SBE11E Chapter 05

Chapter5
DiscreteProbabilityDistributions
LearningObjectives
1.
Understandtheconceptsofarandomvariableandaprobabilitydistribution.
2.
Beabletodistinguishbetweendiscreteandcontinuousrandomvariables.
3.
Beabletocomputeandinterprettheexpectedvalue,variance,andstandarddeviationforadiscrete
randomvariable.
4.
Beabletocomputeandworkwithprobabilitiesinvolvingabinomialprobabilitydistribution.
5.
BeabletocomputeandworkwithprobabilitiesinvolvingaPoissonprobabilitydistribution.
6.
Knowwhenandhowtousethehypergeometricprobabilitydistribution.
51
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Chapter5
Solutions:
1.
a.
Head,Head(H,H)
Head,Tail(H,T)
Tail,Head(T,H)
Tail,Tail(T,T)
b.
x=numberofheadsontwocointosses
c.
Outcome
(H,H)
(H,T)
(T,H)
(T,T)
2.
Values of x
2
1
1
0
d.
Discrete.Itmayassume3values:0,1,and2.
a.
Letx=time(inminutes)toassembletheproduct.
b.
Itmayassumeanypositivevalue:x>0.
c.
Continuous
3.
Let Y=positionisoffered
N=positionisnotoffered
a.
S={(Y,Y,Y),(Y,Y,N),(Y,N,Y),(N,Y,Y),(Y,N,N),(N,Y,N),(N,N,Y),(N,N,N)}
b.
LetN=numberofoffersmade;Nisadiscreterandomvariable.
c.
Experimental Outcome
Value of N
4.
5.
(Y,Y,Y) (Y,Y,N) (Y,N,Y) (N,Y,Y) (Y,N,N) (N,Y,N) (N,N,Y) (N,N,N)

3
2
2
2
1
1
1
0
0,1,2,3,4,5,6,7,8,9
a.
S={(1,1),(1,2),(1,3),(2,1),(2,2),(2,3)}
b.
Experimental Outcome
Number of Steps Required
6.
a.
values: 0,1,2,...,20
discrete
b.
values: 0,1,2,...
(1,1)
2
(1,2)
3
52
(1,3)
4
(2,1)
3
(2,2)
4
(2,3)
5

discrete
c.
d.
7.
values: 0,1,2,...,50
discrete
values: 0x8
continuous
e.
values: x>0
continuous
a.
f(x)0forallvaluesofx.
f(x)=1Therefore,itisaproperprobabilitydistribution.
8.
b.
Probabilityx=30isf(30)=.25
c.
Probabilityx25isf(20)+f(25)=.20+.15=.35
d.
Probabilityx>30isf(35)=.40
a.
x
1
2
3
4
b.
f (x)
3/20
5/20
8/20
4/20
Total
=
=
=
=
.15
.25
.40
.20
1.00
f(x)
.4
.3
.2
.1
x
1
c.
f(x)0forx=1,2,3,4.
f(x)=1
53

Chapter5
9.
a.
Age
6
7
8
9
10
11
12
13
14
NumberofChildren
37,369
87,436
160,840
239,719
286,719
306,533
310,787
302,604
289,168
2,021,175
f(x)
0.018
0.043
0.080
0.119
0.142
0.152
0.154
0.150
0.143
1.000
b.
f(x)
.16
.14
.12
.10
.08
.06
.04
.02
x
6
10 11 12 13 14
c.
f(x)0foreveryx
f(x)=1
10. a.
x
1
2
3
4
5
f(x)
0.05
0.09
0.03
0.42
0.41
1.00
b.
54

