COMM 215: BUSINESS STATISTICS

SOLUTIONS TO PRACTICE PROBLEMS 1

Descriptive Statistics
a.

1.

Leaf-unit = 0.01
0
1
2
3
4
5
6
7
8

b.

Leaf Unit = 0.10

26, 45, 52, 81, 85, 88, 91, 94

01, 22, 42, 91, 92, 94
25, 33, 51, 62, 66, 93, 95, 95
51, 60, 72
91
19
71
96
81

i.

X = 2.689

ii.

Q1 = the 8th ordered value = 0.94

Q3 = the 23rd ordered value = 3.51

iii.

Range = 8.81 - 0.26 = 8.55, IQR = 3.51 0.94 = 2.57

iv.

S2= 4.69,

c. 1.5 (IQR),

0
1
2
3
4
5
6
7
8

24588899
024999
23566999
567
9
1
7
9
8

Median = 2.29 Mode = 2.95

S = 2.166

1.5 (2.57) = 3.855,

Q1 - 3.855 = -2.92, Q3 + 3.855 = 7.37

Two outliers whose values are 7.96 and 8.81

--------------------I
+
I-------------------*
*
----------------+---------+---------+---------+---------+---------+------minutes
0.0
1.6
3.2
4.8
6.4
8.0

COMM 215 Solution to Practice Problems 1

2.

a.

Leaf Unit = 1.0

0
1
2
3
4

b.
c.
d.

3.

Q1 = 18.5,
Q2 = 27.5,
Q3 = 36.5,
Xmin = 8,
X = 27.083,
S = 11.735
40th. Percentile = the 5th ordered value = 24

Xmax = 43

a.
0
0
1
1
2
2
3

4.

8
0 5
2 4 5
0 5 5 8
03

3
5689
00244
8
014
5
3

or

0
1
2
3

b.

30th percentile: 9
70th percentile: 17 (.7) = 20

c.

Q1 = 9, Q3 = 20. 5
IQR = 11.5
1.5(IQR)=17.25
Q3 + 1.5(IQR) = 37.75
Yes, 42 days would be considered an outlier.

35689
002448
0145
3

a.
i.
ii.
iii.
iv.

X = $3430, Median = $3500,

Q1 = $2,350, Q3 = $4,450
Range = 5200 - 1000 = $4,200;
S2 = 1,560,105; S = $1,249

COMM 215 Solution to Practice Problems 1

Mode = $3500
IQR = 4450 - 2350 = $2,100

v.
vi.

-------------------------------------------I
+
I-----------------------------------+---------+---------+---------+---------+---------+----800
1600
2400
3200
4000
4800

Compute:

b.

5.

(1.5) IQR+Q3 = 7600.

No outliers

C.V. retainers = (1249/3430) *100 = 36.4%

C.V total compensation = (20,000/120,000) * 100 = 16.67%
No, each retainer is relatively more variable.

a.
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
b.

Fi
3
7
11
13
9
7
5
3
1
1

Cumulative
3
10
21
34
43
50
55
58
59
60

Cumulative relative
0.05
0.167
0.35
0.57
0.717
0.833
0.917
0.967
0.983
1

Right or positively skewed.

6.

a.
b.
c.

X = $2491.25
S= $282.11
CV = 11.32%
The median = $2405; 40th percentile: = $2390
CV = 320/3600 = 0.0889 * 100 = 8.89%
No, they are less variable or smaller C.V.

7.

a.

X = 696.809

S = 483.188

b.
---------------------I
+
I--------------*
------------+---------+---------+---------+---------+---------+-----0
400
800
1200
1600
2000

IQR = 857 - 378 = 479

IQR (1.5) = 718.5,
Therefore, the data value 2063 is an outlier.

COMM 215 Solution to Practice Problems 1

857 + 718.5 = 1575.5

c. Point where 50% of the observations are more than $684 and 50% are less
d.

The proportion below X - 1S = 213.6 plus the proportion above X + 2S = 1663.2

You would expect: 0.34 + 0.475 = 0.815 or 81.5%
Actually proportion: out of 21, there are a total of 17 in the two regions giving 17/21 = 0.809
or 80.9%.

8.

a.

b.

