Chapter 1 Solutions

2. a. The 10 elements are the 10 tablet computers

b. Five variables: Cost ($), Operating System, Display Size (inches), Battery Life

(hours), and CPU Manufacturer

c Categorical variables: Operating System and CPU Manufacturer

Quantitative variables: Cost ($), Display Size (inches), and Battery Life (hours)

d.

Variable Measurement Scale

Cost ($) Ratio

Operating system Nominal

Display size (inches) Ratio

Battery life (hours) Ratio

CPU manufacturer Nominal

4. a. There are eight elements in this data set; each element corresponds to one of the eight

models of cordless telephones.

b. Categorical variables: Voice Quality and Handset on Base

Quantitative variables: Price, Overall Score, and Talk Time

c. Price: ratio measurement

Overall score: interval measurement

Voice quality: ordinal measurement

Handset on base: nominal measurement

Talk time: ratio measurement

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6. a. Categorical

b. Quantitative

c. Categorical

d. Quantitative

e. Quantitative

8. a. 762

b. Categorical

c. Percentages

d. .67(762) = 510.54
510 or 511 respondents said they want the amendment to pass.
10. a. Categorical

b. Percentages

c. 44 of 1080 respondents, approximately 4%, strongly agree with allowing drivers of

motor vehicles to talk on a hand-held cell phone while driving.

d. 165 of the 1,080 respondents or 15% of said they somewhat disagree and 741 or 69%

said they strongly disagree. Thus, there does not appear to be general support for

allowing drivers of motor vehicles to talk on a hand-held cell phone while driving.

12. a. The population is all visitors coming to the state of Hawaii.

b. Because airline flights carry the vast majority of visitors to the state, the use of

questionnaires for passengers during incoming flights is a good way to reach this

population. The questionnaire actually appears on the back of a mandatory plants and

animals declaration form that passengers must complete during the incoming flight. A

large percentage of passengers complete the visitor information questionnaire.

c. Questions 1 and 4 provide quantitative data indicating the number of visits and the

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 number of days in Hawaii. Questions 2 and 3 provide categorical data indicating the

categories of reason for the trip and where the visitor plans to stay.

14. a. The graph of the time series follows:

Hertz Dollar Avis

350

300
Cars in Service (1000s)

250

200

150

100

50

0
Year 1 Year 2 Year 3 Year 4

b. In 2007 and 2008, Hertz was the clear market share leader. In 2009 and 2010, Hertz

and Avis have approximately the same market share. The market share for Dollar

appears to be declining.

c. The bar chart for 2010 follows, based on cross-sectional data.

350
300
Cars in Service (1000s)

250
200
150
100
50
0
Hertz Dollar Avis
Company

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16. a. Time series

b.

4.50
4.00
3.50
Sales ($ Billions)

3.00
2.50
2.00
1.50
1.00
0.50
0.00
1 2 3 4
Year

c. Sales appear to be increasing in a linear fashion.

18. a. 684/1,021; or approximately 67%

b. 612

c. Categorical

20. a. 43% of managers were bullish or very bullish; 21% of managers expected health care

to be the leading industry over the next 12 months.

b. We estimate the average 12-month return estimate for the population of investment

managers to be 11.2%.

c. We estimate the average over the population of investment managers to be 2.5 years.

22. a. The population consists of all clients who currently have a home listed for sale with

the agency or who have hired the agency to help them locate a new home.

b. Some of the ways that could be used to collect the data are as follows:

• A survey could be mailed to each of the agency’s clients.

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 • Each client could be sent an e-mail with a survey attached.

• The next time one of the firms agents meets with a client they could conduct a

personal interview to obtain the data.

24. a. This is a statistically correct descriptive statistic for the sample.

b. An incorrect generalization because the data were not collected for the entire

population.

c. An acceptable statistical inference based on the use of the word estimate.

d. Although this statement is true for the sample, it is not a justifiable conclusion for the

entire population.

e. This statement is not statistically supportable. Although it is true for the particular

sample observed, it is entirely possible and even highly likely that at least some

students will be outside the 65 to 90 range of grades.

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Chapter 2 Solutions

2. a. 1 – (.22 + .18 + .40) = .20

b. .20(200) = 40

c/d.

Class Frequency Percent Frequency

A .22(200) = 44 22

B .18(200) = 36 18

C .40(200) = 80 40

D .20(200) = 40 20

Total 200 100

4. a. These data are categorical.

b.

Website Frequency % Frequency

FB 8 16

GOOG 14 28

WIKI 9 18

YAH 13 26

YT 6 12

Total 50 100

c. The most frequently visited website is google.com (GOOG); the second is yahoo.com

(YAH).

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6. a.

Network Relative Frequency % Frequency

ABC 6 24

CBS 9 36

FOX 1 4

NBC 9 36

Total: 25 100

10
9
8
7
Frequency

6
5
4
3
2
1
0
ABC CBS FOX NBC
Network

10
8
Frequency

6
4
2
0
ABC CBS FOX NBC
Network

b. For these data, NBC and CBS tie for the number of top-rated shows. Each has nine (36%)

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 of the top 25. ABC is third with six (24%) and the much younger FOX network has

1(4%).

8. a.

Position Frequency Relative Frequency

Pitcher 17 0.309

Catcher 4 0.073

1st base 5 0.091

2nd base 4 0.073

3rd base 2 0.036

Shortstop 5 0.091

Left field 6 0.109

Center field 5 0.091

Right field 7 0.127

55 1.000

b. Pitchers (almost 31%)

c. 3rd base (3%–4%)

d. Right field (almost 13%)

e. Infielders (16 or 29.1%) to outfielders (18 or 32.7%)

10. a.

Rating Frequency

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 Excellent 187

Very good 252

Average 107

Poor 62

Terrible 41

Total 649

b.

Rating Percent Frequency

Excellent 29

Very good 39

Average 16

Poor 10

Terrible 6

Total 100

c.

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 45
40
35

Percent Frequency
30
25
20
15
10
5
0
Excellent Very Good Average Poor Terrible
Rating

d. At the Lakeview Lodge, 29% + 39% = 68% of the guests rated the hotel as excellent

or very good, but 10% + 6% = 16% of the guests rated the hotel as poor or terrible.

e. The percent frequency distribution for the Timber Hotel follows:

Rating Percent Frequency

Excellent 48

Very good 31

Average 12

Poor 6

Terrible 3

Total 100

At the Lakeview Lodge, 48% + 31% = 79% of the guests rated the hotel as excellent or

very good, and 6% + 3% = 9% of the guests rated the hotel as poor or terrible.

Compared to ratings of other hotels in the same region, both of these hotels

received very favorable ratings. But in comparing the two hotels, guests at the Timber

Hotel provided somewhat better ratings than guests at the Lakeview Lodge.

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12.

Class Cumulative Cumulative Relative

Frequency Frequency

Less than or equal to 19 10 .20

Less than or equal to 29 24 .48

Less than or equal to 39 41 .82

Less than or equal to 49 48 .96

Less than or equal to 59 50 1.00

14. a.

     

b/c.

Class Frequency Percent Frequency

6.0–7.9 4 20

8.0–9.9 2 10

10.0–11.9 8 40

12.0–13.9 3 15

14.0–15.9 3 15

20 100

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16. Leaf unit = 10

1 6

1 0 2

1 0 6 7

1 2 2 7

1 5

1 0 2 8

1 0 2 3

18. a.

PPG Frequency

10–12 1

12–14 3

14–16 7

16–18 19

18–20 9

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 20–22 4

22–24 2

24–26 0

26–28 3

28–30 2

Total 50

b.

PPG Relative Frequency

10–12 0.02

12–14 0.06

14–16 0.14

16–18 0.38

18–20 0.18

20–22 0.08

22–24 0.04

24–26 0.00

26–28 0.06

28–30 0.04

Total 1.00

c.

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 PPG Cumulative Percent Frequency

Less than 12 2

Less than 14 8

Less than 16 22

Less than 18 60

Less than 20 78

Less than 22 86

Less than 24 90

Less than 26 90

Less than 28 96

Less than 30 100

d.

20
18
16
14
Frequency

12
10
8
6
4
2
0
10-12 12-14 14-16 16-18 18-20 20-22 22-24 24-26 26-28 28-30
PPG

e. There is skewness to the right.

f. (11/50)(100) = 22%

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20. a. Lowest = 12, Highest = 23

b.

Hours in Meetings per Week Frequency Percent Frequency (%)

11–12 1 4

13–14 2 8

15–16 6 24

17–18 3 12

19–20 5 20

21–22 4 16

23–24 4 16

25 100

c.

7
6
5
Fequency

4
3
2
1
0
11-12 13-14 15-16 17-18 19-20 21-22 23-24
Hours per Week in Meetings

The distribution is slightly skewed to the left.

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22. a.

No. U.S. Locations Frequency Percent Frequency

0–4,999 10 50

5,000–9,999 3 15

10,000–14,999 2 10

15,000–19,999 1 5

20,000–24,999 0 0

25,000–29,999 1 5

30,000–34,999 2 10

35,000–39,999 1 5

Total: 20 100

b.

12
10
Frequency

8
6
4
2
0

Number of U.S. Locations

c. The distribution is skewed to the right. The majority of the franchises in this list have

fewer than 20,000 locations (50% + 15% + 15% = 80%). McDonald’s, Subway, and

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 7-Eleven have the highest number of locations.

24.

Starting Median Salary

4 6 8

5 1 2 3 3 5 6 8 8

6 0 1 1 1 2 2

7 1 2 5

Mid-Career Median Salary

8 0 0 4

9 3 3 5 6 7

10 5 6 6

11 0 1 4 4 4

12 2 3 6

There is a wider spread in the mid-career median salaries than in the starting median

salaries. Also, as expected, the mid-career median salaries are higher that the starting

median salaries. The mid-career median salaries were mostly in the $93,000 to

$114,000 range while the starting median salaries were mostly in the $51,000 to

$62,000 range.

26. a.

2 1 4

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 2 6 7

3 0 1 1 1

3 5 6 7 7

4 0 0 3 3

4 6 6 7 9

5 0 0 0 2

5 5 6 7 9

6 1 4

6 6

7 2

b. Most frequent age group: 40-44 with 9 runners

c. 43 was the most frequent age with 5 runners

28. a.

20–39 40–59 60–79 80–100 Grand Total

10–29 1 4 5

x 30–49 2 4 6

50–69 1 3 1 5

70–90 4 4

Grand Total 7 3 6 4 20

b.

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 y

20–39 40–59 60–79 80–100 Grand Total

10–29 20.0 80.0 100

x 30–49 33.3 66.7 100

50–69 20.0 60.0 20.0 100

70–90 100.0 100

c.

20–39 40–59 60–79 80–100

10–29 0.0 0.0 16.7 100.0

x 30–49 28.6 0.0 66.7 0.0

50–69 14.3 100.0 16.7 0.0

70–90 57.1 0.0 0.0 0.0

Grand Total 100 100 100 100

d. Higher values of x are associated with lower values of y and vice versa.

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30. a.

Year

Average Speed 1988–1992 1993–1997 1998–2002 2003–2007 2008–2012 Total

130–139.9 16.7 0.0 0.0 33.3 50.0 100

140–149.9 25.0 25.0 12.5 25.0 12.5 100

150–159.9 0.0 50.0 16.7 16.7 16.7 100

160–169.9 50.0 0.0 50.0 0.0 0.0 100

170–179.9 0.0 0.0 100.0 0.0 0.0 100

b. It appears that most of the faster average winning times occur before 2003. This could be the result of new regulations that

take into account driver safety, fan safety, the environmental impact, and fuel consumption during races.

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32. a. Row percentages follow.

Region Under $15,000 to $25,000 to $35,000 to $50,000 to $75,000 to $100,000 and Total

$15,000 $24,999 $34,999 $49,999 $74,999 $99,999 Higher

Northeast 12.72 10.45 10.54 13.07 17.22 11.57 24.42 100.00

Midwest 12.40 12.60 11.58 14.27 19.11 12.06 17.97 100.00

South 14.30 12.97 11.55 14.85 17.73 11.04 17.57 100.00

West 11.84 10.73 10.15 13.65 18.44 11.77 23.43 100.00

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 The percent frequency distributions for each region now appear in each row of the table.

For example, the percent frequency distribution of the West region is as follows:

Income Level Percent Frequency

Under $15,000 11.84

$15,000 to $24,999 10.73

$25,000 to $34,999 10.15

$35,000 to $49,999 13.65

$50,000 to $74,999 18.44

$75,000 to $99,999 11.77

$100,000 and over 23.43

Total 100.00

b. West: 18.44 + 11.77 + 23.43 = 53.64%

South: 17.73 + 11.04 + 17.57 = 46.34%

c.

Northeast
25.00
Percent Frequency

20.00

15.00

10.00

5.00

0.00
Under $15,000 $25,000 $35,000 $50,000 $75,000 $100,000
$15,000 to to to to to and over
$24,999 $34,999 $49,999 $74,999 $99,999
Income Level

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 Midwest

25.00

Percent Frequency
20.00

15.00

10.00

5.00

0.00
Under $15,000 to $25,000 to $35,000 to $50,000 to $75,000 to $100,000
$15,000 $24,999 $34,999 $49,999 $74,999 $99,999 and over
Income Level

South
25.00

20.00
Percent Frequency

15.00

10.00

5.00

0.00
Under $15,000 to $25,000 to $35,000 to $50,000 to $75,000 to $100,000
$15,000 $24,999 $34,999 $49,999 $74,999 $99,999 and over
Income Level

West
25.00

20.00
Percent Frequency

15.00

10.00

5.00

0.00
Under $15,000 to $25,000 to $35,000 to $50,000 to $75,000 to $100,000
$15,000 $24,999 $34,999 $49,999 $74,999 $99,999 and over
Income Level

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 The largest difference appears to be a higher percentage of household incomes of

$100,000 and higher for the Northeast and West regions.

d. Column percentages follow.

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Region Under $15,000 to $25,000 to $35,000 to $50,000 to $75,000 to $100,000 and

$15,000 $24,999 $34,999 $49,999 $74,999 $99,999 Higher

Northeast 17.83 16.00 17.41 16.90 17.38 18.35 22.09

Midwest 21.35 23.72 23.50 22.68 23.71 23.49 19.96

South 40.68 40.34 38.75 39.00 36.33 35.53 32.25

West 20.13 19.94 20.34 21.42 22.58 22.63 25.70

Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Each column is a percent frequency distribution of the region variable for one of the household income categories. For

example, for an income level of $35,000 to $49,999 the percent frequency distribution for the region variable is as follows:

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 Region Percent Frequency

Northeast 16.90

Midwest 22.68

South 39.00

West 21.42

Total 100.00

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34. a.

Brand Revenue ($ billions)

Industry 0–25 25–50 50–75 75–100 100–125 125–150 Total

Automotive and luxury 10 1 1 1 2 15

Consumer packaged goods 12 12

Financial services 2 4 2 2 2 2 14

Other 13 5 3 2 2 1 26

Technology 4 4 4 1 2 15

Total 41 14 10 5 7 5 82

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 b.

Brand Revenue ($ Billion) Frequency

0–25 41

25–50 14

50–75 10

75–100 5

100–125 7

125–150 5

Total 82

c. Consumer packaged goods have the lowest brand revenues; each of the 12 consumer

packaged goods brands in the sample data had a brand revenue of less than $25

billion. Approximately 57% of the financial services brands (8 out of 14) had a brand

revenue of $50 billion or greater, and 47% of the technology brands (7 out of 15) had

a brand revenue of at least $50 billion.

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 d.

One-Year Value Change (%)

Industry –60–41 -40–21 –20–1 0–19 20–39 40–60 Total

Automotive and luxury 11 4 15

Consumer packaged goods 2 10 12

Financial services 1 6 7 14

Other 2 20 4 26

Technology 1 3 4 4 2 1 15

Total 1 4 14 52 10 1 82

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 e.

One-Year Value Change (%) Frequency

–60–41 1

–40–21 4

–20–1 14

0–19 52

20–39 10

40–60 1

Total 82

f. The automotive & luxury brands all had a positive one-year value change (%). The technology brands had the greatest

variability.

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36. a.

56

40

24

8
y
-8

-24

-40
-40 -30 -20 -10 0 10 20 30 40
x

b. There is a negative relationship between x and y; y decreases as x increases.

38. a.

100%

80%

60%

40% No
Yes
20%

0%
Low Medium High
x

b.

40. a.

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 120

Avg. Snowfall (inches)

100

80

60

40

20

0
30 40 50 60 70 80
Avg. Low Temp

b. Colder average low temperature seems to lead to higher amounts of snowfall.

c. Two cities have an average snowfall of nearly 100 inches of snowfall: Buffalo, New

York, and Rochester, New York. Both are located near large lakes in the state.

42. a.

100%
90%
80%
70%
60%
50% No Cell Phone
40% Other Cell Phone
30% Smartphone
20%
10%
0%
18-24 25-34 35-44 45-54 55-64 65+
Age

b. After increasing in ages 25–34, smartphone ownership decreases with increasing age.

The percentage of people with no cell phone increases with age. There is less

variation across age groups in the percentage who own other cell phones.

c. Unless a newer device replaces the smartphone, we would expect smartphone

ownership would become less sensitive to age. This would be true because current

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 users will become older and because the device will become to be seen more as

necessity than luxury.

44. a.

Class Frequency

800–999 1

1000–1199 3

1200–1399 6

1400–1599 10

1600–1799 7

1800–1999 2

2000–2199 2

Total 30

12

10

8
Frequency

0
800-999 1000-1199 1200-1399 1400-1599 1600-1799 1800-1999 2000-2199
SAT Score

b. The distribution if nearly symmetrical. It could be approximated by a bell-shaped

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 curve.

c. Ten of 30, or 33%, of the scores are between 1400 and 1599. The average SAT score

looks to be slightly more than 1500. Scores below 800 or above 2200 are unusual.

46. a.

Population in Millions Frequency % Frequency

0.0–2.4 15 30.0

2.5–4.9 13 26.0

5.0–7.4 10 20.0

7.5–9.9 5 10.0

10.0–12.4 1 2.0

12.5–14.9 2 4.0

15.0–17.4 0 0.0

17.5–19.9 2 4.0

20.0–22.4 0 0.0

22.5–24.9 0 0.0

25.0–27.4 1 2.0

27.5–29.9 0 0.0

30.0–32.4 0 0.0

32.5–34.9 0 0.0

35.0–37.4 1 2.0

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 37.5–39.9 0 0.0

More 0 0.0

16
14
12
Frequency

10
8
6
4
2
0

Population Millions

b. The distribution is skewed to the right.

c. Fifteen states (30%) have a population less than 2.5 million. More than half of the

states have populations of less than 5 million (28 states, or 56%). Only seven states

have a population greater than 10 million (California, Florida, Illinois, New York,

Ohio, Pennsylvania, and Texas). The largest state is California (37.3 million). and the

smallest states are Vermont and Wyoming (600.000).

48. a.

Industry Frequency % Frequency

Bank 26 13%

Cable 44 22%

Car 42 21%

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 Cell 60 30%

Collection 28 14%

Total 200 100%

b.

35%
30%
Percent Frequency

25%
20%
15%
10%
5%
0%
Bank Cable Car Cell Collection
Industry

c. The cellular phone providers had the highest number of complaints.

d. The percentage frequency distribution shows that the two financial industries (banks and

collection agencies) had about the same number of complaints. Also, new car dealers and

cable and satellite television companies also had about the same number of complaints.

50. a.

Level of Education Percent Frequency

High school graduate 32,773/65,644(100) = 49.93

Bachelor’s degree 22,131/65,644(100) = 33.71

Master’s degree 9003/65,644(100) = 13.71

Doctoral degree 1737/65,644(100) = 2.65

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 Total 100.00

13.71 + 2.65 = 16.36% of heads of households have a master’s or doctoral degree.

b.

Household Income Percent Frequency

Less than $25,000 13,128/65,644(100) = 20.00

$25,000 to $49,999 15,499/65,644(100) = 23.61

$50,000 to $99,999 20,548/65,644(100) = 31.30

$100,000 and higher 16,469/65,644(100) = 25.09

Total 100.00

31.30 + 25.09 = 56.39% of households have an income of $50,000 or more.

c.

Household Income

Level of Education Under $25,000 to $50,000 to $100,000 and

$25,000 $49,999 $99,999 Higher

High School 75.26 64.33 45.95 21.14

graduate

Bachelor’s degree 18.92 26.87 37.31 47.46

Master’s degree 5.22 7.77 14.69 24.86

Doctoral degree 0.60 1.03 2.05 6.53

Total 100.00 100.00 100.00 100.00

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 There is a large difference between the level of education for households with an

income of less than $25,000 and households with an income of $100,000 or more. For

instance, 75.26% of households with an income of less than $25,000 are households in

which the head of the household is a high school graduate, but only 21.14% of

households with an income level of $100,000 or more are households in which the head

of the household is a high school graduate. It is interesting to note, however, that

45.95% of households with an income of $50,000 to $99,999 are households in which

the head of the household his a high school graduate.

52 a.

Size of Company

Job Growth (%) Small Midsized Large Total

–10–0 4 6 2 12

0–10 18 13 29 60

10–20 7 2 4 13

20–30 3 3 2 8

30–40 0 3 1 4

60–70 0 1 0 1

Total 32 28 38 98

b. Frequency distribution for growth rate.

Job Growth (%) Total

–10–0 12

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 0–10 60

10–20 13

20–30 8

30–40 4

60-70 1

Total 98

Frequency distribution for size of company.

Size Total

Small 32

Medium 28

Large 38

Total 98

c. Cross-tabulation showing column percentages.

Size of Company

Job Growth (%) Small Midsized Large

–10–0 13 21 5

0–10 56 46 76

10–20 22 7 11

20–30 9 11 5

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 30–40 0 11 3

60–70 0 4 0

Total 100 100 100

d. Cross-tabulation showing row percentages.

Size of Company

Job Growth (%) Small Midsized Large Total

–10–0 33 50 17 100

0–10 30 22 48 100

10–20 54 15 31 100

20–30 38 38 25 100

30–40 0 75 25 100

60–70 0 4 0 100

e. Twelve companies had negative job growth: 13% were small companies, 21% were

midsized companies, and 5% were large companies. So in terms of avoiding negative

job growth, large companies were better off than small and midsized companies. But

even though 95% of the large companies had a positive job growth, the growth rate

was below 10% for 76% of these companies. In terms of better job growth rates,

midsized companies performed better than either small or large companies. For

instance, 26% of the midsized companies had a job growth of at least 20% as

compared to 9% for small companies and 8% for large companies.

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54. a.

Percent Graduating

Year 35– 40– 45– 50– 55– 60– 65– 70– 75– 80– 85– 90– 95– Grand

Founded 40 45 50 55 60 65 70 75 80 85 90 95 100 Total

1600–1649 1 1

1700–1749 3 3

1750–1799 1 3 4

1800–1849 1 2 4 2 3 4 3 2 21

1850–1899 1 2 4 3 11 5 9 6 3 4 1 49

1900–1949 1 1 1 1 3 3 2 4 1 1 18

1950–2000 1 1 3 2 7

Grand Total 2 1 3 5 5 7 15 12 13 13 8 9 10 103

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 b.

c. Older colleges and universities tend to have higher graduation rates.

56. a.

120.00

100.00
% Graduate

80.00

60.00

40.00

20.00

0.00
0 10,000 20,000 30,000 40,000 50,000
Tuition & Fees ($)

b. There appears to be a strong positive relationship between Tuition and Fees and

Percent Graduating.

58. a.

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 Zoo attendance appears to be dropping over time.

b.

c. General attendance is increasing, but not enough to offset the decrease in member

attendance. School membership appears fairly stable.

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Chapter 3 Solutions

xi 96
2. x   16
n 6

10, 12, 16, 17, 20, 21

16  17
Median =  16.5
2

4.

Period Rate of Return (%)

1 –6.0

2 –8.0

3 –4.0

4 2.0

5 5.4

The mean growth factor over the five periods is:

xg  n
 x1  x2  x5   5  0.940  0.920  0.960 1.020 1.054   5 0.8925  0.9775

So the mean growth rate (0.9775 – 1)100% = –2.25%.

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 xi 657
6. Mean    59.73
n 11

Median = 57 sixth item

Mode = 53 It appears three times.

8. a. Median = 80 or $80,000. The median salary for the sample of 15 middle-level

managers working at firms in Atlanta is slightly lower than the median salary

reported by the Wall Street Journal.

xi 1260
b. x    84
n 15

Mean salary is $84,000. The sample mean salary for the sample of 15 middle-level

managers is greater than the median salary. This indicates that the distribution of

salaries for middle-level managers working at firms in Atlanta is positively skewed.

c. The sorted data are as follow:

53 55 63 67 73 75 77 80 83 85 93 106 108 118 124

p 25
i ( n  1)  (16)  4
100 100

First quartile or 25th percentile is the value in position 4 or 67.

p 75
i (n  1)  (16)  12
100 100

Third quartile or 75th percentile is the value in position 12 or 106.

10. a. x
x i

1318
 65.9
n 20

Order the data from the lowest rating (42) to the highest rating (83)

Position Rating Position Rating

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 1 42 11 67

2 53 12 67

3 54 13 68

4 61 14 69

5 61 15 71

6 61 16 71

7 62 17 76

8 63 18 78

9 64 19 81

10 66 20 83

p 50
L50  (n  1)  (20  1)  10.5
100 100

Median or 50th percentile = 66 + . 5(67 ̶ 66) = 66.5

Mode is 61.

p 25
b. L25  (n  1)  (20  1)  5.25
100 100

First quartile or 25th percentile = 61

p 75
L75  (n  1)  (20  1)  15.75
100 100

Third quartile or 75th percentile = 71

p 90
c. L90  (n  1)  (20  1)  18.9
100 100

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 90th percentile = 78 + .9(81 ̶ 78) = 80.7

Ninety percent of the ratings are 80.7 or less; 10% of the ratings are 80.7 or

greater.

12. a. The mean for the previous year is 34,182; the median for the previous year is 34,000;

the mode for the previous year is 34,000.

b. The mean for the current year is 35,900; the median for the current year is 37,000; the

mode for the current year is 37,000.

c. The data are first arranged in ascending order.

𝑝 25
𝐿 = (𝑛 + 1) = (11 + 1) = 3
100 100

25th percentile = 33 (or 33,000)

𝑝 75
𝐿 = (𝑛 + 1) = (11 + 1) = 9
100 100

75th percentile = 35 (or 35,000)

d. The data are first arranged in ascending order.

𝑝 25
𝐿 = (𝑛 + 1) = (10 + 1) = 2.75
100 100

25th percentile = 33 + .75(35 – 33) = 34.5 (or 34,500).

𝑝 75
𝐿 = (𝑛 + 1) = (10 + 1) = 8.25
100 100

75th percentile = 37 + .25(37 ̶ 37) = 37 (or 37,000).

e. The mean, median, mode, Q1, and Q3 values are all larger for the current year than

for the previous year. This indicates that there have been more consistently more

downloads in the current year compared to the previous year.

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14. For the previous year:

p 25
L25  (n  1)  (50  1)  12.75
100 100

First quartile or 25th percentile = 6.8 + .75(6.8 – 6.8) = 6.8

p 50
L50  (n  1)  (50  1)  25.5
100 100

Second quartile or median = 8 + .5(8 ̶ 8) = 8

p 75
L75  (n  1)  (50  1)  38.25
100 100

Third quartile or 75th percentile = 9.4 + . 25(9.6 – 9.4) = 9.45

For the current year:

p 25
L25  (n  1)  (50  1)  12.75
100 100

First quartile or 25th percentile = 6.2 + .75(6.2 – 6.2) = 6.2

p 50
L50  (n  1)  (50  1)  25.5
100 100

Second quartile or median = 7.3 + .5(7.4 ̶ 7.3) = 7.35

p 75
L75  (n  1)  (50  1)  38.25
100 100

Third quartile or 75th percentile = 8.6 + . 25(8.6 ̶ 8.6) = 8.6

It may be easier to compare these results if we place them in a table.

Previous Year Current Year

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 First Quartile 6.80 6.20

Median 8.00 7.35

Third Quartile 9.45 8.60

The results show that in the current year approximately 25% of the states had an

unemployment rate of 6.2% or less, lower than in the previous year. And the median of

7.35% and the third quartile of 8.6% in the current year are both less than the

corresponding values in the previous year, indicating that unemployment rates across

the states are decreasing.

16. a.

Grade xi Weight Wi

4 (A) 9

3 (B) 15

2 (C) 33

1 (D) 3

0 (F) 0

60 Credit Hours

wi xi 9(4)  15(3)  33(2)  3(1) 150

x    2.50
wi 9  15  33  3 60

b. Yes; satisfies the 2.5 grade point average requirement.

18.

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 Assessment Deans fiMi Recruiters fiMi

5 44 220 31 155

4 66 264 34 136

3 60 180 43 129

2 10 20 12 24

1 0 0 0 0

Total 180 684 120 444

i fM i 1745
Deans: x   3.49
n 500

i fM i 1745
Recruiters: x    3.49
n 500

20.

Stivers Trippi

Year End of Year Growth End of Year Growth Factor

Value ($) Factor Value ($)

1 11,000 1.100 5,600 1.120

2 12,000 1.091 6,300 1.125

3 13,000 1.083 6,900 1.095

4 14,000 1.077 7,600 1.101

5 15,000 1.071 8,500 1.118

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 6 16,000 1.067 9,200 1.082

7 17,000 1.063 9,900 1.076

8 18,000 1.059 10,600 1.071

For the Stivers mutual fund, we have:

18000=10000  x1  x2   x8   , so  x1  x2   x8   =1.8

and

xg  n
 x1  x2   x8   8 1.80  1.07624

So the mean annual return for the Stivers mutual fund is (1.07624 – 1)100 = 7.624%.

For the Trippi mutual fund, we have:

10600=5000  x1  x2   x8   , so  x1  x2   x8   =2.12

and

xg  n
 x1  x2   x8   8 2.12  1.09848

So the mean annual return for the Trippi mutual fund is (1.09848 – 1)100 = 9.848%.

Although the Stivers mutual fund has generated a nice annual return of 7.6%,

the annual return of 9.8% earned by the Trippi mutual fund is far superior.

22. 25,000,000 = 10,000,000  x1  x2   x6   , so  x1  x2   x6   =2.50,

and so

xg  n
 x1  x2   x6   6 2.50  1.165

So the mean annual growth rate is (1.165 – 1)100 = 16.5%

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 xi 75
24. x   15
n 5

( xi  x ) 2 64
s 
2
  16
n 1 4

s  16  4

26. a. x
 i
xi

74.4
 3.72
n 20

b. s   (x i i x ) 2

1.6516
 .0869  .2948
n 1 20  1

c. The average price for a gallon of unleaded gasoline in San Francisco is much higher

than the national average. This indicates that the cost of living in San Francisco is

higher than it would be for cities that have an average price close to the national

average.

28. a. The mean annual sales amount is $315,643, the variance is 13,449,632, and the

standard deviation is $115,973.

b. Although the mean sales amount has increased from the previous to most recent fiscal

year by more than $15,000, this amount is extremely small compared to the standard

deviation in either fiscal year. Therefore, there is a strong likelihood that this change

is the result of simple randomness rather than a true change in demand for these

products.

30. Dawson Supply: Range = 11 – 9 = 2

4.1
s  0.67
9

J. C. Clark: Range = 15 – 7 = 8

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 60.1
s  2.58
9

32. a. Automotive:

x
x i

39201
 1960.05
n 20

Department store:

x
x i

13857
 692.85
n 20

b. Automotive:

s
 (x i  x )2

4, 407, 720.95
 481.65
( n  1) 19

Department store:

s
 (x i  x )2

456804.55
 155.06
( n  1) 19

c. Automotive: 2901 – 598 = 2303

Department store:

1011 – 448 = 563

d. Order the data for each variable from the lowest to highest.

Automotive Department Store

1 598 448

2 1,512 472

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 3 1,573 474

4 1,642 573

5 1,714 589

6 1,720 597

7 1,781 598

8 1,798 622

9 1,813 629

10 2,008 669

11 2,014 706

12 2,024 714

13 2,058 746

14 2,166 760

15 2,202 782

16 2,254 824

17 2,366 840

18 2,526 856

19 2,531 947

20 2,901 1011

p 25
i (n  1)  (21)  5.25
100 100

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 Automotive: First quartile or 25th percentile =

1,714 + .25(1,720 – 1,714) = 1,715.5

Department store: First quartile or 25th percentile =

589 + .25(597 – 589) = 591

p 75
i (n  1)  (21)  15.75
100 100

Automotive: Third quartile or 75th percentile =

2,202 + .75(2,254 – 2,202) = 2,241

Department store: First quartile or 75th percentile =

782 + .75(824 – 782) = 813.5

e. Automotive spends more on average, has a larger standard deviation, larger max and

min, and larger range than department store. Autos have all new model years and may

spend more heavily on advertising.

34. Quarter milers

s = 0.0564

Coefficient of variation =

(s/ x )100% = (0.0564/0.966)100% = 5.8%

Milers

s = 0.1295

Coefficient of variation =

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 (s/ x )100% = (0.1295/4.534)100% = 2.9%

Yes; the coefficient of variation shows that as a percentage of the mean the quarter

milers’ times show more variability.

36.

520  500
z  .20
100

650  500
z  1.50
100

500  500
z  0.00
100

450  500
z  .50
100

280  500
z  2.20
100

38. a. Approximately 95%

b. Almost all

c. Approximately 68%

40. a. $3.33 is one standard deviation below the mean, and $3.53 is one standard deviation

above the mean. The empirical rule says that approximately 68% of gasoline sales are

in this price range.

b. Part (a) shows that approximately 68% of the gasoline sales are between $3.33 and

$3.53. Because the bell-shaped distribution is symmetric, approximately half of 68%,

or 34%, of the gasoline sales should be between $3.33, and the mean price of $3.43.

$3.63 is two standard deviations above the mean price of $3.43. The empirical rule

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 says that approximately 95% of the gasoline sales should be within two standard

deviations of the mean. Thus, approximately half of 95%, or 47.5%, of the gasoline

sales should be between the mean price of $3.43 and $3.63. The percentage of

gasoline sales between $3.33 and $3.63 should be approximately 34% + 47.5% =

81.5%.

c. $3.63 is two standard deviations above the mean, and the empirical rule says that

approximately 95% of the gasoline sales should be within two standard deviations of

the mean. Thus, 1 – 95% = 5% of the gasoline sales should be more than two standard

deviations from the mean. Because the bell-shaped distribution is symmetric, we

expected half of 5%, or 2.5%, would be more than $3.63.

x 2300  3100

42. a. z   .67
 1200

x 4900  3100

b. z    1.50
 1200

c. $2300 is .67 standard deviations below the mean. $4900 is 1.50 standard deviations

above the mean. Neither is an outlier.

x 13000  3100

d. z    8.25
 1200

$13,000 is 8.25 standard deviations above the mean. This cost is an outlier.

xi 765
44. a. x   76.5
n 10

( xi  x ) 2 442.5
s  7
n 1 10  1

x  x 84  76.5
b. z    1.07
s 7

This is approximately one standard deviation above the mean. Approximately 68% of

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 the scores are within one standard deviation. Thus, half of (100–68), or 16%, of the

games should have a winning score of 84 or more points.

x  x 90  76.5
z   1.93
s 7

This is approximately two standard deviations above the mean. Approximately 95% of

the scores are within two standard deviations. Thus, half of (100–95), or 2.5%, of the

games should have a winning score of more than 90 points.

xi 122
c. x   12.2
n 10

( xi  x ) 2 559.6
s   7.89
n 1 10  1

x  x 24  12.2
Largest margin 24: z    1.50 . No outliers.
s 7.89

46. 15, 20, 25, 25, 27, 28, 30, 34

Smallest = 15

p 25
L25  (n  1)  (8  1)  2.25
100 100

First quartile or 25th percentile = 20 + .25(25 ̶ 20) = 21.25

p 50
L50  (n  1)  (8  1)  4.5
100 100

Second quartile or median = 25 + .5(27 ̶ 25) = 26

p 75
L75  (n  1)  (8  1)  6.75
100 100

Third quartile or 75th percentile = 28 + . 75(30 ̶ 28) = 29.5

Largest = 34

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48. 5, 6, 8, 10, 10, 12, 15, 16, 18

Smallest = 5

p 25
L25  (n  1)  (9  1)  2.5
100 100

First quartile or 25th percentile = 6 + .5(8 ̶ 6) = 7

p 50
L50  (n  1)  (9  1)  5.0
100 100

Second quartile or median = 10

p 75
L75  (n  1)  (9  1)  7.5
100 100

Third quartile or 75th percentile = 15 + . 5(16 ̶ 15) = 15.5

Largest = 18

A box plot follows:

50. a. The first place runner in the men’s group finished 109.03  65.30  43.73 minutes ahead

of the first place runner in the women’s group. Lauren Wald would have finished in

11th place for the combined groups.

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  50 
b. Men: i   22  .50(22)  11
 100 

Use the 11th and 12th place finishes.

109.05  110.23
Median =  109.64
2

 50 
Women: i  31  .50(31)  15.5
 100 

Use the 16th place finish.

Median = 131.67

Using the median finish times, the men’s group finished 131.67  109.64  22.03 minutes

ahead of the women’s group.

Also note that the fastest time for a woman runner, 109.03 minutes, is

approximately equal to the median time of 109.64 minutes for the men’s group.

c. Men: Lowest time = 65.30; highest time = 148.70

 25 
Q1: i   (n 1)  .25(23)  5.75 Q1 = 70.87 + .75(87.18-70.87) = 83.1025
 100 

 75 
Q3: i   (n 1)  .75(23)  17.25 Q3 = 128.4 + .25(130.90—128.40) = 129.025
 100 

Five-number summary for men: 65.30, 83.1025, 109.64, 129.025, 148.70

Women: Lowest time = 109.03; highest time = 189.28

 25 
Q1: i   (n 1)  .25(32)  8.0
 100 

Use 8th position.

Q1 = 122.08

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  75 
Q3: i   (n 1)  .75(32)  24.0
 100 

Use 24th position.

Q3 = 147.18

Five-number summary for women: 109.03, 122.08, 131.67, 147.18, 189.28

d. Men: IQR = 129.025 – 83.1025 = 45.9225

Lower limit = Q1  1.5(IQR) = 83.1025 – 1.5(45.9225) = 14.22

Upper limit = Q3  1.5(IQR) = 129.025 + 1.5(45.9225) = 197.91

There are no outliers in the men’s group.

Women: IQR = 147.18  122.08  25.10

Lower limit = Q1  1.5(IQR) =  122.08  1.5(25.10)  84.43

Upper limit = Q3  1.5(IQR)  147.18  1.5(25.10)  184.83

The two slowest women runners with times of 189.27 and 189.28 minutes are outliers in

the women’s group.

e.

Box Plot of Men and Women Runners

200

175

150
Time in Minutes

125

100

75

50
Men Women

The box plots show the men runners with the faster or lower finish times. However, the

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 box plots show the women runners with the lower variation in finish times. The

interquartile ranges of 41.22 minutes for men and 25.10 minutes for women support this

conclusion.

52. a. Median n = 20; 10th and 11th positions

73  74
Median =  73.5
2

b. Five-number summary: 68, 71.25, 73.5, 74.75, 77

c. IQR = Q3 – Q1 = 74.75 – 71.25 = 3.5

Lower limit = Q1 – 1.5(IQR) = 71.25 – 1.5(3.5) = 66

Upper limit = Q3 + 1.5(IQR) = 74.75 + 1.5(3.5) = 80

All ratings are between 66 and 80. There are no outliers for the T-Mobile service.

d. Using the solution procedures shown in parts a, b, and c, the five number summaries

and outlier limits for the other three cell phone services are as follows.

AT&T 66, 68, 71, 73, 75 Limits: 60.5 and 80.5

Sprint 63, 65, 66, 67.75, 69 Limits: 60.875 and 71.875

Verizon 75, 77, 78.5, 79.75, 81 Limits: 72.875 and 83.875

There are no outliers for any of the cell phone services.

e.

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 Box Plots of Cell-Phone Services

80

75

Rating
70

65

AT&T Sprint T-Mobile Verizon

The box plots show that Verizon is the best cell phone service provider in terms of

overall customer satisfaction. Verizon’s lowest rating is better than the highest AT&T

and Sprint ratings and is better than 75% of the T-Mobile ratings. Sprint shows the

lowest customer satisfaction ratings among the four services.

54.

a. Mean = 173.24 and median (second quartile) = 89.5

b. First quartile = 38.5, and the third quartile = 232

c. 21, 38.5, 89.5, 232, 995

d. A box plot follows.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The box plot shows the distribution of number of personal vehicle crossings is skewed

to the right (positive). Three ports of entry are considered outliers:

NY: Buffalo-Niagara Falls 707

TX: El Paso 807

CA: San Ysidro 995

56. a.

18
16
14
12
10
y

8
6
4
2
0
0 5 10 15 20 25 30
x

b. Positive relationship

80 50
c/d. xi  80 x  16 yi  50 y  10
5 5

 ( xi  x )( yi  y )  106  ( xi  x ) 2  272  ( yi  y ) 2  86

( xi  x )( yi  y ) 106
sxy    26.5
n 1 5 1

( xi  x ) 2 272
sx    8.2462
n 1 5 1

( yi  y ) 2 86
sy    4.6368
n 1 5 1

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 sxy 26.5
rxy    .693
sx s y (8.2462)(4.6368)

A positive linear relationship

58. Let x = miles per hour and y = miles per gallon.

420 270
xi  420 x  42 yi  270 y  27
10 10

( xi  x )( yi  y )  475 ( xi  x ) 2  1660  ( yi  y ) 2  164

( xi  x )( yi  y ) 475
sxy    52.7778
n 1 10  1

( xi  x ) 2 1660
sx    13.5810
n 1 10  1

( yi  y ) 2 164
sy    4.2687
n 1 10  1

sxy 52.7778
rxy    .91
sx s y (13.5810)(4.2687)

A strong negative linear relationship exists. For driving speeds between 25 and 60 miles

per hour, higher speeds are associated with lower miles per gallon.

60. a.

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 % Return ofDJIA versus Russell 1000

40.00
30.00
20.00
10.00
Russell 1000

0.00
-40.00 -30.00 -20.00 -10.00
-10.00 0.00 10.00 20.00 30.00 40.00
-20.00
-30.00
-40.00
-50.00
DJIA

b. DJIA : x    (x
xi 227.57  x )2 5672.61
  9.10 s  i
  15.37
n 25 ( n  1) 24

Russell 1000: x    (x
xi 227.29  x )2 7679.81
  9.09 s  i
  17.89
n 25 ( n  1) 24

sxy 263.611
c. rxy    .959
sx s y (15.37)(17.89)

d. Based on this sample, the two indexes are strikingly similar. They have a strong

positive correlation. The variance of the Russell 1000 is slightly larger than that of the

DJIA.

62. The data in ascending order follow.

Position Value Position Value

1 0 11 3

2 0 12 3

3 1 13 3

4 1 14 4

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 5 1 15 4

6 1 16 5

7 1 17 5

8 2 18 6

9 3 19 6

10 3 20 7

a. The mean is 2.95, and the median is 3.

p 25
b. L25  (n  1)  (20  1)  5.25
100 100

First quartile or 25th percentile = 1 + . 25(1 ̶ 1) = 1

p 75
L75  (n  1)  (20  1)  15.75
100 100

Third quartile or 75th percentile = 4 + . 75(5 ̶ 4) = 4.75

c. The range is 7 and the interquartile range is 4.75 – 1 = 3.75.

d. The variance is 4.37, and standard deviation is 2.09.

e. Because most people dine out a relatively few times per week and a few families dine

out frequently, we would expect the data to be positively skewed. The skewness

measure of 0.34 indicates the data are somewhat skewed to the right.

f. The lower limit is –4.625, and the upper limit is 10.375. No values in the data are less

than the lower limit or greater than the upper limit, so there are no outliers.

64. a. The mean and median patient wait times for offices with a wait-tracking system are

17.2 and 13.5, respectively. The mean and median patient wait times for offices

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 without a wait-tracking system are 29.1 and 23.5, respectively.

b. The variance and standard deviation of patient wait times for offices with a wait-

tracking system are 86.2 and 9.3, respectively. The variance and standard deviation of

patient wait times for offices without a wait-tracking system are 275.7 and 16.6,

respectively.

c. Offices with a wait-tracking system have substantially shorter patient wait times than

offices without a wait-tracking system.

37  29.1
d. z   0.48
16.6

37  17.2
e. z   2.13
9.3

As indicated by the positive z–scores, both patients had wait times that exceeded the

means of their respective samples. Even though the patients had the same wait time, the

z–score for the sixth patient in the sample who visited an office with a wait-tracking

system is much larger because that patient is part of a sample with a smaller mean and a

smaller standard deviation.

f. The z–scores for all patients follow.

Without Wait-Tracking System With Wait-Tracking System

–0.31 1.49

2.28 –0.67

–0.73 –0.34

–0.55 0.09

0.11 –0.56

0.90 2.13

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 –1.03 –0.88

–0.37 –0.45

–0.79 –0.56

0.48 –0.24

The z–scores do not indicate the existence of any outliers in either sample.

66. a. x
x i

20665
 413.3
n 50

This is slightly higher than the mean for the study.

b. s   (x i  x )2

69424.5
 37.64
( n  1) 49

p 25
c. i  ( n)  (50)  12.5 (13th position) Q1 = 384
100 100

p 75
i (n)  (50)  37.5 (38th position) Q3 = 445
100 100

IQR = 445 – 384 = 61

LL = Q1 – 1.5 IQR = 384 – 1.5(61) = 292.5

UL = Q3 + 1.5 IQR = 445+ 1.5(61) = 536.5

There are no outliers.

68. a. The data in ascending order follow:

46.5 48.7 49.4 51.2 51.3 51.6 52.1 52.1 52.2 52.4 52.5 52.9 53.4 64.5

p 50
L50  (n  1)  (14  1)  7.5
100 100

Median or 50th percentile = 52.1 + . 5(52.1 ̶ 52.1) = 52.1

b. Percentage change =  52.1  55.5 100  6.1%

 55.5 

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 p 25
c. L25  (n  1)  (14  1)  3.75
100 100

25th percentile = 49.4 + .75(51.2 ̶ 49.4) = 50.75

p 75
L75  (n  1)  (14  1)  11.25
100 100

75th percentile = 52.5 + .25(52.9 ̶ 52.5) = 52.6

d. 46.5 50.75 52.1 52.6 64.5

xi 730.8
e. x    52.2
n 14

 ( xi  x ) 2 208.12
s2    16.0092
n 1 13

s  16.0092  4.0012

xi  x
The z-scores = are shown below:
s

–1.42 –0.87 –0.70 –0.25 –0.22 –0.15 –0.02 –0.02 0.00 0.05 0.07 0.17 0.30 3.07

The last household income (64.5) has a z-score > 3 and is an outlier.

Lower limit = Q1  1.5(IQR)  50.75  1.5(52.6  50.75)  47.98

Upper limit = Q3  1.5(IQR)  52.6  1.5(52.6  50.75)  55.38

Using this approach, the first observation (46.5) and the last observation (64.5) would

be consider outliers.

The two approaches will not always provide the same results.

xi 4368
70. a. x   364 rooms
n 12

yi 5484
b. y    $457
n 12

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 c.

It is difficult to see much of a relationship. When the number of rooms becomes larger,

there is no indication that the cost per night increases. The cost per night may even

decrease slightly.

xi yi ( xi  x ) ( yi  y ) ( xi  x )2 ( yi  y )2 ( xi  x )( yi  y )

499 –144 42 20.736 1,764 –6,048

727 340 363 –117 131,769 13,689 –42,471

285 585 –79 128 6,241 16,384 –10,112

273 495 –91 38 8,281 1,444 –3,458

145 495 –219 38 47,961 1,444 –8,322

213 279 –151 –178 22,801 31,684 26,878

398 279 34 –178 1,156 31,684 –6,052

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 343 455 –21 –2 441 4 42

250 595 –114 138 12,996 19,044 –15,732

414 367 50 –90 2,500 8,100 –4,500

400 675 36 218 1,296 47,524 7,848

700 420 336 –37 112,896 1,369 –12,432

174,13

Total 369,074 4 –74,359

d.

∑(𝑥 − 𝑥̅ )(𝑦 − 𝑦) −74,359

𝑠 = = = −6,759.91
𝑛−1 11

∑(𝑥 − 𝑥̅ ) 369,074
𝑠 = = = 183.17
𝑛−1 11

∑(𝑦 − 𝑦) 174,134
𝑠 = = = 125.82
𝑛−1 11

𝑠 −6759.91
𝑟 = = = −.293
𝑠 𝑠 (183.17)(125.82)

There is evidence of a slightly negative linear association between the number of rooms

and the cost per night for a double room. Augh this is not a strong relationship, it

suggests that the higher room rates tend to bessociated with the smaller hotels.

This tends to make sense when we think about the economies of scale for

larger hotels. Many of the amenities—pools, equipment, spas, restaurants, and so

on—exist for all hotels in the Travel + Leisure top 50 hotels in the world. The smaller

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 hotels tend to charge more for their rooms. The larger hotels can spread their fixed

costs over many rooms and may actually be able to charge less per night and still

achieve nice profits. The larger hotels may also charge slightly less in an effort to

obtain a higher occupancy rate. In any case, there is apparently a slightly negative

linear association between the number of rooms and the cost per night for a double

room at the top hotels.

72. a.

xi yi ( xi  x ) ( yi  y ) ( xi  x )2 ( yi  y )2 ( xi  x )( yi  y )

.407 .422 –.1458 –.0881 .0213 .0078 .0128

.429 .586 –.1238 .0759 .0153 .0058 –.0094

.417 .546 –.1358 .0359 .0184 .0013 –.0049

.569 .500 .0162 –.0101 .0003 .0001 –.0002

.569 .457 .0162 –.0531 .0003 .0028 –.0009

.533 .463 –.0198 –.0471 .0004 .0022 .0009

.724 .617 .1712 .1069 .0293 .0114 .0183

.500 .540 –.0528 .0299 .0028 .0009 –.0016

.577 .549 .0242 .0389 .0006 .0015 .0009

.692 .466 .1392 –.0441 .0194 .0019 –.0061

.500 .377 –.0528 –.1331 .0028 .0177 .0070

.731 .599 .1782 .0889 .0318 .0079 .0158

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 .643 .488 .0902 –.0221 .0081 .0005 –.0020

.448 .531 –.1048 .0209 .0110 .0004 –.0022

Total .1617 .0623 .0287

( xi  x )( yi  y ) .0287
sxy    .0022
n 1 14  1

( xi  x ) 2 .1617
sx    .1115
n 1 14  1

( yi  y ) 2 .0623
sy    .0692
n 1 14  1

sxy .0022
rxy    .286
sx s y .1115(.0692)

b. There is a low positive correlation between a Major League Baseball team’s winning

percentage during spring training and its winning percentage during the regular

season. The spring training record should not be expected to be a good indicator of

how a team will play during the regular season.

Spring training consists of practice games between teams with wins and losses

not counted in the regular season standings and not affecting the teams’ chances of

making the playoffs. Teams use spring training to help players regain their timing and

to evaluate new players. Substitutions are frequent with regular or better players

rarely playing an entire spring training game. Winning is not the primary goal in

spring training games. A low correlation between spring training winning percentage

and regular season winning percentage should be anticipated.

74.

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 fi Mi fi Mi Mi  x (M i  x )2 fi (M i  x )2

10 47 470 –13.68 187.1424 1,871.42

40 52 2,080 –8.68 75.3424 3,013.70

150 57 8,550 –3.68 13..5424 2,031.36

175 62 10,850 +1.32 1.7424 304.92

75 67 5,025 +6.32 39.9424 2,995.68

15 72 1,080 +11.32 128.1424 1,922.14

10 77 770 +16.32 266.3424 2,663.42

475 28,825 14,802.64

28,825
a. x   60.68
475

14,802.64
b. s 2   31.23
474

s  31.23  5.59

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Chapter 4 Solutions

 6  6! 6  5  4  3  2 1
2.     20
 3  3!3! (3  2 1)(3  2 1)

ABC ACE BCD BEF

ABD ACF BCE CDE

ABE ADE BCF CDF

ABF ADF BDE CEF

ACD AEF BDF DEF

4. a.

1st Toss 2nd Toss 3rd Toss

H (H,H,H)
T
H
(H,H,T)
T
H (H,T,H)
H
T
(H,T,T)

T H (T,H,H)
T
H (T,H,T)
T
H (T,T,H)
T
(T,T,T)

b. Let: H be head and T be tail:

(H,H,H) (T,H,H)

(H,H,T) (T,H,T)

(H,T,H) (T,T,H)

(H,T,T) (T,T,T)

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 c. The outcomes are equally likely, so the probability of each outcome is 1/8.

6. P(E1) = .40, P(E2) = .26, P(E3) = .34

The relative frequency method was used.

8. a. There are four outcomes possible for this two-step experiment; planning commission

positive—council approves; planning commission positive—council disapproves;

planning commission negative—council approves; and planning commission

negative—council disapproves.

Planning Commission Council

(p, a)
a

d
p
(p, d) .

n
(n, a)
a

(n, d)

b. Let p = positive, n = negative, a = approves, and d = disapproves

10. a.

