University of Western Australia

School of Mathematics and Statistics

STAT1520, Semester 1 2014

Mid-semester Test
Student Number:
Family Name:
Use Block Letters

Given Name:
Use Block Letters
Please select your tutorial time from the following.
Mon 9:00 ENCM:111 Bernadette Podesta-Bajada
Mon 11:00 ENCM:111 Bernadette Podesta-Bajada
Mon 14:00 ENCM:111 Cheryl Ng
Mon 16:00 ENCM:G23 Surabhi Gupta
Tue 10:00 ENCM:G23 Nur Izzati Mokak
Tue 14:00 ENCM:111 Marco Susilo
Wed 9:00 ENCM:G23 Marco Susilo
Wed 12:00 ENCM:111 Nur Izzati Mokak
Wed 14:00 ENCM:G23 Aisyah Ishak
Thu 10:00 ENCM:111 Dinuka Muhandiramge
Thu 13:00 ENCM:G23 Chrianna Bharat

Mon 9:00 ENCM:G23 Chrianna Bharat

Mon 11:00 ENCM:G23 Robert Nguyen
Mon 14:00 ENCM:G23 Hubert Heng
Mon 16:00 ENCM:111 Robert Nguyen
Tue 10:00 ELEC:151 Andrew Hardegen
Tue 14:00 ENCM:G23 Jack Lee-Kopij
Wed 9:00 ENCM:111 Aisyah Ishak
Wed 12:00 ENCM:G23 Andrew Hardegen
Thu 10:00 ENCM:G23 Hubert Heng
Thu 13:00 ENCM:111 Dinuka Muhandiramge
Thu 15:00 ENCM:G23 Jack Lee-Kopij

1. This test counts for 15% of your final mark for STAT1520.
2. Total Marks = 100.
3. Attempt all questions.
4. Where appropriate, working with reasons should be given.
5. The last page has been left blank for rough working.

Tables are available separately and must be submitted with

the paper.
Time Limit: 90 minutes

THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY

Section 1 (30 marks) This section contains fifteen multiple choice questions. Each question is
worth 2 marks.
1. A discrete random variable X takes values 0, 1 and 2, with pX (1) = 0.1, pX (2) = 0.3. What is
P(X = 0)?
0.4.
0.5.
0.6.
0.7.
2. A discrete random variable X takes only positive values, and P(X = 1) = 0.1, P(X = 3) = 0.3.
Which one of the following must be true?
P(X 3) = 0.6.
P(X 4) = 0.6.
P(X > 3) 0.6.
P(X = 2) = 0.6.
3. A discrete random variable X takes values 1, 1 and 0, and E(X) = 0. Which one of the
following must be true?
P(X = 1) = P(X = 0).
P(X = 0) = P(X = 1).
P(X = 1) = P(X = 1).
P(X 0) = 0.5.
4. A discrete random variable X takes values 0, 2 and 4, with P (X = 0) = P (X = 4). Which one
of the following must be true?
E(X2 ) = Var(X) + 2.
E(X2 ) = Var(X) + 4.
E(X2 ) = Var(X).
E(X2 ) = Var(X) + 16.
5. Let X and Y be random variables with Var(X) = 0.5 2 and Var(Y) = 2 . Put V =
Y Y
and W =
. Which one of the following statements must be true?

Var(V) = 4Var(W).
Var(W) = 4Var(V).
The variances of V and W are 1.
Var(W) = 2Var(V).
3

X X

6. Let Z N (0, 1), and put X = 2(2 Z). Which one of the following statements is true?
X N (4, 1).
X N (4, 2).
X N (2, 2).
X N (4, 4).
7. Let Y N (0, 1) and Z N (0, 1), and let Cov(Y, Z) = 1. What is the distribution of
2Y 3Z + 1?
N (0, 13).
N (1, 49).
N (0, 25).
N (1, 25).
8. Let X Poi() with Var(X) = 1. Which of the following must be true?
E(X2 ) = 2
E(X2 ) = 4
E(X2 ) = 3.
E(X2 ) = 0.
9. The random variable X Bin(10, p) has mean 2. What is the value of P (X 2)?
0.3020
0.3578
0.6778
0.2684
10. The random variable X as a binomial distribution with n = 20 and P(X = 2) = 0.0278. What
is P(X 4)?
0.2375
0.1071
0.0350
0.8929

11. Random variables X1 and X2 have equal variances 2 = 1. Also, Cov(X1 , X2 ) = 1. Put
Y1 = 2X2 X1 and Y2 = X1 + 2X2 . What is Cov(Y1 , Y2 )?
3.
1.
1.
0.
12. The random variable X has a U (0, a) distribution and Var(X) = 3. What is the mean of X?
0
3
1.5
6
13. Random variables X and Y satisfy E(XY) = E(X) E(Y). Which one of the following must be
true?
X and Y are independent.
E(X) = 0 or E(Y) = 0.
E(XY) = 0.
Var(X Y) = Var(X) + Var(Y).
14. Let Z N(0, 1) and P(Z < k) = a where 0.5 < a < 1. Which of the following is true?
P(Z > k) = 0.5 a
P(| Z |> k) = 2a.
P(| Z |> k) = 2(0.5 a).
P(| Z |> k) = 2 2a.
15. The random variable X has a symmetric distribution with P(X < 1) = P(X > 2). Further,
P(X < 3) = 1 a. Which of the following is true?
P(| X 1.5 |> 1.5) = 1 2a.
P(| X 1.5 |> 1.5) = a.
P(| X 1.5 |> 1.5) = 2a.
P(| X 1.5 |> 1.5) = 1 a.