x
1
2
3
4
5
f(x)
0.04
0.10
0.12
0.46
0.28
1.00
c.
P(4or5)=f(4)+f(5)=0.42+0.41=0.83
d.
Probabilityofverysatisfied:0.28
e.
Seniorexecutivesappeartobemoresatisfiedthanmiddlemanagers.83%ofseniorexecutiveshave
ascoreof4or5with41%reportinga5.Only28%ofmiddlemanagersreportbeingverysatisfied.
11. a.
DurationofCall
x
1
2
3
4
f(x)
0.25
0.25
0.25
0.25
1.00
b.
f(x)
0.30
0.20
0.10
x
0
c.
f(x)0andf(1)+f(2)+f(3)+f(4)=0.25+0.25+0.25+0.25=1.00
d.
f(3)=0.25
e.
P(overtime)=f(3)+f(4)=0.25+0.25=0.50
12. a.
Yes;f(x)0.f(x)=1
b.
f(500,000)+f(600,000)=.10+.05=.15
c.
f(100,000)=.10
13. a.
b.
Yes,sincef(x)0forx=1,2,3andf(x)=f(1)+f(2)+f(3)=1/6+2/6+3/6=1
f(2)=2/6=.333
55

Chapter5
c.
14. a.
f(2)+f(3)=2/6+3/6=.833
f(200) =1f(100)f(0)f(50)f(100)f(150)
=1.95=.05
ThisistheprobabilityMRAwillhavea$200,000profit.
b.
P(Profit) =f(50)+f(100)+f(150)+f(200)
=.30+.25+.10+.05=.70
c.
P(atleast100) =f(100)+f(150)+f(200)
=.25+.10+.05=.40
15. a.
x
3
6
9
f (x)
.25
.50
.25
1.00
x f (x)
.75
3.00
2.25
6.00
E(x)==6
b.
x
3
6
9
x
3
0
3
(x)2
9
0
9
(x)2f(x)
2.25
0.00
2.25
4.50
f(x)
.25
.50
.25
Var(x)=2=4.5
c.
= 4.50 =2.12
16. a.
y
2
4
7
8
E(y)==5.2
b.
y
2
4
7
8
y
3.20
1.20
1.80
2.80
f (y)
.2
.3
.4
.1
1.0
(y)2
10.24
1.44
3.24
7.84
y f (y)
.4
1.2
2.8
.8
5.2
f(y)
.20
.30
.40
.10
56
(y)2f(y)
2.048
.432
1.296
.784
4.560

Var( y ) 4.56
4.56 2.14
17. a.
TotalStudent=1,518,859
x=1
x=2
x=3
x=4
x=5
b.
f(1)=721,769/1,518,859=.4752
f(2)=601,325/1,518,859=.3959
f(3)=166,736/1,518,859=.1098
f(4)=22,299/1,518,859=.0147
f(5)=6730/1,518,859=.0044
P(x>1)=1f(1)=1.4752=.5248
Over50%ofthestudentstaketheSATmorethan1time.
c.
P(x>3)=f(3)+f(4)+f(5)=.1098+.0147+.0044=.1289
d./e.
x
1
2
3
4
5
f(x)
.4752
.3959
.1098
.0147
.0044
xf(x)
.4752
.7918
.3293
.0587
.0222
1.6772
x
.6772
.3228
1.3228
2.3228
3.3228
(x)2
.4586
.1042
1.7497
5.3953
11.0408
(x)2f(x)
.2179
.0412
.1921
.0792
.0489
.5794
E(x)=xf(x)=1.6772
ThemeannumberoftimesastudenttakestheSATis1.6772,orapproximately
1.7times.
2 ( x ) 2 f ( x) .5794
2 .5794 .7612
18. a/b.
x
0
1
2
3
4
Total
f(x)
0.04
0.34
0.41
0.18
0.04
1.00
x
1.84
0.84
0.16
1.16
2.16
xf(x)
0.00
0.34
0.82
0.53
0.15
1.84
E(x)
57
(x)2
3.39
0.71
0.02
1.34
4.66
(x)2f(x)
0.12
0.24
0.01
0.24
0.17
0.79
Var(x)