Programmer Total Lines of Code Number of Lines of Code Probability

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 Written Requiring Edits

Liwei 23,789 4,589 0.1929

Andrew 17,962 2,780 0.1548

Jaime 31,025 12,080 0.3894

Sherae 26,050 3,780 0.1451

Binny 19,586 1,890 0.0965

Roger 24,786 4,005 0.1616

Dong-Gil 24,030 5,785 0.2407

Alex 14,780 1,052 0.0712

Jay 30,875 3,872 0.1254

Vivek 21,546 4,125 0.1915

b. Probability = 4589 / 23789 = 0.1929

c. Probability = 1 – 3780 / 26050 = 1 – 0.1451 = 0.8549

d. The lowest probability is Alex at 0.0712; the highest probability is Jaime at 0.3894.

12. Initially a probability of .20 would be assigned if selection is equally likely. Data do not

appear to confirm the belief of equal consumer preference. For example, using the

relative frequency method we would assign a probability of 5/100 = .05 to the design 1

outcome, .15 to design 2, .30 to design 3, .40 to design 4, and .10 to design 5.

14. a. P(E2) = 1/4

b. P(any 2 outcomes) = 1/4 + 1/4 = 1/2

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 c. P(any 3 outcomes) = 1/4 + 1/4 + 1/4 = 3/4

16. a. (6)(6) = 36 sample points

b.

Die 2
1 2 3 4 5 6

1 2 3 4 5 6 7

2 3 4 5 6 7 8 Total for Both .

3 4 5 6 7 8 9
Die 1

4 5 6 7 8 9 10

5 6 7 8 9 10 11

6 7 8 9 10 11 12

c. 6/36 = 1/6

d. 10/36 = 5/18

e. No. P(odd) = 18/36 = P(even) = 18/36 or 1/2 for both.

f. Classical. A probability of 1/36 is assigned to each experimental outcome.

18. a. Let C = corporate headquarters located in California:

P(C) = 53/500 = .106

b. Let N = corporate headquarters located in New York

T = corporate headquarters located in Texas

P(N) = 50/500 = .100

P(T) = 52/500 = .104

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 Located in California, New York, or Texas:

P(C)  P( N )  P(T )  .106  .100  .104  .31

c. Let A = corporate headquarters located in one of the eight states

Total number of companies with corporate headquarters in the eight states = 283

P(A) = 283/500 = .566

More than half the Fortune 500 companies have corporate headquartered located in

these eight states.

20. a.

Age

Experimental Outcome Financially Number of Responses Probability

Independent

E1 16 to 20 191 191/944 = 0.2023

E2 21 to 24 467 467/944 = 0.4947

E3 25 to 27 244 244/944 = 0.2585

E4 28 or older 42 42/944 = 0.0445

944

b. P(Age <25)  P(E1 )  P(E2 )  .2023 .4947  .6970

c. P(Age >24)  P(E3 )  P(E4 )  .2585  .0445  .3030

d. The probability of being financially independent before age 25, .6970, seems high

given the general economic conditions. The teenagers who responded to this survey

may have had unrealistic expectations about becoming financially independent at a

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 relatively young age.

22. a. P(A) = .40, P(B) = .40, P(C) = .60

b. P(A  B) = P(E1, E2, E3, E4) = .80. Yes, P(A  B) = P(A) + P(B).

c. Ac = {E3, E4, E5} Cc = {E1, E4} P(Ac) = .60 P(Cc) = .40

d. A  Bc = {E1, E2, E5} P(A  Bc) = .60

e. P(B  C) = P(E2, E3, E4, E5) = .80

24. Let E = experience exceeded expectations

M = experience met expectations

a. Percentage of respondents that said their experience exceeded expectations

= 100 – (4 + 26 + 65) = 5%

P(E) = .05

b. P(M  E) = P(M) + P(E) = .65 + .05 = .70

26. a. Let D = Domestic Equity Fund

P(D) = 16/25 = .64

b. Let A = 4- or 5-star rating

Thirteen funds were rated 3 star or less; thus, 25 – 13 = 12 funds must be 4 star or 5 star.

P(A) = 12/25 = .48

c. Seven Domestic Equity funds were rated 4 star, and two were rated 5 star. Thus, nine

funds were Domestic Equity funds and were rated 4 star or 5 star:

P(D  A) = 9/25 = .36

d. P(D  A) = P(D) + P(A) - P(D  A)

= .64 + .48 - .36 = .76

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28. Let: B = rented a car for business reasons

P = rented a car for personal reasons

a. P(B  P) = P(B) + P(P) - P(B  P)

= .54 + .458 - .30 = .698

b. P(Neither) = 1 – .698 = .302

P (A  B) .40
30. a. P (A B)    .6667
P(B) .60

P (A  B) .40
P (B A)    .80
P(A) .50
b.

c. No because P(A | B)  P(A)

32. a. Dividing each entry in the table by 500 yields the following (rounding to two digits):

Yes No Totals

Men 0.210 0.282 0.492

Women 0.186 0.322 0.508

Totals 0.396 0.604 1.000

Let M = 18-34-year-old man,

W = 18-34-year-old woman,

Y = responded yes,

N = responded no

b. P(M) = .492, P(W) = .508

P(Y) = .396, P(N) = .604

c. P(Y|M) = .210/.492 = .4268

d. P(Y|W) = .186/.508 = .3661

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 e. P(Y) = .396/1 = .396

f. P(M) = .492 in the sample. Yes, this seems like a good representative sample based

on gender.

34. a. Let O = flight arrives on time

L = flight arrives late

J = Jet Blue flight

N = United flight

U = US Airways flight

Given:

P(O | J) = .768 P(O | N) = .715 P(O | U) = .822

P(J) = .30 P(N) = .32 P(U) = .38

Joint probabilities using the multiplication law

P(J  O)  P(J )P(O | J )  (.30)(.768)  .2304

P(N  O)  P(N )P(O | N )  (.32)(.715)  .2288

P(U  O)  P(U )P(O |U )  (.38)(.822)  .3124

With the marginal probabilities P(J) = .30, P(N) = .32, and P(U) = .38 given, the joint

probability table can then be shown as follows.

On Time Late Total

Jet Blue .2304 .0696 .30

United .2288 .0912 .32

US Airways .3124 .0676 .38

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 Total .7716 .2284 1.00

b. Using the joint probability table, the probability of an on-time flight is the marginal

probability

P(O) = .2304 + .2288 + .3124 = .7716

c. Because US Airways has the highest percentage of flights into terminal C, US

Airways with P(U) = .38 is the most likely airline for Flight 1382.

d. From the joint probability table, P(L) = .2284:

P(J  L) .0696
P(J L)    .3047
P(L) .2284

P(N  L) .0912
P(N L)    .3992
P(L) .2284

P(U  L) .0676
P(U L)    .2961
P(L) .2284

Most likely airline for Flight 1382 is now United with a probability of .3992. US

Airways is now the least likely airline for this flight with a probability of .2961.

36. a. We have that P(Make the Shot) = .93 for each foul shot, so the probability that the

player will make two consecutive foul shots is that P(Make the Shot) P(Make the

Shot) = (.93)(.93) = .8649.

b. There are three unique ways in which the player can make at least one shot: He can

make the first shot and miss the second shot, miss the first shot and make the second

shot, or make both shots. Because the event “Miss the Shot” is the complement of the

event “Make the Shot,” P(Miss the Shot) = 1 – P(Make the Shot) = 1 – .93 = .07.

Thus:

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 P(Make the Shot) P(Miss the Shot) = (.93)(.07) = .0651

P(Miss the Shot) P(Make the Shot) = (.07)(.93) = .0651

P(Make the Shot) P(Make the Shot) = (.93)(.93) = .8649

.9951

c. We can find this probability in two ways. We can calculate the probability directly:

P(Miss the Shot) P(Miss the Shot) = (.07)(.07) = .0049

Or we can recognize that the event “Miss both Shots” is the complement of the event

“Make at Least One of the Two Shots,” so

P(Miss the Shot) P(Miss the Shot) = 1 – .9951 = .0049

d. For the player who makes 58% of his free throws, we have:

P(Make the Shot) = .58 for each foul shot,

so the probability that this player will make two consecutive foul shots is

P(Make the Shot) P(Make the Shot) = (.58)(.58) = .3364.

Again, there are three unique ways that this player can make at least one shot: He can

make the first shot and miss the second shot, miss the first shot and make the second

shot, or make both shots. Because the event “Miss the Shot” is the complement of the

event “Make the Shot” P(Miss the Shot) = 1 – P(Make the Shot) = 1 – .58 = .42. Thus,

P(Make the Shot) P(Miss the Shot) = (.58)(.42) = .2436

P(Miss the Shot) P(Make the Shot) = (.42)(.58) = .2436

P(Make the Shot) P(Make the Shot) = (.58)(.58) = .3364

.8236

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 We can again find the probability the 58% free-throw shooter will miss both shots in

two ways. We can calculate the probability directly:

P(Miss the Shot) P(Miss the Shot) = (.42)(.42) = .1764

Or we can recognize that the event “Miss Both Shots” is the complement of the event

“Make at Least One of the Two Shots,” so

P(Miss the Shot) P(Miss the Shot) = 1 – .9951 = .1764

Intentionally fouling the 58% free-throw shooter is a better strategy than intentionally

fouling the 93% shooter.

38. Let Y = has a college degree

N = does not have a college degree

D = a delinquent student loan

a. From the table, P(Y )  .42

b. From the table, P(N )  .58

P(D  Y ) .16
c. P(D |Y )    .3810
P(Y ) .42

P(D  N ) .34
d. P(D | N )    .5862
P(N ) .58

e. Individuals who obtained a college degree have a .3810 probability of a delinquent

student loan, whereas individuals who dropped out without obtaining a college degree

have a .5862 probability of a delinquent student loan. Not obtaining a college degree

will lead to a greater probability of struggling to payback the student loan and will

likely lead to financial problems in the future.

40. a. P(B  A1) = P(A1)P(B | A1) = (.20)(.50) = .10

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 P(B  A2) = P(A2)P(B | A2) = (.50)(.40) = .20

P(B  A3) = P(A3)P(B | A3) = (.30)(.30) = .09

.20
P(A 2 B)   .51
b. .10  .20  .09

c.

Events P(Ai) P(B | Ai) P(Ai  B) P(Ai | B)

A1 .20 .50 .10 .26

A2 .50 .40 .20 .51

A3 .30 .30 .09 .23

1.00 .39 1.00

42. M = missed payment

D1 = customer defaults

D2 = customer does not default

P(D1) = .05 P(D2) = .95 P(M | D2) = .2 P(M | D1) = 1

P(D1 ) P(M D1 ) (.05)(1) .05

P(D1 M)     .21
P(D1 ) P(M D1 )  P(D2 ) P(M D 2 ) (.05)(1)  (.95)(.2) .24
a.

b. Yes, the probability of default is greater than .20.

44. M = the current visitor to the ParFore website is a male

F = the current visitor to the ParFore website is a female

D = a visitor to the ParFore website previously visited the Dillard website

a. Using past history, P(F) = .40.

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 b. P(M) = .60, P(D | F )  .30 , and P(D | M )  .10

P(F )P( D | F ) (.40)(.30)

P(F | D)    .6667
P(F )P(D | F )  P( M )P( D | M ) (.40)(.30)  (.60)(.10)

The revised probability that the current visitor is a female is .6667.

ParFore should display the special offer that appeals to female visitors.

46. a. 422 + 181 + 80 + 121 + 201 = 1005 respondents

b. Most frequent response a day or less; probability = 422/1005 = .4199

c. 201/1005 = .20

d. Responses of two days, three days, and four or more days = 181 + 80 + 121 = 382

Probability = 382/1005 = .3801

48. a. 0.5029

b. 0.5758

c. No, from part a we have P(F) = 0.5029, and from part b we have P(A|F) = 0.5758.

Because P(F) ≠ P(A|F), events A and F are not independent.

50. a. Probability of the event = P(average) + P(above average) + P(excellent)

11 14 13
=   = .22 + .28 + .26 = .76
50 50 50

b. Probability of the event = P(poor) + P(below average)

4 8
=  .24
50 50

52. a.

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 Yes No Total

23 and Under .1026 .0996 .2022

24 - 26 .1482 .1878 .3360

27 - 30 .0917 .1328 .2245

31 - 35 .0327 .0956 .1283

36 and Over .0253 .0837 .1090

Total .4005 .5995 1.0000 .

b. .2022

c. .2245 + .1283 + .1090 = .4618

d. .4005

54. a. .1485+.2273+.4008 = .7766

P(OKAY  30  49) 0.0907

P(OKAY 30  49)    0.2852
b. P(30  49) 0.3180

( ∩ NOT OKAY) .
c. 𝑃(50 + | 𝑁𝑂𝑇 𝑂𝐾𝐴𝑌) = = = .5161
(NOT OKAY) .

d. The attitude about this practice is not independent of the age of the respondent. We

can show this in several ways. One example is to use the result from part (b). We

have

P  OKAY 30  49  0.2852

and

P  OKAY   0.2234

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 If the attitude about this practice were independent of the age of the respondent, we

would expect these probabilities to be equal. Because these probabilities are not equal,

the data suggest the attitude about this practice is not independent of the age of the

respondent.

e. Respondents in the 50+ age category are far more likely to say this practice is not

okay than are respondents in the 18–29 age category:

P  NOT OKAY  50   0.4008

P  NOT OKAY|50+     0.8472
P  50+  0.4731

P  NOT OKAY  18-29  0.1485

P  NOT OKAY|18-29     0.7109
P 18-29  0.2089

56. a. P(A) = 200/800 = .25

b. P(B) = 100/800 = .125

c. P(A  B) = 10/800 = .0125

d. P(A | B) = P(A  B)/P(B) = .0125/.125 = .10

e. No, P(A | B) ≠ P(A) = .25

58. a. Let A1 = student studied abroad

A2 = student did not study abroad

F = female student

M = male student

P(A1) = .095

P(A2) = 1 P( A1 ) = 1  .095 = .905

P(F | A1) = .60

P(F | A2) = .49

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 Tabular computations

Events P(Ai) P(F|Ai) P(Ai∩F) P(Ai|F)

A1 .095 .60 .0570 .1139

A2 .905 .49 .4435 .8861

P(F) = .5005

P(A1|F) = .1139

b.

Events P(Ai) P(M|Ai) P(Ai∩M) P(Ai|M)

A1 .095 .40 .0380 .0761

A2 .905 .51 .4615 .9239

P(M) = .4995

P(A1|M) = .0761

c. From the preceding, P(F) = .5005 and P(M) = .4995, so almost 50:50 female and

male full-time students.

60. a.

P  spam  P  shipping!|spam 
P  spam|shipping!  
P  spam  P  shipping!|spam   P  ham  P  shipping!|ham 

 0.10  0.051
  0.791
 0.10  0.051   0.90  0.0015 

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 P  ham  P  shipping!|ham 
P  ham|shipping!  
P  ham  P  shipping!|ham   P  spam  P  shipping!|ham 

 0.90  0.0015 
  0.209
 0.90  0.0015    0.10  0.051

If a message includes the word shipping!, the probability the message is spam is high

(.7910), so the message should be flagged as spam.

b.

P  spam  P  today!|spam 
P  spam|today!  
P  spam  P  today!|spam   P  ham  P  today!|ham 

 0.10  0.045 
  0.694
 0.10  0.045    0.90  0.0022 

P  spam  P  here!|spam 
P  spam|here!  
P  spam  P  here!|spam   P  ham  P  here!|ham 

 0.10  0.034 
  0.632
 0.10  0.034    0.90  0.0022 

A message that includes the word today! is more likely to be spam. P(spam|today!) is

higher than P(spam|here!) because P(today!|spam) is larger than P(here!|spam) and

P(today!|ham) = P(here!|ham) meaning that today! occurs more often in unwanted

messages (spam) than here!, and just as often in legitimate messages (ham). Therefore,

it is easier to distinguish spam from ham in messages that include today!.

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 c.

P  spam  P  available|spam 
P  spam|available  
P  spam  P  available|spam   P  ham  P  available|ham 

 0.10  0.014 
  0.275
 0.10  0.014    0.90  0.0041

P  spam  P  fingertips!|spam 
P  spam|fingertips!  
P  spam  P  fingertips!|spam   P  ham  P  fingertips!|ham 

 0.10  0.014 
  0.586
 0.10  0.014    0.90  0.0011

A message that includes the word fingertips! is more likely to be spam.

P(spam|fingertips!) is larger than P(spam|available) because P(available|ham) is larger

than P(fingertips!|ham) and P(available|spam) = P(fingertips!|spam) meaning that

available occurs more often in legitimate messages (ham) than fingertips! and just as

often in unwanted messages (spam). Therefore, it is more difficult to distinguish spam

from ham in messages that include available.

d. It is easier to distinguish spam from ham when a word occurs more often in unwanted

messages (spam), less often in legitimate messages (ham), or both.

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Chapter 5 Solutions

2. a. Let x = time (in minutes) to assemble the product.

b. It may assume any positive value: x > 0.

c. Continuous

4. 0, 1, 2, 3, 4, 5, 6, 7, 8, 9

6. a. values: 0, 1, 2, . . . , 20

discrete

b. values: 0, 1, 2, . . .

discrete

c. values: 0, 1, 2, . . . , 50

discrete

d. values: 0 ≤ x ≤ 8

continuous

e. values: x > 0

continuous

8. a.

x f(x)

1 3/20 = .15

2 5/20 = .25

3 8/20 = .40

4 4/20 = .20

Total 1.00

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 b.

f (x)
.4

.3

.2

.1

x
1 2 3 4

c. f(x) ≥ 0 for x = 1,2,3,4.

Σ f(x) = 1

10. a.

x f(x)

1 0.05

2 0.09

3 0.03

4 0.42

5 0.41

1.00

b.

x f(x)

1 0.04

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 2 0.10

3 0.12

4 0.46

5 0.28

1.00

c. P(4 or 5) = f(4) + f(5) = 0.42 + 0.41 = 0.83

d. Probability of very satisfied: 0.28

e. Senior executives appear to be more satisfied than middle managers; 83% of senior

executives have a score of 4 or 5, with 41% reporting a 5. Only 28% of middle

managers report being very satisfied.

12. a. Yes; f(x) ≥ 0. Σf(x) = 1

b. f(500,000) + f(600,000) = .10 + .05 = .15

c. f(100,000) = .10

14. a. f(200) = 1 – f(–100) – f(0) – f(50) – f(100) – f(150)

= 1 – .95 = .05

This is the probability MRA will have a $200,000 profit.

b. P(Profit) = f(50) + f(100) + f(150) + f(200)

= .30 + .25 + .10 + .05 = .70

c. P(at least 100) = f(100) + f(150) + f(200)

= .25 + .10 +.05 = .40

16. a.

y f(y) yf (y)

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 2 .2 .4

4 .3 1.2

7 .4 2.8

8 .1 .8

1.0 5.2

E(y) =  = 5.2

b.

y y–μ (y – μ)2 f(y) (y – μ)2 f(y)

2 –3.20 10.24 .20 2.048

4 –1.20 1.44 .30 .432

7 1.80 3.24 .40 1.296

8 2.80 7.84 .10 .784

4.560

Var ( y )  4.56
  4.56  2.14

18. a/b/.

x f(x) xf (x) x–μ (x – μ)2 (x – μ)2 f(x)

0 .2188 .0000 –1.1825 1.3982 .3060

1 .5484 .5484 –.1825 .0333 .0183

2 .1241 .2483 .8175 .6684 .0830

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 3 .0489 .1466 1.8175 3.3035 .1614

4 .0598 .2393 2.8175 7.9386 .4749

Total 1.0000 1.1825 1.0435

 

E(x) Var(x)

c/d.

y f(y) yf (y) y–μ (y – μ)2 (y – μ)2 f(y)

0 .2497 .0000 –1.2180 1.4835 .3704

1 .4816 .4816 –.2180 .0475 .0229

2 .1401 .2801 .7820 .6115 .0856

3 .0583 .1749 1.7820 3.1755 .1851

4 .0703 .2814 2.7820 7.7395 .5444

Total 1.0000 1.2180 1.2085

 

E(y) Var(y)

e. The expected number of times that owner-occupied units have a water supply

stoppage lasting six or more hours in the past three months is 1.1825, slightly less

than the expected value of 1.2180 for renter-occupied units. And the variability is

somewhat less for owner-occupied units (1.0435) as compared to renter-occupied

units (1.2085).

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20. a.

x f(x) xf (x)

0 .85 0

500 .04 20

1000 .04 40

3000 .03 90

5000 .02 100

8000 .01 80

10000 .01 100

Total 1.00 430

The expected value of the insurance claim is $430. If the company charges $430 for this

type of collision coverage, it would break even.

b. From the point of view of the policyholder, the expected gain is as follows:

Expected gain = Expected claim payout – Cost of insurance coverage

= $430 – $520 = –$90

The policyholder is concerned that an accident will result in a big repair bill if there is

no insurance coverage. So even though the policyholder has an expected annual loss of

$90, the insurance is protecting against a large loss.

22. a. E(x) = Σ x f(x) = 300 (.20) + 400 (.30) + 500 (.35) + 600 (.15) = 445

The monthly order quantity should be 445 units.

b. Cost: 445 @ $50 = $22,250

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 Revenue: 300 @ $70 = 21,000

$1,250 loss

24. a. Medium E(x) = Σx f(x)

= 50 (.20) + 150 (.50) + 200 (.30) = 145

Large: E(x) = Σx f(x)

= 0 (.20) + 100 (.50) + 300 (.30) = 140

Medium preferred.

b. Medium

x f(x) x–μ (x – μ)2 (x – μ)2 f(x)

50 .20 –95 9,025 1,805.0

150 .50 5 25 12.5

200 .30 55 3,025 907.5

2 = 2,725.0

Large

y f(y) y–μ (y – μ)2 (y – μ)2 f(y)

0 .20 –140 19,600 3,920

100 .50 –40 1,600 800

300 .30 160 25,600 7,680

2 = 12,400

Medium is preferred because of less variance.

26. a. The standard deviation for these two stocks is the square root of the variance.

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  x  Var ( x)  25  5%   Var ( y)  1  1%
y

Investments in stock 1 would be considered riskier than investments in stock 2 because

the standard deviation is higher. Note that if the return for stock 1 falls 8.45/5 = 1.69 or

more standard deviation below its expected value, an investor in that stock will

experience a loss. The return for stock 2 would have to fall 3.2 standard deviations

below its expected value before an investor in that stock would experience a loss.

b. Because x represents the percent return for investing in stock1, the expected return for

investing $100 in stock 1 is $8.45 and the standard deviation is $5.00. So to get the

expected return and standard deviation for a $500 investment, we just multiply by 5.

Expected return ($500 investment) = 5($8.45) = $42.25

Standard deviation ($500 investment) = 5($5.00) = $25.00

c. Because x represents the percent return for investing in stock 1 and y represents the

percent return for investing in stock 2, we want to compute the expected value and

variance for .5x + .5y.

E(.5x + .5y) = .5E(x) + .5E(y) = .5(8.45) + .5(3.2) = 4.225 + 1.6 = 5.825

Var (.5 x  .5 y )  .52 Var ( x)  .52 Var ( y )  2(.5)(.5) xy

 (.5) 2 (25)  (.5)2 (1)  2(.5)(.5)(3)

 6.25  .25  1.50  5

 .5 x.5 y  5  2.236

d. Because x represents the percent return for investing in stock 1 and y represents the

percent return for investing in stock 2, we want to compute the expected value and

variance for .7x + .3y.

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 E(.7x + .3y) = .7E(x) + .3E(y) = .7(8.45) + .3(3.2) =5.915 + .96 = 6.875

Var (.7 x  .3 y )  .7 2Var ( x)  .32 Var ( y )  2(.7)(.3) xy

 .7 2 (25)  .32 (1)  2(.7)(.3)( 3)

 12.25  .09  1.26  11.08

.7 x.3 y  11.08  3.329

e. The standard deviations of x and y were computed in part a. The correlation

coefficient is given by

 xy 3
 xy     .6
 x y (5)(1)

There is a fairly strong negative relationship between the variables.

28. a. Marginal distribution of Direct Labor Cost

y f(y) y f(y) y – E(y) (y – E(y))2 (y – E(y))2 f(y)

43 .3 12.9 –2.3 5.29 1.587

45 .4 18 –.3 .09 .036

48 .3 14.4 2.7 7.29 2.187

45.3 Var(y) = 3.81

E(y) = 45.3 y = 1.95

b. Marginal distribution of Parts Cost

x f(x) xf(x) x – E(x) (x–E(x))2 (x–E(x))2f(x)

85 .45 38.25 –5.5 30.25 13.6125

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 95 .55 52.25 4.5 20.25 11.1375

90.5 Var(x)= 24.75

E(x) = 90.5 x= 4.97

c. Let z = x + y represent total manufacturing cost (direct labor + parts).

z f(z)

128 .05

130 .20

133 .20

138 .25

140 .20

143 .10

1.00

d. The computation of the expected value, variance, and standard deviation of total

manufacturing cost is shown as follows.

z f(z) zf (z) z – E(z) (z – E(z))2 (z – E(z))2 f(z)

128 .05 6.4 –7.8 60.84 3.042

130 .20 26 –5.8 33.64 6.728

133 .20 26.6 –2.8 7.84 1.568

138 .25 34.5 2.2 4.84 1.21

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 140 .20 28 4.2 17.64 3.528

143 .10 14.3 7.2 51.84 5.184

135.8 Var(z)= 21.26

E(z) = 135.8 z = 4.61

e. To determine if x = parts cost and y = direct labor cost are independent, we need to

compute the covariance  xy .

 xy  (Var( x  y )  Var ( x ) - Var ( y )) / 2  (21.26 - 24.75 - 3.81) / 2  -3.65

Because the covariance is not equal to zero, we can conclude that direct labor cost is not

independent of parts cost. Indeed, they are negatively correlated. When parts cost goes

up, direct labor cost goes down. Maybe the parts costing $95 come from a different

manufacturer and are higher quality. Working with higher quality parts may reduce

labor costs.

f. The expected manufacturing cost for 1500 printers is

E (1500 z )  1500 E ( z )  1500(135.8)  203,700

The total manufacturing costs of $198,350 are less than we would have expected.

Perhaps as more printers were manufactured there was a learning curve and direct labor

costs went down.

30. a. Let x = percentage return for S&P 500

y = percentage return for Core Bond fund

z = percentage return for REITs

The formula for computing the correlation coefficient is given by

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  xy
 xy 
 x y

In this case, we know the correlation coefficients and the three standard deviations, so

we want to rearrange the correlation coefficient formula to find the covariances.

S&P 500 and REITs:  xz   xz x z  (.74)(19.45)(23.17)  333.486

Core Bonds and REITS:  yz   yz y z  ( .04)(2.13)(23.17)  1.974

b. Letting r = portfolio percentage return, we have r = .5x + .5y. The expected return for

a portfolio with 50% invested in the S&P 500 and 50% invested in REITs is

E (r )  .5 E ( x )  .5 E ( z )  (.5)5.04%  (.5)13.07%  9.055%

We are given  x and 𝜎 , so Var ( x )  19.452  378.3025 and Var ( z )  23.17 2  536.8489 . We can now

Var (.5x  .5z )  .52Var ( x)  .52Var ( z )  2(.5)(.5)( xz )

=.25(378.3025)+.25(536.8489)+.5(333.486)

=395.53
compute

Then 𝜎 = √395.53 = 19.89

So, the expected return for our portfolio is 9.055%, and the standard deviation is

19.89%.

c. Letting r = portfolio percentage return, we have r = .5y + .5z. The expected return for

a portfolio with 50% invested in Core Bonds and 50% invested in REITs is

E (r )  .5 E ( y )  .5 E ( z )  (.5)5.78%  (.5)13.07%  9.425%

We are given 𝜎 and𝜎 , so Var ( y )  2.132  4.5369 and Var ( z )  23.17 2  536.8489 . We can

now compute

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 𝑉𝑎𝑟(. 5𝑦 + .5𝑧) =. 5 𝑉𝑎𝑟(𝑦) +. 5 𝑉𝑎𝑟(𝑧) = 2(. 5). 5)(𝜎 )

= .25(4.5369) + .25(536.8489) + .5(−1.974)

= 134.3595

Then 𝜎 = √134.3595 = 11.59

So, the expected return for our portfolio is 9.425%, and the standard deviation is

11.59%.

d. Letting r = portfolio percentage return, we have r = .8y + .2z. The expected return for

a portfolio with 80% invested in Core Bonds and 20% invested in REITs is

E (r )  .8E ( y )  .2 E ( z )  (.8)5.78%  (.2)13.07%  7.238%

From part c, we have Var ( y )  4.5369 and Var ( z )  536.8489 . We can now compute

𝑉𝑎𝑟(. 8𝑦 + .2𝑧) =. 8 𝑉𝑎𝑟(𝑦) +. 2 𝑉𝑎𝑟(𝑧) + 2(. 8)(. 2) 𝜎

= .64(4.5369) + .04(536.8489) + .32(−1.974)

= 23.7459

Then 𝜎 = √23.7459 = 4.87

So, the expected return for our portfolio is 7.238%, and the standard deviation is

4.87%.

e. The expected returns and standard deviations for the three portfolios are summarized

as follow.

Portfolio Expected Return (%) Standard Deviation

50% S&P 500 & 50% REITs 9.055 19.89

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 50% Core Bonds & 50% REITs 9.425 11.63

80% Core Bonds & 20% REITs 7.238 4.94

The portfolio from part c involving 50% Core Bonds and 50% REITS has the highest

return. Using the standard deviation as a measure of risk, it also has less risk than the

portfolio from part b involving 50% invested in an S&P 500 index fund and 50%

invested in REITs. So the portfolio from part b would not be recommended for either

type of investor.

The portfolio from part d involving 80% in Core Bonds and 20% in REITs has

the lowest standard deviation and thus lesser risk than the portfolio in part c. We would

recommend the portfolio consisting of 50% Core Bonds and 50% REITs for the

aggressive investor because of its higher return and moderate amount of risk.

We would recommend the portfolio consisting of 80% Core Bonds and 20%

REITS to the conservative investor because of its low risk and moderate return.

32. a. f(0) = .3487

b. f(2) = .1937

c. P(x ≤ 2) = f(0) + f(1) + f(2) = .3487 + .3874 + .1937 = .9298

d. P(x ≥ 1) = 1 – f(0) = 1 – .3487 = .6513

e. E(x) = n p = 10 (.1) = 1

f. Var(x) = n p (1 – p) = 10 (.1) (.9) = .9

= .9 = .95

34. a. Yes. Because the teenagers are selected randomly, p is the same from trial to trial and

the trials are independent. The two outcomes per trial are use Pandora Media Inc.’s

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 online radio service or do not use Pandora Media Inc.’s online radio service.

Binomial n = 10 and p = .35

10!
f ( x)  (.35) x (1  .35)10 x
x !(10  x)!

10!
f (0)  (.35)0 (.65)100  .0135
b. 0!(10  0)!

10!
f (4)  (.35)4 (.65)104  .2377
c. 4!(10  4)!

d. Probability (x > 2) = 1 – f(0) – f(1)

From part b, f(0) = .0135

10!
f (1)  (.35)1 (.65)101  .0725
1!(10  1)!

Probability (x > 2) = 1 – f(0) – f(1) = 1 – (.0135+ .0725) = .9140

36. a. Probability of a defective part being produced must be .03 for each part selected; parts

must be selected independently.

b. Let: D = defective

G = not defective
Experimental Number
1st part 2nd part Outcome Defective
D (D, D) 2

D G
(D, G) 1 .

G
D (G, D) 1

G
(G, G) 0

c. Two outcomes result in exactly one defect.

d. P(no defects) = (.97) (.97) = .9409

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 P (1 defect) = 2 (.03) (.97) = .0582

P (2 defects) = (.03) (.03) = .0009

38. a. .90

b. P(at least 1) = f(1) + f(2)

2!
f (1)  (.9)1 (.1)1
1! 1!

 2(.9)(.1)  .18

2!
f (2)  (.9) 2 (.1) 0
2! 0!

 1(.81)(1)  .81

P(at least 1) = .18 + .81 = .99

Alternatively

P(at least 1) = 1 – f(0)

2!
f (0)  (.9)0 (.1) 2  .01
0! 2!

Therefore, P(at least 1) = 1 – .01 = .99.

c. P(at least 1) = 1 – f(0)

3!
f (0)  (.9)0 (.1)3  .001
0! 3!

Therefore, P(at least 1) = 1 – .001 = .999.

d. Yes; P(at least 1) becomes very close to 1 with multiple systems, and the inability to

detect an attack would be catastrophic.

40. a. Yes. Because the 18- to 34-year-olds living with their parents are selected randomly, p

is the same from trial to trial and the trials are independent. The two outcomes per trial

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 either do or do not contribute to household expenses.

Binomial n = 15 and p = .75

15!
f ( x)  (.75) x (1  .75)15 x
x !(15  x)!

b. The probability that none of the 15 contribute to household expenses is

15!
f (0)  (.75)0 (1  .75)150  .0000
0!(15  0)!

Obtaining a sample result that shows that none of the 15 contributed to household

expenses is so unlikely you would have to question whether the 75% value reported by

the Pew Research Center is accurate.

c. Probability of at least 10 = f(10) + f(11) + f(12) + f(13) + f(14) + f(15).

Using binomial tables:

Probability = .1651 + .2252 + .2252 + .1559 + .0668 + .0134 = .8516

20!
f (4)  (.30) 4 (.70)204  .1304
42. a. 4!(20  4)!

b. Probability (x > 2) = 1 – f(0) – f(1)

20!
f (0)  (.30)0 (.70)200  .0008
0!(20  0)!

20!
f (1)  (.30)1 (.70)201  .0068
1!(20  1)!

Probability (x > 2) = 1 – f(0) – f(1) = 1 – (.0008+ .0068) = .9924

c. E(x) = n p = 20(.30) = 6

d. Var(x) = n p (1 – p) = 20(.30)(1 ̶ .30) = 4.2

= 4.2 = 2.0499

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 3 x e 3
f ( x) 
44. a. x!

32 e 3 9(.0498)
f (2)    .2241
b. 2! 2

31 e 3
f (1)   3(.0498)  .1494
c. 1!

d. P(x ≥ 2) = 1 – f(0) – f(1) = 1 – .0498 – .1494 = .8008

46. a. μ = 48 (5/60) = 4

3 -4
4 e (64) (.0183)
f (3) = = = .1952
3! 6

b. μ = 48 (15 / 60) = 12

10 -12
f (10) = 12 e = .1048
10 !

c. μ = 48 (5 / 60) = 4. I expect four callers to be waiting after five minutes.

0 -4
f (0) = 4 e = .0183
0!

The probability none will be waiting after five minutes is .0183.

d. μ = 48 (3 / 60) = 2.4

0 -2.4
f (0) = 2.4 e = .0907
0!

The probability of no interruptions in three minutes is .0907.

48. a. For a 15-minute period, the mean is 14.4/4 = 3.6.

3.60 e3.6
f (0)   e3.6  .0273
0!

b. Probability = 1 – f(0) = 1 – .2073 = .9727

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 c. Probability = 1 – [f(0) + f(1) + f(2) + f(3)]

= 1 – [.0273+ .0984 + .1771 + .2125] = .4847

Note: The value of f(0) was computed in part a; a similar procedure was used to

compute the probabilities for f(1), f(2), and f(3).

50. a. μ = 18/30 = .6 per day during June.

.60 e .6
f (0)   .5488
b. 0!

.61 e.6
f (1)   .3293
c. 1!

d. P(More than 1) = 1 – f(0) – f(1) = 1 ̶ .5488 ̶ .3293 = .1219

 3   10  3   3!   7! 
  
1 4  1   1!2!   3!4!  (3)(35)
f (1)        .50
 10  10! 210
  4!6!
52. a. 4

 3   10  3 
  
2 2  2  (3)(1)
f (2)       .067
 10  45
 
b. 2

 3   10  3 
  
0 2  0  (1)(21)
f (0)       .4667
 10  45
 
c. 2

 3   10  3 
  
2 4  2  (3)(21)
f (2)       .30
 10  210
 
d. 4

e. Note x = 4 is greater than r = 3. It is not possible to have x = 4 successes when there

are only three successes in the population. Thus, f(4) = 0. In this exercise, n is greater

than r. Thus, the number of successes x can only take on values up to and including r

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 = 3. Thus, x = 0, 1, 2, 3.

54. Hypergeometric distribution with N = 10 and r = 7

7 3
  
2 1 (21)(3)
f (2)      
 10  120
 
 3
a. = .5250

b. Compute the probability that three prefer shopping online.

73
  
3 0 (35)(1)
f (3)        .2917
 10  120
 
3

P(majority prefer shopping online) = f(2) + f(3) = .5250 + .2917 = .8167

56. N = 60, n = 10

a. r = 20 x = 0

 20   40   40! 
    (1)  
 0   10   10!30!   40!   10!50! 
f (0)     
 60  60!  10!30!   60! 
  10!50!
 10 

40 39  38  37  36 35 34  33 32  31

=  .0112
60 59  58 57  56 55 54  53 52  51

b. r = 20 x = 1

 20   40 
  
1 9  40!   10!50! 
f (1)       20   
 60   9!31!   60! 
 
 10   .0725

c. 1 – f(0) – f(1) = 1 – .0112 – .0725 = .9163

d. Same as the probability one will be from Hawaii; .0725.

58. Hypergeometric with N = 10 and r = 3.

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 a. n = 3, x = 0

 3   7   3!   7! 
   
0 3 0!3!   3!4!  (1)(35)
f (0)          .2917
 10  10! 120
  3!7!
3

This is the probability there will be no banks with increased lending in the study.

b. n = 3, x = 3

 3   7   3!   7! 
   
3 0 3!0!   0!7!  (1)(1)
f (3)          .0083
 10  10! 120
  3!7!
3

This is the probability all three banks with increased lending will be in the study. This

has a very low probability of happening.

c. n = 3, x = 1

3 7   3!   7! 
    1!2!   2!5!  (3)(21)
1 2
f (1)           .5250
 10  10! 120
  3!7!
3

n = 3, x = 2

 3   7   3!   7! 
   
2 1 2!1!   1!6!  (3)(7)
f (2)          .1750
 10  10! 120
  3!7!
3

x f(x)

0 0.2917

1 0.5250

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 2 0.1750

3 0.0083

Total 1.0000

f(1) = .5250 has the highest probability showing there is more than a .50 chance there

will be exactly one bank that had increased lending in the study.

d. P(x > 1) = 1  f (0)  1  .2917  .7083

There is a reasonably high probability of .7083 that at least one bank with increased

lending will be in the study.

 r   3 
E ( x)  n    3    .90
e. N   10 

 r  r  N  n   3  3   10  3 
 2  n   1    3   1      .49
 N  N  N  1   10   10   10  1 

   2  .49  .70

60. a.

x f(x)

1 .150

2 .050

3 .075

4 .050

5 .125

6 .050

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 7 .100

8 .125

9 .125

10 .150

Total 1.000

b. Probability of outstanding service is .125 + .150 = .275

c.

x f(x) xf (x) x–μ (x – μ)2 (x – μ)2 f(x)

1 .150 .150 –4.925 24.2556 3.6383

2 .050 .100 –3.925 15.4056 .7703

3 .075 .225 –2.925 8.5556 .6417

4 .050 .200 –1.925 3.7056 .1853

5 .125 .625 –.925 .8556 .1070

6 .050 .300 .075 .0056 .0003

7 .100 .700 1.075 1.1556 .1156

8 .125 1.000 2.075 4.3056 .5382

9 .125 1.125 3.075 9.4556 1.1820

10 .150 1.500 4.075 16.6056 2.4908

Total 1.000 5.925 9.6694

E(x) = 5.925 and Var(x) = 9.6694

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 d. The probability of a new car dealership receiving an outstanding wait-time rating is 2/7

= .2857. For the remaining 40 – 7 = 33 service providers, nine received an

outstanding rating; this corresponds to a probability of 9/33 = .2727. For these

results, there does not appear to be much difference between the probability that a

new car dealership is rated outstanding compared to the same probability for other

types of service providers.

62. a. There are 600 observations involving the two variables. Dividing the entries in the table

shown by 600 and summing the rows and columns we obtain the following.

Reading Material (y)

Snacks (x) 0 1 2 Total

0 .0 .1 .03 .13

1 .4 .15 .05 .6

2 .2 .05 .02 .27

Total .6 .3 .1 1

The entries in the body of the table are the bivariate or joint probabilities for x and y.

The entries in the right most (Total) column are the marginal probabilities for x, and the

entries in the bottom (Total) row are the marginal probabilities for y.

The probability of a customer purchasing one item of reading materials and two

snack items is given by f( x = 2, y = 1) =.05.

The probability of a customer purchasing one snack item only is given by f(x =

1, y = 0) = .40.

The probability f(x = 0, y = 0) = 0 because the point of sale terminal is only used

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 when someone makes a purchase.

b. The marginal probability distribution of x along with the calculation of the expected

value and variance is shown as follows.

x f(x) xf (x) x – E(x) (x – E(x))2 (x – E(x))2 f(x)

0 0.13 0 –1.14 1.2996 0.1689

1 0.60 0.6 –0.14 0.0196 0.0118

2 0.27 0.54 0.86 0.7396 0.1997

1.14 0.3804

E(x) Var(x)

We see that E(x) = 1.14 snack items and Var(x) = .3804.

c. The marginal probability distribution of y along with the calculation of the expected

value and variance is shown as follows.

y f(y) yf (y) y – E(y) (y – E(y))2 (y – E(y))2 f(y)

0 0.60 0 –0.5 0.25 0.15

1 0.30 0.3 0.5 0.25 0.075

2 0.10 0.2 1.5 2.25 0.225

0.5 0.45

E(y) Var(y)

We see that E(y) = .50 reading materials and Var(y) = .45.

d. The probability distribution of t = x + y is shown as follows along with the calculation

of its expected value and variance.

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 t f(t) tf (t) T – E(t) (t – E(t))2 (t – E(t))2 f(t)

1 0.50 0.5 –0.64 0.4096 0.2048

2 0.38 0.76 0.36 0.1296 0.0492

3 0.10 0.3 1.36 1.8496 0.1850

4 0.02 0.08 2.36 5.5696 0.1114

1.64 0.5504

E(t) Var(t)

We see that the expected number of items purchased is E(t) = 1.64, and the variance in

the number of purchases is Var(t) = .5504.

e. From part (b), Var(x) = .3804. From part (c), Var(y) = .45. And from part (d), Var(x +

y) = Var(t) = .5504. Therefore,

 xy  [Var ( x  y )  Var ( x)  Var ( y)] / 2

 (.5504  .3804  .4500) / 2

 .14

To compute the correlation coefficient, we must first obtain the standard deviation of x

and y.

 x  Var ( x )  .3804  .6168

 y  Var ( y )  .45  .6708

So the correlation coefficient is given by

 xy  .14
 xy     .3384
 x y (.6168)(.6708)

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 The relationship between the number of reading materials purchased and the number of

snacks purchased is negative. This means that the more reading materials purchased the

fewer snack items purchased and vice versa.

64. a. n = 20 and x = 3

 20 
f (3)    (.53)3 (.47)17
 3 = .0005

b. n = 20 and x = 0

P (x  5)  f (0)  f (1)  f (2)  f (3)  f (4)  f (5)

= .4952

c. E(x) = n p = 2000(.49) = 980

The expected number who would find it very hard to give up their smartphone is 980.

d. E(x) = n p = 2000(.36) = 720

The expected number who would find it extremely hard to give up their e-mail is 720.

2 = np (1 – p) = 2000(.36)(.64) = 460.8

= 46 0 .8 = 21.4663

66. Because the shipment is large, we can assume that the probabilities do not change from

trial to trial and use the binomial probability distribution.

a. n = 5

5
f (0)    (0.01) 0 (0.99) 5  .9510
0

5
f (1)    (0.01)1 (0.99) 4  .0480
b. 1

c. 1 – f(0) = 1 – .9510 = .0490

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 d. No, the probability of finding one or more items in the sample defective when only

1% of the items in the population are defective is small (only .0490). I would consider

it likely that more than 1% of the items are defective.

68. a. E(x) = 200(.235) = 47

b.   np(1 p)  200(.235)(.765)  5.9962

c. For this situation, p = .765 and (1–p) = .235, but the answer is the same as in part b.

For a binomial probability distribution, the variance for the number of successes is the

same as the variance for the number of failures. Of course, this also holds true for the

standard deviation.

70. μ = 1.5

P(3 or more breakdowns) = 1 – [ f(0) + f(1) + f(2) ]

1 – [ f(0) + f(1) + f(2) ]

= 1 – [ .2231 + .3347 + .2510]

= 1 – .8088 = .1912

33 e 3
72. a. f (3)   .2240
3!

b. f(3) + f(4) + · · · = 1 – [ f(0) + f(1) + f(2) ]

0 -3
f (0) = 3 e
-3
= e = .0498
0!

Similarly, f(1) = .1494, f(2) = .2240

 1 – [ .0498 + .1494 + .2241 ] = .5767

74. a. Hypergeometric distribution with N = 10, n =2, and r = 7.

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  r  N  r   7   10  7   7   3 
        
f (1)   x n  x  1
  
2  1   1   1  (7)(3)
   .4667
N  10   10  45
     
n 2 2

73
  
2 0 (21)(1)
f (2)        .4667
 
10 45
 
b. 2

73
  
0 2 (1)(3)
f (0)        .0667
 10  45
 
c. 2

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Chapter 6 Solutions

2. a.

f (x)

.15

.10

.05

x
0 10 20 30 40

b. P(x < 15) = .10(5) = .50

c. P(12 ≤ x ≤ 18) = .10(6) = .60

10  20
d. E ( x )   15
2

(20  10) 2
e. Var ( x )   8.33
12

4. a.

f (x)

1.5

1.0

.5

x
0 1 2 3

b. P(.25 < x < .75) = 1 (.50) = .50

c. P(x ≤ .30) = 1 (.30) = .30

d. P(x > .60) = 1 (.40) = .40

ì 1
ï for a  x  b
6. a. For a uniform probability density function f (x)  í b  a
ï 0 elsewhere
î

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 1
Thus, = .00625.
b a

Solving for b a , we have b a = 1/.00625 = 160.

In a uniform probability distribution, ½ of this interval is below the mean and ½

of this interval is above the mean. Thus,

a = 136 – ½(160) = 56 and b = 136 + ½(160) = 216

b. P(100  x  200)  (200  100)(.00625)  .6250

c. P(x ³ 150)  (216 150)(.00625)  .4125

d. P(x  80)  (80  56)(.00625)  .1500

EP ($15,000) = 1 ($1000) + 0 (0) = $1,000

8.

 = 10

70 80 90 100 110 120 130

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10.

-3 -2 -1 0 +1 +2 +3

a. P(z ≤ 1.5) = .9332

b. P(z ≤ 1.0) = .8413

c. P(1 ≤ z ≤ 1.5) = P(z ≤ 1.5) – P(z < 1) = .9932 – .8413 = .0919

d. P(0 < z < 2.5) = P(z < 2.5) – P(z ≤ 0) = .9938 – .5000 = .4938

12. a. P(0 ≤ z ≤ .83) = .7967 – .5000 = .2967

b. P(–1.57 ≤ z ≤ 0) = .5000 – .0582 = .4418

c. P(z > .44) = 1 – .6700 = .3300

d. P(z ≥ –.23) = 1 – .4090 = .5910

e. P(z < 1.20) = .8849

f. P(z ≤ –.71) = .2389

14. a. The z-value corresponding to a cumulative probability of .9750 is z = 1.96.

b. The z-value here also corresponds to a cumulative probability of .9750: z = 1.96.

c. The z-value corresponding to a cumulative probability of .7291 is z = .61.

d. Area to the left of z is 1 – .1314 = .8686. So z = 1.12.

e. The z-value corresponding to a cumulative probability of .6700 is z = .44.

f. The area to the left of z is .6700. So z = .44.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
16. a. The area to the left of z is 1 – .0100 = .9900. The z-value in the table with a

cumulative probability closest to .9900 is z = 2.33.

b. The area to the left of z is .9750. So z = 1.96.

c. The area to the left of z is .9500. Because .9500 is exactly halfway between .9495 (z =

1.64) and .9505(z = 1.65), we select z = 1.645. However, z = 1.64 or z = 1.65 are also

acceptable answers.

d. The area to the left of z is .9000. So z = 1.28 is the closest z-value.

18.  = 14.4 and  = 4.4

20  14.4
a. At x = 20, z   1.27
4.4

P(z  1.27) = .8980

P(x ≤ 20) = 1 – .8980 = .1020

10  14.4
b. At x = 10, z   1.00
4.4

P(z ≤ –1.00) = .1587

So,

P(x  10) = .1587

c. A z-value of 1.28 cuts off an area of approximately 10% in the upper tail.

x = 14.4 + 4.4(1.28) = 20.03

A return of 20.03% or higher will put a domestic stock fund in the top 10%.

20. a. United States:   3.73   .25

At x = 3.50,

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 3.5  3.73
z  .92
.25

P(z < –.92) = .1788

So, P(x < 3.50) = .1788

b. Russia:   3.40   .20

At x = 3.50,

3.50  3.40
z  .50
.20

P(z < .50) = .6915

So, P(x < 3.50) = .6915

That is, 69.15% of the gas stations in Russia charge less than $3.50 per gallon.

c. Use mean and standard deviation for Russia.

At x = 3.73,

3.73  3.40
z  1.65
.20

P ( z  1.65)  1  P ( z  1.65)  1  .9505  .0495

P ( x  3.73)  .0495

The probability that a randomly selected gas station in Russia charges more than the

mean price in the United States is .0495. Stated another way, only 4.95% of the gas

stations in Russia charge more than the average price in the United States.

22. Use  = 8.35 and  = 2.5.

a. We want to find P(5 ≤ x ≤10).

At x = 10,

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 x 10  8.35
z   .66
 2.5

At x = 5,

x 5  8.35
z   1.34
 2.5

P(5 ≤ x ≤ 10) = P(–1.34 ≤ z ≤ .66) = P(z ≤ .66) – P(z ≤ –1.34)

= .7454 – .0901

= .6553

The probability of a household viewing television between 5 and 10 hours a day is

.6553.

b. Find the z-value that cuts off an area of .03 in the upper tail. Using a cumulative

probability of 1 – .03 = .97, z = 1.88 provides an area of .03 in the upper tail of the

normal distribution.

x =  + z = 8.35 + 1.88(2.5) = 13.05 hours

A household must view slightly more than 13 hours of television a day to be in the top

3% of television viewing households.

x 3  8.35
c. At x = 3, z    2.14
 2.5

P(x>3) = 1 – P(z< –2.14) = 1 – .0162 = .9838

The probability a household views more than three hours of television a day is .9838.

24.  = 749 and  = 225

x 400  749

a. z    1.55
 225

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 P ( x  400) = P ( z   1.55) = .0606

The probability that expenses will be less than $400 is .0606.

x 800  749

b. z    .23
 225

P ( x ³ 800) = P ( z ³ .23) = 1  P ( z  .23) = 1 – .5910 = .4090

The probability that expenses will be $800 or more is .4090.

x 1000  749

c. For x = 1000, z    1.12
 225

x 500  749

For x = 500, z    1.11
 225

P(500  x  1000) = P (z  1.12)  P (z  1.11) = .8686  .1335 = .7351

The probability that expenses will be between $500 and $1,000 is .7351.

d. The upper 5%, or area = 1 .05  .95 occurs for z  1.645

x    z = 749 + 1.645(225) = $1119

The 5% most expensive travel plans will be $1,119 or more.

26. a. μ = np = 100(.20) = 20

2 = np (1 – p) = 100(.20) (.80) = 16

  16  4

b. Yes because np = 20 and n (1 – p) = 80

c. P(23.5 ≤ x ≤ 24.5)

24.5  20
z  1.13
4

P (z ≤ 1.13) = .8708

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 23.5  20
z  .88
4

P (z ≤ .88) = .8106

P(23.5 ≤ x ≤ 24.5) = .8708 – .8106 = .0602

d. P(17.5 ≤ x ≤ 22.5)

22.5  20
z  .63 P (z ≤ .63) = .7357
4

17.5  20
z  .63 P (z ≤ –.63) = .2643
4

P(17.5 ≤ x ≤ 22.5) = .7357 – .2643 = .4714

e. P(x ≤ 15.5)

15.5  20
z  1.13
4

P(x ≤ 15.5) = P (z ≤ –1.13) = .1292

28. a. μ = np = (250)(.20) = 50

b. 2 = np(1–p) = 250(.20)(1–.20) = 40

  40  6.3246

Allowing for the continuity correction factor, P ( x  40)  P ( x  39.5)

At x = 39.5,

x 39.5  50
z   1.66
 6.3246

P ( x  39.5)  .0485

c. Allowing for the continuity correction factor, P (55  x  60)  P (54.5  x  60.5)

At x = 54.5,

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 x 54.5  50
z   .71
 6.3246

At x = 60.5,

x 60.5  50
z   1.66
 6.3246

P (54.5  x  60.5)  .9515  .7611  .1904

d. Allowing for the continuity correction factor, P ( x ³ 70)  P ( x ³ 69.5) .

