Business Statistics 3rd Edition Sharpe Solutions

Manual

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Business Statistics 3rd Edition Sharpe Solutions Manual

CHAPTER 5
Discrete Probability Distributions

5.1 P  x  5   1.0   0.06  0.11  0.24  0.27  0.20   1.0  0.88  0.12

5.2
a) µ = (1)(0.18) + (2)(0.25) + (3)(0.35) + (4)(0.22) = 2.61
b)   7.850  (2.61) 2 = 1.019

5.3
a) µ = (10)(0.10) + (15)(0.30) + (20)(0.20) + (25)(0.30) + (30)(0.10) = 20.0
b)   435  (20.0) 2 = 5.916

5.4 A – not a discrete probability distribution (the sum of the probabilities of all outcomes is
greater than 1)
B – discrete probability distribution
C – discrete probability distribution
D – not a discrete probability distribution (probability of one outcome is greater than 1)
A – not a discrete probability distribution (the sum of the probabilities of all outcomes is
less than 1)

5.5
 88   40   42   20   7   3 
a) µ = (0)    (1)    (2)    (3)    (4)    (5)  
 200   200   200   200   200   200 
= (0)(0.44) + (1)(0.20) + (2)(0.21) + (3)(0.10) + (4)(0.035) + (5)(0.015) = 1.135
b)   2.875  (1.135) 2 = 1.260

5.6
a) Stanton:
 4   12   8   36   20 
  (1)    (2)    (3)    (4)    (5)   
 80   80   80   80   80 
 (1)  0.05   (2)  0.15   (3)  0.10   (4)  0.45   (5)  0.25   3.7
Newark:
 12   12   18   15   18 
  (1)    (2)    (3)    (4)    (5)   
 75   75   75   75   75 
 (1)  0.16   (2)  0.16   (3)  0.24   (4)  0.20   (5)  0.24   3.2

5-1
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5-2 Chapter 5

b) Stanton:   15.00  (3.7) 2 = 1.14; Newark:   12.16  (3.2) 2 =1.36

c) Stanton’s fast-food restaurants have higher average customer satisfaction rating than ones
in Newark. Customer satisfaction ratings for Stanton’s fast-food restaurants are more
consistent when compared with ones in Newark.

5.7
a) µ = (3)(0.23) + (4)(0.57) + (5)(0.14) + (6)(0.06) = 4.03
b)   16.850  (4.03) 2 = 0.78

5.8 EMV = ($4,000)(0.30) + ($20,000)(0.45) + ($36,000)(0.25) = $19,200

5.9 Profit = Revenue– Costs

Revenue is based on the number loaves sold, which is the minimum of the supply of loaves
and the eventual demand.
Demand Profit (Bake 25 loaves) Probability
25 (25)($6) – (25)($3) = $75 0.35
50 (25)($6) – (25)($3) = $75 0.25
75 (25)($6) – (25)($3) = $75 0.40

EMV (25) = ($75)(0.35) + ($75)(0.25) + ( $75)(0.40) = $75

Demand Profit (Bake 50 loaves) Probability

25 (25)($6) – (50)($3) = $0 0.35
50 (50)($6) – (50)($3) = $150 0.25
75 (50)($6) – (50)($3) = $150 0.40

EMV (50) = ($0)(0.35) + ($150)(0.25) + ( $150)(0.40) = $97.50

Demand Profit (Bake 75 loaves) Probability

25 (25)($6) – (75)($3) = -$75 0.35
50 (50)($6) – (75)($3) = $75 0.25
75 (75)($6) – (75)($3) = $225 0.40

EMV (75) = (-$75)(0.35) + ($75)(0.25) + ( $225)(0.40) = $82.50

The most profitable is to bake 50 loaves every morning.

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 Discrete Probability Distributions 5-3

5.10
7!
a) P (2, 7)  (0.6) 2 (0.4)5  0.0774
(7  2)!2!
7! 7!
b) P(0, 7)  P(1, 7)  (0.60)0 (0.40)7  (0.60)1 (0.40)6  0.0188
(7  0)!0! (7  1)!1!
7! 7!
c) P(6, 7)  P(7, 7)  (0.60)6 (0.40)1  (0.60)7 (0.40)0  0.1586
(7  6)!6! (7  7)!7!

5.11
8!
a) P (3,8)  (0.35)3 (0.65)5  0.2786
(8  3)!3!
b)
8!
P(0,8)  (0.35)0 (0.65)8  0.0319
(8  0)!0!
8!
P(1,8)  (0.35)1 (0.65)7  0.1373
(8  1)!1!
8!
P(2,8)  (0.35) 2 (0.65)6  0.2587
(8  2)!2!
P  x  3  0.0319  0.1373  0.2587  0.4279
c)
8!
P(6,8)  (0.35)6 (0.65) 2  0.0217
(8  6)!6!
8!
P(7,8)  (0.35)7 (0.65)1  0.0033
(8  7)!7!
8!
P(8,8)  (0.35)8 (0.65)0  0.0002
(8  8)!8!
P  x  6   0.0217  0.0033  0.0002  0.0252

5.12
5!
a) P(4,5)  (0.25)4 (0.75)1  0.0146
(5  4)!4!
7!
b) P(4, 7)  (0.25) 4 (0.75)3  0.0577
(7  4)!4!
10!
c) P(4,10)  (0.25) 4 (0.75)6  0.1460
(10  4)!4!

