Understanding Business Statistics 1st Edition Freed Test Bank 1

Understanding Business Statistics 1st
Edition Freed Test Bank

Full download at link: https://testbankpack.com/
CHAPTER 5
True/False
1. A description of how the probabilities are distributed over the values the random
variable can assume is called a random variable.
Ans: FALSE, LO: 1, Bloom: , Difficulty: Easy, Min:, AACSB:
2. When playing a round of golf, the distance of the drive off the second tee in feet is
considered to be a discrete variable.
3. When playing a round of golf, the number of pars is considered to be a discrete

variable.
Ans: TRUE, LO: 1, Bloom: , Difficulty: Easy, Min:, AACSB:
4. A probability distribution identifies the probabilities that are assigned to all possible
values of a random variable.
5. The first step in producing a probability distribution is to identify values for the
random variable.
6. The symbol “x” is used to denote the random variable while the symbol “P(x)” is
used to denote the probabilities associated with the random variable.
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7. The mean of a discrete probability distribution is generally referred to as the
expected value of the distribution.
8. The expected value of a discrete random variable is the average value for the
random variable over many repeats of the experiment.
9. The expected value of a discrete random variable is the value of the random variable
that occurs most frequently.
10. The standard deviation of a discrete probability distribution is the positive square
root of the variance, which determines the expected value of the distribution.
11. One of the conditions for a binomial experiment is that the trials are statistically
independent.
12. One of the conditions for a binomial experiment is that the probability of success on
any one trial changes throughout the experiment.
13. In a binomial experiment x is always less than or equal to n, the number of trials.
14. The binomial probability function is composed of two parts, the second of which
computes the probability of each of the ways in which the x successes in n trials can
occur.
15. The binomial probability function is composed of two parts, the first of which
computes the probability of each of the ways in which the x successes in n trials can
occur.
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16. One of the conditions for a Poisson experiment is that the average number of
occurrences per unit of time, space, or distance is constant and proportionate to the
size of the unit of time, space, or distance involved.
17. The expected value or mean of a Poisson distribution is the same as the variance.
MULTIPLE CHOICE
18. The number of customers that enter a store during one day is an example of:
a. a continuous random variable

b. a discrete random variable
c. either a continuous or a discrete random variable, depending on the number of
the customers
d. either a continuous or a discrete random variable, depending on the gender of
the customers
e. none of the above
Ans: B, LO: 1, Bloom: , Difficulty: Easy, Min:, AACSB:
19. The number of damaged items found on a shelf in a grocery store when taking
inventory is:
a. a discrete random variable

b. a continuous random variable
the items found
d. either a continuous or a discrete random variable, depending on the type of item
e. a complex random variable
Ans: A, LO: 1, Bloom: , Difficulty: Easy, Min:, AACSB:
20. An experiment consists of making 80 telephone calls in order to sell a particular

insurance policy. The random variable is the number of sales made. This random
variable is a:
a. a discrete random variable

b. a continuous random variable
the calls made
d. either a continuous or a discrete random variable, depending on the gender of
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the customers
e. a complex random variable
21. A discrete random variable would be an appropriate way to describe the outcome of
which of the following experiments?
a. the color of car chosen by a randomly selected car buyer

b. the number of points a soccer team scores in its next game
c. the length of time it takes a randomly selected commuter to drive to work
d. the area of a city covered by trees
e. the distance covered by a golfer hitting the ball off the tee
22. If X is a discrete random variable,
a. it is possible for X to take on an infinite number of values.

b. X may only take a finite number of values.
c. X may only take on whole number values.
d. X cannot take on negative values.
e. X cannot take on positive values.
23. If Z represents the sum of two discrete random variables X and Y,
a. Z may be a discrete or a continuous random variable.

b. the probability distribution of Z is obtained by adding the distributions of X and Y.
c. Z may not satisfy the general requirements for a discrete probability distribution
d. Z will also be a discrete random variable.
e. Z will be a continuous random variable.
Ans: D, LO: 1, Bloom: , Difficulty: Medium, Min:, AACSB:
24. Which of the following is NOT a general requirement for a discrete probability
distribution?
a. the random variable must take on whole-numbered values.
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b. each probability must be greater than or equal to zero.
c. the sum of the probabilities of all values must be one.
d. the random variable must take on distinct numerical values.
e. each probability must be less than or equal to 1.
25. Which of the following is the second step involved in building a discrete probability
distribution?
a. defining the random variable

b. identifying the values for the random variable
c. assigning probabilities to values of the random variable
d. building a bar chart of the distribution
e. calculating the expected value and variance
26. Which of the following is the first step involved in building a discrete probability
distribution?

e. calculating the expected value and variance
27. Which of the following is NOT one of the steps involved in building a discrete
probability distribution?

Ans: D, LO: 2, Bloom: , Difficulty: Easy, Min:, AACSB:
28. The variance of a discrete random variable is a weighted average of the:
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a. squared deviations from the mean
b. squared deviations from the median
c. square root of the deviations from the mean
d. square root of the deviations from the median
29. A perfectly balanced coin is tossed 6 times and tails appears on all six tosses.
Then, on the seventh trial,
a. tails cannot appear

b. heads has a larger chance of appearing than tails
c. tails has a better chance of appearing than heads
d. heads and tails both have an equal chance of appearing
30. Which of the following is a condition of a binomial experiment?
a. only two outcomes are possible on each of the trials

b. the trials are statistically independent
c. the probability of success remains constant throughout the experiment
d. all of the above
31. Which of the following is NOT a condition of an experiment where the binomial
probability distribution is applicable?
a. the experiment has a sequence of n identical trials