Leaf Unit = 0.10

Xminimum = 0.2;
Q1 = 1.45;
Q2 = 3.0;
Q3 = 5.55
Xmaximum = 9.7

0
1
2
3
4
5
6
7
8
9

2455789
124589
34457889
13347
247
2568
238
68
57

c.
--------------------------I
+
I-----------------------------------------+---------+---------+---------+---------+---------+-----0.0
2.0
4.0
6.0
8.0
10.0

IQR (1.5) = 6.15;

There are no outliers.

5.55 + 6.15 = 11.7

d. Distribution is positive or right skewed.

9.

a. Cov (x,y) = -15.133 indicating a negative or an inverse linear relationship between price and
demand
b. r = -15.133/ ((1.94) (8.214)) = - 0.9496, indicating a strong inverse or negative linear
association between price and demand.

COMM 215 Solution to Practice Problems 1

10.

Nonsampling errors occur due to incorrect acquisitions of observations, improper selections

samples, and the lack of response from individual in the sample. Examples are:
1. data acquisitions: wrong measurements on employees information (answers may vary)
2. exclusion of part-time employees from the sample (answers may vary)
3. missing information on employees characteristics; responses coming only from people
who have strong feeling about the issues (answers may vary)

Probability
1.
M
W

E
.52
.28
.80

U
.08
.12
.20

.6 U = WU
.6 (.2) = .12
.3W = WU,
.3W = .12,
W = .4

.60
.40

a.
b.

P(W) = 0.40
P(U/M) = 0.08 / 0.60 = .13

0.15
2.

S 0.30

GM 0.50
Ford 0.40

Chrysler 0.10

0.65

S 0.30

0.26

P (Strike) = .15 + .26 + .03 = .44

0.03

3.
a. (.9) (.9) = .81
b. (.1) (.1) = .01
c. (.9) (.1) + (.1) (.9) + (.9) (.9) = .99

COMM 215 Solution to Practice Problems 1

or 1 0.01 = 0.99

4.
Correct (.85)

0.0425

Bankrupt 0.05
Not Correct (.15)

Correct (.82)

Not Bankrupt. 0.95

Not Correct (.18)

5.

0.0075
0.779

P (correct) = 0.0425 + 0.779

= 0.8215
0.8215 * 100 firms = 82
firms

0.171

a. P(<30 or 1st) = 1 (.07 + .09 + .05) = .79

b. P(repeat | < 30) = (.01+.02+.04)/.43 = .16
c. P ( 30 | 1st ) = .36/.72 = .50
P ( 30 | repeat) = .21/.28 = .75;
repeat offender is more likely to be 30
d. 50th p of first offenders = .36 = 30
a. 50th p of repeat offenders = .14 = 35, repeat offenders are older
e. (.28) (.28) = .0784

6.
47.9%

0%
0.01-.09%

> .10%

a. P (X .01) = 11.1 + 41 = 52.1%

b. P ( X >0.1| X 0.01) = .41 / .521 = .7869
11.1%

41%

COMM 215 Solution to Practice Problems 1

7.

a.

i. 365/500 = .73

iii.

ii. 110/340 = .3235

iv.

30/500 = .06
230 + 140 30
= .68
500

b. Not mutually exclusive since P (work pt-time and < 6) = 60/500 = .12.
It will be zero if mutually exclusive.
Independent if P(work pt. time) * P(<6) = P(work pt. time and < 6)
Since 135/500 * 140/500 .12, the two are not independent.

8.
U
UC

P
0.125
0.125
0.25

S
0
0.15
0.15

A
0.06
0.54
0.60

0.185
0.815
1

a. P(U) = 0.185
b. P(A |Uc) = .54/.815 = .6625

9.
a.
City
Own Stock

YES
NO
Total

A
85
(.17)
115
(.23)
200
(.40)

B
55
(.11)
95
(.19)
150
(.30)

b. i. P(YES) = 0.38;
iii. P(B and NO) = 95/500 = 0.19;

C
50
(.10)
100
(.20)
150
(.30)

Total
190
(.38)
310
(.62)
500
(1.0)

ii. P(YES and A) = 85/500 = 0.17;

iv. P(B and YES) = 215/500 = 0.43

c. P (NO / NOT B ) = 215/350 = 0.614

COMM 215 Solution to Practice Problems 1

10.

