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Newbold 8e:
b. Py(0) =.23
Py(1) = .21
Py(2) = .30
Py(3) = .26
Mean_y = 1.59
c. PY|X(0|3) =.1111
PY|X(1|3) =.1111
PY|X(2|3) =.3333
PY|X(3|3) =.4444
5.79.
a. triangular shape
b. f(x) always non-negative and area under f(x), the integral, equals 1.
c. 0.75
5.17.
a. 0.8849
b. 0.0918
c. 0 .0446
d. 0 .8413
e. 0 .0233
f. 0.8403
g. 0.1141
5.18
a. .52
b. -.67
c. .84
d. -.25
1
5.19.
a. 0 .1056
b. 0.9031
c. 0.7324
d. 56.72
e. 49.52 and 50.48.
5.20. X ~N (µ = 80 , 2 = 100)
a. .9772
b. .3674
c. .0062
d. 92.8
e. X = 70 and90.
5.35.
a. 0.2266
b. 0.2266
c. The graph should show that 60 minutes and 90 minutes are equidistant
from the mean of 75 minutes. Therefore, the areas above 90 minutes and
below 60 minutes by the property of symmetry must be equal.
d. 100.6
5.70 The calculation of the mean is correct, but the standard deviations of two random variables
cannot be summed. To get the correct standard deviation, add the variances together and
then take the square root. The standard deviation: z = 5(15)2 = 33.5410.
5.83.
Cov[(X1 + X2), (X1 – X2)] = E[(X1 + X2)(X1 – X2)] – E[X1 + X2] E[X1 – X2] =
E[X12 - X22]– E[(X1) + E(X2)][E(X1) – E(X2)] =
E(X12) – E(X22) - [(E(X1))2 – (E(X2)2] = Var (X1) – Var (X2)
Which is 0 if and only if Var (X1) = Var (X2)
2.
X~N(mu, sigma^2)
mu=50, sigma=5
P(X<50) = 50% because Normal is symmetric around mean=median=50.
b) P(X<45)=P(Z< (45-50)/5)=P(Z<-1)=1-0.8413=0.16
c) P(49<X<51)=P( (49-50)/5 < Z < (51-50)/5 ) = P(-0.2 < Z < 0.2)=...
d) Find k such that P(X< k) = 5% <=> P( Z < (k-50)/5 ) = 5% <=> (k-50)/5 = -1.645
<=> k=...
3.
X~N(mu, sigma^2)
mu= 0.30
sigma=0.10
a) P(X<0)=P(Z<(0-0.30)/0.10) = P(Z<-3)=...
2
b) Find k such that P(X>k)=0.95 <=> P(Z>(k-0.3)/0.1) ) = 0.95 <=> (k-0.3)/0.1 = -
1.645 <=>k=....
4.
a) A and B give same expected value
b) B is better
c) "Result of option A" = 2 X1 (or = 2 X2 ). "Result of option B" = X1 + X2 .
d) Var(result option B) < Var(result option B)
5.
a) X1~N(40,42)
P(X1>46)=P(Z>(46-40)/4)=P(Z>1,5) =1-0,9332 =7%
b) V(X1+ X2)=V(X1)+V(X2)+2Cov(X1,X2) = 42 + 32 + 2 × 0,5 × 4 × 3 = 37
c.i) P(X1 +X2 < k)=0,85 P(Z<(k-100)/5)=0,85 (k-100)/5=1,04 k = 105
c.ii) V(X1+ X2) = 42 + 32 + 2 × × 4 × 3 = 25+24
P(X1 +X2 < k)=0,85 P[Z<(k-100)/( 25+24 )]=0,85 k=100+1,04 ×( 25+24 ).
Therefore, k is maximized when = 1.
6.
a) Both give same expected value
b) Carla in 1st week and Maria in 2nd week. Or Maria in 1st week and Carla in 2nd
week.
7.
a) P(XA>0)=P(Z>(0-3)/3)=P(Z>-1)=0.8413
b) Note: XA- XB ~N(3-3, 3^2+2^2)
P(XA> XB)=P(XA- XB>0)=P(Z>(0-0)/13)=0.5
c) 100XB vs. (50XA + 50XB).
Same expected values = 300
Var(100XB) = 40 000
Var(50XA+50XB) = 2500*9 + 2500*4= 2500*13= 32500
Better to diversify risk!
d) Var(50XA+50XB) = 2500*9 + 2500*4 + something negative
Would not change previous answer. But diversification would be even better!