Chapter5
c/d.
y
0
1
2
3
4
Total
e.
19. a.
f(y)
0.00
0.03
0.23
0.52
0.22
1.00
y
2.93
1.93
0.93
0.07
1.07
yf(y)
0.00
0.03
0.45
1.55
0.90
2.93
E(y)
(y)2
8.58
3.72
0.86
0.01
1.15
(y)2f(y)
0.01
0.12
0.20
0.00
0.26
0.59
Var(y)
Thenumberofbedroomsinowneroccupiedhousesisgreaterthaninrenteroccupiedhouses.The
expectednumberofbedroomsis2.931.84=1.09greater.And,thevariabilityinthenumberof
bedroomsislessfortheowneroccupiedhouses.
E(x)=xf(x)=0(.56)+2(.44)=.88
b.
E(x)=xf(x)=0(.66)+3(.34)=1.02
c.
Theexpectedvalueofa3pointshotishigher.So,iftheseprobabilitiesholdup,theteamwill
makemorepointsinthelongrunwiththe3pointshot.
20. a.
x
0
500
1000
3000
5000
8000
10000
Total
f(x)
.85
.04
.04
.03
.02
.01
.01
1.00
xf(x)
0
20
40
90
100
80
100
430
Theexpectedvalueoftheinsuranceclaimis$430.Ifthecompanycharges$430forthistypeof
collisioncoverage,itwouldbreakeven.
b.
Fromthepointofviewofthepolicyholder,theexpectedgainisasfollows:
ExpectedGain =ExpectedclaimpayoutCostofinsurancecoverage
=$430$520=$90
The policyholder is concerned that an accident will result in a big repair bill if there is no insurance
coverage. So even though the policyholder has an expected annual loss of $90, the insurance is
protecting against a large loss.
21. a.
E(x) =xf(x) =0.05(1)+0.09(2)+0.03(3)+0.42(4)+0.41(5)=4.05
b.
E(x) =xf(x) =0.04(1)+0.10(2)+0.12(3)+0.46(4)+0.28(5)=3.84
c.
Executives:
2 = (x)2f(x)=1.25
58

MiddleManagers:2 = (x)2f(x)=1.13
d.
=1.12
Executives:
MiddleManagers: =1.07
e.
22. a.
Theseniorexecutiveshaveahigheraveragescore:4.05vs.3.84forthemiddlemanagers.The
executivesalsohaveaslightlyhigherstandarddeviation.
E(x) =xf(x)=300(.20)+400(.30)+500(.35)+600(.15)=445
Themonthlyorderquantityshouldbe445units.
b.
23. a.
Cost:
445@$50 = $22,250
Revenue: 300@$70 = 21,000
$1,250Loss
RentControlled:E(x)=1(.61)+2(.27)+3(.07)+4(.04)+5(.01)=1.57
RentStabilized:E(x)=1(.41)+2(.30)+3(.14)+4(.11)+5(.03)+6(.01)=2.08
b.
RentControlled:
Var(x)=(.57)2.61+(.43)2.27+(1.43)2.07+(2.43)2.04+(3.43)2.01=.75
RentStabilized:
Var(x)=(1.08)2.41+(.08)2.30+(.92)2.14+(1.92)2.11+(2.92)2.03+(3.92)2.01=1.41
c.
24. a.
Fromtheexpectedvaluesinpart(a),itisclearthattheexpectednumberofpersonslivinginrent
stabilizedunitsisgreaterthanthenumberofpersonslivinginrentcontrolledunits.Forexample,
comparingabuildingthatcontained10rentcontrolledunitstoabuildingthatcontained10rent
stabilizedunits,theexpectednumberofpersonslivingintherentcontrolledbuildingwouldbe
1.57(10)=15.7orapproximately16.Fortherentstabilizedbuilding,theexpectednumberof
personsisapproximately21.Thereisalsomorevariabilityinthenumberofpersonslivinginrent
stabilizedunits.
MediumE(x) =xf(x)
=50(.20)+150(.50)+200(.30)=145
Large: E(x)
=xf(x)
=0(.20)+100(.50)+300(.30)=140
Mediumpreferred.
b.
Medium
x
50
150
200
f(x)
.20
.50
.30
x
95
5
55
(x)2
9025
25
3025
59
(x)2f(x)
1805.0
12.5
907.5
2=2725.0