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5-4 Chapter 5

5.13   (15)(0.65)  9.75;   (15)(0.65)(0.35)  1.847

5.14 P( x  14)  0.1091  0.1746  0.2182  0.2054  0.1369  0.0576  0.0115  0.9133

5.15
10!
a) P (3,10)  (0.28)3 (0.72)7  0.2642
(10  3)!3!
b)
10!
P(0,10)  (0.28)0 (0.72)10  0.0374
(10  0)!0!
10!
P(1,10)  (0.28)1 (0.72)9  0.1456
(10  1)!1!
10!
P(2,10)  (0.28) 2 (0.72)8  0.2548
(10  2)!2!
10!
P(3,10)  (0.28)3 (0.72)7  0.2642
(10  3)!3!
P  x  3  0.0374  0.1456  0.2548  0.2642  0.7020
c)
10!
P(0,10)  (0.28)0 (0.72)10  0.0374
(10  0)!0!
10!
P(1,10)  (0.28)1 (0.72)9  0.1456
(10  1)!1!
10!
P(2,10)  (0.28)2 (0.72)8  0.2548
(10  2)!2!
10!
P(3,10)  (0.28)3 (0.72)7  0.2642
(10  3)!3!
10!
P(4,10)  (0.28)4 (0.72)6  0.1798
(10  4)!4!
P  x  5  1  P  x  5
P  x  5  1  0.0374  0.1456  0.2548  0.2642  0.1798  0.1182
d)   (10)(0.28)  2.8;   (10)(0.28)(0.72)  1.42

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 Discrete Probability Distributions 5-5

5.16
8!
a) P(7,8)  (0.90)7 (0.10)1  0.3826
(8  7)!7!
8!
b) P  x  7   P(8,8)  (0.90)8 (0.10)0  0.4305
(8  8)!8!
c)
8!
P(6,8)  (0.90)6 (0.10)2  0.1488
(8  6)!6!
8!
P(7,8)  (0.90)7 (0.10)1  0.3826
(8  7)!7!
8!
P(8,8)  (0.90)8 (0.10)0  0.4305
(8  8)!8!
P( x  6)  1  P  x  6 
1  P  x  6   1  0.1488  0.3826  0.4305  0.0381
8!
d) P (4,8)  (0.90) 4 (0.10) 4  0.0046
(8  4)!4!
The probability of 4 out of 8 customers being satisfied is very low assuming that 90% of the
customer base is satisfied. Based on this sample, it is not likely that 90% of the customers are
satisfied.

5.17
11!
a) P(2,11)  (0.43) 2 (0.57)9  0.0646
(11  2)!2!
b)
11!
P(0,11)  (0.43)0 (0.57)11  0.0021
(11  0)!0!
11!
P(1,11)  (0.43)1 (0.57)10  0.0171
(11  1)!1!
11!
P(2,11)  (0.43) 2 (0.57)9  0.0646
(11  2)!2!
P  x  3  0.0021  0.0171  0.0646  0.0838

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5-6 Chapter 5

c)
11!
P(0,11)  (0.43)0 (0.57)11  0.0021
(11  0)!0!
11!
P(1,11)  (0.43)1 (0.57)10  0.0171
(11  1)!1!
11!
P(2,11)  (0.43) 2 (0.57)9  0.0646
(11  2)!2!
11!
P(3,11)  (0.43)3 (0.57)8  0.1462
(11  3)!3!
11!
P(4,11)  (0.43)4 (0.57)7  0.2206
(11  4)!4!
11!
P(5,11)  (0.43)5 (0.57)6  0.2329
(11  5)!5!
P  x  5  1.0  0.0021  0.0171  0.0646  0.1462  0.2206  0.2329  0.3166
d)   (11)(0.43)  4.73;   (11)(0.43)(0.57)  1.642

5.18
9!
a) P (3, 9)  (0.35)3 (0.65) 6  0.2716
(9  3)!3!
b)
9!
P (0,9)  (0.35)0 (0.65)9  0.0207
(9  0)!0!
9!
P (1, 9)  (0.35)1 (0.65)8  0.1004
(9  1)!1!
9!
P (2,9)  (0.35) 2 (0.65) 7  0.2162
(9  2)!2!
9!
P (3, 9)  (0.35)3 (0.65)6  0.2716
(9  3)!3!
P  x  4   0.0207  0.1004  0.2162  0.2716  0.6089
c)
9!
P (6,9)  (0.35) 6 (0.65)3  0.0424
(9  6)!6!
9!
P (7, 9)  (0.35)7 (0.65) 2  0.0098
(9  7)!7!
P (6,9)  P (7,9)  0.0424  0.0098  0.0522
d)   (9)(0.35)  3.15;   (9)(0.35)(0.65)  1.43

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 Discrete Probability Distributions 5-7

5.19
a)

12!
P(1,12)  (0.05)1 (0.95)11  0.3413
(12  1)!1!
b)
12!
P(0,12)  (0.05)0 (0.95)12  0.5404
(12  0)!0!
12!
P(1,12)  (0.05)1 (0.95)11  0.3413
(12  1)!1!
12!
P(2,12)  (0.05) 2 (0.95)10  0.0988
(12  2)!2!
12!
P(3,12)  (0.05)3 (0.95)9  0.0173
(12  3)!3!
P( x  4)  0.5404  0.3413  0.0988  0.0173  0.9978

c)
12!
P(0,12)  (0.05)0 (0.95)12  0.5404
(12  0)!0!
12!
P(1,12)  (0.05)1 (0.95)11  0.3413
(12  1)!1!
12!
P(2,12)  (0.05)2 (0.95)10  0.0988
(12  2)!2!
P( x  2)  1  0.5404  0.3413  0.0988  0.0196

d)   (12)(0.05)  0.60;   (12)(0.05)(0.95)  0.755

5.20
15!
a) P(0,15)  (0.06)0 (0.94)15  0.3953
(15  0)!0!

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5-8 Chapter 5

b)
15!
P(0,15)  (0.06)0 (0.94)15  0.3953
(15  0)!0!
15!
P(1,15)  (0.06)1 (0.94)14  0.3785
(15  1)!1!
15!
P(2,15)  (0.06) 2 (0.94)13  0.1691
(15  2)!2!
P  x  3  0.3953  0.3785  0.1691  0.9429
c)
15!
P(0,15)  (0.06)0 (0.94)15  0.3953
(15  0)!0!
15!
P(1,15)  (0.06)1 (0.94)14  0.3785
(15  1)!1!
P( x  1)  1  0.3953  0.3785  0.2262
d)

15!
e) P(4,15)  (0.06) 4 (0.94)11  0.0090
(15  4)!4!
The probability of 4 out of 15 customers making a purchase on the web site is very low
assuming that 6% of the customers make a purchase. Based on this sample, it is not likely
that 6% of the customers make purchases.

