A)

Health care issues are receiving much attention in both academic and political arenas. A
sociologist recently conducted a survey of citizens over 60 years of age whose net worth is
too high to qualify for Medicaid and have no private health insurance. The ages of 25
uninsured senior citizens were as follows:

60 61 62 63 64 65 66 68 68 69 70 73 73

74 75 76 76 81 81 82 86 87 89 90 92

Calculate the arithmetic mean age of the uninsured senior citizens to the nearest hundredth of
a year. Compute also the median. Compute the quartiles (Q1, Q2 and Q3).

ANSWER:

Mean = 74.04 years

Median = 73 years.

Q1 = 65.5 years

Q2 = median = 73 years

Q3 = 81.5 years

B) The following table represents the assets in billions of dollars of the five largest bond
funds.

Bond Fund

Assets (Billions $)

Vanguard GNMA

19.5

 
Vanguard Total Bond Mkt. Index

16.8

Bond Fund of America A

13.7

Franklin Calif. Tax-Free Inc. A

12.8

Vanguard Short-Term Corp.

10.9

1. Referring to Table, what is the mean for this population of the five largest bond funds?

ANSWER:

$14.74 billions

2. Referring to Table, what are the variance and standard deviation for this population?

ANSWER:

9.2984 squared billion dollars, $3.0493 billions, respectively

C)

A recent survey of banks revealed the following distribution for the interest rate being
charged on a home loan (based on a 30-year mortgage with a 10% down payment).

 Interest Rate

7.0%

7.5%

8.0%

8.5%

> 8.5%

Probability

0.12

0.23

0.24

0.35

0.06

 If a bank is selected at random from this distribution, what is the chance that the interest rate
charged on a home loan will exceed 8.0%?

ANSWER:
0.41

D)

The employees of a company were surveyed on questions regarding their educational

background and marital status. Of the 600 employees, 400 had college degrees, 100 were
single, and 60 were single college graduates. What is the probability that an employee of the
company is married and has a college degree?

ANSWER:

340/600

E)

According to a survey of American households, the probability that the residents own 2 cars
if annual household income is over $25,000 is 80%. Of the households surveyed, 60% had
incomes over $25,000 and 70% had 2 cars. What is the probability that annual household
income is over $25,000 if the residents of a household own 2 cars?

ANSWER:

0.69

F)

A lab orders 100 rats a week for each of the 52 weeks in the year for experiments that the lab
conducts. Prices for 100 rats follow the following distribution:

Price: $10.00 $12.50 $15.00

Probability: 0.35 0.40 0.25

How much should the lab budget for next year’s rat orders be, assuming this distribution does
not change?

ANSWER:

637$

G)

If X has a binomial distribution with n = 4 and p = 0.3, then P(X = 1) = ________ .

ANSWER:

0.4116

F)
Suppose that past history shows that 60% of college students prefer Brand C cola. A sample
of 5 students is to be selected. The probability that exactly 1 prefers brand C is ________.

ANSWER:

0.0768

H) The following table contains the probability distribution for X = the number of
retransmissions necessary to successfully transmit a 1024K data package through a double
satellite media.  

P(X)

0.35

0.35

0.25

0.05