BES Tutorial Sample Solutions, S1/13

WEEK 6 TUTORIAL EXERCISES (To be discussed in the week starting

April 15)
1. Among employed women, 25% have never been married. Select 12
employed women at random.
(a) The number in your sample who have never been married has a
binomial distribution. What are the binomial parameters n and p?

n=12, p=.25
(b)

What is the probability that exactly 2 of the 12 women in your sample

have never been married?
2

(c)
2

12!
0.25 1
2! 10!

0.25

0.2323

What is the probability that 2 or fewer have never been married?

0
0.3907

0.0317

0.1267

0.2323

2. A telemarketer is employed to telephone 10 households each evening

between 6 and 7pm with a view to selling a particular service. From past
experience it is known that the probability of any one household being
interested in purchasing the service is p = 0.20. Let the random variable X
represent the number of households called on a given evening that are
interested in the service.
(a) Comment on the suitability of modelling the (relative frequency)
distribution of X as a binomial distribution.
Recall that we can summarize the precise requirements for a binomial
experiment as follows:
There are n identical and independent trials.
There are only two possible outcomes for each trial: success and failure.
The probability of a success p is the same for each trial.

Is it reasonable to suppose our example satisfies all these conditions?

 Independence is often the most problematic assumption but if were

drawing from a large market it seems a reasonable assumption here.
Some people get annoyed at telemarketers and hang up before they ask
their questions. This is not necessarily a problem here if we define failure as
all outcomes other than having a stated interest in purchasing.
While some households may be more predisposed to the particular service
e.g. richer households may have a different p from poorer ones; this
couldnt be determined beforehand. With random sampling (so that one is
likely to ask both rich and poor households) then the constant p represents
an average over the whole population.
(b) Use the binomial distribution tables to calculate: P(X = 4), P(X < 4),
P(X 1).
Wehaven=10, p=.2
4
0.0881
4
3
0.8791
1
1
0
1 0.1074 0.8926

3. A believer in the random walk theory of stock markets thinks that an

index of stock prices has a probability of 0.65 of increasing in any one year.
Let X be the number of years among the next 5 years in which the index
rises.
(a) What do we need to assume for X to have a binomial distribution.
What are n and p? What are the possible values that X can take?

Each of the n=5 years represent identical and independent trials. For this
to be true the fact that the index went up last year does not change the
probability it will go up in the subsequent year.
Index going up is denoted a success and all other outcomes (going down or
staying unchanged) are taken to be a failure.
The probability of a success p=0.65 is the same for each trial.
X=0, 1, , 5
(b) Assuming X has a binomial distribution, construct the probability
distribution of X and draw the associated probability histogram.

0
0.0053

1
0.0488

2
0.1811

3
0.3364

4
0.3124

5
0.1160

Stockindexincreasesover5years
0.40
0.35

Probability

0.30
0.25
0.20
0.15
0.10
0.05
0.00
0

Numberofincreases

(c) What are the mean and variance of X?

1

5
5

0.65
0.65

3.25
0.35

1.1375

(d) Let Y be the number of years in which the index falls. Assuming X is
binomial is Y binomial? What are the mean and standard deviation of
Y?

Because all that is being done is to reclassify the outcomes into success and
failures Y will also be binomial. (Ignore the unlikely complication of the index
staying the same.)

1
1.75

5
5 3.25 1.75
and



1
1.1375

5
1


So

. .

1.1375

1.067.

4. In each of the following cases X is a count. Does it have a binomial

distribution? Justify you answer in each case.
(a) You observe the sex of the next 20 babies born at a local hospital; X is
the number of girls among them.
Yes
Recall our concerns about the gender composition example used in lectures:
the fertility decision about whether to have a third child or not being

impacted by the gender mix of the first two children; possibility of multiple
births. These are not relevant here.
Independence across trials now refers to births to different women and
having a girl is not contagious!
(b)

A couple decides to continue to have children until their first girl is

born; X is the total number of children the couple has.

No
Here n is not fixed and depends on previous trial outcomes.
5. A software random number generator is designed to produce numbers
within a specified range. We can consider any number in the range as a
possible outcome. Suppose the random number Y can be any value between
0 and 2. Then the uniform density of the outcomes of Y will have a constant
height between 0 and 2 and be zero elsewhere.
(a) What is the height of the density? Draw a graph of the density.
1
0
2
0

Uniformdensityforrandomnumber
generation
0.6
0.5

f(y)

0.4
0.3
0.2
0.1
0
0

0.5

1.5

(b) What is the cumulative probability distribution of Y? Draw a graph of

the cumulative probability distribution.
The cumulative probability distribution, F(y) = P(YY) is just a graph
of F(y) against y. So, from the above graph, we can see F(0)=0 and

F(2)=1. Since the probability is increasing uniformly the graph must

be a straight line with an upward slope (since probability cannot be
negative) increasing from the point (y,F(y))=(0,0) to (y,F(y))=(2,1).
Specifically, F(y)=0.5y in the range (0,2). If y<0, F(y)=0 and if y>2,
F(y)=1.
(c) Find the following: P(Y<0.8); P(Y0.8); P(0.5<Y<1.5) from both the
density function and the cumulative probability function and show
that your answers match whichever you use.
0.8

0.8

0.5

0.8
0.5

0.8
1.5

0.5

0.4
0.4
0.5

As indicated in the question, whether you get these values as given here from
the uniform probability density function as given here, or from F(y)=0.5y (the
cumulative probability distribution) you get the same values.
E.g.
1.5

0.8
0.8
0.5 0.8
0.5
0.75 0.25 0.5.

0.4

and

0.5

1.5

6. Make sure you have downloaded your project data file. Use EXCEL to
generate descriptive statistics for your your personalized project data.
What are the means of the variables Bid and Expenditure? Are these useful
statistics in the context of the project?
The mean of ID=Bid is meaningless. (This is the same for all students)

While having summary statistics is important for Expenditure (a variable that
is randomly generated for each student, so you should not get the same answer
as you colleagues), the variable ID=Bid is simply an identifier for the
observation and should play no role in the analysis except if you want to say
something specific about a particular observation.