At x = 69.5,

x 69.5  50
z   3.08
 6.3246

P ( x ³ 69.5)  1  .9990  .0010

30. a. μ = np = 800(.18) = 144

b. μ = np = 600(.18) = 108

  np(1 p)  (600)(.18)(.82)  9.4106

For x < 100, use the continuity correction to find P(x < 99.5)

At x = 99.5,

x 99.5  108

z   .90 P (z < –.90) = .1841
 9.4106

P(x < 99.5) = .1841

The probability that fewer than 100 individuals will be less than 18 years of age is

.1841.

c.   np(1 p)  (800)(.29)(.71) 12.8343

For x = 200 or more, use the continuity correction to find P(x ≥ 199.5)

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 At x = 199.5,

x 199.5  232

z   2.53 P (z ≥ –2.53) = 1 – .0057 = .9943
 12.8343

P(x ≥ 199.5) = .9943

The probability that 200 or more individuals will be more than 59 is .9943.

32. a. P(x ≤ 6) = 1 – e–6/8 = 1 – .4724 = .5276

b. P(x ≤ 4) = 1 – e–4/8 = 1 – .6065 = .3935

c. P(x ≥ 6) = 1 – P(x ≤ 6) = 1 – .5276 = .4724

d. P(4 ≤ x ≤ 6) = P(x ≤ 6) – P(x ≤ 4) = .5276 – .3935 = .1341

1  x/20
34. a. With μ = f ( x)  e
20

x/ 15/20
b. P(x ≤ 15) = 1  e  1  e = .5276

c. P( x > 20) = 1 – P(x ≤ 20)

20/ 20 1
= 1 – (1 – e ) = e  .3679

1
d. With μ = f ( x)  e x/7
7

P ( x  5)  1  e  x /   1  e  5/7  .5105

1 1 x/2
36. a. f ( x)  e x /   e for x > 0
 2

P(x < x0) = 1  e  x0 / 

1/2 .5
P(x < 1) = 1 e = 1  e  1 – .6065 = .3935

b. P(x < 2) = 1 e2/2 = 1  e  1.0  1 – .3679 = .6321

P (1  x  2)  P ( x  2)  P ( x  1) = .6321 – .3935 = .2386

c. For this customer, the cable service repair would have to take longer than four hours.

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 P ( x  4)  1  P ( x  4) 4 / 2
)  e  2.0  .1353
= 1  (1  e

38. a. Because the number of calls per hour follows a Poisson distribution, the time between

calls follows an exponential distribution. So, for a mean of 1.6 calls per hour, the

mean time between calls is

60 minutes/hour
  37.5 minutes per call
1.6 calls/hour

b. The exponential probability density function is f (x) =  1   x/37.5 for , where x

x³0
 37.5  e

is the minutes between 911 calls.

c. Using time in minutes,

 
P x  60  1 e60/37.5  1 .2019  .7981

d. P(x ³ 30)  1 P  x  30  1 (1 e30/37.5 )  1 .5507  .4493

e. P  5  x  20  (1 e20/37.5 )  (1 e5/37.5 )  .4134  .1248  .2886

40. a. Find the z-value that cuts off an area of .10 in the lower tail. From the standard

normal table z ≈ –1.28. Solve for x:

x  19, 000
z  1.28 
2100

x = 19,000 – 1.28(2100) = 16,312

Ten percent of athletic scholarships are valued at $16,312 or less.

x 22, 000  19, 000

b. z    1.43
 2100

P(x ≥ 22,000) = 1 – P(z ≤ 1.43) = 1 – .9236 = .0764

That is, 7.64% of athletic scholarships are valued at $22,000 or more.

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 c. Find the z-value that cuts off an area of .03 in the upper tail: z = 1.88. Solve for x,

x  19, 000
z  1.88 
2100

x = 19,000 + 1.88(2100) = 22,948

In other words, 3% of athletic scholarships are valued at $22,948 or more.

42.  = 658

a. z = –1.88 cuts off .03 in the lower tail

So,

610  658
z  1.88 


610  658
  25.5319
1.88

x 700  658

b. At 700, z    1.65
 25.5319

At 600,

x 600  659

z   2.31
 25.5319

P(600 < x < 700) = P(–2.31 < z < 1.65) = .9505 – .0104 = .9401

c. z = 1.88 cuts off approximately .03 in the upper tail

x = 658 + 1.88(25.5319) = 706

On the busiest 3% of days 706 or more people show up at the pawnshop.

44. a. At x = 200,

200  150
z 2
25

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 P(x > 200) = P(z > 2) = 1 – P(z ≤ 2) = 1 – .9772 = .0228

b. Expected profit = Expected revenue – Expected cost

= 200 – 150 = $50

46. a. At 400,

400  450
z  .500
100

Area to left is .3085

At 500,

500  450
z  .500
100

Area to left is .6915

P(400  x  500) = .6915 – .3085 = .3830

That is, 38.3% will score between 400 and 500.

b. At 630,

630  450
z  1.80
100

In words, 96.41% do worse and 3.59% do better.

c. At 480,

480  450
z  .30
100

Area to left is .6179

That is, 38.21% are acceptable.

48.  = .6

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 At 2%

z ≈ –2.05 x = 18

x 18  
z  2.05 
 .6

μ = 18 + 2.05 (.6) = 19.23 oz.

The mean filling weight must be 19.23 oz.

50. a. μ = np = (240)(0.49) = 117.6

Expected number of wins is 117.6

Expected number of losses = 240(0.51) = 122.4

Expected payoff = 117.6(50) – 122.4(50) = (–4.8)(50) = –240

The player should expect to lose $240.

b. To lose $1000, the player must lose 20 more hands than he wins. With 240 hands in

four hours, the player must win 110 or less in order to lose $1,000. Use normal

approximation to binomial.

μ = np = (240)(0.49) = 117.6

  240(.49)(.51)  7.7444

Find P(x ≤ 110.5)

At x = 110.5,

110.5  117.6
z  .92
7.7444

P(x ≤ 110.5) = .1788

The probability he will lose $1,000 or more is .1788.

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 c. To win, the player must have 121 or more winning hands.

Find P(x ≥ 120.5)

At x = 120.5,

120.5  117.6
z  .37
7.7444

P(x ≥ 120.5) = 1 – .6443 = .3557

The probability that the player will win is .3557. The odds are clearly in the house’s

favor.

d. To lose $1,500, the player must lose 30 hands more than he wins. This means he wins

105 or fewer hands. Find P(x ≤ 105.5)

At x = 105.5

105.5  117.6
z  1.56
7.7444

P(x ≤ 105.5) =.0594

The probability the player will go broke is .0594.

52. a. Mean time between arrivals = 1/7 minutes

b. f (x) = 7e–7x

c. P(x > 1) = 1 – P(x < 1) = 1 – [1 – e–7(1)] = e–7 = .0009

d. 12 seconds is .2 minutes

P(x > .2) = 1 – P(x < .2) = 1– [1– e–7(.2)] = e–1.4 = .2466

1
54. a.  0.5 therefore μ = 2 minutes = mean time between telephone calls


b. Note: 30 seconds = .5 minutes

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 P(x ≤ .5) = 1 – e–.5/2 = 1 – .7788 = .2212

c. P(x ≤ 1) = 1 – e–1/2 = 1 – .6065 = .3935

d. P(x ≥ 5) = 1 – P(x < 5) = 1 – (1 – e–5/2) = .0821

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Chapter 7 Solutions

2. Using the last three digits of each five-digit grouping provides the random numbers:

601, 022, 448, 147, 229, 553, 147, 289, 209

Numbers greater than 350 do not apply, and the 147 can only be used once. Thus, the simple

random sample of four includes 22, 147, 229, and 289.

4. a. 5, 0, 5, 8

Vale SA, Ford, General Electric

N! 10! 3, 628, 800

   120
n !( N  n )! 3!(10  3)! (6)(5040)
b.

6. 2782, 493, 825, 1807, 289

8. Random numbers used: 13, 8, 27, 23, 25, 18

The second occurrence of the random number 13 is ignored.

Companies selected: Goldman Sachs, Coca Cola, UnitedHealth, Pfizer,

Travelers Companies Inc, and JP Morgan Chase.

10. a. Finite population. A frame could be constructed obtaining a list of licensed drivers from

the New York State driver’s license bureau.

b. Infinite population. Sampling from a process. The process is the production line

producing boxes of cereal.

c. Infinite population. Sampling from a process. The process is one of generating

arrivals to the Golden Gate Bridge.

d. Finite population. A frame could be constructed by obtaining a listing of students

enrolled in the course from the professor.

e. Infinite population. Sampling from a process. The process is one of generating orders

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 for the mail-order firm.

12. a. p = 75/150 = .50

b. p = 55/150 = .3667

14. a. Two of the 40 stocks in the sample received a five-star rating.

2
p  .05
40

b. Seventeen of the 40 stocks in the sample are rated Above Average with respect to risk.

17
p  .425
40

c. There are eight stocks in the sample that are rated one star or two stars.

8
p  .20
40

16. a. The sampled population is U. S. adults that are 50 years of age or older.

b. We would use the sample proportion for the estimate of the population proportion.

350
p  .8216
426

c. The sample proportion for this issue is .74, and the sample size is 426. The number of

respondents citing education as “very important” is (.74) 426 = 315.

d. We would use the sample proportion for the estimate of the population proportion.

354
p  .8310
426

e. The inferences in parts b and d are being made about the population of U.S. adults

who are age 50 or older. So the population of U.S. adults who are age 50 or older is

the target population. The target population is the same as the sampled population. If

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 the sampled population was restricted to members of AARP who were 50 years of

age or older, the sampled population would not be the same as the target population.

The inferences made in parts b and d would only be valid if the population of AARP

members age 50 or older was representative of the U.S. population of adults age 50

and older.

18. a. E ( x )    200

b.
 x   / n  50/ 100  5

c. Normal with E ( x) = 200 and  x = 5

d. It shows the probability distribution of all possible sample means that can be

observed with random samples of size 100. This distribution can be used to compute

the probability that x is within a specified + from μ.

20. x  / n

 x  25/ 50  3.54

 x  25/ 100  2.50

 x  25/ 150  2.04

 x  25/ 200  1.77

The standard error of the mean decreases as the sample size increases.

22. a. E( x ) = 71,800 and  x   / n  4000 / 60  516.40

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 The normal distribution for x is based on the central limit theorem.

b. For n = 120, E ( x ) remains $71,800, and the sampling distribution of x can still be

approximated by a normal distribution. However,  x is reduced to 4000 / 120 =

365.15.

c. As the sample size is increased, the standard error of the mean,  x , is reduced. This

appears logical from the point of view that larger samples should tend to provide

sample means that are closer to the population mean. Thus, the variability in the

sample mean, measured in terms of  x , should decrease as the sample size is

increased.

24. a. Normal distribution, E ( x )  17.5

 x   / n  4 / 50  .57

b. Within one week means 16.5  x  18.5.

18.5  17.5
At x = 18.5, z   1.75 P(z ≤ 1.75) = .9599
.57

At x = 16.5, z = –1.75. P(z < –1.75) = .0401

So P(16.5 ≤ x ≤ 18.5) = .9599 – .0401 = .9198

c. Within 1/2 week means 17.0 ≤ x ≤ 18.0.

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 18.0  17.5
At x = 18.0, z   .88 P(z ≤ .88) = .8106
.57

At x = 17.0, z = –.88 P(z < –.88) = .1894

P(17.0 ≤ x ≤ 18.0) = .8106 – .1894 = .6212

x  16642
z
26. a. / n

Within  200 means x – 16,642 must be between –200 and +200.

The z value for x – 16,642 = –200 is the negative of the z value for x – 16,642

= 200. So we just show the computation of z for x – 16,642 = 200.

200
n = 30 z  .46 P(–.46 ≤ z ≤ .46) = .6772 – .3228 = .3544
2400 / 30

200
n = 50 z  .59 P(–.59 ≤ z ≤ .59) = .7224 – .2776 = .4448
2400 / 50

200
n = 100 z  .83 P(–.83 ≤ z ≤ .83) = .7967 – .2033 = .5934
2400 / 100

200
n = 400 z  1.67 P(–.1.67 ≤ z ≤ .1.67) = .9525 – .0475 = .9050
2400 / 400

b. A larger sample increases the probability that the sample mean will be within a

specified distance of the population mean. In this instance, the probability of being

within +200 of μ ranges from .3544 for a sample of size 30 to .9050 for a sample of

size 400.

28. a. This is a graph of a normal distribution with E ( x ) = 22 and  x   / n  4 / 30  .7303 .

b. Within 1 inch means 21  x  23

23  22
z  1.37
.7303

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 21  22
z  1.37
.7303

P(21  x  23) = P(–1.37 ≤ z ≤ 1.37) = .9147 – .0853 = .8294

The probability the sample mean will be within 1 inch of the population mean of 22 is

.8294.

c.  x   / n  4 / 45  .5963

Within 1 inch means 41  x  43

43  42 41  42
z  1.68 z  1.68
.5963 .5963

P(41  x  43) = P(–1.68 ≤ z ≤ 1.68) = .9535 – .0465 = .9070

The probability the sample mean will be within 1 inch of the population mean of 42 is

.9070.

The probability of being within 1 inch is greater for New York in part c because

the sample size is larger.

30. a. n / N = 40 / 4000 = .01 < .05; therefore, the finite population correction factor is not

necessary.

b. With the finite population correction factor

N n  4000  40 8.2
x    129
.
N 1 n 4000  1 40

Without the finite population correction factor

 x   / n  130
.

Including the finite population correction factor provides only a slightly different value

for  x than when the correction factor is not used.

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 x 2
c. z   154
. P(z ≤ 1.54) = .9382
1.30 1.30

P(z < –1.54) = .0618

Probability = .9382 – .0618 = .8764

32. a. E( p ) = .40

p(1  p) .40(.60)
p    .0346
n 200

Within ± .03 means .37 ≤ p ≤ .43

p p .03
z   .87 P(z ≤ .87) = .8078
p .0346

P(z < –.87) = .1922

P(.37 ≤ p ≤ .43) = .8078 – .1922 = .6156

p p .05
b. z    1.44 P(z ≤ 1.44) = .9251
p .0346

P(z < –1.44) = .0749

P(.35 ≤ p ≤ .45) = .9251 – .0749 = .8502

(.30)(.70)
p   .0458
34. a. 100

Within ± .04 means .26 ≤ p ≤ .34.

p p .04
z   .87 P(z ≤ .87) = .8078
p .0458

P(z < –.87) = .1922

P(.26 ≤ p ≤ .34) = .8078 – .1922 = .6156

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 (.30)(.70)
p   .0324
b. 200

p p .04
z   1.23 P(z ≤ 1.23) = .8907
p .0324

P(z < –1.23) = .1093

P(.26 ≤ p ≤ .34) = .8907 – .1093 = .7814

(.30)(.70)
p   .0205
c. 500

p p .04
z   1.95 P(z ≤ 1.95) = .9744
p .0205

P(z < –1.95) = .0256

P(.26 ≤ p ≤ .34) = .9744 – .0256 = .9488

(.30)(.70)
p   .0145
1000 p p .04
d. z   2.76 P(z ≤ 2.76) = .9971
p .0145

P(z < –2.76) = .0029

P(.26 ≤ p ≤ .34) = .9971 – .0029 = .9942

e. With a larger sample, there is a higher probability p will be within + .04 of the

population proportion p.

36. a. This is a graph of a normal distribution with a mean of E ( p ) = .55 and

p (1  p ) .55(1  .55)
p    .0352
n 200

b. Within ± .05 means .50 ≤ p ≤ .60

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 p p .60  .55 p p .50  .55
z   1.42 z   1.42
p .0352 p .0352

P(.50  p  .60) = P(–1.42 ≤ z ≤ 1.42) = .9222 – .0778 = .8444

c. This is a graph of a normal distribution with a mean of E ( p ) = .45 and

p (1  p ) .45(1  .45)
p    .0352
n 200

p (1  p ) .45(1  .45)
p    .0352
d. n 200

Within ± .05 means .40 ≤ p ≤ .50.

p p .50  .45 p p .40  .45

z   1.42 z   1.42
p .0352 p .0352

P(.40  p  .50) = P(–1.42 ≤ z ≤ 1.42) = .9222 – .0778 = .8444

e. No, the probabilities are exactly the same. This is because  p , the standard error, and

the width of the interval are the same in both cases. Notice the formula for computing

the standard error. It involves p (1  p) . So whenever p = 1 – p, the standard error will

be the same. In part b, p = .45 and 1 – p = .55. In part d, p = .55 and 1 – p = .45.

p (1  p ) .55(1  .55)
f. For n = 400,  p    .0249 .
n 400

Within ± .05 means .50 ≤ p ≤ .60.

p p .60  .55 p p .50  .55

z   2.01 z   2.01
p .0249 p .0249

P(.50  p  .60) = P(–2.01 ≤ z ≤ 2.01) = .9778 – .0222 = .9556

The probability is larger than in part b. This is because the larger sample size has

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 reduced the standard error from .0352 to .0249.

38. a. It is a normal distribution with E( p ) = .42.

p(1  p) (.42)(.58)
p    .0285
n 300

p p .03
b. z    1.05 P(z ≤ 1.05) = .8531
p .0285

P(z < –1.05) = .1469

P(.39 ≤ p ≤ .44) = .8531 – .1469 = .7062

p p .05
c. z    1.75 P(z ≤ 1.75) = .9599
p .0285

P(z < –1.75) = .0401

P(.39 ≤ p ≤ .44) = .9599 – .0401 = .9198

d. The probabilities would increase. This is because the increase in the sample size

makes the standard error,  p , smaller.

40. a. E ( p) = .76

p (1  p ) .76(1  .76)
p    .0214
n 400

Normal distribution because np = 400(.76) = 304 and n(1 – p) = 400(.24) = 96.

.79  .76
b. z   1.40 P(z ≤1.40) = .9192
.0214

.73  .76
z  1.40 P(z < –1.40) = .0808
.0214

P(.73  p  .79) = P(–1.40  z  1.40) = .9192 – .0808 = .8384

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 p (1  p ) .76(1  .76)
p    .0156
c. n 750

.79  .76
z  1.92 P(z ≤ 1.92) = .9726
.0156

.73  .76
z  1.92 P(z < –1.92) = .0274
.0156

P(.73  p  .79) = P(–1.92  z  1.92) = .9726 – .0274 = .9452

42. a. 𝐸(𝑥̅ ) = 𝜇 = 400

b. 𝜎 ̅ = 𝜎⁄√𝑛 = 100⁄√100,000 = .3162

c. Normal with E( x) = 400 and  x = .3162.

d. It shows the probability distribution of all possible sample means that can be

observed with random samples of size 100,000. This distribution can be used to

compute the probability that x is within a specified + from μ.

44. a. E(𝑝̅ ) = p = .75

p (1  p ) .75(.25)
p    .0014
b. n 100,000

c. Normal distribution with E(𝑝̅ ) = .75 and  p

= .0014

d. It shows the probability distribution of all possible sample proportions that can be

observed with random samples of size 100,000. This distribution can be used to

compute the probability that 𝑝̅ is within a specified + from p.

46. a. Normal distribution, E ( x )  100

 x   / n  48 / 15, 000  .3919

b. Within ±1 hour means 99  x  101

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 101  100
At x = 101, z   2.55 P(z ≤ 2.55) = .9946
.3919

99  100
At x = 99, z   2.55 P(z < –2.55) = .0054
.3919

So P(99 ≤ 𝑥̅ ≤ 101) = .9946 – .0054 = .9892.

c. In part a we found that P(99 ≤ 𝑥̅ ≤ 101) = .9892, so the probability the mean annual

number of hours of vacation time earned for a sample of 15,000 blue collar and

service employees who work for small private establishments and have at least 10

years of service differs from the population mean μ by more than 1 hour is 1 – . 9892

– .0108, or approximately 1%.

Because these sample results are unlikely if the population mean is 100, the

sample results suggest either (a) the mean annual number of hours of vacation time

earned by blue-collar and service employees who work for small private establishments

and have at least 10 years of service is not 100 or (b) the sample is not representative of

the population of blue-collar and service employees who work for small private

establishments and have at least 10 years of service. The sampling procedure should be

carefully reviewed.

48. a.

.30
.42

The normal distribution is appropriate because np = 108,700(.42) = 45,654 and n(1 – p)

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 =108,700(.58) = 63,046 are both greater than 5.

b. P (.419 ≤ 𝑝̅ ≤ .421) = ?

.421  .42
z  0.67 P(z ≤ 0.67) = .7486
.0015

.419  .42
z  0.67 P(z < –0.67) = .2514
.0015

P(.419 ≤ 𝑝̅ ≤ .421) = .7486 – .2514 = .4972

c. P (.4175 ≥ 𝑝̅ ≥ .4225) = ?

.4225  .42
z  1.67 P(z ≤ 1.67) = .9525
.0015

.4175  .42
z  1.67 P(z < –1.67) = .0475
.0015

P(.25 ≤ 𝑝̅ ≤ .35) = .9525 – .0475 = .9050

For samples of the same size, the probability of being within 1% of the population

proportion of repeat purchasers is much smaller than the probability of being within

.25% of the population proportion of repeat purchasers.

d. P (.41 ≤ 𝑝̅ ≤ .43) = ?

.43  .42
z  6.68 P(z ≤ 6.68) ≈ 1.0000
.0015

.41 .42
z  6.68 P(z < –6.68) ≈ .0000
.0015

P(.41 ≤ 𝑝̅ ≤ .43) ≈ 1.0000 – .0000 = .0000

Because the probability the proportion of orders placed by repeat customers for a

sample of 108,700 orders from the past six months differs from the population

proportion p by less than 1% is approximately 1.0000, the probability the proportion of

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 orders placed by repeat customers for a sample of 108,700 orders from the past six

months differs from the population proportion p by more than 1% is approximately 1 –

1.0000 = .0000.

These sample results are unlikely if the population proportion is .42, so these

sample results would suggest either (1) the population proportion of orders placed by

repeat customers from the past six months is not 42% or (2) the sample is not

representative of the population of orders placed by repeat customers from the past six

months. The sampling procedure should be carefully reviewed.

50. a. Sorting the list of companies and random numbers to identify the five companies

associated with the five smallest random numbers provides the following sample.

Company Random Number

LMI Aerospace .008012

Alpha & Omega Semiconductor .055369

Olympic Steel .059279

Kimball International .144127

International Shipholding .227759

b. Step 1: Generate a new set of random numbers in column B. Step 2: Sort the random

numbers and corresponding company names into ascending order and then select the

companies associated with the five smallest random numbers. It is extremely unlikely

that you will get the same companies as in part a.

52. a. Normal distribution with

E (x) = 406

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  80
x    10
n 64

b. z  x    15
 1.50 P(z ≤ 1.50) = .9332
/ n 80 / 64

x  15
z   1.50 P(z < –1.50) = .0668
/ n 80 / 64

P(391  x  421) = P(–1.50  z  1.50) = .9332 – .0668 = .8664

c. At x = 380, z  x    380  406  2.60

/ n 80 / 64

P( x ≤ 380) = P(z ≤ –2.60) = .0047

Yes, this is an unusually low performing group of 64 stores. The probability of a sample

mean annual sales per square foot of $380 or less is only .0047.

54.  = 27,175  = 7400

a.  x  7 400 / 60  955

x 0
b. z  0
x 955

P( x > 27,175) = P(z > 0) = .50

Note: This could have been answered easily without any calculations; 27,175 is the

expected value of the sampling distribution of x .

x  1000
c. z   1.05 P(z ≤ 1.05) = .8531
x 955

P(z < –1.05) = .1469

P(26,175  x  28,175) = P(–1.05  z  1.05) = .8531 – .1469 = .7062

d.  x  7 40 0 / 10 0  74 0

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 x  1000
z   1.35 P(z ≤ 1.35) = .9115
x 740

P(z < –1.35) = .0885

P(26,175  x  28,175) = P(–1.35  z  1.35) = .9115 – .0885 = .8230

 500
x    20
56. a. n n

n= 500/20 = 25 and n = (25)2 = 625

b. For + 25,

25
z  1.25 P(z ≤ 1.25) = .8944
20

P(z < –1.25) = .1056

Probability = P(–1.25  z  1.25) = .8944 – .1056 = .7888

58. p = .15

a. This is the graph of a normal distribution with E( p ) = p = .15 and

p (1  p ) .15(1  .15)
p    .0230 .
n 240

b. Within ± .04 means .11 ≤ p ≤ .19

p p .19  .15 .11  .15

z   1.74 z  1.74
p .0230 .0230

P(.11  p  .19) = P(–1.74 ≤ z ≤ 1.74) = .9591 – .0409 = .9182

c. Within ±.02 means .13 ≤ p ≤ .17.

p p .17  .15 p p .13  .15

z   .87 z    .87
p .0230 p .0230

P(.13  p  .17) = P(–.87 ≤ z ≤ .87) = .8078 – .1922 = .6156

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 p (1  p ) (.40)(1  .40)
p    .0251
60. a. n 380

Within ± .04 means .36 ≤ p ≤ .44.

.44  .40 .36  .40

z  1.59 z  1.59
.0251 .0251

P(.36  p  .44) = P(–1.59 ≤ z ≤ 1.59) = .9441 – .0559 = .8882

b. We want P( p ³.45).

p p .45  .40
z   1.99
p .0251

P( p ³ .45) = 1 – P( p ≤ .45) = 1 – P(z ≤ 1.99) = 1 – .9767 = .0233

p (1  p ) .25(.75)
 p    .0625
62. a. n n

Solve for n

.25(.75)
n  48
(.0625) 2

b. Normal distribution with E( p) = .25 and p= .0625.

[Note: (48)(.25) = 12 > 5, and (48)(.75) = 36 > 5.]

c. P ( p ≥ .30) = ?

.30  .25
z  .80 P(z ≤ .80) = .7881
.0625

P ( p ≥ .30) = 1 – P ( p ≤ .30) = 1 – P(z ≤ .80) = 1 – .7881 1 – .7881 =

.2119

64. a. Normal distribution, E ( x )  17.6

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  x   / n  5.1 / 85, 020  .0175

b. Within ±3 minutes of the mean is the same as within 3/60 – .05 hours of the mean,

i.e., 17.55  x  17.65.

17.65  17.6
At x = 17.65, z   2.86 P(z ≤ 2.86) = .9979
.0175

At x = 17.55, z = –2.86. P(z < –2.86) = .0021

So P(17.55 ≤ 𝑥̅ ≤ 17.65) = .9979 – .0021 = .9958

c. In part b we found that if we assume the U.S. population mean and standard deviation

are appropriate for Florida, then P(17.55 ≤ 𝑥̅ ≤ 17.65) = .9958, so the probability the

mean for a sample of 85,020 Floridians will differ from the U.S. population mean by

more than 3 minutes is 1 – .9958 = .0042. This result is would be highly unlikely and

would suggest that the home Internet usage of Floridians differs from home Internet

usage for the rest of the United States.

66. a.

p (1  p ) .58(.42)
p    .0035
n 20, 000

p
.30
.58

The normal distribution is appropriate because np = 20,000(.58) = 11,600 and n(1 – p)

=20,000(.42) = 8,400 are both greater than 5.

b. P (.57 ≤ 𝑝̅ ≤ .59) = ?

.59  .58
z  2.87 P(z ≤ 2.87) = .9979
.0035

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 .57  .58
z  2.87 P(z < –2.87) = .0021
.0035

P(.57 ≤ 𝑝̅ ≤ .59) = .9979 – .0021 = .9958

c. In part b we found that P(.57 ≤ 𝑥̅ ≤ .59) = .9958, so the probability the proportion of a

sample of 20,000 drivers that is speeding will differ from the U.S. population

proportion of drivers that is speeding by more than 1% is 1 – .9958 = .0042.

These sample results are unlikely if the population proportion is .58, so these

sample results would suggest either (1) the population proportion of drivers who are

speeding is not 58% or (2) the sample is not representative of the population of U.S.

drivers. The sampling procedure should be carefully reviewed.

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Chapter 8 Solutions

2. a. 32 + 1.645 (6 / 50 )

32 + 1.4 or 30.6 to 33.4

b. 32 + 1.96 (6 / 50 )

32 + 1.66 or 30.34 to 33.66

c. 32 + 2.576 (6 / 50 )

32 + 2.19 or 29.81 to 34.19

6. A 95% confidence interval is of the form x  z .025 ( / n) .

Using Excel and the web file TravelTax, the sample mean is x  40.31 and the sample size

is n = 400. The sample standard deviation  = 85 is known. The confidence interval is

40.31 + 1.96(8.5/ 200 )

40.311.18 40.31 + 1.18 or 39.13 to 41.49

8. a. Because n is small, an assumption that the population is at least approximately normal

is required so that the sampling distribution of x can be approximated by a normal

distribution.

b. Margin of error: z .0 25 ( / n )  1 .9 6 (5 .5 / 1 0 )  3 .4 1

c. Margin of error: z .0 0 5 ( / n )  2 .5 7 6 (5 .5 / 1 0 )  4 .4 8


x  z / 2
10. a. n

3,486 + 1.645 (650 / 120 )

3,486 + 98 or $3388 to $3584

b. 3,486 + 1.96 (650 / 120 )

3,486 + 116 or $3370 to $3602

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 c. 3,486 + 2.576 (650 / 120 )

3,486 + 153 or $3,333 to $3,639

The confidence interval gets wider as we increase our confidence level. We need a

wider interval to be more confident that the interval will contain the population mean.

12. a. 2.179

b. –1.676

c. 2.457

d. Use .05 column, –1.708 and 1.708

e. Use .025 column, –2.014 and 2.014

x  t / 2 ( s / n)
14. , df = 53

a. 22.5 ± 1.674 (4.4 / 54 )

22.5 ± 1 or 21.5 to 23.5

b. 22.5 ± 2.006 (4.4 / 54 )

22.5 ± 1.2 or 21.3 to 23.7

c. 22.5 ± 2.672 (4.4 / 54 )

22.5 ± 1.6 or 20.9 to 24.1

d. As the confidence level increases, there is a larger margin of error and a wider

confidence interval.

16. a. Using JMP or Excel, x = 9.7063 and s = 7.9805

The sample mean years to maturity is 9.7063 years with a standard deviation of 7.9805.

b. x  t .0 25 ( s / n) , df = 39, t.025 = 2.023

9.7063 ± 2.023 (7 .9 8 0 5 / 40 )

9.7063 ± 2.5527 or 7.1536 to 12.2590

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 The 95% confidence interval for the population mean years to maturity is 7.1536 to

12.2590 years.

c. Using JMP or Excel, x = 3.8854 and s = 1.6194

The sample mean yield on corporate bonds is 3.8854% with a standard deviation of

1.6194.

d. x  t .0 25 ( s / n) df = 39 t.025 = 2.023

3.8854 ± 2.023 (1 .6 1 9 4 / 40 )

3.8854 ± .5180 or 3.3674 to 4.4034

The 95% confidence interval for the population mean yield is 3.3674 to 4.4034%.

18. For the JobSearch data set, x  22 and s = 11.8862

a. x = 22 weeks

b. margin of error = t .02 5 s / n  2 .0 2 3(1 1 .8 8 6 2 ) / 40  3.8020

c. The 95% confidence interval is x  margin of error

22  3.8020 or 18.20 to 25.80

d. Skewness = 1.0062, data are skewed to the right. Use a larger sample next time.

x   xi / n  51, 020 / 20  2551

20. a.

The point estimate of the mean annual auto insurance premium in Michigan is $2,551.

( xi  x )2 ( xi  2551)2
s   301.3077
b. n 1 20 1

95% confidence interval: x + t.025 ( s / n) , df = 19

2,551 + 2.093 (301.3077 / 20 )

$2,551 + 141.01 or $2,409.99 to $2,692.01

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 c. The 95% confidence interval for Michigan does not include the national average of

$1,503 for the United States. We would be 95% confident that auto insurance

premiums in Michigan are above the national average.

xi 693,000
x   $23,100
22. a. n 30

The point estimate of the population mean ticket sales revenue per theater is $23,100.

(xi  x )2
s  3981.89
n 1

95% confidence interval: x + t.025 ( s / n) with df = 29 t.025 = 2.045

23,100 + 3981.89
2.045
30

23,100 + 1,487

The 95% confidence interval for the population mean is $21,613 to $24,587.

b. Mean number of customers per theater = 23,100/8.11 = 2,848 customers per theater

c. Total number of customers = 4,080(2,848) = 11,619,840

Total box office ticket sales for the weekend = 4,080(23,100) = $94,248,000

24. a. Planning value of  = Range/4 = 36/4 = 9

z.2025 2 (196
. ) 2 ( 9) 2
n   34.57 Use n  35
b. E2 32

. ) 2 ( 9) 2
(196
n  77.79 Use n  78
c. 22

26. a.
2
z.025  2 (1.96) 2 (.25) 2 Use 25.
n   24.01
E2 (.10) 2

If the normality assumption for the population appears questionable, this should be

adjusted upward to at least 30.

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 b. (1.96) 2 (.25) 2
n  49
(.07) 2

Use 49 to guarantee a margin of error no greater than .07. However, the U.S. EIA may

choose to increase the sample size to a round number of 50.

c. (1.96) 2 (.25) 2 Use 97

n  96.04
(.05) 2

For reporting purposes, the U.S. EIA might decide to round up to a sample size of 100.

z2 /2 2 (1.645) 2 (25) 2

n 2
  187.92 Use n  188
E (3) 2
28. a.

(1.96) 2 (25) 2
n  266.78 Use n  267
(3) 2
b.

(2.576) 2 (25) 2
n  460.82 Use n  461
(3) 2
c.

d. The sample size gets larger as the confidence level is increased. We would not

recommend 99% confidence. The sample size must be increased by 79 respondents

(267 – 188) to go from 90% to 95%. This may be reasonable. However, increasing

the sample size by 194 respondents (461 – 267) to go from 95% to 99% would

probably be viewed as too expensive and time consuming for the 4% gain in

confidence level.

30. Planning value from previous study:   2000

2
z.025  2
(1.96) 2 (2000) 2
n   1536.64
E2 (100) 2

Use n = 1537 to guarantee the margin of error will not exceed 100.

32. a. .70 + 1.645 .70(.30)

800

.70 + .0267 or .6733 to .7267

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 .70(.30)
b. .70 + 1.96 800

.70 + .0318 or .6682 to .7318

34. Use planning value p* = .50

(1.96) 2 (.50)(.50)
n  1067.11 Use n  1068
(.03) 2

36. a. p = 46/200 = .23

p (1  p ) .23(1  .23)
  .0298
b. n 200

p (1  p )
p  z .025
n

.23 + 1.96(.0298)

.23 + .0584 or .1716 to .2884

p  81 / 142  .5704
38. a.

b. Margin of error = p (1  p ) (.5704)(.4296)

1.96  1.96  .0814
n 142

Confidence interval: .5704 + .0814 or .4890 to .6518

1.96 2 (.5704)(.4296)
n  1046
(.03) 2
c.

p (1  p ) .52(1  .52)
40. Margin of error: z.025  1.96  .0346
n 800

95% confidence interval: p ± .0346

.52 + .0346 or .4854 to .5546

p * (1  p *) .50(1  .50)
  .0226
42. a. n 491

p * (1  p *) = 1.96(.0226) = .0442
z.025
n

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 2
z.025 p  (1  p  )
n
b. E2

1.96 2 (.50)(1  .50)

September n  600.25 Use 601
.04 2

1.962 (.50)(1  .50)

October n  1067.11 Use 1068
.032

1.96 2 (.50)(1  .50)

November n  2401
.02 2

1.96 2 (.50)(1  .50)

Preelection n  9604
.012

44. a. 𝑥̅ = 326.6674

b. degrees of freedom = 10,000 and 𝑠 ̅ = 12,318.01, so 𝑡 ⁄ 𝑠̅=

1.9600(12,318.01/√10,001) = 241.4165.

c. 𝑥̅ ± 𝑡 ⁄ 𝑠 ̅ = 326.6674 ± 241.4165 = (85.25, 568.08)

46. a. 𝑝̅ = 65120/102519 = .6352

b. 𝑧 ⁄ 𝜎 ̅ = 1.96(.0015) = .0029

c. 𝑥̅ ± 𝑧 ⁄ 𝜎 ̅ = .6352 ± .0029 = (.6323, .6381)

 15
48. a. Margin of error: z.025  1.96  4.00
n 54

b. Confidence interval: x + margin of error

33.77 + 4.00 or $29.77 to $37.77

50. a. Margin of error = t.025 ( s / n)

df = 79 t.025 = 1.990 s = 550

1.990 (5 5 0 / 80 ) = 122

b. x ± margin of error

1873 + 122 or $1,751 to $1,995

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 c. Because 92 million Americans were age 50 and older, the estimate of total

expenditures = 92(1873) = 172,316.

In dollars, we estimate that $172,316 million dollars are spent annually by Americans of

age 50 and older on restaurants and carryout food.

d. We would expect the median to be less than the mean of $1,873. The few individuals

who spend much more than the average cause the mean to be larger than the median.

This is typical for data of this type.

52. a. Using Excel shows that the sample mean and sample standard deviation are x  773

and s  738.3835 .

Margin of error = t.05  s   738.3835 

  1.645    60.73
 n   400 

90% Confidence Interval: 773  60.73 or $712.27 to $833.73

b. Using Excel shows that the sample mean and sample standard deviation are x  187

and s  178.6207 .

Margin of error = t.05  s   178.6207 

  1.645    14.69
 n   400 

90% confidence interval: 187 + 14.69 or $172.31 to $201.69

c. There were 136 employees who had no prescription medication cost for the year:

p  136 / 400  .34 .

d. The margin of error in part a is 60.73; the margin of error in part c is 14.69. The

margin of error in part a is larger because the sample standard deviation in part a is

larger. The sample size and confidence level are the same in both parts.

( 2.33) 2 ( 2.6) 2
n  36.7 Use n  37
54. 12

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 . ) 2 ( 675) 2
(196
n  175.03 Use n  176
56. 100 2

58. a. p = 200/369 = .5420

p (1  p ) (.5420)(.4580)
1.96  1.96  .0508
b. n 369

c. .5420 + .0508 or .4912 to .5928

60. a. With 165 out of 750 respondents rating the economy as good or excellent,

p = 165/750 = .22

b. Margin of error  1.96 p (1  p ) .22(1  .22)

 1.96  .0296
n 750

95% Confidence interval: .22 + .0296 or .1904 to .2496

c. With 315 out of 750 respondents rating the economy as poor,

p = 315/750 = .42

Margin of error  1.96 p (1  p ) .42(1  .42)

 1.96  .0353
n 750

95% Confidence interval: .42 + .0353 or .3847 to .4553

d. The confidence interval in part c is wider. This is because the sample proportion is

closer to .5 in part c.

(2.33) 2 (.70)(.30)
n  1266.74 U se n  1267
(.03) 2
62. a.

(2.33) 2 (.50)(.50)
n  1508.03 Use n  1509
(.03) 2
b.

64. a. p = 618/1993 = .3101

p (1  p )
b. p  1.96
1993

.3101 + 1.96 (.3101)(.6899)

1993

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 .3101 + .0203 or .2898 to .3304

z 2 p  (1  p  )
n
c. E2

(1.96) 2 (.3101)(.6899)
z  8218.64 Use n  8219
(.01) 2

No, the sample appears unnecessarily large. The .02 margin of error reported in part b

should provide adequate precision.

66. a. 𝑥̅ = 34.9872

b. degrees of freedom = 28,584 and s = 2.9246,

so 𝑡 ⁄ 𝑠 ̅ = 2.58(2.9246/√28,584) = .0446

c. 𝑥̅ ± 𝑡 ⁄ 𝑠 ̅ = 34.9872 ± .0446 = (34.9426, 35.0318)

d. The 99% confidence interval for the mean hours worked hours during the past week

does not include the value for the mean hours worked during the same week one year

ago. This suggests that the mean hours worked taken changed from last year to this

year.

68. a. 𝑝̅ = 490/8749 = .0560

b. 𝑧 ⁄ 𝜎 ̅ = 1.64(.0025) = .0040

c. 𝑥̅ ± 𝑧 ⁄ 𝜎 ̅ = .0560 ± .0040 = (.0520, .0600)

d. The 90% confidence interval for the proportion of California bridges that are deficient

does not include the value for the proportion of deficient bridges in the entire country.

This suggests that the proportion of California bridges that is deficient differs from

the proportion for the U.S.

Even though the IRC report indicates that California has a large proportion of the

nation’s deficient bridges, California has a large total number of bridges, so the

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 proportion of bridges in California that are deficient is smaller than the proportion of

deficient bridges nationwide.

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Chapter 9 Solutions

2. a. H0: μ ≤ 14

Ha: μ > 14 Research hypothesis

b. There is no statistical evidence that the new bonus plan increases sales volume.

c. The research hypothesis that μ > 14 is supported. We can conclude that the new

bonus plan increases the mean sales volume.

4. a. H0: μ ≥ 220

Ha: μ < 220

Research hypothesis to see if mean cost is less than $220.

b. We are unable to conclude that the new method reduces costs.

c. Conclude μ < 220. Consider implementing the new method based on the conclusion

that it lowers the mean cost per hour.

6. a. H0: μ ≤ 1 The label claim or assumption

Ha: μ > 1

b. Claiming μ > 1 when it is not. This is the error of rejecting the product’s claim when

the claim is true.

c. Concluding μ ≤ 1 when it is not. In this case, we miss the fact that the product is not

meeting its label specification.

8. a. H0: μ ≥ 220

Ha: μ < 220

b. Claiming μ < 220 when the new method does not lower costs. A mistake could be

implementing the method when it does not help.

c. Concluding μ ≥ 220 when the method really would lower costs. This could lead to not

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 implementing a method that would lower costs.

x  0 26.4  25
10. a. z   1.48
/ n 6 / 40

b. Using normal table with z = 1.48: p-value = 1.0000 – .9306 = .0694.

c. p-value > .01, do not reject H0.

d. Reject H0 if z ³ 2.33

1.48 < 2.33, do not reject H0.

x  0 78.5  80
12. a. z   1.25
 / n 12 / 100

Lower tail p-value is the area to the left of the test statistic.

Using normal table with z = –1.25: p-value =.1056.

p-value > .01, do not reject H0.

x  0 77  80
b. z    2.50
/ n 12 / 100

Lower tail p-value is the area to the left of the test statistic.

Using normal table with z = –2.50: p-value =.0062.

p-value  .01, reject H0.

x  0 75.5  80
c. z    3.75
 / n 12 / 100

Lower tail p-value is the area to the left of the test statistic.

Using normal table with z = –3.75: p-value ≈ 0.

p-value  .01, reject H0.

x  0 81  80
d. z    .83
/ n 12 / 100

Lower tail p-value is the area to the left of the test statistic.

Using normal table with z = .83: p-value =.7967.

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 p-value > .01, do not reject H0.

x  0 23  22
14. a. z   .87
/ n 10 / 75

Because z > 0, p-value is two times the upper tail area.

Using normal table with z = .87: p-value = 2(1 – .8078) = .3844.

p-value > .01, do not reject H0.

x  0 25.1  22
b. z    2.68
/ n 10 / 75

Because z > 0, p-value is two times the upper tail area.

Using normal table with z = 2.68: p-value = 2(1 – .9963) = .0074.

p-value  .01, reject H0.

x  0 20  22
c. z    1.73
/ n 10 / 75

Because z < 0, p-value is two times the lower tail area.

Using normal table with z = –1.73: p-value = 2(.0418) = .0836.

p-value > .01, do not reject H0.

16. a. H0: μ  3,173

Ha: μ > 3,173.

x  0 3325  3173
z   2.04
b. / n 1000 / 180

p-value = 1.0000 – .9793 = .0207.

c. p-value < .05. Reject H0. The current population mean credit card balance for

undergraduate students has increased compared to the previous all-time high of

$3,173 reported in the original report.

18. a. H0: μ ≥ 60

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 Ha: μ < 60

x  0 55  60
b. z    2.23
/ n 27.4 / 150

Lower tail p-value is the area to the left of the test statistic.

Using normal table with z = – 2.23: p-value = .0129.

c. p-value = .0129    .05 .

Reject H0 and conclude that the mean number of hours worked per week during tax

season by CPAs in states with flat state income tax rates is less than the mean hours

CPAs work during tax season throughout the United States.

20. a. H0: μ ≥ 838

Ha: μ < 838

x  0 745  838
z    2.40
b.  / n 300 60

c. Lower tail p-value is area to left of the test statistic.

Using normal table with z = –2.40: p-value = .0082.

d. p-value  .01; reject H0 . Conclude that the annual expenditure per person on

prescription drugs is less in the Midwest than in the Northeast.

22. a. H0: μ = 8

Ha: μ  8

x  8.4  8.0
b. z    1.37
/ n 3.2 / 120

Because z > 0, p-value is two times the upper tail area.

Using normal table with z = 1.37: p-value = 2(1 – .9147) = .1706.

c. p-value > .05; do not reject H0. Cannot conclude that the population mean waiting

time differs from eight minutes.

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 d. x  z .025 ( / n)

8.4 ± 1.96 (3 .2 / 120 )

8.4 ± .57 (7.83 to 8.97)

Yes; μ = 8 is in the interval. Do not reject H0.

x  0 17  18
24. a. t    1.54
s/ n 4.5 / 48

b. Degrees of freedom = n – 1 = 47.

Because t < 0, p-value is two times the lower tail area.

Using t table: area in lower tail is between .05 and .10; therefore, p-value is

between .10 and .20.

Exact p-value corresponding to t = –1.54 is .1303.

c. p-value > .05, do not reject H0.

d. With df = 47, t.025 = 2.012

Reject H0 if t  –2.012 or t ³ 2.012.

t = –1.54; do not reject H0.

x  0 103  100
26. a. t    2.10
s/ n 11.5 / 65

Degrees of freedom = n – 1 = 64.

Because t > 0, p-value is two times the upper tail area.

Using t table; area in upper tail is between .01 and .025; therefore, p-value is

between .02 and .05.

Exact p-value corresponding to t = 2.10 is .0397.

p-value  .05, reject H0.

x  0 96.5  100
b. t    2.57
s/ n 11 / 65

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 Because t < 0, p-value is two times the lower tail area.

Using t table: area in lower tail is between .005 and .01; therefore, p-value is

between .01 and .02.

Exact p-value corresponding to t = –2.57 is .0125.

p-value  .05, reject H0.

x  0 102  100
c. t    1.54
s/ n 10.5 / 65

Because t > 0, p-value is two times the upper tail area.

Using t table: area in upper tail is between .05 and .10; therefore, p-value is

between .10 and .20.

Exact p-value corresponding to t = 1.54 is .1285.

p-value > .05, do not reject H0.

28. a. H0: μ ³ 9

Ha: μ < 9

x  0 7.27  9
t   2.50
b. s/ n 6.38 / 85

Degrees of freedom = n – 1 = 84

Lower tail p-value is P(t ≤ –2.50).

Using t table: p-value is between .005 and .01.

Exact p-value corresponding to t = –2.50 is .0072.

c. p-value  .01; reject H0. The mean tenure of a CEO is significantly lower than nine

years. The claim of the shareholders group is not valid.

30. a. H0: μ = 6.4

Ha: μ  6.4

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 b. Using Excel or JMP, we find x  7.0 and s = 2.4276.

x  0 7.0  6.4
t   1.56
s/ n 2.4276 / 40

df = n – 1 = 39

Because t > 0, p-value is two times the upper tail area at t = 1.56.

Using t table: area in upper tail is between .05 and .10; therefore, p-value is

between .10 and .20.

Exact p-value corresponding to t = 1.56 is .1268.

c. Most researchers would choose   .10 or less. If you chose = .10 or less, you cannot

reject H0. You are unable to conclude that the population mean number of hours

married men with children in your area spend in child care differs from the mean

reported by Time.

32. a. H0: μ = 10,192

Ha: μ  10,192

x  0 9750  10,192
b. t    2.23
s/ n 1400 / 50

Degrees of freedom = n – 1 = 49.

Because t < 0, p-value is two times the lower tail area.

Using t table: area in lower tail is between .01 and .025; therefore, p-value is

between .02 and .05.

Exact p-value corresponding to t = –2.23 is .0304.

c. p-value  .05; reject H0. The population mean price at this dealership differs from the

national mean price $10,192.

34. a. H0: μ = 2

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 Ha: μ  2

xi 22
x   2.2
b. n 10

  xi  x 
2

c. s   .516
n 1

x  0 2.2  2
d. t    1.22
s/ n .516 / 10

Degrees of freedom = n – 1 = 9.

Because t > 0, p-value is two times the upper tail area.

Using t table: area in upper tail is between .10 and .20; therefore, p-value is

between .20 and .40.

Exact p-value corresponding to t = 1.22 is .2535.

e. p-value > .05; do not reject H0. No reason to change from the 2 hours for cost

estimating purposes.

p  p0 .68  .75
36. a. z   2.80
p0 (1  p0 ) .75(1  .75)
n 300

Lower tail p-value is the area to the left of the test statistic.

Using normal table with z = –2.80: p-value =.0026.

p-value  .05; Reject H0.

.72  .75
b. z   1.20
.75(1  .75)
300

Lower tail p-value is the area to the left of the test statistic.

Using normal table with z = –1.20: p-value =.1151.

p-value > .05; Do not reject H0.

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 .70  .75
c. z   2.00
.75(1  .75)
300

Lower tail p-value is the area to the left of the test statistic.

Using normal table with z = –2.00: p-value =.0228.

p-value  .05

Reject H0.

.77  .75
d. z   .80 .
.75(1  .75)
300

Lower tail p-value is the area to the left of the test statistic.

Using normal table with z = .80: p-value =.7881.

p-value > .05

Do not reject H0.

38. a. H0: p μ .64

Ha: p  .64

52
b. p  .52
100

p  p0 .52  .64
z   2.50
p0 (1  p0 ) .64(1  .64)
n 100

Because z < 0, p-value is two times the lower tail area.

Using normal table with z = –2.50: p-value = 2(.0062) = .0124.

c. p-value  .05; reject H0. Proportion differs from the reported .64.

d. The results of the hypothesis test provide evidence that the proportion differs from

.64, and the sample proportion p = .52 suggests that fewer than 64% of the shoppers

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 believe the supermarket brand is as good as the name brand. So the manufacturer has

some evidence that the percentage of supermarket shoppers who believe the

supermarket ketchup is as good as the national brand is less than 64%. However, the

manufacturer would have more appropriate evidence if a lower tailed hypothesis test

had been used.

40. a. Sample proportion: p  .35

Number planning to provide holiday gifts: np  60(.35)  21

b. H0: p ³ .46

Ha: p < .46

p  p0 .35  .46
z   1.71
p0 (1  p0 ) .46(1  .46)
n 60

p-value is area in lower tail.

Using normal table with z = –1.71: p-value = .0436.

c. Using a .05 level of significance, we can conclude that the proportion of business

owners providing gifts has decreased from last year to this year. The smallest level of

significance for which we could draw this conclusion is .0436; this corresponds to the

p-value = .0436. This is why the p-value is often called the observed level of

significance.

42. a. p = 12/80 = .15

p (1  p ) .15(.85)
b.   .0399
n 80

p (1  p )
p  z.025
n

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 .15 + 1.96 (.0399)

.15 + .0782 or .0718 to .2282

c. H0: p = .06

Ha: p  .06

p = .15

p  p0 .15  .06
z   3.38
p0 (1  p0 ) .06(.94)
n 80

p-value ≈ 0

We conclude that the return rate for the Houston store is different than the U.S. national

return rate.

44. a. H0: p  .50

Ha: p > .50

b. Using Excel we find that 92 of the 150 physicians in the sample have been sued.

So,

92
p  .6133
150

p  p0 .6133  .50
z   2.78
p0 (1  p0 ) (.50)(.50)
n 150

p-value is the area in the upper tail at z = 2.78.

Using normal table with z = 2.78: p-value = 1 – .9973 = .0027.

c. Because p-value = .0027  .01, we reject H0 and conclude that the proportion of

physicians over age 55 who have been sued at least once is greater than .50.

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  5
46. x    .46
n 120

Ha :  < 10
H0:  ³ 10

.05

x
10

c = 10 – 1.645 (5 / 120 ) = 9.25

Reject H0 if x  9.25.

a. When μ = 9,

9.25  9
z  .55
5 / 120

P(Reject H0) = (1.0000 – .7088) = .2912.

b. Type II error

c. When μ = 8,

9.25  8
z  2.74
5 / 120

β = (1.0000 – .9969) = .0031

48. a. H0: μ ≤ 15

Ha: μ > 15

Concluding μ ≤ 15 when this is not true. Fowle would not charge the premium rate even

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 though the rate should be charged.

b. Reject H0 if z ³ 2.33.

x  0 x  15
z   2.33
/ n 4 / 35

Solve for x = 16.58.

Decision rule:

Accept H0 if x < 16.58.

Reject H0 if x ³ 16.58.

For μ = 17,

16.58  17
z  .62
4 / 35

β = .2676

c. For μ = 18,

16.58  18
z  2.10
4 / 35

β = .0179

50. a. Accepting H0 and concluding the mean average age was 28 years when it was not.

b. Reject H0 if z  –1.96 or if z ³ 1.96.

x  0 x  28
z 
/ n 6 / 100

Solving for x , we find

at z = –1.96, x = 26.82

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 at z = +1.96, x = 29.18

Decision rule:

Accept H0 if 26.82 < x < 29.18

Reject H0 if x  26.82 or if x ³ 29.18

At μ = 26,

26.82  26
z  1.37
6 / 100

β = 1.0000 – .9147 = .0853

At μ = 27,

26.82  27
z  .30
6 / 100

β = 1.0000 – .3821 = .6179

At μ = 29,

29.18  29
z  .30
6 / 100

β = .6179

At μ = 30,

29.18  30
z  1.37
6 / 100

β = .0853

c. Power = 1 – β.