Chapter5
Large
y
0
100
300
f(y)
y
(y)2
(y)2f(y)
.20
140
19600
3920
.50
40
1600
800
.30
160
25600
7680
=12,400
Mediumpreferredduetolessvariance.
25. a.
S
F
S
F
S
F
b.
2
2!
f (1) (.4)1 (.6)1
(.4)(.6) .48
1!1!
1
c.
2
2!
f (0) (.4)0 (.6) 2
(1)(.36) .36
0!2!
0
d.
2
2!
f (2) (.4) 2 (.6) 0
(.16)(1) .16
2!0!
2
e.
P(x1)=f(1)+f(2)=.48+.16=.64
f.
E(x)=np=2(.4)=.8
Var(x)=np(1p)=2(.4)(.6)=.48
= .48 =.6928
26. a.
f(0)=.3487
b.
f(2)=.1937
c.
P(x2)=f(0)+f(1)+f(2)=.3487+.3874+.1937=.9298
510

d.
P(x1)=1f(0)=1.3487=.6513
e.
E(x)=np=10(.1)=1
f.
Var(x)=np(1p)=10(.1)(.9)=.9
= .9 =.95
27. a.
f(12)=.1144
b.
f(16)=.1304
c.
P(x16) =f(16)+f(17)+f(18)+f(19)+f(20)
=.1304+.0716+.0278+.0068+.0008=.2374
d.
P(x15)=1P(x16)=1.2374=.7626
e.
E(x)=np=20(.7)=14
f.
Var(x)=np(1p)=20(.7)(.3)=4.2
= 4.2 =2.0494
28. a.
b.
6
f (2) (.23)2 (.77) 4 .2789
2
P(atleast2) =1f(0)f(1)
6
0
6 6
(.23)1 (.77)5
= 1 (.23) (.77)
0
1
=
c.
29. a.
b.
1.2084.3735=.4181
10
0
10
(.23) (.77) .0733
0
f (0)
n
f ( x) ( p ) x (1 p ) n x
x
f (3)
10!
(.30)3 (1 .30)10 3
3!(10 3)!
f (3)
10(9)(8)
(.30)3 (1 .30)7 .2668
3(2)(1)
P(x3)=1f(0)f(1)f(2)
511

Chapter5
f (0)
10!
(.30)0 (1 .30)10 .0282
0!(10)!
f (1)
10!
(.30)1 (1 .30)9 .1211
1!(9)!
f (2)
10!
(.30) 2 (1 .30)8 .2335
2!(8)!
P(x3)=1.0282.1211.2335=.6172
30. a.
b.
Probabilityofadefectivepartbeingproducedmustbe.03foreachpartselected;partsmustbe
selectedindependently.
Let: D=defective
G=notdefective
1st part
2nd part
Experimental
Outcome
Number
Defective
(D, D)
(D, G)
(G, D)
(G, G)
c.
2outcomesresultinexactlyonedefect.
d.
P(nodefects)=(.97)(.97)=.9409
P(1defect)=2(.03)(.97)=.0582
P(2defects)=(.03)(.03)=.0009
31.
Binomialn=10andp=.09
f ( x)
10!
(.09) x (.91)10 x
x !(10 x)!
512

a.
Yes.Sincetheyareselectedrandomly,pisthesamefromtrialtotrialandthetrialsare
independent.
b.
f(2)=.1714
c.
f(0)=.3894
d.
1f(0)f(1)f(2)=1(.3894+.3851+.1714)=.0541
32. a.
b.
.90
P(atleast1)=f(1)+f(2)
f (1)
2!
(.9)1 (.1)1
1! 1!
2(.9)(.1) .18
f (2)
2!
(.9)1 (.1) 0
2! 0!
1(.81)(1) .81
P(at least 1) = .18 + .81 = .99
Alternatively
P(atleast1) = 1f(0)
f (0)
2!
(.9)0 (.1) 2 .01
0! 2!
Therefore, P(at least 1) = 1 - .01 = .99

