Question 1

A survey was conducted on a random sample of 100 employees in an insurance firm in order to determine
how many telephone calls each employee makes per week. The following table recorded the distribution of
the number of telephone calls made last week from the selected random sample.

Number of Telephone Calls Made Number of Employees

0 to <10 6
10 to <20 26
20 to <30 30
30 to <40 12
40 to <50 10
50 to <60 10
60 to <70 4
70 to <80 2

(i) Calculate the mean, median and standard deviation for the number of telephone calls made by each
employee per week.
(ii) Comment on the shape of the distribution of the data.
(iii)Construct a 95% confidence interval for the mean number of telephone calls made by each employee
per week.

Question 2
(a) A study was recently conducted to estimate the mean cholesterol for adult males over the age of 55 years.
The following random sample data were observed:

245 304 135 202 300

196 210 188 256 390

(i) Given this information, what is the sample mean and standard deviation?
(ii) Construct and interpret a 95 percent confidence interval estimate for the population mean.

(b) A regional hardware chain is interested in estimating the proportion of their customers who own their own
homes. There is some evidence to suggest that the proportion might be around 0.70. Given this, what
sample size is required if they wish a 90 percent confidence level with a margin of error of ± .025?

Question 3
A production supervisor wants to verify the weight of the 5 kg rice that packed by two production lines. 5
sample of each production line has been selected and the reading of the weight has been recorded as below.

Line 1 4.8 4.9 4.7 4.9 5.0

Line 2 5.1 4.8 4.9 5.1 5.2

(a) Calculate the mean and the standard deviation of the weight of the rice that packed by production line 1
and line 2 respectively.
(b) Which production line has more consistent weight of rice packed? Explain.
(c) Construct a 95% confidence interval to estimate the true mean of the weight of rice packed from
production line 1 and line 2 respectively.

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Question 4
An experiment was conducted to study the choices made in mutual fund selection. Undergraduate and MBA
students were presented with different S & P 500 Index funds that were identical except for fees. Suppose 100
undergraduate students 100 MBA students were selected. Partial results are shown in the following table:
Student Group
Fund Undergraduate MBA
Highest-cost fund 27 18
Not highest-cost
fund 73 82
If a student is selected at random,

(i) what is the probability that he selected the highest-cost fund?

(ii) what is the probability that he selected the highest-cost fund or is an undergraduate?
(iii)suppose that he is a MBA student, what is the probability that he does not select the highest-cost
fund?

Question 5
A municipal bond service has three rating categories (A, B, and C). Suppose that in the past year, of the
municipal bonds issued throughout the United States, 70% were rated A, 20% were rated B, and 10% were
rated C. Of the municipal bonds rated A, 50% were issued by cities, 40% by suburbs, and 10% by rural areas.
Of the municipal bonds rated B, 60% were issued by cities, 20% by suburbs, and 20% by rural areas. Of the
municipal bonds rated C, 90% were issued by cities, 5% by suburbs, and 5% by rural areas.

(a) What proportion of municipal bonds is issued by suburbs?

(b) If a new municipal bond is to be issued by a city, what is the probability that it will receive an
A rating?

Question 6
A university president has proposed that all students must take a course in ethics as a requirement for
graduation. Three hundred faculty members and students from this university were asked about their opinion
in this issue. The following table gives a two-way classification of the responses of these faculty members
and students.

Favour Oppose Neutral Total

Faculty 45 15 10 70
Student 90 110 30 230
Total 135 125 40 300

(a) What is the probability that a randomly selected person is a faculty member or is in favour of
this proposal?
(b) What is the probability that a randomly selected person is a student and is oppose of this
proposal?

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Question 7
Two vacuum cleaner salesmen A and B must make two calls per day, one in the morning and one in the
afternoon. The probability that salesman A makes a sale on any call is 0.4 while the probability that salesman
B makes a sale is 0.1. Find the probability that, in a day:
(a) Salesman A sells two cleaners.
(b) Salesman A sells just one cleaner.
(c) Salesman B makes at least one sale.

Question 8
(a) David's gasoline station offers 4 cents off per gallon if the customer pays in cash and does not use a
credit card. Past evidence indicates that 40% of all customers pay in cash. During a one hour period
twenty-five customers buy gasoline at this station. What is the probability that more than eight and
less than twelve customers pay in cash?

(b) Phone calls arrive at the rate of 30 per hour at the reservation desk for a hotel.
(i) Find the probability of receiving two calls in a five-minute interval of time.
(ii) Find the probability of receiving exactly eight calls in 15 minutes.

(c) At a department store, the customers arrive at an average rate of 2.4 per minute. Find the probability
that:
(i) there is no customer arrive an any particular minute.
(ii) there is one or more customers arrive in any 30-second period.

Question 9
(a) A certain brand of flood lamps has a lifetime that is normally distributed with a mean of 3,750 hours
and a standard deviation of 300 hours.
(i) What proportion of these lamps will last for more than 4,000 hours?
(ii) What lifetime should the manufacturer advertise for these lamps in order that only 2% of the
lamps will burn out before the advertised lifetime?

(b) A shoes company records show that their salesmen weekly distance travelled are normally distributed
with a mean of 900 miles and standard deviation of 100 miles. The salesmen are considered poorly
performed if the distance travelled less than 700 miles a week.
(i) Find the probability that the salesmen are poorly performed in a particular week.

(ii) Find the expected number of the poorly performed salesmen if there are 300 marketing officers
in the shoes company.
(iii) Find the mileage travelled if the salesmen wishes to identify the number of miles travelled in a
week above which only 1% of the salesmen are expected to exceed.