Department of Decision Science

Quantitative Techniques in Management

Module 2 : Probability and Probability Distribution

Module 2

Multiple Choice
Identify the choice that best completes the statement or answers the question.

____ 1. If A and B are independent events with P(A) = 0.65 and P(A  B) = 0.26, then, P(B) =
a. 0.400
b. 0.169
c. 0.390
d. 0.650
____ 2. If P(A) = 0.4, P(B | A) = 0.35, P(A  B) = 0.69, then P(B) =
a. 0.14
b. 0.43
c. 0.75
d. 0.59
____ 3. Given that event E has a probability of 0.31, the probability of the complement of event E
a. cannot be determined with the above information
b. can have any value between zero and one
c. 0.69
d. is 0.31
____ 4. Each individual outcome of an experiment is called
a. the sample space
b. a sample point
c. an experiment
d. an individual
____ 5. The collection of all possible sample points in an experiment is
a. the sample space
b. a sample point
c. an experiment
d. the population
____ 6. A graphical method of representing the sample points of an experiment is
a. a frequency polygon
b. a histogram
c. an ogive
d. a tree diagram
____ 7. Each customer entering a department store will either buy or not buy some merchandise. An experiment
consists of following 3 customers and determining whether or not they purchase any merchandise. The
number of sample points in this experiment is
a. 2
b. 4
 c. 6
d. 8
____ 8. Any process that generates well-defined outcomes is
a. an event
b. an experiment
c. a sample point
d. a sample space
____ 9. The sample space refers to
a. any particular experimental outcome
b. the sample size minus one
c. the set of all possible experimental outcomes
d. an event
____ 10. In statistical experiments, each time the experiment is repeated
a. the same outcome must occur
b. the same outcome can not occur again
c. a different outcome may occur
d. a different out come must occur
____ 11. When the assumption of equally likely outcomes is used to assign probability values, the method used to
assign probabilities is referred to as the
a. relative frequency method
b. subjective method
c. probability method
d. classical method
____ 12. When the results of experimentation or historical data are used to assign probability values, the method used
to assign probabilities is referred to as the
a. relative frequency method
b. subjective method
c. classical method
d. posterior method
____ 13. A method of assigning probabilities based upon judgment is referred to as the
a. relative method
b. probability method
c. classical method
d. subjective method
____ 14. Bayes' theorem is used to compute
a. the prior probabilities
b. the union of events
c. intersection of events
d. the posterior probabilities
____ 15. The intersection of two mutually exclusive events
a. can be any value between 0 to 1
b. must always be equal to 1
c. must always be equal to 0
d. can be any positive value
____ 16. Two events are mutually exclusive
a. if their intersection is 1
b. if they have no sample points in common
c. if their intersection is 0.5
d. None of these alternatives is correct.
____ 17. The range of probability is
a. any value larger than zero
b. any value between minus infinity to plus infinity
c. zero to one
d. any value between -1 to 1
____ 18. Which of the following statements is always true?
a. -1 P(Ei) 1
b. P(A) = 1 - P(Ac)
c. P(A) + P(B) = 1
d. P 1
____ 19. Events that have no sample points in common are
a. independent events
b. posterior events
c. mutually exclusive events
d. complements
____ 20. Initial estimates of the probabilities of events are known as
a. sets
b. posterior probabilities
c. conditional probabilities
d. prior probabilities
____ 21. Two events with nonzero probabilities
a. can be both mutually exclusive and independent
b. can not be both mutually exclusive and independent
c. are always mutually exclusive
d. are always independent
____ 22. Two events, A and B, are mutually exclusive and each have a nonzero probability. If event A is known to
occur, the probability of the occurrence of event B is
a. one
b. any positive value
c. zero
d. any value between 0 to 1
____ 23. The addition law is potentially helpful when we are interested in computing the probability of
a. independent events
b. the intersection of two events
c. the union of two events
d. conditional events
____ 24. On a December day, the probability of snow is .30. The probability of a "cold" day is .50. The probability of
snow and "cold" weather is .15. Are snow and "cold" weather independent events?
