Random Variables and Binomial distribution

1. Management of an airline knows that 0.5% of the airline’s passengers lose their luggage on domestic
flights. Management also knows that the average value claimed for a lost piece of luggage on domestic
flights is $600. The company is considering increasing fares by an appropriate amount to cover expected
compensation to passengers who lose their luggage. By how much should the airline increase fares?
Why? Explain, using the ideas of a random variable and its expectation.

2. A shooter fires 12 independent shots at a target with a probability of hitting the target of each shot of
0.8.

a) Calculate the average number of shots that hit the target and the number of shots that hit the target
with the highest probability.

b) Find the probability that the target are hit by at least 2 bullets

3. An employee at an arcade center is in charge of 20 machines. The probability that each machine
needs assistance from the employee in an hour is 0.1. The machines operate independently.

a) Let X be the number of machines that need assistance from the employee in an hour. Find the
probability distribution law of X.

b) Find the probability that in an hour of work, at least one machine needs assistance from the
employee.

4. The probability of a treatment method curing disease B is 0.8. There are 5 people treated with this
method. Let X be the number of people who are cured of the disease.

a) Create a probability distribution table for X.

b) Calculate the expectation and variance of X.

5. Let X and Y be two independent random variables.

Assume ~ 1; 0.4 , ~ 2; 0.3 .

a) Create a probability distribution table for the random variable XY

b) Calculate + , +

6. Three of the 10 airplane tires at a hangar are faulty. Four tires are selected at random for a plane; let F
be the number of faulty tires found. Is F a binomial random variable? Explain.

7. A salesperson finds that, in the long run, two out of three sales calls are successful. Twelve sales calls
are to be made; let X be the number of concluded sales. Is X a binomial random variable? Explain.

8. A shipment of 100 pins contains some defectives. To decide whether to accept the shipment, the
consumer follows a sampling plan where 15 items are chosen at random from the sample and tested. If
the number of defectives in the sample is at most one, the shipment is accepted. (The number 1 is
known as the acceptance number of the sampling plan.)
a. Assuming that the shipment includes 5% defectives, what is the probability that the shipment will be
accepted?

b. Assuming that the shipment includes 8% defectives, what is the probability that the shipment will be
accepted?

9. A recent study published in the Toronto Globe and Mail reveals that 25% of mathematics degrees
from Canadian universities and colleges are awarded to women. If five recent graduates from Canadian
universities and colleges are selected at random, what is the probability that

a. At least one would be a woman.

b. None of them would be a woman.

10. An article published in Access magazine states that according to a survey conducted by the American
Management Association, 78% of major U.S. companies electronically monitor their employees. If five
such companies are selected at random, find the probability that

a. At most one company monitors its employees electronically.

b. All of them monitor their employees electronically.

11. A commercial jet aircraft has four engines. For an aircraft in flight to land safely, at least two engines
should be in working condi@on. Each engine has an independent reliability of p
92%.

a. What is the probability that an aircraft in flight can land safely?

b. If the probability of landing safely must be at least 99.5%, what is the minimum value for p? Repeat
the question for probability of landing safely to be 99.9%.

c. If the reliability cannot be improved beyond 92% but the number of engines in a plane can be
increased, what is the minimum number of engines that would achieve at least 99.5% probability of
landing safely? Repeat for 99.9% probability.

12. An MBA graduate is applying for nine jobs, and believes that she has in each of the nine cases a
constant and independent 0.48 probability of getting an offer.

a. What is the probability that she will have at least three offers?

b. If she wants to be 95% confident of having at least three offers, how many more jobs should she apply
for? (Assume each of these additional applications will also have the same probability of success.)

c. If there are no more than the original nine jobs that she can apply for, what value of probability of
success would give her 95% confidence of at least three offers?

13. Five percent of the many cars produced at a plant are defective. Ten cars made at the plant are sent
to a dealership. Let X be the number of defective cars in the shipment.

a. Under what conditions can we assume that X is a binomial random variable? b. Making the required
assumptions, write the probability distribution of X.

c. What is the probability that two or more cars are defective?

Normal distribution

14. A sensitive measuring device is calibrated so that errors in the measurements it provides are
normally distributed with mean 0 and variance 1.00. Find the probability that a given error will be
between −2 and 2.

15. Find a value such that the probability that the standard normal random variable will be above it is
0.85.

16. Find a value of the standard normal random variable cutting off an area of 0.685 to its left.

17. Find two values, equidistant from 0 on either side, such that the probability that a standard normal
random variable will be between them is 0.40.

18. Find two values of the standard normal random variable, z and − , such that − < < ≤
0.95.

19. The deviation of a magnetic needle from the magnetic pole in a certain area in northern Canada is a
normally distributed random variable with mean 0 and standard deviation 1.00. What is the probability
that the absolute value of the deviation from the north pole at a given moment will be more than 2.4?

