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Review Exercises

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8 views4 pages

Review Exercises

Uploaded by

Valuer Khayourday Orllarwhalesky
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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ConREM Master Programme

Advanced Mathematical Methods in Economics and Management

Review Exercises

Not to be reported, but strongly recommended to solve these problems.

1. A company is producing electronic components, and 3 % of the components are


somehow defective or faulty.

a) What is the probability that 20 randomly selected components are all faultless?

b) What is the probability to pick up exactly two faulty components, when 20 com-
ponents are selected randomly?

c) The components are checked before delivery to the customers, but the control
process also includes a risk of mistake: 25 % of faulty components are stated as fault-
less (when the defect is not observed), and 0.5 % of faultless components are judged
as faulty. How many percent of all components are judged as faulty?

2. What do you think to be a suitable probability distribution to describe following


random variables? Give the distribution type and, if possible, also parameter (or pa-
rameters) of the distribution.

a) Number of serious quality exceptions in a production process during one month,


when there happens on average 1.5 exceptions in a week. Exceptions are supposed
to be independent (if there happens a quality exception in a certain day, it doesn’t
increase or decrease the probability that there will be another exception in the near
future).

b) Duration of a construction activity for a certain type of building when the dura-
tion is on average 3,0 months. Can you say something more about the distribution if
you know that typically the duration is approximately 3 months and in almost every
case the duration is between 1.5 and 4.5 months?

c) Number of delayed payments in a set of 500 randomly selected invoices when,


according to statistics, the payment is delayed approximately in 5 % of the invoices
sent to the customers.

d) Time between two quality exceptions in the case of point a.


3. a) When testing difference between the means in two samples, Excel’s Data Ana-
lysis tool gave following output. Level of significance used in the test was 0.05. Let’s
denote the population mean (not the sample mean) of the variable 1 by X1 , and the
population mean of variable 2 by X2 . The null hypothesis H0 in the test was X1 = X2 .
Does this test indicate that H0 is to be rejected or not? Justify your answer.

b) What about if the null hypothesis was X1 <= X2 instead of X1 = X2 , the level
of significance being the same? Is the null hypothesis rejected or not? Justify your
answer.

c) What about if the level of significance was 0.01, and the null hypothesis was as in
point b (X1 <= X2 ) ? Is the null hypothesis rejected or not? Justify your answer.

4. Let’s assume that a scatterbrained professor forgets his umbrella to a shop with
probability of 14 , every time he visits a shop. Once he visits four different shops and
when back at home, observes that he has forgot his umbrella. Calculate the probabi-
lity that the umbrella is in the k:th shop, for each value of k from 1 to 4.
Hint: Conditional probability.
5. a) A device has four components, each of them working properly with the probabi-
lity p. The device works properly, if every component works. Determine the minimum
value for p so that there is probability of 95 % that the device works.

b) An airline company knows that on average 5% of people who have booked a ticket
will not arrive to the flight. For that reason the airline overbooked a flight and sold
257 tickets, when the number of seats in the plane was 250. What is the probabi-
lity that everyone who arrived got a seat? Hint: binomial distribution. If you meet
problems because too big numbers when using calculator, note that sometimes bino-
mial coefficient can be easily calculated based on its definition, e.g.
 
257 257! 257 · 256 · 255 · 254
= = .
4 4!253! 4!
You can also use Excel in this problem, to save time in calculations.

6. Let’s suppose that annual precipitation (total rainfall and snowfall) in a certain
area is normally distributed with expected value 550 mm and standard deviation 70
mm.

a) What is the probability that the precipitation is more than 600 mm?

b) For random variable X, p-fractile is limit z such as P (X ≤ z) = p. Determine the


0.9-fractile for the annual precipitation.

1
7. A dice is weighted so that the probability of result 6 is 4
and results 2, 3, 4 and 5
have all equal probability 61 .

a) What is the probability of result 1?

b) Determine the expected value, the variance and the standard deviation of random
variable X=”result of a single roll of the biased die”.

c) Make a graph of the pdf of random variable X.


Answers

1. a) 0.5438 b) 0.0988 c) 0.0274

2. a) Poisson distribution with expected value (parameter) 6.


b) Normal distribution with expected value 3 months. The standard deviation may
be approximately 0.5 months, because the rule of three sigma. So the distribution
would be N(3 , 0.5). (But this is only a rough approximation becaouse we don’t know
what exactly means ”in almost every case”.)
c) Binomial distribution with parameters n = 500 and p = 0.05.
d) Exponential distribution with expected value 1/6 months = appr. 5 days. So, the
parameter of the distribution is 6 (unit of the parameter is 1/month).

3. a) It’s a two-tail test and the test statistic 1.8225 is between the critical values
-2.056 and -2.056. Therefore H0 is not rejected.
b) Now it’s one-tail test and the test statistic 1.8225 is greater than the critical value
1.7056. H0 is rejected.
c) Now the same critical value can’t be used anymore. But p-value is about 0.04,
which is greater than 0.01. So, H0 is not rejected with significance level 0.01.

4. 0.366 , 0.274 , 0.206 , 0.154

5. a) 0.987 b) 0.975

6. a) 0.238 b) 640 mm

1
7. a) 12
b) Expected value 3.92, variance 2.74, st.dev. 1.66.

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