. A large insurance company sells homeowner's insurance to compensate homeowners in case ofdamage to their home. Suppose the insurance company's annual payout on a single policy has aseverely right-skewed distribution with a mean of $4750 and a standard deviation of $2150. Whichof the following best states the Central Limit Theorem in this context?(A) The distribution of annual payouts for all such policies will be approximately normal if thepopulation size is sufficiently large.(B) The distribution of annual payouts in a random sample of these policies will be approximatelynormal if the sample size is sufficiently large.(C) The distribution of the mean annual payout for many random samples of policies of the samesize will be approximately normal if the sample size is sufficiently large.(D) The value of the mean annual payout for a random sample of these policies will be equal to$4,750 if the sample size is sufficiently large.(E) The variability of annual payouts in a random sample of these policies will be smaller for largersample sizes.

The objective of the question is to understand the application of the Central Limit Theorem (CLT) in…

Answered: . A large insurance company sells…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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A Scenario: Jimmy store sells large tins of Tom Tucker Coffee. The deli uses a periodic review system. Inventory is checked every 10 days which more orders are needed for tins. Order lead time is 3 days. Average demand is 7 tins, so average demand during the reorder period and order lead time (13) is 91 tins. Standard deviation of demand during the same 13 day period is 17 tins.1. Calculate the restocking level ( Assume the desired level is 90%)2. Suppose standard deviation of demand during the 13-day period drops to 4 tins. What happened to restocking level? Explain why?3. Draw a saw-tooth diagram. Beginning inventory level is equal to restocking level and the demand rate is a constant 7 tins per day. What is the safety stock level? What is the average inventory level?
Andrew plans to retire in 40 years. He plans to invest part of his retirement funds in stocks, so he seeks out information on past returns. He learns that over the entire 20th century, the real (that is, adjusted for inflation) annual returns on U.S. common stocks had mean 8.7% and standard deviation 20.2%. The distribution of annual returns on common stocks is roughly symmetric, so the mean return over even a moderate number of years is close to Normal. What is the probability (assuming that past pattern of variation continues) that the mean annual return on common stocks over the next 40 years will exceed 10%? What is the probability that the mean return will be less than 5%?
3. What percentage of College students have made at least one online purchase in the last three months? To answer this question, a market researcher surveyed 200 college students. Of those surveyed, 76 said that they had made at least one online purchase (a.) What is the parameter of interest in this study? (b.) Calculate the corresponding point estimate of the population proport
Directions: Compute the total returns, the average of returns, and the standard deviation of the following stocks: 1) 2) EGRH Inc. MP, Ltd. AVERAGE OF STOCK RETURN YEA AVERAGE OF RETURNS (x) YEAR STOCK RETURN PRICE (x₁) PRICE RETU Jan-2021 Po Feb-2021 P8.6 Jan-2021 PO. Feb-2021 PO.090 Mar-2021 P0.097 Apr-2021 PO.189 May-2021 PO.164 Mar-2021 P9.14 Apr-2021 P13.30 May-2021 P13 Jun-2021 P60 Jul-2021 16.94 Jun-2021 P0.495 Jul-2021 PO.28 Aug-2021 PO Sep-2021 90 Aug-202 P13.70 Sep-2 P14.88 Oct-2021 0.375 Oct 21 P15.30 Nov-20 PO.325 N2021 P14.30 Dec-2 PO.330 ec-2021 P15.52 3) SD (8) GSM Inc. YEAR Jan-2021 P57. Feb-2021 P52.90 Mar-2021 P50.95 Apr-2021 P58.25 May-2021 P74.05 Jun-2021 P94.75 Jul-2021 P85.0 Aug-2021 P10 Sep-2021 P 00 Oct-2021 01.00 Nov-2021 100.40 Dec-202 P113.80 SD (8) = STOCK RETURN PRICE (x₁) AVERAGE OF RETURNS -x)² SD (8) = ACEE, Inc. YEAR STOCK RETURN PRICE (x₁) Jan-2021 P13.56 Feb-2021 P20.80 Mar-2021 P22.50 Apr-2021 P18.90 May-2021 P17.00 Jun-2021 P18.76 Jul-2021 P16.38…
Historically it has been observed that patients admitted to a certain hospital for treatment of influenza spend a MEAN length of 4.4 days in the hospital. Every flu season, different strains of the flu circulate: Some years the primary strain causes more severe illness (and presumably longer than average hospital stays) and other years less so (meaning presumably shorter than average stays). We assume the hospital stays are NORMALLY distributed. a. A hospital wants to see how this year's flu season compares to previous years. Therefore, state the null and alternate hypotheses that would be used to test whether the hospital is seeing a mean hospital stay that is significantly DIFFERENT than the historical mean of 4.4 days. b. FIFTEEN patients admitted for influenza treatment are then randomly sampled and the length of their hospital stay in days is given below. 4641056443743774 SAMPLE MEAN =? SAMPLE STANDARD DEVIATION =? c. Using the results of part (b), determine what type of test is…
