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Essential Statistics in Business and Economics 3rd Edition Doane Test Bank Full Chapter PDF
Essential Statistics in Business and Economics 3rd Edition Doane Test Bank Full Chapter PDF
Answer: TRUE
Explanation: The PDF is the same height for all X values.
Difficulty: 1 Easy
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2) The height and width of a continuous uniform distribution's PDF are the same.
Answer: FALSE
Explanation: The PDF height must be 1/(b − a) so that the total area is unity.
Difficulty: 1 Easy
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Answer: TRUE
Explanation: Apply the formulas for the uniform distribution mean and standard
deviation. The standard deviation is [(800 − 0)2/12]1/2 = 230.94.
Difficulty: 2 Medium
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
1
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
4) A continuous uniform distribution U(100,200) will have the same standard deviation as a
continuous uniform distribution U(200,300).
Answer: TRUE
Explanation: In the standard deviation formula, (b − a)2 is the same for both these examples.
Difficulty: 2 Medium
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
5) For a continuous uniform distribution U(200,400), the parameters are μ = 300 and σ = 100.
Answer: FALSE
Explanation: The standard deviation is [(400 − 200)2/12]1/2 = 57.7.
Difficulty: 2 Medium
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
6) The exponential distribution describes the number of arrivals per unit of time.
Answer: FALSE
Explanation: Arrivals per unit of time would be Poisson (but waiting time is exponential).
Difficulty: 1 Easy
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Answer: TRUE
Explanation: The exponential PDF clearly shows extreme right-skewness.
Difficulty: 1 Easy
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
8) If arrivals follow a Poisson distribution, waiting times follow the exponential distribution.
Answer: TRUE
Explanation: Poisson arrivals (discrete) imply exponential waiting times (continuous).
Difficulty: 1 Easy
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
9) For a continuous random variable, the total area beneath the PDF will be greater than zero but
less than one.
Answer: FALSE
Explanation: If it is a PDF, the total area must be 1.
Difficulty: 1 Easy
Topic: 07.01 Continuous Probability Distributions
Learning Objective: 07-01 Define a continuous random variable.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
10) The exponential distribution is continuous and the Poisson distribution is discrete, yet the
two distributions are closely related.
Answer: TRUE
Explanation: Poisson arrivals (discrete) imply exponential waiting times (continuous).
Difficulty: 2 Medium
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
11) The mean, median, and mode of a normal distribution will always be the same.
Answer: TRUE
Explanation: A normal distribution is perfectly symmetric.
Difficulty: 2 Medium
Topic: 07.03 Normal Distribution
Learning Objective: 07-03 Know the form and parameters of the normal distribution.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
3
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
12) There is a simple formula for normal areas, but we prefer a table for greater accuracy.
Answer: FALSE
Explanation: We have a formula for the PDF, but there is no exact formula for areas under the
curve.
Difficulty: 2 Medium
Topic: 07.03 Normal Distribution
Learning Objective: 07-03 Know the form and parameters of the normal distribution.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Answer: TRUE
Explanation: All normal distributions look the same except for scaling.
Difficulty: 1 Easy
Topic: 07.03 Normal Distribution
Learning Objective: 07-03 Know the form and parameters of the normal distribution.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Answer: FALSE
Explanation: Only the standardized normal is N(0,1).
Difficulty: 1 Easy
Topic: 07.03 Normal Distribution
Learning Objective: 07-03 Know the form and parameters of the normal distribution.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
15) We would use a normal distribution to model the waiting time until the next Florida
hurricane strike.
Answer: FALSE
Explanation: Hurricane arrivals might be regarded as Poisson events, so waiting times are
exponential.
Difficulty: 2 Medium
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
4
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
16) Experience suggests that 4 percent of all college students have had a tonsillectomy. In a
sample of 300 college students, we need to find the probability that at least 10 have had a
tonsillectomy. It is acceptable to use the normal distribution to estimate this probability.
Answer: TRUE
Explanation: The quick rule is nπ ≥ 10 and n(1 − π) ≥ 10, which is the case in this example.
Difficulty: 2 Medium
Topic: 07.05 Normal Approximations
Learning Objective: 07-06 Use the normal approximation to a binomial or a Poisson.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
17) The normal is a good approximation to the binomial when n is greater than or equal to 10.
Answer: FALSE
Explanation: Without knowing π we cannot be sure. The quick rule is nπ ≥ 10 and n(1 − π) ≥
10.
Difficulty: 1 Easy
Topic: 07.05 Normal Approximations
Learning Objective: 07-06 Use the normal approximation to a binomial or a Poisson.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
18) The true proportion of accounts receivable with some kind of error is 4 percent for Venal
Enterprises. If an auditor randomly samples 50 accounts receivable, it is acceptable to use the
normal approximation to estimate the probability that fewer than two will contain errors.
Answer: FALSE
Explanation: The quick rule is nπ ≥ 10 and n(1 − π) ≥ 10, which is not fulfilled in this case.
Difficulty: 2 Medium
Topic: 07.05 Normal Approximations
Learning Objective: 07-06 Use the normal approximation to a binomial or a Poisson.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
5
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
19) The normal distribution is a good approximation to the binomial if n ≥ 30.
Answer: FALSE
Explanation: Without knowing π we cannot be sure. The quick rule is nπ ≥ 10 and n(1 − π) ≥
10.
