Question 1 (8 points)

The following table is the probability distribution of the number of orders a household places from a catalogue.

Number of Orders (x)	Probability of x Orders f(x)
0	0.40
1	0.30
2	0.15
3	0.10
4	0.05

If the standard deviation of the number of orders is 1.18, what is the probabilitythat the number of orders falls within 1 standard deviation of the mean?

Question 1 options:

	0.95
	0.80
	0.85
	0.70
	0.40

Question 2 (8 points)

Saved

A company has installed a computer network. The distribution of the number of

breakdowns per month is given below:

Number of Breakdowns = x	Probability of x Breakdowns = f(x)
0	.40
1	.25
2	.10
3	.10
4	.05
5	.04
6	.04
7	.02

Each breakdown will cost the company $800. In addition, there will be an extra fixed cost of $3000 if there are 5 or more breakdowns in that month.

Compute the expected monthly cost due to breakdowns.

Question 2 options:

	$1,000
	$1,524
	$1,850
	$2,280
	$2,570

Question 3 (8 points)

The probability distribution for X = the number of clients who come

to a consulting office on a given day is:

x	f(x)
0	0.10
1	0.25
2	0.20
3	0.17
4	0.13
5	0.10
6	0.04
7	0.01

The office would be idle on a given day if no clients come to the office.

If the daily arrivals are independent of each other and the probability

of an idle day remains constant from day to day, compute the

probability that there will be at least two idle days in a period of 10

days.

Question 3 options:

	0.6126
	0.1937
	0.0059
	0.2639
	0.3874

Question 4 (8 points)

The probability distribution of the rate of return from a mutual fund is normal with mean 5% and standard deviation 10%. What is the probability that the rate of return realized on the fund will be greater than 0%?

Question 4 options:

	0.5216
	0.8413
	0.9772
	0.6915
	0.5743

Question 5 (8 points)

Saved

The random variable Z has a standard normal distribution. Which of the following statements are true.

I. Z is a discrete random variable.

II. The mean of Z equals 1.

III. The probability that the value of Z falls between -0.50 and 1.00 is 0.5328.

Question 5 options:

	II and III only
	I and III only
	I, II, and III
	III only
	I and II only

Question 6 (8 points)

The probability distribution of the rate of return from a mutual fund is normal with mean 5% and standard deviation 10%. What is the 20^th percentile of the rate of return?

Question 6 options:

	-7.80%
	3.60%
	0%
	-3.40%
	1.28%

Question 7 (8 points)

The probability distribution of the rate of return from a mutual fund is normal

with mean 5% and standard deviation 10%. Sharon is the manager of

this mutual fund. She will receive a fixed salary of $100,000 in 2020 plus a bonus

of $100,000 if her mutual fund's rate of return will exceed 10% in 2020.

Compute Sharon's expected compensation for 2020.

NOTE: COMPENSATION = FIXED SALARY + BONUS

Question 7 options:

	$130,850
	$142,750
	$164,580
	$115,870
	$152,640

Question 8 (8 points)

A random sample of 100 employees is drawn from a firm where the job satisfaction rate is P%. The ratio of the standard deviation of the number of satisfied employees to the mean number of satisfied employees is 0.10. What is the value of P?

Question 8 options:

	50%
	60%
	90%
	70%
	80%

Question 9 (8 points)

Sea End Online Clothing advertises its new brand of Oxford shirts on the Internet.

Based on large amounts of data on past purchasing experience, the probability distribution of the number of shirts ordered per household generated by this promotional campaign was determined and is tabulated below:

Number of Shirts Ordered per Household (x)	Probability f(x)
0	0.90
1	0.04
2	0.03
3	0.02
4	0.01

There are 250,000 households in Sea End's customer data base.

The profit generated from a household that orders x Oxford Shirts is given by the following formula:

PROFIT = 28x - 4 for x = 1,2,3,4.

= 0 for x = 0.

Estimate the total profit that Sea End will realize from its sale of Oxford Shirts.

Question 9 options:

	$1,080,000
	$400,000
	$560,000
	$280,000
	$1,300,000

Question 10 (8 points)

The probability distribution of selling prices for nonwaterfront properties in a

seaside area is normally distributed with standard deviation equal to

$400,000. 10% of these properties had a selling price that exceeded

$1,500,000.

The 25^th percentile of the selling prices of these properties is:

Question 10 options:

	$1,092,000
	$988,000
	$1,182,000
	$720,000
	$1,256,000

Question 11 (8 points)

A company has installed a computer network. The distribution of the number of

breakdowns per month is given below:

Number of Breakdowns = x	Probability of x Breakdowns = f(x)
0	0.40
1	0.25
2	0.10
3	0.09
4	0.06
5	0.05
6	0.04
7	0.01

A bad month will have 4 or more breakdowns. The number of breakdowns from month to month are independent and the probability distribution remains the same from month to month.

Compute the mean number of breakdowns in the bad months.

Question 11 options:

	5.60
	1.52
	6.00
	6.40
	5.00

Question 12 (8 points)

Because not all airline passengers show up for their reserved seat, a small airline sells 20 tickets for a flight that holds only 16 seats. The probability that a passenger shows up for a flight is 0.85 and the passengers behave independently. What is the probability that every passenger who shows up will have a seat?