At μ = 26,

Power = 1 – .0853 = .9147.

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 When μ = 26, there is a .9147 probability that the test will correctly reject the

null hypothesis that μ = 28.

 4
52. c   0  z.01  15  2.33  16.32
n 50

16.32  17
z  1.20
At μ = 17 4 / 50

β = .1151

16.32  18
z  2.97
At μ = 18 4 / 50

β = .0015

Increasing the sample size reduces the probability of making a type II error.

( z  z  ) 2  2 (1.645  1.28) 2 (5) 2

54. n   214
( 0   a ) 2
(10  9) 2

56. At μ0 = 3, α = .01. z.01 = 2.33

At μa = 2.9375, β = .10. z.10 = 1.28

 = .18

( z  z  ) 2  2 (2.33  1.28) 2 (.18) 2

n   108.09 Use 109.
( 0   a ) 2 (3  2.9375) 2

58. At μ0 = 28, α = .05. Note, however, for this two-tailed test, z / 2 = z.025 = 1.96.

At μa = 29, β = .15. z.15 = 1.04

=6

( z / 2  z  ) 2  2 (1.96  1.04) 2 (6) 2

n   324
(0  a )2 (28  29)2

60. H0: μ = 101.5

Ha: μ ≠ 101.5

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 x 
z 0  100.47  101.5  4.15
 n 25 10163

Because z < 0, p-value is two times the lower tail area.

Using normal table with z = –4.15: p-value ≈ 2(.0000) = .0000.

p-value  .01, reject H0. Conclude that the actual mean number of business e-

mails sent and received per business day by employees of this department of the federal

government differs from corporate employees.

Although the difference between the sample mean number of business emails

sent and received per business day by employees of this department of the Federal

Government and the mean number of business emails sent and received by corporate

employees is statistically significant, this difference of 1.03 emails is relatively small

and so may be of little or no practical significance.

62. H0: p ≤ .62

Ha: p > .62

p  p0 .626  .62
z   2.75
p0 1  p0  .62 1  .62 
n 49581

p-value is the area in the upper tail.

Using normal table with z = 2.75: p-value = 1 – .9970 = .0030.

p-value  .05, reject H0. Conclude that the actual proportion of fast-food orders

this year that includes French fries exceeds the proportion of fast food orders that

included french fries last year.

Although the difference between the sample proportion of fast-food orders this

year that includes french fries and the proportion of fast-food orders that included

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 french fries last year is statistically significant, APGA should be concerned about

whether this .006 or .6% increase is large enough to be effective in an advertising

campaign.

64. a. H0: μ = 16

Ha: μ  16

x  0 16.32  16
b. z    2.19
/ n .8 / 30

Because z > 0, p-value is two times the upper tail area.

Using normal table with z = 2.19: p-value = 2(.0143) = .0286.

p-value  .05; reject H0. Readjust production line.

x  0 15.82  16
c. z    1.23
/ n .8 / 30

Because z < 0, p-value is two times the lower tail area.

Using normal table with z = –1.23: p-value = 2(.1093) = .2186.

p-value > .05; do not reject H0. Continue the production line.

d. Reject H0 if z  –1.96 or z ³ 1.96.

For x = 16.32, z = 2.19; reject H0.

For x = 15.82, z = –1.23; do not reject H0.

Yes, same conclusion.

66. a. H0: μ ≤ 4

Ha: μ > 4

x  0 4.5  4
b. z    2.58
/ n 1.5 / 60

p-value is the upper tail area at z =2.58.

Using normal table with z = 2.58: p-value = 1.0000 – .9951 = .0049.

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 c. p-value  .01, reject H0. Conclude that the mean daily background television that

children from low-income families are exposed to is greater than four hours.

68. H0: μ ≤ 30.8

Ha: μ > 30.8

x  0 32.7234  30.8
t   1.0894
s/ n 12.1041 / 47

Degrees of freedom = n – 1 = 46.

Using t table, area in the upper tail is between .20 and .10 and p-value is

between .10 and .20.

Exact p-value is .1408.

Because p-value > α = .05, do not reject H0. There is no evidence to conclude

that the mean age of recently wed British men exceeds the mean age for those wed in

2013.

70. H0: μ  125,000

Ha: μ > 125,000

x  0 130, 000  125, 000

t   2.26
s/ n 12, 500 / 32

Degrees of freedom = 32 – 1 = 31.

Upper tail p-value is the area to the right of the test statistic.

Using t table: p-value is between .01 and .025.

Exact p-value corresponding to t = 2.26 is .0155.

p-value  .05; reject H0. Conclude that the mean cost is greater than $125,000

per lot.

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72. a. H0: p  .52

Ha: p > .52

285
p  .5588
510

p  p0 .5588  .52
z   1.75
p0 (1  p0 ) .52(1  .52)
n 510

p-value is the area in the upper tail.

Using normal table with z = 1.75: p-value = 1.0000 – .9599 = .0401.

p-value  .05; reject H0. We conclude that people who fly frequently are more

likely to be able to sleep during flights.

b. H0: p  .52

Ha: p > .52

285
p  .5588
510

p  p0 .5588  .52
z   1.75
p0 (1  p0 ) .52(1  .52)
n 510

p-value is the area in the upper tail.

Using normal table with z = 1.75: p-value = 1.0000 – .9599 = .0401.

p-value > .01; we cannot reject H0. Thus, we cannot conclude that that people

who fly frequently better more likely to be able to sleep during flights.

74. a. H0: p  .30

Ha: p > .30

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 136
p  .34
b. 400 (34%)

p  p0 .34  .30
c. z   1.75
p0 (1  p0 ) .30(1  .30)
n 400

p-value is the upper-tail area.

Using normal table with z = 1.75: p-value = 1.0000 – .9599 = .0401.

d. p-value  .05; reject H0. Conclude that more than 30% of the millennials either live at

home with their parents or are otherwise dependent on their parents.

76. H0: p ³ .90

Ha: p < .90

49
p  .8448
58

p  p0 .8448  .90
z   1.40
p0 (1  p0 ) .90(1  .90)
n 58

Lower tail p-value is the area to the left of the test statistic.

Using normal table with z = –1.40: p-value =.0808.

p-value > .05; do not reject H0. Claim of at least 90% cannot be rejected.

78. a. H0: μ ≤ 72

Ha: μ > 72

Reject H0 if z ³ 1.645

x  0 x  72
z   1.645
/ n 20 / 30

Solve for x = 78.

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 Decision rule:

Reject H0 if x ³ 78.

b. For μ = 80

78  80
z  .55
20 / 30

β = .2912

c. For μ = 75,

78  75
z  .82
20 / 30

β = .7939

d. For μ = 70, H0 is true. In this case the type II error cannot be made.

e. Power = 1 – β

1.0

.8
P
o
.6
w
e
r .4

.2

72 74 76 78 80 82 84
Possible Values of 
Ho False

80. a. H0: μ = 120

Ha: μ ≠ 120

At μ0 = 120 α = .05.

With a two-tailed test, zα / 2 = z.025 = 1.96.

At μa = 117, β = .02. z.02 = 2.05.

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 ( z / 2  z  ) 2  2 (1.96  2.05) 2 (5) 2
n   44.7
( 0   a ) 2
(120  117) 2
Use 45.

b. Example calculation for μ = 118.

Reject H0 if z  –1.96 or if z ³ 1.96.

x  0 x  120
z 
/ n 5 / 45

Solve for x .

At z = –1.96 x = 118.54

At z = +1.96 x = 121.46

Decision rule:

Reject H0 if x  118.54 or if x ³ 121.46.

For μ = 118,

118.54  118
z  .72
5 / 45

β = .2358

Other Results

If μ is z β

117 2.07 .0192

118 .72 .2358

119 –.62 .7291

121 +.62 .7291

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 122 +.72 .2358

123 –2.07 .0192

82. H0: p ≥ .001

Ha: p < .001

98
p  .000878
11, 667

p  p0 .00878  .001
z   1.29
p0 (1  p0 ) (.001)(1  .001)
n 111667

Lower tail p-value is the area to the left of the test statistic.

Using normal table with z = –1.29: p-value = .0985.

Because p-value = .0985    .05 , do not reject H 0 . We cannot conclude that

the manufacturer is meeting its goal for overfried chips at α = .05.

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Chapter 10 Solutions

z
 x1  x2   D0 
(25.2  22.8)  0
 2.03
 2
 2
(5.2) 2 6 2
1
 2

n1 n2 40 50
2. a.

b. p-value = 1.0000 – .9788 = .0212

c. p-value  .05, reject H0.

4. a. 1 = population mean for smaller cruise ships

2 = population mean for larger cruise ships

x1  x2 = 85.36 – 81.40 = 3.96

 12  22
z.025 
n1 n2
b.

(4.55) 2 (3.97) 2
1.96   1.88
37 44

c. 3.96 ± 1.88 (2.08 to 5.84)

6. μ1 = mean hotel price in Atlanta

2 = mean hotel price in Houston

H0: 1  2 ³ 0

Ha: 1  2  0

z
 x1  x2   D0 
(91.71  101.13)  0
 1.81
 2
 2
20 2 252
1
 2

n1 n2 35 40

p-value = .0351

p-value  .05; reject H0. The mean price of a hotel room in Atlanta is lower

than the mean price of a hotel room in Houston.

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8. a. This is an upper-tail hypothesis test.

H0: 1  2  0

Ha: 1  2  0

z
 x1  x2  
(76  73)
 2.74
 2
 2
62 62
1
 2

n1 n2 60 60

p-value = area in upper tail at z = 2.74

p-value = 1.0000 - .9969 = .0031

Because .0031  α = .05, we reject the null hypothesis. The difference is

significant. We can conclude that customer service has improved for Rite Aid.

b. This is another upper-tail test, but it only involves one population.

H0:   75.7

Ha:   75.7

z
 x1  75.7   (76  75.7)  .39
2 62
n1 60

p-value = area in upper tail at z = .39

p-value = 1.0000 – .6517 = .3483

Because .3483 > α = .05, we cannot reject the null hypothesis. The difference

is not statistically significant.

c. This is an upper-tail test similar to the one in part a.

H0: 1  2  0

Ha: 1  2  0

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 z
 x1  x2  
(77  75)
 1.83
 2
 2
62 6 2
1
 2

n1 n2 60 60

p-value = area in upper tail at z = 1.83

p-value = 1.0000 – .9664 = .0336

Because .0336  α = .05, we reject the null hypothesis. The difference is

significant. We can conclude that customer service has improved for Expedia.

d. We will reject the null hypothesis of “no increase” if the p-value ≤ .05. For an upper-

tail hypothesis test, the p-value is the area in the upper tail at the value of the test

statistic. A value of z = 1.645 provides an upper-tail area of .05. So, we must solve

the following equation for x1  x2 .

 x1  x2 
z  1.645
62 62

60 60

62 6 2
x1  x2  1.645   1.80
60 60

This tells us that as long as the year 2 score for a company exceeds the year 1 score by

1.80 or more the difference will be statistically significant.

e. The increase from year 1 to year 2 for J.C. Penney is not statistically significant

because it is less than 1.80. We cannot conclude that customer service has improved

for J.C. Penney.

t
 x1  x2   0  (13.6  10.1)  0  2.18
s12 s22 5.22 8.52
 
n1 n2 35 40
10. a.

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 2 2
 s12 s22   5.22 8.52 
     
 n1 n2   35 40 
df  2 2
 2 2
 65.7
1  s12  1  s22  1  5.22  1  8.52 
         
n1  1  n1  n2  1  n2  34  35  39  40 
b.

Use df = 65.

c. Using t table, area in tail is between .01 and .025  two-tail p-value is between .02

and .05.

Exact p-value corresponding to t = 2.18 is .0329

d. p-value  .05, reject H0.

12. a. x1  x2 = 22.5 – 18.6 = 3.9

2 2
 s12 s22   8.42 7.42 
     
 n1 n2   50 40 
df  2 2
 2 2
 87.1
1  s12  1  s22  1  8.42  1  7.42 
         
n1  1  n1  n2  1  n2  49  50  39  40 
b.

Use df = 87, t.025 = 1.988

8.42 7.42
3.9  1.988 
50 40

3.9 + 3.3 (.6 to 7.2)

14. a. H0: 1  2 ³ 0

Ha: 1  2  0

b.

(𝑥̅ − 𝑥̅ ) − 𝐷 (48,537 − 55,317) − 0

𝑡= = = −2.71
𝑠 𝑠 18,000 10,000
+
+ 110 30
𝑛 𝑛

c.

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 𝑠 𝑠 18,000 10,000
+ +
𝑛 𝑛 110 30
𝑑𝑓 = =
1 𝑠 1 𝑠 1 18,000 1 10,000
+ +
𝑛 −1 𝑛 𝑛 −1 𝑛 110 − 1 110 30 − 1 30

= 85.20

Rounding down, we will use a t distribution with 85 degrees of freedom. From the t

table we see that t = –2.71 corresponds to a p-value between .005 and 0.

Exact p-value corresponding to t = –2.71 is .004.

d. p-value  .05, reject H0. We conclude that the salaries of finance majors are lower

than the salaries of business analytics majors.

16. a. 1 = population mean verbal score parents college grads

2 = population mean verbal score parents high school grads

H0: 1  2  0

Ha: 1  2  0

xi 8400
x1    525
b. n 16

xi 5844
x2    487
n 12

x1  x2 = 525 – 487 = 38 points higher if parents are college grads

( xi  x1 ) 2 52962
s1    3530.8  59.42
n1  1 16  1
c.

( xi  x2 ) 2 29456
s2    2677.82  51.75
n2  1 12  1

t
 x1  x2   D0 
(525  487)  0
 1.80
2 2
s s 59.422 51.752
1
 2

n1 n2 16 12

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 2 2
 s12 s22   59.422 51.752 
     
df   n1 n2    16 12 
 25.3
2 2 2 2
1  s12  1  s22  1  59.422  1  51.752 
         
n1  1  n1  n2  1  n2  15  16  11  12 

Use df = 25.

Using t table, p-value is between .025 and .05.

Exact p-value corresponding to t = 1.80 is .0420/

d. p-value  .05, reject H0. Conclude higher population mean verbal scores for students

whose parents are college grads.

18. a. Let 1 = population mean minutes late for delayed Delta flights

2 = population mean minutes late for delayed Southwest flights

H0: 1  2  0

Ha: 1   22  0

x i
1265
x1  i1
  50.6
b. n1 25 minutes

x i
1056
x2  i1
  52.8 minutes
n2 20

The difference between sample mean delay times is 50.6 – 52.8 = –2.2 minutes, which

indicates the sample mean delay time is 2.2 minutes less for Delta.

c. Sample standard deviations: s1 = 26.57 and s2 = 20.11

t
x  x   D
1 2 0

(50.6  52.8)  0
 .32
2 2
s s 26.57 2 20.112
1 2

n1 n2 25 20

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 2 2
 s12 s22   26.572 20.112 
n n   25  20 
 1 2  
df  2 2
 2 2
 42.9
1  s1  1  s2  1  26.572  1  20.112 
2 2

    
n1 1  n1  n2  1  n2 
 24  25  19  20 
 

Use df = 42.

p-value for this two-tailed test is two times the lower-tail area for t = –.32.

Using t table, p-value is greater than 2(.20) = .40.

Exact p-value corresponding to t = –.32 with 42 df is .7506.

p-value > .05, do not reject H0. We cannot reject the assumption that the

population mean delay times are the same at Delta and Southwest Airlines. There is

no statistical evidence that one airline does better than the other in terms of its

population mean delay time.

20. a. 3, –1, 3, 5, 3, 0, 1

b. d   di / n  14 / 7  2

 (di  d ) 2 26
c. sd    2.08
n 1 7 1

d. d = 2

e. With 6 degrees of freedom t.025 = 2.447


2  2.447 2.082 / 7 
2 + 1.93 (.07 to 3.93)

22. a. Let

𝑒𝑛𝑑 𝑜𝑓 𝑓𝑖𝑟𝑠𝑡 𝑞𝑢𝑎𝑟𝑡𝑒𝑟 𝑝𝑟𝑖𝑐𝑒 − 𝑏𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑜𝑓 𝑓𝑖𝑟𝑠𝑡 𝑞𝑢𝑎𝑟𝑡𝑒𝑟 𝑝𝑟𝑖𝑐𝑒

𝑑 =
𝑏𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑜𝑓 𝑓𝑖𝑟𝑠𝑡 𝑞𝑢𝑎𝑟𝑡𝑒𝑟 𝑝𝑟𝑖𝑐𝑒

∑ 𝑑 −1.74
𝑑̅ = = = −0.07
𝑛 25

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 b.

∑ (𝑑 − 𝑑̅ ) 0.2666
𝑠 = = = 0.105
𝑛−1 25 − 1

With df = 24, t.025 = 2.064

sd .
d  t.025 = −0.07 ± 2.064 = −0.07 ± 0.04
n √

Confidence interval: (–0.11 to –0.03)

The 95% confidence interval shows that the population mean percentage

change in the price per share of stock is a decrease of 3% to 11%. This may be a

harbinger of a further stock market swoon.

24. a. Difference = Current year airfare – Previous year airfare

H0: d ≤ 0

Ha: d > 0

Differences 30, 63, –42, 10, 10, –27, 50, 60, 60, –30, 62, 30

 di 276
d   23
n 12

(di  d )2 16,558
sd    38.80
n 1 12  1

d 0 23  0
t   2.05
sd / n 38.80 / 12

df = n – 1 = 11

Using t table, p-value is between .05 and .025.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Exact p-value corresponding to t = 2.05 is .0325.

Because p-value < .05, reject H0. We can conclude that there has been a

significance increase in business travel airfares over the one-year period.

b. Current year: x   xi / n  5844 / 12  $487

Previous year: x   xi / n  5568 / 12  $464

c. One-year increase = $487 – $464 = $23

$23/$464 = .05, or a 5% increase in business travel airfares for the one-year period.

26. a. H0: μd = 0

Ha: μd  0

Differences: –2, –1, –5, 1, 1, 0, 4, –7, –6, 1, 0, 2, –3, –7, –2, 3, 1, 2, 1, –4

d   di / n  21/ 20  1.05

 (di  d ) 2
sd   3.3162
n 1

d  d 1.05  0
t   1.42
sd / n 3.3162 / 20

df = n – 1 = 19

Using t table, area in tail is between .05 and .10.

Two-tail p-value must be between .10 and .20.

Exact p-value corresponding to t = –1.42 is .1718.

Cannot reject H0. There is no significant difference between the mean scores

for the first and fourth rounds.

b. d = –1.05; first round scores were lower than fourth round scores.

c. α = .05

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 df = 19 t = 1.729

sd
Margin of error = t.025 = 1.729 3.3162  1.28
n 20

Yes, just check to see if the 90% confidence interval includes a difference of zero. If it

does, the difference is not statistically significant.

90% Confidence interval: –1.05 ± 1.28 (–2.33, .23)

The interval does include 0, so the difference is not statistically significant.

28. a. p1  p2 = .48 – .36 = .12

p1 (1  p1 ) p2 (1  p2 )
p1  p2  z.05 
n1 n2
b.

.48(1  .48) .36(1  .36)

.12  1.645 
400 300

.12 + .0614 (.0586 to .1814)

.48(1  .48) .36(1  .36)

.12  1.96 
c. 400 300

.12 + .0731 (.0469 to .1931)

30. p1 = 220/400 = .55 p2 = 192/400 = .48

p1 (1  p1 ) p2 (1  p2 )
p1  p2  z.025 
n1 n2

.55(1  .55) .48(1  .48)

.55  .48  1.96 
400 400

.07 + .0691 (.0009 to .1391)

Seven percent more executives are predicting an increase in full-time jobs. The

confidence interval shows the difference may be from 0.09% to 13.91%. Because 0%

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 does not lie strictly within this confidence interval (i.e., the lower limit of the

confidence interval is not negative), we can state with 95% confidence that the

percentage of executives optimistic about hiring is larger in the current year than in the

previous year.

32. Let p1 = the population proportion of tuna that is mislabeled

p2 = the population proportion of mahi mahi that is mislabeled

a. The point estimate of the proportion of tuna that is mislabeled is p1 = 99/220 = .45.

b. The point estimate of the proportion of mahi mahi that is mislabeled is p2 = 56/160 =

.35.

c. p1  p2 = .45 – .35 = .10

p1 (1  p1 ) p2 (1  p2 )
.10  z.025 
n1 n2

.45(.55) .35(.65)
.10  1.96 
220 160

.10 ± .0989 (.0011 to .1989)

The 95% confidence interval estimate of the difference between the proportion of tuna

and mahi mahi that is mislabeled is .10 ± .0989 or (.0011 to .1989).

34. Let p1 = the population proportion of wells drilled in 2012 that were dry

p2 = the population proportion of wells drilled in 2018 that were dry

a. H0: p1  p2  0

Ha: p1  p2  0

p1
b. = 24/119 = .2017

p2
c. = 21/162 = .1111

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 n1 p1  n2 p2 24  18
d. p   .1495
n1  n2 119  162

p1  p2 .2017  .1111
z   2.10
1 1   1 1 
p 1  p     .1495 1  .1495    
 n1 n2   119 162 

Upper-tail p-value is the area to the right of the test statistic.

Using normal table with z = 2.10: p-value = 1 – .9821 = .0179.

p-value < .05, so reject H0 and conclude that wells drilled in 2012 were dry

more frequently than wells drilled in 2018—that is, the frequency of dry wells has

decreased over the eight years from 2012 to 2018.

36. a. Let p1 = population proportion of men expecting to get a raise or promotion this year

p2 = population proportion of women expecting to get a raise or promotion this year

H0: p1 – p2 < 0

Ha: p1 – p2 > 0

b. p1 = 104/200 = .52 (52%)

p2 = 74/200 = .37 (37%)

n1 p1  n2 p2 104  74
p   .445
c. n1  n2 200  200

p1  p2 .52  .37
z   3.02
1 1  1 1 
 
p 1 p    
.445 1 .445 
 200

200 
 n1 n2 

p-value = 1.0000 – .9987 = .0013

Reject H0. There is a significant difference between the population proportions with a

great proportion of men expecting to get a raise or a promotion this year.

38. H0: μ1 – μ2 = 0

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 Ha: μ1 – μ2 ≠ 0

( x1  x2 )  D0 (4.1  3.4)  0
z   2.79
 2
 2
(2.2) 2 (1.5) 2
1
 2

n1 n2 120 100

p-value = 2(1.0000 – .9974) = .0052

p-value  .05, reject H0. A difference exists with system B having the lower mean

checkout time.

40. a. H 0 : 1   2  0

H a : 1  2  0

b. n1 = 30 n2 = 30

x1 = 16.23 x2 = 15.70

s1 = 3.52 s2 = 3.31

( x1  x2 )  D0 (16.23  15.70)  0
t   .60
2 2
s s (3.52)2 (3.31) 2
1
 2

n1 n2 30 30

2
 s12 s22   3.52 2 3.312 
     
df   n1 n2    30 30 
 57.8
2 2 2 2
1  s12  1  s22  1  3.522  1  3.312 
         
n1  1  n1  n2  1  n2  29  30  29  30 

Use df = 57.

Using t table, p-value is greater than .20.

Exact p-value corresponding to t = .60 is .2754.

p-value > .05, do not reject H0. Cannot conclude that the mutual funds with a

load have a greater mean rate of return.

 di 280
d   14
42. a. n 20

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 ( d i  d ) 2 54,880
sd    53.744
b. n 1 19

df = n – 1 = 19, t.05 = 1.729

sd
d  t.05 = 14  1.729 53.744
n 20

14  20.78 (–6.78 to 34.78)

c. H0: μd = 0

Ha: μd  0

d  d 14  0
t  1.165
sd / n 53.744 / 20

Using t table with df = 19, the area in upper tail is between .20 and .10. Thus, for the

two-tailed test, the p-value is between .20 and .40.

Using software, the exact p-value for t = 1.165 is .258.

Cannot reject H0; cannot concluded that there is a difference between the

mean scores for the no sibling and with sibling groups.

44. a. p1 = 76/400 = .19

p2 = 90/900 = .10

n1 p1  n2 p2 76  90
p   .1277
n1  n2 400  900

p1  p2 .19  .10
z   4.49
1 1   1 1 
p 1  p     .1277 1  .1277    
 n1 n2   400 900 

p-value  0

Reject H0; there is a difference between claim rates.

p1 (1  p1 ) p2 (1  p2 )
p1  p2  z.025 
n1 n2
b.

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 .19(1  .19) .10(1  .10)
.19  .10  1.96 
400 900

.09 + .0432 (.0468 to .1332)

Claim rates are higher for single males.

46. Let p1 = the population proportion of American adults under 30 years old

p2 = the population proportion of Americans over 30 years old

a. From the file Computer News, there are 109 Yes responses for each age group. The

total number of respondents of the under 30 years group is n1 = 150, whereas the 30

and over group had is n2 = 200 total respondents.

American adults under 30 years old: p1 = 109/150 = .727

Americans over 30 years old: p2 = 109/200 = .545

b. p1  p2  .727  .545  .182

.727(1  .727) .545(1  .545)

s p1  p2    .0506
150 200

Confidence interval: .182  1.96(.0506) or.182  .0992 (.0824 to .2809)

c. Because the confidence interval in part b does not include 0 and both values are

negative, conclude that the proportion of American adults under 30 years old who use

a computer to gain access to news is greater than the proportion of Americans over 30

years old that use a computer to gain access to news.

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Chapter 11 Solutions

2. s2 = 25

a. With 19 degrees of freedom .05

2
= 30.144 and .95
2
= 10.117:

19(25) 19(25)
2 
30.144 10.117

15.76 ≤  2 ≤ 46.95

b. With 19 degrees of freedom .025

2
= 32.852 and .975
2
= 8.907:

19(25) 19(25)
2 
32.852 8.907

14.46 ≤  2 ≤ 53.33

c. 3.8 ≤  ≤ 7.3

4. a. n = 24

s2 = .81

With 24 – 1 = 23 degrees of freedom, .05

2
= 35.172 and .95
2
= 13.091.

23(. 81) 23(. 81)

≤𝜎 ≤
35.172 13.091

.53 ≤  2 ≤ 1.42

b. .73 ≤  ≤ 1.19

 xi 25.6
x   3.2
6. a. n 8

The sample mean quarterly total return for General Electric is 3.2%. This is the estimate

of the population mean percent total return per quarter for General Electric.

(xi  x )2 1773.6
s2    253.37
b. n 1 81

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 s  253.37  15.92

c. With df = (n – 1) = 7 .025
2
= 16.013 .975
2
= 1.690

(n 1)s 2 (n 1)s 2
2 
 .025  .975

(8  1)(253.37) (8  1)(253.37)
2 
16.013 1.690

110.76 ≤  2 ≤ 1,049.47

d. 10.52 ≤  ≤ 32.40

8. a. x  .78

( xi  x )2 5.2230
s2    .4748
n 1 12  1

b. s  .4748  .6891

c. 11 degrees of freedom

 .025
2
= 21.920  .975
2
= 3.816

(12  1).4748 (12  1).4748

2 
21.920 3.816

.2383 ≤ 2 ≤ 1.3687

.4882 ≤  ≤ 1.1699

 xi 1260
x    84
10. a. n 15

 ( xi  x ) 2 1662
s    118.71
2

b. n 1 15  1

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 c. s  s 2  118.71  10.90

d. Hypothesis for  = 12 is for  2 = (12)2 = 144

H0:  2 = 144

Ha:  2  144

(n 1)s2 (15 1)(118.71)

2    11.54
 2
0
144

Degrees of freedom = n – 1 = 14.

Using  2 table, p–value is greater than 2(1 – .90) = .20.

Exact p–value corresponding to  2 = 11.54 is 2(1 – .6431) = .7138.

p–value > .05; do not reject H0. The hypothesis that the population standard

deviation is 12; cannot be rejected.

( xi  x ) 2
s2   .8106
12. a. n 1

b. H0:  2 = .94

Ha:  2  .94

( n  1) s 2 (12  1)(.8106)
2    9.49
 2
0 .94

Degrees of freedom = n – 1 = 11.

Using  2 table, area in tail is greater than .10.

Two–tail p–value is greater than .20.

Exact p–value corresponding to  2 = 9.49 is .8465.

p–value > .05, cannot reject H0.

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 s12 5.8
F   2.4
s22 2.4
14. a.

Degrees of freedom 15 and 20.

Using F table, p–value is between .025 and .05.

Exact p–value corresponding to F = 2.4 is .0345.

p–value  .05; reject H0. Conclude 12   22 .

b. F.05 = 2.20

Reject H0 if F ³ 2.20

2.4 ³ 2.20; reject H0. Conclude 12   22

16. For this type of hypothesis test, we place the larger variance in the numerator. So the

Fidelity variance is given the subscript of 1.

H 0 :12   22

H a :12   22

s12 18.9 2
F   1.59
s22 15.0 2

Degrees of freedom in the numerator and denominator are both 59.

Using the F table, p–value is between .05 and .025.

Exact p–value corresponding to F = 1.59 is .0387.

p–value  .05; reject H0. We conclude that the Fidelity fund has a greater

variance than the American Century fund.

18. We place the larger sample variance in the numerator. So, the Merrill Lynch variance is

given the subscript of 1.

H 0 : 12   22

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 H a : 12   22

s12 587 2
F   1.44
s22 489 2

Degrees of freedom 15 and 9.

Using F table, area in tail is greater than .10.

Two–tail p–value is greater than .20 .

Exact p–value corresponding to F = 1.44 is .5906.

p–value > .10; do not reject H0. We cannot conclude there is a statistically

significant difference between the variances for the two companies.

20. H0 :12   22

Ha :12   22

s12 11.1
F   5.29
s22 2.1

Degrees of freedom 25 and 24.

Using F table, area in tail is less than .01.

Two–tail p–value is less than .02 .

Exact p–value  0.

p–value  .05; reject H0. The population variances are not equal for seniors

and managers.

22. a. Population 1—Wet pavement.

H0 :12   22

Ha :12   22

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 s12 32 2
F   4.00
s22 16 2

Degrees of freedom 15 and 15.

Using F table, p–value is less than .01.

Exact p–value corresponding to F = 4.00 is .0054.

p–value  .05; reject H0. Conclude that there is greater variability in stopping

distances on wet pavement.

b. Drive carefully on wet pavement because of the variability in stopping distances.

24. With 12 degrees of freedom:

.025
2
= 23.337 .975 = 4.404
2

(12)(14.95) 2 (12)(14.95) 2
2 
23.337 4.404

114.9 ≤  2 ≤ 609

10.72 ≤  ≤ 24.68

26. a. H0:  2 ≤ .0001

Ha:  2 ≤ .0001

( n  1) s 2 (15  1)(.014) 2
2    27.44
 2
.0001

Degrees of freedom = n – 1 = 14.

Using  2 table, p– value is between .01 and .025.

Exact p–value corresponding to  2 = 27.44 is .0169.

p–value  .10; reject H0. Variance exceeds maximum variance requirement.

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 b. .05 = 23.685
2

.95
2
= 6.571 (14 degrees of freedom)

(14)(.014) 2 (14)(.014) 2
2 
23.685 6.571

.00012 ≤  2 .00042

28. H0:  2 ≤ 1

Ha:  2 > 1

( n  1) s 2 (22  1)(1.5)
2    31.50
 2
0 1

Degrees of freedom = n – 1 = 21

Using  2 table, p–value is between .05 and .10

Exact p–value corresponding to  2 = 31.50 is .0657

p–value  .10; reject H0. Conclude that  2 > 1.

30. a. Try n = 15

.025
2
= 26.119

.975
2
= 5.629 (14 degrees of freedom)

(14)(64) (14)(64)
2 
26.119 5.629

34.3 ≤  2 ≤ 159.2

5.86 ≤  ≤ 12.62

A sample size of 15 was used.

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 b. n = 25; expect the width of the interval to be smaller.

.05
2
= 39.364

.975
2
= 12.401 (24 degrees of freedom)

(24)(8) 2 (24)(8) 2
2 
39.364 12.401

39.02 ≤  2 ≤ 123.86

6.25 ≤  ≤ 11.13

32. H 0 : 12   22

H a : 12   22

Use critical value approach because F tables do not have 351 and 72 degrees of

freedom.

F.025 = 1.47

Reject H0 if F ³ 1.47.

s12 .9402
F   1.39
s22 .797 2

F < 1.47; do not reject H0. We are not able to conclude students who complete

the course and students who drop out have different variances of grade point

averages.

34. 𝐻 :𝜎 ≤𝜎

𝐻 :𝜎 >𝜎

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 s12 25
F   2.08
s22 12

Degrees of freedom 30 and 24

Using the F table, the area in the tail (which corresponds to the p-value) is

between .025 and .05.

Exact p–value corresponding to F = 2.08 is .0348.

p–value  .10; reject H0. Conclude that the population variances has

decreased because of the lean process improvement.

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Chapter 12 Solutions

2. a. p1  150 / 250  .60

p2  150 / 300  .50

p3  96 / 200  .48

b. Multiple comparisons

For 1 versus 2

p1 (1  p1 ) p2 (1  p2 ) .60(1  .60) .50(1  .50)

CV12  2   5.991   .1037
n1 n2 250 300

df = k –1 = 3 – 1 = z .05
2
= 5.991

Comparison pi pj Difference ni nj Critical Value Significant Diff > CV

1 vs. 2 .60 .50 .10 250 300 .1037

1 vs. 3 .60 .48 .12 250 200 .1150 Yes

2 vs. 3 .50 .48 .02 300 200 .1117

Only one comparison is significant, 1 versus 3. The others are not significant. We can

conclude that the population proportions differ for populations 1 and 3.

4. a. H0: p1  p2  p3

Ha: Not all population proportions are equal

b. Observed Frequencies (fij)

Component A B C Total

Defective 15 20 40 75

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 Good 485 480 460 1425

Total 500 500 500 1500

Expected Frequencies (eij)

Component A B C Total

Defective 25 25 25 75

Good 475 475 475 1425

Total 500 500 500 1500

Chi-Square Calculations (fij – eij)2 / eij

Component A B C Total

Defective 4.00 1.00 9.00 14.00

Good .21 .05 .47 0.74

 2  14.74

Degrees of freedom = k – 1 = (3 – 1) = 2

Using the  2 table with df = 2,  2 = 14.74 shows the p-value is less than .005.

Using software, the p-value corresponding to  2 = 14.74 is .0006.

Because the p-value < .05; reject H0. Conclude that the three suppliers do not

provide equal proportions of defective components.

c. p1  15 / 500  .03

p2  20 / 500  .04

p3  40 / 500  .08

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 Multiple comparisons

For Supplier A Versus Supplier B

df = k –1 = 3 – 1 = z .05 = 5.991
2

pi (1  pi ) p j (1  p j ) .03(1  .03) .04(1  .04)

CVij  2   5.991   .0284
ni nj 500 500

Comparison pi pj Difference ni nj Critical Value Significant Diff > CV

A vs. B .03 .04 .01 500 500 .0284

A vs. C .03 .08 .05 500 500 .0351 Yes

B vs. C .04 .08 .04 500 500 .0366 Yes

Supplier A and supplier B are both significantly different from supplier C. Supplier C

can be eliminated on the basis of a significantly higher proportion of defective

components. Since suppliers A and supplier B are not significantly different in terms of

the proportion defective components, both suppliers should remain candidates for use

by Benson.

6. a. p1  35 / 250  .14 14% error rate

p2  27 / 300  .09 9% error rate

b. H0: p1  p2  0

Ha: p1  p2  0

Observed Frequencies (fij)

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 Return Office 1 Office 2 Total

Error 35 27 62

Correct 215 273 488

250 300 550

Expected Frequencies (eij)

Return Office 1 Office 2 Total

Error 28.18 33.82 62

Correct 221.82 266.18 488

250 300 550

Chi-Square Calculations (fij – eij)2 / eij

Return Office 1 Office 2 Total

Error 1.65 1.37 3.02

Correct .21 .17 .38

 2  3.41

df = k – 1 = (2 – 1) = 1.

Using the  2 table with df = 1,  2 = 3.41 shows the p-value is between .10 and

.05.

Using software, the p-value corresponding to  2 = 3.41 is .0648.

p-value < .10; reject H0. Conclude that the two offices do not have the same

population proportion error rates.

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 c. With two populations, a chi-square test for equal population proportions has one

degree of freedom. In this case, the test statistic  2 is always equal to z2. This

relationship between the two test statistics always provides the same p-value and the

same conclusion when the null hypothesis involves equal population proportions.

However, the use of the z-test statistic provides options for one–tailed hypothesis tests

about two population proportions while the chi-square test is limited to two–tailed

hypothesis tests about the equality of the two population proportions.

8. H0: The distribution of defects is the same for all suppliers

Ha: The distribution of defects is not the same all suppliers

Observed Frequencies (fij)

Part Tested A B C Total

Minor defect 15 13 21 49

Major defect 5 11 5 21

Good 130 126 124 380

Total 150 150 150 450

Expected Frequencies (eij)

Part tested A B C Total

Minor defect 16.33 16.33 16.33 49

Major defect 7.00 7.00 7.00 21

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 Good 126.67 126.67 126.67 380

Total 150 150 150 450

Chi-Square Calculations (fij – eij)2 / eij

Part tested A B C Total

Minor defect .11 .68 1.33 2.12

Major defect .57 2.29 .57 3.43

Good .09 .00 .06 .15

 2  5.70

Degrees of freedom = (r – 1)(k – 1) = (3 – 1)(3 – 1) = 4

Using the  2 table with df = 4,  2 = 5.70 shows the p-value is greater than .10

Using software, the p-value corresponding to  2 = 5.70 is .2227

p-value > .05; do not reject H0. Conclude that we are unable to reject the

hypothesis that the population distribution of defects is the same for all three

suppliers. There is no evidence that quality of parts from one suppliers is better than

either of the others two suppliers.

10. H0: The column variable is independent of the row variable

Ha: The column variable is dependent on the row variable

Observed Frequencies (fij)

A B C Total

P 20 30 20 70

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 Q 30 60 25 115

R 10 15 30 55

Total 60 105 75 240

Expected Frequencies (eij)

A B C Total

P 17.50 30.63 21.88 70

Q 28.75 50.31 35.94 115

R 13.75 24.06 17.19 55

Total 60 105 75 240

Chi-Square Calculations (fij – eij)2 / eij

A B C Total

P .36 .01 .16 .53

Q .05 1.87 3.33 5.25

R 1.02 3.41 9.55 13.99

 2 = 19.77

Degrees of freedom = (r – 1)(c – 1) = (3 – 1)(3– 1) = 4.

Using the  2 table with df = 4,  2 = 19.77 shows the p-value is less than .005.

Using software, the p-value corresponding to  2 = 19.77 is .0006.

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 p-value  .05; reject H0. Conclude that the column variable is not independent

of the row variable.

12. a. H0: Employment plan is independent of the type of company

Ha: Employment plan is not independent of the type of company

Observed Frequency (fij)

Employment Plan Private Public Total

Add employees 37 32 69

No change 19 34 53

Lay off employees 16 42 58

Total 72 108 180

Expected Frequency (eij)

Employment plan Private Public Total

Add employees 27.6 41.4 69

No change 21.2 31.8 53

Lay off employees 23.2 34.8 58

Total 72.0 108.0 180

Chi-Square Calculations (fij – eij)2 / eij

Employment Plan Private Public Total

Add employees 3.20 2.13 5.34

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 No change 0.23 0.15 0.38

Lay off employees 2.23 1.49 3.72

2 = 9.44

Degrees of freedom = (r – 1)(c – 1) = (3 – 1)(2 – 1) = 2

Using the  2 table with df = 2,  2 = 9.44 shows the p-value is between .01 and

0.005.

Using software, the p-value corresponding to  2 = 9.44 is .0089.

Because the p-value  .05; reject H0. Conclude the employment plan is not

independent of the type of company. Thus, we expect employment plan to differ for

private and public companies.

b. Column probabilities: For example, 37/72 = .5139

Employment plan Private Public

Add employees .5139 .2963

No change .2639 .3148

Lay off employees .2222 .3889

Employment opportunities look to be much better for private companies with over 50%

of private companies planning to add employees (51.39%). Public companies have the

greater proportions of no change and lay off employees planned. 38.89% of public

companies are planning to lay off employees over the next 12 months. 69/180 = .3833,

or 38.33% of the companies in the survey are planning to hire and add employees

during the next 12 months.

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14. a. H0: Quality rating is independent of the education of the owner

Ha: Quality rating is not independent of the education of the owner

Observed Frequencies Some HS HS Grad Some College College Grad Total

(fij)Quality Rating

Average 35 30 20 60 145

Outstanding 45 45 50 90 230

Exceptional 20 25 30 50 125

Total 100 100 100 200 500

Expected Frequencies (eij)

Quality Rating Some HS HS Grad Some College College Grad Total

Average 29 29 29 58 145

Outstanding 46 46 46 92 230

Exceptional 25 25 25 50 125

Total 100 100 100 200 500

Chi-Square Calculations (fij – eij)2 / eij

Quality Rating Some HS HS Grad Some College College Grad Total

Average 1.24 .03 2.79 .07 4.14

Outstanding .02 .02 .35 .04 .43

Exceptional 1.00 .00 1.00 .00 2.00

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  2  6.57

Degrees of freedom = (r – 1)(c – 1) = (3 – 1)(4 – 1) = 6.

Using the  2 table with df = 6,  2 = 6.57 shows the p-value is greater than .10.

Using software, the p-value corresponding to  2 = 6.57 is .3624.

p-value > .05; do not reject H0. We are unable to conclude that the quality

rating is not independent of the education of the owner. Thus, quality ratings are not

expected to differ with the education of the owner.

b. Average: 145/500 = 29%

Outstanding 230/500 = 46%

Exceptional 125/500 = 25%

New owners look to be pretty satisfied with their new automobiles with almost 50%

rating the quality outstanding and over 70% rating the quality outstanding or

exceptional.

16. a. Observed Frequency (fij)

Age of Respondent

Actress 18–30 31–44 45–58 Over 58 Totals

Jessica Chastain 51 50 41 42 184

Jennifer Lawrence 63 55 37 50 205

Emmanuelle Riva 15 44 56 74 189

Quvenzhané Wallis 48 25 22 31 126

Naomi Watts 36 65 62 33 196

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 Totals 213 239 218 230 900

The sample size is 900.

b. The sample proportion of movie fans who prefer each actress is:

184
p1   .2044
900

205
p2   .2278
900

189
p3   .2100
900

126
p4   .1400
900

196
p5   .2178
900

The movie fans favored Jennifer Lawrence, but three other nominees (Jessica Chastain,

Emmanuelle Riva, and Naomi Watts) each were favored by almost as many of the fans.

c. Expected Frequency (eij)

Age of Respondent

Actress 18–30 31–44 45–58 Over 58 Totals

Jessica Chastain 43.5 48.9 44.6 47.0 184

Jennifer Lawrence 48.5 54.4 49.7 52.4 205

Emmanuelle Riva 44.7 50.2 45.8 48.3 189

Quvenzhané Wallis 29.8 33.5 30.5 32.2 126

Naomi Watts 46.4 52.0 47.5 50.1 196

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 Totals 213 239 218 230 900

( fij  eij ) 2
Calculate for each cell in the table.
eij

Age of Respondent

Actress 18–30 31–44 45–58 More Than 58 Totals

Jessica Chastain 1.28 0.03 0.29 0.54 2.12

Jennifer Lawrence 4.32 0.01 3.23 0.11 7.66

Emmanuelle Riva 19.76 0.76 2.28 13.67 36.48

Quvenzhané Wallis 11.08 2.14 2.38 0.04 15.65

Naomi Watts 2.33 3.22 4.44 5.83 15.82

Totals 38.77 6.16 12.61 20.20 77.74

( fij  eij )2
 2    77.74
i j eij

With (5 – 1)(4 – 1) = 12 degrees of freedom, the p-value is approximately 0.

p-value  .05; reject H0. Attitude toward the actress who was most deserving

of the 2013 Academy Award for actress in a leading role is not independent of age.

18. Expected frequencies:

e11 = 11.81 e12 = 8.44 e13 = 24.75

e21 = 8.40 e22 = 6.00 e23 = 17.60

e31 = 21.79 e32 = 15.56 e33 = 45.65

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 Observed Frequency Expected Frequency Chi-Square

Host A Host B (fi) (ei) (fi – ei)2 / ei

Con Con 24 11.81 12.57

Con Mixed 8 8.44 .02

Con Pro 13 24.75 5.58

Mixed Con 8 8.40 .02

Mixed Mixed 13 6.00 8.17

Mixed Pro 11 17.60 2.48

Pro Con 10 21.79 6.38

Pro Mixed 9 15.56 2.77

Pro Pro 64 45.65 7.38

 2 = 45.36

Degrees of freedom = (r – 1)(c – 1) = (3 – 1)(3 – 1) = 4

Using the  2 table with df = 2,  2 = 45.36 shows the p-value is less than .005.

Using software, the p-value corresponding to  2 = 45.36 is .0000.

p-value  .01; reject H0. Conclude that the ratings of the two hosts are not

independent. The host responses are more similar than different and they tend to

agree or be close in their ratings.

20. With n = 30 we will use six classes, each with the probability of .1667.

x = 22.8 s = 6.27

The z values that create six intervals, each with probability .1667, are –.97, –

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 .43, 0, .43, .97.

z Cutoff Value of x

–.97 22.8 – .97 (6.27) = 16.74

–.43 22.8 – .43 (6.27) = 20.10

0 22.8 + 0 (6.27) = 22.80

.43 22.8 + .43 (6.27) = 25.50

.97 22.8 + .97 (6.27) = 28.86

Interval Observed Frequency Expected Frequency Difference

Less than 16.74 3 5 –2

16.74–20.10 7 5 2

20.10–22.80 5 5 0

22.80–25.50 7 5 2

25.50–28.86 3 5 –2

28.86 and up 5 5 0

(−2) (2) (0) (2) (−2) (0) 16

𝜒 = + + + + + = = 3.20
5 5 5 5 5 5 5

Degrees of freedom = k – p – 1 = 6 – 2 – 1 = 3

Using the  2 table with df = 3,  2 = 3.20 shows the p-value is greater than .10.

Using software, the p-value corresponding to  2 = 3.20 is .3618.

p-value > .05; do not reject H 0 . The claim that the data come from a normal

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 distribution cannot be rejected.

22.

Category Hypothesized Observed Expected Chi-Square

Proportion Frequency (fi) Frequency (ei) (fi – ei)2 / ei

Blue .24 105 120 1.88

Brown .13 72 65 .75

Green .20 89 100 1.21

Orange .16 84 80 .20

Red .13 70 65 .38

Yellow .14 80 70 1.43

Total: 500  2 = 5.85

k – 1 = 6 – 1 = 5 degrees of freedom

Using the  2 table with df = 5,  2 = 5.85 shows the p-value is greater than .10

Using software, the p-value corresponding to  2 = 5.85 is .3211

p-value > .05; do not reject H0. We cannot reject the hypothesis that the

overall percentages of colors in the population of M&M milk chocolate candies are

.24 blue, .13 brown, .20 green, .16 orange, .13 red and .14 yellow.

24. a. H0: p1  p 2  p3  p 4  p5  p 6  p 7  1 / 7

Ha: Not all proportions are equal

Observed Frequency (fi)

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 Sunday Monday Tuesday Wednesday Thursday Friday Saturday

66 50 53 47 55 69 80

Expected Frequency (ei) ei = 1/7(420) = 60

Sunday Monday Tuesday Wednesday Thursday Friday Saturday

60 60 60 60 60 60 60

Chi-Square Calculations (fi – ei)2 / ei

Sunday Monday Tuesday Wednesday Thursday Friday Saturday

.60 1.67 .82 2.82 .42 1.35 6.67

 2 = 14.33

Degrees of freedom = (k – 1) = ( 7 – 1) = 6

Using the  2 table with df = 6,  2 = 14.33 shows the p-value is between .05

and .025.

Using software, the p-value corresponding to  2 = 14.33 is .0262

p-value  .05; reject H0. Conclude the proportion of traffic accidents is not the

same for each day of the week.

b. Percentage of traffic accidents by day of the week

Sunday 66/420 = .1571 15.71%

Monday 50/420 = .1190 11.90%

Tuesday 53/420 = .1262 12.62%

Wednesday 47/420 = .1119 11.19%

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 Thursday 55/420 = .1310 13.10%

Friday 69/420 = .1643 16.43%

Saturday 80/420 = .1905 19.05%

Saturday has the highest percentage of traffic accident (19%). Saturday is typically the

late night and more social day/evening of the week. Alcohol, speeding and distractions

are more likely to affect driving on Saturdays. Friday is the second highest with

16.43%.

26. x = 24.5 s = 3 n = 30

Use six classes,

Percentage z Data Value

16.67% –.97 24.5–.97(3) = 21.59

33.33% –.43 24.5–.43(3) = 23.21

50.00% .00 24.5+.00(3) = 24.50

66.67% .43 24.5+.43(3) = 25.79

83.33% .97 24.5+.97(3) = 27.41

Interval Observed Frequency Expected Frequency

Less than 21.59 5 5

21.59–23.21 4 5

23.21–24.50 3 5

24.50–25.79 7 5

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 25.7927.41 7 5

27.41 up 4 5

 2 = 2.80

Degrees of freedom = (k – p – 1) = 6 – 2 – 1 = 3.

Using the  2 table with df = 3,  2 = 2.80 shows the p-value is greater than .10.

Using software, the p-value corresponding to  2 = 2.80 is .4235.

p-value > .10; do not reject H0. The assumption of a normal distribution

cannot be rejected.

28. a. H0: p1  p2  p3

Ha: Not all population proportions are equal

Observed Frequencies (fij)

Quality First Second Third Total

Good 285 368 176 829

Defective 15 32 24 71

Total 300 400 200 900

Expected Frequencies (eij)

Quality First Second Third Total

Good 276.33 368.44 184.22 829

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 Defective 23.67 31.56 15.78 71

Total 300 400 200 900

Chi-Square Calculations (fij – eij)2 / eij

Quality First Second Third Total

Good .27 .00 .37 .64

Defective 3.17 .01 4.28 7.46

 2  8.10

Degrees of freedom = k – 1 = (3 – 1) = 2.

Using the  2 table with df = 2,  2 = 8.10 shows the p-value is between .025

and .01.

Using software, the p-value corresponding to  2 = 8.10 is .0174.

p-value  .05; reject H0. Conclude the population proportion of good parts is

not equal for all three shifts. The shifts differ in terms of production quality.

b. p1  285 / 300  .95

p2  368 / 400  .92

p3  176 / 200  .88

df = k –1 = 3 – 1 = 2 .05
2
 5.991

Comparison pi pj Difference ni nj Critical Significant Diff

Value > CV

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 1 vs. 2 .95 .92 .03 300 400 .0453

1 vs. 3 .95 .88 .07 300 200 .0641 Yes

2 vs. 3 .92 .88 .04 400 200 .0653

Shifts 1 and 3 differ significantly with shift 1 producing better quality (95%)

than shift 3 (88%). The study cannot identify shift 2 (92%) as better or worse quality

than the other two shifts. Shift 3, at 7% more defectives than shift 1 should be studied

to determine how to improve its production quality.

30. a. H0: The preferred pace of life is independent of gender

Ha: The preferred pace of life is not independent of gender

Observed Frequency (fij)

Gender

Preferred Pace of Life Male Female Total

Slower 230 218 448

No Preference 20 24 44

Faster 90 48 138

Total 340 290 630

Expected Frequency (eij)

Gender

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 Preferred Pace of Life Male Female Total

Slower 241.78 206.22 448

No Preference 23.75 20.25 44

Faster 74.48 63.52 138

Total 340 290 630

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Chi-Square Calculations (fij – eij)2/ eij

Gender

Preferred Pace of Life Male Female Total

Slower .57 .67 1.25

No preference .59 .69 1.28

Faster 3.24 3.79 7.03

 2  9.56

Degrees of freedom = (r – 1)(c – 1) = (3 – 1)(2 – 1) = 2.

Using the  2 table with df = 2,  2 = 9.56 shows the p-value is less than .01.

Using software, the p-value corresponding to  2 = 9.56 is .0084.

p-value < .05; reject H0. The preferred pace of life is not independent of

gender. Thus, we expect men and women differ with respect to the preferred pace of

life.

b. Percentage responses for each gender

Gender

Preferred Pace of Life Male Female

Slower 67.65 75.17

No preference 5.88 8.28

Faster 26.47 16.55

The highest percentages are for a slower pace of life by both men and women.

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 However, 75.17% of women prefer a slower pace compared to 67.65% of men and

26.47% of men prefer a faster pace compared to 16.55% of women. More women prefer

a slower pace while more men prefer a faster pace.

32. H0: The county with the emergency call is independent of the day of week

Ha: The county with the emergency call is not independent of the day of week

Observed Frequencies (fij)

Day of Week

County Sun Mon Tues Wed Thu Fri Sat Total

Urban 61 48 50 55 63 73 43 393

Rural 7 9 16 13 9 14 10 78

Total 68 57 66 68 72 87 53 471

Expected Frequencies (eij)

Day of Week

County Sun Mon Tue Wed Thu Fri Sat Total

Urban 56.74 47.56 55.07 56.74 60.08 72.59 44.22 393

Rural 11.26 9.44 10.93 11.26 11.92 14.41 8.78 78

Total 68 57 66 68 72 87 53 471

Chi-Square (fij – eij)2/ eij

Day of Week

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 County Sun Mon Tue Wed Thu Fri Sat Total

Urban .32 .00 .47 .05 .14 .00 .03 1.02

Rural 1.61 .02 2.35 .27 .72 .01 .17 5.15

 2 = 6.17

Degrees of freedom = (r – 1)(c – 1) = (2 – 1)(7 – 1) =6.