b. exactly two outcomes are possible on each trial
c. the trials are dependent
d. the probabilities of the outcomes do not change from one trial to another
e. all are characteristics of a binomial probability experiment
Ans: C, LO: 4, Bloom: , Difficulty: Easy, Min:, AACSB:
32. Which of the following is a condition for a binomial probability experiment?
a. the experiment involves a number of “trials,” represented by n.
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b. only two outcomes are possible on each of the trials.
c. the trials are statistically independent.
d. the probability of success, p, on any one trial remains constant throughout the
experiment.
e. all of the above
Ans: E, LO: 4, Bloom: , Difficulty: Easy, Min:, AACSB:
33. Which of the following best describes the logic of the binomial function?
a. the first part counts the number of ways in which exactly x successes in n trials
can occur while the second part computes the probability of each of the ways in
which the x successes can occur
b. the first part counts the number of ways in which exactly n successes in x trials
can occur while the second part computes the probability of each of the ways in
which the n successes can occur
c. the first part computes the probability of each of the ways in which the x
successes can occur while the second part simply counts the number of ways in
which exactly x successes in n trials can occur
d. the first part computes the probability of each of the ways in which the n
successes can occur while the second part simply counts the number of ways in
which exactly n successes in x trials can occur
Ans: A, LO: 4, Bloom: , Difficulty: Medium, Min:, AACSB:
34. The variance of a binomial random variable X with n trials and p probability of
success, where p is greater than 0,
a. will always be less than the expected value of X.

b. will always be equal to the expected value of X.
c. will always be greater than the expected value of X.
d. may be less than, equal to, or greater than the expected value of X.
e. has no relationship to the expected value of X.
35. Suppose a random variable X describes the outcome of a binomial experiment with
30 trials and a 0.80 probably of success for each trial. The shape of the distribution
of X is:
a. negatively skewed
b. symmetric
c. positively skewed
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d. bimodal
e. insufficient information is given to determine the distribution shape
36. The binominal distribution:
a. may be used to describe a discrete or a continuous random variable.

b. is used to describe a particular type of discrete random variable.
c. is a special case of the Poisson distribution.
d. may be used to describe any experiment whose outcome takes discrete values.
e. is only useful when dealing with distance, time, or space.
37. Which of the following is a condition for a Poisson probability experiment?
a. we need to be assessing the probability for the number of occurrences of some

event per unit time, space, or distance.
b. the average number of occurrences per unit of time, space, or distance is
constant.
c. the average number of occurrences per unit of time, space, or distance is
proportionate to the size of the unit of time, space, or distance involved.
d. individual occurrences of the event are random and statistically independent.
e. all of the above
38. The expected value or mean of a Poisson distribution is equal to:
a. the variance of the distribution.

b. the standard deviation of the distribution.
c. the negative square root of the variance of the distribution.
d. the number of occurrences multiplied by its probability.
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39. Which graph below shows the shape of the Poisson distribution for λ = 5?
a. a
b. b
c. c
d. d
FILL IN THE BLANK

40. A would be an appropriate way to describe the outcome of
which of an experiments that involves the number of points a soccer team makes in
its next game.
a. discrete random variable

b. continuous random variable
c. time-series random variable
d. exponential random variable
e. Poisson random variable
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41. The step involved in building a discrete probability distribution is
identifying the values for the random variable.
a. first
b. second
c. third
d. fourth
e. fifth
42. The calculations for the expected value (mean) and variance of a discrete probability
distribution are essentially identical to those for a :
a. frequency distribution
b. percent frequency distribution
c. relative frequency distribution
d. binomial probability distribution
e. continuous probability distribution
43. The of a binomial distribution is equal to n time p.
a. expected value
b. variance
c. standard deviation
d. probability of success
e. the number of trials
44. One of the conditions for a Poisson experiment is the need to assess probability for
the number of occurrences of some event per unit .
a. space
b. time
c. distance
d. space, time, or distance
e. space or time
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PROBLEMS
45. The number of re-tweets of your Twitter tweets over the last ten days is shown
below. If you define a random variable that counts the number of daily re-tweets
during this 10-day period, show the possible values for the random variable in
ascending order.
3, 1, 1, 0, 1, 1, 2, 2, 0, 2.
a. 0, 1, 2, 3
b. 1, 2, 3, 4
c. 1, 1, 0, 3
d. 2, 2, 1, 0
e. 0, 2, 3, 4
below. If you define a random variable that counts the number of daily re-tweets
during this 10-day period, which set of probabilities would be used to form the
probability distribution for this random variable?
3, 1, 1, 0, 1, 1, 2, 2, 0, 2.
a. .1, .3, .5, .1

