Statistical Inference/ Business Statistics

Problems Set 3
Topics Covered:
 Continuous Random Variable
 Normal Distribution

Instructions
In all the questions that follow, show your working method too in addition to the answer.

Answers may vary in decimal values.

Question 1
A continuous random variable X is defined to have a uniform probability density function given as follows:
1
𝑓(𝑥) = {𝑏 − 𝑎 𝑓𝑜𝑟 1.0 ≤ 𝑥 ≤ 1.5
0 𝑒𝑙𝑠𝑒𝑤ℎ𝑒𝑟𝑒
Show the PDF graph of this 𝑓(𝑥).

Question 2
Let X be a continuous random variable defined by
3
𝑓(𝑥) = {4𝑥 𝑓𝑜𝑟 0 ≤ 𝑥 ≤ 1
0 𝑒𝑙𝑠𝑒𝑤ℎ𝑒𝑟𝑒
1 2
a) Find 𝑃(3 ≤ 𝑋 ≤ 3)
b) Find predicted outcome.

Question 3
A Project Manager determined that 𝑇 is a continuous random variable indicating the project completion
time. She consulted the literature and came to know that the probability density function (PDF) of 𝑇 , i.e.
𝑓(𝑡) is given by
2
3
𝑓(𝑡) = {𝑡 (2𝑡 + 2 ) 0≤𝑡 ≤1
0 𝑒𝑙𝑠𝑒𝑤ℎ𝑒𝑟𝑒

a) What is the expected mean value of project completion time?

b) What is the probability that the project will be completed in the expected mean time value?

Question 4
Given a normal distribution with μ=50 and σ=10, find the probability that X assumes a value between 45
and 62. (Answer: 0.5739)

Question 5
Given a normal distribution with μ=40 and σ=6, find the value of x that has a) 38% of the area below it
and b) 5% of the area above it. (Answer: 38.17, 49.87)

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Question 6
Company X knows that mean of earnings of firms in their industry is $200,000 and needs to know the
probability that in a given quarter the earnings of the company be less than $100,000 with an industry
standard deviation of $80,000. (Answer: 0.1056)

Question 7
The Z is a standard normal random variable. What is the probability that Z is between -0.4 and +1.2?
(Answer:0.54035)

Question 8
Suppose that X is a normal random variable with mean μ = 200 and standard deviation σ = 40. What is the
probability that X will take a value greater than 228? (Answer: 0.24196)

Question 9
A random variable is normally distributed with a mean of 𝜇 = 50 and a standard deviation 𝜎 = 5. Answer
the following questions:
a) Sketch a normal curve for the probability density function. Label the horizontal axis with values
pf 35,40, 45, 50, 55, 60 and 65. Find the probability of 𝑃(𝑍 ≤ 3.0) and 𝑃(𝑍 ≥ 3.0).
b) 45 ≤ 𝑃(𝑋) ≤ 55=?
c) 40 ≤ 𝑃(𝑋) ≤ 60=?

Question 10
The empirical rule states that for a normal distribution, nearly all of the data will fall within three standard
deviations of the mean. The empirical rule can be broken down into three parts:
 68% of data falls within the first standard deviation from the mean.
 95% fall within two standard deviations from the mean.
 99.7% fall within three standard deviations from the mean.
The rule is also called the 68-95-99.7 Rule or the Three Sigma Rule.

Verify this rule.

Question 11
A soft drink machine is regulated so that it discharges an average of 200 milliliters per cup. If the amount
of drink is normally distributed with a standard deviation of 15 milliliters,
a) What fraction of the cups will contain more than 224 milliliters?
b) What is the probability that a cup contains between 191 and 209 milliliters?

Question 12

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 a) Sketch the normal distribution curve for the given problem. What are your interpretations about
the project completion time?
b) What is the probability that Haynes Construction will not be in violation of their construction
contract? Also sketch the problem graphically.
c) If the Haynes Construction finishes this triplex in 75 days or less, it will be awarded a bonus
payment of $5000/=. What is the probability that Haynes will receive this contract? Also sketch
the problem graphically.
d) What is the probability that the triplex will take between 110 and 125 days? Also sketch the
problem graphically.

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