Section A (Answer All parts of Question 1)

1. A research organization was hired by a vehicle rental agency, operating in the tourism
sector of a Caribbean island, to investigate the fuel efficiency of new imported mountain
bikes. A stratified random sample was taken of new mountain bikes with permission
from the different vehicle dealerships with the stratification factor being country of
origin. The data collection focused on gasoline mileage (kilometres per litre). These were
entered on a Minitab spreadsheet for analysis. Exhibit I below was subsequently
generated.

Exhibit 1

Country
5% Tri
of N Mean Median St. Dev. S. E. Mean
Mean
Origin
Malaysia 64 12.13 10.74 10.55 6.677 *
Europe 81 14.89 16.63 16.50 6.724 0.853
Japan 100 20.45 20.40 20.41 ** 0.509

Country
of Min Max Q1 IQR
Origin
Malaysia 2 31 7 9
Europe 4 31 15 9
Japan 5 35 18 4

(a) Determine the values for * and **. [2]

(b) What should be the preferred measure of central tendency in describing the data
for European bikes? Why is it preferred? [2]
(c) Give both the point estimator and point estimate for the mean mileage of all new
Japanese bikes imported into this Caribbean island. [3]

(d) Give both the point estimator and point estimate for the variance of the mileage of
all new Japanese bikes imported into this Caribbean island. [3]

(e) Hence, assuming normality, construct a 99% confidence interval for the mean
mileage of all new Japanese bikes imported into this Caribbean island. [5]
(f) Give an interpretation of the confidence interval that you constructed above. [3]

(g) Assuming normality, find the probability that a Japanese bike selected at random
will have a mileage of at least 25 kilometres per litre. [5]

(h) You are required to test the hypothesis at the 5% level of significance that the
mean gasoline mileage for Japanese Bikes is equal to 20 kilometres per litre
versus the alternative that it is different from 20 kilometres per litre.
Complete the following:

i. State the null hypothesis H0 and the alternative hypothesis H1. [2]

ii. Which of the following test statistic will you use: Z test statistic, T test
statistic, Chi Square test statistic, F test statistic? Why use it? [3]

iii. The value of the selected test statistic is _____________. (Show use of
formula). [2]

iv. Using the computed value of the test statistic above and the tables provided,
the p-value is approximately equal to ______. [3]

v. State the decision rule that involves the p-value. [2]

vi. Hence, state your conclusion. [3]

 (i) A public sector agricultural organization has purchased a small fleet comprising
2 European and 3 Japanese mountain bikes. Assuming that the gasoline mileage of both
these types of bikes is normally distributed,
a. What distribution will the gasoline mileage for the fleet possess? Give reason for
your answer. [3]

b. Find the mean gasoline mileage for this fleet. [2]

c. Find the variance of the gasoline mileage of this fleet. Make sure to state any
assumption that you may make. [4]

d. Compute the probability that the gasoline mileage for the fleet will exceed 91.13
kilometres per litre. [3].

(ii) Part (h) on the next page

(iii)
Section B (Answer All parts of Question 2)

2. A market research firm is studying the relationship between monthly income of a

household and three factors viz. the mortgage payment for the household, the value of the
family car and the age of the breadwinner. A random sample of 19 households was
surveyed with a view to testing the model:

INCOME =  +  MORTGAGE +  VALUE +  AGE

where INCOME = Monthly Household Income (in dollars), MORTGAGE = Mortgage

Payment (in dollars), VALUE = Value of the family car (in dollars) and AGE = Age of the
household’s breadwinner (in years). The data pertaining to the 19 households were
processed using MINITAB and the following is an extract of the output obtained:

The regression equation is

*********

Predictor Coef StDev t-ratio p-value

Constant -424.3 928.8 -0.46
MORTGAGE 1.686 0.622 2.71
VALUE 0.157 0.274 0.57 *
AGE 42.51 24.32 **