9.
p=2
Q~N(100,5^2)
Profit=pQ-C
a) P(Q>=99)=P(Z>= (99-100)/5) = ...
b) Profit= 2Q-190
i) E(Profit)=2*100-190=10
ii)Var(Profit)=4*5^2=100
SD(Profit)= 10
iii) Normal distribution
iv) P(Profit < 0 ) = P(Z< (0-10)/10 ) =...
c) Profit = 2Q-C
Q~N(100,5^2)
C~N(190, 10^2)
Profit ~N
E(Profit) = 10
Var(Profit) = Var(2Q-C)= 22 Var(Q) + Var(C) + 2*(2)*(-1)*Cov(Q,C)=
3
= 4*25 + 100 - 4*Corr(Q,C)*5*10 = 200-200* Corr(Q,C)
Profit ~N
iv) Corr(Q,C) =1
Profit~N
E(Profit)=10
Var(Profit)=0
Profit is constant and equal to 10
10.
a) C~N(50,102). P(C>60)=P(Z>(60-50)/10)=P(Z>1)=1-0.8413=16%
b) E(L)=E(5Q-C)=5E(Q)-E(C)=5 ×20 – 50 =50
c) V(L)=V(5Q-C)=52V(Q)+V(C)-2×5×Cov(Q,C)
=25×22+102-10×Corr(Q,C)×10×2=200-200×Corr(Q,C)
=200-200×0,1=200-20=180
d) Maximizar: V(L)=…=200-200×Corr(Q,C)
The larger the Corr(Q,C), the smaller will be V(L). Hence the answer is the minimum
value that Corr(Q,C) can take: Corr(Q,C) = -1.
4
2. Point Estimators
Newbold 8e:
7.3.
a. 2.57
b. 0.0512
c. 0.0512/10 = 0.00512
d. 7/10 = 0.70
e. 0.7 (1-0.7) / 10 = 0.021
7.7.
a.
b. Var ( X ) Var (Z ) Var (Y )
Var (Y ) 5
c. Relative efficiency between Y and X : = = 1.25
Var ( X ) 4
Var ( Z ) 10
Relative efficiency between Z and X : = = 1.111
Var ( X ) 9
1.
i: d)
ii: c)
2. E(X1)=E(X2)=mu, Var(X1)=Var(X2)=12
a)E(Xbarra)=mu
b)Var(Xbarra)=(1/2)^2 [12+12+2*0.5*12]
c) Normal
3.
a) Using the basic rules of the expected value and the fact that E(Xi) = it follows that:
E( X ) = E(i Xi / n) = i E(Xi) / n = i / n = n / n = .
Therefore X is an unbiased estimator of .
5
<=> b= 1 / 5
~
Therefore the values of a and b that guarantee the X is unbiased and has minimum
variance are given by:
a= 1- 1/5 = 4/5 , b= 1/5.
~
For these values we have that V( X )=(a2+4 b2) 2 = (16/25 + 4/25) 2 = (4/5) 2
The variance of X is given by:
V( X )=V((X1+X2)/2)= (1/4)(V(X1) + V(X2) + 0 ) (Cov( X 1 , X 2 )=0 because of
independence)
=(1/4)( 2 + 4 2) = (5/4) 2 .
~
Finally, V( X )= (4/5) 2 < V( X ) =(5/4) 2.
4.
a) Let be the value to be estimated.
Let U be the estimator of the 1st study and V the estimator of the 2nd study with
E(U ) = E(V ) = (both U and V are unbiased).
Let W = aU + bV + c be the linear combination (the independent term is included to
correct for a possible bias although in this example that will not be necessary as will be
seen below).
The expected value of W:
E(W ) = E(aU + bV + c) = aE(U ) + bE(V ) + c = aU + bV + c = (a + b) + c .
To ensure W unbiased: a + b = 1 e c = 0 .
It follows that the linear combination must be given by: W=aU+(1-a)V.
ii) What is the linear combination of these two estimators that is unbiased and has
minimum variance?
From i) above W=aU+(1-a)V to ensure unbiasedness.
1
I tis known that Var (U ) = Var (V ) , that is, if Var (U ) = 2 then Var (V ) = 4 2 .
2
We obtain:
Var (W ) = Var (aU + (1 − a)V ) = a 2Var (U ) + (1 − a) 2Var (V ) = a 2 2 + (1 − a ) 4 2 .
