Some revision questions with answers for week 6 and 7 coverage

Section A : Multiple choice Questions.

1 . If X and Y are two independent random variables with V(X) = 6 and V(Y) = 5, then V(3X + 2Y) is:
A. 11. B. 158.
C. 28. D. 74.

2. A z-score is the number of __________ that a value is away from the mean.

A variances B standard deviations

C units D miles

3. In a standardised normal distribution, mean is:

A. smaller than the median. B. larger than the mode.

C. always equal to zero. D. always smaller than zero.

4. A smaller standard deviation of a normal distribution indicates that the distribution becomes:

A. more skewed to the left. B. flatter and wider.

C. narrower and more peaked. D. symmetrical.

5. A market research team compiled the following discrete probability distribution. In this
distribution x represents the number of cars owned by a family residing in Sydney.

X P(X) Find P ( X > 1) = _______________.

0 0.10 A. 1.0
1 0.10 B. 0.1
2 0.50 C. 0.9
3 0.30 D. 0.8

6. A variable that can take on values at any point over a given interval is called _______.

A. a point variable B. a continuous random variable

C. a discrete random variable D. a value variable

7. If a random sample of size n is drawn from a normal population, then the sampling distribution
of the sample mean will be:
A. normal for all values of n. B. normal only for n ≥ 30.
C. unknown. D. depends on value of n.
Question 2 [ 14 marks]
Part A
The owner of a small firm has just purchased a personal computer, which she expects will serve
her for the next two years. The owner has been told that she ‘must’ buy surge suppressor to
provide protection for her new hardware against possible surges or variations in the electrical
current. Her son David, a recent university graduate, advises that an inexpensive suppressor could
be purchased that would provide protection against one surge only. He notes that the amount of
damages without a suppressor would depend on the extent of the surge. David conservatively
estimates that over the next two years, there is a1% chance of incurring $400 damage and a 2%
chance of incurring $200 damage. But the probability of incurring $100 damage is 0.1.How much
should the owner be willing to pay for a suppressor? [6 marks ](Hint: similar to Insurance company
question in Tutorial 6, define your random variable, construct appropriate probability distribution)

Let X=the amount of damage incurred. 1 mark

X P(x) X.P(x)
0 0.87 0
100 0.10 10 3 mark
200 0.02 4
400 0.01 4
Total 1.00 18

The owner should be willing to pay up to $18, which is the expected amount of damage to be
incurred. 1 mark
Part B
Probability for a student taking EC203 by the DFL mode misses a satellite tutorial is 0.7. Out of 9
satellite tutorials, what is the probability that a randomly selected EC203 (DFL) student

a. would miss less than 4 satellite tutorials? (2 marks)

𝑃(𝑋 < 4) = 𝑃(𝑋 ≤ 3) = 𝑃(𝐾 = 3) = 0.0253

b. would attend 5 or more satellite tutorials? (2 marks)

𝑃(𝑋 ≥ 5) = 1 − 𝑃(𝑋 ≤ 4) = 1 − 𝑃(𝐾 = 4) = 1 − 0.0988 = 0.9012
Part C
An advertising executive receives an average of 4 telephone calls each afternoon between 2 and
3pm. The calls occur randomly and independently of one another.
a. State the random variable and Name the probability distribution for this scenario.
Let X = # of telephone calls received by an advertising executive in a 1 hour interval. 1 mark

Poisson distribution 1 mark

b. Find the probability that the executive will receive exactly 2 calls between 2 and 3pm on a
particular afternoon. (2 marks)
𝑒 −𝜇 𝜇 2 𝑒 −4 42
𝑃(𝑋 = 2|𝜇 = 4) = = = 0.1465
𝑥! 2!
𝑜𝑟
𝑃(𝑋 = 2|𝜇 = 4) = 𝑃(𝐾 = 2) − 𝑃(𝐾 = 1) = 0.2381 − 0.0916 = 0.1465

Question 3 [16 marks]

Part A [1 + 2 + 1]
Retail price of fuel in Fiji is uniformly distributed between $2.00 and $3.50 per litre.
a) Calculate retail average price of fuel in Fiji.
𝑎+𝑏 2+3.5
Mean = = = 2.75
2 2
b) What is the probability that price of fuel will be less than $3. Show working.
1 2
𝑃(𝑋 < 3) = x 1 = 0.66 or
1.5 3
0.5 mark for diagram and 1.5 marks for correct answer with working.

c) What is the probability that price of fuel will less than $2. Show working.
𝑃(𝑋 < 2) = 0, since its not part of the possible values of X; (2 < 𝑥 < 3.5)
PART B [4 + 1 + 3] [show all working with diagram]

A bank has determined that the monthly balances of the saving accounts of its customers are
normally distributed, with an average balance of $1200 and a standard deviation of $250?
a) What proportions of the customers have monthly balances between $950 and $1075?