0.72
P (0.90)
NP (0.10)

0.08

S (0.80)

P (.35)

0.07

NS (0.20)

P (0.65)

0.13

a. P(S/P) = .72/.79 = 0.91

b. P(NS/NP) = 0.61

11.
0.30

NS (0.5)
S (0.2)

Home (.6)

L (0.2)

G (0.1)

0.12

a. 0.4 + (.6) (.5) = .70

b. 0.12 + .06 = .18

0.12
0.06

Not Home (.4)

COMM 215 Solution to Practice Problems 1

12.
a.

Defective (D)
1
2
3

Not Defective (ND)

.008
.0075
.0045
.02

.392
.2925
.2955
.98

.40
.30
.30

b. P (1/D) = .008/.02 = .40

c. P (D or 2) = .02 + .03 - .0075 = .3125
d. P (D) = .02
e. P (2/D) = P (2) = .0075/.02 = .375 = .30; not independent

13.

a.
M
F

E
.5
.43
.93

U
.04
.03
.07

.54
.46
1

b. P(F/U) = .03/.07 = .428

c. i. P(um*um) = (.04) (.04) = .0016 ii. P(1 or 2)
Easiest way would be with Binomial (but not the only way)
(Combination of 2 and 1) (.04) (.96) + (Combination of 2 and 2) (.04)2 (.96)0 = .0784
d. P(U) = .07
e. P(Males) = .54

P(Male/U) = 0.04/0.07

.54 .571

Therefore they are not independent

(Can use any of the formulas as long as it is correct)
P( A B)
P ( A B ) = P ( A) * P ( B )
P(A/B) =
P( B)

COMM 215 Solution to Practice Problems 1

P(B/A) =

P( A B)
P( B)

Discrete Probability Distribution / Binomial Distribution

a.

1.

Regular
Reduced
Total

1st
.9 (.2)=0.18
$4.00
.1 (.2)=0.02
$2.00

2nd
.7 (.3)=0.21
$2.00
.3 (.3)=0.09
$1.00

3rd
.8(.5)=0.4
$0.50
.2 (.5)=0.10
$0.25

Total
0.79

0.20

0.30

0.50

0.21

P (regular) = .79
b. P(1st/regular) = .18/.79 = .227
c. = .18 (4) + .21 (2) + .4 (.50) + .02 (2) + .09 (1) + .10 (.25)
= $1.495

regular =

.18(4) + .21(2) + .4(.5)

= $1.696
.79

d. P(X 2 / n = 8, p = .21) = 1 {f(0) + f(1)}

P(0) = (Combination of 8 and 0) (.21)0 (.79)8 = .1517
P(1) = (Combination of 8 and 1) (.21)1 (.79)7 = .3226
1 (.1517 + .3226) = .5257
E (X) = 8 (.21) = 1.68;
e. $1.495 (75000) = $112,125

2.

a.

or

= 1.68(.79) = 1.15
$1.50 (75000) = $112,500

X = arrive on time p = .75

P(X = 4 / n = 4, p = .75) = .3164

b. P(X = 3) + P (X = 4) = .4219 + .3164 = 0.7383

3.

.05 (2) + .15 (5) + .25 (10) + .35 (20) + .10 (50) + .10 (100)

= Xi * P ( X ) = $25.35,
4.

2 = ( X ) 2 P ( X ) = 776.33

a. = np = 12(.30) = 3.6 people = np = 12(.30) = 3.6 people

b. P(X3 / n = 12, p = .30) = 1 (f(0) + f(1) + f(2))
1 (.0138 + .0712 + .1678) = .7472

COMM 215 Solution to Practice Problems 1

10

c. P(X4 / n = 12, p = .30) = 1 (f(0) + f(1) + f(2) + f(3))

1 .4925 = 0.5075
a. E(X) = .3 (100) + .2 (100) + .7 (100) = $120
b. Var (X) = ( X )2 P( x) = $480.00

5.

6.
a.

(X )

a.
b.
c.
d.