b. .3, .4, .3, .1
c. .2, .1, .5, .2
d. .2, .4, .3, .1
e. .2, .2, .4, .2
below. If you pick a day at random, how likely is it that the number of re-tweets on
that day is 2?
3, 1, 1, 0, 1, 1, 2, 2, 0, 2.
a. .10
b. .30
c. .20
d. .25
e. .40
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Ans: B, LO: 2, Bloom: , Difficulty: Medium, Min:, AACSB:
48. Which one of the following probability distributions accurately represents the random
variable “the number of times heads comes up in two tosses of a fair coin”?
a.
x P(x)
0 1/3
1 1/3
2 1/3
b.
x P(x)
0 1/2
1 1/2
2 1/2
c.
x P(x)
HH 1/4
HT 1/4
TH 1/4
TT 1/4
d.
x P(x)
0 1/4
1 1/2
2 1/4
e.
x P(x)
0 1/2
1 1/4
2 1/2
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49. Which one of the following probability distributions represents the random variable
“the number of 6’s that appear in a roll of two fair dice”?
a.
x P(x)
0 1/6
1 1/6
2 1/6
3 1/6
4 1/6
5 1/6
6 1/6
b.
x P(x)
0 1/6
1 1/6
2 1/6
c.
x P(x)
0 25/36
1 10/36
2 1/36
d.
x P(x)
0 10/36
1 25/36
2 1/36
e.
x P(x)
0 1/6
1 4/6
2 1/6
Ans: C, LO: 2, Bloom: , Difficulty: Medium, Min:, AACSB:
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50. Hi-Plains Design is bidding on a project that will earn the company at least $650
million. The competitive bidding process will involve presenting the company’s
proposal to three successive review panels at the client company, all of which must
approve the proposal for Hi-Plains bid to be successful. If the proposal is approved
by the first panel, Hi-Plains will present the proposal to the next panel. If it is
approved there, Hi-Plains will present the proposal to the third panel. Hi-Plains
estimates that its proposal has a 40% chance of approval at each of the stages.
Define “number of Hi-Plains presentations” as your random variable for this
“experiment.” The possible values for the random variable (in ascending order) are:
a. 0,1,2,3
b. 1,2,3
c. 0,1,2,3,4
d. 1,2,3,4
e. 0,1
approve the proposal for Hi-Plains bid to be successful. If the proposal is approved
Define “number of review panel approvals” as your random variable. The possible
values for the random variable (in ascending order) are:
a. 1,2,3
b. 1,2,3,4
c. 0,1,2
d. 2,3,4
e. 0,1,2,3
approve the proposal for Hi-Plains’ bid to be successful. If the proposal is approved
Define “number of panels that fail to approve the proposal” as your random variable.
The possible values for the random variable (in ascending order) are:
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a. 0,1,2,3
b. 1,2
c. 1,2,3,4
d. 0,1
e. 0,0,2,3
Define “number of Hi-Plains presentations” as the random variable x. Which
distribution below shows the proper probability distribution for this random variable?
a.
x P(x)
1 .60
2 .14
3 .26
b. x P(x)
1 .60
2 .24
3 .16
c.
x P(x)
1 .64
2 .20
3 .16
d.
x P(x)
1 .60
2 .26
3 .14
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a. a
b. b
c. c
d. d
Define “number of approvals” as the random variable x. Which distribution below
shows the proper probability distribution for this random variable?
a. x P(x)
0 .60
1 .24
2 .096
3 .064
b.
x P(x)
0 .60
1 .24
2 .090
3 .068
c.
x P(x)
0 .64
1 .20
2 .096
3 .064
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d.
x P(x)
0 .60
1 .24
2 .086
3 .074
a. a
b. b
c. c
d. d
e. None of them
estimates that its proposal has a 40% chance of approval at each of the stages. If
you define “number of panels that fail to approve” as the random variable x, which
distribution below shows the proper probability distribution for this random variable?
a.
x P(x)
0 .054
1 .946
b. x P(x)
0 .044
1 .956
c.
x P(x)
0 .069
1 .931
d. x P(x)
0 .064
1 .936
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a. a
b. b
c. c
d. d
56. Seven percent of the potential customers visiting Gadget.com’s website make at
least one purchase: 4% purchase item A, 5% purchase item B, and 2% percent
purchase both. If you define “number of items purchased by a website visitor” as a
random variable, the possible values for the random variable are, in ascending
order,
a. 1,2,3
b. 2,4,5
c. 0,1,2
d. 1,1,1
e. 3,2,1
57. Seven percent of the potential customers visiting Gadget.com’s website make at
least one purchase: 4% purchase item A, 5% purchase item B, and 2% percent
purchase both. If you define “number of items purchased by a website visitor” as a
random variable, which set of probabilities would be used to form the probability
distribution for this random variable?
a. .63, .25, .12

b. .82, .12, .05
c. .93, .05, .02
d. .83, .14, .03
e. .12, .23, .65
58. You need to buy three books for your finance course this semester. You estimate that
there is 60% chance of that you can buy any one of the books cheaper online than in
the bookstore. If you define “number of the finance books that will be cheaper online”
as a random variable, the possible values for the random variable are, in ascending
order:
a. 1,2,3,4
b. 0,1,2
c. 2,4,6
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d. 0,1,2,3
e. 4,3,2,1
59. You need to buy three books for your finance course this semester. You estimate
that there is 60% chance of that you can buy any one of the books cheaper online
than in the bookstore. If you define “number of the finance books that will be cheaper
online” as a random variable, which set of probabilities would be used to form the
probability distribution for this random variable?
a. .064, .298, .422, .216