Using the  2 table with df = 6,  2 = 6.17 shows the p-value is greater than .10.

Using software, the p-value corresponding to  2 = 6.17 is .4044.

p-value > .05; do not reject H0. The assumption of independence cannot be

rejected. The county with the emergency call does not vary or depend upon the day of

the week.

34.

Expected Frequencies for n = 344

Professional football e1 = .33*344 = 113.52

Baseball e2 = .15*344 = 51.60

Men’s college football e3 = .10*344 = 34.40

Auto racing e4 = .06*344 = 20.64

Men’s professional basketball e5 = .05*344 = 17.20

Ice hockey e6 = .05*344 = 17.20

Other sports e7 = .26*344 = 89.44

Actual Frequencies

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 Professional football f1 = 111

Baseball f2 = 39

Men’s college football f3 = 46

Auto racing f4 = 14

Men’s professional basketball f5 = 6

Ice hockey f6 = 20

Other sports f7 = 108

(111  113.52)2 (39  51.6)2 (46  34.4) 2 (14  20.64) 2 (6  17.2) 2 (20  17.2) 2 (108  89.44) 2
2       
113.52 51.6 34.4 20.64 17.2 17.2 89.44
 20.78

k – 1 = 6 degrees of freedom

Using the  2 table with df = 6,  2 = 20.78 shows the p-value is less than .005.

Using Excel, the p-value corresponding to  2 = 20.78 with df = 6 is .0020.

p-value < .05; reject H0. Yes, undergraduate students differ from the general

public with regard to their favorite sports. Men’s college football is more popular

among undergraduate students, and baseball and auto racing are less popular among

undergraduate students. The difference between expected and actual number of

undergraduate students who responded other sports also suggests that undergraduate

students are interested in a broader range of sports.

36. x = 76.83 s = 12.43

Interval Observed Frequency Expected Frequency

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 Less than 62.54 5 5

62.54–68.50 3 5

68.50–72.85 6 5

72.85–76.83 5 5

76.83–80.81 5 5

80.81–85.16 7 5

85.16–91.12 4 5

91.12 up 5 5

2= 2

Degrees of freedom = k – p – 1 = 8 – 2 – 1 = 5.

Using the  2 table with df = 5,  2 = 2.00 shows the p-value is greater than .10.

Using software, the p-value corresponding to  2 = 2.00 is .8491.

p-value > .05; do not reject H 0 . The assumption of a normal distribution

cannot be rejected.

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Chapter 13 Solutions

2.

Source of Variation Sum of Degrees of Mean F p-value

Squares Freedom Square

Treatments 300 4 75 14.07 .0000

Error 160 30 5.33

Total 460 34

4.

Source of Variation Sum of Degrees of Mean F p-value

Squares Freedom Square

Treatments 150 2 75 4.80 .0233

Error 250 16 15.63

Total 400 18

Using F table (2 degrees of freedom numerator and 16 denominator), p-value is between

.01 and .025

Using Excel, the p-value corresponding to F = 4.80 is .0233.

Because p-value   = .05, we reject the null hypothesis that the means of the

three treatments are equal.

6.

A B C

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 Sample Mean 119 107 100

Sample Variance 146.86 96.44 173.78

8(119)  10(107)  10(100)

x  107.93
28

 
2
SSTR   n j x j  x = 8(119 – 107.93) 2 + 10(107 – 107.93) 2 + 10(100 – 107.93) 2
j 1

= 1617.857

MSTR = SSTR /(k – 1) = 1617.857 /2 = 808.93

k
SSE   (n j  1) s 2j = 7(146.86) + 9(96.44) + 9(173.78) = 3,460
j 1

MSE = SSE /(nT – k) = 3,460 /(28 – 3) = 138.4

F = MSTR /MSE = 809.95 /138.4 = 5.85

Using F table (2 degrees of freedom numerator and 25 denominator), p-value is less

than .01

Using Excel, the p-value corresponding to F = 5.85 is .0082.

Because p-value   = .05, we reject the null hypothesis that the means of the

three treatments are equal.

8. x = (79 + 74 + 66)/3 = 73

 
2
SSTR   n j x j  x = 6(79 – 73) 2 + 6(74 – 73) 2 + 6(66 – 73) 2 = 516
j 1

MSTR = SSTR /(k – 1) = 516/2 = 258

s12 = 34 s22 = 20 s32 = 32

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 k
SSE   (n j  1) s 2j = 5(34) + 5(20) +5(32) = 430
j 1

MSE = SSE /(nT – k) = 430/(18 – 3) = 28.67

F = MSTR /MSE = 258/28.67 = 9.00

Source of Variation Sum of Degrees of Mean F p-value

Squares Freedom Square

Treatments 516 2 258 9.00 .003

Error 430 15 28.67

Total 946 17

Using F table (2 degrees of freedom numerator and 15 denominator), p-value is less

than .01.

Using Excel the p-value corresponding to F = 9.00 is .003.

Because p-value   = .05, we reject the null hypothesis that the means for the

three plants are equal. In other words, analysis of variance supports the conclusion

that the population mean examination score at the three NCP plants are not equal.

10.

Direct Experience Indirect Experience Combination

Sample Mean 17.0 20.4 25.0

Sample Variance 5.01 6.26 4.01

x = (17 + 20.4 + 25)/3 = 20.8

 
2
SSTR   n j x j  x = 7(17 – 20.8) 2 + 7(20.4 – 20.8) 2 + 7(25 – 20.8) 2 = 225.68
j 1

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 MSTR = SSTR /(k – 1) = 225.68 /2 = 112.84

k
SSE   (n j  1) s 2j = 6(5.01) + 6(6.26) + 6(4.01) = 91.68
j 1

MSE = SSE /(nT – k) = 91.68 /(21 – 3) = 5.09

F = MSTR /MSE = 112.84 /5.09 = 22.17

Using F table (2 degrees of freedom numerator and 18 denominator), p-value is less

than .01.

Using Excel the p-value corresponding to F = 22.17 is .0000.

Because p-value   = .05, we reject the null hypothesis that the means for the

three groups are equal.

12.

Italian Seafood Steakhouse

Sample Mean 17 19 24

Sample Variance 14.857 13.714 14.000

x = (17 + 19 + 24)/3 = 20

 
2
SSTR   n j x j  x = 8(17 – 20) 2 + 8(19 – 20) 2 + 8(24 – 20) 2 = 208
j 1

MSTR = SSTR /(k – 1) = 208/2 = 104

k
SSE   (n j  1) s 2j = 7(14.857) + 7(13.714) + 7(14.000) = 298
j 1

MSE = SSE /(nT – k) = 298 /(24 – 3) = 14.19

F = MSTR /MSE = 104 /14.19 = 7.33

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 Using the F table (2 degrees of freedom numerator and 21 denominator), the p-value is

less than .01.

Using Excel the p-value corresponding to F = 7.33 is .0038.

Because p-value   = .05, we reject the null hypothesis that the mean meal

prices are the same for the three types of restaurants.

14. a.

Sample 1 Sample 2 Sample 3

Sample Mean 51 77 58

Sample Variance 96.67 97.34 81.99

x = (51 + 77 + 58)/3 = 62

 
2
SSTR   n j x j  x = 4(51 – 62) 2 +4(77 – 62) 2 + 4(58 – 62) 2 = 1,448
j 1

MSTR = SSTR /(k – 1) = 1,448/2 = 724

k
SSE   (n j  1) s 2j = 3(96.67) + 3(97.34) + 3(81.99) = 828
j 1

MSE = SSE /(nT – k) = 828/(12 – 3) = 92

F = MSTR /MSE = 724/92 = 7.87

Using F table (2 degrees of freedom numerator and 9 denominator), p-value is between

.01 and .025.

Actual p-value = .0106

Because p-value   = .05, we reject the null hypothesis that the means of the three

populations are equal.

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 1 1 
b. LSD  t / 2 MSE     t.025 92     2.262 46  15.34
1 1
 ni n j  4 4

x1  x2  51  77  26  LSD; significant difference

x1  x3  51  58  7  LSD; no significant difference

x2  x3  77  58  19  LSD; significant difference

16. x1  x2  LSD

23 – 28 + 3.54

–5 + 3.54 = –8.54 to –1.46

18. a.

Machine 1 Machine 2 Machine 3 Machine 4

Sample Mean 7.1 9.1 9.9 11.4

Sample Variance 1.21 .93 .70 1.02

x = (7.1 + 9.1 + 9.9 + 11.4)/4 = 9.38

 
2
SSTR   n j x j  x = 6(7.1 – 9.38) 2 + 6(9.1 – 9.38) 2 + 6(9.9 – 9.38) 2 + 6(11.4 –
j 1

9.38) 2 = 57.77

MSTR = SSTR /(k – 1) = 57.77/3 = 19.26

k
SSE   (n j  1) s 2j = 5(1.21) + 5(.93) + 5(.70) + 5(1.02) = 19.30
j 1

MSE = SSE /(nT – k) = 19.30/(24 – 4) = .97

F = MSTR /MSE = 19.26/.97 = 19.86

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 Using F table (3 degrees of freedom numerator and 20 denominator), p-value is less

than .01.

Using Excel, the p-value corresponding to F = 19.86 is .0000.

Because p-value   = .05, we reject the null hypothesis that the mean time

between breakdowns is the same for the four machines.

b. Note: t/2 is based on 20 degrees of freedom.

1 1  1 1
LSD  t / 2 MSE     t.025 0.97     2.086 .3233  1.19
 ni n j  6 6
 

x2  x4  9.1  11.4  2.3  LSD; significant difference

20. a. Partial output is shown below:

One-way ANOVA: Attendance versus Division

Analysis of Variance for Attendance

Source DF Adj SS Adj MS F-Value P-Value

Division 2 18109727 9054863 6.96 0.011

Error 11 14315319 1301393

Total 13 32425045

Model Summary

S R-sq R-sq(adj) R-sq(pred)

1140.79 55.85% 47.82% 30.33%

Means

Division N Mean StDev 95% CI

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 North 6 7702 1301 (6677, 8727)

South 4 5566 1275 (4310, 6821)

West 4 8430 570 (7174, 9685)

Pooled StDev = 1140.79

Because p-value = .011   = .05, we reject the null hypothesis that the mean attendance

values are equal.

b. n1 = 6 n2 = 4 n3 = 4

t/2 is based upon 11 degrees of freedom

Comparing North and South

1 1 1 1
LSD  t.025 1,301,393     2.201 1,301,393     1620.76
6 4 6 4
7702  5566 = 2136 > LSD; significant difference

Comparing North and West

1 1 1 1
LSD  t.025 1,301,393     2.201 1,301,393     1620.76
6 4 6 4

7702  8430 = 728 < LSD; no significant difference

Comparing South and West

1 1 1 1
LSD  t.025 1, 301,393     2.201 1,301,393     1775.45
 4 4  4 4

5566  8430 = 2864 > LSD; significant difference

The difference in the mean attendance among the three divisions is the result of low

attendance in the South division.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
22.

Source of Sum of Degrees of Mean F p-value

Variation Squares Freedom Square

Treatments 310 4 77.5 17.69 .0005

Blocks 85 2 42.5

Error 35 8 4.38

Total 430 14

Using F table (4 degrees of freedom numerator and 8 denominator), p-value is less than

.01.

Using Excel, the p-value corresponding to F = 17.69 is .0005.

Because p-value   = .05, we reject the null hypothesis that the means of the

treatments are equal.

24. Treatment Means:

x1 = 56 x2 = 44

Block Means:

x1 = 46 x2 = 49.5 x3 = 54.5

Overall Mean:

x = 300/6 = 50

Step 1

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  
2
SST   xij  x = (50 – 50) 2 + (42 – 50) 2 + · · · + (46 – 50) 2 = 310
i j

Step 2

 
2
SSTR  b x j  x = 3 [ (56 – 50) 2 + (44 – 50) 2 ] = 216
j

Step 3

SSBL  k  xi   x  
2
= 2 [ (46 – 50) 2 + (49.5 – 50) 2 + (54.5 – 50) 2 ] = 73
i

Step 4

SSE = SST – SSTR – SSBL = 310 – 216 – 73 = 21

Source of Variation Sum of Degrees of Mean F p-value

Squares Freedom Square

Treatments 216 1 216 20.57 .0453

Blocks 73 2 36.5

Error 21 2 10.5

Total 310 5

Using F table (1 degree of freedom numerator and 2 denominator), p-value is between

.025 and .05.

Using Excel, the p-value corresponding to F = 20.57 is .0453.

Because p-value   = .05, we reject the null hypothesis that the mean tune-up

times are the same for both analyzers.

26. a. Treatment Means:

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 x1 = 502 x2 = 515 x3 = 494

Block Means:

x1 = 530 x2 = 590 x3 = 458 x4 = 560 x5 = 448 x6 = 436

Overall Mean:

x = 9066/18 = 503.67

Step 1

 
2
SST   xij  x = (526 – 503.67) 2 + (534 – 503.67) 2 + · · · + (420 – 503.67) 2
i j

= 65,798

Step 2

 
2
SSTR  b x j  x = 6[ (502 – 503.67) 2 + (515 – 503.67) 2 + (494 – 503.67) 2 ] =
j

1348

Step 3

SSBL  k  xi   x  
2
= 3 [ (530 – 503.67) 2 + (590 – 503.67) 2 + · · · + (436 –
i

503.67) 2 ] = 63,250

Step 4

SSE = SST – SSTR – SSBL = 65,798 – 1348 – 63,250= 1200

Source of Variation Sum of Degrees of Mean F p-value

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Squares Freedom Square

Treatments 1348 2 674 5.62 .0231

Blocks 63,250 5 12,650

Error 1200 10 120

Total 65,798 17

Using F table (2 degrees of freedom numerator and 10 denominator), p-value is between

.01 and .025.

Using Excel, the p-value corresponding to F = 5.62 is .0231.

Because p-value   = .05, we reject the null hypothesis that the mean scores

for the three parts of the SAT are equal.

b. The mean test scores for the three sections are 502 for critical reading, 515 for

mathematics, and 494 for writing. Because the writing section has the lowest average

score, this section appears to give the students the most trouble.

28.

Factor B Factor A
Level 1 Level 2 Level 3 Means

Level 1 x11 = 150 x12 = 78 x13 = 84 x1 = 104

Factor A
Level 2 x21 = 110 x22 = 116 x23 = 128 x2 = 118

Factor B Means x1 = 130 x2 = 97 x3 = 106 x = 111

Step 1

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  
2
SST   xijk  x = (135 – 111) 2 + (165 – 111) 2 + · · · + (136 – 111) 2 =
i j k

9,028

Step 2

SSA  br  xi   x  
2
= 3 (2) [ (104 – 111) 2 + (118 – 111) 2 ] = 588
i

Step 3

 
2
SSB  ar  x j  x = 2 (2) [ (130 – 111) 2 + (97 – 111) 2 + (106 – 111) 2 ] = 2,328
j

Step 4

 
2
SSAB  r  xij  xi   x j  x = 2 [ (150 – 104 – 130 + 111) 2 + (78 – 104 – 97 +
i j

111) 2 + · ·+ (128 – 118 – 106 + 111) 2 ] = 4,392

Step 5

SSE = SST – SSA – SSB – SSAB = 9,028 – 588 – 2,328 – 4,392 = 1,720

Source of Sum of Degrees of Mean F p-value

Variation Squares Freedom Square

Factor A 588 1 588 2.05 .2022

Factor B 2328 2 1164 4.06 .0767

Interaction 4392 2 2196 7.66 .0223

Error 1720 6 286.67

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Total 9028 11

Factor A: F = 2.05

Using F table (1 degree of freedom numerator and 6 denominator), p-value is greater

than .10.

Using Excel, the p-value corresponding to F = 2.05 is .2022.

Because p-value >  = .05, Factor A is not significant.

Factor B: F = 4.06

Using F table (2 degrees of freedom numerator and 6 denominator), p-value is between

.05 and .10.

Using Excel, the p-value corresponding to F = 4.06 is .0767.

Because p-value >  = .05, Factor B is not significant.

Interaction: F = 7.66

Using F table (2 degrees of freedom numerator and 6 denominator), p-value is between

.01 and .025.

Using Excel, the p-value corresponding to F = 7.66 is .0223.

Because p-value   = .05, Interaction is significant.

30. Factor A is navigation menu position; Factor B is amount of text entry required.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Factor B Factor A

Small Large Means

A x11 = 10 x12 = 10 x1 = 10

Factor A B x21 = 18 x22 = 28 x2 = 23

C x31 = 14 x32 = 16 x3 = 15

Factor B Means x1 = 14 x2 = 18 x = 16

Step 1

 
2
SST   xijk  x = (8 – 16) 2 + (12 – 16) 2 + (12 – 16) 2 + · · · + (14 – 16) 2 =
i j k

664

Step 2

SSA  br  xi .  x  
2
= 2 (2) [ (10– 16) 2 + (23 – 16) 2 + (15 – 16) 2 ] = 344
i

Step 3

 
2
SSB  ar  x j  x = 3 (2) [ (14 – 16) 2 + (18 – 16) 2 ] = 48
j

Step 4

 
2
SSAB  r  xij  xi   x j  x = 2 [ (10 – 10 – 14 + 16) 2 + · · · + (16 – 15 – 18
i j

+16) 2 ] = 56

Step 5

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 SSE = SST – SSA – SSB – SSAB = 664 – 344 – 48 – 56 = 216

Source of Sum of Degrees of Mean F p-value

Variation Squares Freedom Square

Factor A 344 2 172 172/36 = 4.78 .0574

Factor B 48 1 48 48/36 = 1.33 .2921

Interaction 56 2 28 28/36 = 0.78 .5008

Error 216 6 36

Total 664 11

Using F table for Factor A (2 degrees of freedom numerator and 6 denominator), p-

value is between .05 and .10.

Using Excel the p-value corresponding to F = 4.78 is .0574.

Because p-value > 𝛼= .05, Factor A is not significant; there is not sufficient

evident to suggest a difference due to the navigation menu position.

Using F table for Factor B (1 degree of freedom numerator and 6

denominator), p-value is greater than .10.

Using Excel the p-value corresponding to F =1.33 is .2921.

Because p-value >  = .05, Factor B is not significant; there is not a

significant difference due to amount of required text entry.

Using F table for Interaction (2 degrees of freedom numerator and 6

denominator), p-value is greater than .10.

Using Excel, the p-value corresponding to F = 0.78 is .5008.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Because p-value >  = .05, Interaction is not significant.

32. Factor A is class of vehicle tested (small car, midsize car, small SUV, and midsize SUV)

and Factor B is Type (hybrid or conventional). The data in tabular format follow.

Hybrid Conventional

Small Car 37 28

44 32

Midsize Car 27 23

32 25

Small SUV 27 21

28 22

Midsize SUV 23 19

24 18

Summary statistics for the preceding data follow.

Hybrid Conventional

Small Car x11 = 40.5 x12 = 30.0 x1 = 35.25

Midsize Car x21 = 29.5 x22 = 24.0 x2 = 26.75

Small SUV x31 = 27.5 x32 = 21.5 x3 = 24.50

Midsize SUV x41 = 23.5 x42 = 18.5 x4 = 21.00

x1 = 30.25 x2 = 23.5 x = 26.875

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Step 1

 
2
SST   xijk  x = (37 – 26.875) 2 + (44 – 26.875) 2 + · · · + (18 – 26.875) 2 =
i j k

691.75

Step 2

SSA  br  xi   x  
2
= 2(2) [(35.25 – 26.875) 2 + (26.75 – 26.875) 2 + (24.5– 26.875)
i

2
+ (21.0– 26.875) 2] = 441.25

Step 3

 
2
SSB  ar  x j  x = 4(2) [(30.25 – 26.875) 2 + (23.5 – 26.875) 2 ] = 182.25
j

Step 4

 
2
SSAB  r  xij  xi   x j  x = 2[(40.5 – 35.25– 30.25 + 26.875) 2 + (30 – 35.25–
i j

23.5+ 26.875) 2 + · · · + (18.5 – 21.0 – 23.5 + 26.875) 2] = 19.25

Step 5

SSE = SST – SSA – SSB – SSAB = 691.75 – 441.25 – 182.25 – 19.25 = 49

Source of Variation Sum of Degrees of Mean F p-value

Squares Freedom Square

Factor A 441.25 3 147.083 24.01 .0002

Factor B 182.25 1 182.250 29.76 .0006

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 Interaction 19.25 3 6.417 1.05 .4229

Error 49.00 8 6.125

Total 691.75 15

Conclusions

Factor A: Because p-value = .0002 < α = .05, Factor A (Class) is significant.

Factor B: Because p-value = .0006 < α = .05, Factor B (Type) is significant.

Interaction: Because p-value = .4229 > α = .05, Interaction is not significant.

The class of vehicles has a significant effect on miles per gallon with cars showing more

miles per gallon than SUVs. The type of vehicle also has a significant effect, with

hybrids having more miles per gallon than conventional vehicles. There is no evidence

of a significant interaction effect.

34.

x y z

Sample Mean 92 97 84

Sample Variance 30 6 35.33

x = (92 + 97 + 44) /3 = 91

 
2
SSTR   n j x j  x = 4(92 – 91) 2 + 4(97 – 91) 2 + 4(84 – 91) 2 = 344
j 1

MSTR = SSTR /(k – 1) = 344 /2 = 172

k
SSE   (n j  1) s 2j = 3(30) + 3(6) + 3(35.33) = 213.99
j 1

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 MSE = SSE /(nT – k) = 213.99 /(12 – 3) = 23.78

F = MSTR /MSE = 172 /23.78 = 7.23

Using F table (2 degrees of freedom numerator and 9 denominator), p-value is

between .01 and .025

Using Excel, the p-value corresponding to F = 7.23 is .0134.

Because p-value   = .05, we reject the null hypothesis that the mean

absorbency ratings for the three brands are equal.

36. The blocks correspond to the 10 dates on which the data were collected (Date) and the

treatments correspond to the four cities (City).

Partial ANOVA output follows.

Analysis of Variance for Ozone Level

Source DF SS MS F P

Date 9 903.02 100.34 4.55 0.001

City 3 160.08 53.36 2.42 0.088

Error 27 595.68 22.06

Total 39 1658.78

S = 4.69702 R-Sq = 64.09% R-Sq(adj) = 48.13%

Because the p-value for City (.088) is greater than α = .05, there is no significant

difference in the mean ozone level among the four cities. But, if the level of significance

was α = .10, the difference would have been significant.

38.

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 Method A Method B Method C

Sample Mean 90 84 81

Sample Variance 98.00 168.44 159.78

x = (90 + 84 + 81) /3 = 85

 
2
SSTR   n j x j  x = 10(90 – 85) 2 + 10(84 – 85) 2 + 10(81 – 85) 2 = 420
j 1

MSTR = SSTR /(k – 1) = 420 /2 = 210

k
SSE   (n j  1) s 2j = 9(98.00) + 9(168.44) + 9(159.78) = 3,836
j 1

MSE = SSE /(nT – k) = 3,836 /(30 – 3) = 142.07

F = MSTR /MSE = 210 /142.07 = 1.48

Using F table (2 degrees of freedom numerator and 27 denominator), p-value

is greater than .10.

Using Excel, the p-value corresponding to F = 1.48 is .2455.

Because p-value >  = .05, we can not reject the null hypothesis that the

means are equal.

40. a. Treatment Means:

x1 = 22.8 x2 = 24.8 x3 = 25.80

Block Means:

x1 = 19.67 x2 = 25.67 x3 = 31 x4 = 23.67 x5 = 22.33

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Overall Mean:

x = 367 /15 = 24.47

Step 1

 
2
SST   xij  x = (18 – 24.47) 2 + (21 – 24.47) 2 + · · · + (24 – 24.47) 2 =
i j

253.73

Step 2

 
2
SSTR  b x j  x = 5 [ (22.8 – 24.47) 2 + (24.8 – 24.47) 2 + (25.8 – 24.47) 2 ] =
j

23.33

Step 3

SSBL  k  xi   x  
2
= 3 [ (19.67 – 24.47) 2 + (25.67 – 24.47) 2 + · · · + (22.33 –
i

24.47) 2 ] = 217.02

Step 4

SSE = SST – SSTR – SSBL = 253.73 – 23.33 – 217.02 = 13.38

Source Sum of Degreesof Mean F p-value

Squares Freedom Square

of Variation

Treatment 23.33 2 11.67 6.99 .0175

Blocks 217.02 4 54.26 32.49

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Error 13.38 8 1.67

Total 253.73 14

Using F table (2 degrees of freedom numerator and 8 denominator), p-value is

between .01 and .025.

Using Excel, the p-value corresponding to F = 6.99 is .0175.

Because p-value   = .05, we reject the null hypothesis that the mean miles

per gallon ratings for the three brands of gasoline are equal.

b.

I II III

Sample Mean 22.8 24.8 25.8

Sample Variance 21.2 9.2 27.2

x = (22.8 + 24.8 + 25.8) /3 = 24.47

 
2
SSTR   n j x j  x = 5(22.8 – 24.47) 2 + 5(24.8 – 24.47) 2 + 5(25.8 – 24.47) 2 =
j 1

23.33

MSTR = SSTR /(k – 1) = 23.33 /2 = 11.67

k
SSE   (n j  1) s 2j = 4(21.2) + 4(9.2) + 4(27.2) = 230.4
j 1

MSE = SSE /(nT – k) = 230.4 /(15 – 3) = 19.2

F = MSTR /MSE = 11.67 /19.2 = .61

Using F table (2 degrees of freedom numerator and 12 denominator), p-value

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 is greater than .10.

Using Excel, the p-value corresponding to F = .61 is .561.

Because p-value >  = .05, we cannot reject the null hypothesis that the mean

miles per gallon ratings for the three brands of gasoline are equal.

Thus, we must remove the block effect in order to detect a significant

difference due to the brand of gasoline. The following table illustrates the relationship

between the randomized block design and the completely randomized design.

Sum of Squares Randomized Block Completely

Design Randomized Design

SST 253.73 253.73

SSTR 23.33 23.33

SSBL 217.02 does not exist

SSE 13.38 230.4

Note that SSE for the completely randomized design is the sum of SSBL (217.02) and

SSE (13.38) for the randomized block design. This illustrates that the effect of blocking

is to remove the block effect from the error sum of squares; thus, the estimate of 2 for

the randomized block design is substantially smaller than it is for the completely

randomized design.

42. The blocks correspond to the 12 golfers (Golfer) and the treatments correspond to the

three designs (Design).

The ANOVA output follows.

ANOVA: Distance versus Design, Golfer

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Analysis of Variance for Distance

Source DF SS MS F P

Design 2 3032.0 1516.0 12.89 0.000

Golfer 11 5003.3 454.8 3.87 0.003

Error 22 2586.7 117.6

Total 35 10622.0

S = 10.8432 R-Sq = 75.65% R-Sq(adj) = 61.26%

Because the p-value for Design (.000) is less than α = .05, there is a significant

difference in the mean driving distance for the three designs.

44.

Factor B Factor B
Manual Automatic Means

Machine 1 x11 = 32 x12 = 28 x1 = 30

Factor A
Machine 2 x21 = 21 x22 = 26 x2 = 23.5

Factor B Means x1 = 26.5 x2 = 27 x = 26.75

Step 1

 
2
SST   xijk  x = (30 – 26.75) 2 + (34 – 26.75) 2 + · · · + (28 – 26.75) 2 =
i j k

151.5

Step 2

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 SSA  br  xi   x  
2
= 2 (2) [ (30 – 26.75) 2 + (23.5 – 26.75) 2 ] = 84.5
i

Step 3

 
2
SSB  ar  x j  x = 2 (2) [ (26.5 – 26.75) 2 + (27 – 26.75) 2 ] = 0.5
j

Step 4

 
2
SSAB  r  xij  xi   x j  x = 2[(32 – 30 – 26.5 + 26.75) 2 + · · · + (26 – 23.5 –
i j

27 + 26.75) 2] = 40.5

Step 5

SSE = SST – SSA – SSB – SSAB = 151.5 – 84.5 – 0.5 – 40.5 = 26

Source of Variation Sum of Degrees of Mean F p-value

Squares Freedom Square

Factor A 84.5 1 84.5 13 .0226

Factor B .5 1 .5 .08 .7913

Interaction 40.5 1 40.5 6.23 .0671

Error 26 4 6.5

Total 151.5 7

Factor A: Using Excel, the p-value corresponding to F = 13 is .0226. Because

p-value   = .05, Factor A (machine) is significant.

Factor B: Using Excel, the p-value corresponding to F = .08 is .7913. Because

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 p-value >  = .05, Factor B (loading system) is not significant.

Interaction: Using Excel, the p-value corresponding to F = 6.23 is .0671. Because p-value >  =

.05, Interaction is not significant.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 14 Solutions

2. a.

b. There appears to be a negative linear relationship between x and y.

c. Many different straight lines can be drawn to provide a linear approximation of the

relationship between x and y; in part d we will determine the equation of a straight

line that “best” represents the relationship according to the least squares criterion.

xi 55 yi 175

x   11 y   35
d. n 5 n 5

 ( xi  x )( yi  y )  540  ( xi  x ) 2  180

( xi  x )( yi  y ) 540
b1    3
( xi  x ) 2 180

b0  y  b1 x  35  (3)(11)  68

yˆ  68  3x

e. yˆ  68  3(10)  38

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
4. a.

b. There appears to be a positive linear relationship between the percentage of women

working in the five companies (x) and the percentage of management jobs held by

women in that company (y).

c. Many different straight lines can be drawn to provide a linear approximation of the

relationship between x and y; in part d we will determine the equation of a straight

line that “best” represents the relationship according to the least squares criterion.

xi 300 yi 215

d. x    60 y   43
n 5 n 5

 ( x i  x )( y i  y )  624  ( x i  x ) 2  480

( xi  x )( yi  y ) 624
b1    1.3
( xi  x )2 480

b0  y  b1 x  43  1.3(60)  35

yˆ  35  1.3 x

yˆ  35  1.3 x   35  1.3(60)  43%

e.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
6. a.

b. The scatter diagram indicates a positive linear relationship between x = average

number of passing yards per attempt and y = the percentage of games won by the

team.

c. x  xi / n  680 /10  6.8 y  yi / n  464 / 10  46.4

 ( xi  x )( y i  y )  121.6  ( xi  x ) 2  7.08

 ( xi  x )( y i  y ) 121.6
b1    17.1751
 ( xi  x ) 2 7.08

b0  y  b1 x  46.4  (17.1751)(6.8)  70.391

yˆ  70.391  17.1751x

d. The slope of the estimated regression line is approximately 17.2. So, for every

increase of one yard in the average number of passes per attempt, the percentage of

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 games won by the team increases by 17.2%.

e. With an average number of passing yards per attempt of 6.2, the predicted percentage

of games won is ŷ = –70.391 + 17.175(6.2) = 36%. With a record of seven wins and

nine losses, the percentage of Kansas City Chiefs wins is 43.8 or approximately 44%.

Considering the small data size, the prediction made using the estimated regression

equation is not too bad.

8. a.

4.5

4.0
Satisfaction

3.5

3.0

2.5

2.0
2.0 2.5 3.0 3.5 4.0 4.5
Speed of Execution

b. The scatter diagram indicates a positive linear relationship between x = speed of

execution rating and y = overall satisfaction rating for electronic trades.

c. x   xi / n  36.3 / 11  3.3 y   yi / n  35.2 / 11  3.2

 ( x i  x )( y i  y )  2.4  ( x i  x ) 2  2.6

 ( xi  x )( y i  y ) 2.4
b1    .9077
 ( xi  x ) 2 2.6

b0  y  b1 x  3.2  (.9077)(3.3)  .2046

yˆ  .2046  .9077 x

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 d. The slope of the estimated regression line is approximately .9077. So, a one unit

increase in the speed of execution rating will increase the overall satisfaction rating

by approximately .9 points.

e. The average speed of execution rating for the other brokerage firms is 3.4. Using this

as the new value of x for Zecco.com, we can use the estimated regression equation

developed in part c to estimate the overall satisfaction rating corresponding to x = 3.4.

yˆ  .2046  .9077 x  .2046  .9077(3.4)  3.29

Thus, an estimate of the overall satisfaction rating when x = 3.4 is approximately 3.3.

10. a.

350.00

300.00

250.00
Price ($)

200.00

150.00

100.00

50.00

0.00
0 10 20 30 40 50
Age (years)

b. The scatter diagram indicates a positive linear relationship between x = age of wine

and y = price of a 750-ml bottle of wine. In other words, the price of the wine

increases with age.

c. x   xi / n  317 / 10  31.7 y   yi / n  2294 / 10  229.4

 ( x i  x )( y i  y )  3838.2  ( x i  x ) 2  552.1

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  ( xi  x )( yi  y ) 3838.2
b1    6.952
 ( xi  x ) 2 552.1

b0  y  b1 x  229.4  (6.952)(31.7)  9.0216

yˆ  9.0216  6.952 x

d. The slope of the estimated regression line is approximately 6.95. So, for every

additional year of age, the price of the wine increases by $6.95.

12. a.

10.00

8.00

6.00
% Return Coca-Cola

4.00

2.00

0.00
-6.00 -4.00 -2.00 0.00 2.00 4.00 6.00 8.00 10.00
-2.00

-4.00
% Return S&P 500

b. The scatter diagram indicates a somewhat positive linear relationship between x =

percentage return of the S&P 500 and y = percentage return for Coca-Cola.

c. x  xi / n  2.00 / 10  .2 y  yi / n  15 / 10  1.5

 ( xi  x )( y i  y )  95  ( xi  x ) 2  179.6

 ( xi  x )( y i  y ) 95
b1    .5290
 ( xi  x ) 2
179.6

b0  y  b1 x  1.5  (.5290)(.2)  1.3942

yˆ  1.3942  .529 x

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 d. A 1-percent increase in the percentage return of the S&P 500 will result in a .529

increase in the percentage return for Coca-Cola.

e. The beta of .529 for Coca-Cola differs somewhat from the beta of .82 reported by

Yahoo Finance. This is likely to the result of differences in the period over which the

data were collected and the amount of data used to calculate the beta. Note: Yahoo

uses the last five years of monthly returns to calculate beta.

14. a.

9
8
7
Number of Days Absent

6
5
4
3
2
1
0
0 5 10 15 20
Distance to Work (miles)

The scatter diagram indicates a negative linear relationship between x = distance to

work and y = number of days absent.

b. x  xi / n  90 / 10  9 y  yi / n  50 / 10  5

 ( x i  x )( y i  y )   95  ( xi  x ) 2  276

 ( xi  x )( yi  y )  95
b1     .3442
 ( xi  x ) 2 276

b0  y  b1 x  5  (  .3442)(9)  8.0978

yˆ  8.0978  .3442 x

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 c. A prediction of the number of days absent is yˆ  8.0978  .3442(5)  6.4 or approximately

six days.

16. a. The estimated regression equation and the mean for the dependent variable are:

yˆi  68  3 x y  35

The sum of squares due to error and the total sum of squares are

SSE   ( yi  yˆ i ) 2  230 SST   ( yi  y ) 2  1850

Thus, SSR = SST – SSE = 1850 – 230 = 1620

b. r2 = SSR/SST = 1620/1850 = .876

The least squares line provided an excellent fit; 87.6% of the variability in y has been

explained by the estimated regression equation.

rxy   .876  .936

c.

Note: the sign for r is negative because the slope of the estimated regression equation is

negative.

(b1 = –3)

x   xi / n  600 / 6  100 y   yi / n  330 / 6  55

18. a.

SST =  ( y i  y ) 2  1800 SSE =  ( y i  yˆ i ) 2  287.624

SSR = SST – SSE = 1800 – 287.624 = 1512.376

SSR 1512.376
r2    .84
b. SST 1800

c. r  r 2  .84  .917

x  xi / n  160 / 10  16 y  yi / n  55,500 / 10  5550

20. a.

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  ( xi  x )( y i  y )   31, 284  ( xi  x ) 2  21.74

 ( xi  x )( yi  y ) 31,284
b1    1439
 ( xi  x ) 2 21.74

b0  y  b1 x  5550  ( 1439)(16)  28,574

yˆ  28,574  1439 x

b. SST = 52,120,800 SSE = 7,102,922.54

SSR = SST – SSE = 52,120,800 – 7,102,922.54 = 45,017,877

r 2 = SSR/SST = 45,017,877/52,120,800 = .864

The estimated regression equation provided a good fit.

c. yˆ  28,574  1439 x  28,574  1439(15)  6989

Thus, an estimate of the price for a bike that weighs 15 pounds is $6,989.

22. a. SSE = 1043.03

y  yi / n  462 / 6  77 SST = ( yi  y ) 2  10,568

SSR = SST – SSR = 10,568 – 1043.03 = 9524.97

SSR 9524.97
r2    .9013
SST 10,568

b. The estimated regression equation provided an especially good fit; approximately

90% of the variability in the dependent variable was explained by the linear

relationship between the two variables.

c. r  r  .9013  .95
2

This reflects a strong linear relationship between the two variables.

24. a. s2 = MSE = SSE/(n – 2) = 230/3 = 76.6667

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 b. s  MSE  76.6667  8.7560

c.  ( xi  x )2  180

s 8.7560
sb1    0.6526
( xi  x ) 2
180

b1 3
t   4.59
sb1 .653
d.

Using t table (3 degrees of freedom), area in tail is less than .01; p-value is

less than .02.

Using Excel, the p-value corresponding to t = –4.59 is .0193.

Because p-value   , we reject H0: β1 = 0.

e. MSR = SSR/1 = 1,620

F = MSR/MSE = 1,620/76.6667 = 21.13

Using F table (1 degree of freedom numerator and 3 denominator), p-value is

less than .025.

Using Excel, the p-value corresponding to F = 21.13 is .0193.

Because p-value   , we reject H0: β1 = 0.

Source of Variation Sum of Degrees of Mean F p-value

Squares Freedom Square

Regression 1620 1 1620 21.13 .0193

Error 230 3 76.6667

Total 1850 4

26. a. In the statement of exercise 18, ŷ = 23.194 + .318x.

In solving exercise 18, we found SSE = 287.624.

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 s 2  MSE = SSE/(n -2) =287.624 / 4  71.906
s  MSE  71.906  8.4797

( x  x ) 2
 14,950

s 8.4797
sb1    .0694
 (x  x )
i
2
14, 950

b1 .318
t   4.58
sb1 .0694

Using t table (4 degrees of freedom), area in tail is between .005 and .01.

p-value is between .01 and .02.

Using Excel, the p-value corresponding to t = 4.58 is .010.

Because p-value   , we reject H0: 1 = 0; there is a significant relationship

between price and overall score.

b. In exercise 18, we found SSR = 1,512.376

MSR = SSR/1 = 1,512.376/1 = 1,512.376

F = MSR/MSE = 1,512.376/71.906 = 21.03

Using F table (1 degree of freedom numerator and 4 denominator), p-value is

between .025 and .01.

Using Excel, the p-value corresponding to F = 11.74 is .010.

Because p-value   , we reject H0: 1 = 0

c.

Source of Sum of Degrees of Mean F p-value

Variation Squares Freedom Square

Regression 1,512.376 1 1,512.376 21.03 .010

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 Error 287.624 4 71.906

Total 1,800 5

28. The sum of squares due to error and the total sum of squares are:

SSE   ( yi  yˆ i ) 2  1.4379 SST   ( yi  y ) 2  3.5800

Thus,

SSR = SST - SSE = 3.5800 – 1.4379 = 2.1421

s2 = MSE = SSE / (n - 2) = 1.4379 / 9 = .1598

s  MSE  .1598  .3997

We can use either the t test or F test to determine whether speed of execution and

overall satisfaction are related.

We will first illustrate the use of the t test.

( xi  x ) 2  2.6

s .3997
sb1    .2479
( xi  x ) 2
2.6

b1 .9077
t   3.66
sb 1
.2479

Using t table (9 degrees of freedom), the area in the tail is less than .005; the

p-value is less than .01.

Using Excel, the p-value corresponding to t = 3.66 is .000.

Because p-value   , we reject H0: 1 = 0.

Because we can reject H0: 1 = 0 we conclude that speed of execution and

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 overall satisfaction are related.

Next we illustrate the use of the F test.

MSR = SSR / 1 = 2.1421

F = MSR / MSE = 2.1421 / .1598 = 13.4

Using the F table (1 degree of freedom numerator and 9 denominator), the p-

value is less than .01.

Using Excel, the p-value corresponding to F = 13.4 is .005.

Because p-value   , we reject H0: 1 = 0.

Because we can reject H0: 1 = 0 we conclude that speed of execution and

overall satisfaction are related.

The ANOVA table follows.

Source of Variation Sum of Degrees of Mean F p-value

Squares Freedom Square

Regression 2.1421 1 2.1421 13.4 .000

Error 1.4379 9 .1598

Total 3.5800 10

SSE = ( yi  yi )  1043.03 SST = ( yi  y ) = 10,568

ˆ 2 2
30.

Thus,

SSR = SST – SSE = 10,568 – 1043.03 = 9524.97

s2 = MSE = SSE/(n-2) = 1043.03/4 = 260.7575

s  260.7575  16.1480

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 ( xi  x )2 = 56.655

s 16.148
sb1    2.145
(x i  x) 2
56.655

b1 12.966
t   6.045
sb1 2.145

Using t table (4 degrees of freedom), area in tail is less than .005.

p-value is less than .01.

Using Excel, the p-value corresponding to t = 6.045 is .004.

Because p-value   , we reject H0: β1 = 0.

There is a significant relationship between cars in service and annual revenue.

32. a. s = 2.033

x 3 ( xi  x )2  10

1 ( x*  x )2 1 (4  3) 2
s yˆ *  s   2.033   1.11
n ( xi  x ) 2
5 10

b. ŷ * = .2 + 2.6 x* = .2 + 2.6(4) = 10.6

yˆ *  t /2 syˆ*

10.6 + 3.182 (1.11) = 10.6 + 3.53

or 7.07 to 14.13.

1 ( x*  x ) 2 1 (4  3) 2
spred  s 1    2.033 1    2.32
n ( xi  x ) 2
5 10
c.

d. ŷ  t /2 spred
*

10.6 + 3.182 (2.32) = 10.6 + 7.38

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 or 3.22 to 17.98.

34. s = 6.5141

x  10 ( xi  x )2  190

1 ( x*  x )2 1 (12  10) 2
s yˆ*  s   6.5141   3.0627
n ( xi  x ) 2 5 190

yˆ *  7.6  .9 x *  7.6  .9(12)  18.40

yˆ *  t /2syˆ*

18.40 + 3.182(3.0627) = 18.40 + 9.75

or 8.65 to 28.15.

1 ( x*  x ) 2 1 (12  10)2
spred  s 1    6.5141 1    7.1982
n ( xi  x ) 2
5 190

ŷ *  t /2 spred

18.40 + 3.182(7.1982) = 18.40 + 22.90

or -4.50 to 41.30.

The two intervals are different because there is more variability associated

with predicting an individual value than there is a mean value.

1 ( x*  x ) 2 1 (9  7)2
syˆ*  s   4.6098   1.6503
n ( xi  x )2 10 142
36. a.

yˆ *  t /2syˆ*

yˆ *  80  4 x *  80  4(9)  116

116 + 2.306(1.6503) = 116 + 3.8056

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 or 112.19 to 119.81 ($112,190 to $119,810).

1 ( x*  x ) 2 1 (9  7)2
spred  s 1    4.6098 1    4.8963
n ( xi  x )2 10 142
b.

ŷ *  t /2 spred

116 + 2.306(4.8963) = 116 + 11.2909

or 104.71 to 127.29 ($104,710 to $127,290).

c. As expected, the prediction interval is much wider than the confidence interval. This

is because it is more difficult to predict annual sales for one new salesperson with

nine years of experience than it is to estimate the mean annual sales for all

salespersons with nine years of experience.

38. a. ŷ * = 1,246.67 + 7.6(500) = $5,046.67

b. x  575 ( xi  x )2  93,750

s2 = MSE = 58,333.33 s = 241.52

1 ( x*  x )2 1 (500  575) 2
spred  s 1    241.52 1    267.50
n ( xi  x )2 6 93,750

ŷ *  t /2 spred

5,046.67 + 4.604 (267.50) = 5,046.67 + 1231.57

or $3,815.10 to $6,278.24.

c. Based on one month, $6,000 is not out of line because $3,815.10 to $6,278.24 is the

prediction interval. However, a sequence of five to seven months with consistently

high costs should cause concern.

40. a. 9

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 b. ŷ = 20.0 + 7.21x

c. 1.3626

d. SSE = SST – SSR = 51,984.1 – 41,587.3 = 10,396.8

MSE = 10,396.8/7 = 1,485.3

F = MSR / MSE = 41,587.3 /1,485.3 = 28.00

Using F table (1 degree of freedom numerator and 7 denominator), p-

value is less than .01.

Using Excel, the p-value corresponding to F = 28.00 is .0011.

Because p-value   = .05, we reject H0: β1 = 0.

Selling price is related to annual gross rents.

e. ŷ = 20.0 + 7.21(50) = 380.5 or $380,500

42. a. ŷ = 80.0 + 50.0x

b. 30

c. F = MSR / MSE = 6828.6/82.1 = 83.17

Using the F table (1 degree of freedom numerator and 28 denominator),

the p-value is less than .01.

Using Excel, the p-value corresponding to F = 83.17 is .000.

Because p-value <  = .05, we reject H0: B1 = 0.

Annual sales is related to the number of salespersons.

d. ŷ = 80 + 50 (12) = 680 or $680,000

44. a. Scatter diagram:

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 1000
900
800
700
600
Price ($)

500
400
300
200
100
0
45 50 55 60 65 70
Weight (oz)

b. There appears to be a negative linear relationship between the two variables. The

heavier helmets tend to be less expensive.

c. The output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 462761 462761 54.90 0.000

Error 16 134865 8429

Total 17 597626

Model Summary

S R-sq R-sq(adj)

91.8098 77.43% 76.02%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 2044 226 9.03 0.000

Weight -28.35 3.83 -7.41 0.000 1.00

Regression Equation

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Price = 2044 - 28.35 Weight

Fits and Diagnostics for Unusual Observations

Obs Price Fit Resid Std Resid

7 900.0 655.2 244.8 3.03 R

R Large residual

d. Significant relationship: p-value = .000 <  = .05.

e. r2 = 0.774; a good fit.

yˆ  2.32  .64 x
46. a.

b.

4
3
2
1
Residuals

0
-1
-2
-3
-4
0 2 4 6 8 10
x

The assumption that the variance is the same for all values of x is

questionable. The variance appears to increase for larger values of x.

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 yˆ  80  4 x
48. a.

2
Residuals

-2

-4

-6

-8
0 2 4 6 8 10 12 14
x

b. The assumptions concerning the error term appear reasonable.

50. a. The output follows:

The standardized residuals are calculated as follows (as in Table14.8):

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The first data point (y= 145, x=135) has a large standardized residual.

b.

2.5

2.0

1.5
Standardized Residual

1.0

0.5

0.0

-0.5

-1.0

110 115 120 125 130 135 140

Fitted Value

The standardized residual plot indicates that the observation x = 135, y = 145 may be an

outlier; note that this observation has a standardized residual of 2.11.

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 c. The scatter diagram follows.

150

145

140

135

130

125
y

120

115

110

105

100
100 110 120 130 140 150 160 170 180

The scatter diagram also indicates that the observation x = 135, y = 145 may be an

outlier; the implication is that for simple linear regression an outlier can be identified by

looking at the scatter diagram.

52. a.

120

100
Program Expenses ($)

80

60

40

20

0
0 5 10 15 20 25
Fund-raising Expenses (%)

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 The scatter diagram does indicate potential influential observations. For example, the

22.2% fund-raising expense for the American Cancer Society and the 16.9% fund-raising

expense for the St. Jude Children’s Research Hospital look like they may each have a

large influence on the slope of the estimated regression line. And with a fund-raising

expense of 2.6%, the percentage spent on programs and services by the Smithsonian

Institution (73.7%) seems to be somewhat lower than would be expected; thus, this

observeraton may need to be considered a possible outlier.

b. A portion of the output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 408.4 408.35 7.31 0.027

Error 8 446.9 55.86

Total 9 855.2

Model Summary

S R-sq R-sq(adj)

7.47387 47.75% 41.22%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 90.98 3.18 28.64 0.000

Fundraising Expenses (%) -0.917 0.339 -2.70 0.027 1.00

Regression Equation

Program Expenses (%) = 90.98 - 0.917 Fundraising Expenses (%)

Fits and Diagnostics for Unusual Observations

Obs Program Expenses(%) Fit Resid Std Resid

3 73.70 88.60 -14.90 -2.13 R

5 71.60 70.62 0.98 0.21 X

R Large residual

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 X Unusual X

R denotes an observation with a large standardized residual.

X denotes an observation whose X value gives it large leverage.

c. The slope of the estimated regression equation is –0.917. Thus, for every 1% increase

in the amount spent on fund-raising, the percentage spent on program expenses will

decrease by .917%; in other words, just a little less than 1%. The negative slope and

value seem to make sense in the context of this problem situation.

d. The output in part b indicates that there are two unusual observations:

• Observation 3 (Smithsonian Institution) is an outlier because it has a large

standardized residual.

• Observation 5 (American Cancer Society) is an influential observation because it

has high leverage.

Although fund-raising expenses for the Smithsonian Institution are on the

low side compared to most of the other supersized charities, the percentage spent

on program expenses appears to be much lower than one would expect. It appears

that the Smithsonian’s administrative expenses are too high. But thinking about

the expenses of running a large museum like the Smithsonian, the percentage

spent on administrative expenses may not be unreasonable; in general, operating

costs for a museum are higher than for some other types of organizations. The

especially large value of fund-raising expenses for the American Cancer Society

suggests that this obervation has a large influence on the estimated regression

equation. The following output shows the results if this observation is deleted

from the original data.

The regression equation is:

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 Program Expenses (%) = 91.3 - 1.00 Fundraising Expenses (%)

Predictor Coef SE Coef T P

Constant 91.256 3.654 24.98 0.000

Fundraising Expenses (%) -1.0026 0.5590 -1.79 0.116

S = 7.96708 R-Sq = 31.5% R-Sq(adj) = 21.7%

The y-intercept has changed slightly, but the slope has changed from –.917

to –1.00.

54. a.

2,500

2,000
Value ($ millions)

1,500

1,000

500

0
0 100 200 300 400 500
Revenue ($ millions)

The scatter diagram does indicate potential outliers or influential observations (or both).

For example, the New York Yankees have both the highest revenue and value and appear

to be an influential observation. The Los Angeles Dodgers have the second highest value

and appear to be an outlier.

b. A portion of the output follows:

Regression Statistics

Multiple R 0.9062

R Square 0.8211

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 Adjusted R Square 0.8148

Standard Error 165.6581

Observations 30

ANOVA

df SS MS F Significance F

Regression 1 3527616.598 3527616.6 128.5453 5.616E-12

Residual 28 768392.7687 27442.599

Total 29 4296009.367

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 Coefficients Standard Error t Stat P-value Lower 95% Upper 95%

Intercept –601.4814 122.4288 –4.9129 3.519E-05 –852.2655 –350.6973

Revenue ($ millions) 5.9271 0.5228 11.3378 5.616E-12 4.8562 6.9979

Thus, the estimated regression equation that can be used to predict the team’s value given the value of annual

revenue is ŷ = –601.4814 + 5.9271 revenue.

c. The standard residual value for the Los Angeles Dodgers is 4.7 and should be treated as an outlier. To determine if the New

York Yankees point is an influential observation, we can remove the observation and compute a new estimated regression

equation. The results show that the estimated regresssion equation is ŷ = –449.061 + 5.2122 revenue. The following two

scatter diagrams illustrate the small change in the estimated regression equation after removing the observation for the New

York Yankees. These diagrams show that the effect of the New York Yankees observation on the regression results is not

that dramatic.

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 Scatter Diagram Including the New York Yankees Observation

Scatter Diagram Excluding the New York Yankees Observation

56. The estimate of a mean value is an estimate of the average of all y values associated with

the same x. The estimate of an individual y value is an estimate of only one of the y

values associated with a particular x.

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58. a.

1420
1400
1380
1360
S&P 500

1340
1320

1300
1280
1260
12200 12400 12600 12800 13000 13200 13400
DJIA

b. A portion of the output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 22146 22145 6 239.89 0.000

Error 13 1200 92.3

Total 14 23346

Model Summary

S R-sq R-sq(adj)

9.60811 94.86% 94.46%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -669 131 -5.12 0.000

DJIA 0.1573 0.0102 15.49 0.000 1.00

Regression Equation

S&P = -669 + 0.1573 DJIA

c. Using the F test, the p-value corresponding to F = 239.89 is .000. Because the p-value

 =.05, we reject H 0 : 1  0 ; there is a significant relationship.