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 Discrete Probability Distributions 5-9

5.21
14!
a) P(9,14)  (0.87)9 (0.13)5  0.0212
(14  9)!9!
14!
b) P(14,14)  (0.87)14 (0.13)0  0.1423
(14  14)!14!
c)
14!
P (12,14)  (0.87)12 (0.13) 2  0.2892
(14  12)!12!
14!
P (13,14)  (0.87)13 (0.13)1  0.2977
(14  13)!13!
14!
P (14,14)  (0.87)14 (0.13) 0  0.1423
(14  14)!14!
P ( x  11)  1  0.2892  0.2977  0.1423  0.2708
d)   (14)(0.87)  12.18;   (14)(0.87)(0.13)  1.258

5.22

a) P(3) 
 3.0  2.71828   0.2240
3 3.0

3!
b)

P(0) 
 3.0  2.71828   0.0498
0 3.0

0!

P(1) 
 3.0  2.718283.0 
1

 0.1494
1!

P(2) 
 3.0  2.718283.0 
2

 0.2240
2!
P( x  2)  0.0498  0.1494  0.2240  0.4232

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5-10 Chapter 5

c)

P (0) 
 3.0  2.71828   0.0498
0 3.0

0!

P (1) 
 3.0  2.718283.0 
1

 0.1494
1!

P (2) 
 3.0  2.718283.0 
2

 0.2240
2!

P (3) 
 3.0  2.71828   0.2240
3 3.0

3!

P  4 
 3.0  2.71828   0.1680
4 3.0

4!
P  x  4  1 P  x  4
P  x  4   1  0.0498  0.1494  0.2240  0.2240  0.1680  0.1848

5.23

a) P(5) 
 4.7  2.71878   0.1738
5 4.7

5!
b)

P (0) 
 4.7  2.71878   0.0091
0 4.7

0!

P (1) 
 4.7  2.718784.7 
1

 0.0427
1!

P (2) 
 4.7  2.718784.7 
2

 0.1005
2!

P (3) 
 4.7  2.718784.7 
3

 0.1574
3!

P (4) 
 4.7  2.718784.7 
4

 0.1849
4!

P (5) 
 4.7  2.718784.7 
5

 0.1738
5!

P (6) 
 4.7  2.718784.7 
6

 0.1362
6!
P ( x  6)  1  P  x  6 
P ( x  6)  1  0.0091  0.0427  0.1005  0.1574  0.1849  0.1738  0.1362
P ( x  6)  0.1954

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 Discrete Probability Distributions 5-11

c)

P (0) 
 4.7  2.71878   0.0091
0 4.7

0!

P (1) 
 4.71  2.718784.7   0.0427
1!

P (2) 
 4.7  2.718784.7 
2

 0.1005
2!

P (3) 
 4.7  2.718784.7 
3

 0.1574
3!
P( x  3)  0.0091  0.0427  0.1005  0.1574  0.3097

5.24

a) P(4) 
 2.0  2.71828   0.0902
4 2.0

4!

b) P(4) 
 3.0  2.71828   0.1680
4 3.0

4!

c) P(4) 
 4.0  2.71828   0.1954
4 4.0

4!
d) As the value of  approached 4.0, the probability that x  4 increases.

5.25     8.5;   8.5  2.92

5.26

a) P(0) 
 2.6  2.71828   0.0743
0 2.6

0!
b)

P(0) 
 2.6  2.71828   0.0743
0 2.6

0!

P(1) 
 2.6  2.718282.6 
1

 0.1931
1!

P(2) 
 2.6  2.718282.6 
2

 0.2510
2!

P(3) 
 2.6  2.718282.6 
3

 0.2176
3!
P  x  4   0.0743  0.1931  0.2510  0.2176  0.7360

Copyright ©2020 Pearson Education, Inc.

5-12 Chapter 5

c)

P(0) 
 2.6  2.71828   0.0743
0 2.6

0!

P(1) 
 2.6  2.718282.6 
1

 0.1931
1!
P( x  1)  1  P  x  1  1  0.0743  0.1931  0.7326

5.27

a) P(5) 
 2.1  2.71828   0.0417
5 2.1

5!

b) P (0) 
 2.1  2.71828   0.1225
0 2.1

0!
c)
P ( x  2)  1  P  x  2 

P 0 
 2.1  2.71828   0.1225
0 2.1

0!

P 1 
 2.1  2.718282.1 
1

 0.2572
1!

P  2 
 2.1  2.718282.1 
2

 0.2700
2!
P ( x  2)  1  0.1225  0.2572  0.2700  0.3503
d)   2.1  1.45

5.28

a) P(7) 
 4.5  2.71828   0.0824
7 4.5

7!
b)

P(0) 
 4.5  2.71828   0.0111
0 4.5

0!

P(1) 
 4.5  2.718284.5 
1

 0.0500
1!

P(2) 
 4.5  2.718284.5 
2

 0.1125
2!
P  x  3  0.0111  0.0500  0.1125  0.1736

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 Discrete Probability Distributions 5-13

c)

P (0) 
 4.5  2.71828   0.0111
0 4.5

0!

P (1) 
 4.5  2.718284.5 
1

 0.0500
1!

P (2) 
 4.5  2.718284.5 
2

 0.1125
2!

P (3) 
 4.5  2.718284.5 
3

 0.1687
3!

P (4) 
 4.5  2.718284.5 
4

 0.1898
4!
P ( x  5)  1  P  x  5 
P ( x  5)  1  0.0111  0.0500  0.1125  0.1687  0.1898  0.4679

5.29

a) P(0) 
1.5  2.71828   0.2231
0 1.5

0!
b)

P 0 
1.5  2.71828   0.2231
0 1.5

0!

P 1 
1.5  2.718281.5 
1

 0.3347
1!

P  2 
1.5  2.718281.5 
2

 0.2510
2!
P ( x  3)  1  P  x  3  1  0.2231  0.3347  0.2510  0.1912

c) P(3) 
 3.0  2.71828   0.2240
3 3.0

3!
d)

P(0) 
 3.0  2.71828   0.0498
0 3.0

0!