b. .064, .288, .432, .216
c. .064, .268, .452, .216
d. .064, .238, .482, .216
e. .238, .064, .216, .482
60. Below is a table showing the probability distribution for the random variable x.
Compute the expected value of the random variable.
x P(x)
20 0.064
30 0.288
40 0.432
50 0.216
a. 36.4
b. 35.0
c. 32.9
d. 41.3
e. 38.0
Compute the variance of the random variable.
x P(x)
20 0.064
30 0.288
40 0.432
50 0.216
a. 84.2
b. 72.0
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c. 54.2
d. 64.0
e. 95. 9
Compute the standard deviation of the random variable.
x P(x)
20 0.064
30 0.288
40 0.432
50 0.216
a. 8.49
b. 14.63
c. 8.00
d. 3.85
e. 23.56
63. The following probability distribution represents the number of vehicles available for
use by a randomly selected US household. To simplify matters, the category “three
or more” is replaced by “3” (Source: US Census, American FactFinder). Calculate
the expected value of the number of vehicles available per household.
Number of
vehicles Probability
x P(x)
0 0.093
1 0.341
2 0.375
3 0.191
a. 0.25
b. 0.42
c. 1.50
d. 1.66
e. 2.50
5-20
64. The following probability distribution represents the number of vehicles available for
use by a randomly selected US household. To simplify matters, the category “three
or more” is replaced by “3” (Source: US Census, American FactFinder). Calculate
the standard deviation of the number of vehicles available per household.
Number of
vehicles Probability
x P(x)
0 0.093
1 0.341
2 0.375
3 0.191
a. 0.11
b. 0.79
c. 0.89
d. 1.12
e. 1.45
65. The following probability distribution represents the number of bedrooms in a

