Bahria University, Karachi Campus

Department of Management Studies

Statistical Inference (QTM-204)
Wednesday, October 18, 2023 Fall - 2023
Course Supervisor: Ishtiaq Ahmed BS-4 [A & F]
Assignment - No. 2
(Numerical Practice Exercises of Discrete and Continuous Probability Distribution)
Q.1 What is first big change that American drivers made due to higher gas prices? According to an Access America survey, 30% said
that it was cutting recreational driving. However, 27% said that it was consolidating or reducing errands. If these figures are
true for all American drivers, and if 15 such drivers are randomly sampled and asked. What is the first big change they made
due to higher gas price? [Answers: a) 11.42%, b) 0.48%, c) 0.40%]
Required:
a) What is the probability that exactly 6 said that it was consolidating or reducing errands?
b) What is the probability that none of them said that it was cutting recreational driving?
c) What is the probability that more than 9 said that it was cutting recreational driving?

Q.2 The Wall Street Journal reported some interesting statistics on the job market. One statistic is that 40% of all workers say they
would change jobs for “slightly higher pay”. In addition, 88% of companies say that there is a shortage of qualified job
candidates. Suppose 16 workers are randomly selected and asked if they would change jobs for “slightly higher pay”.
Required:
a) What is the probability that nine or more say yes?
b) What is the probability that three, four, five, or six say yes?
c) If 13 companies are contacted, what is the probability that exactly 10 say there is a shortage of qualified job candidates?
d) If 13 companies are contacted, what is the probability that all of the companies say there is a shortage of qualified job
candidates?
e) If 13 companies are contacted, what is the expected number of companies that would say there is a shortage of qualified
job candidates?

Q.3 An increasing number of consumers believe they have to look out for themselves in the marketplace. According to a survey
conducted by the Yankelovich Partners for USA Weekend magazine, 60% of all consumers have called an 800 or 900 telephone
numbers for information about some product. Suppose a random sample of 20 consumers is contacted and interviewed about
their buying habits. [Answers: a) 41.50%, b) 0.3%, c) 0%]
Required:
a) What is the probability that 13 or more of these consumers have called an 800 or 900 telephone numbers for
information about some product?
b) What is the probability that more than 17 of these consumers have called an 800 or 900 telephone numbers for
information about some product?
c) What is the probability that fewer than 5 of these consumers have called an 800 or 900 telephone numbers for
information about some product?

Page 1 of 3 Statistical Inference [QTM 204] Fall-2023

Q.4 In the past few years, outsourcing overseas has become more frequently used than ever before by U.S companies. However,
outsourcing is not without problems. A recent survey by Purchasing indicates that 20% of the companies that outsource
overseas use a consultant. Suppose 15 companies that outsource overseas are randomly selected.
Required:
a) What is the probability that exactly 5 companies that outsource overseas use a consultant?
b) What is the probability that more than 10 companies that outsource overseas use a consultant?
c) What is the probability that none of the companies that outsource overseas use a consultant?
d) What is the probability that between four and eight (inclusive) companies that outsource overseas use a consultant?
e) Construct a graph for this binomial distribution. In light of the graph and the expected value, explain why the
probability results from parts a) through d) were obtained. [Answers: a) 10.32%, b) 0%, c) 3.52%, d) 35.10%]

Q.5 Bank customers arrive randomly on weekday afternoons at an average of 3.2 customers every 4 minutes. [Answer: 1.69%]
Required:
What is the probability of having more than 7 customers in a 4-minute interval on a weekday afternoon?

Q.6 Suppose the probability of a bank making a mistake in processing a deposit is 0.0003. If 10,000 deposits (n) are audited.
Required:
What is the probability that more than 6 mistakes were made in processing deposits? [Answer: 3.35%]

Q.7 The average number of annual trips per family to amusement parks in the United States, with a mean of 0.7 trips per year.
What is the probability of randomly selecting an American family and finding the following? [Answer: 1.69%]
a) The family did not make a trip to an amusement park last year.
b) The family took exactly one trip to an amusement park last year.
c) The family took two or more trips to amusement parks last year.
d) The family took three or fewer trips to amusement parks over a five-year period.
e) The family took exactly four trips to amusement parks during a six-year period.
[Answers: a) 49.66%, b) 34.76 c) 15.59%, d) 53.67%, e) 19.44%]

Q.8 A pen company averages 1.1 defective pens per carton produced (200 pens). Answers: a) 33.29%, b) 0.0001 c) 2.57%]
a) What is the probability of selecting a carton and finding no defective pens?
b) What is the probability of finding seven or more defective pens in a carton?
c) Suppose a purchaser of these pens will quit buying from the company, if a carton contains more than three defective
pens. What is the probability that a carton contains more than three defective pens?

Q.9 Suppose you are working with a data set that is normally distributed with a mean of 200 and a standard deviation of 47.
Determine the value of ‘x’ from the following information. [Answers: a) 175.56, b) 239.48 c) 168.51 d) 218.33]
a) 70% of the value are greater than x.
b) ‘x’ is less than 20% of the values.
c) 25% of the values are less than ‘x’.
d) ‘x’ is greater than 65% of the values.

Q.10a What is the probability of obtaining a score greater than 750 on a GMAT test that has a mean of 560 and a standard deviation of
100? Examine by the diagram. [Answer: 1.79%]

Page 2 of 3 Statistical Inference [QTM 204] Fall-2023

Q10b For the same GMAT examination, what is the probability of randomly drawing a score that is 590 or less? Examine by the
diagram. [Answer: 69.15%]

Q.10c For the same GMAT examination, what is the probability of randomly obtaining a score between 350 and 630 on the GMAT
examination? Examine by the diagram. [Answer: 78.72%]

Q.11 According to the Internal Revenue Service, income tax returns one year averaged $1,332 in refunds for taxpayers. One
explanation of this figure is that taxpayers would rather have the government keep back too much money during the year than
to owe it money at the end of the year. Suppose the average amount of tax at the end of a year is a refund of $1,332 with a
standard deviation of $725. [Answers: a) 21.77, b) 3.29% c) 17.33%]
a) What proportion of tax returns show a refund greater than $1,900?
b) What proportion of the tax returns show that the taxpayer woes money to the government?
c) What proportion of the tax returns show a refund between $200 and $800?
d) Examine by the diagram.

Q.12 Suppose commute times in a large city are normally distributed and that 62.5% of commuters in this city take more than 21
minutes to commute one-way. If the standard deviation of such commutes is 6.2 minutes, what is the mean commute?
[Answer: mean =22.984]

Q.13 Based on annual driving of 15,000 miles and fuel efficiency of 20 mpg, a car in the United States uses, on average 750 gallons of
gasoline per year, and if 29.12% of cars in the United states use less than 500 gallons of gasoline per year, what is the standard
deviation? [Answer: 454.22]

- : * * * * Good Luck * * * * : -

Note:
1) Deadline of submission of this Assignment No. 2 on Thursday, November 2, 2023 positively at LMS.
2) All students are advised to make sure to solve this assignment No. 2 individually.
3) In case any issue or difficulty in this Assignment No. 2 or any query, students are advised to discuss with course supervisor
during given students’ consultation slots or hours in the mentioned course supervisor’s time table.
4) No extension will be treated in given deadline of Assignment No. 2 at any reason.

Page 3 of 3 Statistical Inference [QTM 204] Fall-2023