A bank’s loan officer rates applicants for credit. The ratings are normally distributed with a mean of 200 and a standard deviation of 50. If an applicant is randomly selected, find the probability of a rating that is between 170 and 220. A. 0.0703 B. 0.1554 C. 0.2257 D. 0.3812
Continuous Probability Distributions
Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.
Normal Distribution
Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!
MULTIPLE CHOICE QUESTION:
1. A bank’s loan officer rates applicants for credit. The ratings are
A. 0.0703 B. 0.1554 C. 0.2257 D. 0.3812
2. Suppose for 40 observations the variance is 50. If all the observations are increased by 20, the variance of these increased observations will be
A. 2.5 B. 50 C. 70 D. 400
3. These descriptive measures are from a sample of time measurements: x̅= 21.3 seconds; s = 1.7 seconds; and n = 400. At least what proportion of the data lies within 234 standard deviations from the arithmetic mean?
A. 20% B. 72.6% C. 86.8% D. 91%
4. The
A. 35% of the variation of the dependent variable Y is due to the linear relationship between Y and X.
B. 12.25% of the variation of the dependent variable Y is due to the linear
relationship between Y and X.
C. there is a weak, negative relationship between Y and X.
D. there is a very weak, negative relationship between Y and X.
5. When three experimental groups were compared using the one-way Analysis of Variance (ANOVA), the result turned out to be significant, that is, the Ho was rejected. What will bethe corresponding interpretation of this result?
A. All three experimental groups significantly differ in means or they have differenteffects on the dependent variable.
B. Exactly two of the three groups significantly differ.
C. At least two of the three experimental groups significantly differ in means or interms of their effect on the dependent variable.
D. None of the above.
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