E(X) = = 10 (.2) = 2;
standard deviation = 10(.2)(.8) = 1.6
P (X2 / n = 10, p = .2) = .1074 + .2684 + .3020 = .6778
P(X=3 / n = 10, p = .8) = (Combination of 10 and 3) (.8)3 (.20)7 = .000786
p = .2/(1-.2) = 0.25
P (X2 / n = 9, p = .25) =0 .60

P( x) = $480.00
P(X=3 / n = 15, p = .05) = (Combination of 15 and 3) (.05)3 (.95)12 = .0307
b. P(X3 / n = 15, p = .05) = 1 (f(0) + f(1) + f(2)) = 0.0361
c. If P is actually .05, than P(X 3) is very small therefore it is unlikely.
2

7.

8.

Xp( x) = 1.98
Var(x) = ( x ) p ( x) = 1.919

a. Mean =

2
b.
Standard deviation = 1.385
c. Expected Profit = 1.98 (2000) = $3,960
d. P(X1+ X2 < 3) = P{(0,0), (0,1), (0,2), (1,0), (1,1), (2,0)}
= (.15)(.15) + (.15) (.24) + (.15)( .31) + (.24) (.15) + (.24) (.24) + (.31) (.15) = .2451

9.
a.
b.
c.
d.

P(X = 6 / n = 12, p =.30) = .0792

P(X6) = 1 P(X5)= .1179
P(X2) = f(0) + f(1) + f(2) = .2528
E(X) = np = 12 (.3) = 3.6, or 3.6 (100) = $360

a.
b.
c.
d.

E(X) = 0 (.48) + 1 (.2) + 2 (.15) + 3 (.08) + 4 (.05) + 5 (.03) + 6 (.01) = 1.15, Var(X) = 2.1075
f(2) + f(3) = .15 + .08 = .23
P(X2) = 1 (.48 + .20) = .32
P(X<3) = P(0,0) + P(0,1) + P(0,2) + P(1,0) + P(1,1) + P(2,0) = .6064

a.
b.
c.
d.

P(X3) = 1 {f(0) + f(1) + f(2)} =0 .74

P(2X5) = f(2) + f(3) + f(4) + f(5) =0 .67
E(X) = 0 (.05) + 1 (.08) + 2 (.13) + 3 (.23) + 4 (.18) + 5 (.13) + 6(.08) + 7 (.06) + 8 (.06) = 3.78
=
4.2 = 2.04

10.

11.

COMM 215 Solution to Practice Problems 1

11

12.
a. E(X) = 0 (.1) + 1000 (.3) + 2000 (.4) + 3000 (.2) = $1700
b.

Sales (x)
0
1000
2000
3000

Net Profit
-28500
-12500
3500
19500
Expected Net Profit

P(X)
.1
.3
.4
.2

-2850
-3750
1400
3900
$-1300

13.
a. P(X9 / n = 15, p = .7) = 1 P(X8) = 1 - .131 = 0.869
b. P(X12 / n = 15, p = .7) = 1 P(X11) = 1 - .703 = 0.297
c. P(X2 / n = 15, p = .25) = p(0) + p(1) + p(2)
= .0134 + .0668 + .1559 = 0.236
d. 0.297 (250) = 74.25

14.
a. p(1) + p(4) + p(5) = .25 + .15 + .10 =0 .5
b. 1 (.25) + 2(.33) + 3(.17) + 4(.15) + 5(.10) = 2.52
c. = 1.649 = 1.28

15.

a. P(X=10 / n = 10, p = .6) = (Combination of 10 and 10) (.6)10 (.4)0 = .006

b. P(X2) = p(0) + p(1) + p(2) = .0001 + .0016 + .0106 = .0123

COMM 215 Solution to Practice Problems 1

12

Normal Probability Distributions

60-80

a. p(x 60)=p z
= p ( z 2) = .0228
10

75 80
60-80
z
b. p(60 x 75)=p
= p ( 2 z 0.5)
10
10
90-80

p(x 90)=p z
= p ( z 1) = 0.1587 60 = 9.5 10 student
10

4 4.5

a. p(x 4)=p z
= p ( z 0.833) = 0.5 + 0.2967
0.6

0.7967 80 = 63.7 64
b. 10 = 0.125, p(z z 0 ) = .125 z0 = 1.15
80
4.5 + 1.15(0.6) = 5.19
c.

