CS1B-05: The Central Limit Theorem – Answers Page 1

The Central Limit Theorem

Answers

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Page 2 CS1B-05: The Central Limit Theorem – Answers

Exercise 5.01
(ii) (a)

(b) The distribution is positively skewed.

(iv) (a)(b)

(v) (a) 0.082

(b) 0.07865

(vi) (c) As the sample size increases, the normal approximation approaches the empirical
distribution more closely.

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Exercise 5.02
(ii) (a) mean 49,909 and variance 50,999,108.

(b) mean 50,000 and variance 50,000,000.

Simulated mean slightly smaller whereas simulated variance slightly larger.

(iii) (a) LQ=44,673, M=49,616, UQ=54,711

(b) LQ=45,231, M=50,000, UQ=54,769

All xsum quartiles are similar but slightly smaller

(iv) (a)(b)

(c) Close to normal in the middle and fairly good in upper tail.

However, ‘banana shape’ indicates skewness. Since sample quantiles above the
line in both tails - they need to be lower to match norm.

Seriously lighter lower tail so it’s not as low as should be and slightly heavier
upper tail so it’s higher than expected.

Lighter lower tail and heavier upper tail indicates positive skew.

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Page 4 CS1B-05: The Central Limit Theorem – Answers

Exercise 5.03
The numbers of claims are modelled by a Poisson distribution with mean 10 per day.

(i) (b)(c)

(ii) (a) 0.409

(b) 0.43718

(c) The probability from the Poisson simulation is closer than that from the normal
approximation to the true value of 0.41696.

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CS1B-05: The Central Limit Theorem – Answers Page 5

(iii) (a)(b)

(c) #QQ plot 'banana shape' shows signs of positive skew. The mean of the Poisson
distribution is not large enough to ensure normal distribution is a good
approximation

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