Difficulty: 1 Easy
Topic: 07.05 Normal Approximations
Learning Objective: 07-06 Use the normal approximation to a binomial or a Poisson.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
20) The normal distribution is a good approximation to the binomial if n = 200 and π = .03.
Answer: FALSE
Explanation: The quick rule is nπ ≥ 10 and n(1 − π) ≥ 10, which is not fulfilled in this case.
Difficulty: 1 Easy
Topic: 07.05 Normal Approximations
Learning Objective: 07-06 Use the normal approximation to a binomial or a Poisson.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
21) The normal distribution is a good approximation to the binomial if n = 25 and π = .50.
Answer: TRUE
Explanation: The quick rule is nπ ≥ 10 and n(1 − π) ≥ 10, which is fulfilled in this case.
Difficulty: 1 Easy
Topic: 07.05 Normal Approximations
Learning Objective: 07-06 Use the normal approximation to a binomial or a Poisson.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Answer: FALSE
Explanation: The PDF of the exponential shows that it is always right-skewed.
Difficulty: 1 Easy
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
6
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
23) The number of lightning strikes in a day in Miami is a continuous random variable.
Answer: FALSE
Explanation: The "number of" anything is discrete.
Difficulty: 1 Easy
Topic: 07.01 Continuous Probability Distributions
Learning Objective: 07-01 Define a continuous random variable.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
24) The area under a normal curve is 1 only if the distribution is standardized N(0,1).
Answer: FALSE
Explanation: Any normal distribution has a total area of one under the PDF.
Difficulty: 1 Easy
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-03 Know the form and parameters of the normal distribution.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
25) The area under an exponential curve can exceed 1 because the distribution is right-skewed.
Answer: FALSE
Explanation: If it is a PDF, the total area under the PDF is one.
Difficulty: 2 Medium
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
7
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
26) A machine dispenses water into a glass. Assuming that the amount of water dispensed
follows a continuous uniform distribution from 10 ounces to 16 ounces, the average amount of
water dispensed by the machine is
A) 12 ounces.
B) 13 ounces.
C) 14 ounces.
D) 16 ounces.
Answer: B
Explanation: The mean is halfway between the end points of the distribution.
Difficulty: 1 Easy
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
27) A machine dispenses water into a glass. Assuming that the amount of water dispensed
follows a continuous uniform distribution from 10 ounces to 16 ounces, the standard deviation of
the amount of water dispensed is about
A) 1.73 ounces.
B) 3.00 ounces.
C) 0.57 ounce.
D) 3.51 ounces.
Answer: A
Explanation: The standard deviation is [(16 − 10)2/12]1/2 = 1.73.
Difficulty: 2 Medium
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
8
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
28) A machine dispenses water into a glass. Assuming that the amount of water dispensed
follows a continuous uniform distribution from 10 ounces to 16 ounces, what is the probability
that 13 or more ounces will be dispensed in a given glass?
A) 0.1666
B) 0.3333
C) 0.5000
D) 0.6666
Answer: C
Explanation: Half the area is above 13.
Difficulty: 2 Medium
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Answer: C
Explanation: The mean is halfway between the end points of the distribution.
Difficulty: 1 Easy
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
9
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
30) A random variable X is best described by a continuous uniform distribution from 20 to 45
inclusive. The standard deviation of this distribution is approximately
A) 52.1
B) 32.5
C) 6.85
D) 7.22
Answer: D
Explanation: The standard deviation is [(45 − 20)2/12]1/2 = 7.22.
Difficulty: 2 Medium
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Answer: B
Explanation: The desired area is 10/25 = 0.40.
Difficulty: 2 Medium
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
10
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
32) The Excel function = 800*RAND() would generate random numbers with standard deviation
approximately equal to
A) 200
B) 188
C) 231
D) 400
Answer: C
Explanation: The standard deviation is [(800 − 0)2/12]1/2 = 230.94.
Difficulty: 2 Medium
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
33) The Excel function = 40*RAND() would generate random numbers with standard deviation
approximately equal to
A) 13.33
B) 20.00
C) 11.55
D) 19.27
Answer: C
Explanation: The standard deviation is [(40 − 0)2/12]1/2 = 11.55.
Difficulty: 2 Medium
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
11
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
34) If arrivals occur at a mean rate of 3.6 events per hour, the exponential probability of waiting
more than 0.5 hour for the next arrival is
A) 0.2407
B) 0.1653
C) 0.1222
D) 0.5000
Answer: B
Explanation: P(X > 0.50) = exp(−3.6 × 0.50) = 0.1653.
Difficulty: 2 Medium
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
35) If arrivals occur at a mean rate of 3.6 events per hour, the exponential probability of waiting
less than 0.5 hour for the next arrival is
A) 0.7122
B) 0.8105
C) 0.8347
D) 0.7809
Answer: C
Explanation: P(X < 0.50) = 1 − exp(−3.6 × 0.50) = 1 − 0.1653 = 0.8347.
Difficulty: 2 Medium
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
12
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
36) If arrivals occur at a mean rate of 2.6 events per minute, the exponential probability of
waiting more than 1.5 minutes for the next arrival is
A) 0.0202
B) 0.0122
C) 0.0535
D) 0.2564
Answer: A
Explanation: P(X > 1.5) = exp(−2.6 × 1.50) = 0.0202.
Difficulty: 2 Medium
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
37) If arrivals occur at a mean rate of 1.6 events per minute, the exponential probability of
waiting less than 1 minute for the next arrival is
A) 0.2019
B) 0.7104
C) 0.8812
D) 0.7981
Answer: D
Explanation: P(X < 1) = 1 − exp(−1.6 × 1) = 1 − 0.2019 = 0.7981.
