1. Using Computer Repair Times.

xls
a. What is the probability that a computer would be repaired in as little as 4 days?
b. The probability that could be repaired in 10 days?
c. The probability that could be repaired not more than 15 days?
d. The probability that could be repaired between 10 and 16 inclusive?
e. The probability that could be repaired at least in 17 days?
f. The probability that could be repaired more than 7 days?
2. Using Energy drink Survey database calculate
a. P(Male)
b. P(female)
c. P(Brand1)
d. Pr(brand2)
e. Pr(brand 3)
f. P(Male and brand 3)
g. P(female or brand2)
h. P(female/ Brand2)
i. P(male/ Brand1)
j. Is Brand1 and male are independent
3. Use Sales transaction database
a. Find the probabilities that a sale originated in each of the four regions and the
probability of each type of sales ( book or DVD)
b. Find the conditional probabilities of selling book given that the customer resides in
each region.

4. Suppose it is known that the distribution of purchase amounts by customers entering a

popular retail store is approximately normal with mean $75 and standard deviation
$20.

a. What is the probability that a randomly selected customer spends less than $85
at this store?
b. What is the probability that a randomly selected customer spends between $65
and $85 at this store?
c. What is the probability that a randomly selected customer spends more than
$45 at this store?
d. Find the dollar amount such that 80% of all customers spend at least this
amount.
e. Find two dollar amounts, equidistant from the mean, such that 90% of all
customer purchases are between these values.
5. In a typical month, an insurance agent presents life insurance plans to 40 potential
customers. Historically, one in four such customers chooses to buy life insurance from
this agent. Based on the relevant binomial distribution, answer the following questions
about X, the number of customers who will buy life insurance from this agent in the
coming month:

a. What is the probability X is exactly 5?

 b. What is the probability that X is no more than 10?
c. What is the probability that X is at least 20?
d. Determine the mean and standard deviation of X.
e. What is the probability that X will be within two standard deviations of the
mean?
f. What is the probability that X will be within three standard deviations of the
mean?
6. Consider a random variable with the following probability distribution: P(X = 0) =
0.1, P(X = 1) = 0.2, P(X = 2) = 0.3, P(X = 3) = 0.3, and P(X = 4) = 0.1.

a. Find P(X ≤ 2).

b. Find P(1 < X ≤ 3).
c. Find P(X > 3|X > 2).
d. Find the expected value of X.
e. Find the standard deviation of X.
7. Suppose that X, the number of customers arriving each hour at the only checkout counter
in a local pharmacy, is approximately Poisson distributed with an expected arrival rate of
20 customers per hour.
a. Find the probability that X is exactly 10.
b. Find the probability that X is at least 5.
c. Find the probability that X is no more than 25.
d. Find the probability that X is between 10 and 30 (inclusive).
e. Find the largest integer k such that we can be at least 95% sure that X will be
greater than k.
8. Let the number of phone calls received by a switchboard during a 5-minute interval be a
random variable X with Exponential (2) distribution.

a. Determine the probability that X equals 0, 1, 2, 3, 4, 5, and 6.

b. Graph the probability mass function for these values of x.
c. Determine the cumulative distribution function for these values of X.
9. Choose an appropriate forecasting technique for the data in the Excel file DJIA
December Close and find the best forecasting model. Explain how you would use the
model to forecast and how far into the future it would be appropriate to forecast.
10. An employee of a vending concession firm at the Subiaco Oval needs to choose
between two options. He can work behind a hamburger counter and receive a fixed
sum of $100 per game. Alternatively, he can walk around the stands selling beer and
snacks on a commission basis. On this second option, the employee can expect to earn
$180 on a good day, $100 on an average day and $70 on a poor day. The probabilities
of a good, average and poor day are 0.30, 0.40 and 0.30 respectively.
(a) What would be the expected earnings and the standard deviation in earnings for the
employee under the commission option?
(b)Which job should he take and why?

11. Suppose that we want to decide between two alternative investments for the coming
year. The first investment is a mutual fund that consists of the shares that make up the
Dow Jones Industrial Average. The second investment is a mutual fund that is
expected to perform best when economic conditions are weak. Your estimate of the
returns for each investment ( per $1,000) under three economic conditions , each with
a given probability of occurrence , is summarized
Investment
P(X,Y) Economic conditions Dow Jones Fund Weak Economy fund

0.2 Recession -$100 +$200

0.5 Stable economy +100 +50
0.3 Expanding economy +250 -100
Calculate Expected value , variance and covariance and comment .

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