Question 12 options:

	0.1028
	0.1701
	0.1323
	0.3522
	0.2428

Question 1 (8 points)

Saved

The following table is the probability distribution of the number of orders a household places from a catalogue.

Number of Orders (x)	Probability of x Orders f(x)
0	0.40
1	0.30
2	0.15
3	0.10
4	0.05

If the standard deviation of the number of orders is 1.18, what is the probabilitythat the number of orders falls within 1 standard deviation of the mean?

Question 1 options:

	0.95
	0.80
	0.85
	0.70
	0.40

Question 2 (8 points)

Saved

A company has installed a computer network. The distribution of the number of

breakdowns per month is given below:

Number of Breakdowns = x	Probability of x Breakdowns = f(x)
0	.40
1	.25
2	.10
3	.10
4	.05
5	.04
6	.04
7	.02

Each breakdown will cost the company $800. In addition, there will be an extra fixed cost of $3000 if there are 5 or more breakdowns in that month.

Compute the expected monthly cost due to breakdowns.

Question 2 options:

	$1,000
	$1,524
	$1,850
	$2,280
	$2,570

Question 3 (8 points)

The probability distribution for X = the number of clients who come

to a consulting office on a given day is:

x	f(x)
0	0.10
1	0.25
2	0.20
3	0.17
4	0.13
5	0.10
6	0.04
7	0.01

The office would be idle on a given day if no clients come to the office.

If the daily arrivals are independent of each other and the probability

of an idle day remains constant from day to day, compute the

probability that there will be at least two idle days in a period of 10

days.

Question 3 options:

	0.6126
	0.1937
	0.0059
	0.2639
	0.3874

Question 4 (8 points)

The probability distribution of the rate of return from a mutual fund is normal with mean 5% and standard deviation 10%. What is the probability that the rate of return realized on the fund will be greater than 0%?

Question 4 options:

	0.5216
	0.8413
	0.9772
	0.6915
	0.5743

Question 5 (8 points)

Saved

The random variable Z has a standard normal distribution. Which of the following statements are true.

I. Z is a discrete random variable.

II. The mean of Z equals 1.

III. The probability that the value of Z falls between -0.50 and 1.00 is 0.5328.

Question 5 options:

	II and III only
	I and III only
	I, II, and III
	III only
	I and II only

Question 6 (8 points)

The probability distribution of the rate of return from a mutual fund is normal with mean 5% and standard deviation 10%. What is the 20^th percentile of the rate of return?

Question 6 options:

	-7.80%
	3.60%
	0%
	-3.40%
	1.28%

Question 7 (8 points)

The probability distribution of the rate of return from a mutual fund is normal

with mean 5% and standard deviation 10%. Sharon is the manager of

this mutual fund. She will receive a fixed salary of $100,000 in 2020 plus a bonus

of $100,000 if her mutual fund's rate of return will exceed 10% in 2020.

Compute Sharon's expected compensation for 2020.

NOTE: COMPENSATION = FIXED SALARY + BONUS

Question 7 options:

	$130,850
	$142,750
	$164,580
	$115,870
	$152,640

Question 8 (8 points)

A random sample of 100 employees is drawn from a firm where the job satisfaction rate is P%. The ratio of the standard deviation of the number of satisfied employees to the mean number of satisfied employees is 0.10. What is the value of P?

Question 8 options:

	50%
	60%
	90%
	70%
	80%

Question 9 (8 points)

Sea End Online Clothing advertises its new brand of Oxford shirts on the Internet.

Based on large amounts of data on past purchasing experience, the probability distribution of the number of shirts ordered per household generated by this promotional campaign was determined and is tabulated below:

Number of Shirts Ordered per Household (x)	Probability f(x)
0	0.90
1	0.04
2	0.03
3	0.02
4	0.01

There are 250,000 households in Sea End's customer data base.

The profit generated from a household that orders x Oxford Shirts is given by the following formula:

PROFIT = 28x - 4 for x = 1,2,3,4.

= 0 for x = 0.

Estimate the total profit that Sea End will realize from its sale of Oxford Shirts.

Question 9 options:

	$1,080,000
	$400,000
	$560,000
	$280,000
	$1,300,000

Question 10 (8 points)

The probability distribution of selling prices for nonwaterfront properties in a

seaside area is normally distributed with standard deviation equal to

$400,000. 10% of these properties had a selling price that exceeded

$1,500,000.

The 25^th percentile of the selling prices of these properties is:

Question 10 options:

	$1,092,000
	$988,000
	$1,182,000
	$720,000
	$1,256,000

Question 11 (8 points)

A company has installed a computer network. The distribution of the number of

breakdowns per month is given below:

Number of Breakdowns = x	Probability of x Breakdowns = f(x)
0	0.40
1	0.25
2	0.10
3	0.09
4	0.06
5	0.05
6	0.04
7	0.01

A bad month will have 4 or more breakdowns. The number of breakdowns from month to month are independent and the probability distribution remains the same from month to month.

Compute the mean number of breakdowns in the bad months.

Question 11 options:

	5.60
	1.52
	6.00
	6.40
	5.00

Question 12 (8 points)

Because not all airline passengers show up for their reserved seat, a small airline sells 20 tickets for a flight that holds only 16 seats. The probability that a passenger shows up for a flight is 0.85 and the passengers behave independently. What is the probability that every passenger who shows up will have a seat?

Question 12 options:

	0.1028
	0.1701
	0.1323
	0.3522
	0.2428