Difficulty: 2 Medium
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
13
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
38) Bob's z-score for the last exam was 1.52 in Prof. Axolotl's class BIO 417, "Life Cycle of the
Ornithorhynchus." Bob said, "Oh, good, my score is in the top 10 percent." Assuming a normal
distribution of scores, is Bob right?
A) Yes
B) No
C) Must have n to answer.
Answer: A
Explanation: P(Z < 1.52) = 0.9357.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
39) The lengths of brook trout caught in a certain Colorado stream are normally distributed with
a mean of 14 inches and a standard deviation of 3 inches. What proportion of brook trout caught
will be between 12 and 18 inches in length?
A) 0.6563
B) 0.6826
C) 0.2486
D) 0.4082
Answer: A
Explanation: P(12 < X < 18) = P(−0.67 < Z < 1.33) = 0.6568 (from Appendix C) or 0.6563
using Excel.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
14
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
40) The lengths of brook trout caught in a certain Colorado stream are normally distributed with
a mean of 14 inches and a standard deviation of 3 inches. The first quartile for the lengths of
brook trout would be
A) 16.01 inches.
B) 11.00 inches.
C) 11.98 inches.
D) 10.65 inches.
Answer: C
Explanation: Using Excel = NORM.INV(0.25,14,3) = 11.98, or Q1 = 14 − 0.675(3) = 11.975
using Appendix C.
Difficulty: 3 Hard
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-05 Solve for z or x for a given normal probability using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
41) The lengths of brook trout caught in a certain Colorado stream are normally distributed with
a mean of 14 inches and a standard deviation of 3 inches. What lower limit should the State
Game Commission set on length if it is desired that 80 percent of the catch may be kept by
fishers?
A) 12.80 inches
B) 11.48 inches
C) 12.00 inches
D) 9.22 inches
Answer: B
Explanation: Using Excel = NORM.INV(0.20,14,3) = 11.475, or X = 14 − 0.84(3) = 11.48
using Appendix C.
Difficulty: 3 Hard
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-05 Solve for z or x for a given normal probability using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
15
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
42) In Melanie's Styling Salon, the time to complete a simple haircut is normally distributed with
a mean of 25 minutes and a standard deviation of 4 minutes. What percentage of customers
require less than 32 minutes for a simple haircut?
A) 95.99 percent
B) 99.45 percent
C) 97.72 percent
D) 45.99 percent
Answer: A
Explanation: Using Excel = NORMDIST(32,25,4,1) = 0.9599, or use z = (32 − 25)/4 = 1.75
with Appendix C.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
43) In Melanie's Styling Salon, the time to complete a simple haircut is normally distributed with
a mean of 25 minutes and a standard deviation of 4 minutes. The slowest quartile of customers
will require more than how many minutes for a simple haircut?
A) 3(n + 1)/4 minutes
B) 26 minutes
C) 25.7 minutes
D) 27.7 minutes
Answer: D
Explanation: Using Excel = NORM.INV(0.75,25,4) = 27.698, or Q3 = 25 + 0.675(4) = 27.7
using Appendix C.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-05 Solve for z or x for a given normal probability using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
16
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
44) In Melanie's Styling Salon, the time to complete a simple haircut is normally distributed with
a mean of 25 minutes and a standard deviation of 4 minutes. For a simple haircut, the middle 90
percent of the customers will require
A) between 18.4 and 31.6 minutes.
B) between 19.9 and 30.1 minutes.
C) between 20.0 and 30.0 minutes.
D) between 17.2 and 32.8 minutes.
Answer: A
Explanation: The 90 percent range is μ ± 1.645σ.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-05 Solve for z or x for a given normal probability using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
45) The area under the normal curve between z = 0 and z = 1 is ________ the area under the
normal curve between z = 1 and z = 2.
A) less than
B) greater than
C) equal to
Answer: B
Explanation: The standard normal PDF grows closer to the axis as z increases to the right of
zero.
Difficulty: 1 Easy
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
17
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
46) The price-earnings ratio for firms in a given industry follows the normal distribution. In this
industry, a firm whose price-earnings ratio has a standardized value of z = 1.00 is approximately
in the highest ________ percent of firms in the industry.
A) 16 percent
B) 34 percent
C) 68 percent
D) 75 percent
Answer: A
Explanation: About 15.86 percent of the area is above one standard deviation.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Answer: D
Explanation: P(Z > 0.67) = 1 − P(Z < 0.67) = 1 − 0.2514 = 0.7486.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
18
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
48) The MPG (miles per gallon) for a certain compact car is normally distributed with a mean of
31 and a standard deviation of 0.8. What is the probability that the MPG for a randomly selected
compact car would be less than 32?
A) 0.3944
B) 0.8944
C) 0.1056
D) 0.5596
Answer: B
Explanation: P(X < 32) = P(Z < 1.25) = 0.8944.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
49) The probability is 0.80 that a standard normal random variable is between −z and +z. The
value of z is approximately
A) 1.28
B) 1.35
C) 1.96
D) 1.45
Answer: A
Explanation: For tail areas of 0.1000 we would use z = 1.282.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-05 Solve for z or x for a given normal probability using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
19
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
50) The time required for a citizen to complete the 2010 U.S. Census "long" form is normally
distributed with a mean of 40 minutes and a standard deviation of 10 minutes. What proportion
of the citizens will require less than one hour?
