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Assignment 3

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14 views

Assignment 3

Uploaded by

kashish26
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Birla Institute of Management Technology

PGDM 2024-26 Batch


Assignment 3

1. The average stock price for companies making up the S&P 500 is $30,
and the standard deviation is $8.20 (BusinessWeek, Special Annual
Issue, Spring 2003). Assume the stock prices are normally distributed.
a) What is the probability a company will have a stock price of at least
$40?
b) What is the probability a company will have a stock price no higher
than $20?
c) How high does a stock price have to be to put a company in the top
10%?
2. In an article about the cost of health care, Money magazine reported
that a visit to a hospital emergency room for something as simple as a
sore throat has a mean cost of $328 (Money, January 2009). Assume
that the cost for this type of hospital emergency room visit is normally
distributed with a standard deviation of $92. Answer the following
questions about the cost of a hospital emergency room visit for this
medical service.
a) What is the probability that the cost will be more than $500?
b) What is the probability that the cost will be less than $250?
c) What is the probability that the cost will be between $300 and
$400?
d) If the cost to a patient is in the lower 8% of charges for this medical
service, what was the cost of this patient’s emergency room visit?
3. In January 2003, the American worker spent an average of 77 hours
logged on to the Internet while at work (CNBC, March 15, 2003).
Assume the population mean is 77 hours, the times are normally
distributed, and that the standard deviation is 20 hours.
a) What is the probability that in January 2003 a randomly selected
worker spent fewer than 50 hours logged on to the Internet?
b) What percentage of workers spent more than 100 hours in January
2003 logged on to the Internet?
c) A person is classified as a heavy user if he or she is in the upper
20% of usage. In January 2003, how many hours did a worker have
to be logged on to the Internet to be considered a heavy user?
4. A person must score in the upper 2% of the population on an IQ test to
qualify for membership in Mensa, the international high-IQ society
(U.S. Airways Attaché, September 2000). If IQ scores are normally
distributed with a mean of 100 and a standard deviation of 15, what
score must a person have to qualify for Mensa?

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