MAT211_Summer2021

Independent University, Bangladesh

Probability and Statistics
Final Exam, Total Marks: 40
Summer 2021, Time: 90 Minutes

Answer any four questions.

01 WNAE, an all-news AM station, finds that the distribution of the lengths of time
listeners are tuned to the station follows the normal distribution. The mean of the
distribution is 11.5 minutes and the standard deviation is 2.9 minutes.
a. What are the parameters of a normal distribution? (2)
b. What is the variable of interest? (1)
c. What is the probability that a particular listener will tune in between 10 and 15
minutes? (3)
d. If the length of time of the listeners is in lower 10% area of a normal curve, that
listener is assumed as an irregular listener. What is the maximum value of the
listening time to categorize a listener as an irregular one? (4)
02 A machine is set to fill a small bottle with 9.0 grams of medicine. A sample of five
bottles revealed the following amounts (in grams) in each bottle:
Last digit of
7.2 8.4 8 7 the student
ID
At 1% level of significance can we conclude that, the mean amount is less than 9.0
grams.
a. State the null and alternative hypothesis. (3)
b. Calculate the test statistic. (3)
c. At 1% level of significance, state your decision regarding the null hypothesis.
(4)
03 A sample survey of 54 discount brokers showed that the mean price charged for a
trade of 100 shares at $50 per share was $33.77 (AAII Journal, February 2006). The
survey is conducted annually. With the historical data available, assume a known
population standard deviation of $15.
 MAT211_Summer2021

a. Using the sample data, what is the margin of error associated with a 95%
confidence interval? (4)
b. Develop a 95% confidence interval for the mean price charged by discount
brokers for a trade of 100 shares at $50 per share. (4)
c. Give an interpretation of your findings from (b). (2)
04 The average of the weekly unit cost of the production department of FINETECH
Japan was reported as $150. The accounting department took a sample of 56 cost
reports and found that the average in the weekly cost is $145 with a population
standard deviation of $15.
a. Formulate a hypothesis to conclude that the average in the weekly cost is
different from the population mean of $150. (3)
b. At 5% level of significance, use the p-value approach and state your conclusion.
(7)

05 A recent article in BusinessWeek listed the “Best Small Companies.” We are

interested in the current results of the companies’ sales and earnings. A random
sample of 4 companies were selected and the sales and earnings, in millions of
dollars, are reported below. Let sales be the independent variable and earnings be
the dependent variable.

Company Sales (in $ millions) Earnings (in $ millions)

Royal Grip 11 17

Daig Int. 28 35

Cobra Golf 69 Last 2 digits of the student ID

Chico’s FAS 40 41

a. Draw a Scatter Diagram and Determine the relationship between Sales and
Earnings. (3)
b. Compute Sample Correlation Coefficient (rxy). (5)
c. Use rxy and Comment on the relationship between Sales and Earnings. (2)

“Good Luck!!”