Decision Sciences 1 : Exercise Set 1

Soudeep Deb

August 10, 2020

Below, we consider datasets {x1 , x2 , . . . , xn } and {y1 , y2 , . . . , yn } for which, the sample averages (mean) are
denoted as x̄ and ȳ. Sample variances are denoted by s2x and s2y respectively. Recall the following:
n
1X
x̄ = xi
n i=1
n
X
1
s2x = (xi x̄)2
n 1 i=1

Pn
1. Prove that the sum i=1 (xi c)2 is minimized for c = x̄.
2. Suppose zi = axi + b for i = 1, 2, . . . , n where a, b are some known constants.
a. How are the medians of z and x related? (Hint: Consider two cases : a > 0 and a < 0 and see
how the order of the datasets change)
Pn
b. Mean absolute deviation from mean is defined as Dx = n1 i=1 |xi x̄|. Find the relation between
Dz and Dx .
3. For the dataset {x1 , x2 , . . . , xn }, the sample average is x̄. Show that it is possible to add another
observation to the dataset such that the new mean remains to be the same. Does the standard
deviation remain same too?
4. If wi = xi + yi for i = 1, 2, . . . , n; find the expressions for w̄ and s2w .
5. Mean and variance of the monthly income of 100 employees in a company are 50,000 and 100, respec-
tively. Because of COVID-19 issues, the company decides to half everyone’s salary. What will be the
new mean and standard deviation?
6. During last year’s DS1, first two quizzes were insanely difficult. One person, however, scored 100 in
both while everyone else got less than 65 in either. Following are the summaries of the scores.

Quiz Mean SD Minimum Q1 Median Q3 Maximum

Quiz 1 37 15 0 26 35 47 100
Quiz 2 45 18 5 26 40 60 100

How can you argue that 100 is an outlier? If you remove the outlier and calculate the above quantities
once again, how would they look like?
7. NBC Universal appoints ten new Data Scientists in their Decision Sciences division every year. In
2019, their per annum salaries (in 100,000 USD) were 0.8, 0.8, 0.8, 0.9, 1.2, 1.45, 1.6, 1.7, 1.7 and
1.95. This year, five of the new employees were o↵ered $160,000 per annum whereas the other five
were o↵ered $100,000 per annum. Compare the mean and standard deviation of the annual salaries for
the two batches of new employees. Use coefficient of variation to comment on whether the company is
becoming more consistent with their packages.

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 8. For the above problem, compute the measure of skewness for the two years. What can you say about
the symmetry of the distribution?
9. Use Chebyshev’s theorem to find what percent of the values will fall between 123 and 179 for a data
set with mean of 151 and standard deviation of 14.
10. Based on a dataset, it is found that on average, an adult sleeps 6.9 hours per night, while the standard
deviation of the same is 1.2 hours. Use Chebyshev’s theorem to calculate the percentage of individuals
who sleep between 4.5 and 9.3 hours.
11. Consider a class of 75 students.
a. What is the probability that at least two students in the class have exact same birthday?
b. What is the minimum number of students such that the probability that at least two students in
the class have exact same birthday is more than 50%? (You may have to use Excel to do this)
c. What is the chance that at least three persons in the class have same birthday?
12. A standard deck of 52 cards have four suits with 13 di↵erent denominations in each suit. Find the
probability of the following five-card poker hands from a standard deck:
• Flush: Any five cards of same suit (e.g. A, 3, 5, 6 and 9 of Diamonds)
• Straight: Consecutive five numbers that can be of any suit (e.g. 3 of Diamonds, 4 of Hearts, 5 of
Spades, 6 of Hearts and 7 of Clubs)
• Full house: Three cards of one common denomination and the other two of another common
denomination (e.g. K of Clubs, K of Diamonds, K of Hearts, 2 of Spades and 2 of Clubs)
13. In the same context as in the above problem, find the probability of getting a Flush if you know that
another player has got a Flush as well.
14. Suppose, Argentina and Portugal are playing in the FIFA World Cup Final and the match goes to
penalty shootout. The conversion probabilities for the penalty-takers of the two teams are given below.
What is the chance that Argentina would score at least four penalties in the shootout? What is the
probability that Argentina will win the shootout?

Argentina Portugal
Player Probability Player Probability
Aguero 0.97 Ronaldo 0.95
Di Maria 0.8 Fernandes 0.95
Pavon 0.75 Silva 0.7
Dybala 0.73 Pereira 0.6
Messi 0.5 Carvalho 0.57

15. Recall the household data. Suppose, the following probability table is true:

Satisfaction SW sector NW sector SE sector NE sector

extremely dissatisfied 0.030 0.022 0.056 0.060
dissatisfied 0.050 0.030 0.078 0.082
neutral 0.042 0.034 0.034 0.048
satisfied 0.058 0.060 0.032 0.028
extremely satisfied 0.078 0.100 0.040 0.038

a. What is the probability that a random household is from NW sector and is neutral?
b. What is the probability of a random household being extremely satisfied?
c. What is the probability that a random household is from NW sector, given that the household is
extremely satisfied?

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16. In BLR airport, the percentage of on-time flights are 80% for Indigo, 75% for Air India, 60% for
SpiceJet and 40% for others. Every day, among all the flights landing on BLR, 50% are Indigo, 30%
are Air India and 15% are SpiceJet. What is the probability that a randomly selected flight is going
to arrive on time?
17. A credit card company finds that 5% of the customers default. It is also observed that 20% of the
customers who do not fault miss a monthly payment. Find the probability that a randomly chosen
customer will miss a monthly payment.
18. You have been assigned the task of selecting the first eleven of the Indian cricket team for the next
match. You have a squad of 23 players, including skipper Virat Kohli who has to be there in the eleven.
a. What is the probability that the eleven will have both Rohit Sharma and Shikhar Dhawan?
b. Suppose there are three wicketkeepers - Rishabh Pant, KL Rahul and MS Dhoni. You need to
select at least one wicketkeeper and for team balance, you can choose at most two of them in the
eleven. What is the probability that MS Dhoni will feature in the first eleven?