P(1) 
 3.0  2.718283.0 
1

 0.1494
1!

P(2) 
 3.0  2.718283.0 
2

 0.2240
2!
P  x  2   0.0498  0.1494  0.2240  0.4232

Copyright ©2020 Pearson Education, Inc.

5-14 Chapter 5

5.30
22!
a) P(2, 22)  (0.015) 2 (0.985) 20  0.0384
(22  2)!2!
((22)(0.015)) 2 2.71828 (22)(0.015)
b) P(2)   0.0391
2!
c) The probabilities are close enough, but fewer calculations were needed for the result when
using the Poisson distribution

5.31
a)
25!
P(0, 25)  (0.012)0 (0.988) 25  0.7395
(25  0)!0!
25!
P(1, 25)  (0.012)1 (0.988) 24  0.2245
(25  1)!1!
25!
P(2, 25)  (0.012)2 (0.988) 23  0.0327
(25  2)!2!
P  x  3  0.7395  0.2245  0.0327  0.9967
b)
np   25 0.012   0.30
(0.30)0 2.71828 (0.30)
P(0)   0.7408
0!
(0.30)1 2.71828 (0.30)
P(1)   0.2222
1!
(0.30) 2 2.71828 (0.30)
P(2)   0.0333
2!
P  x  3  0.7408  0.2222  0.0333  0.9964

5.32
C53  6 C3
a) P  x   P (3)  12  6
 0.3788
12 C5

C5 2  6 C2
b) P ( x)  P (2)  12  6
 0.3788
12 C5

C50  6 C0 C51  6 C1
c) P ( x)  P (0)  P (1)  12  6
 12  6
 0.1212
12 C5 12 C5

d)  
(5)(6)
 2.5;  
(5)(6)(12  6) 12  5   0.89
12 12 2 12  1

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 Discrete Probability Distributions 5-15

5.33
C3 0  5 C0
a) P ( x)  P (0)  9 5
 0.0476
9 C3

 C  C C  C 
b) P( x)  1   P(0)  P(1)   1   95 30 5 0  95 31 5 1   0.5952
 9 C3 9 C3 
C  C C  C C  C
c) P ( x)  P (0)  P (1)  P (2)  95 3 0 5 0  95 31 5 1  95 3 2 5 2  0.8810
9 C3 9 C3 9 C3

d)  
(3)(5)
 1.67;  
(3)(5)(9  5)  9  3  0.7453
9 92  9  1

C43  6 C3
5.34 N  14, R  6, n  4, x  3; P ( x)  P (3)  14  6
 0.1598
14 C4

C6 6  10 C6
5.35 N  18, R  10, n  6, x  6; P ( x)  P (6)  18 10
 0.0113
18 C6

5.36
C 2  0  2 C0
a) N  9, R  2, n  2, x  0; P ( x)  P (0)  92
 0.5833
9 C2

C21  2 C1
b) N  9, R  2, n  2, x  1; P ( x)  P (1)  92
 0.3889
9 C2

C 2  2  2 C2
c) N  9, R  2, n  2, x  2; P ( x)  P (2)  92
 0.0278
9 C2

d)  
(2)(2)
 0.444;  
(2)(2)(9  2)  9  2   0.55
9 92  9  1
e) HYPGEOM.DIST(0, 2, 2, 9, FALSE) = 0.5833
HYPGEOM.DIST(1, 2, 2, 9, FALSE) = 0.3889
HYPGEOM.DIST(2, 2, 2, 9, FALSE) = 0.0278

5.37
C6  4  5 C 4
a) N  12, R  5, n  6, x  4; P ( x)  P (4)  12  5
 0.1136
12 C6

C6  2  5 C 2
b) N  12, R  5, n  6, x  2; P ( x)  P (2)  12  5
 0.3788
C
12 6

C63  5 C3
c) N  12, R  5, n  6, x  3; P ( x)  P (3)  12  5
 0.3788
C
12 6

Copyright ©2020 Pearson Education, Inc.

5-16 Chapter 5

d)  
(6)(5)
 2.50;  
(6)(5)(12  5) 12  6   0.8919
12 12 2 12  1
e) HYPGEOM.DIST(4, 6, 5, 12, FALSE) = 0.1136
HYPGEOM.DIST(2, 6, 5, 12, FALSE) = 0.3788
HYPGEOM.DIST(3, 6, 5, 12, FALSE) = 0.3788

5.38
C33  8 C3
a) N  20, R  8, n  3, x  3; P ( x)  P (3)  20 8
 0.0491
20 C3

C31  8 C1
b) N  20, R  8, n  3, x  1; P ( x)  P(1)  20 8
 0.4632
20 C3

C3 2  8 C2
c) N  20, R  8, n  3, x  2; P ( x)  P (2)  20 8
 0.2947
20 C3

C3 0  8 C0
d) N  20, R  8, n  3, x  0; P ( x)  P (0)  20 8
 0.1930
20 C3

e)  
(3)(8)
 1.2;  
(3)(8)(20  8)  20  3  0.80
20 202  20  1
f) HYPGEOM.DIST(3, 3, 8, 20, FALSE) = 0.0491
HYPGEOM.DIST(1, 3, 8, 20, FALSE) = 0.4632
HYPGEOM.DIST(2, 3, 8, 20, FALSE) = 0.2947
HYPGEOM.DIST(0, 3, 8, 20, FALSE) = 0.1930

5.39 1 0.10 45
2 0.20 90
3 0.50 225
4 0.20 90

5.40
a) µ = (0)(0.23) + (1)(0.32) + (2)(0.22) + (3)(0.15) + (4)(0.08) = 1.53
b)   3.83  (1.53) 2 = 1.22

5.41
a) µ = (0)(0.37) + (1)(0.28) + (2)(0.21) + (3)(0.10) + (4)(0.04) = 1.16
b)   2.66  (1.16) 2  1.15

5.42
a) 8 AM class: µ = 2.58; 10 AM class: µ = 1.79

Copyright ©2020 Pearson Education, Inc.