A) 0.4772
B) 0.9772
C) 0.9974
D) 0.9997
Answer: B
Explanation: P(X < 60) = P(Z < 2.00) = 0.9772.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
51) The time required for a citizen to complete the 2010 U.S. Census "long" form is normally
distributed with a mean of 40 minutes and a standard deviation of 10 minutes. The slowest 10
percent of the citizens would need at least how many minutes to complete the form?
A) 27.2
B) 35.8
C) 52.8
D) 59.6
Answer: C
Explanation: Using Excel = NORM.INV(0.90,40,10) = 52.82, or 40 + 1.282(10) = 52.82 using
Appendix C.
Difficulty: 3 Hard
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-05 Solve for z or x for a given normal probability using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
20
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
52) The time required for a citizen to complete the 2010 U.S. Census "long" form is normally
distributed with a mean of 40 minutes and a standard deviation of 10 minutes. What is the third
quartile (in minutes) for the time required to complete the form?
A) 44.75
B) 46.75
C) 47.50
D) 52.50
Answer: B
Explanation: Using Excel = NORM.INV(0.75,40,10) = 46.75, or Q3 = 40 + 0.675(10) = 46.75
using Appendix C.
Difficulty: 3 Hard
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-05 Solve for z or x for a given normal probability using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
53) Exam scores were normal in BIO 200. Jason's exam score was one standard deviation above
the mean. What percentile is he in?
A) 68th
B) 75th
C) 78th
D) 84th
Answer: D
Explanation: About 15.87 percent of the area lies above one standard deviation.
Difficulty: 1 Easy
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
21
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
54) Compared to the area between z = 1.00 and z = 1.25, the area between z = 2.00 and z = 2.25
in the standard normal distribution will be
A) smaller.
B) larger.
C) the same.
D) impossible to compare without knowing μ and σ.
Answer: A
Explanation: The normal PDF approaches the axis as z increases beyond zero.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
55) A large number of applicants for admission to graduate study in business are given an
aptitude test. Scores are normally distributed with a mean of 460 and standard deviation of 80.
What fraction of applicants would you expect to have scores of 600 or above?
A) 0.0401
B) 0.4599
C) 0.5401
D) 0.0852
Answer: A
Explanation: P(X > 600) = P(Z > 1.75) = 0.0401.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
22
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
56) A large number of applicants for admission to graduate study in business are given an
aptitude test. Scores are normally distributed with a mean of 460 and standard deviation of 80.
What fraction of the applicants would you expect to have a score of 400 or above?
A) 0.2734
B) 0.7734
C) 0.7266
D) 0.7500
Answer: B
Explanation: P(X > 400) = P(Z > − 0.75) = 0.7734.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
57) A large number of applicants for admission to graduate study in business are given an
aptitude test. Scores are normally distributed with a mean of 460 and standard deviation of 80.
The top 2.5 percent of the applicants would have a score of at least (choose the nearest integer)
A) 606
B) 617
C) 600
D) 646
Answer: B
Explanation: Using z = 1.96, we get X = 460 + 1.96 × 80 = 616.8.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-05 Solve for z or x for a given normal probability using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
23
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
58) If the random variable Z has a standard normal distribution, then P(1.25 ≤ Z ≤ 2.17) is
A) 0.0906
B) 0.9200
C) 0.4700
D) 0.3944
Answer: A
Explanation: P(Z ≤ 2.17) − P(Z ≤ 1.25) = 0.0906.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
59) If the random variable Z has a standard normal distribution, then P(Z ≤ − 1.37) is
A) 0.9147
B) 0.4147
C) 0.5016
D) 0.0853
Answer: D
Explanation: From Appendix C, we get the left-tail area of 0.0853.
Difficulty: 1 Easy
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
60) Assume that X is normally distributed with a mean μ = $64. Given that P(X ≥ $75) = 0.2981,
we can calculate that the standard deviation of X is approximately
A) $20.76
B) $13.17
C) $5.83
D) $7.05
Answer: A
Explanation: For a right-tail area of 0.2981, we need z = −0.53. So with x = 75, we set z = (x −
μ)/σ and solve for σ.
Difficulty: 3 Hard
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-05 Solve for z or x for a given normal probability using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
24
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written consent of McGraw-Hill Education.
61) The standard deviation of a normal random variable X is $20. Given that P(X ≤ $10) =
0.1841 we can determine that the mean of the distribution is equal to
A) $13
B) $26
C) $20
D) $28
Answer: D
Explanation: For a left-tail area of 0.1841, we need z = −0.90. With x = 10, we set z = (x − μ)/σ
and solve for μ.
Difficulty: 3 Hard
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-05 Solve for z or x for a given normal probability using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
62) The random variable X is normally distributed with mean of 80 and variance of 36. The 67th
percentile of the distribution is
A) 72.00
B) 95.84
C) 90.00
D) 82.64
Answer: D
Explanation: Since P(Z < 0.44) = 0.6700 (from Appendix C), we get 80 + 0.44(6) = 82.64.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-05 Solve for z or x for a given normal probability using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
63) The area under the normal curve between the 20th and 70th percentiles is equal to
A) 0.7000
B) 0.5000
C) 0.9193
Answer: B
Explanation: Logically, this must be 0.70 − 0.20 = 0.50, as you can verify from Appendix C.