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 d. With R-Sq = 94.9%, the estimated regression equation provided an excellent fit.

yˆ  669.0  .15727(DJIA)=  669.0  .15727(13,500)  1454

e.

f. The DJIA is not that far beyond the range of the data. With the excellent fit provided

by the estimated regression equation, we should not be too concerned about using the

estimated regression equation to predict the S&P 500.

60. a.

The scatter diagram indicates a positive linear relationship between the two variables.

Online universities with higher retention rates tend to have higher graduation rates.

b. The output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 1224.3 1224.29 22.02 0.000

Error 27 1501.0 55.59

Total 28 2725.3

Model Summary

S R-sq R-sq(adj)

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 7.45610 44.92% 42.88%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 25.42 3.75 6.79 0.000

RR(%) 0.2845 0.0606 4.69 0.000 1.00

Regression Equation

GR(%) = 25.42 + 0.2845 RR(%)

Fits and Diagnostics for Unusual Observations

Obs GR(%) Fit Resid Std Resid

2 25.00 39.93 -14.93 -2.04 R

3 28.00 26.56 1.44 0.22 X

R Large residual

X Unusual X

R denotes an observation with a large standardized residual.

X denotes an observation whose X value gives it large leverage.

c. Because the p-value = .000 < α =.05, the relationship is significant.

d. The estimated regression equation is able to explain 44.9% of the variability in the

graduation rate based on the linear relationship with the retention rate. It is not a great

fit, but the fit is reasonably good given the type of data.

e. In the output in part b, South University is identified as an observation with a large

standardized residual. With a retention rate of 51% it does appear that the graduation

rate of 25% is low compared to the results for other online universities. The president

of South University should be concerned after looking at the data. Using the

estimated regression equation, we estimate that the graduation rate at South

University should be 25.4 + .285(51) = 40%.

f. In the output in part b, the University of Phoenix is identified as an observation whose

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 x value gives it large influence. With a retention rate of only 4%, the president of the

University of Phoenix should be concerned after looking at the data.

62. a. The output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 25.130 25.130 11.33 0.028

Error 4 8.870 2.217

Total 5 34.000

Model Summary

S R-sq R-sq(adj)

1.48909 73.91% 67.39%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 22.17 1.65 13.42 0.000

Speed -0.1478 0.0439 -3.37 0.028 1.00

Regression Equation

Defects = 22.17 - 0.1478 Speed

Variable Setting

Speed 50

Fit SE Fit 95% CI 95% PI

14.7826 0.896327 (12.2940, 17.2712) (9.95703, 19.6082)

b. Because the p-value corresponding to F = 11.33 = .028 <  = .05, the relationship is

significant.

c. r 2 = .739; a good fit. The least squares line explained 73.9% of the variability in the

number of defects.

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 d. Using the output in part a, the 95% confidence interval is 12.294 to 17.2712.

64. a. The output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 312050 312050 54.75 0.000

Error 8 45600 5700

Total 9 357650

Model Summary

S R-sq R-sq(adj)

75.4983 87.25% 85.66%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 220.0 58.5 3.76 0.006

Age 131.7 17.8 7.40 0.000 1.00

Regression Equation

Cost = 220.0 + 131.7 Age

Variable Setting

Age 4

Fit SE Fit 95% CI 95% PI

746.667 29.7769 (678.001, 815.332) (559.515, 933.818)

b. Because the p-value corresponding to F = 54.75 is .000 < α = .05, we reject H0: 1 =

0. Maintenance cost and age of bus are related.

c. r2 = .873. The least squares line provided a good fit.

d. The 95% prediction interval is 559.515 to 933.818 or $559.52 to $933.82

66. a. The output follows.

Analysis of Variance

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 Source DF Adj SS Adj MS F-Value P-Value

Regression 1 50.26 50.255 7.08 0.029

Error 8 56.78 7.098

Total 9 107.04

Model Summary

S R-sq R-sq(adj)

2.66413 46.95% 40.32%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 0.275 0.900 0.31 0.768

S&P 500 0.950 0.357 2.66 0.029 1.00

Regression Equation

Horizon = 0.275 + 0.950 S&P 500

The market beta for Horizon is b1 = .95

b. Because the p-value = 0.029 is less than α = .05, the relationship is significant.

c. r2 = .470. The least squares line does not provide an especially good fit.

d. Xerox has higher risk with a market beta of 1.22.

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68. a.

18.0
16.0

Price ($1000s)
14.0
12.0
10.0
8.0
6.0
4.0
0 20 40 60 80 100 120
Miles (1000s)

b. There appears to be a negative relationship between the two variables that can be

approximated by a straight line. An argument could also be made that the relationship

is perhaps curvilinear because at some point a car has so many miles that its value

becomes very small.

c. The output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 47.158 47.158 19.85 0.000

Error 17 40.389 2.376

Total 18 87.547

Model Summary

S R-sq R-sq(adj)

1.54138 53.87% 51.15%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 16.470 0.949 17.36 0.000

Miles (1000s) -0.0588 0.0132 -4.46 0.000 1.00

Regression Equation

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 Price ($1000s) = 16.470 - 0.0588 Miles (1000s)

d. Significant relationship: p-value = 0.000 < α = .05.

e. r 2 = .5387; a reasonably good fit considering that the condition of the car is also an

important factor in what the price is.

f. The slope of the estimated regression equation is –.0558. Thus, a one-unit increase in

the value of x coincides with a decrease in the value of y equal to .0558. Because the

data were recorded in thousands, every additional 1,000 miles on the car’s odometer

will result in a $55.80 decrease in the predicted price.

g. The predicted price for a 2007 Camry with 60,000 miles is ŷ = 16.47 –.0588(60) =

12.942 or $12,942. Because of other factors such as condition and whether the seller

is a private party or a dealer, this is probably not the price you would offer for the car.

But it should be a good starting point in figuring out what to offer the seller.

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Chapter 15 Solutions

2. a. Partial output follows:

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 10021.2 10021.2 15.53 0.004

Error 8 5161.7 645.2

Total 9 15182.9

Model Summary

S R-sq R-sq(adj)

25.4009 66.00% 61.75%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 45.1 25.4 1.77 0.114

X1 1.944 0.493 3.94 0.004 1.00

Regression Equation

Y = 45.1 + 1.944 X1

The estimated regression equation is ŷ = 45.1 + 1.944x1.

An estimate of y when x1 = 47 is ŷ = 45.1 + 1.944(47) = 136.468.

b. Partial output follows:

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 3363.4 3363.4 2.28 0.170

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Error 8 11819.5 1477.4

Total 9 15182.9

Model Summary

S R-sq R-sq(adj)

38.4374 22.15% 12.42%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 85.2 38.4 2.22 0.057

X2 4.32 2.86 1.51 0.170 1.00

Regression Equation

Y = 85.2 + 4.32 X2

The estimated regression equation is

ŷ = 85.2 + 4.32x2

An estimate of y when x2 = 10 is

ŷ = 85.2 + 4.32(10) = 128.4

c. Partial output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 14052 7026.1 43.50 0.000

Error 7 1131 161.5

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Total 9 1518

Model Summary

S R-sq R-sq(adj)

12.7096 92.55% 90.42%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -18.4 18.0 -1.02 0.341

X1 2.010 0.247 8.13 0.000 1.00

X2 4.738 0.948 5.00 0.002 1.00

Regression Equation

Y = -18.4 + 2.010 X1 + 4.738 X2

The estimated regression equation is

ŷ = –18.4 + 2.01x1 + 4.738x2

An estimate of y when x1 = 47 and x2 = 10 is

ŷ = –18.4 + 2.01(47) + 4.738(10) = 123.45

4. a. ŷ = 25 + 10(15) + 8(10) = 255. Sales estimate: $255,000.

b. Sales can be expected to increase by $10 for every dollar increase in inventory

investment when advertising expenditure is held constant. Sales can be expected to

increase by $8 for every dollar increase in advertising expenditure when inventory

investment is held constant.

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6. a. Partial output follows:

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 4814.3 4814.3 19.11 0.001

Error 14 3527.4 252.0

Total 15 8341.7

Model Summary

S R-sq R-sq(adj)

15.8732 57.71% 54.69%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -58.8 26.2 -2.25 0.041

Yds/Att 16.39 3.75 4.37 0.001 1.00

Regression Equation

Win% = -58.8 + 16.39 Yds/Att

Fits and Diagnostics for Unusual Observations

Std Obs Win% Fit Resid Resid

14 81.30 47.77 33.53 2.19 R

R Large residual

b. Partial output follows:

Analysis of Variance

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Source DF Adj SS Adj MS F-Value P-Value

Regression 1 3653 3652.8 10.91 0.005

Error 14 4689 334.9

Total 15 8342

Model Summary

S R-sq R-sq(adj)

18.3008 43.79% 39.77%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 97.5 13.9 7.04 0.000

Int/Att -1600 485 -3.30 0.005 1.00

Regression Equation

Win% = 97.5 - 1600 Int/Att

Fits and Diagnostics for Unusual Observations

Obs Win% Fit Resid Std Resid

8 12.50 55.93 -43.43 -2.45 R

R Large residual

c. Partial output follows:

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 6277 3138.5 19.76 0.000

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Error 13 2065 158.8

Total 15 8342

Model Summary

S R-sq R-sq(adj)

12.6024 75.25% 71.44%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -5.8 27.1 -0.21 0.835

Yds/Att 12.95 3.19 4.06 0.001 1.15

Int/Att -1084 357 -3.03 0.010 1.15

Regression Equation

Win% = -5.8 + 12.95 Yds/Att - 1084 Int/Att

Fits and Diagnostics for Unusual Observations

Obs Win% Fit Resid Std Resid

8 12.50 38.57 -26.07 -2.28 R

R Large residual

d. The predicted value of Win% for the Kansas City Chiefs is

Win% = –5.8 + 12.95(6.2) – 1,084(.036) = 35.47%

With seven wins and nine loses, the Kansas City Chiefs won 43.75% of the games they

played. The predicted value is somewhat lower than the actual value.

8. a. Partial output follows.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 60.202 60.2022 17.21 0.001

Error 18 62.963 3.4980

Total 19 123.166

Model Summary

S R-sq R-sq(adj)

1.87028 48.88% 46.04%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 69.30 4.80 14.44 0.000

Shore Excursions 0.2348 0.0566 4.15 0.001 1.00

Regression Equation

Overall = 69.30 + 0.2348 Shore Excursions

b. Partial output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 90.95 45.477 24.00 0.000

Error 17 32.21 1.895

Total 19 123.17

Model Summary

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S R-sq R-sq(adj)

1.37650 73.85% 70.77%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 45.18 6.95 6.50 0.000

Shore Excursions 0.2529 0.0419 6.04 0.000 1.01

Food/Dining 0.2482 0.0616 4.03 0.001 1.01

Regression Equation

Overall = 45.18 + 0.2529 Shore Excursions + 0.2482 Food/Dining

c. yˆ  45.18  .2529(Shore Excursions)  .2482(Food/Dining)  45.18  .2529(80)  .2482(90) = 87.75

Thus, an estimate of the overall score is approximately 88.

10. a. Partial output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 0.047263 0.047263 13.01 0.002

Error 18 0.065392 0.003633

Total 19 0.112655

Model Summary

S R-sq R-sq(adj) R-sq(pred)

0.0602733 41.95% 38.73% 29.38%

Coefficients

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Term Coef SE Coef T-Value P-Value VIF

Constant 0.6758 0.0631 10.71 0.000

SO/IP -0.2838 0.0787 -3.61 0.002 1.00

Regression Equation

R/IP = 0.6758 - 0.2838 SO/IP

b. Partial output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 0.02887 0.028874 6.20 0.023

Error 18 0.08378 0.004655

Total 19 0.11265

Model Summary

S R-sq R-sq(adj) R-sq(pred)

0.0682239 25.63% 21.50% 14.87%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 0.3081 0.0604 5.10 0.000

HR/IP 1.347 0.541 2.49 0.023 1.00

Regression Equation

R/IP = 0.3081 + 1.347 HR/IP

c. Partial output follows.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 0.06348 0.031738 10.97 0.001

Error 17 0.04918 0.002893

Total 19 0.11266

Model Summary

S R-sq R-sq(adj)

0.0537850 56.35% 51.21%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 0.5365 0.0814 6.59 0.000

SO/IP -0.2483 0.0718 -3.46 0.003 1.05

HR/IP 1.032 0.436 2.37 0.030 1.05

Regression Equation

R/IP = 0.5365 - 0.2483 SO/IP + 1.032 HR/IP

d. Using the estimated regression equation in part c we obtain

R/IP = 0.5365 – 0.2483 SO/IP + 1.032 HR/IP = 0.5365 – 0.2483(.91) + 1.032(.16)

= .4757

The predicted value for R/IP was less than the actual value.

e. This suggestion does not make sense. If a pitcher gives up more runs per inning

pitched, then earned run average also has to increase. For these data, the sample

correlation coefficient between ERA and R/IP is .964. The following partial output

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 shows the results for part c using ERA as the dependent variable.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 5.174 2.5870 14.17 0.000

SO/IP 1 1.905 1.9052 10.44 0.005

HR/IP 1 2.190 2.1901 12.00 0.003

Error 17 3.103 0.1825

Total 19 8.276

Model Summary

S R-sq R-sq(adj) R-sq(pred)

0.427204 62.51% 58.10% 50.29%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 3.878 0.647 6.00 0.000

SO/IP -1.843 0.570 -3.23 0.005 1.05

HR/IP 11.99 3.46 3.46 0.003 1.05

Regression Equation

ERA = 3.878 - 1.843 SO/IP + 11.99 HR/IP

SSR 14, 052.2

12. a. R 2    .926
SST 15,182.9

n 1 10  1
b. Ra2  1  (1  R 2 )  1  (1  .926)  .905
n  p 1 10  2  1

c. Yes; after adjusting for the number of independent variables in the model, we see that

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 90.5% of the variability in y has been accounted for.

SSR 12,000
14. a. R 2    .75
SST 16,000

n 1 9
b. Ra2  1  (1  R 2 )  1  .25  .68
n  p 1 7

c. The adjusted coefficient of determination shows that 68% of the variability has been

explained by the two independent variables; thus, we conclude that the model does

not explain a large amount of variability.

16. a. r 2 = .577. Thus, the average number of passing yards per attempt is able to explain

57.7% of the variability in the percentage of games won. Considering the nature of

the data and all the other factors that might be related to the number of games won,

this is not too bad a fit.

b. The value of the coefficient of determination increased to R2 = .752, and the adjusted

coefficient of determination is Ra2 = .714. Thus, using both independent variables

provides a much better fit.

18. a. A portion of the output follows:

Model Summary

S R-sq R-sq(adj) R-sq(pred)

0.0537850 56.35% 51.21% 41.25%

The output in part c of exercise 10 shows that R-sq = .5635 and R-sq(adj) = .5121.

b. The fit is not great, but considering the nature of the data being able to explain

slightly more than 50% of the variability in the number of runs given up per inning

pitched using just two independent variables is not too bad.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 c. Partial output using ERA as the dependent variable follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 5.174 2.5870 14.17 0.000

Error 17 3.103 0.1825

Total 19 8.276

Model Summary

S R-sq R-sq(adj)

0.427204 62.51% 58.10%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 3.878 0.647 6.00 0.000

SO/IP -1.843 0.570 -3.23 0.005 1.05

HR/IP 11.99 3.46 3.46 0.003 1.05

Regression Equation

ERA = 3.878 - 1.843 SO/IP + 11.99 HR/IP

The output shows that R-sq = .6251 and R-sq(adj) = .5810

Approximately 60% of the variability in the ERA can be explained by the

linear effect of HR/IP and SO/IP. This is not too bad considering the complexity of

predicting pitching performance.

20. A portion of the output follows.

Analysis of Variance

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Source DF Adj SS Adj MS F-Value P-Value

Regression 2 14052 7026.1 43.50 0.000

Error 7 1131 161.5

Total 9 15183

Model Summary

S R-sq R-sq(adj)

12.7096 92.55% 90.42%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -18.4 18.0 -1.02 0.341

X1 2.010 0.247 8.13 0.000 1.00

X2 4.738 0.948 5.00 0.002 1.00

Regression Equation

Y = -18.4 + 2.010 X1 + 4.738 X2

a. Because the p-value corresponding to F = 43.50 is .000 < α = .05, we reject H0: β1 = β

2 = 0; there is a significant relationship.

b. Because the p-value corresponding to t = 8.13 is .000 < α = .05, we reject H0: β1 = β 2

= 0; β1 is significant.

c. Because the p-value corresponding to t = 5.00 is .002 < α = .05, we reject H0: β1 = β 2

= 0; β2 is significant.

22. a. SSE = SST – SSR = 16,000 – 12,000 = 4,000

SSE 4000
s2    571.43
n - p -1 7

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 SSR 12000
MSR    6000
p 2

b. F = MSR/MSE = 6,000/571.43 = 10.50

Using F table (two degrees of freedom numerator and seven denominator), p-value is

less than .01.

Actual p-value = .008

Because p-value   , we reject H0. There is a significant relationship among the

variables.

24. a. Partial output follows:

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 6179 3089.6 13.18 0.000

Error 29 6797 234.4

Total 31 12976

Model Summary

S R-sq R-sq(adj)

15.3096 47.62% 44.01%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 60.5 28.4 2.14 0.041

OffPassYds/G 0.3186 0.0626 5.09 0.000 1.21

DefYds/G -0.2413 0.0893 -2.70 0.011 1.21

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Regression Equation

Win% = 60.5 + 0.3186 OffPassYds/G - 0.2413 DefYds/G

ŷ = 60.5 + 0.3186 OffPassYds/G ˗ 0.2413 DefYds/G

b. Because the p-value for the F test = .000 < α = .05, there is a significant relationship.

c. For OffPassYds/G: Because the p-value = .000 < α = .05, OffPassYds/G is

significant.

For DefYds/G: Because the p-value = .011 < = .05, DefYds/G is significant.

26. The partial output from part c of exercise 10 follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 0.06348 0.031738 10.97 0.001

Error 17 0.04918 0.002893

Total 19 0.11266

Model Summary

S R-sq R-sq(adj)

0.0537850 56.35% 51.21%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 0.5365 0.0814 6.59 0.000

SO/IP -0.2483 0.0718 -3.46 0.003 1.05

HR/IP 1.032 0.436 2.37 0.030 1.05

Regression Equation

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
R/IP = 0.5365 - 0.2483 SO/IP + 1.032 HR/IP

a. The p-value associated with F = 10.97 is .001. Because the p-value < .05, there is a

significant overall relationship.

b. For SO/IP, the p-value associated with t = –3.46 is .003. Because the p-value < .05,

SO/IP is significant. For HR/IP, the p-value associated with t = 2.37 is .030. Because

the p-value < .05, HR/IP is also significant.

28. Partial output follows:

Regression Equation

Y = -18.4 + 2.010 X1 + 4.738 X2

Variable Setting

X1 47

X2 10

a. Using JMP, the 95% confidence interval is 112.13 to 134.84.

b. Using JMP, the 95% prediction interval is 91.36 to 155.62.

30 a. Partial output follows:

Analysis of Variance

Source DF Seq SS Contribution Adj SS Adj MS F-Value P-

Value

Regression 2 6179 47.62% 6179 3089.6 13.18 0.000

Error 29 6797 52.38% 6797 234.4

Total 31 12976 100.00%

Model Summary

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
S R-sq R-sq(adj) PRESS

15.3096 47.62% 44.01% 8636.13

Coefficients

Term Coef SE Coef 95% CI T-Value P-Value VIF

Constant 60.5405 28.4 ( 2.5, 2.14 0.041

118.5)

OffPassYds/G 0.3186 0.0626 ( 0.1907, 5.09 0.000 1.21

0.4466)

DefYds/G -0.2413 0.0893 (-0.4239, -2.70 0.011 1.21

-0.0587)

Regression Equation

Win% = 60.5405 + 0.3186 OffPassYds/G - 0.2413 DefYds/G

The estimated regression equation is

ŷ = 60.5405 + 0.3186 OffPassYds/G ˗ 0.2413 DefYds/G

For OffPassYds/G = 225 and DefYds/G = 300, the predicted value of the percentage of

games won is

ŷ = 60.5405 + 0.3186(225) ˗ 0.2413(300) = 59.8

b. Using JMP, the 95% prediction interval is 26.96 to 92.70.

32 a. E(y) = β0 + β1 x1 + β2 x2 where

x2 = 0 if level 1 and 1 if level 2

b. E(y) = β0 + β 1 x1 + β 2 (0) = β0 + β 1 x1

c. E(y) = β0 + β1 x1 + β2 (1) = β0 + β1 x1 + β2

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 d. β2 = E(y | level 2) – E(y | level 1)

β1 is the change in E(y) for a one-unit change in x1 holding x2 constant.

34 a. $15,300

b. Estimate of sales = 10.1 – 4.2(2) + 6.8(8) + 15.3(0) = 56.1 or $56,100

c. Estimate of sales = 10.1 – 4.2(1) + 6.8(3) + 15.3(1) = 41.6 or $41,600

36 a. The output follows:

Analysis of Variance

Source DF Seq SS Contribution Adj SS Adj MS F-Value P-Value

Regression 3 9.4305 90.02% 9.43049 3.14350 18.04 0.002

Error 6 1.0455 9.98% 1.04551 0.17425

Total 9 10.4760 100.00%

Model Summary

S R-sq R-sq(adj) PRESS

0.417434 90.02% 85.03% 3.38309

Coefficients

Term Coef SE Coef 95% CI T-Value P-Value VIF

Constant 1.860 0.729 ( 0.077, 3.643) 2.55 0.043

Months 0.2914 0.0836 (0.0869, 0.4960) 3.49 0.013 2.43

Type 1.102 0.303 ( 0.360, 1.845) 3.63 0.011 1.27

Person -0.609 0.388 (-1.558, 0.340) -1.57 0.167 2.16

Regression Equation

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Repair Time_(hours) = 1.860 + 0.2914 Months + 1.102 Type - 0.609 Person

b. Because the p-value corresponding to F = 18.04 is .002 < α = .05, the overall model is

statistically significant.

c. The p-value corresponding to t = –1.57 is .167 > α = .05; thus, the addition of Person

is not statistically significant. Person is highly correlated with Months (the sample

correlation coefficient is –.691); thus, once the effect of Months has been accounted

for, Person will not add much to the model.

38 a. Partial output follows:

Analysis of Variance

Source DF Seq SS Contribution Adj SS Adj MS F-Value P-Value

Regression 3 3660.7 87.35% 3660.7 1220.25 36.82 0.000

Error 16 530.2 12.65% 530.2 33.14

Total 19 4190.9 100.00%

Model Summary

S R-sq R-sq(adj) PRESS

5.75657 87.35% 84.98% 799.476

Coefficients

Term Coef SE Coef 95% CI T-Value P-Value VIF

Constant -91.8 15.2 (-124.0, -59.5) -6.03 0.000

Age 1.077 0.166 ( 0.725, 1.429) 6.49 0.000 1.46

Pressure 0.2518 0.0452 (0.1559, 0.3477) 5.57 0.000 1.25

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Smokers 8.74 3.00 ( 2.38, 15.10) 2.91 0.010 1.36

Regression Equation

Risk = -91.8 + 1.077 Age + 0.2518 Pressure + 8.74 Smokers

b. Because the p-value corresponding to t = 2.91 is .010 < α = .05, smoking is a

significant factor.

c. Partial output follows.

Regression Equation

Risk = -91.8 + 1.077 Age + 0.2518 Pressure + 8.74 Smokers

Variable Setting

Age 68

Pressure 175

Smokers 1

Fit SE Fit 95% CI 95% PI

34.2661 1.99785 (30.0309, 38.5014) (21.3487, 47.1836)

The point estimate is 34.2661; the 95% prediction interval is 21.3487 to 47.1836. Thus,

the probability of a stroke (.213487 to .471836 at the 95% confidence level) appears to

be quite high. The physician would probably recommend that Art quit smoking and

begin some type of treatment designed to reduce his blood pressure.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
40 a. Partial output follows:

Analysis of Variance

Source DF Seq SS Contribution Adj SS Adj MS F-Value P-Value

Regression 1 1934.42 98.76% 1934.42 1934.42 238.03 0.001

Error 3 24.38 1.24% 24.38 8.13

Total 4 1958.80 100.00%

Model Summary

S R-sq R-sq(adj) PRESS

2.85073 98.76% 98.34% 243.374

Coefficients

Term Coef SE Coef 95% CI T-Value P-Value VIF

Constant -53.28 5.79 (-71.69, -34.87) -9.21 0.003

x 3.110 0.202 ( 2.468, 3.752) 15.43 0.001 1.00

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Regression Equation

y = -53.28 + 3.110 x

b. We obtained the following values:

xi yi Studentized Deleted Residual

22 12 –1.94

24 21 –.12

26 31 1.79

28 35 .40

40 70 –1.90

t.025 = 4.303 (n – p – 2 = 5 – 1 – 2 = 2 degrees of freedom)

Because none of the studentized deleted residuals are less than –4.303 or greater than

4.303, none of the observations can be classified as an outlier.

c. We obtained the following values:

xi yi hi

22 12 .38

24 21 .28

26 31 .22

28 35 .20

40 70 .92

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The critical value is 3( p  1)  3(1  1)  1.2 .
n 5

Because none of the values exceed 1.2, we conclude that there are no

influential observations in the data.

d. We obtained the following values:

xi yi Di

22 12 .60

24 21 .00

26 31 .26

28 35 .03

40 70 11.09

Because D5 = 11.09 > 1 (rule of thumb critical value), we conclude that the fifth

observation is influential.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
42 a. Partial output follows:

Analysis of Variance

Source DF Seq SS Contribution Adj SS Adj MS F-Value P-Value

Regression 2 915.66 91.94% 915.66 457.828 74.12 0.000

Error 13 80.30 8.06% 80.30 6.177

Total 15 995.95 100.00%

Model Summary

S R-sq R-sq(adj) PRESS

2.48532 91.94% 90.70% 142.697

Coefficients

Term Coef SE Coef 95% CI T-Value P-Value VIF

Constant 71.33 2.25 ( 66.47, 76.18) 31.73 0.000

Price($1000s) 0.1072 0.0392 ( 0.0225, 0.1918) 2.74 0.017 1.30

Horsepower 0.08450 0.00931 (0.06439, 0.10460) 9.08 0.000 1.30

Regression Equation

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Speed at 1/4 mile (mph) = 71.33 + 0.1072 Price ($1000s) + 0.08450 Horsepower r

Fits and Diagnostics for All Observations

Obs Speed at 1/4 mile (mph) Fit SE Fit 95% CI Resid Std Resid Del Resid HI

1 90.70 90.49 0.89 ( 88.56, 92.41) 0.21 0.09 0.09 0.128399

2 108.00 105.88 2.01 (101.55, 110.22) 2.12 1.45 1.52 0.652221

3 93.20 91.68 0.88 ( 89.78, 93.59) 1.52 0.65 0.64 0.126054

4 103.20 99.76 1.14 ( 97.30, 102.23) 3.44 1.56 1.66 0.210277

5 102.10 105.85 0.94 (103.81, 107.89) -3.75 -1.63 -1.76 0.144325

6 116.20 116.83 1.70 (113.16, 120.50) -0.63 -0.35 -0.33 0.467435

7 91.70 92.83 0.89 ( 90.90, 94.76) -1.13 -0.49 -0.47 0.129294

8 89.70 90.63 0.87 ( 88.75, 92.51) -0.93 -0.40 -0.39 0.122422

9 93.00 94.32 0.78 ( 92.63, 96.00) -1.32 -0.56 -0.54 0.098752

10 92.30 91.54 0.94 ( 89.52, 93.56) 0.76 0.33 0.32 0.141539

11 99.00 103.46 0.80 (101.73, 105.19) -4.46 -1.90 -2.14 0.104138

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12 84.60 87.11 1.06 ( 84.81, 89.41) -2.51 -1.12 -1.13 0.183349

13 103.20 100.08 1.05 ( 97.80, 102.35) 3.12 1.39 1.44 0.180096

14 93.20 93.20 0.87 ( 91.31, 95.08) 0.00 0.00 0.00 0.123771

15 105.00 102.76 0.86 (100.91, 104.62) 2.24 0.96 0.96 0.119325

16 97.00 95.68 0.65 ( 94.27, 97.08) 1.32 0.55 0.54 0.068602

Obs Cook’s D DFITS

1 0.00 0.03363

2 1.31 2.07558 X

3 0.02 0.24241

4 0.21 0.85470

5 0.15 -0.72273

6 0.03 -0.31262

7 0.01 -0.18152

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 8 0.01 -0.14467

9 0.01 -0.17970

10 0.01 0.12868

11 0.14 -0.73025

12 0.09 -0.53557

13 0.14 0.67723

14 0.00 0.00071

15 0.04 0.35229

16 0.01 0.14555

X Unusual X

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 b. The standardized residual plot follows. There appears to be a highly unusual trend in

the standardized residuals.

1
Standardized Residual

-1

-2
90 95 100 105 110 115 120
Fitted Value

c. The output shown in part a did not identify any observations with a large standardized

residual; thus, there do not appear to be any outliers in the data.

d. The output shown in part a identifies observation 2 as an influential observation.

e 0   x
44 a. E ( y ) 
1  e 0   x

b. It is an estimate of the probability that a customer who does not have a Simmons

credit card will make a purchase.

c. A portion of the binary logistic regression output follows:

Coefficients

Term Coef SE Coef VIF

Constant -0.944 0.315

Card 1.025 0.423 1.00

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Odds Ratios for Continuous Predictors

Odds Ratio 95% CI

Card 2.7857 (1.2147, 6.3886)

Regression Equation

P(1) = exp(Y')/(1 + exp(Y'))

Y' = -0.944 + 1.025 Card

Thus, the estimated logit is gˆ( x)  -0.944 + 1.025x.

d. For customers who do not have a Simmons credit card (x = 0):

gˆ(0)  -0.945 + 1.25(0) = 0.945

and

e gˆ (0) e0.945 0.38868

yˆ   0.945
  0.279
1 e gˆ (0)
1 e 1  0.38868

For customers who have a Simmons credit card (x = 1)

gˆ(1)  -0.945 + 1.025(1) = 0.0800

and

e gˆ (1) e0.08 1.0833

yˆ     0.52
1 e gˆ (1)
1 e 0.08
1  1.0833

e. Using the output shown in part c, the estimated odds ratio is 2.7857. We can conclude

that the estimated odds of making a purchase for customers who have a Simmons

credit card are 2.7857 times greater than the estimated odds of making a purchase for

customers who do not have a Simmons credit card.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 e 0   x
46. a. E ( y ) 
1  e 0   x

b. A portion of the binary logistic regression output follows:

Coefficients

Term Coef SE Coef VIF

Constant -2.633 0.799

Balance 0.2202 0.0900 1.00

Odds Ratios for Continuous Predictors

Odds Ratio 95% CI

Balance 1.2463 (1.0447, 1.4868)

Regression Equation

P(1) = exp(Y')/(1 + exp(Y'))

Y' = -2.633 + 0.2202 Balance

Thus, the estimated logistic regression equation is

e2.633 0.2202 x
E( y) 
1  e 2.633 0.2202 x

c. A portion of the binary logistic regression output follows:

Deviance Table

Source DF Adj Dev Adj Mean Chi-Square P-Value

Regression 1 9.460 9.460 9.46 0.002

Error 48 51.626 1.076

Total 49 61.086

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Significant result: the p-value corresponding to the x2 test statistic is 0.002.

d. For an average monthly balance of $1,000, x = 10.

e2.633 0.2202 x e2.633 0.2202(10) e0.431 0.6499

E( y)  2.633  0.2202 x
 2.633  0.2202(10)
   0.3939
1 e 1 e 1  e0.431 1.6499

Thus, an estimate of the probability that customers with an average monthly balance of

$1,000 will sign up for direct payroll deposit is 0.3939.

e. Repeating the calculations in part d using various values for x, a value of x = 12 or an

average monthly balance of approximately $1,200 is required to achieve this level of

probability.

f. Using the output shown in part b, the estimated odds ratio is 1.2463. Because values

of x are measured in hundreds of dollars, the estimated odds of signing up for payroll

direct deposit for customers who have an average monthly balance of $600 is 1.2463

times greater than the estimated odds of signing up for payroll direct deposit for

customers who have an average monthly balance of $500. Moreover, this

interpretation is true for any 100-dollar increment in the average monthly balance.

e  0  1 x1   2 x2
48 a. E ( y) 
1  e  0  1 x1   2 x2

b. A portion of the binary logistic regression output follows:

Coefficients

Term Coef SE Coef VIF

Constant -39.5 12.5

Wet 3.37 1.26 1.03

Noise 1.816 0.831 1.03

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Odds Ratios for Continuous Predictors

Odds Ratio 95% CI

Wet 29.2095 (2.4521, 347.9413)

Noise 6.1489 (1.2059, 31.3540)

Regression Equation

P(1) = exp(Y')/(1 + exp(Y'))

Y' = -39.5 + 3.37 Wet + 1.816 Noise

Thus, the estimated logit is gˆ( x)  -39.5 + 3.37Wet + 1.816Noise

c. For tires that have a Wet performance rating of 8 and a Noise performance rating of

8:

gˆ( x)  -39.5 + 3.37Wet + 1.816Noise

gˆ( x)  -39.5 + 3.37(8) + 1.816(8) = 1.988

e1.988 7.30092
yˆ    0.8795
1  e1.988 1  7.30092

The probability that a customer will probably or definitely purchase a particular tire

again with these performance characteristics is .8795.

d. For tires that have a Wet performance rating of 7 and a Noise performance rating of

7:

gˆ( x)  -39.5 + 3.37Wet + 1.816Noise

gˆ( x)  -39.5 + 3.37(7) + 1.816(7) = -3.198

e 3.198 .04084
yˆ    0.0392
1  e 3.198 1  .04084

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The probability that a customer will probably or definitely purchase a particular tire

again with these performance characteristics is .0392.

e. Wet and Noise performance ratings of 7 are both considered excellent performance

ratings using the Tire Rack performance scale. Nonetheless, the probability that the

customer will repurchase a tire with these characteristics is extremely low. But a one-

point increase in both ratings increases the probability to .8795, so achieving the

highest possible levels of performance is essential if the manufacturer wants to have

the greatest chance of having an existing customer buy its tire again.

50 a. Job satisfaction can be expected to decrease by 8.69 units with a one-unit increase in

length of service if the wage rate does not change. A dollar increase in the wage rate

is associated with a 13.5-point increase in the job satisfaction score when the length

of service does not change.

b. ŷ = 14.4 - 8.69(4) + 13.5(13) = 155.14

52 a. The computer output with the missing values filled in follows.

Regression Equation

y = -1.41 + 0.0235 X1 + 0.00486 X2

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -1.41 0.4848 -2.91 0.023

x1 0.0235 0.0087 2.71 0.030 1.54

x2 0.00486 0.0011 4.51 0.003 1.54

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
S R-sq R-sq(adj) R-sq(pred)

0.1298 93.73% 91.93% 74.53%

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 1.76209 0.88105 52.29 0.000

Error 7 0.11794 0.01685

Total 9 1.88003

b. F.05 = 4.74

F = 52.29 > F.05; significant relationship

Actual p-value = .000

Because p-value   = .05, the overall relationship is significant.

c. For 1 : p-value = .030; reject H0: 1 = 0

for 2 : p-value = .003; reject H0: 2 = 0

d. R 2  SSR  .9373
SST

9
Ra2  1  (1  .9373)  .9193 Good fit
7

54. a. A portion of the output follows

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 60.787 60.7866 85.93 0.000

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Error 16 11.318 0.7074

Total 17 72.105

Model Summary

S R-sq R-sq(adj)

0.841071 84.30% 83.32%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -7.52 1.47 -5.13 0.000

Steering 1.815 0.196 9.27 0.000 1.00

Regression Equation

Buy Again = -7.52 + 1.815 Steering

Because the p-value = .000 < α = .05, there is a significant relationship.

b. The estimated regression equation provided a good fit; 84.3 % of the variability in the

Buy Again rating was explained by the linear effect of the Steering rating.

c. A portion of the output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 67.185 33.5924 102.41 0.000

Error 15 4.920 0.3280

Total 17 72.105

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Model Summary

S R-sq R-sq(adj)

0.572723 93.18% 92.27%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -5.39 1.11 -4.86 0.000

Steering 0.690 0.288 2.40 0.030 4.65

Tread Wear 0.911 0.206 4.42 0.001 4.65

Regression Equation

Buy Again = -5.39 + 0.690 Steering + 0.911 Tread Wear

d. For the Treadwear independent variable, the p-value = .001 < α = .05; thus, the

addition of Treadwear is significant.

56. a. Type of Fund is a categorical variable with three levels. Let FundDE = 1 for a

domestic equity fund and FundIE = 1 for an international fund. The output follows:

Regression Statistics

Multiple R 0.7838

R Square 0.6144

Adjusted R Square 0.5960

Standard Error 5.5978

Observations 45

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ANOVA

Df SS MS F Significance F

Regression 2 2096.8489 1048.4245 33.4584 2.03818E-09

Residual 42 1316.0771 31.3352

Total 44 3412.9260

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 Coefficients Standard Error t Stat P-Value Lower 95% Upper 95%

Intercept 4.9090 1.7702 2.7732 0.0082 1.3366 8.4814

FundDE 10.4658 2.0722 5.0505 9.033E-06 6.2839 14.6477

FundIE 21.6823 2.6553 8.1658 3.288E-10 16.3237 27.0408

ŷ = 4.9090+ 10.4658 FundDE + 21.6823 FundIE

Because the p-value corresponding to F = 33.4584 is .0000 < α = .05, there is a significant relationship.

b. R square = .6144. A reasonably good fit using only Type of Fund.

c. The output follows:

Regression Statistics

Multiple R 0.8135

R Square 0.6617

Adjusted R Square 0.6279

Standard Error 5.3726

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 Observations 45

ANOVA

Df SS MS F Significance F

Regression 4 2258.3432 564.5858 19.5598 5.48647E-09

Residual 40 1154.5827 28.8646

Total 44 3412.9260

Coefficients Standard Error t Stat P-Value Lower 95% Upper 95%

Intercept 1.1899 2.3781 0.5004 0.6196 –3.6164 5.9961

FundDE 6.8969 2.7651 2.4942 0.0169 1.3083 12.4854

FundIE 17.6800 3.3161 5.3315 4.096E-06 10.9778 24.3821

Net Asset Value ($) 0.0265 0.0670 0.3950 0.6950 –0.1089 0.1619

Expense Ratio (%) 6.4564 2.7593 2.3399 0.0244 0.8798 12.0331

Because the p-value corresponding to F = 19.5558 is .0000 < α = .05, there is a significant relationship.

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 For Net Asset Value ($), the p-value corresponding to t = .3950 is .6950 > α = .05, Net Asset Value ($) is not

significant and can be deleted from the model.

d. Morningstar Rank is a categorical variable. The data set only contains funds with four ranks (two-star through –five star),

so three dummy variables are needed. Let 3StarRank = 1 for a 3-StarRank, 4StarRank = 1 for a 4-StarRank, and 5StarRank

= 1 for a 5-StarRank. The output follows:

Regression Statistics

Multiple R 0.8501

R Square 0.7227

Adjusted R Square 0.6789

Standard Error 4.9904

Observations 45

ANOVA

Df SS MS F Significance F

Regression 6 2466.5721 411.0954 16.5072 2.96759E-09

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 Residual 38 946.3539 24.9040

Total 44 3412.9260

Coefficients Standard Error t Stat P-value Lower 95% Upper 95%

Intercept –4.6074 3.2909 –1.4000 0.1696 –11.2694 2.0547

FundDE 8.1713 2.2754 3.5912 0.0009 3.5650 12.7776

FundIE 19.5194 2.7795 7.0227 2.292E-08 13.8926 25.1461

Expense Ratio (%) 5.5197 2.5862 2.1343 0.0393 0.2843 10.7552

3StarRank 5.9237 2.8250 2.0969 0.0427 0.2048 11.6426

4StarRank 8.2367 2.8474 2.8927 0.0063 2.4725 14.0009

5StarRank 6.6241 3.1425 2.1079 0.0417 0.2624 12.9858

ŷ = -4.6074 + 8.1713 FundDE + 19.5194 FundIE +5.5197 Expense Ratio (%) + 5.9237 3StarRank + 8.2367 4StarRank

+ 6.6241 5StarRank

At the .05 level of significance, all the independent variables are significant.

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 e. ŷ = -4.6074 + 8.1713(1) + 19.5194(0) +5.5197(1.05) + 5.9237(1) + 8.2367(0)

+6.62415(0) = 15.28%

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Chapter 16 Solutions

2. a. The output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 59.39 59.39 4.76 0.117

Error 3 37.41 12.47

Total 4 96.80

Model Summary

S R-sq R-sq(adj)

3.53110 61.36% 48.48%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 9.32 4.20 2.22 0.113

x 0.424 0.194 2.18 0.117 1.00

Regression Equation

y = 9.32 + 0.424 x

The high p-value (.117) indicates a weak relationship; note that 61.4% of the variability

in y has been explained by x.

b. The output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Regression 2 93.529 46.765 28.60 0.034

Error 2 3.271 1.635

Total 4 96.800

Model Summary

S R-sq R-sq(adj)

1.27880 96.62% 93.24%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -8.10 4.10 -1.97 0.187

x 2.413 0.441 5.47 0.032 39.22

xsq -0.0480 0.0105 -4.57 0.045 39.22

Regression Equation

y = -8.10 + 2.413 x - 0.0480 xsq

At the .05 level of significance, the relationship is significant; the fit is excellent.

c. ŷ = –8.101 + 2.413(20) – 0.048(20)2 = 20.959

4. a. The output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 33223 33223 31.86 0.005

Error 4 4172 1043

Total 5 37395

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 Model Summary

S R-sq R-sq(adj)

32.2940 88.84% 86.06%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 943.0 59.4 15.88 0.000

Vehicle 8.71 1.54 5.64 0.005 1.00

Speed

Regression Equation

Traffic Flow = 943.0 + 8.71 Vehicle Speed

b. p-value = .005 <  = .01; reject H0.

6. a. The scatter diagram follows.

1.8
1.6
1.4
1.2
Distance

1
0.8
0.6
0.4
0.2
0
5 10 15 20 25 30 35
Number

b. No; the relationship appears to be curvilinear.

c. Several possible models can be fitted to these data as follow:

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 = 2.90 – 0.185x + .00351x2 Ra  .91
2
ŷ

1 2
yˆ  0.0468  14.4   Ra  .91
x

8. a. The scatter diagram follows.

4500

4000

3500

3000
Price

2500

2000

1500

1000

500

0
12 14 16 18 20
Rating

A simple linear regression model does not appear to be appropriate. There appears to be a

curvilinear relationship between the two variables.

b. The output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 12643604 6321802 14.15 0.001

Error 12 5359686 446641

Total 14 18003290

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Model Summary

S R-sq R-sq(adj)

668.312 70.23% 65.27%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 33829 13657 2.48 0.029

Rating -4571 1688 -2.71 0.019 296.05

RatingSq 153.6 51.7 2.97 0.012 296.05

Regression Equation

Price ($1000) = 33829 - 4571 Rating + 153.6 RatingSq

c. The output for the model using the base 10 log of Price as the dependent variable follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 3.7885 3.78851 53.81 0.000

Error 13 0.9153 0.07041

Total 14 4.7038

Model Summary

S R-sq R-sq(adj)

0.265348 80.54% 79.04%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Constant -2.208 0.658 -3.36 0.005

Rating 0.2857 0.0390 7.34 0.000 1.00

Regression Equation

logPrice = -2.208 + 0.2857 Rating

d. The model in part c is preferred because it provides a better fit.

10. a. SSR = SST – SSE = 1,030

MSR = 1,030 MSE = 520/25 = 20.8 F = 1,030/20.8 = 49.52

Using statistical software, the p-value corresponding to F = 49.52 is .000.

Because p-value ≤ α, x1 is significant.

(520  100) / 2
F  48.3
b. 100 / 23

Using statistical software, the p-value corresponding to F = 48.3 is .000.

Because p-value ≤ α, the addition of variables x2 and x3 is significant.

12. a. A portion of the output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 78.25 78.2452 61.86 0.000

Error 132 166.95 1.2648

Total 133 245.20

Model Summary

S R-sq R-sq(adj)

1.12463 31.91% 31.40%

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 Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 47.95 3.12 15.36 0.000

Putting Ave. 0.806 0.102 7.87 0.000 1.00

Regression Equation

Scoring Ave. = 47.95 + 0.806 Putting Ave.

b. A portion of the output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 3 229.677 76.559 641.25 0.000

Error 130 15.521 0.119

Total 133 245.197

Model Summary

S R-sq R-sq(adj)

0.345528 93.67% 93.52%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 57.16 1.06 53.95 0.000

Putting Ave. 1.0319 0.0322 32.07 0.000 1.04

Greens in Reg. -23.102 0.653 -35.37 0.000 1.05

Drive Accuracy -0.022 0.481 -0.05 0.964 1.02

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 Regression Equation

Scoring Ave. = 57.16 + 1.0319 Putting Ave. - 23.102 Greens in

Reg. - 0.022 Drive Accuracy

c. SSE(reduced) = 166.95

SSE(full) = 15.521

MSE(full) = .119

SSE(reduced) - SSE(full) 166.95 - 15.521

F  number of extra terms  2  634.19
MSE(full) .119

The p-value associated with F = 634.19 (two degrees of freedom numerator and 130

denominator) is 0.00. With a p-value < α =.05, the addition of the two independent

variables is statistically significant.

14. a. The output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 3379.6 1689.82 35.41 0.000

Error 17 811.3 47.72

Total 19 4190.9

Model Summary

S R-sq R-sq(adj)

6.90826 80.64% 78.36%

Coefficients

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 Term Coef SE Coef T-Value P-Value VIF

Constant -110.9 16.5 -6.74 0.000

Age 1.315 0.173 7.59 0.000 1.11

Blood_Pressure 0.2964 0.0511 5.80 0.000 1.11

Regression Equation

Risk = -110.9 + 1.315 Age + 0.2964 Blood_Pressure

b. The output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 4 3672.11 918.03 26.54 0.000

Error 15 518.84 34.59

Total 19 4190.95

Model Summary

S R-sq R-sq(adj)

5.88127 87.62% 84.32%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -123.2 56.9 -2.16 0.047

Age 1.513 0.780 1.94 0.071 30.87

Blood_Pressure 0.448 0.346 1.30 0.214 69.91

Smoker 8.87 3.07 2.88 0.011 1.37

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 AgePress -0.00276 0.00481 -0.57 0.575 71.91

Regression Equation

Risk = -123.2 + 1.513 Age + 0.448 Blood_Pressure + 8.87 Smoker -

0.00276 AgePress

SSE(reduced) - SSE(full) 811.3  518.84

F  number of extra terms  2  4.23
MSE(full) 34.59
c.

The p-value associated with F = 4.23 (2 numerator and 15 denominator DF) is .0349.

Because p-value ≤ α = .05, the addition of the two terms is significant.

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16. a. The sample correlation coefficients are as follows.

Weeks Age Educ Married Head Tenure Manager

Age 0.577

0.000

Educ 0.007 0.100

0.962 0.490

Married -0.130 -0.209 -0.151

0.370 0.145 0.296

Head -0.205 0.027 -0.156 -0.449

0.153 0.854 0.280 0.001

Tenure 0.398 0.459 0.174 -0.057 -0.046

0.004 0.001 0.228 0.692 0.750

Manager -0.198 0.097 0.160 0.073 -0.200 -0.113

0.167 0.504 0.266 0.616 0.164 0.435

Sales -0.134 0.137 0.124 -0.148 -0.013 0.097 -0.156

0.354 0.343 0.393 0.306 0.926 0.504 0.279

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Cell Contents: Pearson correlation

P-Value

The independent variable most highly correlated with Weeks is Age. The output

corresponding to using Age as the independent variable follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 9161 9161.4 24.01 0.000

Error 48 18316 381.6

Total 49 27478

Model Summary

S R-sq R-sq(adj)

19.5342 33.34% 31.95%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -8.9 11.0 -0.80 0.425

Age 1.509 0.308 4.90 0.000 1.00

Regression Equation

Weeks = -8.9 + 1.509 Age

b. Stepwise regression output follows.

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 Stepwise Selection of Terms

Candidate terms: Age, Educ, Married, Head, Tenure, Manager, Sales

----Step 1---- -----Step 2---- -----Step 3---- -----Step 4----

Coef P Coef P Coef P Coef P

Constant -8.9 -9.1 -0.1 -0.07

Age 1.509 0.000 1.574 0.000 1.609 0.000 1.725 0.000

Manager -20.06 0.029 -24.61 0.006 -28.67 0.001

Head -14.31 0.012 -15.09 0.005

Sales -17.42 0.008

S 19.5342 18.7494 17.6857 16.5069

R-sq 33.34% 39.87% 47.64% 55.38%

R-sq(adj) 31.95% 37.31% 44.22% 51.41%

Mallows’ Cp 22.52 17.81 11.83 5.87

α-to-enter = 0.05, α-to-leave = 0.05

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The results suggest a model using four independent variables: Age, Manager, Head, and

Sales. The corresponding output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 4 15216 3804.0 13.96 0.000

Error 45 12261 272.5

Total 49 27478

Model Summary

S R-sq R-sq(adj)

16.5069 55.38% 51.41%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -0.07 9.84 -0.01 0.994

Age 1.725 0.265 6.51 0.000 1.04

Head -15.09 5.12 -2.95 0.005 1.05

Manager -28.67 8.12 -3.53 0.001 1.09

Sales -17.42 6.24 -2.79 0.008 1.05

Regression Equation

Weeks = -0.07 + 1.725 Age - 15.09 Head - 28.67 Manager - 17.42

Sales

c. The results using the forward selection procedure are the same as the results using the

stepwise procedure in part b.

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 d. The results using the backward elimination procedure follow:

Backward Elimination of Terms

Candidate terms: Age, Educ, Married, Head, Tenure, Manager, Sales

-----Step 1---- -----Step 2---- -----Step 3---- -----Step 4----

Coef P Coef P Coef P Coef P

Constant 22.9 13.6 13.1 -0.07

Age 1.509 0.000 1.521 0.000 1.637 0.000 1.725 0.000

Educ -0.613 0.516

Married -10.74 0.081 -9.85 0.098 -9.76 0.099

Head -19.78 0.002 -19.01 0.002 -19.41 0.001 -15.09 0.005

Tenure 0.426 0.366 0.373 0.418

Manager -26.74 0.003 -27.71 0.001 -28.99 0.001 -28.67 0.001

Sales -18.56 0.005 -18.99 0.004 -18.97 0.004 -17.42 0.008

S 16.3497 16.2408 16.1794 16.5069

R-sq 59.14% 58.72% 58.08% 55.38%

R-sq(adj) 52.33% 52.96% 53.32% 51.41%

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 Mallows’ Cp 8.00 6.43 5.09 5.87

α-to-leave = 0.05

These results also suggest using the model with four independent variables: Age, Head, Manager, and Sales.

e. The results using Minitab’s Best-Subset procedure follow:

Response is Weeks

M M
a T a
r e n S
E r H n a a
A d i e u g l
g u e a r e e
Vars R-Sq R-Sq (adj) R-Sq (pred) Mallows Cp S e c d d e r s
1 33.3 32.0 28.7 22.5 19.534 X

1 15.8 14.0 10.0 40.6 21.954 X

2 39.9 37.3 33.3 17.8 18.749 X X

2 38.2 35.6 30.2 19.5 19.005 X X

3 47.6 44.2 37.8 11.8 17.686 X X X

3 46.8 43.3 38.1 12.7 17.831 X X X

4 55.4 51.4 44.9 5.9 16.507 X X X X

4 49.1 44.6 37.4 12.3 17.628 X X X X

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 5 58.1 53.3 46.6 5.1 16.179 X X X X X

5 56.0 51.0 43.9 7.3 16.582 X X X X X

6 58.7 53.0 46.0 6.4 16.241 X X X X X X

6 58.3 52.5 44.6 6.8 16.318 X X X X X X

7 59.1 52.3 43.8 8.0 16.350 X X X X X X X

The results suggest a model using five independent variables: Age, Married, Head, Manager, and Sales.

The corresponding output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 5 15959.5 3191.9 12.19 0.000

Error 44 11518.0 261.8

Total 49 27477.5

Model Summary

S R-sq R-sq(adj)

16.1794 58.08% 53.32%

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 Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 13.1 12.4 1.05 0.298

Age 1.637 0.265 6.18 0.000 1.08

Married -9.76 5.79 -1.69 0.099 1.35

Head -19.41 5.64 -3.44 0.001 1.32

Manager -28.99 7.96 -3.64 0.001 1.09

Sales -18.97 6.18 -3.07 0.004 1.08

Regression Equation

Weeks = 13.1 + 1.637 Age - 9.76 Married - 19.41 Head - 28.99

Manager - 18.97 Sales

18. a. Because the independent variable most highly correlated with RPG is OBP, it will

provide the best one-variable estimated regression equation. The output using OBP to

predict RPG follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 72.11 72.1076 78.85 0.000

Error 18 16.46 0.9145

Total 19 88.57

Model Summary

S R-sq R-sq(adj)

0.956308 81.41% 80.38%

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 Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -4.05 1.01 -4.02 0.001

OBP 27.55 3.10 8.88 0.000 1.00

Regression Equation

RPG = -4.05 + 27.55 OBP

b. The output using the stepwise regression procedure using α to enter = 0.05 and α to

leave = 0.05 follows.

