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Statistics for Engineers and Scientists
4th Edition
ISBN: 9780073401331
Author: William Navidi Prof.
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 2.3, Problem 32E
A quality-control program at a plastic bottle production line involves inspecting finished bottles for flaws such as microscopic holes. The proportion of bottles that actually have such a flaw is only 0.0002. If a bottle has a flaw, the
- a. If a bottle fails inspection, what is the probability that it has a flaw?
- b. Which of the following is the more correct interpretation of the answer to part (a)?
- i. Most bottles that fail inspection do not have a flaw.
- ii. Most bottles that pass inspection do have a flaw.
- c. If a bottle passes inspection, what is the probability that it does not have a flaw?
- d. Which of the following is the more correct interpretation of the answer to part (c)?
- i. Most bottles that fail inspection do have a flaw.
- ii. Most bottles that pass inspection do not have a flaw.
- e. Explain why a small probability in part (a) is not a problem, so long as the probability in part (c) is large.
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We consider the one-period model studied in class as an example. Namely, we assumethat the current stock price is S0 = 10. At time T, the stock has either moved up toSt = 12 (with probability p = 0.6) or down towards St = 8 (with probability 1−p = 0.4).We consider a call option on this stock with maturity T and strike price K = 10. Theinterest rate on the money market is zero.As in class, we assume that you, as a customer, are willing to buy the call option on100 shares of stock for $120. The investor, who sold you the option, can adopt one of thefollowing strategies: Strategy 1: (seen in class) Buy 50 shares of stock and borrow $380. Strategy 2: Buy 55 shares of stock and borrow $430. Strategy 3: Buy 60 shares of stock and borrow $480. Strategy 4: Buy 40 shares of stock and borrow $280.(a) For each of strategies 2-4, describe the value of the investor’s portfolio at time 0,and at time T for each possible movement of the stock.(b) For each of strategies 2-4, does the investor have…
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Chapter 2 Solutions
Statistics for Engineers and Scientists
Ch. 2.1 - The probability that a bearing fails during the...Ch. 2.1 - A die (six faces) has the number 1 painted on...Ch. 2.1 - A section of an exam contains four True-False...Ch. 2.1 - Three times each day, a quality engineer samples a...Ch. 2.1 - Four candidates are to be interviewed for a job....Ch. 2.1 - Refer to Exercise 5. Two candidates are randomly...Ch. 2.1 - In a survey of households with television sets,...Ch. 2.1 - An automobile insurance company divides customers...Ch. 2.1 - Among the cast aluminum parts manufactured on a...Ch. 2.1 - The article High Cumulative Risk of Lung Cancer...
Ch. 2.1 - A quality-control engineer samples 100 items...Ch. 2.1 - Let V be the event that a computer contains a...Ch. 2.1 - Let S be the event that a randomly selected...Ch. 2.1 - Six hundred paving stones were examined for...Ch. 2.1 - All the fourth-graders in a certain elementary...Ch. 2.1 - A system contains two components, A and B. The...Ch. 2.1 - A system contains two components, A and B. The...Ch. 2.1 - Human blood may contain either or both of two...Ch. 2.1 - True or false: If A and B are mutually exclusive,...Ch. 2.1 - A flywheel is attached to a crankshaft by 12...Ch. 2.2 - DNA molecules consist of chemically linked...Ch. 2.2 - A metallurgist is designing an experiment to...Ch. 2.2 - The article Improved Bioequivalence Assessment of...Ch. 2.2 - A group of 18 people have gotten together to play...Ch. 2.2 - In horse racing, one can make a trifecta bet by...Ch. 2.2 - A college math department consisting of 10 faculty...Ch. 2.2 - A test consists of 15 questions. Ten are...Ch. 2.2 - In a certain state, license plates consist of...Ch. 2.2 - A computer password consists of eight characters....Ch. 2.2 - A company has hired 15 new employees, and must...Ch. 2.2 - Let A and B be events with P(A) = 0.8 and P(A B)...Ch. 2.2 - A drawer contains 6 red socks, 4 green socks, and...Ch. 2.3 - Let A and B be events with P(A) = 0.8 