Difficulty: 3 Hard
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
25
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
64) The variable in a normal distribution can assume any value between
A) −3 and +3
B) −4 and +4
C) −1 and +1
D) −∞ and +∞
Answer: D
Explanation: Almost all the area is within −3 and +3, but the curve never quite touches the z-
axis.
Difficulty: 1 Easy
Topic: 07.03 Normal Distribution
Learning Objective: 07-03 Know the form and parameters of the normal distribution.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
65) What are the mean and standard deviation for the standard normal distribution?
A) μ = 0, σ = 0
B) μ = 1, σ = 1
C) μ = 1, σ = 0
D) μ = 0, σ = 1
Answer: D
Explanation: It's a standardized normal distribution, so the mean must be zero.
Difficulty: 1 Easy
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-03 Know the form and parameters of the normal distribution.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
66) Any two normal curves are the same except for their
A) standard deviations.
B) means.
C) standard deviations and means.
D) standard deviations, means, skewness, and kurtosis.
Answer: C
Explanation: We write N(μ,σ) to show the similar form of all normals.
Difficulty: 1 Easy
Topic: 07.03 Normal Distribution
Learning Objective: 07-03 Know the form and parameters of the normal distribution.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
26
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
67) Light bulbs are normally distributed with an average lifetime of 1000 hours and a standard
deviation of 250 hours. The probability that a light bulb picked at random will last less than 1500
hours is about
A) 97.72 percent.
B) 95.44 percent.
C) 75.00 percent.
D) 68.00 percent.
Answer: A
Explanation: P(X < 1500) = P(Z < 2.00) = 0.9772 from Appendix C (or from Excel).
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Answer: B
Explanation: Review the z-score transformation.
Difficulty: 1 Easy
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-03 Know the form and parameters of the normal distribution.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
27
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
69) Regarding continuous probability distributions, which statement is correct?
A) The exponential distribution may be skewed left or right.
B) The uniform distribution is never skewed.
C) The normal distribution is sometimes skewed.
D) The standard normal distribution is platykurtic.
Answer: B
Explanation: Review the characteristics of these distributions.
Difficulty: 2 Medium
Topic: 07.03 Normal Distribution
Learning Objective: 07-03 Know the form and parameters of the normal distribution.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
70) Which model best describes your waiting time until you get the next nonworking web URL
("This page cannot be displayed") as you click on various websites for Florida condo rentals?
A) Standard normal
B) Uniform
C) Normal
D) Exponential
Answer: D
Explanation: The waiting time until the next event resembles an exponential distribution.
Difficulty: 1 Easy
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
28
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
71) On average, a major earthquake (Richter scale 6.0 or above) occurs 3 times a decade in a
certain California county. What is the probability that less than six months will pass before the
next earthquake?
A) 0.1393
B) 0.8607
C) 0.0952
D) 0.9048
Answer: A
Explanation: Set λ = 3/120 = 0.025 earthquake/month so P(X < 6) = 1 − exp(− 0.025 × 6) = 1 −
0.8607 = 0.1393.
Difficulty: 3 Hard
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
72) If the mean time between in-flight aircraft engine shutdowns is 12,500 operating hours, the
90th percentile of waiting times to the next shutdown will be
A) 20,180 hours.
B) 28,782 hours.
C) 23,733 hours.
D) 18,724 hours.
Answer: B
Explanation: Set λ = 1/12500. To solve for x, set the left-tail area 1− exp(−λx) equal to 0.90.
Then solve for x by taking logs of both sides.
Difficulty: 3 Hard
Topic: 07.06 Exponential Distribution
Learning Objective: 07-08 Solve for x for a given exponential probability.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
29
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
73) On average, 15 minutes elapse between discoveries of fraudulent corporate tax returns in a
certain IRS office. What is the probability that less than 30 minutes will elapse before the next
fraudulent corporate tax return is discovered?
A) 0.1353
B) 0.6044
C) 0.7389
D) 0.8647
Answer: D
Explanation: P(X < 30) = 1 − exp(−λx) = 1 − exp(−(1/15) × 30) = 1 − 0.1353 = 0.8647.
Difficulty: 3 Hard
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
74) If the mean time between unscheduled maintenance of LCD displays in a hospital's CT scan
facility is 4,000 operating hours, what is the probability of unscheduled maintenance in the next
5,000 hours?
A) 0.8000
B) 0.7135
C) 0.2865
D) 0.5000
Answer: B
Explanation: P(X < 5000) = 1 − exp(−λx) = 1 − exp(−(1/4000) × 5000) = 1 − 0.2865 = 0.7135.
Difficulty: 2 Medium
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
30
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written consent of McGraw-Hill Education.
75) A certain assembly line at Vexing Manufacturing Company averages 30 minutes between
breakdowns. What is the probability that less than 6 minutes will elapse before the next
breakdown?
A) 0.8187
B) 0.0488
C) 0.1813
D) 0.2224
Answer: C
Explanation: (X < 6) = 1 − exp(−λx) = 1 − exp(−(1/30) × 6) = 1 − 0.8187 = 0.1813.
Difficulty: 3 Hard
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
76) A certain assembly line at Vexing Manufacturing Company averages 30 minutes between
breakdowns. The median time between breakdowns is
A) 30.0 minutes.
B) 35.7 minutes.
C) 25.4 minutes.
D) 20.8 minutes.
Answer: D
Explanation: Set λ = 1/30. To solve for x, set the right-tail area exp(−λx) equal to 0.50. Then
solve for x by taking logs of both sides.