Candidate terms: H, 2B, 3B, HR, RBI, BB, SO, SB, CS, OBP, SLG, AVG

-----Step 1---- -----Step 2----- -----Step 3-----

Coef P Coef P Coef P

Constant -4.05 -1.595 -0.981

OBP 27.55 0.000 17.16 0.000 25.14 0.000

HR 0.0711 0.001 0.0695 0.000

AVG -12.62 0.005

S 0.956308 0.692987 0.555522

R-sq 81.41% 90.78% 94.43%

R-sq(adj) 80.38% 89.70% 93.38%

Mallows’ Cp 66.65 26.99 12.79

α-to-enter = 0.05, α-to-leave = 0.05

Analysis of Variance

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 Source DF Adj SS Adj MS F-Value P-Value

Regression 3 83.631 27.8771 90.33 0.000

Error 16 4.938 0.3086

Total 19 88.569

Model Summary

S R-sq R-sq(adj)

0.555522 94.43% 93.38%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -0.981 0.776 -1.26 0.224

HR 0.0695 0.0137 5.06 0.000 2.24

OBP 25.14 3.65 6.88 0.000 4.11

AVG -12.62 3.90 -3.23 0.005 2.76

Regression Equation

RPG = -0.981 + 0.0695 HR + 25.14 OBP - 12.62 AVG

Using less-sensitive values for α to enter and α to leave will provide a model with

additional independent variables. For example, the output using the stepwise regression

procedure using α to enter = 0.10 and α to leave = 0.10 follows.

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Stepwise Selection of Terms

Candidate terms: H, 2B, 3B, HR, RBI, BB, SO, SB, CS, OBP, SLG, AVG

-----Step 1---- -----Step 2----- -----Step 3----- -----Step 4-----

Coef P Coef P Coef P Coef P

Constant -4.05 -1.595 -0.981 -0.616

OBP 27.55 0.000 17.16 0.000 25.14 0.000 26.61 0.000

HR 0.0711 0.001 0.0695 0.000 0.0681 0.000

AVG -12.62 0.005 -16.50 0.001

3B 0.1823 0.079

BB

S 0.956308 0.692987 0.555522 0.515891

R-sq 81.41% 90.78% 94.43% 95.49%

R-sq(adj) 80.38% 89.70% 93.38% 94.29%

Mallows’ Cp 66.65 26.99 12.79 10.04

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 ------Step 5------

Coef P

Constant -0.909

OBP 32.18 0.000

HR 0.1088 0.000

AVG -21.51 0.000

3B 0.2439 0.010

BB -0.02231 0.011

S 0.420960

R-sq 97.20%

R-sq(adj) 96.20%

R-sq(pred) 93.86%

Mallows’ Cp 4.46

α-to-enter = 0.1, α-to-leave = 0.1

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 5 86.088 17.2176 97.16 0.000

Error 14 2.481 0.1772

Total 19 88.569

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Model Summary

S R-sq R-sq(adj)

0.420960 97.20% 96.20%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -0.909 0.617 -1.47 0.163

3B 0.2439 0.0817 2.99 0.010 1.55

HR 0.1088 0.0174 6.26 0.000 6.26

BB -0.02231 0.00764 -2.92 0.011 8.02

OBP 32.18 3.42 9.40 0.000 6.28

AVG -21.51 3.81 -5.65 0.000 4.58

Regression Equation

RPG = -0.909 + 0.2439 3B + 0.1088 HR - 0.02231 BB + 32.18 OBP -

21.51 AVG

The following output using the best subset procedure also confirms that a variety of

models will provide a good fit.

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Response is RPG

Vars R-Sq R-Sq R-Sq Mallows S H 2B 3B HR RBI BB SO SB CS OBP SLG AVG

(adj) (pred) Cp

1 81.4 80.4 75.4 66.6 0.95631 X

1 78.9 77.7 73.1 77.9 1.0192 X

2 90.8 89.7 87.4 27.0 0.69299 X X

2 88.4 87.0 83.5 37.8 0.77872 X X

3 94.4 93.4 89.2 12.8 0.55552 X X X

3 94.4 93.3 87.9 13.0 0.55820 X X X

4 95.8 94.6 89.9 8.8 0.50014 X X X X

4 95.5 94.3 90.0 10.0 0.51589 X X X X

5 97.2 96.2 93.9 4.5 0.42096 X X X X X

5 97.2 96.2 93.8 4.6 0.42336 X X X X X

6 97.6 96.6 92.6 4.5 0.40042 X X X X X X

6 97.5 96.4 94.1 5.1 0.41198 X X X X X X

7 98.2 97.2 94.4 3.9 0.36245 X X X X X X X

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 7 98.2 97.1 94.4 4.1 0.36664 X X X X X X X

8 98.3 97.1 93.3 5.3 0.36471 X X X X X X X X

8 98.3 97.0 93.3 5.7 0.37269 X X X X X X X X

9 98.4 97.0 92.4 7.1 0.37506 X X X X X X X X X

9 98.4 96.9 91.3 7.3 0.38077 X X X X X X X X X

10 98.4 96.7 91.8 9.0 0.39477 X X X X X X X X X X

10 98.4 96.7 88.1 9.0 0.39496 X X X X X X X X X X

11 98.4 96.3 86.0 11.0 0.41758 X X X X X X X X X X X

11 98.4 96.2 88.6 11.0 0.41848 X X X X X X X X X X X

12 98.4 95.7 83.8 13.0 0.44629 X X X X X X X X X X X X

It would be difficult to make an argument that there is one best model given these results. The five-variable model identified

using the stepwise regression procedure with α to enter = 0.10 and α to leave = 0.10 seems like a reasonable choice. The

regression output corresponding to this model follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 5 86.088 17.2176 97.16 0.000

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 Error 14 2.481 0.1772

Total 19 88.569

Model Summary

S R-sq R-sq(adj)

0.420960 97.20% 96.20%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -0.909 0.617 -1.47 0.163

3B 0.2439 0.0817 2.99 0.010 1.55

HR 0.1088 0.0174 6.26 0.000 6.26

BB -0.02231 0.00764 -2.92 0.011 8.02

OBP 32.18 3.42 9.40 0.000 6.28

AVG -21.51 3.81 -5.65 0.000 4.58

Regression Equation

RPG = -0.909 + 0.2439 3B + 0.1088 HR - 0.02231 BB + 32.18 OBP - 21.51 AVG

The corresponding standardized residual plot follows.

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 2

Standardized Residual
0

-1

-2
1 2 3 4 5 6 7 8 9 10
Fitted Value

The standardized residual plot does not indicate any reason to question the usual assumptions regarding the error term. Thus,

the estimated regression equation using OBP, HR, AVG, 3B, and BB appears to be a good choice.

20. The dummy variables are defined as follow.

x1 x2 x3 Treatment

0 0 0 A

1 0 0 B

0 1 0 C

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 0 0 1 D

E(y) = 0 + 1 x1 + 2 x2 + 3 x3

22. Factor A

x1 = 0 if level 1 and 1 if level 2

Factor B

x2 x3 Level

0 0 1

1 0 2

0 1 3

E(y) = 0 + 1 x1 + 2 x2 + 3 x1x2 + 4 x1x3

24. a. The dummy variables are defined as follows.

D1 D2 D3 Paint

0 0 0 1

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 1 0 0 2

0 1 0 3

0 0 1 4

The output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 3 330.00 110.00 2.54 0.093

Error 16 692.00 43.25

Total 19 1022.00

Model Summary

S R-sq R-sq(adj)

6.57647 32.29% 19.59%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 133.00 2.94 45.22 0.000

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 D1 6.00 4.16 1.44 0.168 1.50

D2 3.00 4.16 0.72 0.481 1.50

D3 11.00 4.16 2.64 0.018 1.50

Regression Equation

Time = 133.00 + 6.00 D1 + 3.00 D2 + 11.00 D3

The appropriate hypothesis test is:

H0 : 1 = 2 = 3 = 0

The p-value of .093 is greater than  = .05; therefore, at the 5% level of significance we cannot reject H0.

b. Estimating the mean drying for paint 2 using the estimated regression equations developed in part a may not be the best

approach because at the 5% level of significance, we cannot reject H0. However, if we want to use the output, we would

proceed as follows:

Time = 133 + 6(1) + 3(0) +11(0) = 139

Note that this is equivalent of just computing the average of the five drying times for paint 2—that is, (144 + 133 + 142 + 146

+ 130) / 5 = 139.

Alternatively, we observe from the regression output that paints 1 and 2 drying times (as represented by the D1 coefficient)

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 and paints 1 and 3 drying times (as represented by the D2 coefficient) do not seem to significantly differ.

Regression Statistics
Multiple R 0.485
R Square 0.235
Adjusted R Square 0.192
Standard Error 6.591
Observations 20

ANOVA
df SS MS F Significance F
Regression 1 240 240 5.524 0.030
Residual 18 782 43.444
Total 19 1022

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 99.0% Upper 99.0%
Intercept 136 1.702 79.913 0.000 132.425 139.575 131.101 140.899
D3 8 3.404 2.350 0.030 0.849 15.151 -1.797 17.797

Using this regression model, the paint 2 drying time can be estimated by:

Time = 136+ 8(0) = 136.

Note that this is equivalent to just computing the average of the 15 drying times for paint 1, paint 2, and paint 3. If there is no

difference between paint 1, paint 2, and paint 3, this estimate of 136 minutes is preferable to the previous estimate of 139

minutes because it is based on more data (15 observations versus just 5 observations)

26. Size = 0 if a small advertisement and 1 if a large advertisement.

DesignB and DesignC are defined as follows.

DesignB DesignC Advertisement Design

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 0 0 A

1 0 B

0 1 C

LargeDesignB denotes the interaction between Large and DesignB

LargeDesignC denotes the interaction between Large and DesignC

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 The complete data set and the output follow.

Number Size DesignB DesignC LargeDesignB LargeDesignC

8 0 0 0 0 0

12 0 0 0 0 0

22 0 1 0 0 0

14 0 1 0 0 0

10 0 0 1 0 0

18 0 0 1 0 0

12 1 0 0 0 0

8 1 0 0 0 0

26 1 1 0 1 0

30 1 1 0 1 0

18 1 0 1 0 1

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 14 1 0 1 0 1

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 5 448.000 89.6000 5.60 0.029

Error 6 96.000 16.0000

Total 11 544.000

Model Summary

S R-sq R-sq(adj)

4 82.35% 67.65%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 10.00 2.83 3.54 0.012

Size 0.00 4.00 0.00 1.000 3.00

DesignB 8.00 4.00 2.00 0.092 2.67

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 DesignC 4.00 4.00 1.00 0.356 2.67

LargeDesignB 10.00 5.66 1.77 0.128 3.33

LargeDesignC 2.00 5.66 0.35 0.736 3.33

Regression Equation

Number = 10.00 + 0.00 Size + 8.00 DesignB + 4.00 DesignC + 10.00 LargeDesignB + 2.00

LargeDesignC

Overall the model is significant because the p-value corresponding to F = 5.60 < α = .05.

Individually, none of the variables are significant using α = .05.

The output using only Design B follows

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 294.0 294.00 11.76 0.006

Error 10 250.0 25.00

Total 11 544.0

Model Summary

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 S R-sq R-sq(adj)

5 54.04% 49.45% 27.84%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 12.50 1.77 7.07 0.000

DesignB 10.50 3.06 3.43 0.006 1.00

Regression Equation

Number = 12.50 + 10.50 DesignB

Thus, DesignB is significant using α = .05. However, the model involving just the interaction between Large and DesignB

also provides some interesting results:

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 345.6 345.60 17.42 0.002

Error 10 198.4 19.84

Total 11 544.0

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 Model Summary

S R-sq R-sq(adj)

4.45421 63.53% 59.88%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 13.60 1.41 9.66 0.000

LargeDesignB 14.40 3.45 4.17 0.002 1.00

Regression Equation

Number = 13.60 + 14.40 LargeDesignB

Here we see that the interaction term is significant. Thus, one might consider that the differences are to the result of both

design and a large advertisement. But it is difficult to reach any definite conclusions given the size of the data set. A larger

sample size is needed to make any stronger conclusions about the relationships among the variables.

28. From statistical software, d = 1.59617. At the .05 level of significance, dL = 1.04 and dU = 1.77. Because dL  d dU, the test

is inconclusive. However, these data are not a time series, so autocorrelation is not a concern and it is not appropriate to

perform a Durbin-Watson test.

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30. a.

There appears to be a curvilinear relationship between weight and price.

b. A portion of the output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 3161747 1580874 26.82 0.000

Error 16 943263 58954

Total 18 4105011

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 Model Summary

S R-sq R-sq(adj)

242.804 77.02% 74.15%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 11376 2565 4.43 0.000

Weight -728 194 -3.76 0.002 287.41

WeightSq 11.97 3.54 3.38 0.004 287.41

Regression Equation

Price = 11376 - 728 Weight + 11.97 WeightSq

The results obtained support the conclusion that there is a curvilinear relationship between weight and price.

c. A portion of the output follows.

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 Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 2944410 1472205 20.30 0.000

Error 16 1160601 72538

Total 18 4105011

Model Summary

S R-sq R-sq(adj)

269.328 71.73% 68.19%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 1283.8 95.2 13.48 0.000

Type_Fitness -572 154 -3.72 0.002 1.20

Type_Comfort -907 145 -6.24 0.000 1.20

Regression Equation

Price = 1283.8 - 572 Type_Fitness - 907 Type_Comfort

Type of bike appears to be a significant factor in predicting price, but the estimated regression equation developed in part b

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 appears to provide a slightly better fit.

d. A portion of the output follows. In this output, WxF denotes the interaction between the weight of the bike, and the dummy

variable Type_Fitness and WxC denote the interaction between the weight of the bike and the dummy variable

Type_Comfort.

Regression Analysis: Price versus Weight, Type_Fitness, Type_Comfort, WxF, WxC

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 5 3450170 690034 13.70 0.000

Error 13 654841 50372

Total 18 4105011

Model Summary

S R-sq R-sq(adj)

224.438 84.05% 77.91%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

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 Constant 5924 1547 3.83 0.002

Weight -214.6 71.4 -3.00 0.010 45.74

Type_Fitness -6343 2596 -2.44 0.030 492.96

Type_Comfort -7232 2518 -2.87 0.013 516.81

WxF 261 112 2.34 0.036 537.48

WxC 266.4 94.0 2.83 0.014 762.67

Regression Equation

Price = 5924 - 214.6 Weight - 6343 Type_Fitness - 7232 Type_Comfort + 261 WxF + 266.4 WxC

By taking into account the type of bike, the weight, and the interaction between these two factors this estimated regression

equation provides an excellent fit.

32. a. The output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 4 2587.7 646.9 5.42 0.002

Error 35 4176.3 119.3

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 Total 39 6764.0

Model Summary

S R-sq R-sq(adj)

10.9235 38.26% 31.20%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 80.43 5.92 13.60 0.000

Industry 11.94 3.80 3.15 0.003 1.06

Public -4.82 4.23 -1.14 0.263 1.05

Quality -2.62 1.18 -2.22 0.033 1.06

Finished -4.07 1.85 -2.20 0.035 1.00

Regression Equation

Delay = 80.43 + 11.94 Industry - 4.82 Public - 2.62 Quality - 4.07 Finished

b. The low value of the adjusted coefficient of determination (31.2%) does not indicate a good fit.

c. The scatter diagram follows.

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 100

90

80

70

Delay
60

50

40

30
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

Finished

The scatter diagram suggests a curvilinear relationship between these two variables.

d. The output from the best subsets procedure follows, where FinishedSq is the square of Finished.

Response is Delay

F
I F i
n Q i n
d P u n i
u u a i s
s b l s h
t l i h e
R-Sq R-Sq Mallows r i t e d
Vars R-Sq (adj) (pred) Cp S y c y d q

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 S
q
1 15.9 13.7 6.5 34.0 12.234 X

1 9.9 7.6 0.0 39.0 12.662 X

2 37.8 34.4 27.0 17.8 10.667 X X

2 26.9 22.9 14.9 26.9 11.561 X X

3 51.1 47.1 39.7 8.7 9.5813 X X X

3 42.2 37.3 30.4 16.1 10.425 X X X

4 59.1 54.4 48.3 4.1 8.8960 X X X X

4 51.6 46.1 35.3 10.3 9.6712 X X X X

5 59.1 53.1 43.0 6.0 9.0149 X X X X x

The estimated regression equation using Industry, Quality, Finished, and FinishedSq has the largest adjusted coefficient of

determination of 54.4%.

The following regression output summarizes this model given by the following equation:

Delay = 112.79 + 11.63*Industry – 2.49*Quality – 36.55*Finished + 6.63*FinishedSq

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 Regression Statistics
Multiple R 0.768
R Square 0.591
Adjusted R Square 0.544
Standard Error 8.896
Observations 40

ANOVA
df SS MS F Significance F
Regression 4 3994.139 998.535 12.618 0.000
Residual 35 2769.836 79.138
Total 39 6763.975

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 99.0% Upper 99.0%
Intercept 112.790 8.852 12.742 0.000 94.820 130.761 88.679 136.901
Industry 11.631 3.060 3.800 0.001 5.418 17.844 3.295 19.967
Quality -2.487 0.957 -2.600 0.014 -4.429 -0.545 -5.092 0.118
Finished -36.551 7.439 -4.914 0.000 -51.652 -21.449 -56.813 -16.289
FinishedSq 6.630 1.493 4.442 0.000 3.600 9.661 2.564 10.696

34. a. The output follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 1818.6 909.3 6.80 0.003

Error 37 4945.4 133.7

Total 39 6764.0

Model Summary

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 S R-sq R-sq(adj)

11.5611 26.89% 22.93%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 70.63 4.56 15.50 0.000

Industry 12.74 3.97 3.21 0.003 1.03

Quality -2.92 1.24 -2.36 0.024 1.03

Regression Equation

Delay = 70.63 + 12.74 Industry - 2.92 Quality

Durbin-Watson Statistic = 1.42611

b. The residual plot as a function of the order in which the data are presented follows.

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 30

20

10

Residuals
0

-10

-20

-30
4 8 12 16 20 24 28 32 36 40
Order In Which Data Are Presented

There is no obvious pattern in the data indicative of positive autocorrelation.

c. At the .05 level of significance, dL = 1.39 and dU = 1.60. Because dL ≤ d ≤ dU, the test is inconclusive. However, these data

are not a time series, so autocorrelation is not a concern and it is not appropriate to perform a Durbin-Watson test.

36. The dummy variables are defined as follow:

D1 D2 Type

0 0 Non

1 0 Light

0 1 Heavy

The output follows.

Analysis of Variance

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 Source DF Adj SS Adj MS F-Value P-Value

Regression 2 9.333 4.667 4.00 0.034

Error 21 24.500 1.167

Total 23 33.833

Model Summary

S R-sq R-sq(adj)

1.08012 27.59% 20.69%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 4.250 0.382 11.13 0.000

D1 1.000 0.540 1.85 0.078 1.33

D2 1.500 0.540 2.78 0.011 1.33

Regression Equation

Score = 4.250 + 1.000 D1 + 1.500 D2

Because the p-value = .034 is less than  = .05, there are significant differences between comfort levels for the three types of

browsers.

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Chapter 17 Solutions

2. The following table shows the calculations for parts a, b, and c.

Week Time-Series Forecast Forecast Absolute Value of Squared Forecast Percentage Absolute Value of

Value Error Forecast Error Error Error Percentage Error

1 18

2 13 18.00 –5.00 5.00 25.00 –38.46 38.46

3 16 15.50 0.50 0.50 0.25 3.13 3.13

4 11 15.67 –4.67 4.67 21.81 –42.45 42.45

5 17 14.50 2.50 2.50 6.25 14.71 14.71

6 14 15.00 –1.00 1.00 1.00 –7.14 7.14

Totals 13.67 54.31 –70.21 105.86

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 a. MAE = 13.67/5 = 2.73

b. MSE = 54.31/5 = 10.86

c. MAPE = 105.89/5 = 21.18

d. Forecast for week 7 is (18 + 13 + 16 + 11 + 17 + 14) / 6 = 14.83

4. a.

Month Time-Series Forecast Forecast Squared Forecast

Value Error Error

1 24

2 13 24 –11 121

3 20 13 7 49

4 12 20 –8 64

5 19 12 7 49

6 23 19 4 16

7 15 23 –8 64

Total 363

MSE = 363/6 = 60.5

Forecast for month 8 = 15.

b.

Week Time-Series Forecast Forecast Squared Forecast

Value Error Error

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 1 24

2 13 24.00 –11.00 121.00

3 20 18.50 1.50 2.25

4 12 19.00 –7.00 49.00

5 19 17.25 1.75 3.06

6 23 17.60 5.40 29.16

7 15 18.50 –3.50 12.25

Total 216.72

MSE = 216.72/6 = 36.12

Forecast for month 8 = (24 + 13 + 20 + 12 + 19 + 23 + 15) / 7 = 18.

c. The average of all the previous values is better because MSE is smaller.

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6. a.

The data appear to follow a horizontal pattern.

Three-Week Moving Average

Week Time-Series Value Forecast Forecast Error Squared Forecast Error

1 24

2 13

3 20

4 12 19.00 –7.00 49.00

5 19 15.00 4.00 16.00

6 23 17.00 6.00 36.00

7 15 18.00 –3.00 9.00

Total 110.00

MSE = 110/4 = 27.5.

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 The forecast for week 8 = (19 + 23 + 15) / 3 = 19.

b. Smoothing constant = .2

Week Time-Series Forecast Forecast Squared Forecast

Value Error Error

1 24

2 13 24.00 –11.00 121.00

3 20 21.80 –1.80 3.24

4 12 21.44 –9.44 89.11

5 19 19.55 –0.55 0.30

6 23 19.44 3.56 12.66

7 15 20.15 –5.15 26.56

Total 252.87

MSE = 252.87/6 = 42.15

The forecast for week 8 is .2(15) + (1 – .2)20.15 = 19.12.

c. The three-week moving average provides a better forecast because it has a smaller

MSE.

d. Smoothing constant = .4.

Week Time-Series Forecast Forecast Error Squared Value of

Value Forecast Error

1 24

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 2 13 24.00 –11.00 121.00

3 20 19.60 0.40 0.16

4 12 19.76 –7.76 60.22

5 19 16.66 2.34 5.49

6 23 17.59 5.41 29.23

7 15 19.76 –4.76 22.62

Total 238.72

MSE = 238.72/6 = 39.79

The exponential smoothing forecast using α = .4 provides a better forecast

than the exponential smoothing forecast using α = .2 because it has a smaller MSE.

8. a.

Week Time-Series Weighted Moving Forecast Error (Error)2

Value Average Forecast

1 17

2 21

3 19

4 23 19.33 3.67 13.47

5 18 21.33 –3.33 11.09

6 16 19.83 –3.83 14.67

7 20 17.83 2.17 4.71

8 18 18.33 –0.33 0.11

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 9 22 18.33 3.67 13.47

10 20 20.33 –0.33 0.11

11 15 20.33 –5.33 28.41

12 22 17.83 4.17 17.39

Total 103.43

b. MSE = 103.43 / 9 = 11.49

Prefer the unweighted moving average here; it has a smaller MSE.

c. You could always find a weighted moving average at least as good as the unweighted

one. Actually the unweighted moving average is a special case of the weighted ones

where the weights are equal.

10.

a.

F13 = .2Y12 + .16Y11 + .64(.2Y10 + .8F10) = .2Y12 + .16Y11 + .128Y10 + .512F10

F13 = .2Y12 + .16Y11 + .128Y10 + .512(.2Y9 + .8F9) = .2Y12 + .16Y11 + .128Y10 +

.1024Y9 + .4096F9

F13 = .2Y12 + .16Y11 + .128Y10 + .1024Y9 + .4096(.2Y8 + .8F8) = .2Y12 + .16Y11 +

.128Y10 + .1024Y9 + .08192Y8 + .32768F8

b. The more recent data receive the greater weight or importance in determining the

forecast. The moving averages method weights the last n data values equally in

determining the forecast.

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12. a.

The data appear to follow a horizontal pattern.

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 b.

Month Time-Series Value Three-Month Moving (Error)2 Four-Month Moving (Error)2

Average Forecast Average Forecast

1 9.5

2 9.3

3 9.4

4 9.6 9.40 0.04

5 9.8 9.43 0.14 9.45 0.12

6 9.7 9.60 0.01 9.53 0.03

7 9.8 9.70 0.01 9.63 0.03

8 10.5 9.77 0.53 9.73 0.59

9 9.9 10.00 0.01 9.95 0.00

10 9.7 10.07 0.14 9.98 0.08

11 9.6 10.03 0.18 9.97 0.14

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 12 9.6 9.73 0.02 9.92 0.10

Totals 1.08 1.09

MSE(3-month) = 1.08 / 9 = .12

MSE(4-month) = 1.09 / 8 = .14

Use three-month moving averages.

c. Forecast = (9.7 + 9.6 + 9.6) / 3 = 9.63

14. a.

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 The data appear to follow a horizontal pattern.

b. Smoothing constant = .3.

Month t Time-Series Forecast Ft Forecast Error Squared Error

Value Y t – Ft (Yt – Ft)2

Yt

1 105

2 135 105.00 30.00 900.00

3 120 114.00 6.00 36.00

4 105 115.80 –10.80 116.64

5 90 112.56 –22.56 508.95

6 120 105.79 14.21 201.92

7 145 110.05 34.95 1,221.50

8 140 120.54 19.46 378.69

9 100 126.38 –26.38 695.90

10 80 118.46 –38.46 1,479.17

11 100 106.92 –6.92 47.89

12 110 104.85 5.15 26.52

Total 5,613.18

MSE = 5,613.18 / 11 = 510.29

Forecast for month 13: F13 = .3(110) + .7(104.85) = 106.4.

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 c. Smoothing constant = .5

Month t Time-Series Forecast Ft Forecast Error Yt – Ft Squared Error

Value Yt (Yt – Ft)2

1 105

2 135 105 30.00 900.00

3 120 120 0.00 0.00

4 105 120 –15.00 225.00

5 90 112.50 –22.50 506.25

6 120 101.25 18.75 351.56

7 145 110.63 34.37 1,181.30

8 140 127.81 12.19 148.60

9 100 133.91 –33.91 1,149.89

10 80 116.95 –36.95 1,365.30

11 100 98.48 1.52 2.31

12 110 99.24 10.76 115.78

5,945.99

MSE = 5945.99 / 11 = 540.55

Forecast for month 13: F13 = .5(110) + .5(99.24) = 104.62

Conclusion: a smoothing constant of .3 is better than a smoothing constant of

.5 because the MSE is less for 0.3.

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16. a.

$300.0

$250.0

Median Home Price ($000)

$200.0

$150.0

$100.0

$50.0

$0.0
1988 1993 1998 2003 2008 2013
Year

The time-series plot exhibits a trend pattern. Although the recession of 2008 led to a downturn in

prices, the median price rose form 2010 to 2011.

b. The methods disucssed in this section are only applicable for a time series that has a

horizontal pattern. Because the time-series plot exhibits a trend pattern, the methods

disucssed in this section are not appropriate.

c. In 2003 the median price was $189,500, and in 2004 the median price was $222,300,

so it appears that the time series shifted to a new level in 2004. The time-series plot

using just the data for 2004 and later follows.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 $300.0

Median Home Price ($000)

$250.0

$200.0

$150.0

$100.0

$50.0

$0.0
2003 2005 2007 2009 2011 2013
Year

This time-series plot exhibits a horizontal pattern. Therefore, the methods discussed in

this section are approporiate.

18. a.

The time-series plot shows a linear trend.

b.

n n

t 28 Y t
48
t  t 1
 4 Y  t 1
  6.857
n 7 n 7

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  (t  t )(Yt  Y )  29  (t  t ) 2  32.857

 (t  t )(Y  Y )
t
29
b1  t 1
n
  1.0357
28
 (t  t )
t 1
2

b0  y  b1 x  6 .85 7  (  1 .0 3 57 )(4 )  1 1

Tt  11  1.0357( t )

c. T8  11  1.0357(8)  2.7

20. a.

The time-series plot exhibits a curvilinear trend.

b. The linear trend equation is Tt =107.857 – 28.9881 t + 2.65476 r2.

c. Tt =107.857 – 28.9881(8) +2.65476 (8)2 = 45.86

22. a.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The time-series plot shows a downward linear trend.

b.

n n

t 28 Y t
77
t  t 1
 4 Y  t 1
  11
n 7 n 7

 ( t  t )(Yt  Y )  19.6  (t  t ) 2  28

 (t  t )(Y  Y )
t
19.6
b1  t 1
n
  .7
28
 (t  t )
t 1
2

b0  Y  b1 t  11  (  .7)(4)  13.8

Tt  13.8  .7t

c. time period t = 8. T8  13.8  .7(8)  8.2

d. If SCF can continue to decrease the percentage of funds spent on administrative and

fund-raising by .7% per year, the forecast of expenses for 2018 is 4.70%.

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24. a.

After declining for several years, the interest rate apparently leveled off in the last few

years. Thus, the time-series plot suggests that a quadratic trend may provide a better fit

for this time series.

b.

6
Average % Interest Rate

3
y = -0.3204x + 6.624
2

0
0 1 2 3 4 5 6 7 8 9 10 11
Year

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 The forecasted value for period 11 is –.3204(11) + 6.624 = 3.10%.

c.

8
7

Average % Interest Rate

6
5
4
3
y = 0.0375x2 - 0.7333x + 7.4498
2
1
0
0 1 2 3 4 5 6 7 8 9 10 11
Year

The forecasted value for period 11 is .0375(11)2 – .7333(11) + 7.4498 = 3.92%.

d. The quadratic trend equation fits the time-series data more closely than does the

linear trend equation. Furthermore, the linear trend equation forecasts that the

percentage interest rate will continue to decrease indefinitely, which the time-series

plot of the data suggests will not happen and is unrealistic. Therefore, the quadratic

trend equation appears to be superior to the linear trend equation.

26. a.

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 A linear trend is not appropriate.

b. The following output shows the results of fitting a quadratic trend to the time series.

The quadratic trend equation is Tt  5.702  2.889 t  .1618t 2

T11  5.702  2.889(11)  .1618(11) 2  17.90

c.

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28. a.

The time-series plot shows a horizontal pattern, but there is a seasonal pattern in the

data. For instance, in each year the lowest value occurs in quarter 2 and the highest

value occurs in quarter 4.

b. The regression output follows.

The regression equation is

Value = 77.00 - 10.00 Qtr1 - 30.00 Qtr2 - 20.00 Qtr3

c. The quarterly forecasts for next year are as follow:

Quarter 1 forecast = 77.0 – 10.0(1) – 30.0(0) – 20.0(0) = 67

Quarter 2 forecast = 77.0 – 10.0(0) – 30.0(1) – 20.0(0) = 47

Quarter 3 forecast = 77.0 – 10.0(0) – 30.0(0) – 20.0(1) = 57

Quarter 4 forecast = 77.0 – 10.0(0) – 30.0(0) – 20.0(0) = 77

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30. a.

There appears to be a seasonal pattern in the data and perhaps a moderate upward linear

trend.

b. The regression output follows.

Regression Equation

Sales = 2491.7 - 712 Qtr1 - 1512 Qtr2 + 327 Qtr3

c. The quarterly forecasts for next year follow:

Quarter 1 forecast = 2,491.7 – 712(1) – 1,512(0) + 327(0) = 1,779.7 or 1,780

Quarter 2 forecast = 2,491.7 – 712(0) – 1,512(1) + 327(0) = 979.7 or 980

Quarter 3 forecast = 2,491.7 – 712(0) – 1,512(0) + 327(1) = 2,818.7 or 2,819

Quarter 4 forecast = 2,491.7 – 712(0) – 1,512(0) + 327(0) = 2,491.7 or 2,492

d. The regression output follows.

Regression Equation

Sales = 2306.7 - 642.3 Qtr1 - 1465.4 Qtr2 + 349.8 Qtr3 + 23.13 t

The quarterly forecasts for next year follow:

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 Quarter 1 forecast = 2,306.7 – 642.3(1) – 1,465.4(0) + 349.8(0) + 23.13(17) = 2,057.61 or

2,058

Quarter 2 forecast = 2,306.7 – 642.3(0) – 1,465.4(1) + 349.8(0) + 23.13(18) = 1,257.64 or

1,258

Quarter 3 forecast = 2,306.7 – 642.3(0) – 1,465.4(0) + 349.8(1) + 23.13(19) = 3,095.97 or

3,096

Quarter 4 forecast = 2,306.7 – 642.3(0) – 1,465.4(0) + 349.8(0) + 23.13(20) = 2,769.3 or

2,769

32. a.

The time-series plot shows both a linear trend and seasonal effects.

b. A portion of the regression output follows.

The regression equation is

Revenue = 70.0 + 10.0 Qtr1 + 105 Qtr2 + 245 Qtr3

Quarter 1 forecast = 70.0 + 10.0(1) + 105(0) + 245(0) = 80

Quarter 2 forecast = 70.0 + 10.0(0) + 105(1) + 245(0) = 175

Quarter 3 forecast = 70.0 + 10.0(0) + 105(0) + 245(1) = 315

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 Quarter 4 forecast = 70.0 + 10.0(0) + 105(0) + 245(0) = 70

c. A portion of the regression output follows.

The regression equation is

Revenue = - 70.1 + 45.0 Qtr1 + 128.3 Qtr2 + 256.7 Qtr3 + 11.68

Period

Quarter 1 forecast = –70.1 + 45.0(1) + 128.3(0) + 256.7(0) + 11.68(21) = 220.18

Quarter 2 forecast = –70.1 + 45.0(0) + 128.3(1) + 256.7(0) + 11.68(22) = 315.16

Quarter 3 forecast = –70.1 + 45.0(0) + 128.3(0) + 256.7(1) + 11.68(23) = 455.24

Quarter 4 forecast = –70.1 + 45.0(0) + 128.3(0) + 256.7(0) + 11.68(24) = 210.22

34. a.

The time-series plot shows seasonal and linear trend effects.

b. Note: Jan = 1 if January, 0 otherwise; Feb = 1 if February, 0 otherwise; and so on.

The regression output follows.

Expense = 174.58 - 18.42 January - 3.72 February

+ 12.66 March + 45.69 April + 57.07 May + 135.10 June

+ 181.48 July + 104.51 August + 47.55 September

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 + 50.59 October + 35.30 November + 1.962 Period

c. Note: The next time period in the time series is period = 37 (January of year 4).

January forecast = 174.58 – 18.42(1) – 3.72(0) + 12.66(0) + 45.69(0) + 57.07(0) +

135.1(0) + 181.48(0) + 104.51(0) + 47.59(0) + 50.59(0) + 35.3(0) + 1.962(37) =

229

February forecast = 174.58 – 18.42(0) – 3.72(1) + 12.66(0) + 45.69(0) + 57.07(0) +

135.1(0) + 181.48(0) + 104.51(0) + 47.59(0) + 50.59(0) + 35.3(0) + 1.962(38) =

245

March forecast = 174.58 – 18.42(0) – 3.72(0) + 12.66(1) + 45.69(0) + 57.07(0) +

135.1(0) + 181.48(0) + 104.51(0) + 47.59(0) + 50.59(0) + 35.3(0) + 1.962(39) =

264

April forecast = 174.58 – 18.42(0) – 3.72(0) + 12.66(0) + 45.69(1) + 57.07(0) + 135.1(0)

+ 181.48(0) + 104.51(0) + 47.59(0) + 50.59(0) + 35.3(0) + 1.962(40) = 299

May forecast = 174.58 – 18.42(0) – 3.72(0) + 12.66(0) + 45.69(0) + 57.07(1) + 135.1(0)

+ 181.48(0) + 104.51(0) + 47.59(0) + 50.59(0) + 35.3(0) + 1.962(41) = 312

June forecast = 174.58 – 18.42(0) – 3.72(0) + 12.66(0) + 45.69(0) + 57.07(0) + 135.1(1)

+ 181.48(0) + 104.51(0) + 47.59(0) + 50.59(0) + 35.3(0) + 1.962(42) = 392

July forecast = 174.58 – 18.42(0) – 3.72(0) + 12.66(0) + 45.69(0) + 57.07(0) + 135.1(0) +

181.48(1) + 104.51(0) + 47.59(0) + 50.59(0) + 35.3(0) + 1.962(43) = 440

August forecast = 174.58 – 18.42(0) – 3.72(0) + 12.66(0) + 45.69(0) + 57.07(0) +

135.1(0) + 181.48(0) + 104.51(1) + 47.59(0) + 50.59(0) + 35.3(0) + 1.962(44) =

365

September forecast = 174.58 – 18.42(0) – 3.72(0) + 12.66(0) + 45.69(0) + 57.07(0) +

135.1(0) + 181.48(0) + 104.51(0) + 47.59(1) + 50.59(0) + 35.3(0) + 1.962(45) =

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 310

October forecast = 174.58 – 18.42(0) – 3.72(0) + 12.66(0) + 45.69(0) + 57.07(0) +

135.1(0) + 181.48(0) + 104.51(0) + 47.59(0) + 50.59(1) + 35.3(0) + 1.962(46) =

315

November forecast = 174.58 – 18.42(0) – 3.72(0) + 12.66(0) + 45.69(0) + 57.07(0) +

135.1(0) + 181.48(0) + 104.51(0) + 47.59(0) + 50.59(0) + 35.3(1) + 1.962(47) =

302

December forecast = 174.58 – 18.42(0) – 3.72(0) + 12.66(0) + 45.69(0) + 57.07(0) +

135.1(0) + 181.48(0) + 104.51(0) + 47.59(0) + 50.59(0) + 35.3(0) + 1.962(48) =

269

36. a.

Year Quarter Time-Series Adjusted Seasonal Deseasonalized

Value Index Value

1 1 4 1.205 3.320

2 2 0.746 2.681

3 3 0.858 3.501

4 5 1.191 4.198

2 1 6 1.205 4.979

2 3 0.746 4.021

3 5 0.858 5.834

4 7 1.191 5.877

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 3 1 7 1.205 5.809

2 6 0.746 8.043

3 6 0.858 7.001

4 8 1.191 6.717

b. Let period = 1 denote the time-series value in year 1, quarter 1; period = 2 denote the

time-series value in year 1, quarter 2; and so on. The regression output treating period

as the independent variable and the deseasonlized values as the values of the

dependent variable follows.

The regression equation is

Deseasonalized Value = 2.424 + 0.4217 Period

c. The quarterly deseasonalized trend forecasts for year 4 (periods 13, 14, 15, and 16)

follow:

Forecast for quarter 1 = 2.424 + 0.4217(13) = 7.906

Forecast for quarter 2 = 2.424 + 0.4217(14) = 8.328

Forecast for quarter 3 = 2.424 + 0.4217(15) = 8.750

Forecast for quarter 4 = 2.424 + 0.4217(16) = 9.171

d. Adjusting the quarterly deseasonalized trend forecasts provides the following

quarterly estimates:

Forecast for quarter 1 = 7.906(1.205) = 9.527

Forecast for quarter 2 = 8.328(.746) = 6.213

Forecast for quarter 3 = 8.750(.857) = 7.499

Forecast for quarter 4 = 9.171(1.191) = 10.923

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38. a.

The time-series plot shows a linear trend and seasonal effects.

b.

Month Expense Centered Moving Seasonal Irregular

Average Value

1 170

2 180

3 205

4 230

5 240

6 315

7 360 241.67 1.49

8 290 243.13 1.19

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 9 240 244.58 0.98

10 240 245.63 0.98

11 230 247.29 0.93

12 195 248.96 0.78

13 180 251.25 0.72

14 205 254.79 0.80

15 215 257.50 0.83

16 245 259.58 0.94

17 265 261.88 1.01

18 330 263.96 1.25

19 400 265.63 1.51

20 335 266.46 1.26

21 260 267.29 0.97

22 270 269.38 1.00

23 255 271.88 0.94

24 220 275.42 0.80

25 195 278.75 0.70

26 210 279.38 0.75

27 230 280.42 0.82

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 28 280 282.71 0.99

29 290 284.79 1.02

30 390 287.08 1.36

31 420

32 330

33 290

34 295

35 280

36 250

Month Seasonal Irregular Values Seasonal Index

1 0.72 0.70 0.71

2 0.80 0.75 0.78

3 0.83 0.82 0.83

4 0.94 0.99 0.97

5 1.01 1.02 1.02

6 1.25 1.36 1.30

7 1.49 1.51 1.50

8 1.19 1.26 1.23

9 0.98 0.97 0.98

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 10 0.98 1.00 0.99

11 0.93 0.94 0.93

12 0.78 0.80 0.79

Total 12.03

Notes: (1) Adjustment for seasonal index = 12 / 12.03 = 0.998. (2) Because the seasonal

irregular values and the seasonal index values were rounded to two decimal places to

simplify the presentation, the adjustment is really not necessary in this problem

because it implies more accuracy than is warranted.

c.

Month Expense Seasonal Index Deseasonalized Expense

1 170 0.71 239.44

2 180 0.78 230.77

3 205 0.83 246.99

4 230 0.97 237.11

5 240 1.02 235.29

6 315 1.3 242.31

7 360 1.5 240.00

8 290 1.23 235.77

9 240 0.98 244.90

10 240 0.99 242.42

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 11 230 0.93 247.31

12 195 0.79 246.84

13 180 0.71 253.52

14 205 0.78 262.82

15 215 0.83 259.04

16 245 0.97 252.58

17 265 1.02 259.80

18 330 1.3 253.85

19 400 1.5 266.67

20 335 1.23 272.36

21 260 0.98 265.31

22 270 0.99 272.73

23 255 0.93 274.19

24 220 0.79 278.48

25 195 0.71 274.65

26 210 0.78 269.23

27 230 0.83 277.11

28 280 0.97 288.66

29 290 1.02 284.31

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 30 390 1.3 300.00

31 420 1.5 280.00

32 330 1.23 268.29

33 290 0.98 295.92

34 295 0.99 297.98

35 280 0.93 301.08

36 250 0.79 316.46

d. Let period = 1 denote the time-series value in January, year 1; period = 2 denote the

time-series value in February, year 2; and so on. The regression output treating period

as the independent variable and the deseasonlized values as the values of the

dependent variable follows.

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression Period 1 14932 14932.2 265.05 0.000

Error 34 1915 56.3

Total 35 16848

Model Summary

S R-sq R-sq(adj) R-sq(pred)

7.50580 88.63% 88.30% 86.77%

Coefficients

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 Term Coef SE Coef T-Value P-Value VIF

Constant 228.01 2.55 89.24 0.000

Period 1.960 0.120 16.28 0.000 1.00

Regression Equation

Deseasonalized Expense = 228.01 + 1.960 Period

Fits and Diagnostics for Unusual Observations

Obs Deseasonalized Expense Fit Resid Std Resid

32 268.29 290.75 -22.46 -3.11 R

36 316.46 298.59 17.87 2.52 R

e. The linear trend estimates for the deseasonalized time series and the adjustment based

on the seasonal effects follow.

Month Deseasonalized Trend Seasonal Index Monthly Forecast

Forecast

January 300.53 0.71 213.38

February 302.49 0.78 235.94

March 304.45 0.83 252.69

April 306.41 0.97 297.22

May 308.37 1.02 314.54

June 310.33 1.3 403.43

July 312.29 1.5 468.44

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 August 314.25 1.23 386.53

September 316.21 0.98 309.89

October 318.17 0.99 314.99

November 320.13 0.93 297.72

December 322.09 0.79 254.45

For instance, using the estimated regression equation the deseasonalized trend forecast

for January in year 4 (period = 37) is 228.01 + 1.96(37) = 300.53. Because the January

seasonal index is .71, the forecast for January is .71(300.53) = $213.38, or

approximately $213. The other monthly forecasts were computed in a similar fashion.

40. a.

The time-series plot indicates a seasonal effect. Power consumption is lowest in the time

period 12–4 AM, steadily increases to the highest value in the 12–4 PM time period, and

then decreases again. There may also be some linear trend in the data.

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 b.

Day Time Period Power Centered Moving Seasonal Irregular

Average Values

Monday 12–4 PM 124,299

Monday 4–8 PM 113,545

Monday 8–12 midnight 41,300

Tuesday 12–4 AM 19,281 71,803.3 0.2685

Tuesday 4–8 AM 33,195 71,598.2 0.4636

Tuesday 8–12 noon 99,516 72,013.5 1.3819

Tuesday 12–4 PM 123,666 73,575.2 1.6808

Tuesday 4–8 PM 111,717 74,887.4 1.4918

Tuesday 8–12 midnight 48,112 76,910.0 0.6256

Wednesday 12–4 AM 31,209 81,311.6 0.3838

Wednesday 4–8 AM 37,014 85,439.8 0.4332

Wednesday 8–12 noon 119,968 89,021.8 1.3476

Wednesday 12–4 PM 156,033 90,849.4 1.7175

Wednesday 4–8 PM 128,889 90,167.9 1.4294

Wednesday 8–12 midnight 73,923 92,517.8 0.7990

Thursday 12–4 AM 27,330

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 Thursday 4–8 AM 32,715

Thursday 8–12 noon 152,465

Time Period Seasonal Irregular Values Seasonal Index Adjusted Seasonal

Index

12–4 AM 0.3838 0.2685 0.3262 0.3256

4–8 AM 0.4332 0.4636 0.4484 0.4476

8–12 noon 1.3476 1.3819 1.3648 1.3622

12–4 PM 1.6808 1.7175 1.6992 1.6959

4–8 PM 1.4918 1.4294 1.4606 1.4578

8–12 midnight 0.6256 0.7990 0.7123 0.7109

Total 6.0114

c.

Day Time Period Power Adjusted Seasonal Deseasonalized

Index Power

Monday 12–4 PM 124,299 1.6959 73,292.80

Monday 4–8 PM 113,545 1.4578 77,885.67

Monday 8–12 midnight 41,300 0.7109 58,092.48

Tuesday 12–4 AM 19,281 0.3256 59,225.36

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 Tuesday 4–8 AM 33,195 0.4476 74,166.93

Tuesday 8–12 noon 99,516 1.3622 73,056.72

Tuesday 12–4 PM 123,666 1.6959 72,919.55

Tuesday 4–8 PM 111,717 1.4578 76,631.76

Tuesday 8–12 midnight 48,112 0.7109 67,674.22

Wednesday 12–4 AM 31,209 0.3256 95,864.54

Wednesday 4–8 AM 37,014 0.4476 82,699.65

Wednesday 8–12 noon 119,968 1.3622 88,070.95

Wednesday 12–4 PM 156,033 1.6959 92,004.73

Wednesday 4–8 PM 128,889 1.4578 88,410.82

Wednesday 8–12 midnight 73,923 0.7109 103,979.91

Thursday 12–4 AM 27,330 0.3256 83,949.43

Thursday 4–8 AM 32,715 0.4476 73,094.48

Thursday 8–12 noon 152,465 1.3622 111,927.66

The following output shows the results of fitting a linear trend equation to the

deseasonalized time series.

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 63108 5185 12.17 0.000

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 t 1854 479 3.87 0.001 1.00

Regression Equation

Deseasonalized Power = 63108 + 1854 t

Using the deseasonalized linear trend equation and the seasonal indexes computed in

part b, we can forecast power consumption for the 12–4 PM and 4–8 PM time periods.

12–4 PM (corresponds to t = 19)

Deseasonalized power = 63,108 + 1,854(19) = 98,334.

Seasonal index for this period = 1.6959.

Forecast for 12–4 PM = 1.6959(98,334) = 166,764.63 or approximately 166,765

kWh.

4–8 PM (corresponds to t = 20)

Deseasonalized power = 63,108 + 1,854(20) = 100,188.

Seasonal index for this period = 1.4578.

Forecast for 4–8 PM = 1.4578(100,188) = 146,054.07 or approximately 146,054

kWh.

Thus, the forecast of power consumption from noon to 8 PM is 166,765 + 146,054 =

312,819 kWh.

42. a.

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 The time-series plot indicates a horizontal pattern.

b.

Period Time-Series Value α = .2 Forecasts α = .3 Forecasts α = .4 Forecasts

1 29.8

2 31.0 29.80 29.80 29.80

3 29.9 30.04 30.16 30.28

4 30.1 30.01 30.08 30.13

5 32.2 30.03 30.09 30.12

6 31.5 30.46 30.72 30.95

7 32.0 30.67 30.95 31.17

8 31.9 30.94 31.27 31.50

9 30.0 31.13 31.46 31.66

MSE(α = .2) = 11.22/8 = 1.40

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 MSE(α = .3) = 10.19/8 = 1.27

MSE(α = .4) = 9.83/8 = 1.23

A smoothing constant of α = .4 provides the best forecast because it has a

smaller MSE.

c. Using α = .4, F10 = .4(30) + .6(31.66) = 31.00

44. a.

There appears to be an increasing trend in the data through t = 16 followed by periods of

decreasing and increasing cost.

b. Using Excel’s Regression tool, the estimated regression equation is:

Cost = 81.29 + .58t

The forecast for t = 49 is Cost = 81.29 + .58(49) = $109.71.

c. Using Excel’s Regression tool, the estimated multiple regression equation is:

Cost = 68.82 + 2.08t – .03t2

The forecast for t = 49 is Cost = 68.82 + 2.08(49) – .03(49)2 = $98.71.

d.

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 Linear trend equation: MSE = 69.6

Quadratic trend equation: MSE = 41.9

The quadratic trend equation provides the best forecast accuracy for the historical data.

46. a. The following table shows the calculations using a smoothing constant of .4.

Month Sales ($1000s) Forecast

January 185.72

February 167.84 185.72

March 205.11 178.57

April 210.36 189.18

May 255.57 197.65

June 261.19 220.82

The forecast for July is .4(261.19) + .6(220.82) = 236.97.

The forecast for August, using forecast for July as the actual sales in July, is

236.97.

Exponential smoothing provides the same forecast for every period in the

future, which is why it is not usually recommended for long-term forecasting.

b. Using regression, we obtained the linear trend equation:

Tt = 149.72 + 18.451t

Forecast for July (t = 7) is 149.72 + 18.451(7) = 278.88

Forecast for August (t = 8) is 149.72 + 18.451(8) = is 297.33

c. The proposed settlement is not fair because it does not account for the upward trend

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 in sales. Based on trend projection, the settlement should be based on forecasted lost

sales of $278,880 in July and $297,330 in August.

48. a.

The time-series plot shows a linear trend.

b.

n n

t 15 Y t
200
t  t 1
 3 Y  t 1
  40
n 5 n 5

 ( t  t )(Yt  Y )  150  ( t  t ) 2  10

 (t  t )(Y  Y )t
150
b1  t 1
n
  15
10
 (t  t )
t 1
2

b0  Y  b1 t  40  (15)(3)  5

Tt  5  15t

The slope of 15 indicates that the average increase in sales is 15 pianos per year.

c. Forecast for year 6 is T6  5  15(6)  85 .

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 Forecast for year 7 is T7   5  15(7)  100 .

50. a.

t Sales Centered Moving Seasonal Irregular

Average Value

1 4

2 2

3 1 3.250 0.308

4 5 3.750 1.333

5 6 4.375 1.371

6 4 5.875 0.681

7 4 7.500 0.533

8 14 7.875 1.778

9 10 7.875 1.270

10 3 8.250 0.364

11 5 8.750 0.571

12 16 9.750 1.641

13 12 10.750 1.116

14 9 11.750 0.766

15 7 13.250 0.528

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 16 22 14.125 1.558

17 18 15.000 1.200

18 10 17.375 0.576

19 13

20 35

Quarter Seasonal Irregular Values Seasonal Index

1 1.371, 1.270, 1.116, 1.200 1.2394

2 0.681, 0.364, 0.766, 0.576 0.5965

3 0.308, 0.533, 0.571, 0.528 0.4852

4 1.333, 1.778, 1.641, 1.558 1.5774

Total 3.8985

Quarter Adjusted Seasonal Index

1 1.2717

2 0.6120

3 0.4978

4 1.6185

Note: Adjustment for seasonal index = 4 / 3.8985 = 1.0260.

b. The largest effect is in quarter 4; this seems reasonable because retail sales are

generally higher during October, November, and December.

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52. a.

A linear trend pattern appears to be present in the time-series plot.

b. The regression output follows.

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 22.86 4.50 5.08 0.004

Year 15.54 1.01 15.43 0.000 1.00

Regression Equation

Number Sold = 22.86 + 15.54 Year

c. Forecast in year 8 = 22.86 +15.54(8) = 147.18 or approximately 147 units.

54. a.

t Sales Centered Moving Average

1 6

2 15

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 3 10 9.250

4 4 10.125

5 10 11.125

6 18 12.125

7 15 13.000

8 7 14.500

9 14 16.500

10 26 18.125

11 23 19.375

12 12 20.250

13 19 20.750

14 28 21.750

15 25 22.875

16 18 24.000

17 22 25.125

18 34 25.875

19 28 26.500

20 21 27.000

21 24 27.500

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 22 36 27.625

23 30 28.000

24 20 29.000

25 28 30.125

26 40 31.625

27 35

28 27

b.

The centered moving average values smooth out the time series by removing seasonal

effects and some of the random variability. The centered moving average time series

shows the trend in the data.

c.