a. only if given that it snowed
b. no
c. yes
d. only when they are also mutually exclusive
____ 25. The multiplication law is potentially helpful when we are interested in computing the probability of
a. mutually exclusive events
b. the intersection of two events
c. the union of two events
d. conditional events
____ 26. If two events are mutually exclusive, then their intersection
 a. will be equal to zero
b. can have any value larger than zero
c. must be larger than zero, but less than one
d. will be one
____ 27. The union of events A and B is the event containing
a. all the sample points belonging to B or A
b. all the sample points belonging to A or B
c. all the sample points belonging to A or B or both
d. all the sample points belonging to A or B, but not both
____ 28. If A and B are independent events with P(A) = 0.4 and P(B) = 0.6, then P(A  B) =
a. 0.76
b. 1.00
c. 0.24
d. 0.20
____ 29. If A and B are independent events with P(A) = 0.2 and P(B) = 0.6, then P(A  B) =
a. 0.62
b. 0.12
c. 0.60
d. 0.68
____ 30. If A and B are independent events with P(A) = 0.05 and P(B) = 0.65, then P(A  B) =
a. 0.05
b. 0.0325
c. 0.65
d. 0.8
____ 31. If A and B are mutually exclusive events with P(A) = 0.3 and P(B) = 0.5, then P(A  B) =
a. 0.30
b. 0.15
c. 0.00
d. 0.20
____ 32. Of the last 100 customers entering a computer shop, 25 have purchased a computer. If the classical method
for computing probability is used, the probability that the next customer will purchase a computer is
a. 0.25
b. 0.50
c. 1.00
d. 0.75
____ 33. Events A and B are mutually exclusive with P(A) = 0.3 and P(B) = 0.2. Then, P(Bc) =
a. 0.00
b. 0.06
c. 0.7
d. 0.8
____ 34. An experiment consists of four outcomes with P(E1) = 0.2, P(E2) = 0.3, and P(E3) = 0.4. The probability of
outcome E4 is
a. 0.500
b. 0.024
c. 0.100
d. 0.900
____ 35. Events A and B are mutually exclusive. Which of the following statements is also true?
a. A and B are also independent.
 b. P(A  B) = P(A)P(B)
c. P(A  B) = P(A) + P(B)
d. P(A  B) = P(A) + P(B)
____ 36. In an experiment, events A and B are mutually exclusive. If P(A) = 0.6, then the probability of B
a. cannot be larger than 0.4
b. can be any value greater than 0.6
c. can be any value between 0 to 1
d. cannot be determined with the information given
____ 37. If P(A) = 0.58, P(B) = 0.44, and P(A  B) = 0.25, then P(A  B) =
a. 1.02
b. 0.77
c. 0.11
d. 0.39
____ 38. If P(A) = 0.50, P(B) = 0.60, and P(A  B) = 0.30, then events A and B are
a. mutually exclusive events
b. not independent events
c. independent events
d. not enough information is given to answer this question
____ 39. If P(A) = 0.50, P(B) = 0.40, then, and P(A  B) = 0.88, then P(B  A) =
a. 0.02
b. 0.03
c. 0.04
d. 0.05
____ 40. If A and B are independent events with P(A) = 0.38 and P(B) = 0.55, then P(A  B) =
a. 0.209
b. 0.000
c. 0.550
d. 0.38
____ 41. If A and B are independent events with P(A) = 0.35 and P(B) = 0.20, then, P(A  B) =
a. 0.07
b. 0.62
c. 0.55
d. 0.48
____ 42. If P(A) = 0.7, P(B) = 0.6, P(A  B) = 0, then events A and B are
a. not mutually exclusive
b. mutually exclusive
c. independent events
d. complements of each other
____ 43. If P(A) = 0.45, P(B) = 0.55, and P(A  B) = 0.78, then P(A  B) =
a. zero
b. 0.45
c. 0.22
d. 0.40
____ 44. If P(A) = 0.48, P(A  B) = 0.82, and P(B) = 0.54, then P(A  B) =
a. 0.3936
b. 0.3400
c. 0.2000
d. 1.0200
____ 45. Each customer entering a department store will either buy or not buy some merchandise. An experiment
consists of following 4 customers and determining whether or not they purchase any merchandise. How many
sample points exist in the above experiment? (Note that each customer is either a purchaser or non-purchaser.)