Difficulty: 3 Hard
Topic: 07.06 Exponential Distribution
Learning Objective: 07-08 Solve for x for a given exponential probability.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
31
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
77) Which probability model is most appropriate to describe the waiting time (working days)
until an office photocopier breaks down (i.e., requires unscheduled maintenance)?
A) Normal
B) Uniform
C) Exponential
D) Poisson
Answer: C
Explanation: Poisson breakdowns suggest exponential waiting time.
Difficulty: 2 Medium
Topic: 07.06 Exponential Distribution
Learning Objective: 07-07 Find the exponential probability for a given x.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
78) On the last exam in FIN 417, "Capital Budgeting Strategies" Bob's z-score was −1.15. Bob
said, "Yipe! My score is within the bottom quartile." Assuming a normal distribution, is Bob
right?
A) Yes
B) No
C) Must know the class size to answer
Answer: A
Explanation: The bottom quartile would be below z = − 0.675 so Bob is indeed below that
point.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
32
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
79) Exam scores were normal in MIS 200. Jason's exam score was 1.41 standard deviations
above the mean. What percentile is he in?
A) 68th
B) 75th
C) 84th
D) 92nd
Answer: D
Explanation: P(Z < 1.41) = 0.9207.
Difficulty: 1 Easy
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
80) Compared to the area between z = 0.50 and z = 0.75, the area between z = 1.50 and z = 1.75
in the standard normal distribution will be
A) smaller
B) larger
C) the same
Answer: A
Explanation: The normal PDF approaches the axis as z increases beyond zero, so areas get
smaller.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
33
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
81) If GMAT scores for applicants at Oxnard Graduate School of Business are N(500, 50), then
the top 5 percent of the applicants would have a score of at least (choose the nearest integer)
A) 575
B) 582
C) 601
D) 608
Answer: B
Explanation: The top 5 percent would require z = 1.645, so x = 500 + 1.645(50) = 582.25.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-05 Solve for z or x for a given normal probability using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
82) If the random variable Z has a standard normal distribution, then P(1.17 ≤ Z ≤ 2.26) is
A) 0.1091
B) 0.1203
C) 0.2118
D) 0.3944
Answer: A
Explanation: Subtract P(Z ≤ 2.26) − P(Z ≤ 1.17) = 0.9881 − 0.8790 = 0.1091.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
83) If the random variable Z has a standard normal distribution, then P(Z ≤ −1.72) is
A) 0.9573
B) 0.0446
C) 0.5016
D) 0.0427
Answer: D
Explanation: Use Appendix C or Excel = NORM.S.DIST(−1.72,1).
Difficulty: 1 Easy
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-04 Find the normal probability for a given z or x using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
34
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
84) Excel's = 100*RAND() function produces continuous random numbers that are uniformly
distributed between 0 and 100. The standard deviation of this distribution is approximately
A) 50.00
B) 28.87
C) 33.33
D) 25.00
Answer: B
Explanation: The standard deviation of a uniform distribution is [(b − a)2/12]1/2 = [(100 −
0)2/12]1/2.
Difficulty: 2 Medium
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
85) Excel's = RAND() function produces random numbers that are uniformly distributed
between 0 and 1. The mean of this distribution is approximately
A) 0.5000
B) 0.2500
C) 0.3333
D) 0.2887
Answer: A
Explanation: The mean is halfway between the end points.
Difficulty: 1 Easy
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
35
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
86) Excel's = RAND() function produces random numbers that are uniformly distributed from 0
to 1. What is the probability that the random number exceeds 0.75?
A) 75 percent
B) 50 percent
C) 25 percent
Answer: C
Explanation: This is the upper 25 percent.
Difficulty: 1 Easy
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
87) Which is the correct Excel formula for the 80th percentile of a distribution that is N(475,
33)?
A) = NORM.DIST(80, 475, 33,1)
B) = NORM.INV(0.80, 475, 33)
C) = NORM.S.INV((80 − 475)/33)
Answer: B
Explanation: Review the Excel functions in Appendix J.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-05 Solve for z or x for a given normal probability using tables or Excel.
Bloom's: Remember
AACSB: Technology
Accessibility: Keyboard Navigation
88) If arrivals follow a Poisson distribution with mean 1.2 arrivals per minute, find the 75th
percentile of waiting times until the next arrival (i.e., 75 percent below).
A) 1.155 minutes (69.3 seconds)
B) 0.240 minute (14.4 seconds)
C) 1.919 minutes (115.1 seconds)
Answer: A
Explanation: Set λ = 1.2. To solve for x, set the right-tail area exp(−λx) equal to 0.25. Then
solve for x by taking logs of both sides.
Difficulty: 3 Hard
Topic: 07.06 Exponential Distribution
Learning Objective: 07-08 Solve for x for a given exponential probability.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
36
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
89) A software developer makes 175 phone calls to its current customers. There is an 8 percent
chance of reaching a given customer (instead of a busy signal, no answer, or answering
machine). The normal approximation of the probability of reaching at least 20 customers is
A) 0.022
B) 0.007
C) 0.063
D) 0.937
Answer: C
Explanation: Set n = 175 and π = 0.08. Calculate μ = nπ = (175)(0.08) = 14 and σ = [nπ(1 −
π)]1/2 = [175(0.08)(1 − 0.08)]1/2 = 3.588872. Use x = 19.5 (with the continuity correction) and
calculate the binomial P(X ≥ 20) ≈ P(z ≥ 1.532515) using z = (x − μ)/σ = 1.532515.