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 t Sales Centered Moving Average Seasonal Irregular Value

1 6

2 15

3 10 9.250 1.081

4 4 10.125 0.395

5 10 11.125 0.899

6 18 12.125 1.485

7 15 13.000 1.154

8 7 14.500 0.483

9 14 16.500 0.848

10 26 18.125 1.434

11 23 19.375 1.187

12 12 20.250 0.593

13 19 20.750 0.916

14 28 21.750 1.287

15 25 22.875 1.093

16 18 24.000 0.750

17 22 25.125 0.876

18 34 25.875 1.314

19 28 26.500 1.057

20 21 27.000 0.778

21 24 27.500 0.873

22 36 27.625 1.303

23 30 28.000 1.071

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 24 20 29.000 0.690

25 28 30.125 0.929

26 40 31.625 1.265

27 35

28 27

Quarter Seasonal Irregular Component Values Seasonal Index

1 0.899, 0.848, 0.916, 0.876, 0.873, 0.929 0.890

2 1.485, 1.434, 1.287, 1.314, 1.303, 1.265 1.348

3 1.081, 1.154, 1.187, 1.093, 1.057, 1.071 1.107

4 0.395, 0.483, 0.593, 0.750, 0.778, 0.690 0.615

Total 3.960

Quarter Adjusted Seasonal Index

1 0.899

2 1.362

3 1.118

4 0.621

Note: Adjustment for seasonal index = 4.00 / 3.96 = 1.0101.

d. Hudson Marine experiences the largest seasonal increase in quarter 2. Because this

quarter occurs before the peak summer boating season, this result seems reasonable.

But the largest seasonal effect is the seasonal decrease in quarter 4. This is also

reasonable because of decreased boating in the fall and winter.

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Chapter 18 Solutions

2. Let p = the probability of a preference for brand A

H0: p = .50

Ha: p ≠ .50

Dropping the individual with no preference, the binomial probabilities for n = 9 and

p = .50 are as follows.

x Probability

0 0.0020

1 0.0176

2 0.0703

3 0.1641

4 0.2461

5 0.2461

6 0.1641

7 0.0703

8 0.0176

9 0.0020

Number of plus signs = 7.

P(x > 7) = P(7) + P(8) +P(9) = .0703 + .0176 + .0020 = .0899

Two-tailed p-value = 2(.0899) = .1798.

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 p-value > .05; do not reject H0. There is no indication that a difference in

preference exists. A larger sample size should be considered.

4. a. H0: Median > 15

Ha: Median < 15

b. Dropping Vanguard GNMA with net assets of $15 billion, the binomial probabilities

for n = 9 and p = .50 are as follow.

x Probability

0 .0020

1 .0176

2 .0703

3 .1641

4 .2461

5 .2461

6 .1641

7 .0703

8 .0176

9 .0020

Number of plus signs = 1 American Funds with net assets of $22.4 billion.

P(x < 1) =P(0) + P(1) = . 0020 + .0176 = .0196

p-value = .0196.

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 p-value <.05; reject H0. Conclude that Bond Mutual Funds have a significantly lower

median net assets than Stock Mutual Funds.

6. H0: Median < 56.2

Ha: Median > 56.2

There are n = 31 + 17 = 48 observations where the value is different from 56.2.

Use the normal approximation with

µ = .5n = .5(48) = 24 and

  .25n  .25(48)  3.4641

With the number of plus signs = 31in the upper tail, we use the continuity

correction factor and the normal distribution approximation as follows

30.5  24 
P(31or more plus signs) = P ( x ³ 30.5)  P  z ³  P ( z ³ 1.88)
 3.4641 

Upper-tail p-value = (1.0000 – .9699) = .0301.

p-value < .05; reject H0. Conclude that the median annual income for families

living in Chicago is greater that $56.2 thousand.

8. a. H0: p = .50

Ha: p ≠ .50

Dropping the individual with no preference, selected binomial probabilities for n = 15

and p = .50 are as follow.

x Probability

0 .0000

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 1 .0005

2 .0032

3 .0139

4 .0417

Let the response faster pace be a plus sign. Number of plus signs = 4.

Because this is in the lower tail of binomial distribution, we compute

P(x < 4) = P(0) + P(1) + P(2) + P(3) + P4) = .0000 + .0005 + .0032 + .0139 +

.0417 = .0593

Two-tailed p-value = 2(.0593) = .1186,

p-value > .05; do not reject H0. The sample does not allow the conclusion that

a difference in preference exists for the fast pace or slower pace of life.

b. Of the original 16 respondents, 4/16(100) = 25% favored a faster pace of life and

11/16(100) = 68.8% favored a slower pace of life. Almost 3 to 1 favor the slower

pace of life. In addition, the p-value (.1186) is low but not low enough to detect a

difference in preference. Continuing to study and taking a larger sample should be

considered.

10. Let p = proportion who favor This Is Us.

H0: p = .50

Ha: p ≠ .50

Eliminating the responses that selected a different television show, we have

n = 330 + 270 = 600

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 Using the normal distribution, we have

µ = .5 n = .5(600) = 300

  .25n  .25(600)  12.2474

With the number of plus signs = 330 in the upper tail, we will use the continuity

correction factor and the normal distribution approximation as follows:

P(330 or more plus signs) = P ( x ³ 329.5)  P  z ³ 329.5  300   P ( z ³ 2.41)

 12.2474 

The two-tailed p-value = 2(1.0000 – .9920) = .0160.

p-value  .05; reject H0.. Conclude that there is a significant difference

between the preference for This Is Us and The Big Bang Theory. Based on the data,

This Is Us is most preferred.

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12. H0: Median for Additive 1 – Median for Additive 2 = 0

Ha: Median for Additive 1 – Median for Additive 2 ≠ 0

Additive Signed Ranks

Car 1 2 Difference Absolute Rank Negative Positive

Difference

1 20.12 18.05 2.07 2.07 9 9

2 23.56 21.77 1.79 1.79 7 7

3 22.03 22.57 –0.54 0.54 3 –3

4 19.15 17.06 2.09 2.09 10 10

5 21.23 21.22 0.01 0.01 1 1

6 24.77 23.80 0.97 0.97 4 4

7 16.16 17.20 –1.04 1.04 5 –5

8 18.55 14.98 3.57 3.57 12 12

9 21.87 20.03 1.84 1.84 8 8

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10 24.23 21.15 3.08 3.08 11 11

11 23.21 22.78 0.43 0.43 2 2

12 25.02 23.70 1.32 1.32 6 6

Sum of Positive Signed Ranks T + = 70

n(n  1) 12(13)
T 
   39
4 4

n(n  1)(2n  1) 12(13)(25)

T 
   12.7475
24 24

T + = 70 is in the upper tail of the sampling distribution. Using the continuity correction factor, we have:

 69.5  39 
P (T  ³ 70)  P  z ³  P ( z ³ 2.39)
 12.7475 

Using z = 2.39, the p-value = 2(1.0000 – .9916) = .0168.

p-value < .05; reject H0. Conclude that there is a significant difference in the median miles per gallon for the two

additives.

14. H0: Median percent on-time in 2006 – Median percent on time in 2007 = 0

Ha: Median percent on-time in 2006 – Median percent on time in 2007 ≠ 0

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 Year Absolute Signed Ranks

Airport 2006 (%) 2007 (%) Difference Difference Rank Negative Positive

1 71.78 69.69 2.09 2.09 4 4

2 68.23 65.88 2.35 2.35 5 5

3 77.98 78.40 –0.42 0.42 2 –2

4 78.71 75.78 2.93 2.93 6 6

5 77.59 73.45 4.14 4.14 9 9

6 77.67 78.68 –1.01 1.01 3 –3

7 76.67 76.38 0.29 0.29 1 1

8 76.29 70.98 5.31 5.31 10 10

9 69.39 62.84 6.55 6.55 11 11

10 79.91 76.49 3.42 3.42 8 8

11 75.55 72.42 3.13 3.13 7 7

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 Sum of Positive Signed Ranks T + = 61

n(n  1) 11(12)
T 
   33
4 4

n(n  1)(2n  1) 11(12)(23)

T 
   11.2472
24 24

T + = 61 is in the upper tail of the sampling distribution. Using the continuity correction factor, we have:

 60.5  33 
P (T  ³ 61)  P  z ³  P ( z ³ 2.45)
 11.2472 

Using z = 2.45, p-value = 2(1.0000 – .9929) = .0142.

p-value < .05; reject H0. Conclude that there is a significance difference between the median percentage of on-time

flights for the two years. Median percentage of on-time flights was better in the earlier of the two years for which data were

collected.

16. H0: Median score for Round 1 – Median score for Round 2 = 0

Ha: Median score for Round 1 – Median score for Round 2 ≠ 0

Round Signed Ranks

Golfer 1 2 Difference Absolute Difference Rank Negative Positive

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Brittany Lang 73 72 1 1 1.5 1.5

Amy Anderson 74 70 4 4 7 7

Meena Lee 71 73 –2 2 4 –4

Juli Inkster 69 75 –6 6 8.5 –8.5

Ha Na Jang 72 72 0

Haeji Kang 71 74 –3 3 6 –6

Ai Miyazato 68 74 –6 6 8.5 –8.5

Stephanie Meadow 76 68 8 8 11.5 11.5

Catriona Matthew 71 69 2 2 4 4

Sandra Gal 75 68 7 7 10 10

Caroline Masson 72 73 –1 1 1.5 –1.5

Suzann Pettersen 76 68 8 8 11.5 11.5

Mo Martin 74 72 2 2 4 4

Sum of Positive Signed Ranks T+= 49.5.

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 Ha Na Jang had the same score on both rounds and is removed from the sample. Thus, n = 12.

n(n  1) 12(13)
T    39
4 4

n(n  1)(2n  1) 12(13)(25)

T    12.7475
24 24

T + = 49.5 is in the upper tail of the sampling distribution. Using the continuity correction factor, we have:

 49  39 
P (T  ³ 49.5)  P  z ³  P ( z ³ .78)
 12.7475 

Using z = .78, p-value = 2(1 – 7,823) = .4354.

p-value > .05; do not reject H0. There is no significant difference between the median scores for the two rounds of

golf.

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18. H0: The two populations of additives are identical

Ha: The two populations of additives are not identical

Additive 1 Rank Additive 2 Rank

17.3 2 18.7 8.5

18.4 6 17.8 4

19.1 10 21.3 15

16.7 1 21.0 14

18.2 5 22.1 16

18.6 7 18.7 8.5

17.5 3 19.8 11

20.7 13

20.2 12

W = 34

1 1
W  n1 (n1  n2  1)  7(7  9  1)  59.5
2 2

1 1
W  n1n2 (n1  n2  1)  7(9)(7  9  1)  9.4472
12 12

With W = 34 in the lower tail, we will use the continuity correction factor and the

normal distribution approximation as follows:

 34.5  59.5 
P (W  34)  P  z   P ( z  2.65)
 9.4472 

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 Using z = –2.65, the two-tailed p-value =2(.0040) = .0080.

p-value < .05; reject H0.

Conclusion: The two populations of fuel additives are not identical. The

population with additive 2 tends to provide higher miles per gallon.

20. a. Median salary for men $54,900 (4th position when ranked)

Median salary for women $40,400 (4th position when ranked)

b. H0: The two populations of salaries are identical

Ha: The two populations of salaries are not identical

Men Rank Women Rank

35.6 4 49.5 8

80.5 14 40.4 5

50.2 9 32.9 3

67.2 13 45.5 7

43.2 6 30.8 2

54.9 11 52.5 10

60.3 12 29.8 1

W= 69

1 1
W  n1 (n1  n2  1)  7(7  7  1)  52.5
2 2

1 1
W  n1n2 (n1  n2  1)  7(7)(7  7  1)  7.8262
12 12

With W = 69 in the upper tail, we will use the continuity correction factor and the

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 normal distribution approximation as follows:

 68.5  52.5 
P (W ³ 69)  P  z ³  P( z ³ 2.04)
 7.8262 

Using z = 2.04, the two-tailed p-value =2(1.000–.9793) = .0414.

p-value < .05; reject H0.

Conclusion: The two populations of salaries are not identical. The population

of men tends to have the higher salaries.

22. H0: The two populations of P/E ratios are identical

Ha: The two populations of P/E ratios are not identical

Japan U.S.

P/E Ratio Rank P/E Ratio Rank

153 20 19 6

21 8 24 11.5

18 5 24 11.5

125 19 43 16

31 13 22 10

213 21 14 2

64 17 21 8

666 22 14 2

33 14 21 8

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 68 18 38 15

15 4

14 2

W = 157

1 1
W  n1 (n1  n2  1)  10(10  12  1)  115
2 2

1 1
W  n1n2 (n1  n2  1)  10(12)(10  12  1)  15.1658
12 12

With W = 157 in the upper tail, we will use the continuity correction factor and the

normal distribution approximation as follows:

 156.5  115 
P (W ³ 157)  P  z ³  P ( z ³ 2.74)
 15.1658 

Using z = 2.74, the two-tailed p-value =2(1.0000 – .9969) = .0062.

p-value < .01; reject H0.

Conclusion: The two populations of P/E ratios are not identical. The

population of Japanese companies tends to have higher P/E ratios than the population

of United States companies.

24. H0: The two populations of microwave prices are identical

Ha: The two populations of microwave prices are not identical

Dallas Rank San Antonio Rank

445 14.5 460 19

489 23 451 17

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 405 1.5 435 11

485 22 479 21

439 13 475 20

449 16 445 14.5

436 12 429 7

420 4 434 10

430 8.5 410 3

405 1.5 422 5

425 6

459 18

430 8.5

W = 116

1 1
W  n1 (n1  n2  1)  10(10  13  1)  120
2 2

1 1
W  n1n2 ( n1  n2  1)  10(13)(10  13  1)  16.1245
12 12

With W = 116 in the lower tail, we will use the continuity correction factor and the

normal distribution approximation as follows:

 116.5  120 
P (W  116)  P  z   P ( z  .22)
 16.1245 

Using z = –.22, the two-tailed p-value =2(.4129) = .8258.

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 p-value > .05; do not reject H0.

Conclusion: We cannot reject the null hypothesis that the two populations of

microware prices are identical. There is no indication that there is a difference

between the populations of microwave prices for the two cities.

26. H0: All populations of product ratings are identical

Ha: Not all populations of product ratings are identical

A Rank B Rank C Rank

50 4 80 11 60 7

62 8 95 14 45 2

75 10 98 15 30 1

48 3 87 12 58 6

65 9 90 13 57 5

Sum of Ranks 34 65 21

 12 k
Ri2   12  342 652 212  
H    T  3( n  1)         3(16)  10.22
 nT ( nT  1) i 1 ni  15(16)  5 5 5  

Using the χ2 table with df = 2, χ2 = 10.22 shows the p-value is between .005 and .01.

Using Excel, the p-value for χ2 = 10.22 with two degrees of freedom is .0060.

p-value < .05; reject H0. Conclude that the populations of product ratings are

not identical.

28. H0: All populations of calories burned are identical

Ha: Not all populations of calories burned are identical

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 Swimming Rank Tennis Rank Cycling Rank

408 8 415 9 385 5

380 4 485 14 250 1

425 11 450 13 295 3

400 6 420 10 402 7

427 12 530 15 268 2

Sum of Ranks 41 61 18

 12 k
Ri2   12  412 612 182 
H     3(nT  1)         3(16)  9.26
 nT (nT  1) i 1 ni   15(16)  5 5 5  

Using the χ2 table with df = 2, χ2 = 9.26 shows the p-value is between .005 and .01.

Using Excel, the p-value for χ2 = 9.26 with two degrees of freedom is .0098.

p-value < .05; reject H0. Conclude that the populations of calories burned by

the three activities are not identical. Cycling tends to have the lowest calories burned.

30. H0: All populations of training courses are identical

Ha: Not all populations of training courses are identical

Course

A B C D

3 2 19 20

14 7 16 4

10 1 9 15

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 12 5 18 6

13 11 17 8

Sum of Ranks 52 26 79 53

 12 k
Ri2   12  522 26 2 792 532  
H    T  3( n  1)          3(21)  8.03
 nT (nT  1) i 1 ni   20(21)  5 5 5 5  

Using the χ2 table with df = 3, χ2 = 8.03 shows the p-value is between .025 and .05.

Using Excel, the p-value for χ2 = 8.03 with three degrees of freedom is .0454.

p-value < .05; reject H0. Conclude that the populations are not identical. There

is a significant difference in the quality of the courses offered at the four management

development centers.

a. d i = 52
2
32.

6d i2 6(52)
rs  1   1  .685
n(n 2  1) 10(99)

1 1
r    .3333
b.
s
n 1 9

rs  0 .685
z   2.05
r s
.3333

p-value = 2(1.0000 – .9798) = .0404.

p-value  .05; reject H0. Conclude that significant positive rank correlation

exists.

d i2
34. = 250

6d i2 6(250)
rs  1   1  .136
n( n 2  1) 11(120)

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 1 1
r    .3162
s
n 1 10

rs  0 .136
z   .43
rs
.3162

p-value = 2(.3336) = .6672

p-value > .05; do not reject H0. We cannot conclude there is a significant

relationship between ranking based on the expenditure per student and the ranking

based on the student–teacher ratio.

36.

Driving Distance Putting di d i2

1 5 –4 16

5 6 –1 1

4 10 –6 36

9 2 7 49

6 7 –1 1

10 3 7 49

2 8 –6 36

3 9 –6 36

7 4 3 9

8 1 7 49

d i2 = 282

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 6d i2 6(282)
rs  1   1  .709
n( n  1)
2
10(100  1)

1 1
r    .3333
s
n 1 9

rs  rs .709  0
z   2.13
r s
.3333

p-value = 2(.0166) = .0332.

p-value  .10; reject H0. There is a significant rank correlation between

driving distance and putting. Professional golfers who rank high in driving distance

tend to rank low in putting.

38. Let p = proportion who favor the proposal.

H0: p = .50

Ha: p ≠ .50

Eliminating the 60 responses that offered no opinion, we have

n = 905 + 1045 = 1950

Using the normal distribution, we have

µ = .5 n = .5(1950) = 975

  .25n  .25(1950)  22.0794

With the number of plus signs = 905 in the lower tail, we will use the continuity

correction factor and the normal distribution approximation as follows:

905.5  975 
P(905 or fewer plus signs) = P ( x  905.5)  P  z   P ( z  3.15)
 22.0794 

Area in lower tail area is less than .0010.

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 The two-tailed p-value is less than 2(.0010) = .0020.

p-value  .05; reject H0. Conclude there is a significant difference between the

preferences for the tax-funded vouchers or tax deductions for parents who send their

children to private schools. The greater percentage opposed the proposal.

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40. H0: Median price for Model 1 – Median price for Model 2 = 0

Ha: Median price for Model 1 – Median price for Model 2 ≠ 0

Signed Ranks

Homemaker Model 1 Model 2 Difference Absolute Difference Rank Negative Positive

1 850 1100 –250 250 11 –11

2 960 920 40 40 2 2

3 940 890 50 50 3 3

4 900 1050 –150 150 6 –6

5 790 1120 –330 330 12 –12

6 820 1000 –180 180 7 –7

7 900 1090 –190 190 8.5 –8.5

8 890 1120 –230 230 10 –10

9 1100 1200 –100 100 5 –5

10 700 890 –190 190 8.5 –8.5

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11 810 900 –90 90 4 –4

12 920 900 20 20 1 1

Sum of Positive Signed Ranks T+= 6

n(n  1) 12(13)
T 
   39
4 4

n(n  1)(2n  1) 12(13)(25)

T 
   12.7475
24 24

T + = 6 is in the lower tail of the sampling distribution. Using the continuity correction factor, we have:

 6.5  39 
P (T   6)  P  z   P ( z  2.55)
 12.7475 

Using z = –2.55, the p-value = 2(.0054) = .0108.

p-value < .05; reject H0. Conclude there is a significance difference between the median prices of the two models.

The housewives are estimating model 2 to have the higher median price.

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42. H0: The two populations of product weights are identical

Ha: The two populations of product weights are not identical

Line 1 Rank Line 2 Rank

13.6 6.5 13.7 8

13.8 9 14.1 13

14.0 11.5 14.2 14

13.9 10 14.0 11.5

13.4 4 14.6 19

13.2 2 13.5 5

13.3 3 14.4 16.5

13.6 6.5 14.8 20

12.9 1 14.5 18

14.4 16.5 14.3 15

15.0 22

14.9 21

W = 70

1 1
W  n1 (n1  n2  1)  10(10  12  1)  115
2 2

1 1
W  n1n2 (n1  n2  1)  10(12)(10  12  1)  15.1658
12 12

With W = 70 is in the lower tail, we will use the continuity correction factor and the

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 normal distribution approximation as follows:

 70.5  115 
P (W  70)  P  z   P ( z  2.93)
 15.1658 

Using z = –2.93, the two-tailed p-value = 2(.0017) = .0034.

p-value < .05; reject H0.

Conclusion: The two populations of product weights are not identical. The

population of product weights from production line 1 tends to be less that the

population of product weights from production line 2.

44. H0: All populations of managerial potential ratings are identical

Ha: Not all populations of managerial potential ratings are identical

No Program Company Off-Site

16 12 7

9 20 1

10 17 4

15 19 2

11 6 3

13 18 8

14 5

Sum of Ranks 74 106 30

 12 k
Ri2   12  742 106 2 302 
H     3( nT  1)         3(21)  12.61
 nT (nT  1) i 1 ni   20(21)  6 7 7  

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 Using the χ2 table with df = 2, χ2 = 12.61 shows the p-value is less than .005.

Using Excel, the p-value for χ2 = 12.61 with two degrees of freedom is .0018.

Using JMP, χ2 = 12.6109 with a p-value of .0018.

p-value < .025; reject H0. Conclude that the three populations of managerial

potential ratings are not identical. Engineers who attended the off-site program tend

to have the highest potential ratings.

d i2
46. = 136

6d i2 6(136)
rs  1   1  .757
n( n  1)
2
15(224)

1 1
r    .2673
s
n 1 14

rs  rs .757
z   2.83
r s
.2673

p-value = 2(1.0000 – .9977) = .0046.

p-value  .10; reject H0. Conclude that there is a significant positive rank

correlation between the two exams. Students who rank high on the midterm exam

tend to rank high on the final exam.

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Chapter 19 Solutions

2. a. EV(d1) = 0.5(14) + 0.2(9) + 0.2(10) + 0.1(5) = 11.3

EV(d2) = 0.5(11) + 0.2(10) + 0.2(8) + 0.1(7) = 9.8

EV(d3) = 0.5(9) + 0.2(10) + 0.2(10) + 0.1(11) = 9.6

EV(d4) = 0.5(8) + 0.2(10) + 0.2(11) + 0.1(13) = 9.5

Recommended decision: d1.

b. The best decision in this case is the one with the smallest expected value; thus, d4,

with an expected cost of 9.5, is the recommended decision.

4. a. The decision to be made is to choose the type of service to provide. The chance event

is the level of demand for the Myrtle Air service. The consequence is the amount of

quarterly profit. There are two decision alternatives (full price and discount service).

There are two outcomes for the chance event (strong demand and weak demand).

b. EV(Full) = 0.7(960) + 0.3(–490) = 525

EV(Discount) = 0.7(670) + 0.3(320) = 565

Optimal Decision: Discount service

c. EV(Full) = 0.8(960) + 0.2(–490) = 670

EV(Discount) = 0.8(670) + 0.2(320) = 600

Optimal Decision: Full price service

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6. a. The decision is to choose what type of grapes to plant, the chance event is demand for

the wine, and the consequence is the expected annual profit contribution. There are

three decision alternatives: Chardonnay, Riesling, and both. There are four chance

outcomes: (W,W), (W,S), (S,W), and (S,S). For instance, (W,S) denotes the outcomes

corresponding to weak demand for Chardonnay and strong demand for Riesling.

b. In constructing a decision tree, it is only necessary to show two branches when only a

single grape is planted. But, the branch probabilities in these cases are the sum of two

probabilities. For example, the probability that demand for Chardonnay is strong is

given by:

W eak for Chardonnay

20
0.55
Plant Chardonnay
2 EV = 42.5

Strong for Chardonnay

70
0.45

W eak for Chardonnay, W eak for Riesling

22
0.05

W eak for Chardonnay, Strong for Riesling

40
0.50
Plant both grapes
1 3 EV = 39.6

Strong for Chardonnay, W eak for Riesling

26
0.25

Strong for Chardonnay, Strong for Riesling

60
0.20

W eak for Riesling

25
0.30

Plant Riesling
4 EV = 39

Strong for Riesling

45
0.70

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 P(Strong demand for Chardonnay) = P(S,W) + P(S,S)

= 0.25 + 0.20

= 0.45

c. EV(Plant Chardonnay) = 0.55(20) +0.45(70) = 42.5

EV(Plant both grapes) = 0.05(22) + 0.50(40) + 0.25(26) + 0.20(60) = 39.6

EV(Plant Riesling) = 0.30(25) + 0.70(45) = 39.0

Optimal decision: Plant Chardonnay grapes only.

d. This changes the expected value in the case where both grapes are planted and when

Riesling only is planted.

EV(Plant both grapes) = 0.05(22) + 0.50(40) +0.05(26) + 0.40(60) = 46.4

EV(Plant Riesling) = 0.10(25) + 0.90(45) = 43.0

We see that the optimal decision is now to plant both grapes. The optimal decision is

sensitive to this change in probabilities.

e. Only the expected value for node 2 in the decision tree needs to be recomputed.

EV(Plant Chardonnay) = 0.55(20) + 0.45(50) = 33.5

This change in the payoffs makes planting Chardonnay only less attractive. It is now

best to plant both types of grapes. The optimal decision is sensitive to a change in the

payoff of this magnitude.

8. a.

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 Profit
Payoff
s1
100
d1
6
s2
300
F
3
s1
400
d2
7
s2
200
Market
2
Research s1
100
d1
8
s2
300
U
4
s1
400
d2
9
s2
200
1
s1
100
d1
10
s2
300
No Market
5
Research s1
400
d2
11
s2
200

b. EV(node 6) = 0.57(100) + 0.43(300) = 186

EV(node 7) = 0.57(400) + 0.43(200) = 314

EV(node 8) = 0.18(100) + 0.82(300) = 264

EV(node 9) = 0.18(400) + 0.82(200) = 236

EV(node 10) = 0.40(100) + 0.60(300) = 220

EV(node 11) = 0.40(400) + 0.60(200) = 280

EV(node 3) = Max(186,314) = 314 d2

EV(node 4) = Max(264,236) = 264 d1

EV(node 5) = Max(220,280) = 280 d2

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 EV(node 2) = 0.56(314) + 0.44(264) = 292

EV(node 1) = Max(292,280) = 292

 Market Research

If Favorable, decision d2.

If Unfavorable, decision d1.

10. a.

Outcome 1 ($ in 000s)

Bid –$200

Contract –2,000

Market research –150

High demand +5,000

$2,650

Outcome 2 ($ in 000s)

Bid –$200

Contract –2,000

Market research –150

Moderate demand +3,000

$650

b. EV(node 8) = 0.85(2,650) + 0.15(650) = 2350

EV(node 5) = Max(2,350, 1,150) = 2350 Decision: build

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 EV(node 9) = 0.225(2,650) + 0.775(650) = 1,100

EV(node 6) = Max(1,100, 1,150) = 1150 Decision: sell

EV(node 10) = 0.6(2,800) + 0.4(800)= 2,000

EV(node 7) = Max(2,000, 13,00) = 2,000 Decision: build

EV(node 4) = 0.6 EV(node 5) + 0.4 EV(node 6) = 0.6(2,350) + 0.4(1,150) = 1,870

EV(node 3) = MAX (EV(node 4), EV(node 7)) = Max (1,870, 2,000) = 2,000

Decision: No market research

EV(node 2) = 0.8 EV(node 3) + 0.2 (–200) = 0.8(2000) + 0.2(–200) = 1560

EV(node 1) = MAX (EV(node 2), 0) = Max (1560, 0) = 1560

Decision: Bid on contract.

Decision strategy: Bid on the contract.

Do not do the market research.

Build the complex.

Expected value is $1,560,000.

c. Compare expected values at nodes 4 and 7.

EV(node 4) = 1,870 Includes $150 cost for research

EV(node 7) = 2,000

Difference is 2,000 – 1,870 = $130

Market research cost would have to be lowered $130,000 to $20,000 or less to make

undertaking the research desirable.

12. a.

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 s1
3500
d1 s2
6 1000
s3
Normal -1500
3 s1
7000
d2 s2
7 2000
s3
W ait -9000
2 s1
3500
d1 s2
8 2000
s3
-1500
Cold s1
4
7000
d2 s2
9 2000
s3
1 -9000
s1
3500
d1 s2
10 2000
s3
Don't W ait -1500
5 s1
7000
d2 s2
11 2000
s3
-9000

b. Using node 5,

EV(node 10) = 0.4(3,500) + 0.3(1,000) + 0.3(–1,500) = 1,250

EV(node 11) = 0.4(7,000) + 0.3(2,000) + 0.3(–9,000) = 700

Decision: d1 blade attachment expected value $1,250

c. EVwPI = 0.4(7,000) + 0.3(2,000) + 0.3(–1,500) = $2,950

EVPI = $2,950 – $1,250 = $1,700

d. EV(node 6) = 0.35(3,500) + 0.30(1,000) + 0.35(–1,500) = 1,000

EV(node 7) = 0.35(7,000) + 0.30(2,000) + 0.35(–9,000) = –100

EV(node 8) = 0.62(3,500) + 0.31(1,000) + 0.07(–1,500) = 2,375

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 EV(node 9) = 0.62(7,000) + 0.31(2,000) + 0.07(–9,000) = 4,330

EV(node 3) = Max(1,000,–100) = 1,000 d1 Blade attachment

EV(node 4) = Max(2,375, 4,330) = 4,330 d2 New snowplow

If normal, blade attachment.

If unseasonably cold, snowplow $1,666.

The expected value of this decision strategy is the expected value of node 2.

EV(node 2) = 0.8(1,000) + 0.2(4,330) = 1,666

Recommend: Wait until September and follow the decision strategy.

14.

State of Nature P(sj) P(I  sj) P(I  sj) P(sj  I)

s1 0.2 0.10 0.020 0.1905

s2 0.5 0.05 0.025 0.2381

s3 0.3 0.20 0.060 0.5714

1.0 P(I) = 0.105 1.0000

16. a, b. The revised probabilities are shown on the branches of the decision tree.

EV(node 7) = 30

EV(node 8) = 0.98(25) + 0.02(45) = 25.4

EV(node 9) = 30

EV(node 10) = 0.79(25) + 0.21(45) = 29.2

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 s1 0.98 30
d1
7
s2 0.02
0.695C 30
3 s1 0.98
25
d2
8
s2 0.02
45
s1 0.79
30
d1
9
s2 0.21
30
W eather Check 0.215O
2 4 s1 0.79
25
d2
10
s2 0.21
45
s1 0.00
30
d1
11
s2 1.00
0.09R 30
5 s1 0.00
25
d2
12
1 s2 1.00
45
s1 0.85
30
d1
13
s2 0.15
No W eather Check 30
6 s1 0.85
25
d2
14
s2 0.15
45

EV(node 11) = 30

EV(node 12) = 0.00(25) + 1.00(45) = 45.0

EV(node 13) = 30

EV(node 14) = 0.85(25) + 0.15(45) = 28.0

EV(node 3) = Min(30,25.4) = 25.4 Expressway

EV(node 4) = Min(30,29.2) = 29.2 Expressway

EV(node 5) = Min(30,45) = 30.0 Queen City

EV(node 6) = Min(30,28) = 28.0 Expressway

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 EV(node 2) = 0.695(25.4) + 0.215(29.2) + 0.09(30.0) = 26.6

EV(node 1) = Min(26.6,28) = 26.6 Weather

c. Strategy:

Check the weather, take the expressway unless there is rain. If rain, take Queen City

Avenue.

Expected time: 26.6 minutes.

18. a. The expected value for the large-cap stock mutual fund is as follows:

EV = 0.1(35.3) + 0.3(20.0) + 0.1(28.3) + 0.1(10.4) + 0.4(–9.3) = 9.68

Repeating this calculation for each mutual fund provides the following expected annual

returns:

Mutual Fund Expected Annual Return

Large-cap stock 9.68

Mid-cap stock 5.91

Small-cap stock 15.20

Energy/resources sector 11.74

Health sector 7.34

Technology sector 16.97

Real estate sector 15.44

The technology sector provides the maximum expected annual return of 16.97%. Using

this recommendation, the minimum annual return is –20.1%. and the maximum annual

return is 93.1%.

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 b. The expected annual return for the small-cap stock mutual fund is 15.20%. The

technology sector mutual fund recommended in part a has a larger expected annual

return. The difference is 16.97% – 15.20% = 1.77%.

c. The annual return for the technology sector mutual fund ranges from –20.1% to

93.1%, whereas the annual return for the small-cap stock ranges from 6.0% to 33.3%.

The annual return for the technology sector mutual fund shows the greater variation

in annual return. It is considered the investment with the more risk. It does have a

higher expected annual return, but only by 1.77%.

d. This is a judgment recommendation and opinions may vary. The higher risk

technology sector mutual fund only has a 1.77% higher expected annual return. We

believe the lower risk, small-cap stock mutual fund would be the preferred

recommendation for most investors.

20. a. EV(node 4) = 0.5(34) + 0.3(20) + 0.2(10) = 25

EV(node 3) = Max(25,20) = 25

Decision: Build.

EV(node 2) = 0.5(25) + 0.5(–5) = 10

EV(node 1) = Max(10,0) = 10

Decision: Start R&D.

Optimal strategy:

Start the R&D project.

If it is successful, build the facility.

Expected value = $10M

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 b. At node 3, payoff for sell rights would have to be $25 M or more. To recover the $5

M R&D cost, the selling price would have to be $30 M or more.

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Chapter 20 Solutions

2. a. From the price relative, we see the percentage increase was 32%.

b. Divide the current cost by the price relative and multiply by 100.

$10.75
Cost in 2001 = (100) = $8.14
132

.19(500)  1.80(50)  4.20(100)  13.20(40)

I (100)  104
.15(500)  1.60(50)  4.50(100)  12.00(40)
4.

Paasche index

6.

Item Price Base Period Base Period Weight Weighted Price

Relative Price Usage Relatives

A 150 22.00 20 440 66,000

B 90 5.00 50 250 22,500

C 120 14.00 40 560 67,200

1250 155,700

155,700
I  125
1250

8.

Item Price Base Quantity Weight Weighted Price

Relatives Price Relatives

Beer 115 17.50 35,000 612,500 70,437,500

Wine 118 100.00 5,000 500,000 59,000,000

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 Soft Drink 110 8.00 60,000 480,000 52,800,000

1,592,500 182,237,500

182, 237, 500

I  114
1, 592, 500

This matches the value of the weighted aggregate index computed in exercise 5.

$30.04
10. a. Deflated 2007 wages: (100)  $14.49
207.3

$35.36
Deflated 2017 wages: (100)  $14.43
245.1

$ .
b. × 100 = 117.7
$ .

The percentage increase in nominal wages is 17.7%.

$ .
c. × 100 = 99.6
$ .

The percentage decrease in real wages is .4%.

12. a.

$29.1
(100)  $13.47
Year 1: 216.0

$33.3
(100)  $15.25
Year 2: 218.4

$32.9
(100)  $14.50
Year 3: 226.9

b.

Year 1: $29.1
(100)  $16.78
173.4

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 Year 2: $33.3
(100)  $18.48
180.2

Year 3: $32.9
(100)  $17.09
192.5

c. PPI is more appropriate than CPI because these figures reflect prices paid by retailers

(rather than by consumers).

300(18.00)  400(4.90)  850(15.00) 20,110

I (100)  (100)  110
350(18.00)  220(4.90)  730(15.00) 18,328
14.

16.

Model Quantity Base Price ($) Weight Weighted Quantity

Relatives Relatives
Quantity

Sedan 85 200 15,200 3,040,000 258,400,000

Sport 80 100 17,000 1,700,000 136,000,000

Wagon 80 75 16,800 1,260,000 100,800,000

6,000,000 495,200,000

495, 200, 000

I  83
6, 000, 000

18. a. Price Relatives

A = (15.90 / 10.50) (100) = 151

B = (32.00 / 16.25) (100) = 197

C = (17.40 /12.20) (100) = 143

D = (35.50 / 20.00) (100) = 178

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 15.90(2000)  32.00(5000)  17.40(6500)  35.50(2500)
I (100)  170
10.50(2000)  16.25(5000)  12.20(6500)  20.00(2500)
b.

20.
22.75(100)  49(150)  32(75)  6.5(50)
I Jan  (100)  73.5
31.50(100)  65(150)  40(75)  18(50)
22.50(100)  47.5(150)  29.5(75)  3.75(50)
I Mar  (100)  70.1
31.50(100)  65(150)  40(75)  18(50)

Market is down compared to the base Year 1.

22.

Price Relatives Base Price Quantity Weight Weighted Price

Relatives

Item (Pit/Pi0)100 Pi0 Qi Wi = Pi0Qi (Pit/Pi0)100 Wi

Handle 126.9 7.46 1 7.46 946.67

Blades 153.7 1.90 17 32.30 4,964.51

Totals 39.76 5,911.18

I = (5911.18 / 39.76) = 148.7

24.

Year 1 (84810/215.3)100 = $39,392

Year 2 (87210/214.5)100 = $40,657

Year 3 (87650/218.1)100 = $40,188

Year 4 (91060/224.9)100 = $40,489

(40489/39392) = 1.028

The median salary increased 2.8% over the period.

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 1200(30)  500(20)  500(25)
I (100)  143
800(30)  600(20)  200(25)
26.

Quantity is up 43%.

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Chapter 21 Solutions

677.5
  5.42
2. a. 25(5)

b. UCL =  + 3( / n ) = 5.42 + 3(.5 / 5 ) = 6.09

LCL =  – 3( / n ) = 5.42 – 3(.5 / 5 ) = 4.75

4. R Chart:

UCL = RD4 = 1.6(1.864) = 2.98

LCL = RD3 = 1.6(0.136) = 0.22

x Chart:

UCL = x  A2 R = 28.5 + 0.373(1.6) = 29.10

LCL = x  A2 R = 28.5 – 0.373(1.6) = 27.90

.  19.90
2012
6. Process mean =  20.01
2

UCL =  + 3( / n ) = 20.01 + 3( / 5 ) = 20.12

Solve for :

.  20.01) 5
( 2012
  0.082
3

141
p  0.0470
8. a. 20(150)

p(1  p) 0.0470(0.9530)
b.  p    0.0173
n 150

UCL = p + 3  p = 0.0470 + 3(0.0173) = 0.0989

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 LCL = p – 3  p = 0.0470 –3(0.0173) = –0.0049

Use LCL = 0.

12
c. p  0.08
150

Process should be considered in control.

d. p = .047, n = 150

UCL = np + 3 np(1 p) = 150(0.047) + 3 150(0.047)(0.953) = 14.826

LCL = np – 3 np(1 p) = 150(0.047) – 3 150(0.047)(0.953) = –0.726

Thus, the process is out of control if more than 14 defective packages are found in a

sample of 150.

e. Process should be considered to be in control because 12 defective packages were found.

f. The np chart may be preferred because a decision can be made by simply counting the

number of defective packages.

n!
f ( x)  p x (1  p) n  x
10. x !(n  x)!

When p = .02, the probability of accepting the lot is

25!
f (0)  (0.02) 0 (1  0.02) 25  0.6035
0!(25  0)!

When p = .06, the probability of accepting the lot is

25!
f (0)  (0.06) 0 (1  0.06) 25  0.2129
0!(25  0)!

12. At p0 = .02, the n = 20 and c = 1 plan provides

P (Accept lot) = f (0) + f (1) = .6676 + .2725 = .9401

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 Producer’s risk: α = 1 – .9401 = .0599

At p0 = .06, the n = 20 and c = 1 plan provides

P (Accept lot) = f (0) + f (1) = .2901 + .3703 = .6604

Producer’s risk: α = 1 – .6604 = .3396

For a given sample size, the producer’s risk decreases as the acceptance

number c is increased.

14.

c P (Accept) p0 = Producer’s P (accept) p1 = Consumer’s

.05 Risk  .30 Risk 

(n = 10) 0 .5987 .4013 .0282 .0282

1 .9138 .0862 .1493 .1493

2 .9884 .0116 .3828 .3828

(n = 15) 0 .4633 .5367 .0047 .0047

1 .8291 .1709 .0352 .0352

2 .9639 .0361 .1268 .1268

3 .9946 .0054 .2968 .2968

(n = 20) 0 .3585 .6415 .0008 .0008

1 .7359 .2641 .0076 .0076

2 .9246 .0754 .0354 .0354

3 .9842 .0158 .1070 .1070

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 The plan with n = 15, c = 2 is close with α = .0361 and β = .1268. However, the plan

with n = 20, c = 3 is necessary to meet both requirements.

x 1908
   954
.
16. a. 20 20

b.

UCL =  + 3( / n ) = 95.4 + 3(.50 / 5 ) = 96.07

LCL =  – 3( / n ) = 95.4 – 3(.50 / 5 ) = 94.73

c. No; all were in control

18. R Chart:

UCL = R D4 = 2(2.115) = 4.23

LCL = R D3 = 2(0) = 0

xChart:

UCL = x  A2 R = 5.42 + 0.577(2) = 6.57

LCL = x  A2 R = 5.42 – 0.577(2) = 4.27

Estimate of Standard Deviation:

R 2
    0.86
d2 2.326

20. R = .053 x = 3.082

xChart:

UCL = x  A2 R = 3.082 + 0.577(0.053) = 3.112

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 LCL = x  A2 R = 3.082 – 0.577(0.053) = 3.051

R Chart:

UCL = R D4 = 0.053(2.115) = 0.1121

LCL = R D3 = 0.053(0) = 0

All sample averages and sample ranges are within the control limits for both charts.

22. a. p = .04

p (1  p ) 0.04 ( 0.96)
p    0.0139
n 200

UCL = p + 3  p = 0.04 + 3(0.0139) = 0.0817

LCL = p – 3  p = 0.04 – 3(0.0139) = –0.0017

Use LCL = 0.

b. For month 1 p= 10/200 = 0.05. Other monthly values are .075, .03, .065, .04, and

.085. Only the last month with p = 0.085 is an out-of-control situation. The seesaw

(i.e., zigzag) pattern of the points is also not considered normal for an in-control

process.

out of control
UCL
(.082)

.04

LCL
(0)

24. a. P (Accept) are shown below (using n = 15):

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 p = .01 p = .02 p = .03 p = .04 p = .05

f (0) .8601 .7386 .6333 .5421 .4633

f (1) .1303 .2261 .2938 .3388 .3658

.9904 .9647 .9271 .8809 .8291

α = 1 – P (Accept) .0096 .0353 .0729 .1191 .1709

Using p0 = .03 since α is close to .075. Thus, .03 is the fraction defective where the

producer will tolerate a .075 probability of rejecting a good lot (only .03 defective).

b.

p = .25

f (0) .0134

f (1) .0668

β= .0802

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Chapter 22 Solutions

2. a. Estimate of population total = N x = 400(75) = 30,000.

b. Estimate of standard error = Nsx .

 8  400  80
Ns x  400    320
 80  400

c. 30,000  2(320) or 29,360 to 30,640

4. B = 15

(70)2 4900
n   72.9830
(15) 2 (70)2 67.1389

4 450

A sample size of 73 will provide an approximate 95% confidence interval of width 30.

6. B = 5,000/2 = 2,500. Use the value of s for the previous year in the formula to determine

the necessary sample size.

(31.3) 2 979.69
n   336.0051
(2.5) 2 (31.3) 2 2.9157

4 724

A sample size of 337 will provide an approximate 95% confidence interval of width no

larger than $5,000.

8. a.

Stratum 1: N1 x1 = 200(138) = 27,600

Stratum 2: N 2 x2 = 250(103) = 25,750

Stratum 3: N 3 x3 = 100(210) = 21,000

b. N xst = 27,600 + 25,750 + 21,000 = 74,350

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 Note: The sum of the estimate for each stratum total equals N xst

c. sx = 550(3.4092) = 1875.06 (see 7c)

st

Approximate 95% confidence interval:

74,350  2(1875.06)

or

70,599.88 to 78,100.12

300(150)  600(75)  500(100)

2
(140, 000) 2
n   92.8359
 (20) 
2
196, 000, 000  15,125, 000
(1400)2    300(150)  600(75)  500(100) 
2 2 2

10. a.  2 

Rounding up we choose a total sample of 93.

 300(150) 
n1  93    30
 140, 000 

 600(75) 
n2  93    30
 140, 000 

 500(100) 
n3  93    33
 140, 000 

b. With B = 10, the first term in the denominator in the formula for n changes.

(140, 000) 2 (140, 000) 2

n   305.6530
 (10) 2  49, 000, 000  15,125, 000
(1400) 2    15,125, 000
 4 

Rounding up, we see that a sample size of 306 is needed to provide this level of

precision.

 300(150) 
n1  306    98
 140, 000 

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  600(75) 
n2  306    98
 140, 000 

 500(100) 
n3  306    109
 140, 000 

Because of rounding, the total of the allocations to each strata only add to 305. Note that

even though the sample size is larger, the proportion allocated to each stratum has not

changed.

(140, 000) 2 (140, 000) 2

n   274.6060
(15, 000) 2 56, 250, 000  15,125, 000
 15,125, 000
c. 4

Rounding up, we see that a sample size of 275 will provide the desired level of

precision.

The allocations to the strata are in the same proportion as for parts a and b.

 300(150) 
n1  275    98
 140,000 

 600(75) 
n2  275    88
 140, 000 

 500(100) 
n3  275    98
 140, 000 

Again, because of rounding, the stratum allocations do not add to the total sample size.

Another item could be sampled from, say, stratum 3 if desired.

12. a. St. Louis total = N1 x1 = 80 (45.2125) = 3,617

In dollars: $3,617,000

b. Indianapolis total = N1 x1 = 38 (29.5333) = 1,122.2654

In dollars: $1,122,265

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 c.

 38   45   80   70 
xst    29.5333   233  64.775   233  45.2125   233  53.0300  48.7821
 233       

s12 (13.3603) 2
N1 ( N1  n1 )  38(32)  36,175.517
n1 6

s22 (25.0666) 2
N 2 ( N 2  n2 )  45(37)  130, 772.1
n2 8

s32 (19.4084) 2
N 3 ( N 3  n3 )  80(72)  271, 213.91
n3 8

s42 (29.6810) 2
N 4 ( N 4  n4 )  70(60)  370,003.94
n4 10

 1 
2 
sxst   36,175.517  130, 772.1  271, 213.91  370, 003.94
 (233) 

1
 (808,165.47)  3.8583
(233) 2

Approximate 95% confidence interval:

xst  2 sxst

48.7821  2(3.8583)

or

41.0655 to 56.4987

In dollars: $41,066 to $56,499

d. Approximate 95% confidence interval:

Nxst  2 Nsxst

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 233(48.7821)  2(233)(3.8583)

11,366.229  1797.9678

or

9,568.2612 to 13,164.197

In dollars: $9,568,261 to $13,164,197

 xi 750
xc    15
 Mi 50
14. a.

Xˆ  M xc = 300(15) = 4,500

 ai 15
pc    .30
 M i 50

2 2 2 2
b.  ( xi  xc M i ) 2 = [95 – 15 (7)] + [325 – 15 (18)] + [190 – 15 (15)] + [140 – 15 (10)]

2 2 2
= (–10)2 + (55) + (–35) + (–10)

= 4450

 25  4   4450 
sxc   2    1.4708
 (25)(4)(12)  3 

sXˆ  Msxc = 300(1.4708) = 441.24

2 2 2 2
 ( ai  pc M i ) 2 = [1 – .3 (7)] + [6 – .3 (18)] + [6 – .3 (15)] + [2 – .3 (10)]

2 2 2
= (–1.1) + (.6)2 + (1.5) + (–1)

= 4.82

 25  4   4.82 
s pc   2    .0484
 (25)(4)(12)  3 

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 c. Approximate 95% confidence

Interval for population mean:

15  2(1.4708)

or

12.0584 to 17.9416

d. Approximate 95% confidence

Interval for population total:

4,500  2(441.24)

or

3,617.52 to 5,382.48

e. Approximate 95% confidence

Interval for population proportion:

.30  2(.0484)

or

.2032 to .3968

2000
xc   40
16. a. 50

Estimate of mean age of mechanical engineers: 40 years

35
pc   .70
b. 50

Estimate of proportion attending local university: .70

c.

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 2 2
 ( xi  xc M i ) 2 = [520 – 40 (12)] + · · · + [462 – 40 (13)]

2 2 2 2 2 2 2 2 2
= (40) + (–7) + (–10) + (–11) + (30) + (9) + (22) + (8) + (–23)

2
+ (–58)

= 7,292

 120  10   7292 
sxc   2    2.0683
 (120)(10)(50 /12)  9 

Approximate 95% confidence

Interval for mean age:

40  2(2.0683)

or

35.8634 to 44.1366

d.

2 2
 ( ai  pc M i ) 2 = [8 – .7 (12)] + · · · + [12 – .7 (13)]

2 2 2 2 2 2 2 2
= (–.4) + (–.7) + (–.4) + (.3) + (–1.2) + (–.1) + (–1.4) + (.3)

2 2
+ (.7) + (2.9)

= 13.3

 120  10   13.3 
s pc   2    .0883
 (120)(10)(50 /12)   9 

Approximate 95% confidence

Interval for proportion attending local university:

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 .70  2(.0883)

or

.5234 to .8766

18. a. p = 0.19

(0.19)(0.81)
sp   0.0206
363

Approximate 95% confidence interval:

0.19  2(0.0206)

or

0.1488 to 0.2312

b. p = 0.31

(0.31)(0.69)
sp   0.0243
363

Approximate 95% confidence interval:

0.31  2(0.0243)

or

0.2615 to 0.3585

c. p = 0.17

(0.17)(0.83)
sp   0.0197
373

Approximate 95% confidence interval:

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 0.17  2(0.0197)

or

0.1306 to 0.2094

d. The largest standard error is when p = .50.

At p = .50, we get

(0.5)(0.5)
sp   0.0262
363

Multiplying by 2, we get a bound of B = 2(.0262) = 0.0525.

For a sample of 363, then, they know that in the worst case ( p = 0.50) the bound will be

approximately 5%.

e. If the poll was conducted by calling people at home during the day, the sample results

would only be representative of adults not working outside the home. It is likely that

the Louis Harris organization took precautions against this and other possible sources

of bias.

3000  200 3000

sx   204.9390
20. a. 3000 200

Approximate 95% confidence interval for mean annual salary:

23,200  2(204.9390)

or

$22,790 to $23,610

b. N x = 3000 (23,200) = 69,600,000

s x̂ = 3000 (204.9390) = 614,817

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 Approximate 95% confidence interval for population total salary:

69,600,000  2(614,817)

or

$68,370,366 to $70,829,634

c. p = .73

 3000  200  (.73)(.27) 

sp      .0304
 3000  199 

Approximate 95% confidence interval for proportion that are generally satisfied:

.73  2(.0304)

or

.6692 to .7908

d. If management administered the questionnaire and anonymity was not guaranteed,

then we would expect a definite upward bias in the percent reporting of those who

were “generally satisfied” with their jobs. A procedure for guaranteeing anonymity

should reduce the bias.

22. a. X̂ = 380 (9/30) + 760 (12/45) + 260 (11/25) = 431.0667

Estimate approximately 431 deaths because of beating.

b.

 380   9   760   12   260   11 

pst               .3079
 1400   30   1400   45   1400   25 

 N h ( N h  nh )
 ph (1  ph )
nh  1

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 = (380) (380 – 30) (9/30) (21/30) / 29 + (760) (760 – 45) (12/45) (33/45) / 44 +

(260) (260 – 25) (11/25) (14/25) / 24

= 4,005.5079

 1 
s pst   2  4005.5079  .0452
 (1400) 

Approximate 95% confidence interval:

.3079  2(.0452)

or

.2175 to .3983

c.

 380   21   760   34   260   15 

pst               .7116
 1400   30   1400   45   1400   25 

 N h ( N h  nh )
 ph (1  ph )
nh  1

= (380) (380 – 30) (21/30) (9/30)/29 + (760) (760 – 45) (34/45) (11/45) / 44 +

(260) (260 – 25) (15/25) (10/25) / 24

= 3,855.0417

 1 
s pst   2  3855.0417  .0443
 (1400) 

Approximate 95% confidence interval:

.7116  2(.0443)

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 or

.6230 to .8002

d. X̂ = 1400 (.7116) = 996.24

Estimate of total number of victims is 996.

14(61)  7(74)  96(78)  23(69)  71(73)  29(84) 18, 066

xc    75.275
24. a. 14  7  96  23  71  29 240

Estimate of mean age is approximately 75 years old.

b.

12  2  30  8  10  22 84
pc    .35
14  7  96  23  71  29 240

2 2 2
 ( ai  pc M i ) 2 = [12 – .35 (14)] + [2 – .35 (7)] + [30 – .35 (96)]

2 2 2
+ [8 – .35 (23)] + [10 – .35 (71)] + [22 – .35 (29)]

2 2 2 2 2 2
= (7.1) + (–.45) + (–3.6) + (–.05) + (–14.85) + (11.85)

= 424.52

 100  6   424.52 
s pc   2    .0760
 (100)(6)(48)  5 

Approximate 95% confidence interval:

.35  2(.0760)

or

.198 to .502

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 X̂ = 4,800 (.35) = 1,680

Estimate of total number of disabled persons is 1,680.

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