randomly selected US household. To simplify matters, the category “five or more” is
replaced by “5” (Source: US Census, American FactFinder). Calculate the
expected value of the number of bedrooms per household.
Number of
bedrooms Probability
x P(x)
0 2.3%
1 11.3%
2 26.8%
3 39.7%
4 15.8%
5 4.1%
a. 0.17
b. 0.54
c. 2.50
d. 2.68
e. 3.65
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66. The following probability distribution represents the number of bedrooms in a
randomly selected US household. To simplify matters, the category “five or more” is
replaced by “5” (Source: US Census, American FactFinder). Calculate the variance
of the number of bedrooms per household.
Number of
bedrooms Probability
x P(x)
0 2.3%
1 11.3%
2 26.8%
3 39.7%
4 15.8%
5 4.1%
a. 0.017
b. 1.070
c. 1.145
d. 2.917
e. 3.215
67. Julian picks winning and losing stocks by tossing a coin (heads means winner, tails
means loser).To test his ‘system’, his friend gives him a list of 20 stocks, half of
which doubled in value over the past 3 years (winners) and half of which lost half
their value over the past 3 years (losers). How likely is it that Julian properly
classifies at least 60% of the stocks on the list?
a. .2202
b. .1786
c. .1365
d. .1973
e. .2517
Ans: E, LO: 4, Bloom: , Difficulty: Hard, Min:, AACSB:
68. Julian picks winning and losing stocks by tossing a coin (heads means winner, tails
means loser).To test his ‘system’, his friend gives him a list of 20 stocks, half of
which doubled in value over the past 3 years (winners) and half of which lost half
their value over the past 3 years (losers). How likely is it that Julian properly
classifies at least 80% of the stocks on the list?
a. .0201
b. .0059
c. .1201
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d. .0952
e. .1028
Ans: B, LO: 4, Bloom: , Difficulty: Hard, Min:, AACSB:
69. Approximately 1% of all USPS package deliveries are lost. You select 10 deliveries
at random. Assuming that all the binomial conditions are met, what is the “expected”
number of lost packages in this 10 delivery sample?
a. 1.00
b. .1542
c. .0666
d. .100
e. .0914
70. Approximately 1% of all USPS package deliveries are lost. You select 10 package
deliveries at random. If you use the binomial probability function to compute the
probability that none of the packages is lost, the value of the binomial coefficient in
your computation is
a. .9900
b. .0100
c. 10.00
d. .9044
e. 1.00
71. Approximately 1% of all USPS package deliveries are lost. You select 10 package
deliveries at random. Use the binomial probability function to compute the probability
that no more than one package will be lost.
a. .8753
b. .9958
c. .9044
d. .8842
e. .9562
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72. It is reported that 7% of the Super Star scratch-and-win lottery tickets are winners. If
you scratch 250 tickets, what is the expected number of winners?
a. 19.8
b. 22.6
c. 17.5
d. 27.4
e. 29.1
you scratch 250 tickets what is the variance of the random variable “number of
winners”?
a. 12.5
b. 11.9
c. 16.3
d. 14.8
e. 9.9
you scratch 250 tickets, what is the standard deviation of the random variable
“number of winning tickets”?
a. 4.03
b. 5.12
c. 4.62
d. 3.98
e. 5.53
75. It is reported that 23% of the home mortgages in Cowlitz County are “underwater”.
For 50 randomly selected home mortgages, compute the expected number of
underwater mortgages.
a. 12.9
b. 14.2
c. 9.6
d. 10.1
e. 11.5
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For 50 randomly selected home mortgages, compute the variance of the random
variable “number of underwater mortgages.”
a. 9.12
b. 8.86
c. 16.23
d. 12.47
e. 11.58
For 50 randomly selected home mortgages, compute the standard deviation of the
random variable “number of underwater home mortgages” in the sample of 50.
Assume all the binomial conditions are met.
a. 3.66
b. 4.38
c. 1.33
d. 2.98
e. 1.80
78. Five percent of all international video calls on Interphone.com are dropped. Suppose
you randomly choose 5 recent calls. If you use the binomial function to compute the
probability that exactly 3 of the 5 calls are dropped, what is the value of the binomial
coefficient in you computation?
a. .0458
b. 5.0
c. 10.0
d. .0011
e. 2.0
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you randomly choose 5 recent calls. Use the binomial function to compute the
probability that none of the calls are dropped.
a. .6234
b. .5612
c. .8945
d. .6432
e. .7738
you randomly choose 5 recent calls. Use the binomial function to compute the
probability that no more than two calls are dropped.
a. .9988
b. .7613
c. .8234
d. .6736
e. .4431
81. For a binomial distribution, find P(x = 2), where n = 8, p = .7.
a. .0100
b. .0467
c. .0217
d. .0952
e. .1361
82. For a binomial distribution, find P(3 < x < 5), where n = 15, p = .5.
a. .1472
b. .1588
c. .1723
d. .3129
e. .2365
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83. For a binomial distribution, find P(x > 2), where n = 10, p = .4.
a. .5989
b. .7341
c. .7944
d. .8116
e. .8328
Ans: E, LO: 4, Bloom: , Difficulty: Medium, Min:, AACSB:
84. Use the Binomial distribution to produce P(x < 12), where n = 15, p = .7.
a. .7821
b. .6631
c. .5978
d. .8116
e. .8732
85. Ten percent of graduating college seniors report planning to spend at least one year
volunteering for a charitable organization. You interview 30 randomly selected
graduating seniors. Assuming that all the binomial conditions are met, determine the
probability that exactly one student in this group of 30 plans to volunteer.
a. .2234
b. .1775
c. .1612
d. .1413
e. .2972
probability that at least three students in the group plan to volunteer.
a. .4889
b. .5886
c. .6214
d. ,6652
e. .4116
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probability that no more than 4 students in the group plan to volunteer.
a. .7663
b. .8598
c. .8246
d. .8916
e. .9113
probability that between 2 and 5 students in the group plan to volunteer.
a. .5219
b. .7432
c. .7873
d. .8226
e. .6482
89. Your car (like most cars) has four tires. Each tire has a 1% chance of running low
on air in the morning. Assume that the state of one tire has no relationship to the
state of the others. Use the binomial probability function to determine the probability
that one tire will be running low on air tomorrow morning.
a. 0.010
b. 0.039
c. 0.250
d. 0.999
e. 0.450
5-28
90. Your car (like most cars) has four tires. Each tire has a 5% chance of running low
on air in the morning. Assume that the state of one tire has no relationship to the
state of the others. Use the binomial probability function to determine the probability
that no more than one tire will be running low on air tomorrow morning.
a. 0.171
b. 0.814
c. 0.900
d. 0.986
e. 0.450
91. The most popular names for babies born in the United Kingdom in 2012 were Harry
and Amelia. Of the roughly 400,000 baby boys born in the UK in 2012, two percent
were named Harry. Two percent of girls born in the UK in 2012 were named Amelia
(Source: UK Office for National Statistics, Baby Names, England and Wales, 2012).
If thirty boys are selected at random from those born in the UK in 2012, what is the
probability that two boys or more in the group will be named Harry?
a. 9.9%
b. 12.1%
c. 54.5%
d. 87.9%
e. 93.2%
were named Harry, while two percent of the girls born that year were named Amelia
Suppose that 30 baby girls are chosen at random. Let X represent the number of
girls named Amelia. What is the expected value of X?
a. 0.02
b. 0.06
c. 1.00
d. 2.00
e. 3.45
5-29
were named Harry, while two percent of the girls born that year were named Amelia
Suppose that 20 baby boys are chosen at random. Let X represent the number of
boys named Harry. What is the standard deviation of X?
a. 4.472
b. 0.179
c. 0.040
d. 0.032
e. 1.360
94. Salem University’s MBA program has a 55% acceptance rate. If you randomly select
a sample of 20 applicants, how likely is it that 10 of the applicants will be accepted
into the program?
a. .1315
b. .1987
c. .1593
d. .1823
e. .1772
a sample of 20 applicants, how likely is it that no more than five of the applicants in
the sample will fail to be accepted into the program?
a. .0162
b. .1083
c. .0002
d. .0553
e. .0241
5-30
a sample of 20 applicants, how likely is it that between 13 and 17 (inclusive) of the
applicants will be accepted into the program?
a. .2989
b. .3196
c. .3341
d. .2511
e. .2813
97. Salem University’s MBA program has a 55% acceptance rate. You randomly select
a sample of 20 applicants. For the random variable "number of applicants in the
sample who are accepted into the program,” compute the expected value.
a. 11
b. 12.2
c. 9.8
d. 7.4
e. 13.5
98. Salem University’s MBA program has a 55% acceptance rate. You randomly select
a sample of 20 applicants. For the random variable "number of applicants in the
sample who are accepted into the program,” compute the standard deviation.