Difficulty: 3 Hard
Topic: 07.05 Normal Approximations
Learning Objective: 07-06 Use the normal approximation to a binomial or a Poisson.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
90) For Gardyloo Manufacturing, the true proportion of accounts receivable with some kind of
error is 0.20. If an auditor randomly samples 225 accounts receivable, what is the approximate
normal probability that 39 or fewer will contain errors?
A) 0.1797
B) 0.2097
C) 0.1587
D) 0.0544
Answer: A
Explanation: Set μ = nπ and σ = [nπ(1 − π)]1/2 and convert x = 39.5 (using the continuity
correction) to a z score with z = (x − μ)/σ. Set n = 225 and π = 0.20. Calculate μ = nπ =
(225)(0.20) = 45 and σ = [nπ(1 − π)]1/2 = [225(0.20)(1 − 0.20)]1/2 = 6.000. Use x = 39.5 (with
the continuity correction) and calculate the binomial P(X ≤ 39) ≈ P(z ≤ − 0.916667) using z = (x
− μ)/σ = − 0.916667.
Difficulty: 3 Hard
Topic: 07.05 Normal Approximations
Learning Objective: 07-06 Use the normal approximation to a binomial or a Poisson.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
37
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
91) A letter is mailed to a sample of 500 homeowners. Based on past experience, the probability
of an undeliverable letter is 0.06. The normal approximation to the binomial probability of 40 or
more undeliverable letters is
A) 0.9632
B) 0.0368
C) 0.2305
D) 0.7695
Answer: B
Explanation: Set n = 500 and π = 0.06. Calculate μ = nπ = (500)(0.06) = 30 and σ = [nπ(1 −
π)]1/2 = [500(0.06)(1 − 0.06)]1/2 = 5.31037. Use x = 39.5 (with the continuity correction) and
calculate the binomial P(X ≥ 40) ≈ P(z ≥ 1.78895) using z = (x − μ)/σ = 1.78895.
Difficulty: 3 Hard
Topic: 07.05 Normal Approximations
Learning Objective: 07-06 Use the normal approximation to a binomial or a Poisson.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
92) In a True-False exam with 100 questions, passing requires a score of at least 60. What is the
approximate normal probability that a "guesser" will score at least 60 points?
A) 0.0287
B) 0.4713
C) 0.0251
D) 0.0377
Answer: A
Explanation: A guesser would have a 50 percent chance of a correct answer, so we set π = 0.50.
There are n = 100 questions, so we calculate μ = nπ = (100)(0.50) = 50 and σ = [nπ(1 − π)]1/2 =
[100(.50)(1 − 0.50)]1/2 = 5. Use x = 59.5 (with the continuity correction) and calculate the
binomial P(X ≥ 60) ≈ P(z ≥ 1.90) using z = (x − μ)/σ = 1.90.
Difficulty: 3 Hard
Topic: 07.05 Normal Approximations
Learning Objective: 07-06 Use the normal approximation to a binomial or a Poisson.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
38
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
93) A multiple choice exam has 100 questions. Each question has five choices. What would be
the approximate probability that a "guesser" could achieve a score of 30 or more?
A) 0.0088
B) 0.0062
C) 0.0015
D) 0.4913
Answer: A
Explanation: A guesser would have a 20 percent chance of a correct answer (1 out of 5), so we
set π = 0.20. There are n = 100 questions, so we calculate μ = nπ = (100)(0.20) = 20 and σ =
[nπ(1 − π)]1/2 = [100(0.20)(1 − 0.20)]1/2 = 4. Use x = 29.5 (with the continuity correction) and
calculate the binomial P(X ≥ 30) ≈ P(z ≥ 2.375) using z = (x − μ)/σ = 2.375.
Difficulty: 3 Hard
Topic: 07.05 Normal Approximations
Learning Objective: 07-06 Use the normal approximation to a binomial or a Poisson.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
94) For which binomial distribution would a normal approximation be most acceptable?
A) n = 50, π = 0.05
B) n = 100, π = 0.04
C) n = 40, π = 0.25
D) n = 400, π = 0.02
Answer: C
Explanation: We want nπ ≥ 10 and n(1 − π) ≥ 10.
Difficulty: 2 Medium
Topic: 07.05 Normal Approximations
Learning Objective: 07-06 Use the normal approximation to a binomial or a Poisson.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
39
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
95) Historically, the default rate on a certain type of commercial loan is 20 percent. If a bank
makes 100 of these loans, what is the approximate probability that at least 26 will result in
default?
A) 0.2000
B) 0.0668
C) 0.0846
D) 0.0336
Answer: C
Explanation: Set n = 100 and π = 0.20. Calculate μ = nπ = (100)(0.20) = 20 and σ = [nπ(1 −
π)]1/2 = [100(.20)(1 − 0.20)]1/2 = 4. Use x = 25.5 (with the continuity correction) and calculate
the binomial P(X ≥ 26) ≈ P(z ≥ 1.375) using z = (x − μ)/σ = 1.375.
Difficulty: 3 Hard
Topic: 07.05 Normal Approximations
Learning Objective: 07-06 Use the normal approximation to a binomial or a Poisson.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
96) A company employs 300 employees. Each year, there is a 30 percent turnover rate for
employees. We want to do a normal approximation to the binomial distribution of the number of
employees who leave each year. For this normal approximation, the mean is ________ and the
standard deviation is ________.
