Assignment #5: Continuous Probability Distributions

Due on ?, 2018

Course Title: Business Statistics I

Exercises 5.6, 5.8, 5.27, 5.32, 5.33, 5.34, 5.37, 5.44, 5.45, 5.49, 5.57, 5.59, 5.60 of Newbold et al. (2013)

Use the probability distributions applets and the android application to check your obtained results.

 Java applets to compute probabilities:

http://homepage.stat.uiowa.edu/~mbognar/ (last accessed on April 10, 2017)
 Android application to compute probabilities:
https://play.google.com/store/apps/details?id=com.mbognar.probdist (last accessed on April 10, 2017)

MCQs

1. Which of the following parameters control the relative flatness of normal distribution
a. Mean.
b. Standard deviation.
c. Mode.
d. None of the above.
2. A certain manufacturer's bicycle pedal sealed-bearing set's lifetime is exponentially distributed
with a mean of 5 years. What is the probability that a sealed-bearing set lasts between 3 and 5
years?
a. 0.0833.
b. 0.1809.
c. 0.4512.
d. 0.6321.
e. None of the above.
3. Assume Z is a standard random variable. If P(Z<z0)<0.5
a. z0 < 0.
b. z0 >0.
c. −∞ ≤ 𝑧 ≤ +∞.
d. We don’t know.
4. Assume z is the standard normal random variable. If the area between zero and z is 0.4115,
then the z value may be
a. 2.70
b. 1.35

Assignment #5 : Continuous Probability Distributions Page 1

 c. 1.00
d. 0.2077
e. None of the above
5. The monthly demand for a certain product is a normal random variable with mean 50 and
standard deviation 10. If you have 60 units on stock at the beginning of the month, the
probability you will still have stock remaining at the end of the month is
a. 0.194
b. 0.563
c. 0.159
d. 0.210
e. None of the above.
6. An exponential probability distribution
a. is a continuous distribution.
b. is a discrete distribution.
c. can be either continuous or discrete.
d. none of the above
7. A normal distribution has unknown mean and standard deviation 20. If a score of 85
represents Q1 (P(X<85) = 0.25) then the mean is
a. 71.49
b. 82.63
c. 88.63
d. 98.49
8. The lifetimes of televisions produced by the Hishobi Company are normally distributed with a
mean of 75 months and a standard deviation of 8 months. If the manufacturer wants to have to
replace only 1% of its televisions, what should its warranty be?
a. 40 months
b. 75 months
c. 57 months
d. 94 months
9. The amount of gasoline sold daily at a service station is uniformly distributed with a minimum
of 2000 gallons and a maximum of 5000 gallons. The probability that daily sales will fall
between 2500 and 3000 gallons is:
a. 0
b. 0.333
c. 0.50
d. 0.167

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 10. The average stock price for companies making up the S&P 500 is $30, and the standard
deviation is $8.20 (BusinessWeek, Special Annual Issue, Spring 2003). Assume the stock
prices are normally distributed. How high does a stock price have to be to put a company in
the top 10%?
a. 30.00
b. 19.49
c. 40.51
d. 25.36
11. An airline knows from experience that the distribution of the number of suitcases that get lost
each week on a certain route is approximately normal with μ = 15.5 and σ = 3.6. What is the
probability that during a given week the airline will lose between 10 and 20 suitcases?
a. 0.1056
b. 0.4040
c. 0.3944
d. 0.8310

Use the following to answer questions 12 and 13

The lifetime of lightbulbs that are advertised to last for 5000 hours are normally distributed
with a mean of 5100 hours and a standard deviation of 200 hours.
12. What is the probability that a bulb lasts longer than the advertised figure?
a. 0.5061
b. 0.7310
c. 0.3085
d. 0.6915
e. None of the above.
13. If we wanted to be sure that 98% of all bulbs last longer than the advertised figure, what
should be advertised?
a. 4689
b. 5511
c. 5200
d. 4920
e. None of the above.
The probability density function of the random variable Y is

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 3 y 2 /2 if -1  y  1
f ( y)  
 0 otherwise

1. Sketch the PD.

2. Show that f(y) is a probability density function.
(1) the expected value E[Y ] (2) the second moment E[Y 2]
(3) the variance Var[Y ] (4) the standard deviation σY

Exercise #1

The fill amount in 2-liter soft drink bottles is normally distributed, with a mean of 2.0 liters and a
standard deviation of 0.05 liter. If bottles contain less than 95% of the listed net content (1.90 liters, in
this case), the manufacturer may be subject to penalty by the state office of consumer affairs. Bottles
that have a net content above 2.10 liters may cause excess spillage upon opening. What proportion of
the bottles will contain

1. between 1.90 and 2.0 liters?

2. between 1.90 and 2.10 liters?
3. below 1.90 liters or above 2.10 liters?
4. 99% of the bottles contain an amount that is between which two values (symmetrically
distributed) around the mean?

Exercise #2

Battery manufacturers compete on the basis of the amount of time their products last in cameras and
toys. A manufacturer of alkaline batteries has observed that its batteries last for an average of 26 hours
when used in a toy racing car. The amount of time is normally distributed with standard deviation of
2.5 hours.

1. What is the probability that the battery lasts between 24 and 28 hours?
2. What is the probability that the battery lasts longer than 28 hours?
3. What is the probability that the battery lasts less than 22 hours?

Exercise #3

The time between arrivals of customers at a bank during the noon-to-1 P.M. hour has a uniform
distribution between 0 to 120 seconds. What is the probability that the time between the arrivals of two
customers will be

1. less than 20 seconds?

2. between 10 and 30 seconds?
3. more than 35 seconds?

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 4. What are the mean and standard deviation of the time between arrivals?

Exercise #4

Monthly sales figures for a particular food industry (X) tend to be normally distributed with
mean of 150 (thousand dollars) and a standard deviation of 35 (thousand dollars). Compute
the following probabilities:

1. P(X < 200).

2. P(X > 175).
3. P(140 < X < 210).
Exercise #5

The speed in which the home page of a website is downloaded is an important quality characteristic of
that website. Suppose that the mean time to download the home page for the Internal Revenue Service
is 1.2 seconds. Suppose that the download time is normally distributed, with a standard deviation of
0.2 second. What is the probability that a download time is
1. less than 1.4 seconds?
2. between 1.4 and 1.8 seconds?
3. above 1.5 seconds?
4. 99% of the download times are slower than how many seconds?
5. Suppose that the download times are uniformly distributed between 0.45 and 1.95 seconds.
What are your answers to 1 through 4?

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