Directions: Compute the total returns, the average of returns, and the standard deviation of the following stocks: 1) 2) EGRH Inc. DMP, Ltd. STOCK RETURN YEA AVERAGE OF RETURNS (x) YEAR STOCK RETURN PRICE AVERAGE OF RETURNS (x) PRICE (x₁) Jan-2021 P8.30 Feb-2021 P8.60 Jan-2021 PO. Feb-2021 PO.090 Mar-2021 P0.097 Apr-2021 PO.189 May-2021 PO.164 Mar-2021 P9.14 Apr-2021 P13.30 May-2021 P13.74 Jun-2021 P14.80 Jul-2021 P16.94 Jun-2021 P0.495 Jul-2021 PO.28 Aug-2021 PO Sep-2021 90 Aug-2021 P13.70 Sep-2021 P14.88 Oct-2021 0.375 Oct-2021 P15.30 Nov-20 PO.325 Nov-2021 P14.30 Dec-2 PO.330 Dec-2021 P15.52 3) SD (8) GSM Inc. STOCK YEAR PRICE Jan-2021 P57.70 Feb-2021 P52.90 Mar-2021 P50.95 Apr-2021 P58.25 May-2021 P74.05 Jun-2021 P94.75 Jul-2021 P85.00 Aug-2021 P105.00 Sep-2021 P114.00 Oct-2021 | P101.00 Nov-2021 P100.40 Dec-2021 P113.80 SD (8) = RETURN (x₁) -x)² AVERAGE OF RETURNS (x-x)² (x) SD (8) = ACEE, Inc. YEAR STOCK RETURN PRICE (x₁) Jan-2021 P13.56 Feb-2021 P20.80 Mar-2021 P22.50 Apr-2021…
5. The changes in the values of two investment portfolios are modelled as Normal distributions. From day to day, the first investment portfolio changes in value with mean 2.6% and standard deviation 1.8%. From day to day, the second investment portfolio changes in value with mean 2.2% and standard deviation 2.5%. An investor is hoping for growth of at least 4%. Which portfolio is most likely to give growth of 4%?
Suppose the returns of a particular group of mutual funds are normally distributed with a mean of 9.9% and a standard deviation of 3.7%. If the manager of a particular fund wants his fund to be in the top 10% of funds with the highest return, what return must his fund have?
C. Atlantic Video is planning to add the new Marvel movie to their collection, and they predict that this will double their demand (i.e. new arrival rate is 60 customers every hour) and halve the standard deviation of the inter-arrival times. However, they want to keep the average waiting time of customers in line the same as before. Assume that the coefficient of variation for the check-out times does not change. Please answer the following questions. 1) Does the employee need to work twice as fast? If not, calculate the new service rate. 2) What is the average number of customers in the store?
The items have a standard cost of $81/unit. The monthly demand for items is normally distributed with a mean of 220 and a standard deviation of 40. The annual holding rate is 23% and the ordering cost is $200/order. it takes 3 weeks to receive the ordered items from the supplier. (4 weeks in a month, 12 months in a year, 48 weeks per year) You have been ordering a quantity of 237 units every time the inventory level fall under 195 units. What is the average cycle stock considering your policy?
The lengths of pregnancies in a small rural village are normally distributed with a mean of 267 days and a standard deviation of 15 days.In what range would you expect to find the middle 95% of most pregnancies?Between and .If you were to draw samples of size 55 from this population, in what range would you expect to find the middle 95% of most averages for the lengths of pregnancies in the sample?Between and .
mnomy use the standard deviation of the monthly percentage return for a mutual fund as a measure of the risk for the fund; in such cases, a fund that has a larger standard deviation is considered more risky than a fund with a lower standard deviation. The standard deviation for the American Century Equity Growth fund and the standard deviation for the Fidelity Growth Discovery fund were recently reported to be 15.0% and 18.9%, respectively. Assume that each of these standard deviations is based on a sample of 60 months of returns. Do the sample results support the conclusion that the Fidelity fund has a larger population variance than the American Century fund? Which fund is more risky? (17. ) Most individuals are aware of the fact that the average annual repair cost for an auto- mobile depends on the age of the automobile. A researcher is interested in finding out whether the variance of the annual repair costs also increases with the age of the auto- mobile. A sample of 26…

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