A) 90, 63
B) 90, 7.937
C) 90, 30
D) 90, 15
Answer: B
Explanation: Use n = 300 and π = 0.30, and then calculate μ = nπ and σ = [nπ(1 − π)]1/2.
Difficulty: 2 Medium
Topic: 07.05 Normal Approximations
Learning Objective: 07-06 Use the normal approximation to a binomial or a Poisson.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
40
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
97) The probability that a rental car will be stolen is 0.001. If 25,000 cars are rented from Hertz,
what is the normal approximation to the probability that fewer than 20 will be stolen?
A) 0.2577
B) 0.1335
C) 0.1128
D) 0.8335
Answer: B
Explanation: Set n = 25,000 and π = 0.001. Calculate μ = nπ = (25000)(0.001) = 25 and σ =
[nπ(1 − π)]1/2 = [25000(0.001)(1 − 0.001)]1/2 = 4.9975. Use x = 19.5 (with the continuity
correction) and calculate the binomial P(X < 20) ≈ P(z < − 1.10055) using z = (x − μ)/σ = −
1.10055.
Difficulty: 3 Hard
Topic: 07.05 Normal Approximations
Learning Objective: 07-06 Use the normal approximation to a binomial or a Poisson.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
98) If adult male heights are normally distributed with a mean of 180 cm and a standard
deviation of 7 cm, how high should an aircraft lavatory door be to ensure that 99.9 percent of
adult males will not have to stoop as they enter?
A) 195.7 cm
B) 201.6 cm
C) 207.3 cm
D) 201.4 cm
Answer: B
Explanation: With Excel, we get = NORM.INV(0.999,180,7) = 201.63, or Appendix C with z =
3.09.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-05 Solve for z or x for a given normal probability using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
41
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
99) TotCo is developing a new deluxe baby bassinet. If the length of a newborn baby is normally
distributed with a mean of 50 cm and a standard deviation of 5 cm, what should be the interior
length of the bassinet to ensure that 99 percent of newborn babies will fit, with a safety margin of
15 cm on each end of the bassinet?
A) 95.45 cm
B) 85.22 cm
C) 91.63 cm
D) 98.92 cm
Answer: C
Explanation: With Excel, we get = NORM.INV(0.99,50,5) + 30 = 91.63, or Appendix C with z
= 2.33.
Difficulty: 2 Medium
Topic: 07.04 Standard Normal Distribution
Learning Objective: 07-05 Solve for z or x for a given normal probability using tables or Excel.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Answer: A
Explanation: A point has no area in a continuous CDF.
Difficulty: 2 Medium
Topic: 07.01 Continuous Probability Distributions
Learning Objective: 07-01 Define a continuous random variable.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
42
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
101) In a continuous distribution the
A) PDF is usually higher than the CDF.
B) CDF is used to find left-tail probabilities.
C) PDF shows the area under the curve.
D) CDF is usually the same as the PDF.
Answer: B
Explanation: The CDF shows P(X ≤ x). Review the definitions of PDF and CDF.
Difficulty: 2 Medium
Topic: 07.01 Continuous Probability Distributions
Learning Objective: 07-01 Define a continuous random variable.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
102) If the mean waiting time for the next arrival is 12 minutes, what is the median waiting time?
A) 7.2 minutes
B) 8.3 minutes
C) 9.1 minutes
D) 12 minutes
Answer: B
Explanation: Set λ = 1/12 minute per arrival and take logs of both sides of exp(−λx) = 0.50 to
solve for x.
Difficulty: 3 Hard
Topic: 07.06 Exponential Distribution
Learning Objective: 07-08 Solve for x for a given exponential probability.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
43
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
103) If the mean waiting time for the next arrival is 18 minutes, what is the first quartile (25th
percentile) for waiting times?
A) 13 minutes
B) 7.9 minutes
C) 5.2 minutes
D) 3.1 minutes
Answer: C
Explanation: Set λ = 1/18 minute per arrival and take logs of both sides of exp(−λx) = 0.75 to
solve for x.
Difficulty: 3 Hard
Topic: 07.06 Exponential Distribution
Learning Objective: 07-08 Solve for x for a given exponential probability.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
A) Yes
B) No
C) It depends on x.
Answer: B
Explanation: Area =1/2 × base × height = 0.500, which is not 1, so it cannot be a PDF.
Difficulty: 2 Medium
Topic: 07.01 Continuous Probability Distributions
Learning Objective: 07-01 Define a continuous random variable.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
44
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
105) Could this function be a PDF?
A) Yes
B) No
C) It depends on x.
Answer: B
Explanation: Area = base × height = 2, which is not 1, so it cannot be a PDF.
Difficulty: 2 Medium
Topic: 07.01 Continuous Probability Distributions
Learning Objective: 07-01 Define a continuous random variable.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
106) The ages of job applicants for a security guard position are uniformly distributed between
25 and 65. Could a 25-year-old job applicant be two standard deviations below the mean (or
more than two standard deviations)?
A) Yes
B) No
C) Impossible to determine from given information
Answer: B
Explanation: Since σ = [(65 − 25)2/12]1/2 = 11.54, we can see that 25 is not 2σ below the mean
of 45.
Difficulty: 3 Hard
Topic: 07.02 Uniform Continuous Distribution
Learning Objective: 07-02 Calculate uniform probabilities.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
45
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
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