Hi Tec City, Hyderabad

ASSIGNEMNT IN BUSINESS MATHEMATICS AND STATISTICS

COURSE CODE: COURSE TITLE: BUSINESS MATHEMATICS AND STATISTICS FACULTY NAME: PROF. BHAVANARAYANA KANDALA

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CREATED BY:

PROF. BHAVANARAYANA KANDALA DATE: 21 SEP 2011

Hi Tec City, Hyderabad

BUSINESS MATHEMATICS AND STATISTICS ASSIGNMENT COURSE: PGP/2011-2013 SEMESTER - I Date:

Oct 2011

Notes: 1. Answer any seven questions with at least three questions from each section. 2. Answers to be brief, to the point and in neat handwriting. 3. All questions carry equal marks. 4. Last date for submission of the assignment with solutions is 15 Oct 2011. -----------------------------------------------------------------------------------------------------------SECTION - I 1. A box of fuses contains 20 fuses, of which 5 are defective. If fuses are drawn one at a time from the box and not replaced, what is the probability that 3 draws will result in 3 defective fuses? If the fuses are drawn one at a time and replaced immediately, what is the probability that the 3 draws will result in 3 defective fuses? 2. A piece of equipment will function only when all the three components A, B and C are working. The probability of A failing during 1 year is 0.15, that of B failing is 0.05, and that of C failing is 0.10. What is the probability that the equipment will fail before the end of one year? 3. Medical records show that one out of ten individuals in a certain town has a low thyroid conditions. If 20 persons in this town are randomly chosen and tested, what is the probability that at least one of them will have a low thyroid conditions? 4. The quality control department of a company has two machines A and B. Machine A is a new one and passes only 2% of the defective products. Machine B is an old one and due to some flaw passes 7% of the defective products. A product finds its way to the finished goods stores only after it is passed by both the machines. What is the probability that a) Machine A has passed a product, given that Machine B has found it defective. b) Machine B has passes a defective product, given that Machine A has passed it. 5. Doctors at a hospital have discovered a new disease that runs in families. A company has discovered two drugs X and Y for the disease. The hospital has agreed to try the drugs on 400 persons. The 400 persons were selected in such a way that each has an 80% chance of getting the disease if given neither drug. In the group, 100 persons were administered drug X, 100 persons were administered drug Y and 200 persons were administered both the drugs. Drug X reduces the probability of the disease occurrence by 35% and drug Y reduces the probability of the disease occurrence by 20%. The two drugs when taken together work independently. If a randomly selected person in the group gets the disease in the future, what is the probability that he was given both the drugs? 6. In a firm 40% of the work force are females, 25% of the female workers are management grade and 30% of the male workers are management grade. If a management grade worker is selected at random from this firm, what is the probability that the worker will be a female?
Page 2 of 4 CREATED BY:

PROF. BHAVANARAYANA KANDALA DATE: 21 SEP 2011

Hi Tec City, Hyderabad

7. X, a quality control manager of a firm, questions the reliability of the two quality control checks in the food-processor manufacturing process. One check is performed by a worker who manually checks the processor and a second check is performed by a computer monitor. X knows that 5% of the time the worker is apt to miss a defective processor and that 2% of the time the computer will malfunction and fail to detect defective processors. a) If Krishna finds that the computer was malfunctioning, what is the probability that the worker will have missed a defective processor? b) If he knows that the worker missed a defective processor, what is the probability that he will find the computer had malfunctioned? c) What is the probability that the worker will miss a defective processor and the computer will malfunction at the same time, allowing a defective processor to the factory? 8. There are two security analysts A and B. The analysis of A has been found to be accurate in 75% of the cases and the analysis of B is found to be accurate in 80% of the cases. If a particular security is given to them for analysis, what is the probability that they will contradict each other? 9. X and Y are two team leaders in a department in an organization. Of all the projects proposals reaching the department head, 60% are proposed by X and 40% are proposed by Y. A proposal given by X has a 40% chance of being approved and a proposal given by Y has a 55% chance of being approved by the department head. Find out: a) Probability of a project being approved. b) Probability that a project has been proposed by X, given that the same has been approved. 10. An investment consultant predicts that the odds against the price of a certain stock going up are 2:1, and odds in favour of the price remaining the same are 1:3. What is the probability that the stock goes down? 11. The conditional returns on two securities Theta and Zeta for 2010 with their respective probabilities are as follows: Market Condition Probability Return on Theta Zeta Bullish 30% 40% 30% Stable 50% 20% 25% Bearish 20% -15% -18% Calculate the covariance between the returns of Theta and Zeta. SECTION-II 12. Fit a binomial distribution to the following data: X: F: 0 28 1 62 2 46 3 10 4 4

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CREATED BY:

PROF. BHAVANARAYANA KANDALA DATE: 21 SEP 2011

Hi Tec City, Hyderabad

13. The placement division of ISTTM is interested in finding out the annual earnings of PGDMs numbering around 1500. How large a sample it should take in order to determine the mean annual earnings within plus and minus Rs 2000 and 95% confidence level? You may assume that the earnings of PGDM follow normal distribution with standard deviation of Rs 5000. 14. Define Binomial Distribution. What is the probability of guessing correctly at least six of the ten answers in a TRUE-FALSE objective test? 15. Fit a Poisson distribution to the following data of mistakes per page in a book and also calculate the theoretical frequencies. No. of mistakes per page 0 1 2 3 4 No. of times the mistake occurs 200 80 20 10 0

16. A manufacturer of blades knows that 5% of his product is defective. If he sells blades in boxes of 100, and guarantees that not more than 10 blades will be defective, what is the probability (approximately) that a box will fail to meet the guaranteed quality? 17. A systematic sample of 100 pages was taken from the Concise Oxford Dictionary and the observed frequency in distribution of foreign words per page was found to be as follows: No. of foreign words per page (X) Frequency (f) 0 48 1 27 2 12 3 7 4 4 5 1 6 1

Calculate the expected frequencies using Poisson Distribution. Also compute the mean and variance of fitted distribution. 18. The average test marks in a particular class if 79. The standard deviation is 5. If the marks are distributed normally, how many students in a class of 200 did not receive marks between 75 and 82? Given Pr{ 0< Z < 0.7 } = 0.2580 Pr{ 0< Z < 0.8 } = 0.2881 Pr{ 0< Z < 0.6 } = 0.2257 where Z is a standard normal deviate

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CREATED BY:

PROF. BHAVANARAYANA KANDALA DATE: 21 SEP 2011