a. 3.88
b. 1.22
c. 2.98
d. 2.23
e. 3.45
99. In recent years, 30% of the patent applications submitted to the US Patent Office
have been approved. Assuming that this same rate holds in the future, if 15 new
applications are submitted this year, how likely is it that at least 9 of them will be
disapproved?
a. .9093
b. .8689
c. .1311
d. .0907
5-31
e. .9455
100. In recent years, 30% of the patent applications submitted to the US Patent Office
have been approved. Assuming that this same rate holds in the future, if 15 new
applications are submitted this year, how likely is it that between 11 and 13
(inclusive) applications will be disapproved?
a. .4093
b. .4802
c. .5198
d. .3557
e. .6455
101. 80% of surviving tech startups still aren’t making a profit after three years. If you
track twenty startups three years after they began operations, how likely is it that
six or more of them are making a profit?
a. .2347
b. .3172
c. .3418
d. .2561
e. .1958
102. 80% of surviving tech startups still aren’t making a profit after three years. If you
track twenty startups three years after they began operations, how likely is it that
more than 8 will be making a profit?
a. .003
b. .2010
c. .0100
d. .0074
e. .0990
5-32
103. 80% of surviving tech startups still aren’t making a profit after three years. In a
sample of twenty startups that have survived for at least three years, there’s less
than a 5% chance that more than what number are making a profit.
a. 7
b. 3
c. 5
d. 2
e. 6
Ans: A, LO: 4, Bloom: , Difficulty: Hard, Min:, AACSB:
104. Car Sounds sells and installs high-end sound systems for cars. 10% of the
systems that the company installs need to be re-installed because of faulty first-
time installation. You plan to randomly select 20 of Car Sounds’ recent
installations. How likely is it that at least three of these systems will require re-
installation.?
a. .3230
b. .3732
c. .2554
d. .1989
e .2868
installations. How likely is it that the company will have to re-install no more than
one of these systems?
a. .2671
b. .3416
c. .2956
d. .3687
e. .3918
5-33
installations. In this sample, there’s less than a 2% chance that more than what
number of the systems will have to be re-installed.
a. 5
b. 4
c. 6
d. 3
e. 10
107. You plan to randomly select 10 city restaurants. Historically, 70% of city
restaurants are rated “high pass” by city health inspectors. If this percentage is still
true, determine the probability that among the ten restaurants you select you’ll find
exactly two that have been rated “high pass.”
a. .0120
b. .1003
c. .0651
d. .0014
e. .0102
true, determine the probability that among the ten restaurants you select, fewer
than three are not rated “high pass.”
a. .4767
b. .2997
c. .3246
d. .3178
e. .3828
5-34
true, determine the probability that among the ten restaurants you select, between
4 and 7 are rated “high pass.”
a. .6066
b. .6975
c. .7853
d. .8110
e. .7724
110. Use the Poisson probability function to find P(x = 3), where λ= 7.
a. .6072
b. .7113
c. .5021
d. .4329
e. .4789
111. Use the Poisson probability function to find P(x = 1), where λ = 1.3.
a. .2564
b. .3829
c. .3381
d. .4607
e. .3543
112. Use the Poisson probability function to find P(1 < x< 3), where λ = 3.2.
a. .3478
b. .5617
c. .4213
d. .3897
e. .4536
5-35
113. Use the Poisson probability function to find P(x < 3), where λ = 1.
a. .7643
b. .9197
c. .8872
d. .9750
e. .9562
114. Use the Poisson probability function to find P(x = 4), where λ= 3.
a. .1123
b. .2240
c. .1680
d. .2631
e. .0902
115. Use the Poisson probability function to find P(x > 13), where λ = 5.
a. .0002
b. .0004
c. .0200
d. .0168
e. .0001
116. Use the Poisson probability function to find P(3 < x < 5), where λ = 2.
a. .2497
b. .3067
c. .1961
d. .1789
e. .4282
5-36
117. In an ordinary 8-hour day, Roto-Drains receives calls for emergency service at an
average rate of 1 per hour (otherwise, the calls appear to be random and
independent). The owner currently has a crew of technicians capable of handling
up to (and including) nine emergencies per day. What is the probability that on a
random day there are more calls than her crew can handle?
a. .2833
b. .2617
c. .3419
d. .2509
e. .2864
Ans: A, LO: 5, Bloom: , Difficulty: Medium, Min:, AACSB
118. In an ordinary 8-hour day, Roto-Drains receives calls for emergency service at an
average rate of 1 per hour (otherwise, the calls appear to be random and
independent). The owner currently has a crew of technicians capable of handling
up to (and including) nine emergencies per day. She is considering expanding the
crew. If she wants to ensure that there is less than a 5% chance that the crew
won't be able to handle the emergency load, she will need a crew that can handle
up to (and including) how many emergencies per day.
a. 13
b. 12
c. 15
d. 11
e. 10
119. On average stoppages on the assembly line at Jamari Industries have a Poisson
distribution with a mean of .1 per hour. Use the Poisson probability function to
determine the probability of having exactly two stoppages in a 10-hour period.
a. .2462
b. .2884
c. .3462
d. .1839
e. .2163
5-37
determine the probability of having no stoppages in a 20 hour period.
a. .0986
b. .1025
c. .0878
d. .1226
e. .1353
determine the probability of having no more than one stoppage in a 30-hour period.
a. .1992
b. .1689
c. .1364
d. .2567
e. .1043
distribution with a mean of .1 per hour. Assume all the Poisson conditions are met.
Use the Poisson probability function to determine the probability of having at least
two stoppages in a 15-hour period.
a. .3265
b. .4422
c. .5123
d. .6213
e. .4746
123. During a meteor shower, ‘shooting stars’ occur at an average rate of 12 per minute
or .2 per second. Assume all the Poisson conditions are met. What is the
probability of exactly one ‘shooting star’ in a randomly selected second?
a. .2136
b. .2653
c. .1918
d. .1637
5-38
e. .3157
probability of no more than two ‘shooting stars’ in a particular second?
a. .8823
b. .7642
c. .9988
d. .9087
e. .8346
probability of exactly three ‘shooting stars’ in a randomly selected half-minute?
a. .1346
b. .0502
c. .1654
d. .1997
e. .0892
probability of between one and three ‘shooting stars’ in a 20-second time interval?
a. .4152
b. .2587
c. .3216
d. .3762
e. .4585
5-39
127. In a study of NBA basketball games, it was reported that there are, on average, .3
fouls committed per minute. Assume all the Poisson conditions are met. Determine
the probability of exactly one foul in a randomly selected minute.
a. .1111
b. .2222
c. .3671
d. .1438
e. .2789
the probability of no fouls in a randomly selected 2-minute interval.
a. .6783
b. .7221
c. .6109
d. .5834
e. .5488
the probability of more than 2 fouls in a randomly selected 4-minute interval.
a. .1766
b. .0942
c. .0561
d. .1203
e. .0783
fouls committed per minute. Assume all the Poisson conditions are met. You are
watching a game. Determine the probability of five fouls in the next 10-minute
interval.
a. .1257
b. .1008
c. .2090
d. .1368
5-40
e. .1552
131. On average, 2.3 wind turbines at the vast Kindler Range Wind Farm malfunction
and need repair. Assume that all the Poisson conditions are met. Letting x
represent values of the random variable “number of turbines that malfunction
during any one day,” determine the probability that x = 2.
a. .1578
b. .2652
c. .2231
d. .3472
e. .3225
132. The average number of wind turbines at the vast Kindler Range Wind Farm that
malfunction and need repair is 2.3 per day. Assume that all the Poisson conditions
are met. Letting x represent values of the random variable “number of turbines that
malfunction during any one day,” what is the expected value of x?
a. 4.2
b. 3.6
c. 1.9
d. 2.9
e. 2.3
133. The average number of wind turbines at the vast Kindler Range Wind Farm that
malfunction and need repair is 2.3 per day. Assume that all the Poisson conditions
are met. Letting x represent values of the random variable “number of turbines that
malfunction during any one day,” what is the variance of x?
a. 2.3
b. 3.5
c. 2.9
d. 3.3
e. 4.7
5-41
134. During the summer season, the average number of lightning strikes per week in
the Royal Canyon area is 3.6. Assume that all the Poisson conditions are met. Let
x represent values for the random variable “number of lightning strikes in a week.”
What is the expected value of x?
a. 4.6
b. 5.1
c. 4.2
d. 3.6
e. 4.9
What is the variance of x?
a. 4.9
b. 5.2
c. 2.7
d. 3.0
e. 3.6
What is the standard deviation of x?
a. 1.897
b. 2.354
c. 4.162
d. 1.212
e. 1.318
5-42
137. Requests for a chat with a customer service representative on Maximax.com’s
website conform roughly to the Poisson conditions. The average number of
requests is six per hour. Compute the probability of exactly four requests during
the next hour.
a. .0968
b. .1123
c. .0792
d. .1339
e. .1024
138. Requests for a chat with a customer service representative on MaxTrend.com’s

