Tutorial

MBC 3643
Quantitative Methods for Business Decisions
SEP 2022/2023

Ronnatasha Mujan Akah BAC22090037

Jackie Hii Yi Pin BAC22090001

Abang Norsyazwan Fakhri Bin Abang Kamis BAC22090042

Daniel Hii Sheng Fu BAC22090040

Muhammad Nafis Bin Sulai BAC22090067

Chai Jing Yii BAC22090039

Lecturer Name: Ms Emy Azizah Majid

Group Member:

Submission Date : 13 January 2023

Question 1
The Wall Street Journal/Harris Personal Finance poll asked 2082 adults if
they owned a home. A total of 1249 survey respondents answered Yes. Of
the 450 respondents in the 18–34 age group, 117 responded Yes.

A. What is the probability that a respondent to the poll owned a home?

Answer: P(A) = Number of ways event occurs

Total frequency

P(A) = 1249
2082
= 0.5999
= 0.60

Thus, the probability that respondent to the poll owned a home is 0.60.
B. What is the probability that a respondent in the 18–34 age
group owned a home?

Answer :P(B) = Number of ways event occurs

Total frequency
P(B) = 117
450
= 0.26

Thus, the probability that respondent in the 18-34 age group owned a home is 0.26.

C. What is the probability that a respondent to the poll did not own a
home?

Answer: P (A^C) = 1-P(A)

P(A^C) = 1- 0.60
= 0.40

Thus, probability that respondent to the poll did not own a home is 0.40.
D. What is the probability that a respondent in the 18–34 age
group did not own a home?

Answer: P(B^C) =1-P(B)

P(B^C) = 1- 0.26

= 0.74
 Thus, the probability that respondent in the 18-34 age group did not own a home is
0.74

Question 2
A financial manager made two new investments—one in the oil industry and one in
municipal bonds. After a one-year period, each of the investments will be classified as
either successful or unsuccessful. Consider the making of the two investments as an
experiment.
a. How many sample points exist for this experiment?

Four sample points exist for the experiment. They are as follows:
• Oil industry–Successful.
• Oil industry–Unsuccessful.
• Municipal bonds – Successful.
• Municipal bonds – Unsuccessful.

B.Show a tree diagram and list the sample points.

Let S = successful
U =unsuccessful

A) Oil Bond

E1
S

S E2
S

U U E3

U E4

B) Oil Bond
E1
U

E2
S U
E3
U S

E4
S
 C)Oil Bond
s E1

s
s E2

U
E3
U

U
E4

D) Oil Bond
s E1

s U

E2
s
E3
U

U E4

C) Let O = the event that the oil industry investment is successful and
M=the event that the municipal bond investment is successful. List the
sample points in O and in M.
O = {E1, E2}
M = {E1, E3}

D) List the sample points in the union of the events (O∪M).

(O U M) = {E1, E2, E3}

E) List the sample points in the intersection of the events (O∩M).

(O∩M).= {E1}

F) Are events 𝑂 and 𝑀 mutually exclusive? Explain.

Event O and M are not mutually exclusive because the have elements in common.

Question 3

In early 2003, President Bush proposed eliminating the taxation of dividends to

shareholders on the grounds that it was double taxation. Corporations pay taxes on the
earnings that are later paid out in dividends. In a poll of 671 Americans,
TechnoMetrica Market Intelligence found that 47 % favored the proposal, 44%
opposed it, and 9% were not sure. In looking at the responses across party lines the
poll showed that 29% of Democrats were in favor, 64% of Republicans were in favor,
and 48% of Independents were in favor.

a) How many of those polled favored elimination of the tax on dividends?

b) What is the conditional probability in favor of the proposal given the
person polled is a Democrat? is the party affiliation independent of
whether one is in favor of the proposal ?
c) If we assume people’s response were consistent with their own self-
interest, which group do you believe will benefit most from passage of the
proposal ?

a)
The data shows the percentage of the votes

a) favored (F) = 47%

b) opposed (O) = 44%
c) not sure (N) = 9%

The data states that 671 Americans were taking the part in the poll, which
means that 47% of them voted in favor of the proposal.

n = 671 . 0.47 = 315.37 = 315

In a poll of 671 Americans, 315 of them were in favor of the new proposal.

b) The data across party lines shows that favored votes are:
Democrat (D|F) = 29%
Republican (R|F) = 64%
Independent (I|F) = 48%

Conditional probability is product of the probability of the favored outcome and the
conditional outcome probability:

P (A n B) = P(A|B) . P(B)
P (D n F) = P(D|F) . P(F)
P (D n F) = 0.29. 0.47 = 0.1363

Probability that the polled person is a Democrat and voted in favor of the proposal is
0.1363.

c) The party affiliation is not independent because probabilities are not equal.
d)The Republicans will have highest benefit of the proposal because they have highest
percentage in voting in favor.
Question 4

A study of 31,000 hospital admissions in New York State found that 4 % of the
admissions led to treatment-caused injuries. One – seventh of these treatment –
caused injuries resulted in death, and one- fourth were caused by negligence.
Malpractices claims were filled in one out of 7.5 cases involving negligence, and
payments were made in one out of every two claims.
a. What is the probability a person admitted to the hospital will suffer a
treatment- caused injury due to negligence?
b. What is the probability a person admitted to the hospital will die form a
treatment-caused injury?
c. In the case of a negligent treatment-caused injury, what is the probability a
malpractice claim will be paid?