 Discrete Probability Distributions 5-17

b) 8 AM class:   1.39 ; 10 AM class:   1.33

c) These results were expected

5.43 EMV = ($10,000)(0.03) + ($0)(0.97) = $300. The cost of insurance is $100 greater than
EMV, so it should not be purchased.

5.44 Portfolio A: EMV = (-$1,500)(0.25) + ($2,500)(0.60) + ($4,000)(0.15) = $1,725

Portfolio B: EMV = (-$4,000)(0.25) + ($3,000)(0.60) + ($6,000)(0.15) = $1,700
Investor should choose the portfolio A.

5.45 Profit = $16 revenue + $5 revenue – cost to purchase shirts

The $16 revenue is based on the number of shirts sold at $16, which is the minimum of the
supply of shirts (3000) and the eventual demand.

Demand Profit (3,000 shirts) Probability

1,000 (1,000)($16) + (2,000)($5) – (3,000)($10) = -$4,000 0.15
2,000 (2,000)($16) + (1,000)($5) – (3,000)($10) = $7,000 0.25
3,000 (3,000)($16) + (0)($5) – (3,000)($10) = $18,000 0.30
4,000 (3,000)($16) + (0)($5) – (3,000)($10) = $18,000 0.30

EMV = (-$4,000)(0.15) + ($7,000)(0.25) + ($18,000)(0.30) + ($18,000)(0.30) = $11,950

5.46 Profit = $14 revenue + $2 revenue – cost to purchase calendars

The $14 revenue is based on the number of calendars sold at $14, which is the minimum of
the supply of calendars and the eventual demand.

Demand Profit (Order 100 calendars) Probability

100 (100)($14) + (0)($2) – (100)($6) = $800 0.25
200 (100)($14) + (0)($2) – (100)($6) = $800 0.40
300 (100)($14) + (0)($2) – (100)($6) = $800 0.35

EMV = ($800)(0.25) + ($800)(0.40) + ($800)(0.35) = $800

Demand Profit (Order 200 calendars) Probability

100 (100)($14) + (100)($2) – (200)($6) = $400 0.25
200 (200)($14) + (0)($2) – (200)($6) = $1,600 0.40
300 (200)($14) + (0)($2) – (200)($6) = $1,600 0.35

EMV = ($400)(0.25) + ($1,600)(0.40) + ($1,600)(0.35) = $1,300

Copyright ©2020 Pearson Education, Inc.

5-18 Chapter 5

Demand Profit (Order 300 calendars) Probability

100 (100)($14) + (200)($2) – (300)($6) = $0 0.25
200 (200)($14) + (100)($2) – (300)($6) = $1,200 0.40
300 (300)($14) + (0)($2) – (300)($6) = $2,400 0.35

EMV = ($0)(0.25) + ($1,200)(0.40) + ($2,400)(0.35) = $1,320

Bob’s Bookstore should order 300 calendars.

14!
5.47 P(14,14)  (0.5)14 (0.5)0  0.000061
(14  14)!14!

5.48
15!
a) P (6,15)  (0.45)6 (0.55)9  0.1914
(15  6)!6!
15!
b) P (9,15)  (0.45)9 (0.55)6  0.1048
(15  9)!9!
c)
15!
P(4,15)  (0.45) 4 (0.55)11  0.0780
(15  4)!4!
15!
P(5,15)  (0.45)5 (0.55)10  0.1404
(15  5)!5!
P  x  4 or x  5   0.0780  0.1404  0.2184
d)   (15)(0.45)  6.75;   (15)(0.45)(0.55)  1.926

Copyright ©2020 Pearson Education, Inc.

 Discrete Probability Distributions 5-19

e)

5.49
5!
a) P(3,5)  (0.24)3 (0.76) 2  0.0798
(5  3)!3!
5!
b) P(0,5)  (0.24)0 (0.76)5  0.2536
(5  0)!0!
c)
5!
P (0,5)  (0.24)0 (0.76)5  0.2536
(5  0)!0!
5!
P (1,5)  (0.24)1 (0.76) 4  0.4003
(5  1)!1!
5!
P (2,5)  (0.24) 2 (0.76)3  0.2529
(5  2)!2!
P ( x  2)  0.2536  0.4003  0.2529  0.9068

5.50
7!
a) P(4,7)  (0.43) 4 (0.57)3  0.2216
(7  4)!4!

Copyright ©2020 Pearson Education, Inc.

5-20 Chapter 5

b)
7!
P(0,7)  (0.43)0 (0.57)7  0.0195
(7  0)!0!
7!
P(1,7)  (0.43)1 (0.57)6  0.1032
(7  1)!1!
7!
P(2,7)  (0.43) 2 (0.57)5  0.2336
(7  2)!2!
P( x  2)  1.0  0.0195  0.1032  0.2336  0.6436
c)   (7)(0.43)  3.01;   (7)(0.43)(0.57)  1.31

5.51
10!
a) P(10,10)  (0.80)10 (0.20)0  0.1074
(10  10)!10!
b)
10!
P(8,10)  P(9,10)  P(10,10)  (0.80)8 (0.20) 2 
(10  8)!8!
10! 10!
(0.80)9 (0.20)1  (0.80)10 (0.20)0  0.6778
(10  9)!9! (10  10)!10!
10! 10!
c) P(6,10)  P(7,10)  (0.80)6 (0.20) 4  (0.80) 7 (0.20)3  0.2894
(10  6)!6! (10  7)!7!
10!
d) P(5,10)  (0.8)5 (0.2)5  0.0264
(10  5)!5!
The probability of 5 out of 10 rounds being below 90 is very low assuming that 80% of the
rounds are below 90. Based on this sample, it is not likely that 80% of the rounds are below
90.

