Solution of homework of lecture 4

Exercise 4.1:

a) The event A represents selection of an open mortgage.

The event B represents selection of a two-year mortgage.

b) A ∪ B = {O1, O2, O3, C2}

c) A ∩ B = {O2}

d) B = {O1, O3, C1, C3}

e) A and B are not mutually exclusive events since A ∩ B = {O2} ≠ ∅ .

Exercise 4.2

a) The sample space S = {HH, H T, TH, T T}

b) The outcomes are equally likely so we assign the probability 1/4 to each outcome.

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c) Let A be the event of observing one head and one tail. Then A = {H T, TH}

So the probability of observing one head and one tail is

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P(A) = = 0.5
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d) Let B be the event of observing at least one head. Then B = {H T, TH, HH}

So the probability of observing at least one head is

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P(B) = = 0.75
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Exercise 4.3 F̄

a) A sample space for this for this experiment is S = {FB, F W, FM, F̄B, F̄ W, F̄M}

b) All outcomes belong to the event F is F = {FB, F W, FM}

c) The joint probability table is

Decision B W M

F 0.335 0.16 0.055

F̄ 0.315 0.09 0.045

The probability that the employee selected is

i. a blue-collar worker is

P(B) = P(FB) + P(F̄B) = 0.335 + 0.315 = 0.65

ii. a white-collar worker is

P(W ) = P(F W ) + P(F̄ W ) = 0.16 + 0.09 = 0.25

iii. a manager is

P(M ) = P(FM ) + P(F̄M ) = 0.055 + 0.045 = 0.1

iv. in favour of the decision is

P(F ) = P(FB) + P(F W ) + F(FM ) = 0.335 + 0.16 + 0.055 = 0.55

v. against the decision is

P(F̄ ) = P(F̄B) + P(F̄ W ) + P(F̄M ) = 0.315 + 0.09 + 0.045 = 0.45

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f) The probability that the employee selected is not a manager is

P(M̄ ) = 1 − P(M ) = 1 − 0.1 = 0.9

Exercise 4.4:

Size of purchase Method of payment Marginal

probability
Cash (A1) Credit card (A2) Debit card (A3)

Under $20 (B1) 0.09 0.03 0.04 0.16

$20-$100 (B2) 0.05 0.21 0.18 0.44

Over $100 (B3) 0.03 0.23 0.14 0.4

Marginal 0.17 0.47 0.36

probability

a) The proportion of purchases was paid by debit card is

P(A3) = 0.04 + 0.18 + 0.14 = 0.36

b) The probability of a “over $100” purchase given that it is a credit card purchase is
P(B3 ∩ A2) 0.23
P(B3 | A2) = = = 0.49
P(A2) 0.47

c) The proportion of purchases made by credit card or by debit card is

P(A2 ∪ A3) = P(A2) + P(A3) = 0.47 + 0.36 = 0.83 (since A2 and A3 are
mutually exclusive)

d) The events “payment by cash” (A1) and “purchase of under $20” (B1) are not
mutually exclusive since A1 ∩ B1 ≠ ∅ (where P(A1 ∩ B1) = 0.09).

e) The events “payment by cash” (A1) and “purchase of under $20” (B1) are not
independent since P(A1)P(B1) = 0.16 * 0.17 = 0.0272 ≠ P(A1 ∩ B1) = 0.09.

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Exercise 4.5:

Rating Customer will Customer will Marginal

return (B1) not return (B2) probability

Poor (A1) 0.02 0.10 0.12

Fair (A2) 0.08 0.09 0.17

Good (A3) 0.35 0.14 0.49

Excellent (A4) 0.20 0.02 0.22

Marginal 0.65 0.35

probability

a) The proportion of customers rated the restaurant’s food as good and said that they
would return is

P(A3 ∩ B1) = 0.35

b) The proportion of customers who said that they would return rated the restaurant’s
food as good is
P(A3 ∩ B1) 0.35
P(A3 | B1) = = = 0.54
P(B1) 0.65

c) The proportion of customers who rated the restaurant’s food as good said that they
would return is
P(A3 ∩ B1) 0.35
P(B1 | A3) = = = 0.714
P(A3) 0.49

d) a) is joint probability while b) and c) are conditional probabilities.

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 Homework of lecture 5

Exercise 5.1:
a) By the multiplication rule,

P(A ∩ B) = P(A)P(B | A) = 0.3 * 0.4 = 0.12

b) By the addition rule,

P(A ∪ B) = P(A) + P(B) − P(A ∩ B) = 0.3 + 0.6 − 0.12 = 0.78

c) By the conditional probability rule,

P(A ∩ B) 0.12
P(A | B) = = = 0.2

P(B) 0.6
d) By the De-Morgan rule and the complement rule,

P(Ā ∩ B̄) = P(A ∪ B) = 1 − P(A ∪ B) = 1 − 0.78 = 0.22

Exercise 5.2:

Let A be the event “a student plays tennis” and let B be the event “a student play
cricket”. Then P(A) = 0.1; P(B) = 0.05 and P(B | A) = 0.4

a) The percentage of the students play both tennis and cricket is

P(A ∩ B) = P(A)P(B | A) = 0.1 * 0.4 = 0.04
b) The percentage of the students do not play either of these two games is

P(Ā ∩ B̄) = P(A ∪ B) = 1 − P(A ∪ B)

= 1 − P(A) − P(B) + P(A ∩ B) = 1 − 0.1 − 0.05 + 0.04 = 0.89
Exercise 5.3:

Let A be the event “The economy will experience a recession within the next 12
months” and let B the event “her mutual fund will increase in value”.

The probability tree:

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The probability that the mutual fund’s value will increase is

P(B) = P(A)P(B | A) + P(Ā)P(B | Ā) = 0.25 * 0.2 + 0.75 * 0.75 = 0.6125

Exercise 5.4:

The probability tree:

By the Bayes’ law,

P(A)P(B | A) 0.3 * 0.9
P(A | B) = = = 0.66
P(A)P(B | A) + P(Ā)P(B | Ā) 0.3 * 0.9 + 0.7 * 0.2

P(A)P(B̄ | A) 0.3 * 0.1

P(A | B̄) = = = 0.051
P(A)P(B̄ | A) + P(Ā)P(B̄ | Ā) 0.3 * 0.1 + 0.7 * 0.8

Exercise 5.5:

Let A be the event “A firm employed women”. Let B1, B2, B3 be the events “A firm
employed no female supervisor”, “A firm employed only one female supervisor” and
“A firm employed more than one female supervisor”, respectively.

The probability tree:

a) The number of businesses surveyed employed no women is 20000*0.18 = 3600

b) The proportion of businesses surveyed employed exactly one female supervisor is

P(B2) = P(A)P(B2 | A) + P(Ā)P(B2 | Ā) = 0.82 * 0.5 + 0.18 * 0 = 0.41

c) The proportion of businesses surveyed employed no female supervisors is

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 P(B1) = P(A)P(B1 | A) + P(Ā)P(B1 | Ā) = 0.82 * 0.195 + 0.18 * 1.0 = 0.3399

d) Given that a particular firm employed women, the probability that it employed at
least one female supervisor is

P(B2 ∪ B3 | A) = P(B2 | A) + P(B3 | A) = 0.5 + 0.305 = 0.805

Exercise 5.6

Let A be the event “They will win the championship” and let B the event “They won
the first game of the series”.

The probability tree:

By the Bayes’ law,

P(A)P(B̄ | A) 0.6 * 0.3
P(A | B̄) = = = 0.375
P(A)P(B̄ | A) + P(Ā)P(B̄ | Ā) 0.6 * 0.3 + 0.4 * 0.75