a. 2
b. 4
c. 12
d. 16
____ 46. A numerical description of the outcome of an experiment is called a
a. descriptive statistic
b. probability function
c. variance
d. random variable
____ 47. A probability distribution showing the probability of x successes in n trials, where the probability of success
does not change from trial to trial, is termed a
a. uniform probability distribution
b. binomial probability distribution
c. hypergeometric probability distribution
d. normal probability distribution
____ 48. Variance is
a. a measure of the average, or central value of a random variable
b. a measure of the dispersion of a random variable
c. the square root of the standard deviation
d. the sum of the squared deviation of data elements from the mean
____ 49. A continuous random variable may assume
a. any value in an interval or collection of intervals
b. only integer values in an interval or collection of intervals
c. only fractional values in an interval or collection of intervals
d. only the positive integer values in an interval
____ 50. Which of the following is a required condition for a discrete probability function?
a. f(x) = 0
b. f(x) 1 for all values of x
c. f(x) < 0
d. f(x) = 1
____ 51. A measure of the average value of a random variable is called a(n)
a. variance
b. standard deviation
c. expected value
d. coefficient of variation
____ 52. Which of the following is not a required condition for a discrete probability function?
a. f(x) 0 for all values of x
b. f(x) = 1
c. f(x) = 0
d. f(x) 1
____ 53. The standard deviation is the
a. variance squared
b. square root of the sum of the deviations from the mean
c. same as the expected value
d. positive square root of the variance
____ 54. The variance is a measure of dispersion or variability of a random variable. It is a weighted average of the
a. square root of the deviations from the mean
b. square root of the deviations from the median
c. squared deviations from the median
d. squared deviations from the mean
____ 55. A weighted average of the value of a random variable, where the probability function provides weights is
known as
a. a probability function
b. a random variable
c. the expected value
d. random function
____ 56. An experiment consists of making 80 telephone calls in order to sell a particular insurance policy. The
random variable in this experiment is a
a. discrete random variable
b. continuous random variable
c. complex random variable
d. simplex random variable
____ 57. An experiment consists of determining the speed of automobiles on a highway by the use of radar equipment.
The random variable in this experiment is a
a. discrete random variable
b. continuous random variable
c. complex random variable
d. simplex random variable
____ 58. The number of electrical outages in a city varies from day to day. Assume that the number of electrical
outages (x) in the city has the following probability distribution.

x f(x)
0 0.80
1 0.15
2 0.04
3 0.01

The mean and the standard deviation for the number of electrical outages (respectively) are
a. 2.6 and 5.77
b. 0.26 and 0.577
c. 3 and 0.01
d. 0 and 0.8
____ 59. The number of customers that enter a store during one day is an example of
a. a continuous random variable
b. a discrete random variable
c. either a continuous or a discrete random variable, depending on the number of the
customers
d. either a continuous or a discrete random variable, depending on the gender of the
customers
____ 60. The weight of an object is an example of
a. a continuous random variable
b. a discrete random variable
c. either a continuous or a discrete random variable, depending on the weight of the object
d. either a continuous or a discrete random variable depending on the units of measurement
____ 61. Four percent of the customers of a mortgage company default on their payments. A sample of five customers
is selected. What is the probability that exactly two customers in the sample will default on their payments?
a. 0.2592
b. 0.0142
c. 0.9588
d. 0.7408
____ 62. Twenty percent of the students in a class of 100 are planning to go to graduate school. The standard deviation
of this binomial distribution is
a. 20
b. 16
c. 4
d. 2
____ 63. If you are conducting an experiment where the probability of a success is .02 and you are interested in the
probability of 4 successes in 15 trials, the correct probability function to use is the
a. standard normal probability density function
b. normal probability density function
c. Poisson probability function
d. binomial probability function
____ 64. In the textile industry, a manufacturer is interested in the number of blemishes or flaws occurring in each 100
feet of material. The probability distribution that has the greatest chance of applying to this situation is the
a. normal distribution
b. binomial distribution
c. Poisson distribution
d. uniform distribution
____ 65. The Poisson probability distribution is a
a. continuous probability distribution
b. discrete probability distribution
c. uniform probability distribution
d. normal probability distribution
____ 66. The binomial probability distribution is used with
a. a continuous random variable
b. a discrete random variable
c. any distribution, as long as it is not normal
d. None of these alternatives is correct.