5.52
12!
a) P(12,12)  (0.80)12 (0.20)0  0.0687
(12  12)!12!
b)
12!
P(10,12)  (0.80)10 (0.20) 2  0.2835
(12  10)!10!
12!
P(11,12)  (0.80)11 (0.20)1  0.2062
(12  11)!11!
12!
P(12,12)  (0.80)12 (0.20)0  0.0687
(12  12)!12!
P  x  9   0.2835  0.2062  0.0687  0.5583

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 Discrete Probability Distributions 5-21

c)
12!
P(8,12)  (0.80)8 (0.20)4  0.1329
(12  8)!8!
12!
P(9,12)  (0.80)9 (0.20)3  0.2362
(12  9)!9!
12!
P(10,12)  (0.80)10 (0.20)2  0.2835
(12  10)!10!
12!
P(11,12)  (0.80)11 (0.20)1  0.2062
(12  11)!11!
12!
P(12,12)  (0.80)12 (0.20)0  0.0687
(12  12)!12!
P  x  7   1  0.1329  0.2362  0.2835  0.2062  0.0687  0.0726
d)   (12)(0.80)  9.60;   (12)(0.80)(0.20)  1.386

5.53
13!
a) P(12,13)  (0.70)12 (0.30)1  0.0540
(13  12)!12!
b)
13!
P(11,13)  P(12,13)  P(13,13)  (0.70)11 (0.30)2 
(13  11)!11!
13! 13!
(0.70)12 (0.30)1  (0.70)13 (0.30)0  0.2025
(13  12)!12! (13  13)!13!
c)
P ( x)  1   P (12,13)  P (13,13)  
 13! 13! 
1  (0.70)12 (0.30)1  (0.70)13 (0.30)0   0.9363
 (13  12)!12! (13  13)!13! 
13!
d) P(5,13)  (0.7)5 (0.3)8  0.0142
(13  5)!5!
The probability that 5 out of 13 men did not use their shoes on the basketball court is very
low assuming that 70% of men do not wear them on courts. Based on this sample, it is not
likely that 70% of men do not wear their basketball shoes on the basketball court.

Copyright ©2020 Pearson Education, Inc.

5-22 Chapter 5

5.54
6!
a) P(6,6)  (0.89)6 (0.11)0  0.4970
(6  6)!6!
b)
6!
P(4,6)  (0.89) 4 (0.11)2  0.1139
(6  4)!4!
6!
P(5,6)  (0.89)5 (0.11)1  0.3685
(6  5)!5!
6!
P(6,6)  (0.89)6 (0.11)0  0.4970
(6  6)!6!
P( x  4)  0.1139  0.3685  0.4970  0.9794
c)
6!
P (5,6)  (0.89)5 (0.11)1  0.3685
(6  5)!5!
6!
P (6, 6)  (0.89)6 (0.11)0  0.4970
(6  6)!6!
P ( x  5)  1  0.3685  0.4970  0.1345
d)   (6)(0.89)  5.34;   (6)(0.89)(0.11)  0.766
e)

Copyright ©2020 Pearson Education, Inc.

 Discrete Probability Distributions 5-23

5.55
10!
a) P(9,10)  (0.79)9 (0.21)1  0.2517
(10  9)!9!
b)
10!
P(8,10)  (0.79)8 (0.21) 2  0.3011
(10  8)!8!
10!
P(9,10)  (0.79)9 (0.21)1  0.2517
(10  9)!9!
10!
P(10,10)  (0.79)10 (0.21)0  0.0947
(10  10)!10!
P( x  7)  0.3011  0.2517  0.0947  0.6475
c)
10!
P (10,10)  (0.79)10 (0.21)0  0.0947
(10  10)!10!
P ( x  10)  1  0.0947  0.9053
d)   (10)(0.79)  7.9;   (10)(0.79)(0.21)  1.29

5.56
a) P (12, 20)  0.0727
b)
P (13, 20)  P (14, 20)  P (15, 20)  P (16, 20) 
 P (17, 20)  P (18, 20)  P (19, 20)  P (20, 20)  0.0580
c)
P (0, 20)  P (1, 20)  P (2, 20)  P (3, 20)  P (4, 20) 
 P (5, 20)  P (6, 20)  P (7, 20)  P (8, 20)  P (9, 20)  0.5914
d)   (20)(0.45)  9;   (20)(0.45)(0.55)  2.2

5.57
9!
a) P(2,9)  (0.20) 2 (0.80)7  0.3020
(9  2)!2!

Copyright ©2020 Pearson Education, Inc.

5-24 Chapter 5

b)
9!
P(0,9)  (0.20)0 (0.80)9  0.1342
(9  0)!0!
9!
P(1,9)  (0.20)1 (0.80)8  0.3020
(9  1)!1!
9!
P(2,9)  (0.20) 2 (0.80)7  0.3020
(9  2)!2!
9!
P(3,9)  (0.20)3 (0.80)6  0.1762
(9  3)!3!
P( x  4)  0.1342  0.3020  0.3020  0.1762  0.9144

c)
9!
P(0,9)  (0.20)0 (0.80)9  0.1342
(9  0)!0!
9!
P(1,9)  (0.20)1 (0.80)8  0.3020
(9  1)!1!
9!
P(2,9)  (0.20) 2 (0.80)7  0.3020
(9  2)!2!
9!
P(3,9)  (0.20)3 (0.80)6  0.1762
(9  3)!3!
9!
P(4,9)  (0.20) 4 (0.80)5  0.0661
(9  3)!3!
P( x  5)  1  0.1342  0.3020  0.3020  0.1762  0.0661  0.0196
d)   (9)(0.20)  1.80;   (9)(0.20)(0.80)  1.20

5.58
8!
a) P (2,8)  (0.43) 2 (0.57)6  0.1776
(8  2)!2!
b)
8!
P(6,8)  (0.43)6 (0.57)2  0.0575
(8  6)!6!
8!
P(7,8)  (0.43)7 (0.57)1  0.0124
(8  7)!7!
8!
P(8,8)  (0.43)8 (0.57)0  0.0012
(8  8)!8!
P  x  5  0.0575  0.0124  0.0012  0.0711

Copyright ©2020 Pearson Education, Inc.