requests is six per hour. Compute the probability of at least 10 requests during the
next hour.
a. .0557
b. .0838
c. .1126
d. .1487
e. .2232

requests is six per hour. Compute the probability of no more than one request
during the next hour and a half.
a. .0012
b. .0200
c. .0317
d. .1017
e. .0120
5-43
requests is six per hour. Compute the probability of exactly two requests during the
next thirty minutes.
a. .2240
b. .2617
c. .3419
d. .2509
e. .2864

requests is six per hour. The probability is approximately 6% that fewer than what
number of requests will be made in the next hour.
a. 5
b. 2
c. 9
d. 4
e. 3
Ans: E, LO: 5, Bloom: , Difficulty: Hard, Min:, AACSB
142. At work, Serge receives an average of four e-mails every hour. Assuming that all of
the Poisson conditions are met, use the Poisson probability function to calculate
the probability that Serge receives no e-mails in the next hour.
a. 0%
b. 2%
c. 18%
d. 25%
e. 44%
5-44
143. At work, Serge receives an average of four e-mails every hour. Assuming that all of
the Poisson conditions are met, use the Poisson probability function to calculate
the probability that Serge receives no e-mails in the next 15 minutes.
a. 1%
b. 2%
c. 25%
d. 37%
e. 48%
144. The binomial probability for P(x = 5), where n = 20, p =.1 is .0319. If you use the
Poisson distribution to approximate this binomial probability, what probability would
you produce?
a. .0918
b. .0361
c. .0117
d. .0266
e. .0141
145. The binomial probability for P(x < 2), where n = 18, p = .05 is .9418. If you use the
Poisson distribution to approximate this binomial probability, what probability would
you produce?
a. .7656
b. .8146
c. .9372
d. .9514
e. .9716
146. The binomial probability for P(1 < x < 3), where n = 30, p = .01 is .2601. If you use
the Poisson distribution to approximate this binomial probability, what probability
would you produce?
a. .1775
b. .1413
c. .2588
d. .2263
e. .1917
5-45
147. Use the Poisson distribution to approximate the binomial probability P(x = 2) when
n = 200, p = .03.
a. .0201
b. .0838
c. .0446
d. .1098
e. .1286
148. Use the Poisson distribution to approximate the binomial probability P(x = 4) when
n = 1000, p = .001.
a. .0617
b. .0992
c. .0234
d. .1182
e. .0153
149. Use the Poisson distribution to approximate the binomial probability P(x < 2) when
n = 800, p = .002 .
a. .6658
b. .5864
c. .4392
d. .7833
e. .5246
150. Use the Poisson distribution to approximate the binomial probability, P(x = 7),
where n = 100, p = .04
a. .0782
b. .1213
c. .0595
d. .0994
e. .1390

5-46
Answers to Questions
1. F 13. T 25. B 37. E 49. C 61. B
2. F 14. T 26. A 38. A 50. B 62. A
3. T 15. F 27. D 39. A 51. E 63. D
4. T 16. T 28. A 40. A 52. D 64. C
5. F 17. T 29. D 41. B 53. B 65. D
6. T 18. B 30. D 42. C 54. A 66. C
7. T 19. A 31. C 43. A 55. D 67. E
8. T 20. A 32. E 44. D 56. C 68. B
9. F 21. B 33. A 45. A 57. C 69. D
10.F 22. A 34. A 46. D 58. D 70. C
11. T 23. D 35. A 47. B 59. B 71. B
12. F 24. A 36. B 48. D 60. E 72. C
73. C 86. B 99. B 112. B 125. E 138. B