5.1-4.5
4.5-4.5

c. p z
= p ( z 1) and p z

0.6
0.6

z 1 .1587
= 0.317
p
=
.5
z 0
3

36.000-34.265
a. p(x>36.000) or p(x<33.500)=p z>
+
2000

33.500 34.265

p z <
= p ( z > 0.861) + p ( z < 0.383)
2000

0.192 + 0.352 = 0.544

36.000 35.185
36.000-34.265

p z>
p z >

2000
2400

p ( z 0.868) p ( z > 0.34) = (.192)(.3669) = 0.07

x-35.185
c. p(x x 0 ) = .90 1.28=
x=$38.257
2400
26 20
18-20
z
a. 1-p(18 x 26)=1-

5
5
1 p ( 0.4 z 1.2) = 1 (0.3849 + 0.1554) = 0.459
b.

b.

7-20

p(x 7)=p z
= 2.6 p(z -2.6)=0.0047
5

p(x 7)
0.0047
=
= 0.0094
p(x 20)
0.5

COMM 215 Solution to Practice Problems 1

13

4.

p ( x 1) = 1 p ( x 0 )

c.

p( x = 0) =

10 !

(.54 ) (.4 6 )

= 0 .0 00 4 2 4

10

0 !1 0 !
1 0 .00 0 42 4 = 0.9 9 95 7 6
d.

p ( x 15 ) = p

1 5 20

= p ( z 1) = 0.5 0.3 4 13

= 0 .1 58 7 2 00 = 3 1 .7 4 32

5.

a.

p ( x > 1 4 0.5 ) = p

z >

14 0 .5 1 4 0
0 .2

= p ( z > 2 .5 ) =

.0 5 0 .49 3 8 = 0 .00 6 2
b.

p (1 40 .2 x 1 4 0 .5 )

1 4 0 .2 1 4 0
0 .2

= 1 .0

p (1 .0 z 2.5 ) = 0 .4 9 38 0 . 3 4 13 = 0.1 5 2 5
c.

p ( x < 13 9 .8 ) o r p ( x > 1 4 0.2 )

p ( z < 1) o r p (z> + 1 )= 0.5 -0 .3 4 1 3= 0 .15 8 7 2 = 0 .3 17 4

d.

15 !

p ( x = 0 / n = 15 , p = 0.3 1 74 ) =

( 0 .3 17 4 ) ( 0 .6 82 6 )

15

= 0.0 0 3 3

0 !1 5 !
e.

15 !

p ( x = 5 / n = 1 5, p = 0 .31 7 4 ) =

( 0 .3 1 74 ) ( 0 .68 2 6 )

10

= 0 .21 1 0

5 !1 0 !

6.

p( x 6) = z

b.

p ( x > 15) = p z >

c.

7.

6 1 2 = 2 .0 p ( z 2 ) = 0 .5 0 .4 7 7 2 = 0 .0 2 2 8

a.

a.

b.

z =

15 12
3
x 12

1 .2 8 =

= p ( z > 1 .0 ) = 0 .5 0 .3 4 1 3 = 0 .1 5 8

x = 1 5 .8 4 1 6 w eek s

2 1 4-2 5 0

p(x> 2 1 4)= p z>

p ( x 20 0 ) = p

45
z

= p ( z > 0 .8 ) = 0 .2 8 8 1 + 0.5 = 0 .7 88 1

20 0 2 5 0
45

= p ( z 1 .1 1) = 0 .5 0 .36 6 5 = 0 .1 1 3 5

T hu s, 1 1 .3 5 % of 5 2 w eek s. T h at is,

c.

0.1 1 35

5 2 w eeks = 6 .9 7 w eeks

F in d th e 6 0 th p ercen tile, su ch th at P (Z z*)= 0 .6 ,

x *-2 5 0

x * -2 5 0
. F ro m tab le, z*= 0 .2 5 3 3 . T h en , 0 .2 5 3 3 =

w h ere z*=

45

45
an d so lvin g fo r x *= 0 .2 5 3 3 *4 5 + 2 5 0 = 2 6 1 .4 0 0 6

d.

N o w , p = 0 .4 an d n = 2 0 0 g ivin g = n p = 8 0 , =
w ith n ew m ean an d std ev,

P{ z

(1 0 0 .5 8 0 )

n p (1 p ) = 2 1 .9 0 8 9

p ( x 1 0 0.5 ) =
( 2 1 .9 0 8 9 )} = 0 .9 3 5 6 9 3

COMM 215 Solution to Practice Problems 1

14