c.
P(atleast1)=1f(0)
f (0)
3!
(.9)0 (.1)3 .001
0! 3!
513

Chapter5
Therefore, P(at least 1) = 1 - .001 = .999

d.
33. a
Yes;P(atleast1)becomesverycloseto1withmultiplesystemsandtheinabilitytodetectanattack
wouldbecatastrophic.
f(12)=
20!
(.5)12 (.5)8
12!8!
Usingthebinomialtables,f(12)=.1201
b.
f(0)+f(1)+f(2)+f(3)+f(4)+f(5)
.0000+.0000+.0002+.0011+.0046+.0148=.0207
c.
E(x)=np=20(.5)=10
d.
Var(x)=2=np(1p)=20(.5)(.5)=5
= 5 =2.24
34. a.
b.
n
f ( x) ( p ) x (1 p ) n x
x
f (4)
15!
(.28) 4 (1 .28)15 4
4!(15 4)!
f (4)
15(14)(13)(12)
(.28) 4 (1 .28)11 .2262
4(3)(2)(1)
P(x3)=1f(0)f(1)f(2)
f (0)
15!
(.28)0 (1 .28)15 .0072
0!(15)!
f (1)
15!
(.28)1 (1 .28)14 .0423
1!(14)!
f (2)
15!
(.28)2 (1 .28)13 .1150
2!(13)!
P(x3)=1.0072.0423.1150=.8355
35. a.
f(0)+f(1)+f(2)=.0115+.0576+.1369=.2060
b.
f(4)=.2182
c.
1[f(0)+f(1)+f(2)+f(3)]
=1.2060.2054=.5886
514

d.
36. a.
=np=20(.20)=4
p==.25
n
f ( x) ( p ) x (1 p ) n x
x
20
4
20 4
(.25) (1 .25)
4

f (4)
f (4)
b.
20!
20(19)(18)(17)
(.25) 4 (.75)16 f (4)
(.25) 4 (.75)16 .1897
4!(20 4)!
4(3)(2)(1)
P(x2)=1f(0)f(1)
Usingthebinomialtablesf(0)=.0032andf(1)=.0211
P(x2)=1.0032.0211=.9757
c.
Usingthebinomialtablesf(12)=.0008
And,withf(13)=.0002,f(14)=.0000,andsoon,theprobabilityoffindingthat12ormore
investorshaveexchangetradedfundsintheirportfolioissosmallthatitishighlyunlikelythatp=.
25.Insuchacase,wewoulddoubttheaccuracyoftheresultsandconcludethatpmustbegreater
than.25.
d.
37.
=np=20(.25)=5
E(x)=np=35(.23)=8.05(8automobiles)
Var(x)=np(1p)=35(.23)(1.23)=6.2
= 6.2 =2.49
38. a.
f ( x)
3x e 3
x!
b.
f (2)
32 e 3 9(.0498)
.2241
2!
2
c.
f (1)
31 e 3
3(.0498) .1494
1!
d.
39. a.
b.
P(x2)=1f(0)f(1)=1.0498.1494=.8008
f ( x)
2 x e 2
x!
=6for3timeperiods
515

Chapter5
c.
f ( x)
6 x e 6
x!
d.
f (2)
22 e 2 4(.1353)
.2706
2!
2
e.
f (6)
66 e 6
.1606
6!
f.
f (5)
45 e4
.1563
5!
40. a.
=48(5/60)=4
3
f(3)= 4 e = (64)(.0183) =.1952

3!
6
b.
=48(15/60)=12
10
12
f(10)= 12 e =.1048
10!
c.
=48(5/60)=4Iexpect4callerstobewaitingafter5minutes.
0
f(0)= 4 e =.0183
0!
Theprobabilitynonewillbewaitingafter5minutesis.0183.
d.
=48(3/60)=2.4
0
f(0)= 2.4 e
0!
2.4
=.0907
Theprobabilityofnointerruptionsin3minutesis.0907.
41. a.
b.
30perhour
=1(5/2)=5/2
f (3)
(5 / 2)3 e (5 / 2)
.2138
3!
516

c.
f (0)
(5 / 2)0 e (5 / 2)
e (5 / 2) .0821
0!
42. a.
f (0)
7 0 e7
e 7 .0009
0!
b.
probability=1[f(0)+f(1)]
f (1)
71 e 7
7e 7 .0064
1!
probability=1[.0009+.0064]=.9927
c.
=3.5
f (0)
3.50 e 3.5
e3.5 .0302
0!
probability=1f(0)=1.0302=.9698
d.
probability =1[f(0)+f(1)+f(2)+f(3)+f(4)]
=1[.0009+.0064+.0223+.0521+.0912]=.8271
Note:ThePoissontableswereusedtocomputethePoissonprobabilitiesf(0),f(1),f(2),f(3)andf(4)
inpart(d).
43. a.
b.
f (0)
100 e 10
e 10 .000045
0!
f(0)+f(1)+f(2)+f(3)
f(0)=.000045(parta)
f (1)
101 e10
.00045
1!
Similarly,f(2)=.00225,f(3)=.0075
andf(0)+f(1)+f(2)+f(3)=.010245
c.
2.5arrivals/15sec.periodUse=2.5
f (0)
d.
44.
2.50 e 2.5
.0821
0!
1f(0)=1.0821=.9179
Poissondistributionapplies
517

