1. Case Study: Motion Theater Releases (ASWCCFO, Chapter 2, Case Problem 2). Use

graphical methods to construct the following (do not write a report): Picture 1

(a) frequency (i.e., histogram or relative frequency) distribution graphs for all 4 variables

(hint: remember to use Sturges' Formula and Excel's Data Analysis tool).

(b) a scatter diagram to explore the relationship between opening gross sales and total

gross sales.

(c) a scatter diagram to explore the relationship between number of theaters and total gross

sales.

(d) a scatter diagram to explore the relationship between weeks in release and total gross

sales.

2. ASWCCFO, Chapter 3 #33. Picture 2

3. ASWCCFO, Chapter 3 #37 parts (a), (b), and (c). Picture 3

4. A wine taster is required to taste and rank three varieties of wine A, B, and C, according

to the taster's preference.

(a) Identify all the possible rankings (note: order matters).

(b) If the taster had no ability to distinguish a difference in taste among the three wines,

what is the probability that the taster will rank wine variety A as best? As least desirable?

5. The personnel manager for a commercial bank has interviewed five men and seven

women for four managerial training positions available with her bank. If the final selection

will include two men and two women, how many different combinations are possible?

2

6. Use the data from ASWCCFO, Chapter 5 #19 to answer the following questions. Picture 4

(a) Graph the probability distribution of X.

(b) Calculate ! and !

".

(c) Calculate the (! } !) and (! } 2!) intervals. What proportion of the

measurements will fall within these intervals? Does this result agree with Chebyshev's

Theorem? The Empirical Rule?

7. You are hoping to take advantage of an opportunity to operate a small business this

summer. In order to provide your services to potential customers, you will need to hire

one worker. If you hire a "hard-working" employee, you will make $5,000 in profit. If you

end up with a "lazy" employee, you will only make $1,000 in profit. There is an 80 percent

chance that you will hire a "hard-working" employee and a 20 percent chance that you will

hire a "lazy" employee. Suppose you have a utility function of the form =

!

", where X is

the amount of profit you make.

(a) What is your expected utility this summer?

(b) Cindy is an employment consultant and an infallible judge of talent and character. After

an interview, she can state with certainty whether the worker will be "hard-working."

Would you be willing to pay her $1,000 for her services? Explain.

(c) What is the maximum amount you would be willing to pay Cindy?