S = 335.5 R-sq = 75.8% R-sq(adj) = 70.9%

Analysis of Variance
Source DF SS MS F p
Regression 2 5430941 1810314 15.66 0.000
 Error 16 1733741 115583
Total 18 7164682

i. Identify the dependent variable in this model. [1 mark]

ii. Identify the independent variable(s) in this model. [2 marks]
iii. Write out the regression equation. [2 marks]
iv. Fill in the missing values * and ** [4 marks]
v. Hence test whether  (the coefficient of VALUE ) is significant? Give reason for your
answer. [4 marks]
vi. What is the purpose of the F test? [2 marks]

vii. Perform the F test, making sure to state the null and alternative hypotheses. [4 marks]

viii. Give an interpretation to the term “R-sq” and comment on its value. [3 marks]
ix. The following correlation matrix was developed for the variables in the model:

INCOME MORTGAGE VALUE

MORTGAGE 0.461
VALUE 0.746 0.098
AGE 0.198 0.167 -0.119

What is your interpretation of the value 0.747 in the above correlation matrix? [3 marks]

Section C (Answer ONE question)

3.a. The East West Corridor Bus Service operates a service during the morning and afternoon
peak periods from Arima to Port of Spain via the Eastern Main Road. The buses utilized for the
service are designed for 50 passengers. Historical data on the service suggest that 70% of the
passengers on a full bus load travel all the way to Port of Spain while the remaining 30% travel
to destinations along the route.

It is now peak time and a full bus load is about to depart Arima for Port of Spain. The driver has
just been alerted to the news of a fatal accident at a major point on the Eastern Main Road.
Accordingly, he decides to use the CR Highway as a nonstop route to Port of Spain. One
implication of this decision is that he runs the risk of making passengers who never wanted to go
all the way to Port of Spain very irate. He wants to know the probability that all the passengers
on the bus are going all the way to Port of Spain.

a. There is a trial in this problem. Define the trial. [2 marks]

b. How many times is the trial being repeated? [2 marks]
c. Name the random variable present in this problem. [2 marks]
 d. Is this variable discrete or continuous? [2 marks]
e. Name the probability distribution of the random variable. [2 marks]
f. What assumptions support your choice of a distribution in part e. above? [3 marks]
g. What are the parameters of this distribution? [2 marks]
h. Hence, write down an expression for the probability that all the passengers on the bus are
going all the way to Port of Spain.[Leave the expression; Do not calculate] [3 marks]

b. A discrete random variable X has the following probability distribution.

X 20 25 30 35
Pr(X = x) 0.2 * 0.3 0.3

i. Fill in the blank * giving reasons for your answer. [2 marks]

ii. Compute Pr(X is greater than 24 but less than 42) [3 marks]

iii. What is the average value of X. [2 marks]

4.a. A sample of young people from the job market was asked by a competent research
organisation to rate the honesty and ethical standards of various groups. The data so gathered
were analysed by a statistician and the results he obtained using MINITAB are shown below:

Expected counts are printed below observed counts

High Average Low Total

Lawyers 24 43 27 ***
27 43.5 23.5

Business Executives 18 55 20 93
27 43 23

Medical Doctors 53 35 10 98
* 45.5 **

Parliamentarians 14 43 38 95
27 44 24

Total 109 176 **** 380

Chi-Sq = 0.33 + 0.006 + 0.86 +

3.00 + 3.35 + 0.39 +

?? + 2.42 + ??? +
 6.26 + 0.23 + 8.17 = 55.916

DF = ????, P-Value = ?????

i) Carefully define the null and alternative hypotheses of the 2 test underlying the
generation of the above table. [2 marks]

ii) Fill in the gaps marked by '*', '**', '***', ‘****’ ‘??’, ‘???’. ‘????’and ‘?????’.
[11 marks]

iii) State the assumption on which these calculations are based. [2 marks]

iv) What is the conclusion of the test? Give reasons for your answer.
[2 marks]

b. On average, 8 UWI students visit VegOut per hour. Create an expression for the probability
that, during a given lunch hour, between exactly 7 and 10 students will visit VegOut. [8
marks]