1.

a. This is a valid probability distribution. It satisfies the 2 necessary conditions: each

probability falls between 0 and 1, and all probabilities add up to 1.

b.
0.45
0.4
Probability

0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
15 22 34 40
x

c. P ( X < 40 )=P ( X =15 ) + P ( X=22 ) + P ( X =34 ) =0.14+ 0.40+0.26=0.8

d. P ( 10 ≤ X ≤ 30 )=P ( X =15 ) + P ( X=22 )=0.14+ 0.40=0.54

 e. P ( X >20 )=P ( X=22 ) + P ( X =34 ) + P ( X =40 )=0.40+0.26 +0.20=0.86

2.
a.
P ( X=10 )=1− [ P ( X =−25 ) + P ( X =−15 ) + P ( X=20 ) ] =1−( 0.35+ 0.10+0.10 )=0.45

b.
0.5
Probability

0.4
0.3
0.2
0.1
0
-25 -15 10 20
x
The distribution is not symmetric.

c. P ( X <0 )=P ( X=−25 ) + P ( X=−15 )=0.35+0.10=0.45

d. P ( X >−20 )=P ( X=−15 )+ P ( X=10 ) + P ( X =20 )=0.10 +0.45+0.10=0.65

e. P ( X <20 )=P ( X=−25 )+ P ( X=−15 ) + P ( X =10 )=0.35+ 0.10+0.45=0.90

a. P ( X <5 ) =P ( X=1 ) + P ( X =2 )+ P ( X=3 ) + P ( X =4 )=0.05+ 0.09+0.12+0.24=0.5

b. P ( X ≥5 )=1−P ( X <5 )=1−0.5=0.5

c. P ( 3< X < 6 )=P ( X =4 ) + P ( X=5 ) =0.24+ 0.25=0.49

d.
0.3
0.25
0.2
Probability

0.15
0.1
0.05
0
1 2 3 4 5 6 7 8
Household Size
The distribution is fairly symmetric.
8.
Let the random variable X represent performance.
A.
0.5
0.4
0.3
Probability

0.2
0.1
0
1 2 3 4 5
Performance

The analyst has a somewhat pessimistic view based on the positively skewed
distribution. There is a 57% chance that the performance will be poor or very poor.

B.

x P (X ≤ x)
1 (Very poor) 0.14
2 (Poor) 0.57
3 (Neutral) 0.79
4 (Good) 0.95
5 (Very
1
Good)

C. P(X ≥ 4) = P(X = 4) + P(X = 5) = 0.16 + 0.05 = 0.21.

9.
Let the random variable X represent number of shots made.
A.
x P(X = x)
0 0.55
1 0.25
2 0.20

b. P ( X <2 ) =1−P ( X=2 )=1−0.20=0.80

c. P ( X ≥1 )=1−P ( X =0 )=1−0.55=0.45
10.
Let the random variable X represent confidence score.

a. P ( X=2 )=1−0.75−0.05=0.20.

b. P ( 2≤ X ≤ 3 )=1−0.75=0.20+0.05=0.25.

11.
Let the random variable X represent the numeric value corresponding to
the letter grade.

0.5
0.4
Probability

0.3
0.2
0.1
0
0 1 2 3 4
Grade

The probability distribution is skewed to the left with 80% of the students getting a
grade of C or better.

b.
 x P(X ≤ x)
0 (F) 0.10
1 (D) 0.20
2 (C) 0.60
3 (B) 0.90
4 (A) 1

c. P ( X ≥3 )=P ( X=3 )+ P ( X=4 )=0.10+0.30=0.40

d.

1−P ( X =0 )=1−0.10=0.90

12.
Let X be the number of students that Jane will be able to fund.

f. P ( X=1 )=1−P ( X =0 )−P ( X =2 )=1−0.05−0. 80=0.15

g.

x P(X ≤ x)
0 0.05
1 0.20
2 1

13.

h. P ( X=3 )=1−P ( X =4 )−P ( X =2 )−P ( X <2 ) =1−0.50−0.30−0.18=0.02

i. Let the random variable X represent the number of tires a customer buys.

x P(X ≤ x)
0 0.05
1 0.18
2 0.48
3 0.50
4 1.00
19. E ( X )=25,000 ×0.10+10,000 × 0.30−5,000 × 0.60=2,500

20.

E ( X )=4 × 0.10+3 ×0.30 +2× 0.40+1 ×0.10+ 0× 0.10=2.2

21.
Let X be the bonus paid out to a sales representative,

E ( X )=20,000 ×0.15+10,000 × 0.30+5,000 ×0.10=6,500 , that is , $ 6,500

Let Y be the total bonus paid out to all sales representatives,

E ( Y )=200 E ( X )=$ 1,300,000

22.
Let X be the amount spent on a warranty for a refrigerator by each buyer,

E ( X )=100 ×0.20+200 × 0.05+0 ×0.75=30 , that is $ 30

Let Y be the revenue earned by the store from selling refrigerator warranties,

E ( Y )=120 E ( X )=120 ×30=3600 ,that is , $ 3,600

23.
Let X represent the repair cost if you do not buy the insurance.

Therefore, (X) = 400 × 0.08 + 800 × 0.03 + 1400 × 0.02 + 0 × 0.85 = 84. If you are risk neutral, you
should buy the insurance because the expected cost of repair ($84) is greater than the cost of the insurance
($80). In other words, a risk neutral person gains $4 ($84 - $80) by buying the insurance.
 14.μ=5 × 0.35+10 ×0.30+ 15× 0.20+20 ×0.15=10.75
2 2 2 2 2
σ =(5−10.75) × 0.35+ ( 10−10.75 ) ×0.30 + ( 15−10.75 ) ×0.20+ ( 20−10.75 ) ×0.15=28.19

σ =√ 28.19=5.31

15. μ= (−23 ) × 0.50+ (−17 ) × 0.25+ (−9 ) × 0.15+ (−3 ) ×0.10=−17.4

2 2 2 2 2
σ =(−23+ 17.4) × 0.50+ (−17+17.4 ) × 0.25+ (−9+ 17.4 ) ×0.15+ (−3+ 17.4 ) ×0.10=47.04

σ =√ 47.04=6.86

16.

a. μ=0× 0.30+1 ×0.50+ 2× 0.15+3 ×0.05=0.95

b.
2 2 2 2 2
σ =(0−0.95) × 0.30+ ( 1−0.95 ) × 0.50+ ( 2−0.95 ) × 0.15+ ( 3−0.95 ) × 0.05=0.65
; σ =√ 0.65=0.80

17.
A.

P ( X ≥1 )=1−P ( X =0 )=1−0.05=0.95
B.

P ( X=2 )=P ( X ≥2 ) −P ( X=3 )=0.60−0.10=0.50

P ( X=1 )=1−P ( X =0 )−P ( X =2 )−P ( X =3 )=1−0.05−0.50−0.10=0.35

E ( X )=0 ×0.05+1 × 0.35+2× 0.50+3 ×0.10=1.65
2 2 2 2 2
σ =(0−1.65) × 0.05+ ( 1−1.65 ) ×0.35+ ( 2−1.65 ) ×0.50+ (3−1.65 ) ×0.10=0.53
σ =√ 0.53=0.73

18.
A.

E ( X )=−5 ×0.30+ 0× 0.45+10 ×0.25=1

B.
2 2 2 2
σ =(−5−1) ×0.30 + ( 0−1 ) ×0.45+ ( 10−1 ) ×0.25=31.5

σ =√ 31.5=5.61