CAEC25 MIDTERM EXAM GIE ANNE D.

VIADO, CPA

1. Cholesterol Content The average cholesterol content of a certain brand of eggs is 215
milligrams, and the standard deviation is 15 milligrams. Assume the variable is normally
distributed (Assume also that the sample is taken from a large population and the
correction factor can be ignored.) (20 pts)
a. If a single egg is selected, find the probability that the cholesterol content will be
greater than 220 milligrams.
b. If a sample of 25 eggs is selected, find the probability that the mean of the sample
will be larger than 220 milligrams.

2. Of the total population of American households, including older Americans and perhaps
some not so old, 17.3% receive retirement income. In a random sample of 120
households, what is the probability that more than 20 households but fewer than
35 households receive a retirement income? (15 pts)
CAEC25 MIDTERM EXAM GIE ANNE D. VIADO, CPA

For # 3 , perform each of the following steps.

a. State the hypotheses and identify the claim (5 pts)
b. Find the critical value(s) (5 pts)
c. Compute the test value (10 pts)
d. Make the decision (5 pts)
e. Summarize the results (5 pts)

Use diagrams to show the critical region, and use the traditional method of
hypothesis testing
3. Revenue of Large Businesses A researcher estimates that the average revenue of the
largest businesses in the United States is greater than $24 billion. A random sample of
50 companies is selected, and the revenues (in billions of dollars) are shown. At = 0.05,
is there enough evidence to support the researcher’s claim? Assume =28.7

178 122 91 44 35 61 56 46 20 32
30 28 28 20 27 29 16 16 19 15
41 38 36 15 25 31 30 19 19 19
24 16 15 15 19 25 25 18 14 15
24 23 17 17 22 22 21 20 17 20