Let X=monthly balance in saving account 0.5 mark

𝑃(950 < 𝑋 < 1075) 0.5 mark each for
drawing PDFs in trms
𝑃(−1 < 𝑍 < −0.5) 1 mark for calculating z-score
of both X and Z
= 𝑃(𝑍 < −0.5) − 𝑃(𝑍 < −1)
= 0.3085 − 0.1587 1 mark for calculating correct probabilities
= 0.1498 0.5 mark

b) What proportions of the customers have monthly balance of $1000?

P(X=1000) =0

c) 20% of customers have balance higher than $X. Find X.

P ( Z > Zo ) = 0.20

1-0.2=0.8

Z=0.845

𝑥−𝜇 𝑋 − 1200
𝑍= = 0.845 = = 𝑋 = 0.845(250) + 1200 = 1411.25
𝜎 250

Part C

1. When is sample mean normally distributed? [2 m]

If it is:

- taken from a normally distributed population

- 𝑛 ≥ 30
Question 2 [19 m]

Part A [2+ 1 + 4+1]

Let X represents the number of computers in an Australian household, for those that own a computer.

a. Find and interpret the expected number of computers in a randomly selected Australian
household.
b. What is the probability that a randomly selected Australian household will have more than 2
computers?
c. Find V (4X +2).
d. Find E(30X + 20].
ANS:
Let X = number of computers per household in Australia.

X P(x) X . P(x) X2 X2 . P(x)

1 0.25 0.25 1 0.25
2 0.33 0.66 4 1.32
3 0.17 0.51 9 1.53
4 0.15 0.60 16 2.40
5 0.10 0.50 25 2.50
Total 1 2.52 8

A. Expected value = ∑(𝑋. 𝑃𝑥) = 2.52, that is on average Australian households have 2 to 3 computers.

B. P(X>2) = P(X=3) + P(X=4) + P(X=5)

= 0.17+0.15+0.10 (*values from the table)
= 0.42

C. V(4X + 2)
Find variance first
V = ∑(𝑋^2. 𝑃𝑥) – 𝜇 2
= 8 – 2.522
= 1.65

V(4X + 2) = 42V(x)
= 16(1.65)
= 26.40

D. E(30X+20) = 30(2.52) +20

= 95.60
Part B [5 m]

It is found that 30% of students failed test 1. Suppose 9 students are randomly selected from the whole
class. Answer the following questions:
a) State your random variable and which probability distribution will be appropriate for above
case? Justify (2 m)

b) What is the probability that more than 4 students failed the test? (3 m)
ANS:
A. Let X = Number of students failed test. It is Binomial distribution as random variable is discrete with
fixed number of trials and only 2 outcomes.

B. P(X>4) = 1 – P(X<4)
= 1 – 0.9012 (*value from binomial distribution table)
= 0.0988

There is 9.88% chance that out of more than 4 students will fail the test.

Part C [3+3M]
The average number of arrivals per hour is 3.5. [Define your random variable for each part.]

a. Find the probability that the number of arrivals per hour is 10 or less.
b. Find the probability that the number of arrivals per 30 minutes is 5.

ANS
A.
Let X = number of arrivals per hour. It is passion distribution as occurrence over an interval.

P(X<10) = P(K=10)
= 0.9990 (value from the passion distribution table)

B. Let X = number of arrivals per half hour.

*Cannot use table, thus manual calculation.

P(X=5) = = 1.755 . e -1.75 = 0.0238

X! 5!
Question 3

Part B

A bank has determined that the monthly balances of the saving accounts of its customers are
normally distributed, with an average balance of $500 and a standard deviation of $60. 30% of
customers monthly balance is less than $X. Find X? [5 marks show all working with diagram]
Part C

The amount of time spent by Australian adults playing sports per day is normally distributed, with a
mean of 3 hours and standard deviation of 1.5 hours. Find the probability that if four Australian adults
are randomly selected, their average number of hours spent playing sport is more than 1 hour per day.
[5 marks show all working with diagram]

ANS
PART B

Let X = Monthly balance of saving account.

𝝁 = 500
𝝈= 60
P( X< ?) = 0.30

*From z-distribution table, find the z-score

which accumulates to 0.30 probability.
Hench,
P(Z<-0.52) = 0.30

Use formula to find x

𝑥−500
-0.52 =
60
X = $468.80

Thus, 30% of the customers have balance below $468.80.

PART C
Let X = Amount of time spent on playing sports per day
𝜇=3 *Since x is normally distributed, 𝑥̅ is also normally distributed.
𝜎 = 1.5
n=4

̅> 1) =
P(𝒙

𝒙̅ −𝛍
̅=1) =
Z(𝒙
𝝈/√𝒏
𝟏−𝟑
=
𝟏.𝟓/ √𝟒
= -2.67

P(z < -2.67) = 0.0038

Hence, P(z > -2.67) = 1 -P(z < -2.67)
= 1 – 0.0038
̅ will be greater than 1.
= 0.9962 Thus there is 99.62% chance that 𝒙