Assignment – 02

Statistical methods for decision making

Submitted by Basudev Guha, FT243011

Q56
A.

b. Relationship between x and y is not perfectly linear but has a positive

association.
c.

The covariance between X and Y is 26.5. Since the covariance is positive, it suggests that as
the values in X increase, the values in Y also tend to increase.
d.

A correlation coefficient of 0.69 between two datasets X and Y means that there is a positive
linear relationship between the two variables, but it's not a perfect correlation.

Q57
a.

b. The correlation coefficient indicates a strong positive linear relationship between Apple's
Adjusted Stock Price and P&G's Adjusted Stock Price. As the Apple stock price tends to
increase over time, the P&G stock price also tends to increase, and vice versa. The strength
of the relationship suggests that the two stock prices are positively correlated and move
together in a fairly predictable manner.
c.

Sample covariance = 169.8397816323362

High positive relation between Apple adjusted stock price and P&G adjusted stock price.
d.
Sample correlation coefficient = 0.67
The value of coefficient is closer to 1 so we can say there is slightly linear relationship
between the stock prices of Apple and P&G.

Q41
41.
a. The probability of the bid being successful is 0.5 or 50 % prior to the request for additional
information.

41.
b The conditional probability of a request for additional information given that bid will ultimately be
successful is P(G|S) = 0.375

41.c Let posterior probability be P(S|G), P(S|G) = 0.652174

Case Study: Rob’s market

1. The probability that a random customer does not purchase any of the three products
(bread, jelly, peanut butter) is 0.278
2. The probability that a random customer purchases white bread is = 461/1000=0.461
3. The probability that a random customer purchases wheat bread is = 164/1000=0.164
4. The probability that a random customer purchases grape jelly given that he or she
purchases white bread is =306/1000=0.306
5. The probability that a random customer purchases strawberry jelly given that he or
she purchases white bread is 38/1000=0.038
6. The probability that a random customer purchases creamy peanut butter given that he
or she purchases white bread is =186/1000=0.186
7. The probability that a random customer purchases natural peanut butter given that he
or she purchases white bread is =54/1000=0.054
8. The probability that a random customer purchases creamy peanut butter given that he
or she purchases wheat bread is= 17/1000=0.017
9. The probability that a random customer purchases natural peanut butter given that he
or she purchases wheat bread is =16/1000 = 0.016
10. The probability that a random customer purchases white bread, grape, and creamy
peanut butter is= 124/1000 = 0.124