Scribd
Upload
338 views3 pages

Sai Charan's Assignment 2 (Basic Statistics Level-2) Set 2

The document contains 5 questions related to normal distributions and functions of random variables. Question 1 asks for the probability that a car service manager cannot meet his commitment to have a car ready within 1 hour given that the service time is normally distributed. Question 2 contains two statements about the age distribution of employees and asks whether they are true or false. Question 3 asks about the distributions and parameters of differences and sums of two normally distributed random variables. Question 4 asks to find values symmetric about the mean that give a 99% probability of being between them for a normal distribution. Question 5 asks about calculating ranges and percentiles for the total profit of a company with two divisions having independent normal profit distributions.

Uploaded by

Sai Charan Teja
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
338 views3 pages

Sai Charan's Assignment 2 (Basic Statistics Level-2) Set 2

The document contains 5 questions related to normal distributions and functions of random variables. Question 1 asks for the probability that a car service manager cannot meet his commitment to have a car ready within 1 hour given that the service time is normally distributed. Question 2 contains two statements about the age distribution of employees and asks whether they are true or false. Question 3 asks about the distributions and parameters of differences and sums of two normally distributed random variables. Question 4 asks to find values symmetric about the mean that give a 99% probability of being between them for a normal distribution. Question 5 asks about calculating ranges and percentiles for the total profit of a company with two divisions having independent normal profit distributions.

Uploaded by

Sai Charan Teja
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

Sai Charan Teja.

J
Assignment 2 (Basic Statistics Level-2) Set 2
Topics: Normal distribution, Functions of Random Variables

1. The time required for servicing transmissions is normally distributed with  = 45 minutes
and  = 8 minutes. The service manager plans to have work begin on the transmission of a
customer’s car 10 minutes after the car is dropped off and the customer is told that the car
will be ready within 1 hour from drop-off. What is the probability that the service manager
cannot meet his commitment?

A. 0.3875
B. 0.2676
C. 0.5
D. 0.6987
Sol:

2. The current age (in years) of 400 clerical employees at an insurance claims processing center
is normally distributed with mean  = 38 and Standard deviation  =6. For each statement
below, please specify True/False. If false, briefly explain why.
A. More employees at the processing center are older than 44 than between 38 and
44.
B. A training program for employees under the age of 30 at the center would be
expected to attract about 36 employees.
Sol: Let X be the number of employees where  = 38 and  =6
A) Probability of employees greater than age of 44= Pr(X>44)
Pr(X > 44) = 1 - Pr(X <= 44).
Z = (X-38)/6
Pr (X <=44) = Pr (Z <= (44 - 38)/6) = Pr(Z <=1)=84.13%
Probability for older than 44 = 100-84.13= 15.86%
Probability of age between 38 and 44 = 34.1345
So, the statement A is true
B) Probability of employees less than age of 30 = Pr(X<30)
Z= (30 - 38)/6
Pr(X <= 30) = Pr(Z <=(30 - 38)/6) = Pr(Z <= -1.333)=9.12%
So, the number of employees with probability 0.912 of them being under age 30 =
0.0912*400=36.48(or 36 employees).
Therefore, the statement B is also True.
3. If X1 ~ N(μ, σ2) and X2 ~ N(μ, σ2) are iid normal random variables, then what is the difference
between 2 X1 and X1 + X2? Discuss both their distributions and parameters.
Sol: X1 and X2 are two independent random variables.
2X1~ N (2 u,4 σ^2)
X1+X2 ~ N (µ + µ, σ^2 + σ^2) ~ N (2 u, 2σ^2)
So, difference between them is
2X1-(X1+X2) = N (4µ,6 σ^2)

4. Let X ~ N(100, 202). Find two values, a and b, symmetric about the mean, such that the
probability of the random variable taking a value between them is 0.99. 

A. 90.5, 105.9
B. 80.2, 119.8
C. 22, 78
D. 48.5, 151.5
E. 90.1, 109.9
Sol: a and b are symmetric about mean such that probability is 0.99
Probability of outside a and b is 1- 0.99= 0.01
The Probability towards left from a = -0.005
The Probability towards right from b = +0.005
Z= (X- μ) / σ
For Probability 0.005 the Z Value is -2.57.
Z*σ+μ=X
Z (-0.005) *20+100 = -(-2.57) *20+100 = 151.4
Z (+0.005) *20+100 = (-2.57) *20+100 = 48.6

5. Consider a company that has two different divisions. The annual profits from the two
divisions are independent and have distributions Profit 1 ~ N(5, 32) and Profit2 ~ N(7, 42)
respectively. Both the profits are in $ Million. Answer the following questions about the
total profit of the company in Rupees. Assume that $1 = Rs. 45
A. Specify a Rupee range (centered on the mean) such that it contains 95% probability
for the annual profit of the company.
B. Specify the 5th percentile of profit (in Rupees) for the company
C. Which of the two divisions has a larger probability of making a loss in a given year?
Sol: Profit1 ~ N(5, 32)
Profit2 ~ N(7, 42)
So, company profits are
P~N(12,52 )
A) Range containing 95% probability for profit is
= (12-196*5.12+1.96*5)
= ($2.2M, $ 1026M)
=(Rs99M,1026M)
B) 5th percentile is
=P(z<=(p-12/5)) = 0.05
=(p-12)/5= 1.644
=p=12-8.22=$3.78M
= 170M Rs.
C) Loss is when profit < 0
Thus: p < 0The first division of company, thus have larger probability of making a loss
each year.

You might also like