Chapter5
a.
b.
c.
d.
45. a.
b.
=1.25permonth
1.250 e 1.25
.2865
0!
1.251 e 1.25
f (1)
.3581
1!
f (0)
P(Morethan1)=1f(0)f(1)=10.28650.3581=.3554
f ( x)
x e
x!
f (0)
30 e 3
e 3 .0498
0!
P(x2)=1f(0)f(1)
f (1)
31 e 3
.1494
1!
P(x2)=1.0498.1494=.8008
c.
d.
46. a.
=3peryear
=3/2=1.5per6months
1.50 e 1.5
f (0)
.2231
0!
3 10 3

1 4 1
f (1)
10

4
7!
3!
1!2! 3!4!
(3)(35)
.50
10!
210
4!6!
b.
3 10 3

2 2 2
(3)(1)
f (2)
.067
45
10

2
c.
3 10 3

0 2 0
(1)(21)
f (0)
.4667
45
10

2
518

d.
e.
3 10 3

2 4 2
(3)(21)
f (2)
.30
210
10

4
Note x = 4 is greater than r = 3. It is not possible to have x = 4 successes when there are only 3
successes in the population. Thus, f(4) = 0. In this exercise, n is greater than r. Thus, the number
of
successes x can only take on values up to and including r = 3. Thus, x = 0, 1, 2, 3.
4 15 4

3 10 3
(4)(330)
f (3)
.4396
3003
15

10
47.
48.
HypergeometricDistributionwithN=10andr=7
a.
b.
7 3

2 1
(21)(3)
f (2)
=.5250
120
10

3
Computetheprobabilitythat3preferfootball.
7 3

3 0
(35)(1)
f (3)
.2917
10
120

3
P(majoritypreferfootball)=f(2)+f(3)=.5250+.2917=.8167
49.
Partsa,b&cinvolvethehypergeometricdistributionwithN=52andn=2
a.
r=20,x=2
f (2)
b.
32
0 (190)(1) .1433
1326
52

2
r=4,x=2
f (2)
c.
20

2
4

2
48
0 (6)(1) .0045
1326
52

2

r=16,x=2
519

Chapter5
f (2)
d.
16

2
36
0 (120)(1) .0905
1326
52

2

Part(a)providestheprobabilityofblackjackplustheprobabilityof2acesplustheprobabilityof
two10s.Tofindtheprobabilityofblackjackwesubtracttheprobabilitiesin(b)and(c)fromthe
probabilityin(a).
P(blackjack)=.1433.0045.0905=.0483
50.
N=60n=10
a.
r=20x=0
20 40
40!
(1)

0
10
10!30!
40! 10!50!
f (0)
60!
60!
60
10!30!

10!50!
10
=
b.
40 39 38 37 36 35 34 33 32 31
.0112
60 59 58 57 56 55 54 53 52 51
r=20x=1
20 40

1
9
40! 10!50!
f (1)
20
.0725
60!
60
9!31!

10
c.
1f(0)f(1)=1.0112.0725=.9163
d.
SameastheprobabilityonewillbefromHawaii;.0725.
51. a.
b.
5 10

0 3
(1)(120)
f (0)
.2637
455
15

3
5 10

1 2
(5)(45)
f (1)
.4945
455
15

3
520

c.
5 10

2 1
(10)(10)
f (2)
.2198
455
15

3
d.
5 10

3 0
(10)(1)
f (3)
.0220
455
15

3
52.
HypergeometricwithN=10andr=3.
a.
n=3,x=0
3 7
7!
3!