20. Let X be a normally distributed random variable with mean = 16 and standard deviation = 3.
Find 11 < < 20 . Also find < 19

21. The time it takes an international telephone operator to place an overseas phone call is normally
distributed with mean 45 seconds and standard deviation 10 seconds.

a. What is the probability that my call will go through in less than 1 minute?

b. What is the probability that I will get through in less than 40 seconds?

c. What is the probability that I will have to wait more than 70 seconds for my call to go through?

22. The number of votes cast in favor of a controversial proposition is believed to be approximately
normally distributed with mean 8,000 and standard deviation 1,000. The proposition needs at least
9,322 votes in order to pass. What is the probability that the proposition will pass? (Assume numbers
are on a continuous scale.) 4–30. Under the system of floating exchange rates, the rate of foreign money
to the U.S. dollar is affected by many random factors, and this leads to the assumption of a normal
distribution of small daily fluctuations. The rate of U.S. dollar per euro is believed in April 2007 to have a
mean of 1.36 and a standard deviation of 0.03.1 Find the following.

a. The probability that tomorrow’s rate will be above 1.42.

b. The probability that tomorrow’s rate will be below 1.35.

c. The probability that tomorrow’s exchange rate will be between 1.16 and 1.23.
23. Wine Spectator rates wines on a point scale of 0 to 100. It can be inferred from the many ratings in
this magazine that the average rating is 87 and the standard deviation is 3 points. Wine ratings seem to
follow a normal distribution. In the May 15, 2007, issue of the magazine, the burgudy Domaine des
Perdrix received a rating of 89.2 What is the probability that a randomly chosen wine will score this high
or higher?

24. The weights of domestic, adult cats are normally distributed with a mean of 10.42 pounds and a
standard deviation of 0.87 pounds. A cat food manufacturer sells three types of foods for underweight,
normal, and overweight cats. The manufacturer considers the bottom 5% of the cats underweight and
the top 10% overweight. Compute what weight range must be specified for each of the three categories.

25. Daily fluctuations of the French CAC-40 stock index from March to June 1997 seem to follow a
normal distribution with mean of 2,600 and standard deviation of 50. Find the probability that the CAC-
40 will be between 2,520 and 2,670 on a random day in the period of study.

26. According to global analyst Olivier Lemaigre, the average price-to-earnings ratio for companies in
emerging markets is 12.5.3 Assume a normal distribution and a standard deviation of 2.5. If a company
in emerging markets is randomly selected, what is the probability that its price-per-earnings ratio is
above 17.5, which, according to Lemaigre, is the average for companies in the developed world?
27. The daily price of coffee is approximately normally distributed over a period of 15 days with a mean
in April 2007 of $1.35 per pound (on the wholesale market) and standard deviation of $0.15. Find a price
such that the probability in the next 15 days that the price will go below it will be 0.90.

28. The daily price in dollars per metric ton of cocoa in 2007 was normally distributed with = $2,014
per metric ton and = $2.00. Find a price such that the probability that the actual price will be above it
is 0.80.

Normal Approximation of Binomial Distributions

In the following problems, use a normal distribution to compute the required probabilities. In each
problem, also state the assumptions necessary for a binomial distribution, and indicate whether the
assumptions are reasonable.

29. The manager of a restaurant knows from experience that 70% of the people who make reservations
for the evening show up for dinner. The manager decides one evening to overbook and accept 20
reservations when only 15 tables are available. What is the probability that more than 15 parties will
show up?

30. An advertising research study indicates that 40% of the viewers exposed to an advertisement try the
product during the following four months. If 100 people are exposed to the ad, what is the probability
that at least 20 of them will try the product in the following four months?

31. According to The Economist, 77.9% of Google stockholders have voting power. If 2,000 stockholders
are gathered in a meeting, what is the probability that at least 1,500 of them can vote?
32. Sixty percent of the managers who enroll in a special training program will successfully complete the
program. If a large company sends 328 of its managers to enroll in the program, what is the probability
that at least 200 of them will pass?

33. A large state university sends recruiters throughout the state to recruit graduating high school
seniors to enroll in the university. University records show that 25% of the students who are interviewed
by the recruiters actually enroll. If last spring the university recruiters interviewed 1,889 graduating
seniors, what is the probability that at least 500 of them will enroll this fall?

34. According to Fortune, Missouri is within 500 miles of 44% of all U.S. manufacturing plants.8 If a
Missouri company needs parts manufactured in 122 different plants, what is the probability that at least
half of them can be found within 500 miles of the state? (Assume independence of parts and of plants.)

35. According to Money, 59% of full-time workers believe that technology has lengthened their
workday.9 If 200 workers are randomly chosen, what is the probability that at least 120 of them believe
that technology has lengthened their workday?