Concordia University Department of MIAE

Course Number Section

Applied Probability and Statistics INDU 6310 ………TT………

Examination Date Time # of pages

Final Exam December 15, 2020 3 Hours 11

Instructor Student Name ID# Signature

Dr. S. Sharifi …….………………………..…………………… .……………………….. ……………………..

PLEASE DONOT FORGET TO SIGN OFF YOUR SOLUTION IN EACH SECTION

• Attempt all questions. If there is ambiguity regarding the statement of the problem, you may
state clearly your interpretation of the problem and corresponding assumptions and solve the
problem accordingly.
• Show all of your work and put a box around your final answer.Providing ONLY the Final
answer (without any calculations) will earn ONLY a Zero in that problem.
• Write clear and legible. Submit a neat and professional presentation.

Problem#1- (12 marks)

A random sample of 10 venture-capital investment of fiber optics business sector
yielded the following data, in millions of dollars:

9.57 5.63 7.42 9.75 4.48 5.53 4.86 3.28 4.96 3.76

Determine a 95% confidence intervals for the mean, μ, for all

venture-capital investments in fiber optics. (4 marks)

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(a) Determine a 90% confidence intervals for the standard deviation σ, for all
venture-capital investments in fiber optics. (4 marks)

(b) If the 95% confidence interval for μ has a length of at most 2.5. What
approximate sample size you recommend? (4 marks)

Problem#2- (16 marks)

Super-cavitation is a propulsion technology for undersea vehicles that can
greatly increase their speed. It occurs approximately above the speed of 50
meters per second, when pressure drops sufficiently to allow the water to
dissociate into water vapor, forming a gas bubble behind the vehicle. When the
gas bubble completely encloses the vehicle, super-cavitation is said to occur.
Eight tests were conducted on a scale model of an undersea vehicle in a towing
basin with the average observed speed x = 102.2 meters per second. Assume
that speed is normally distributed with known standard deviation σ = 4 meters
per second.
a) Test the hypothesis: H0: μ =100 versus: H1: μ < 100 using α = 0.05.
(4 marks)

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b) What is the P-value for the test in part (a)? (4 marks)

c) Compute the power of the test if the true mean speed is actually as low as 95
meters per second. (4 marks)

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d) What sample size would be required to detect a true mean speed as low as 95
meters per second if we wanted the power of the test to be at least 0.85?
(4marks)