74. A 87. C 100. B 113. B 126. A 139. A
75. D 88. B 101. E 114. C 127. B 140. A
76. B 89. B 102. C 115. C 128. E 141. E
77. D 90. D 103. A 116. B 129. D 142. B
78. C 91. B 104. A 117. A 130. B 143. D
79. E 92. B 105. E 118. A 131. B 144. B
80. A 93. B 106. A 119. D 132. E 145. C
81. A 94. C 107. D 120. E 133. A 146. C
82. A 95. D 108. E 121. A 134. D 147. C
83. E 96. D 109. A 122. B 135. E 148. E
84. E 97. A 110. C 123. D 136. A 149. D
85. D 98. D 111. B 124. C 137. D 150. C
5-47

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Ans: FALSE, LO: 1, Bloom: , Difficulty: Easy, Min:, AACSB:

Ans: FALSE, LO: 1, Bloom: , Difficulty: Easy, Min:, AACSB:

3. When playing a round of golf, the number of pars is considered to be a discrete

Ans: TRUE, LO: 1, Bloom: , Difficulty: Easy, Min:, AACSB:

Ans: TRUE, LO: 1, Bloom: , Difficulty: Easy, Min:, AACSB:

Ans: FALSE, LO: 2, Bloom: , Difficulty: Easy, Min:, AACSB:

Ans: TRUE, LO: 2, Bloom: , Difficulty: Easy, Min:, AACSB:

Ans: TRUE, LO: 3, Bloom: , Difficulty: Easy, Min:, AACSB:

Ans: TRUE, LO: 3, Bloom: , Difficulty: Easy, Min:, AACSB:

Ans: FALSE, LO: 3, Bloom: , Difficulty: Easy, Min:, AACSB:

Ans: FALSE, LO: 3, Bloom: , Difficulty: Easy, Min:, AACSB:

Ans: TRUE, LO: 4, Bloom: , Difficulty: Easy, Min:, AACSB:

Ans: FALSE, LO: 4, Bloom: , Difficulty: Easy, Min:, AACSB:

Ans: TRUE, LO: 4, Bloom: , Difficulty: Easy, Min:, AACSB:

Ans: TRUE, LO: 4, Bloom: , Difficulty: Easy, Min:, AACSB:

Ans: FALSE, LO: 4, Bloom: , Difficulty: Easy, Min:, AACSB:

Ans: TRUE, LO: 5, Bloom: , Difficulty: Easy, Min:, AACSB:

Ans: TRUE, LO: 5, Bloom: , Difficulty: Easy, Min:, AACSB:

a. a continuous random variable

Ans: B, LO: 1, Bloom: , Difficulty: Easy, Min:, AACSB:

a. a discrete random variable

Ans: A, LO: 1, Bloom: , Difficulty: Easy, Min:, AACSB:

20. An experiment consists of making 80 telephone calls in order to sell a particular

a. a discrete random variable

Ans: A, LO: 1, Bloom: , Difficulty: Easy, Min:, AACSB:

a. the color of car chosen by a randomly selected car buyer

Ans: B, LO: 1, Bloom: , Difficulty: Easy, Min:, AACSB:

22. If X is a discrete random variable,

a. it is possible for X to take on an infinite number of values.

Ans: A, LO: 1, Bloom: , Difficulty: Easy, Min:, AACSB:

23. If Z represents the sum of two discrete random variables X and Y,

a. Z may be a discrete or a continuous random variable.

Ans: D, LO: 1, Bloom: , Difficulty: Medium, Min:, AACSB:

a. the random variable must take on whole-numbered values.

Ans: A, LO: 2, Bloom: , Difficulty: Easy, Min:, AACSB:

a. defining the random variable

Ans: B, LO: 2, Bloom: , Difficulty: Easy, Min:, AACSB:

a. defining the random variable

Ans: A, LO: 2, Bloom: , Difficulty: Easy, Min:, AACSB:

a. defining the random variable

Ans: D, LO: 2, Bloom: , Difficulty: Easy, Min:, AACSB:

28. The variance of a discrete random variable is a weighted average of the:

Ans: A, LO: 3, Bloom: , Difficulty: Easy, Min:, AACSB:

a. tails cannot appear

Ans: D, LO: 4, Bloom: , Difficulty: Easy, Min:, AACSB:

30. Which of the following is a condition of a binomial experiment?

a. only two outcomes are possible on each of the trials

Ans: D, LO: 4, Bloom: , Difficulty: Easy, Min:, AACSB:

a. the experiment has a sequence of n identical trials

Ans: C, LO: 4, Bloom: , Difficulty: Easy, Min:, AACSB:

32. Which of the following is a condition for a binomial probability experiment?

a. the experiment involves a number of “trials,” represented by n.

Ans: E, LO: 4, Bloom: , Difficulty: Easy, Min:, AACSB:

Ans: A, LO: 4, Bloom: , Difficulty: Medium, Min:, AACSB:

a. will always be less than the expected value of X.

Ans: A, LO: 4, Bloom: , Difficulty: Medium, Min:, AACSB:

Ans: A, LO: 4, Bloom: , Difficulty: Medium, Min:, AACSB:

36. The binominal distribution:

a. may be used to describe a discrete or a continuous random variable.

Ans: B, LO: 4, Bloom: , Difficulty: Easy, Min:, AACSB:

37. Which of the following is a condition for a Poisson probability experiment?

a. we need to be assessing the probability for the number of occurrences of some