2
6
= a 2 + (2(1 − a)) 2 − 2a2(1 − a) 2
= (a − 2(1 − a)) 2 2
= (3a − 2) 2 2
First order condition:
((3a − 2) 2 2 ) 2
= 0 2(3a − 2)3 2 = 0 a = .
a 3
Can easily check 2nd order condition.
Finally:
2 1
W= U+ V.
3 3
7
3. Distribution of Sample Means, Variances, and Proportion
Newbold 8e:
6.5.
a. 100 and 81/25=3.24
b. 0.1335
c. 0.5788
d. 0.7967
6.11.
a.
i) 0.3085
ii) 0.1587
iii) 0.0228
b. number of observations increase -> variance of sample mean decreases -> distribution
more concentrated around mean and less area in the tails.
6.17
a. 0.3085
b. 0.2266
c. 0.3174
d. Lower, lower, lower
6.35.
a. 0.0285
b. 0.0025
c. 0.6111
d. 0.41-0.43
6.39. n=1068
6.75.
a. 0.0228
b. 0.6826
c. larger for a ; smaller for b
I. Sampling
2. Only those that accepted the invitation are considered in the sample - not a simple random
sample. Solution: make workshop mandatory (if possible).
1. P(sample mean < 45)=P( Z< (45-50) / (12/9) ) = P(Z < -1.25) = 1 - 0.8944=11% approx.
8
Therefore, there is a 10% chance that the inspection will force a shutdown. It's not very
high. But whether the company should be worried or not, would also depend on the costs
of the shutdown.
3.
a) P(X<95)=P(Z<(95-100)/5)=P(Z<-5/5) = P(Z<-1) = 1-0.8413=0.16
iii. P( X >95)=P(Z>(95-100)/2.5)=P(Z>-2)=0.98
2. p=0.9, n=100
a) Prob(p^ <0.8). Use Normal approximation.
4. n = 100, p = 0,5
p(1 − p)
pˆ ~ N p,
n
0,5
2
pˆ ~ N 0,5,
100
P( p̂ > 55/100 )
= P[Z > 0,05/(0,5/10) ]
= P(Z > 1)
= 1-0,8413 = 16%
1.
a) E(sample variance)= population variance=0.03^2
b) Use chi-square distribution
c) iii
d)
a) same answer
b) could not be computed
c) same answer
9
4. Confidence Intervals for Means and Proportions
Newbold 8e:
7.13
a. 174.076 up to 201.724
b. 95.96%
7.95.
a. 69.089 up to 80.311
b. Wider
7.41.
a. 0.9087 up to 0.9775
b. 0.0114 up to 0.0699
7.99. n=777.
I. Confidence intervals for a population mean (also for: a change in a population mean
after a treatment, and the mean difference between matched pairs from two
populations)
1.
a)
i) x bar ± 1.96 × /n = 7 ± 1.96 × 0.5/25 = 7 ± 0.2 = [6.8 , 7.2]
c) iv.
2.
2
a) 25 2,131 , that is, [24 , 26]
4
/2 2
b) Margin of error = 1.3 t15 , / 2
= 1.3 t15 = 2.6 / 2 = 0,01 = 2%
4
Confidence level = 98%.
3.
a) 38 ± 1,96 (2 / 3), that is, [ 36.7 , 39.3 ].
b)
10
For sure the critical value t(n-1)2,5% is above 1.96. However, the estimated standard
deviation depends on the random sample. Therefore, the amplitude may be larger, the
same, or smaller than in the previous case.
c)
i)
Confidence interval is X ± z/2 ( / n). For =2 and n=9: X ± z/2 ( 2 / 3 ). Given
proposed interval is X ± 1.1 it follows that: z/2 ( 2 / 3 ) = 1.1. Therefore z/2 = (3/2) 1.1
= 1.65. From the Normal distribution table, /2 = 5%, so that, =10%. We conclude
the confidence leve is (1-) = 90%.
ii)
(1-) = 95%, so that z/2 = 1.96, so that the M.E= z/2 / n = 1.96 (2/n).