____ 67. Which of the following is not a characteristic of an experiment where the binomial probability distribution is
applicable?
a. the experiment has a sequence of n identical trials
b. exactly two outcomes are possible on each trial
c. the trials are dependent
d. the probabilities of the outcomes do not change from one trial to another
____ 68. Which of the following is a characteristic of a binomial experiment?
a. at least 2 outcomes are possible
b. the probability changes from trial to trial
c. the trials are independent
d. None of these alternatives is correct.
____ 69. Assume that you have a binomial experiment with p = 0.5 and a sample size of 100. The expected value of
this distribution is
a. 0.50
b. 0.30
 c. 100
d. 50
____ 70. Which of the following is not a property of a binomial experiment?
a. the experiment consists of a sequence of n identical trials
b. each outcome can be referred to as a success or a failure
c. the probabilities of the two outcomes can change from one trial to the next
d. the trials are independent
____ 71. The Poisson probability distribution is used with
a. a continuous random variable
b. a discrete random variable
c. either a continuous or discrete random variable
d. any random variable
____ 72. The expected value for a binomial probability distribution is
a. E(x) = Pn(1 - n)
b. E(x) = P(1 - P)
c. E(x) = nP
d. E(x) = nP(1 - P)
____ 73. The variance for the binomial probability distribution is
a. var(x) = P(1 - P)
b. var(x) = nP
c. var(x) = n(1 - P)
d. var(x) = nP(1 - P)
____ 74. A production process produces 2% defective parts. A sample of five parts from the production process is
selected. What is the probability that the sample contains exactly two defective parts?
a. 0.0004
b. 0.0038
c. 0.10
d. 0.02
____ 75. When dealing with the number of occurrences of an event over a specified interval of time or space, the
appropriate probability distribution is a
a. binomial distribution
b. Poisson distribution
c. normal distribution
d. hypergeometric probability distribution
____ 76. Assume that you have a binomial experiment with p = 0.4 and a sample size of 50. The variance of this
distribution is
a. 20
b. 12
c. 3.46
d. 144
____ 77. In a binomial experiment the probability of success is 0.06. What is the probability of two successes in seven
trials?
a. 0.0036
b. 0.0600
c. 0.0555
d. 0.2800
____ 78. A random variable that may take on any value in an interval or collection of intervals is known as a
a. continuous random variable
b. discrete random variable
 c. continuous probability function
d. finite probability function
____ 79. The center of a normal curve is
a. always equal to zero
b. is the mean of the distribution
c. cannot be negative
d. is the standard deviation
____ 80. The probability that a continuous random variable takes any specific value
a. is equal to zero
b. is at least 0.5
c. depends on the probability density function
d. is very close to 1.0
____ 81. A normal distribution with a mean of 0 and a standard deviation of 1 is called
a. a probability density function
b. an ordinary normal curve
c. a standard normal distribution
d. none of these alternatives is correct
____ 82. The z score for the standard normal distribution
a. is always equal to zero
b. can never be negative
c. can be either negative or positive
d. is always equal to the mean
____ 83. In a standard normal distribution, the probability that Z is greater than 0.5 is
a. 0.5
b. equal to 1
c. at least 0.5
d. 1.96
____ 84. A negative value of Z indicates that
a. the number of standard deviations of an observation is to the right of the mean
b. the number of standard deviations of an observation is to the left of the mean