 Discrete Probability Distributions 5-25

c)
8!
P(0,8)  (0.43)0 (0.57)8  0.0111
(8  0)!0!
8!
P(1,8)  (0.43)1 (0.57)7  0.0672
(8  1)!1!
8!
P(2,8)  (0.43)2 (0.57)6  0.1776
(8  2)!2!
8!
P(3,8)  (0.43)3 (0.57)5  0.2679
(8  3)!3!
P( x  3)  0.0111  0.0672  0.1776  0.2679  0.5238
d)   (8)(0.43)  3.44;   (8)(0.43)(0.57)  1.40

5.59
 36   0.9
1
 2.71828   0.3659
0.9

a)  =   10   0.9 ; P ( x )  P (1) 

 400  1!

 36   
1.81 2.718281.8 
b)  =    20   1.8 ; P( x)  P(1)   0.2975
 400  1!
 36   4.5 4
 2.71828   0.1898
4.5

c)  =    50   4.5 ; P( x)  P(4) 
 400  4!

 36   9.9 12
 2.71828   0.0928
9.9

d)  =   110   9.9 ; P ( x)  P(12) 

 400  12!

5.60

a) P(6) 
11.0  2.71828   0.0411
6 11.0

6!

b) P(3) 
 5.5  2.71828   0.1133
3 5.5

3!
c)
  11.0
P ( x  7)  1.0  P( x  7)  1.0  0.0786  0.9214
d)
  11
P ( x  10)  0.3405

Copyright ©2020 Pearson Education, Inc.

5-26 Chapter 5

5.61

a) P(8) 
13  2.71828   0.0457
8 13

8!
b) P(0)  P(1)  P(2)  P(3)  P(4)  P(5)  P(6)  P(7)  P(8)  P(9)  0.1658
c)
P ( x)  1   P (0)  P (1)  P (2)  P (3)  P (4)  P (5)  P (6)  P (7)  P (8)  P (9) 
 P (10)  P (11)  P (12)  P (13)  P (14)  P (15)   0.2364

d)   (0.5)(13)  6.5; P( x)  P(4) 

 6.5  2.71828   0.1118
4 6.5

4!

5.62

a)   (0.25)(16)  4; P( x)  P (2) 
 4  2.71828   0.1465
2 4

2!

b)   (0.25)(16)  4; P( x)  P (4) 
 4  2.71828   0.1954
4 4

4!

c)   (0.5)(16)  8; P( x)  P(6) 
8  2.71828   0.1221
6 8

6!

d)   (0.75)(16)  12; P( x)  P(6) 

12  2.71828   0.02556 12

6!

5.63

a) P(0) 
 2.01  2.71828   0.1340
0 2.01

0!
b)

P (0) 
 2.01  2.71828   0.1340
0 2.01

0!

P (1) 
 2.01  2.718282.01 
1

 0.2693
1!

P (2) 
 2.01  2.718282.01 
2

 0.2707
2!
P( x  3)  0.1340  0.2693  0.2707  0.6740

c) P(0) 
1.005  2.71828
0 1.005
  0.3660
0!

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 Discrete Probability Distributions 5-27

d)

P (0) 
1.005  2.71828
0 1.005
  0.3660
0!

P (1) 
1.005  2.718281.005 
1

 0.3679
1!

P (2) 
1.005  2.718281.005 
2

 0.1849
2!
P( x  3)  0.3660  0.3679  0.1849  0.9188

5.64

a) P(1) 
 6.5  2.71828   0.0098
1 6.5

1!
b)

P(0) 
 6.5  2.71828   0.0015
0 6.5

0!

P(1) 
 6.51  2.718286.5 
 0.0098
1!

P(2) 
 6.52  2.718286.5 
 0.0318
2!
P( x  3)  0.0015  0.0098  0.0318  0.0431
c)

P(0) 
 6.5  2.71828   0.0015
0 6.5

0!

P(1) 
 6.5  2.718286.5 
1

 0.0098
1!

P(2) 
 6.52  2.718286.5 
 0.0318
2!

P(3) 
 6.53  2.718286.5 
 0.0688
3!

P(4) 
 6.54  2.718286.5 
 0.1118
4!
P ( x  4)  1.0  0.0015  0.0098  0.0318  0.0688  0.1118  0.7763
d)   6.5  2.55

Copyright ©2020 Pearson Education, Inc.

5-28 Chapter 5

5.65

a) P(3) 
 5.3  2.71828   0.1239
1 5.3

3!
b)

P(0) 
5.3  2.71828   0.0050
0 5.3

0!

P(1) 
 5.3  2.718285.3 
1

 0.0265
1!

P(2) 
 5.32  2.718285.3 
 0.0701
2!

P(3) 
 5.33  2.718285.3 
 0.1239
3!
P( x  4)  0.0050  0.0265  0.0701  0.1239  0.2255
c)

P(0) 
5.3  2.71828   0.0050
0 5.3

0!

P(1) 
 5.3  2.718285.3 
1

 0.0265
1!

P(2) 
 5.32  2.718285.3 
 0.0701
2!

P(3) 
 5.33  2.718285.3 
 0.1239
3!

P(4) 
 5.34  2.718285.3 
 0.1641
4!
 5.35   2.718285.3 
P(5)   0.1740
5!
P( x  6)  1  0.0050  0.0265  0.0701  0.1239  0.1641  0.1740  0.4364

d) P(6) 
10.6  2.71828   0.0491
1 10.6

6!

5.66
24!
a) P (1, 24)  (0.024)1 (0.976) 23  0.3294
(24  1)!1!

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 Discrete Probability Distributions 5-29

24!
b) P (4, 24)  (0.024) 4 (0.976) 20  0.0022
(24  4)!4!
c)
np   24  0.024   0.576

P(1) 
 0.576  2.71828
1 0.576
  0.3238
1!
d)
np   24  0.024   0.576

P(4) 
 0.576  2.71828
4 0.576
  0.0026
4!