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 b. Estimate and interpret the sample coefficient of multiple determination.
c. Is the model significant at 5% level of confidence?
b. current
d. If the Estimate and interpret
dividend the sample
per share coefficient
increases of multiple
by $2.25 while thedetermination.
rate of growth remains
c. Is the model significant at 5% level of confidence?
constant, what change would you predict in the price of the stock?
d. If the current dividend per share increases by $2.25 while the rate of growth remains
b. Estimate and interpret
constant, the sample
what change wouldcoefficient
you predictofinmultiple
the pricedetermination.
of the stock?
3. A sample
Problem
c. Is theof 30#3-
model
(12 marks)
houses that
significant were
at 5% levelsold in the last year was taken. The value of the
of confidence?
3.
house A
(Y)
d. If sample
thewas of 30 houses
estimated.
current The
dividend per that were
independent
share sold in thewhile
increases by variables
$2.25 lastincluded
yearrate
the was taken.
of in The value
the analysis
growth remains of the
were the
house (Y)
constant, was
what estimated.
change would The
you independent
predict in the variables
price of the included
stock?
number of rooms (X1), the size of the lot (X2), the number of bathrooms (X3), and a in the analysis were the
dummynumber of rooms (X1), the size of the lot (X2), the number of bathrooms (X3), and a
variable (X4), which equals 1 if the house has a garage and equals 0 if the
3. A sample of 30
dummy variable
houses(X4),
that which equalsin1the
were sold if the
lasthouse
year has
wasataken.
garageThe and value
equalsof0 the
if the
house does not have a garage. The following results were
house does not have a garage. The following results were obtained: obtained:
house (Y) was estimated. The independent variables included in the analysis were the
number of rooms (X1), the size of the lot (X2), the number of bathrooms (X3), and a
Coefficients
dummy variable (X4), which Coefficients Standard
houseError
equals 1 if theStandard Error
has a garage and equals 0 if the
Intercept
Intercept 15,232.5
15,232.5 8,462.5
8,462.5
house does not have
X1 a garage. The following results
2,178.4 778.0were obtained:
X1 2,178.4 778.0
X2 7.8 2.2
X2 X3 7.8
Coefficients 2.2Error
2,675.2 Standard
2,229.3
X3 X4
Intercept 2,675.2
15,232.5 2,229.3
1,157.8 8,462.5463.1
X4
X1 1,157.8
2,178.4 463.1
778.0
X2 ANOVA 7.8 2.2
ANOVA
X3 2,675.2 df 2,229.3 SS MS
X4 Regression 1,157.8
df 204,242.88
463.1 SS 51,060.72
MS
Error (Residuals) 205,890.00 8,235.60
Regression 204,242.88 51,060.72
ANOVA
Error
a. (Residuals)
Write out the estimated equation.205,890.00 8,235.60
a) 3b.marks df on the numberSSof rooms (X1). MS
Interpret the coefficient
Regression
a. Write out theareestimated
c. What equation.
the degrees 204,242.88
of freedom for the sum51,060.72
of squares explained by the
Error
b. Interpret (Residuals)
regression (SSR) and
the coefficient onthe
thesum of205,890.00
squares
number 8,235.60
due to(X1).
of rooms error (SSE)?
c. Whatd. Test whether
are the or notofthere
degrees is a significant
freedom for the sumrelationship
of squaresbetween the value
explained byofthe
a
house
a. regression
Write out the and the independent
estimated equation. variables. Use a .05 level of significance.
e. Test
(SSR)
the
and the
significance
sum
ofthe
ofatsquares
X1number
the 5%
due to error (SSE)?
level. (X1).
b. Interpret the
d. Testf. whether coefficient
orthenot on of
there isofadetermination rooms
significant relationship between the value of a
c. What Compute
are the degrees coefficient
of freedom for the sum and interpret
of squaresits meaning.
explained by the
house and the independent
g. Estimate the value of avariables. thatUse
hasa9.05 levelaoflotsignificance.
regression
b) 4 marks (SSR) and the sumhouse of squares due torooms;
error (SSE)? with an area of 7,500; 2
e. Test the significance
bathrooms, and aofgarage.
X1 at the 5% level.
d. Test whether or not there is a significant relationship between the value of a
f. Compute
house andthethe coefficient
independentofvariables.
determination
Use a and interpret
.05 level its meaning.
of significance.
g.
e. Estimate the value ofofaX1
Test the significance house
at thethat
5%has 9 rooms; a lot with an area of 7,500; 2
level.
f. bathrooms,
Compute theand a garage.of determination and interpret its meaning.
coefficient
g. Estimate the value of a house that has 9 rooms; a lot with an area of 7,500; 2
bathrooms, and a garage.

COMM 215 – Practice Problems 2 11

COMM 215 – Practice Problems 2 11 5

COMM 215 – Practice Problems 2 11

 b. Interpret the coefficient on the number of rooms (X1).
c. What are the degrees of freedom for the sum of squares explained by the
regression (SSR) and the sum of squares due to error (SSE)?
d. Test whether or not there is a significant relationship between the value of a
house
c) and the independent variables. Use a .05 level of significance.
5 marks
e. Test the significance of X1 at the 5% level.
f. Compute the coefficient of determination and interpret its meaning.
g. Estimate the value of a house that has 9 rooms; a lot with an area of 7,500; 2
bathrooms, and a garage.

COMM 215 – Practice Problems 2 11

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Problem#4 (6 marks)
Suppose that on a small tropical island there are only two types of weather; sunny
days and rainy days. The probability that a sunny day is followed by a rainy day is
0.6, and the probability that a rainy day is followed by another rainy day is 0.8.
The weather on any day depends upon the previous day’s weather but not upon any
earlier days. Find the probability that if Thursday is rainy then it will be sunny on
Saturday.

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Problem#5 (6 marks)
Batches of an item are accepted or rejected depending on the number of defective
items counted in a sample. It is known that the probabilities of three, four, five,
six, and seven defective items in a rejected batch are respectively 0.3, 0.4, 0.2, 0.08
and 0.02. Fifty rejected batches produced a total of 221 defective items. Does this
suggest that the process is producing more defective items than it should? Support
your answer with the proper calculations.

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Problem#6 (12 marks)
Two methods of measuring surface smoothness are used to evaluate a paper
product. The joint probability density function of the two measurements over the
region 0<x<4, and x-1<y<x+1 is defined as fxy(x,y)= C(x+y) for x and y in the
region. Determine:
a) The value of C such that f is a joint probability density function. (4 marks)

b) P(x <1.0, y <1.0) (4 marks)

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c) Conditional probability density of y given x=2. (4marks)

d) Conditional probability: P(y<1.0 | x=2) (4 marks)

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Extra page

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