Step 1 :

P (injury) = 4% = 0.04
P (death|injury) = 1 = 0.1429
7
P (negligence| injury) = 1 = 0.25
4
P (claim|negligence) = 1 = 0.1333
7.5
P (payment|claim) = 1 = 0.5
2

Step 2 :

P (A and B) = P(A) x P(B|A) = P(B) x P(A|B)

Step 3 :

P ( negligence and injury )

= P (injury) x P ( negligency|injury )
= 0.04 x 0.25
= 0.01

Step 4 :

= 0.01

d. What is the probability a person admitted to the hospital will die from a
treatment – caused injury?
= 0.006

e. In the case of a negligent treatment-caused injury, what is the probability a

malpractice claim will be paid?

= 0.1333 x 0.65 = 0.06665

 Question 5

a.Total Frequency = 50

P = 11+14+13
50
= 0.76

b. P= 4+8
50
= 0.24

Question 6

a.
Education Level < 25 25.0-49.9 50.0- 75.0-99.9 >100 Total
74.9
Hot H.S. Graduate 0.0571 0.0469 0.0188 0.0073 0.005 0.1351
H. s. Graduate 0.0667 0.0929 0.0682 0.0358 0.0362 0.2997
Some College 0.0381 0.0713 0.0634 0.0441 0.0553 0.2721
Bachelor’s Degree 0.012 0.0204 0.0386 0.035 0.0729 0.187
Beyond Bach. Deg 0.0039 0.0112 0.0173 0.0168 0.0568 0.1061
Total 0.1777 0.2508 0.2064 0.139 0.2262 1

a. P ( Not Hs) = 0.1351

b. P ( Bachelor or more ) = P (bachelor) + P (beyond)

= 0.187 + 0.1061
= 0.2931

c. P ( Bachelor or more ) = P (100 + bachelor )

P ( bachelor )

= 0.0729
0.187
= 0.3898
d. P (under $ 25,000) = 0.1777
e. P (bachelors under $ 25,000 ) = P (< 24 & Bachelors )
P (bachelors)
= 0.012
0.187
= 0.0642
g.It is not because probability household by someone with a bachelor less
than $25,000 is 0.0642, however probability of household having below
$25,000 are 0.1777.
 Question 7

Age Group Applied to More Than One+ School

YES NO TOTAL
23 and under 0.1026 0.0996 0.2022
24-26 0.1482 0.1878 0.3360
27-30 0.0917 0.1328 0.2245
31-35 0.0327 0.0956 0.1283
36 and over 0.0253 0.0837 0.1090
TOTAL 0.4005 0.5995 1.0000

b) P (23 or under) = 0.2022

c) P (older than 26) = 1.000 – 0.3360 – 0.2022

= 0.4618
d) P (more than one school) = 0.4005

Question 8.

a) P (24-26 | Yes) = 0.1482/0.4005 = 0.3700

b) P (Yes | 36 and over) = 0.0253/0.1090 = 0.2321

c) P (24-26 or yes) = 0.1482 + 0.1878 + 0.1026 + 0.0917 +0.0327 + 0.0253

= 0.5883

d) P (31 or more | No) = (0.0956 + 0.0837) /0.5995= 0.2991

e) No, because P (Yes | 36 and over) = 0.2321 is not equal to P (Yes) =

0.4005.

Question 9.

Let I be important
Let NI be not important
Let M be male
Let F be female

a) P (I) = 0.49

b) P (I | M) = 0.22/0.50 = 0.44

c) P (I | F) = 0.27/0.50 = 0.54

d) No, because the P (I | M) = 0.44 and P (I | F) = 0.54 are not equal to P (I) =
0.49.
 e) Yes, male and female respondents have different attitude because the level
of risk is not independent of the gender of the respondent.

Question 10

A) P ( B / S ) = 0.12/0.40 = 0.30 , Yes we can continue the advertisement since

P(B/S) >P(B)

B) It is preferable to continue advt as chances of purchase after seeing advt is more

than purchase without seeing advt.

C) P (B/S) = 0.1 / 0.3 = 0.3333, The second advt has the bigger effect since
conditional probabilities is more here.

Question 11

A) 200 / 800 = 0.25

B) 100 / 800 = 0.125
C) P (A ∩ B ) = 10 / 800 = 0.01250
D) P (A | B ) = 0.0125 / 0.125 = 0.1
E) No. Because P (A|B) = 0.1 no equal to P (A) = 0.25

Question 12

a)
Young adults (18- Older adults Total
29)
Blogger 0.0432 0.0368 0.0800
Non-blogger 0.2208 0.6992 0.9200
Total 0.2640 0.7360 1.0000

b) P (Blogger, Young adult) = 0.0432

c) P (Blogger and Young adult) = 0.0800 + 0.2208

= 0.3008

d) P (Blogger | Young adult – 24) = 0.0432 / 0.2640 = 0.1636

7. An MBA new – matriculants survey provided the following data for 2018 students.