Practice

Questions
 Assignment Question for Today
FundInfo provides information to its subscribers to enable them to evaluate the performance of mutual funds
they are considering as potential investment vehicles. A recent survey of funds whose stated investment goal
was growth and income produced the following data on total annual rate of return over the past five years
(refer table)

Annual return (%) 11.0–11.9 12.0–12.9 13.0–13.9 14.0–14.9 15.0–15.9 16.0–16.9 17,0–17.9 18.0–18.9

Frequency 2 2 8 10 11 8 3 1

Calculate the mean, variance, and standard deviation of the annual rate of return for this sample of 45 funds.
(b) According to Chebyshev’s theorem, between what values should at least 75 percent of the sample
observations fall? What percentage of the observations actually do fall in that interval?
(c) Because the distribution is roughly bell-shaped, between what values would you expect to find 68 percent
of the observations? What percentage of the observations actually do fall in that interval?
 Class Frequency

0–199 10 Question 1
The number of checks cashed each day at the
five branches of The Bank of Orange County
200–399 13 during the past month had the following
frequency distribution:

400–599 17
Hank Spivey, director of operations for the bank,
knows that a standard deviation in check
600–799 42 cashing of more than 200 checks per day creates
staffing and organizational problems at the
branches because of the uneven workload.
800–999 18 Should Hank worry about staffing next month?
Question 2
American Foods heavily markets three different products nationally. One of the
underlying objectives of each of the product’s advertisements is to make consumers
recognize that American Foods makes the product. To measure how well each ad
implants recognition, a group of consumers was asked to identify as quickly as possible
the company responsible for a long list of products. The first American Foods product
had an average latency of 2.5 seconds, and a standard deviation of 0.004 second. The
second had an average latency of 2.8 seconds, and a standard deviation of 0.006
second. The third had an average latency of 3.7 seconds, and a standard deviation of
0.09 second. One particular subject had the following latencies: 2.495 for the first, 2.79
for the second, and 3.90 for the third. For which product was this subject farthest from
average performance, in standard deviation units?
 Question 3
Sid Levinson is a doctor who specializes in the knowledge and
effective use of pain-killing drugs for the seriously ill. In order to
know approximately how many nurses and office personnel to
employ, he has begun to keep track of the number of patients he
sees each week. Each week his office manager records the number
of seriously ill patients and the number of routine patients. Sid has
reason to believe that the number of routine patients per week
Seriously ill would look like a bell-shaped curve if he had enough data. (This is
33 50 22 27 48
patients not true of seriously ill patients.) However, he has been collecting
data for only the past five weeks.
Routine (a) Calculate the mean and variance for the number of seriously ill
34 31 37 36 27 patients per week. Use Chebyshev’s theorem to find boundaries
patients
within which the “middle 75 percent” of numbers of seriously ill
patients per week should fall.
(b) Calculate the mean, variance, and standard deviation for the
number of routine patients per week. Within what boundaries
should the “middle 68 percent” of these weekly numbers fall?