Unit F

1) Suppose it is known that the daily trade volume of securities is normally distributed with an
average of 1.8 billion trades and a standard deviation of 0.15 billion.
a) What is the probability that a randomly selected day will have a trade volume below 1.75
billion?

b) What is the probability that a randomly selected day will have a trade volume higher than 1.6
billion?

c) What is the probability that the number of trades on a given day will be between 1.5 billion and
2.0 billion?

2) Companies that sell stock mutual funds charge their investors expense fees to offset the costs of
research and administrative activities. Assume that the distribution of expense fees is distributed as
a normal random variable with a mean of 0.96% and a standard deviation of 0.30%.
a) Find the probability that a randomly selected stock mutual fund has an expense fee greater than
1.20%.

b) Find the probability that a randomly selected stock mutual fund has an expense fee less than
1.10%.

c) Find the probability that a randomly selected stock mutual fund has an expense fee between
1.00% and 1.25%?

3) Troys Trucking Company determined that on an annual basis the distance traveled per truck is
normally distributed with a mean of 43.5 thousand miles and a standard deviation of 8.0 thousand
miles.
a) What is the likelihood that a randomly selected truck travels between 30.0 and 40.0 thousand
miles in the year?

b) What is the likelihood that a randomly selected truck travels more than 50.0 thousand miles in
the year?

c) What is the likelihood that a randomly selected truck travels less than 45.0 thousand miles in the
year?

4) Suppose it is known that the daily trade volume of securities is normally distributed with an
average of 1.8 billion trades and a standard deviation of 0.15 billion.
a) What is the number of securities traded such that 2.5% of the days trade fewer than that?

b) What is the number of securities traded such that 15.9% of the days trade more than that?

c) 68.2% of the days will have trade volume between what two amounts (symmetrically distributed
about the mean)?

5) Companies that sell stock mutual funds charge their investors expense fees to offset the costs of
research and administrative activities. Assume that the distribution of expense fees is distributed as
a normal random variable with a mean of 0.96% and a standard deviation of 0.30%.
a) The expense fee for 90% of stock mutual funds is greater than what value?

b) The expense fee for 80% of stock mutual funds is lower than what value?

c) The expense fee for 60% of stock mutual funds is between what two values (symmetrically
distributed around the mean)?

6) Troys Trucking Company determined that on an annual basis the distance traveled per truck is
normally distributed with a mean of 43.5 thousand miles and a standard deviation of 8.0 thousand
miles.
a) The mileage for 95% of trucks will be between what two values (symmetrically distributed
around the mean)?

b) 1% of the trucks will travel more than how many miles?

c) 33% of the trucks will travel fewer than how many miles?

7) Understand the following concepts:

Proper sampling for inferential statistics

Bias

Explain 3 sources of bias:

Selection bias

Nonresponse bias

Measurement bias

Describe various Sampling Methods how are they conducted?

Simple Random Sampling

Stratified Random Sampling

Cluster Sampling