5.
a) E( (X1+X2) / 2 ) = ( +)/2=
Var( (X1+X2) / 2 ) = (1/4) * ( 12 + 12 + 2*0.5*12 ) = 36/4 = 9
Normal
b) 95% C.I.: 20 +/- 1.96 * 9
6.
a)
Cov( X i , X j ) 0
Var (X )
1 n
= Var ( X i )
n i =1
n
1
= 2 Var ( X i )
n i =1
1 n n −1 n
= 2 Var ( X i ) + 2 Cov( X i , X j )
n i =1 i =1 j =i +1
1 n −1 n
= 2 n 2 + 2 Cov( X i , X j )
n i =1 j =i +1
2 2 n −1 n
=
n
+ Cov( X i , X j )
n ´2 i =1 j =i +1
95% confidence interval for µ:
2 2 n −1 n
x 1.96
n
+
n2
Cov( X , X
i =1 j =i +1
i j )
11
Therefore if the usual C.I. is used, its amplitude will be smaller than for this interval, so
that its confidence level will be below 95%.
b)
n −1 n
Cov( X
i =1 j = i +1
i ,X j)
n −1 n
=
i =1 j = i +1
n −1 n
= 2
i =1 j = i +1
= C 2n 2
n(n − 1)
= 2
2
where the number of covariances between the Xs = C2n = number of combinations of n
n(n − 1)
elements 2 by 2 =
2
2 2 n −1 n
Var (X ) =
n
+
n2
Cov( X
i =1 j =i +1
i ,X j)
2 2 n(n − 1)
= 2
+ 2
n n 2
2
(n − 1)
= + 2
n n
2 (n − 1) 1 n +1 2
Since = 0.5 it follows that Var (X ) = + 0,5 2 =
n n 2 n
1 n +1 2
x 1.96
2 n
7. The 95% confidence interval is for the mean of the population (the formula used to
compute the confidence interval contains the population mean with a probability of 95%).
The reader of study stated something about the proportion of people whose waiting time is
less than 3.5 - this is a completely different thing. In fact, with the information available
for this particular hospital we have a sample mean of 3 a standard deviation of 2.5. If the
distribution of the waiting time for the patients in this hospital was normally distributed we
could actually compute the proportion of people waiting more than 3.5 months which
would give a rather large number.
12
9. Confidence interval: [ 1296.99 , 1703.01 ]. Impossible to conclude if the campaign had an
effect because this increase could be due to many other effects that occured during that
period. Would need a control group.
1.
a) Confidence interval: 0.2 1.96*0.04
b) Max. M.E.= 1.96*0.5/100
2.
a) p = proportion of families that reduced their consumption.
pˆ = 80 / 100 =0.8.
n p̂ (1- p̂ )>5 so the central limit theorem can be used:
pˆ (1 − pˆ )
95% C.I. for: pˆ z 2,5% .
n
Substituting:
0.8 0.2 0.16 0.4
C.I. = 0.8 1.96 = 0.8 1.96 = 0.8 1.96 0.8 0.08
100 10 10
Finally, we obtain the C.I.: [0.72 , 0.88].
b)
Proposed C.I. = -0.5 ± 0.1 = x 0.1
M.E.=0.1
2
z
2
= 0.1 (Given that sample size n=100 is large enough, one can apply
100
the C.L.T. and use z 2 )
0.1 100 2
z 2
= z = 0,5 = (1 − 0.6915) =0.3185 60%.
2 2
0.5 0.5
c) Maximum margin of error obtained when p=0,5,that is, Max. M.E. = 1.96 .
n
We need Max. M.E. = 0.01
0.5 0.5
1.96 =0.01
n
0.5
1.96 =0.01
n
0.5
1.96 = n
0.01
1.96 50 = n
13
Approximate calculations!:
2 50 = n
n=1002
n=10000
Exact calculations:
98= n
n=9604
Minimum sample size to consider is 9604 observations (approx. 10000 observations).
III. Confidence intervals for the difference between two population means
(independent samples)
1. Difference in means = 6. Standard Error of difference in sample means (sUWL2/nUWL+ sUKL2/nUKL) =2.
2. Confidence interval: [ 4.44 , 13.56 ]. The individuals were not randomly assigned to the two
groups. There may be other differences between the two groups that may explain IQ. So, it is not
possible to support the stated conclusion with the information that is available.
IV. Confidence intervals for the difference between two population proportions
(independent samples)
2.
a) Max. M.E.=0.025 <=> 1.96*0.5 / n = 0.025 <=> n= 1536.64 . Need at least n=1537 .
3. We have a completely randomized experiment with a treatment group and a control group so we
can infer about impact of the new brochure relative to the old one.
Difference in proportions = 90/200 - 40/100 = 0.05 . This is the estimated additional impact of the
new brochures.
C.I. contains zero so it is plausible that there could be actually no impact of the new brochures.
14