 viewers and a standard deviation of 150,000.
a) What is the probability that the web publisher will be able to deliver the
promised impressions?
b) How many impressions should the web publisher have taken on, to be able to
guarantee a 95% service level?