Q.1 A fair coin is tossed twice and two outcomes are noted.

What is the probability

that both outcomes are heads? Explain.

Q.2 Suppose that 25% of the population in a given area is exposed to a television
commercial on Ford automobiles, and 34% is exposed to Ford’s radio
advertisements. Also, it is known that 10 % of the population is exposed to both
means of advertising. If a person is randomly chose out of the entire population on
this area, what is the probability that he or she was exposed to at least one of the
two modes of advertising?

Q.3 A Consulting firm is bidding for two jobs, one with each of two large
multinational corporations. The company executive estimate the probability of
obtaining the consulting job with firm A is 0.45. The executives also feel that if the
company gets the job with firm A, then there is 0.90 probability that firm B will also
give the company the consulting job. What are the company’s chances of getting
both jobs?

Q.4 A bank loan officer knows that 12% of the bank’s mortgage holders lose their
jobs and default on the loan in course of 5 years. She also knows that 20% of the
bank’s mortgage holders lose their jobs during this period. Given that one of her
mortgage holder just lost his job, what is the probability that he will now default on
the loan?

Q.5 The probability that a consumer will be exposed to an advertisement for a

certain product by seeing a commercial on television is 0.04. The probability that
the consumer will exposed to the product by seeing it an advertisement on a
billboard is 0.06. The two events, being exposed to the commercial and being
exposed to the billboard are assumed to be independent.

a) What is the probability that the consumer will be exposed to both

advertisements?

b) What is the probability that he or she will be exposed to at least one of the
advertisements?

Q.6 An economist believes that during periods of high economic growth, the
U.S.dollar appreciates with probability 0.70, in periods of moderate economic
growth the dollar appreciates with probability 0.40, and during periods of low
economic growth, the dollar appreciates with probability 0.20. During any period of
time, the probability of high economic growth is 0.30, the probability of moderate
economic growth is 0.50, and the probability of low economic growth is 0.20.
Suppose the dollar has been appreciating during the present period. What is the
probability we are experiencing a period of high economic growth?

Q.7 A chemical plant has an emergency alarm system. When an emergency

situation exists, the alarm sounds with probability 0.95. When an emergency
situation does not exist, the alarm system sounds with probability 0.02. A real
emergency situation is a rare event, with probability 0.004. Given that the alarm
has just sounded, what is the probability that a real emergency situation exists?

Q.8 On average, a ship arrives at a certain dock every second day. What is the
probability that two or more ships will arrive on a randomly selected day?

Q.9 An insurance company is considering the addition of major medical coverage for
a relatively rare ailment. The probability that a randomly selected individual will
have the ailment is 0.001 and 3,000 individuals are included in the group that is
insured.

a) What is the expected number of people who will have the ailment in the
group?

b) What is the probability that no one in this group of 3,000 people will have this
ailment?

Q.10 Harley Davidson, director of quality control for the Kyoto motor company, is
conducting his monthly spot check of automatic transmissions. In this procedure, 10
transmissions are removed from the pool of components and are checked for
manufacturing defects. Historically, only 2 percent of the transmissions have such
flaws. (Assume that flaws occur independently in different transmissions.)

a) What is the probability that Harley’s sample contains more than two
transmissions with manufacturing flaws? (Don’t use the tables).

b) What is the probability that none of the selected transmissions has any
manufacturing flaws?

Q.11 A recent study of how Americans spend their leisure time surveyed workers
employed more than 5 years. They determined the probability an employee has 2
weeks of vacation time to be 0.45, 1 week of vacation time to be 0.10 and 3 or
more weeks to be 0.20. Suppose 20 workers are selected at random, Answer the
following questions:

a) What is the probability that 8 have 2 weeks of vacation time?

b) What is the probability that only one worker has 1 week of vacation time?

c) What is the probability that at most 2 of the workers have 3 or more weeks of
vacation time?

Q.12 Each 500 ft roll of sheet includes two flaws, on average. A flaw is a scratch or
mark that would affect the use of that segment of sheet steel in the finished
product. What is the probability that a particular 100 ft segment will include no
flaws?
Q.13 What is the probability of obtaining a score greater than 700 on a GMAT test
that has a mean of 494 and a standard deviation of 100? Assume GMAT scores are
normally distributed.

Q.14 For the same GMAT examination (that has a mean of 494 and a standard
deviation of 100), what is the probability of randomly drawing a score that is 550 or
less?

Q.15 Calculate Karl Pearson’s coefficient of correlation between expenditure on

advertising and sales from data given below.

Advertising expenses (in’000

39 65 62 90 82 75 25 98 36 78
Rs.)

Sales ( Lakh Rs.) 47 53 58 86 62 68 60 91 51 84

Q. 16 Calculate Karl Pearson’s coefficient of correlation for the ages of husbands

and wives given below:

Ages of husbands
23 27 28 29 30 31 33 35 36 39
(years)

Ages of Wives (years) 18 22 23 24 25 26 28 29 30 32

Q. 17 Calculate Spearman’s rank correlation coefficient between advertisement cost

and sales from the following data:

Advertising expenses (in’000

39 65 62 90 82 75 25 98 36 78
Rs.)

Sales ( Lakh Rs.) 47 53 58 86 62 68 60 91 51 84

Q. 18 Ranking of 10 trainees at the beginning (x) and at the ending (y) of a certain
course are given below:

Trainees A B C D E F G H I J

X 1 6 3 9 5 2 7 10 8 4

Y 6 8 3 7 2 1 5 9 4 10
Calculate Spearman’s rank correlation coefficient.

Q.19 A study by the Alaska, Alabama department of transportation of the effect of

train ticket prices on the number of passengers produced following results:

Ticket price ($) 25 30 35 40 45 50 55 60

Passenger per 200 miles 78 78 66 64 60 62 62

800
0 0 0 0 0 0 0

a) Plot these data.

b) Develop estimating equation that best describes these data.

c) Predict the number of passengers per 200 miles if the ticket prices were 50$.
Use a 95% approximate prediction interval.

Q.20 During recent tennis matches, Diane has noticed that her lobs have been less
than totally effective because her opponents have been returning more of them.
Some of the people she says are quite tall, so she was wondering whether the
height of her opponent could be used to explain the number of lobs not returned
during a match. The following data were collected from five recent matches.

Opponent’s Height 5. 6.
5.0 6.5 5.0
(H) 5 0

Unreturned Lobs
9 6 3 0 7
(L)

a) Which variable is the dependent variable?

b) What is the least squares estimating equation for these data?

c) What is your best estimate of the number of unreturned lobs in her match
tomorrow with an opponent who is 5.9 feet tall?