0!3! 3!4!
0 3
(1)(35)
f (0)
.2917
10!
10
120

3!7!
3
Thisistheprobabilitytherewillbenobankswithincreasedlendinginthestudy.
b.
n=3,x=3
3 7
7!
3!

3!0! 0!7!
3
0
(1)(1)
f (3)
.0083
10!
120
10

3!7!
3
Thisistheprobabilitythereallthreebankswithincreasedlendingwillbeinthestudy.Thishasa
verylowprobabilityofhappening.
c.
n=3,x=1
3 7
7!
3!

1!2! 2!5!
1
2
(3)(21)
f (1)
.5250
10!
120
10

3!7!
3
n=3,x=2
3 7
7!
3!

2!1! 1!6!
2 1
(3)(7)
f (2)
.1750
10!
10
120

3!7!
3
x
0
1
f(x)
0.2917
0.5250
521

Chapter5
2
3
Total
0.1750
0.0083
1.0000
f(1)=.5250hasthehighestprobabilityshowingthatthereisovera.50chancethattherewillbe
exactlyonebankthathadincreasedlendinginthestudy.
d.
P(x>1)= 1 f (0) 1 .2917 .7083

Thereisareasonablyhighprobabilityof.7083thattherewillbeatleastonebankthathad
increasedlendinginthestudy.
r
3
3 .90
N
10
e. E ( x) n
r
r
2 n 1
N
N
N n
3
3
3 1
N 1 10
10
10 3
.49
10 1
2 .49 .70
53. a/b/c.
x
1
2
3
4
5
Total
f(x)
0.07
0.21
0.29
0.39
0.04
1.00
xf(x)
0.07
0.42
0.87
1.56
0.20
3.12
E(x)
x
2.12
1.12
0.12
0.88
1.88
(x)2
4.49
1.25
0.01
0.77
3.53
(x)2f(x)
0.31
0.26
0.00
0.30
0.14
1.03
Var(x)
= 1.03 =1.01
d.
Theexpectedlevelofoptimismis3.12.Thisisabitaboveneutralandindicatesthatinvestment
managersaresomewhatoptimistic.Theirattitudesarecenteredbetweenneutralandbullishwiththe
consensusbeingclosertoneutral.
54. a/b.
x
1
2
f(x)
0.24
0.21
xf(x)
0.24
0.41
x
2.00
1.00
522
(x)2
4.00
1.00
(x)2f(x)
0.97
0.21

3
4
5
Total
c.
0.10
0.21
0.24
1.00
0.31
0.83
1.21
3.00
E(x)
0.00
1.00
2.00
0.00
1.00
4.00
0.00
0.21
0.97
2.34
Var(x)
Forthebondfundcategories:E(x)=1.36Var(x)=.23
Forthestockfundcategories:E(x)=4Var(x)=1.00
Thetotalriskofthestockfundsismuchhigherthanforthebondfunds.Itmakessensetoanalyze
theseseparately.Whenyoudothevariancesforbothgroups(stocksandbonds),theyarereduced.
55. a.
x
9
10
11
12
13
b.
f (x)
.30
.20
.25
.05
.20
E(x) =xf(x)
=9(.30)+10(.20)+11(.25)+12(.05)+13(.20)=10.65
Expectedvalueofexpenses:$10.65million
c.
Var(x) =(x)2f(x)
=(910.65)2(.30)+(1010.65)2(.20)+(1110.65)2(.25)
+(1210.65)2(.05)+(1310.65)2(.20)=2.13
d.
LooksGood:E(Profit)=1210.65=1.35million
However,thereisa.20probabilitythatexpenseswillequal$13millionandthecollegewillruna
deficit.
56. a.
n=20andx=3
20
3
17
(.05) (.95) .0596
3

