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BA 1502Spring 2020HW3 - Answers
BA 1502Spring 2020HW3 - Answers
HW3 ANSWERS
The following exercises are form the 8th edition of Newbold, Carlson, Thorne textbook.
1) 4.70
2) 4.73
3) 4.93
4) 4.100
5) 4.102
1) Exercise 4.70
x P( X <= x )
0.00 0.0000
1.00 0.0238
2.00 0.2619
3.00 0.7381
4.00 0.9762
5.00 1.0000
2) Exercise 4.73
Exercise_4.73 X_4.73
Y_4.73 1 2 P(y) Mean of Y Var of Y StDev of Y
0 0.3 0.2 0.5 0 0.125
1 0.25 0.25 0.5 0.5 0.125
P(x) 0.55 0.45 1 0.5 0.25 0.5
Cov( X , Y )
Corr ( X , Y ) = .025/(.497494)(.5) = 0.1005
x y
3) Exercise 4.93
5
a. P(X = 3) = .553.452 = .3369
3
b. P(X 3) = P(3)+P(4)+P(5) = .3369 + (5)(.55)4(.45) + (1)(.55)5(1) = .5931
c. np = (80)(.55) = 44 will graduate in 4 years. The proportion is 44/80 = .55.
80(.55)(.45) = 4.4497. The proportion is 4.4497/80 = .05562
4) Exercise 4.100
The mean and variance for the total value of the stock portfolio:
Exercise_4.100 X_4.100
Y_4.100 40 50 60 70 P(y) Mean of Y Var of Y StDev of Y
45 0 0 0.05 0.2 0.25 11.25 17.01563
50 0.05 0 0.05 0.1 0.2 10 2.1125
55 0.1 0.05 0 0.05 0.2 11 0.6125
60 0.2 0.1 0.05 0 0.35 21 15.94688
P(x) 0.35 0.15 0.15 0.35 1 53.25 35.6875 5.973902
∑∑xyP(x,y)-μxμy -53.75
The mean and variance for the linear function W = aX + bY.
5) Exercise 4.102
a. Use the Poisson probability distribution because the random variable is the number
of occurrences of a certain event (delivery failures) in a given continuous interval (one
day).
b. First, use the given data to determine an estimate for , the expected number of
failures per day.
15 10 ... 8 11
10.75
20
Cumulative Distribution Function
Poisson with mu = 10.7500
x P( X <= x)
1.00 0.0003
2.00 0.0015
3.00 0.0059
4.00 0.0179
5.00 0.0435
6.00 0.0895
7.00 0.1601
8.00 0.2549
9.00 0.3682
10.00 0.4900
x P( X <= x)
1.00 0.0003
2.00 0.0015
3.00 0.0059
4.00 0.0179
5.00 0.0435
6.00 0.0895
7.00 0.1601
8.00 0.2549
9.00 0.3682
10.00 0.4900
P( X 6) P( X 5) 0.0435
x P( X <= x)
1.00 0.0003
2.00 0.0015
3.00 0.0059
4.00 0.0179
5.00 0.0435
6.00 0.0895
7.00 0.1601
8.00 0.2549
9.00 0.3682
10.00 0.4900
11.00 0.6091
12.00 0.7157
13.00 0.8039
14.00 0.8716
15.00 0.9201
16.00 0.9527
17.00 0.9733
18.00 0.9857
19.00 0.9926
20.00 0.9964
Use the cumulative distribution function table to construct a table of probabilities for
P( X x) .
x P( X x)
0 1.0000
1 0.9997
2 0.9985
3 0.9941
4 0.9821
5 0.9565
6 0.9105
7 0.8399
8 0.7451
9 0.6318
10 0.5100
11 0.3909
12 0.2843
13 0.1961
14 0.1284
15 0.0799
16 0.0473
17 0.0267
18 0.0143
19 0.0074
20 0.0036
Note that P( X 14) is greater than 10%, but P( X 15) is less than 10%. Thus, the number
of failures such that the probability of exceeding this number is 10% or less is 15.