END OF SECTION ONE

Section 2 (70 marks)

1. (18 marks) A major reason for return of tablets under warranty is screen failure. The probability distribution for the number of months X after purchase that a tablet is returned with
screen failure as estimated by CompSys is given in the table below.
3
x
pX (x) 0.2

6
0.1

9
0.1

12
0.2

18
0.1

24
0.3

(a) What is the probability that a tablet is returned with screen failure within six months?
(1 mark)
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(b) Find the mean and standard deviation of the the time for a tablet to be returned with
screen failure.
(4 marks)
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(c) Tablets that are returned with screen failures within the warranty period of two years are
repaired with no charge to the customer. Based on company data, the cost of repairs is
as follows:
(i) a fixed cost of $25;
(ii) a variable cost (in dollars) that is two times the time (in months) after purchase that
the tablet is returned.
Let the random variable Y denote the cost of repairs to tablet returned within the warranty
period.
i. Write down an equation relating Y to the time after purchase that the tablet is
returned.
(2 marks)
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ii. What is the expected cost of repairs for a tablet under warranty?

(2 marks)

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iii. What is the standard deviation of the cost of repairs for a tablet under the warranty?
(2 marks)
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(d) CompSys receives 100 tablets for repairs under warranty.

i. What is the expected cost of repairs for these tablets?

(3 marks)

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ii. What is the standard deviation of the cost of repairs for these tablets?
(4 marks)
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2. (11 marks) An analyst determines that over the next six months the change in interest rate R
(%) and the change in median house price X (in $10,000) have the following joint distribution.
r

-0.25

0.25

$ 20

0.10

0.10

0.30

$0

0.15

0.00

0.10

$ 30

0.25

0.00

0.00

(a) Find the expected change in median house price in the next six months.

(2 marks)

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(b) Find the expected change in median house price in the next six months if the interest rate
decreases by 0.25%.
(4 marks)
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(c) Find the covariance between interest rates and median house price over the next six months
and interpret it.
(4 marks)
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(d) Are median house price and interest rate independent? Justify your answer. (1 marks)
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3. (10 marks) The number of calls (X) received at a telco complaints centre between 8 am and
9 am off peak period has a Poisson distribution with mean 3.
(a) What is the probability that no more than 6 calls are received between 8 am and 9 am on
a randomly selected day?
(2 marks)
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(b) If two calls arrive in the first twenty minutes, what is the probability that a total of more
than 6 calls arrive in the hour?
(4 marks)
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(c) What is the probability that in a week of five days, more than 6 calls arrive between 9 am
and 10 am on at least one day?
(4 marks)
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4. (9 marks) Commercial airplanes have a B maintenance check every four to six months. This
results in one major preventative work per 500 checks on average. The manufacturer of a
commercial airline puts in place stricter quality control in an attempt to reduce the number
of preventative work during B maintenance checks. Data on new aircraft reveals that out of
2, 000 checks, major preventative work was carried out only once.
Assume that that number of preventative works has a Poisson distribution. Let be the
mean number of works per 500 checks, and let the random variable X denote the number of
maintenance works in 2, 000 checks.
(a) In terms of state the null and alternative hypotheses to answer the question: Is the
mean number of works less than 1 per 500 checks?
(2 marks)
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(b) State the distribution of X under the null hypothesis.

(1 mark)

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(c) Calculate the p-value of the test.

(2 marks)

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(d) Test the hypotheses at the 2.5% level of significance.

(2 marks)

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(e) Write a one sentence conclusion to the hypothesis test.

(2 marks)

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5. (9 marks) A light bulb manufacturer claims that at least 90% of its bulbs meet its lifetime
guarantee. A simple random sample of 20 bulbs found that only 16 of them lasted at least as
long as the guaranteed lifetime. Let the random variable X denote the number of bulbs in the
sample that lasted at least as long as the lifetime, and let p denote the proportion of bulbs that
last satisfy the lifetime guarantee.
(a) In terms of p, state the null and alternative hypotheses to answer the question: Is the
proportion of light bulbs that satisfy the lifetime guarantee at least 0.9?
(2 marks)
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(b) State the distribution of X under the null hypothesis.

(1 marks)

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(c) Calculate the p-value of the test.

(2 marks)

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(d) Test the hypotheses at the 2.5% level of significance.

(2 marks)

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(e) Write a one sentence conclusion to the hypothesis test.

(2 marks)

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6. (13 marks) The number of new companies X listing on the ASX per month has a Poisson
distribution with mean 6.
(a) What is the probability that 10 businesses list on the ASX in January?

(2 marks)

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(b) The probability that a new listing on the ASX fails within a year is 0.1. Assume that the
failures are independent. If 10 businesses list in January, what is the probability that at
least half of them fail within a year?
(3 marks)
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(c) What is the expected number of companies that list in January and fail? Explain your
reasoning.
(3 marks)
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(d) The capital (in $AUD millions) that each company raises is normally distributed with
mean 100 and standard deviation 20.
i. What is probability that a company raises more than 130 million dollars?
marks)

(2

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ii. The time T (in years) to returning a dividend to investors depends on the capital
raised, as given in the table below.

Capital X (millions) ($)

Time T (years)

X < 70 70 < X < 130 X > 130

1
1.5
2

What is the mean time to returning a dividend to investors?

(3 marks)

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END OF PAPER

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