c. a mistake has been made in computations, since Z cannot be negative
d. the data has a negative mean
____ 85. A value of 0.5 that is added and/or subtracted from a value of x when the continuous normal distribution is
used to approximate the discrete binomial distribution is called
a. 50% of the area under the normal curve
b. continuity correction factor
c. factor of conversion
d. all of the alternatives are correct answers
____ 86. For any continuous random variable, the probability that the random variable takes on exactly a specific value
is
a. 1.00
b. 0.50
c. any value between 0 to 1
d. almost zero
____ 87. For the standard normal probability distribution, the area to the left of the mean is
a. -0.5
b. 0.5
c. any value between 0 to 1
d. 1
____ 88. Which of the following is not a characteristic of the normal probability distribution?
a. The mean, median, and the mode are equal
b. The mean of the distribution can be negative, zero, or positive
c. The distribution is symmetrical
d. The standard deviation must be 1
____ 89. In a standard normal distribution, the range of values of z is from
a. minus infinity to infinity
b. -1 to 1
c. 0 to 1
d. -3.09 to 3.09
____ 90. When a continuous probability distribution is used to approximate a discrete probability distribution
a. a value of 0.5 is added and/or subtracted from the area
b. a value of 0.5 is added and/or subtracted from the value of x
c. a value of 0.5 is added to the area
d. a value of 0.5 is subtracted from the area
____ 91. A continuous probability distribution that is useful in describing the time, or space, between occurrences of an
event is a(n)
a. normal probability distribution
b. uniform probability distribution
c. exponential probability distribution
d. Poisson probability distribution
____ 92. The exponential probability distribution is used with
a. a discrete random variable
b. a continuous random variable
c. any probability distribution with an exponential term
d. an approximation of the binomial probability distribution
____ 93. Consider a binomial probability experiment with n = 3 and p = 0.1. Then, the probability of x = 0 is
a. 0.0000
b. 0.0001
c. 0.001
d. 0.729
____ 94. Larger values of the standard deviation result in a normal curve that is
a. shifted to the right
b. shifted to the left
c. narrower and more peaked
d. wider and flatter
____ 95. Which of the following is not a characteristic of the normal probability distribution?
a. symmetry
b. The total area under the curve is always equal to 1.
c. 99.72% of the time the random variable assumes a value within plus or minus 1 standard
deviation of its mean
d. The mean is equal to the median, which is also equal to the mode.
____ 96. The mean of a standard normal probability distribution
a. is always equal to zero
b. can be any value as long as it is positive
c. can be any value
d. is always greater than zero
____ 97. The standard deviation of a standard normal distribution
a. is always equal to zero
 b. is always equal to one
c. can be any positive value
d. can be any value
____ 98. A normal probability distribution
a. is a continuous probability distribution
b. is a discrete probability distribution
c. can be either continuous or discrete
d. must have a standard deviation of 1
____ 99. For a standard normal distribution, the probability of z 0 is
a. zero
b. -0.5
c. 0.5
d. one
____ 100. The highest point of a normal curve occurs at
a. one standard deviation to the right of the mean
b. two standard deviations to the right of the mean
c. approximately three standard deviations to the right of the mean
d. the mean
____ 101. The random variable x is known to be uniformly distributed between 70 and 90. The probability of x having a
value between 80 to 95 is
a. 0.75
b. 0.5
c. 0.05
d. 1
____ 102. Z is a standard normal random variable. The P(-1.96 Z -1.4) equals
a. 0.8942
b. 0.0558
c. 0.475
d. 0.4192
____ 103. A standard normal distribution is a normal distribution
a. with a mean of 1 and a standard deviation of 0
b. with a mean of 0 and a standard deviation of 1
c. with any mean and a standard deviation of 1
d. with any mean and any standard deviation
____ 104. Z is a standard normal random variable. The P (1.20 Z 1.85) equals
a. 0.4678
b. 0.3849
c. 0.8527
d. 0.0829
____ 105. Given that Z is a standard normal random variable, what is the probability that -2.51 Z -1.53?
a. 0.4950
b. 0.4370
c. 0.0570
d. 0.9310
____ 106. X is a normally distributed random variable with a mean of 8 and a standard deviation of 4. The probability
that X is between 1.48 and 15.56 is
a. 0.0222
b. 0.4190
c. 0.5222
 d. 0.9190
____ 107. Given that Z is a standard normal random variable, what is the value of Z if the area to the right of Z is 0.5?