f (3)
b.
n=20andx=0
20
0
20
(.05) (.95) .3585
0

f (0)
523

Chapter5
c.
E(x)=np=2000(.05)=100
Theexpectednumberofemployeesis100.
d.
=np(1p)=2000(.05)(.95)=95
= 95 =9.75
57. a.
WemusthaveE(x)=np20
Forthe1834agegroup,p=.26.
n(.26)20
n76.92
Sampleatleast77peopletohaveanexpectednumberofhomeownersatleast20forthisage
group.
b.
Forthe3544agegroup,p=.50.
n(.50)20
n40
group.
c.Forthe55andoveragegroup,p=.88.
n(.88)20
n22.72
group.
d.
np (1 p) 77(.26)(.74) 3.85
e.
np(1 p ) 40(.50)(.50) 3.16
58.
Sincetheshipmentislargewecanassumethattheprobabilitiesdonotchangefromtrialtotrialand
usethebinomialprobabilitydistribution.
a.
n=5
5
f (0) (0.01)0 (0.99) 5 .9510
0
b.
c.
5
f (1) (0.01)1 (0.99) 4 .0480
1
1f(0)=1.9510=.0490
524

d.
59. a.
b.
No,theprobabilityoffindingoneormoreitemsinthesampledefectivewhenonly1%oftheitems
inthepopulationaredefectiveissmall(only.0490).Iwouldconsideritlikelythatmorethan1%
oftheitemsaredefective.
E(x)=np=100(.041)=4.1
Var(x)=np(1p)=100(.041)(.959)=3.93
3.93 1.98
60. a.
E(x)=800(.30)=240
b.
np(1 p) 800(.30)(.70) 12.96
c.
Forthisonep=.70and(1p)=.30,buttheansweristhesameasinpart(b).Forabinomial
probabilitydistribution,thevarianceforthenumberofsuccessesisthesameasthevarianceforthe
numberoffailures.Ofcourse,thisalsoholdstrueforthestandarddeviation.
=15
61.
probof20ormorearrivals =f(20)+f(21)+
=.0418+.0299+.0204+.0133+.0083+.0050+.0029
+.0016+.0009+.0004+.0002+.0001+.0001=.1249
=1.5
62.
probof3ormorebreakdownsis1[f(0)+f(1)+f(2)].
1[f(0)+f(1)+f(2)]
=1[.2231+.3347+.2510]
=1.8088=.1912
=10f(4)=.0189
63.
64. a.
b.
f (3)
33 e 3
.2240
3!
f(3)+f(4)+=1[f(0)+f(1)+f(2)]
0
3
f(0)= 3 e =e =.0498
0!
Similarly,f(1)=.1494,f(2)=.2240
1[.0498+.1494+.2241]=.5767
65.
HypergeometricN=52,n=5andr=4.
525

Chapter5
a.
b.
c.
d.
66. a.
4IF
48I
F
G
J
G
2K
H
H3 JK 6(17296) .0399
52I
2,598,960
F
G
J
H5 K
4IF
48I
F
G
J
G
1K
H
H4 JK 4(194580) .2995
52I
2,598,960
F
G
H5 JK
4IF
48I
F
G
J
G
0K
H
H5 JK 1,712,304 .6588
52I
2,598,960
F
G
J
H5 K
1f(0)=1.6588=.3412
7 3

1 1
(7)(3)
f (1)
.4667
10
45

2
b.
7 3

2 0
(21)(1)
f (2)
.4667
45
10

2
c.
7 3

0 2
(1)(3)
f (0)
.0667
45
10

2
526


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Chapter5

2010 Cengage Learning. All Rights Reserved.

(Y,Y,Y) (Y,Y,N) (Y,N,Y) (N,Y,Y) (Y,N,N) (N,Y,N) (N,N,Y) (N,N,N)

2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

E(x) =xf(x) =0.05(1)+0.09(2)+0.03(3)+0.42(4)+0.41(5)=4.05

E(x) =xf(x) =0.04(1)+0.10(2)+0.12(3)+0.46(4)+0.28(5)=3.84

2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

Therefore, P(at least 1) = 1 - .01 = .99

2010 Cengage Learning. All Rights Reserved.

Therefore, P(at least 1) = 1 - .001 = .999

2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

f(3)= 4 e = (64)(.0183) =.1952

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2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

P(x>1)= 1 f (0) 1 .2917 .7083

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2010 Cengage Learning. All Rights Reserved.

np(1 p ) 40(.50)(.50) 3.16

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np(1 p) 800(.30)(.70) 12.96

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2010 Cengage Learning. All Rights Reserved.

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