Indian Institute of Management Bangalore

Postgraduate Programme in Management

Batch 2012-14
Quantitative Methods I
Mid Term
(For Sections A and D only)
Maximum Time: 2 Hours 30 Minutes Name:
Maximum Marks: 40 Roll No:
This is an open-book, open note (only class notes) test; however, you are not allowed to
share materials with other students. Use of calculator is permitted, but not computer (laptop).
Do not seek any clarications.
Read all of the following information before starting the test:
To get any credit, you must
circle/clearly indicate your nal answer (in the space, whenever provided).
answer all questions in the space provided.
show (in brief ) adequate reasoning, including calculations, if any, in support of your
answers.
state any assumption you make. (Your assumptions need to be reasonable.)
This test cum answer booklet has 13 pages, including this page.
Space for evaluation only
Question No. 1 2 3 4 5 6 7 8 Total
Maximum
Marks
4 2 4 4 1 + 2
+ 2
1+2+2 31+
2
4 3+2 40
Students
Score
1. (a) Let X be Binomial(2,p) and let Y be Binomial(4,p). If P(X 1) = 5;9, nd
P(Y 1) (2 Marks)
(b) Suppose a statistics class contains 70% male and 30% female students. It is known
that in a test, 10% of males and 20% of females got an A grade. If one student
from this class is randomly selected and observed to have an A grade, what is
the probability that this is a male student? (2 Marks)
QM1 - Mid Term 2
(c) Let ^
1
and ^
2
are independent events with P(^
1
) = 0.6 and P(^
2
)= 0.3. (i)Show
that ^
1
and ^
t
2
are independent. (ii)Compute P(^
t
1
^
2
) (Where ^
t
means compli-
ment of ^.) (2 Marks)
(d) Let the pdf | (x) be positive at x=-1,0,1 and zero elsewhere. If | (0) =
1
4
, nd |[X
2
].
(2 Marks)
QM1 - Mid Term 3
2. Suppose that a grocery store purchases 5 tetrapack of soya milk at the wholesale price
of Rs 80 per pack and retails the milk at Rs 100 per pack. After the expiration date,
the unsold milk is removed from the shelf and the grocer receives a credit from the
distributor equal to three-fourths of the wholesale price. If the probability distribution
of the random variable X, the number of pack that are sold from this lot, is
x 0 1 2 3 4 5
| (x)
1
15
2
15
2
15
3
15
4
15
3
15
Find the expected prot. (4 Marks)
QM1 - Mid Term 4
3. The annual sales of a children comics follow the normal distribution. However, the
mean and the standard deviation are unknown. Forty percent of the time sales are
more than 47,000, and 10 percent of the time sales are more than 50,000. What are the
mean and the standard deviation? (2+2 Marks)
QM1 - Mid Term 5
4. The GMAT scores of students who are potential applicants to a university are normally
distributed with a mean of 487 and a standard deviation of 98.
(a) What ist he percentage of students will have scores exceeding 500?
(b) Find the narrowest interval that will contain 75% of the students scores.
(c) Find x such that the interval [x, 2x] will contain 75% of the students scores. (There
are two answers.) (1+2+2 Marks)
QM1 - Mid Term 6
5. A chemical system that results from a chemical reaction has two important components
among others in a blend. The joint distribution describing the proportion X
1
and X
2
of
these two components is given by
| (x
1
, x
2
) =

2, 0 < x
1
< x
2
< 1
0 elsewhere
(a) Give the marginal distribution of X
1
.
(b) Give the conditional distribution of |
X
1
[X
2
(x
1
|x
2
).
(c) Calculate Corr(X
1
, X
2
). (1+2+2 Marks)
QM1 - Mid Term 7
6. The time (in minutes) between telephone calls at an insurance claims oce has the
following exponential probability distribution. with mean 2 minutes
(a) What is the median time between telephone calls?
(b) What is the probability of having 30 seconds or less between telephone calls?
(c) What is the probability of having 5 or more minutes without a telephone call?
(d) What is the probability of having one minute to next telephone call given that the
previous call was two minutes ago?
(1+1+1+2 Marks)
QM1 - Mid Term 8
7. A state politician would like to determine the average amount earned during summer
employment by state teenagers during the past summers vacation period. He wants
to have 95% condence that the sample mean is within Rs 1K( 1K=One thousand) of
the actual population mean. Based on past studies, she has estimated the population
standard deviation to be = Rs 8K. ( Write all required theoretical steps to derive the
sample size. This question is not intended use the direct formula for sample size) (4
Marks)
QM1 - Mid Term 9
8. The crowd for a music event might be small (with a probability of 0.4) or large. The
organisers can pay a consultant to collect and analyse advance ticket sales one week
before the event takes place. Then advance sales can be classied as high, average or
low, with the probability of advanced sales conditional on crowd size given by this table:
Advance Sales
Crowd size high average low
large 0.7 0.3 0.0
small 0.2 0.2 0.6
The organisers must choose one of two plans in running the event, and the table below
gives the net prot in thousands of rupees for each combination of plan and crowd size.
Crowd size Plan 1 Plan 2
large 20 28
small 18 10
If the organisers use information about advance sales, what decisions would maximise
their expected prots? How much should they pay for the information on advance sales?
(3+2 Marks)
QM1 - Mid Term 10
QM1 - Mid Term 11
Scrap Page-1
(please do not remove this page from the test booklet)
QM1 - Mid Term 12
Scrap Page-2
QM1 - Mid Term 13