a. 0.0000
b. 1.0000
c. 0.1915
d. 0.3413
____ 108. Z is a standard normal random variable. What is the value of Z if the area to the right of Z is 0.1112?
a. 0.3888
b. 1.22
c. 2.22
d. 3.22
____ 109. Z is a standard normal random variable. What is the value of Z if the area between -Z and Z is 0.754?
a. 0.377
b. 0.123
c. 2.16
d. 1.16
____ 110. The ages of students at a university are normally distributed with a mean of 21. What percentage of the
student body is at least 21 years old?
a. It could be any value, depending on the magnitude of the standard deviation
b. 50%
c. 21%
d. 1.96%
____ 111. Given that Z is a standard normal random variable. What is the value of Z if the area to the left of Z is
0.9382?
a. 1.8
b. 1.54
c. 2.1
d. 1.77
____ 112. Given that Z is a standard normal random variable. What is the value of Z if the area between -Z and Z is
0.754?
a. 1.16
b. 1.96
c. 2.0
d. 11.6
____ 113. Use the normal approximation to the binomial distribution to answer this question. Fifteen percent of all
students at a large university are absent on Mondays. If a random sample of 12 names is called on a Monday,
what is the probability that four students are absent?
a. 0.0683
b. 0.0213
c. 0.0021
d. 0.1329
Module 2
Answer Section

MULTIPLE CHOICE

1. ANS: A PTS: 1
2. ANS: B PTS: 1
3. ANS: C PTS: 1
4. ANS: B PTS: 1
5. ANS: A PTS: 1
6. ANS: D PTS: 1
7. ANS: D PTS: 1
8. ANS: B PTS: 1
9. ANS: C PTS: 1
10. ANS: C PTS: 1
11. ANS: D PTS: 1
12. ANS: A PTS: 1
13. ANS: D PTS: 1
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16. ANS: B PTS: 1
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20. ANS: D PTS: 1
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27. ANS: C PTS: 1
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40. ANS: D PTS: 1
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50. ANS: D PTS: 1
51. ANS: C PTS: 1
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55. ANS: C PTS: 1
56. ANS: A PTS: 1
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60. ANS: A PTS: 1
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62. ANS: C PTS: 1
63. ANS: D PTS: 1
64. ANS: C PTS: 1
65. ANS: B PTS: 1
66. ANS: B PTS: 1
67. ANS: C PTS: 1
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69. ANS: D PTS: 1
70. ANS: C PTS: 1
71. ANS: B PTS: 1
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76. ANS: B PTS: 1
77. ANS: C PTS: 1
78. ANS: A PTS: 1
79. ANS: B PTS: 1
80. ANS: A PTS: 1
81. ANS: C PTS: 1
82. ANS: C PTS: 1
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84. ANS: B PTS: 1
85. ANS: B PTS: 1
86. ANS: D PTS: 1
87. ANS: B PTS: 1
 88. ANS: D PTS: 1
89. ANS: A PTS: 1
90. ANS: B PTS: 1
91. ANS: D PTS: 1
92. ANS: B PTS: 1
93. ANS: D PTS: 1
94. ANS: D PTS: 1
95. ANS: C PTS: 1
96. ANS: A PTS: 1
97. ANS: B PTS: 1
98. ANS: A PTS: 1
99. ANS: C PTS: 1
100. ANS: D PTS: 1
101. ANS: B PTS: 1
102. ANS: B PTS: 1
103. ANS: B PTS: 1
104. ANS: D PTS: 1
105. ANS: C PTS: 1
106. ANS: D PTS: 1
107. ANS: A PTS: 1
108. ANS: B PTS: 1
109. ANS: D PTS: 1
110. ANS: B PTS: 1
111. ANS: B PTS: 1
112. ANS: A PTS: 1
113. ANS: A PTS: 1