5.67
20!
a) P (0, 20)  (0.025) 0 (0.975) 20  0.6027
(20  0)!0!
b)
20!
P(0, 20)  (0.025)0 (0.975) 20  0.6027
(20  0)!0!
20!
P(1, 20)  (0.025)1 (0.975)19  0.3091
(20  1)!1!
P  x  2   0.6027  0.3091  0.9118
c)
np   20  0.025  0.50

P(0) 
 0.50  2.71828   0.6065
0 0.50

0!
d)
np   20  0.025  0.50

P(0) 
 0.50  2.71828   0.6065
0 0.50

0!

P(1) 
 0.50  2.718280.50 
1
 0.3033
1!
P  x  2   0.6065  0.3033  0.9098

5.68
24!
a) P ( x)  P(3, 24)  (0.035)3 (0.965) 21  0.0411
(24  3)!3!

Copyright ©2020 Pearson Education, Inc.

5-30 Chapter 5

((24)(0.035))3 2.71828 (24)(0.035)

b) P( x)  P(3)   0.0426
3!
c) The probabilities are very close.

5.69
C3 0  4 C0
a) P ( x)  P (0)  18  4
 0.4461
C
18 3

 C  C C31  4 C1 
b) P( x)  1   P(0)  P(1)   1   18 4 30 4 0  18  4
  0.1078
 18 C3 18 C3 

c)  
(3)(4)
 0.667;  
(3)(4)(18  4) 18  3  0.6763
18 182 18  1
d) HYPGEOM.DIST(0, 3, 4, 18, FALSE) = 0.4461
1 – (HYPGEOM.DIST(0, 3, 4, 18, FALSE) + HYPGEOM.DIST(1, 3, 4, 18, FALSE) ) =
1 - 0.8922 = 0.1078

5.70
C88  14 C8
a) P ( x)  P (8)  19 14
 0.0397
19 C8

C8 6  14 C6 C8 7  14 C7 C88  14 C8

b) P ( x)  P (6)  P (7)  P (8)  19 14
 19 14
 19 14
 0.6640
19 C8 19 C8 19 C8

c) There are only five returns that are not using the short form. If eight returns are selected, at
least three returns must be short forms.

d)  
(8)(14)
 5.895;  
(8)(14)(19  14) 19  8   0.9737
19 192 19  1
e) HYPGEOM.DIST(8, 8, 14, 19, FALSE) = 0.0397
HYPGEOM.DIST(6, 8, 14, 19, FALSE) + HYPGEOM.DIST(7, 8, 14, 19, FALSE)
+ HYPGEOM.DIST(8, 8, 14, 19, FALSE) = 0.3973 + 0.2270 + 0.0397 = 0.6640

5.71
C6 2  10 C2
a) N  16, R  10, n  6, x  2; P ( x)  P (2)  16 10
 0.0843
16 C6

C6 4  10 C4
b) N  16, R  10, n  6, x  4; P ( x)  P (4)  16 10
 0.3934
16 C6

C6 6  10 C6
c) N  16, R  10, n  6, x  6; P ( x)  P (6)  16 10
 0.0262
16 C6

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 Discrete Probability Distributions 5-31

d)  
(6)(10)
 3.75;  
(6)(10)(16  10) 16  6   0.968
16 162 16  1

e) HYPGEOM.DIST(2, 6, 10, 16, FALSE) = 0.0843

HYPGEOM.DIST(4, 6, 10, 16, FALSE) = 0.3934
HYPGEOM.DIST(6, 6, 10, 16, FALSE) = 0.0262

5.72
C10  4  8 C4
a) N  22, R  8, n  10, x  4; P ( x)  P (4)  22 8
 0.3251
22 C10

C10  6  8 C6
b) N  22, R  8, n  10, x  6; P ( x)  P (6)  22 8
 0.0433
22 C10

c) The proportion of cars (0.636) is much higher than the proportion of trucks (0.364) on the
lot. Four trucks out of 10 vehicles have a higher probability than 4 cars out of 10 vehicles
because the 0.40 proportion is very close to the proportion of trucks on the lot.

d)  
(10)(8)
 3.64;  
(10)(8)(22  8)  22  10   1.150
22 22 2  22  1
e) HYPGEOM.DIST(4, 10, 8, 22, FALSE) = 0.3251
HYPGEOM.DIST(6, 10, 8, 22, FALSE) = 0.0433

5.73
C30  22 C0
a) N  53, R  22, n  3, x  0; P ( x)  P (0)  53 22
 0.1919
53 C3

C33  22 C3
b) N  53, R  22, n  3, x  3; P ( x)  P (3)  53 22
 0.0657
53 C3

C3 2  22 C2
c) N  53, R  22, n  3, x  2; P ( x)  P (2)  53 22
 0.3057
C
53 3

d)  
(3)(22)
 1.245;  
(3)(22)(53  22)  53  3  0.8368
53 532  53  1
e) HYPGEOM.DIST(0, 3, 22, 53, FALSE) = 0.1919
HYPGEOM.DIST(3, 3, 22, 53, FALSE) = 0.0657
HYPGEOM.DIST(2, 3, 22, 53, FALSE) = 0.3057

5.74
C5 0  12 C0
a) N  52, R  12, n  5, x  0; P ( x)  P (0)  52 12
 0.2532
52 C5

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Business Statistics 3rd Edition Sharpe Solutions Manual

5-32 Chapter 5

C51  12 C1
b) N  52, R  12, n  5, x  1; P ( x)  P (1)  52 12
 0.4220
52 C5

C5 2  12 C2
c) N  52, R  12, n  5, x  2; P ( x)  P (2)  52 12
 0.2509
52 C5

C5 4  12 C4
d) N  52, R  12, n  5, x  4; P ( x)  P (4)  52 12
 0.0076
52 C5

e)  
(5)(12)
 1.154;  
(5)(12)(52  12)  52  5   0.9044
52 52 2  52  1
f) HYPGEOM.DIST(0, 5, 12, 52, FALSE) = 0.2532
HYPGEOM.DIST(1, 5, 12, 52, FALSE) = 0.4220
HYPGEOM.DIST(2, 5, 12, 52, FALSE) = 0.2509
HYPGEOM.DIST(4, 5, 12, 52, FALSE) = 0.0076

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