and P(A B)...Ch. 2.3 - Let A and B be events with P(A) = 0.5 and P(A Bc)...Ch. 2.3 - A box contains 15 resistors. Ten of them are...Ch. 2.3 - Prob. 4ECh. 2.3 - On graduation day at a large university, one...Ch. 2.3 - The article Integrating Risk Assessment and Life...Ch. 2.3 - Suppose that start-up companies in the area of...Ch. 2.3 - A drag racer has two parachutes, a main and a...Ch. 2.3 - Of people in a certain city who bought a new...Ch. 2.3 - Of all failures of a certain type of computer hard...Ch. 2.3 - In the process of producing engine valves, the...Ch. 2.3 - Sarah and Thomas are going bowling. The...Ch. 2.3 - A particular automatic sprinkler system has two...Ch. 2.3 - Laura and Philip each fire one shot at a target....Ch. 2.3 - A population of 600 semiconductor wafers contains...Ch. 2.3 - Refer to Exercise 15. Let E1 be the event that the...Ch. 2.3 - A geneticist is studying two genes. Each gene can...Ch. 2.3 - A car dealer sold 750 automobiles last year. The...Ch. 2.3 - The following table presents the 100 senators of...Ch. 2.3 - An automobile insurance company divides customers...Ch. 2.3 - Nuclear power plants have redundant components in...Ch. 2.3 - Prob. 22ECh. 2.3 - A lot of 10 components contains 3 that are...Ch. 2.3 - A lot of 1000 components contains 300 that are...Ch. 2.3 - In a lot of n components, 30% are defective. Two...Ch. 2.3 - Prob. 26ECh. 2.3 - Each day, a weather forecaster predicts whether or...Ch. 2.3 - Items are inspected for flaws by two quality...Ch. 2.3 - Refer to Exercise 28. Assume that both inspectors...Ch. 2.3 - Refer to Example 2.26. Assume that the proportion...Ch. 2.3 - Sickle-cell anemia is an inherited disease in...Ch. 2.3 - A quality-control program at a plastic bottle...Ch. 2.3 - Refer to Example 2.26. a. If a man tests negative,...Ch. 2.3 - A system consists of four components connected as...Ch. 2.3 - A system consists of four components, connected as...Ch. 2.3 - A system contains two components, A and B,...Ch. 2.3 - A system contains two components, C and D,...Ch. 2.3 - If A and B are independent events, prove that the...Ch. 2.4 - Determine whether each of the following random...Ch. 2.4 - Computer chips often contain surface...Ch. 2.4 - A chemical supply company ships a certain solvent...Ch. 2.4 - Let X represent the number of tires with low air...Ch. 2.4 - A survey of cars on a certain stretch of highway...Ch. 2.4 - The element titanium has five stable occurring...Ch. 2.4 - A computer sends a packet of information along a...Ch. 2.4 - After manufacture, computer disks are tested for...Ch. 2.4 - On 100 different days, a traffic engineer counts...Ch. 2.4 - Microprocessing chips are randomly sampled one by...Ch. 2.4 - Refer to Exercise 10. Let Y be the number of chips...Ch. 2.4 - Three components are randomly sampled, one at a...Ch. 2.4 - Resistors labeled 100 have true resistances that...Ch. 2.4 - Elongation (in percent) of steel plates treated...Ch. 2.4 - The lifetime in months of a transistor in a...Ch. 2.4 - A process that manufactures piston rings produces...Ch. 2.4 - Refer to Exercise 16. A competing process produces...Ch. 2.4 - The lifetime, in years, of a certain type of pump...Ch. 2.4 - The level of impurity (in percent) in the product...Ch. 2.4 - The main bearing clearance (in mm) in a certain...Ch. 2.4 - The error in the length of a part (absolute value...Ch. 2.4 - Prob. 22ECh. 2.4 - The thickness of a washer (in mm) is a random...Ch. 2.4 - Particles are a major component of air pollution...Ch. 2.4 - The repair time (in hours) for a certain machine...Ch. 2.4 - The diameter of a rivet (in mm) is a random...Ch. 2.5 - Prob. 1ECh. 2.5 - The bottom of a cylindrical container has an area...Ch. 2.5 - The lifetime of a certain transistor in a certain...Ch. 2.5 - Two batteries, with voltages V1 and V2, are...Ch. 2.5 - A laminated item is composed of five layers. The...Ch. 2.5 - Two independent measurements are made of the...Ch. 2.5 - The molarity of a solute in solution is defined to...Ch. 2.5 - A machine that fills bottles with a beverage has a...Ch. 2.5 - The four sides of a picture frame consist of two...Ch. 2.5 - A gas station earns 2.60 in revenue for each...Ch. 2.5 - A certain commercial jet plane uses a mean of 0.15...Ch. 2.5 - Prob. 12ECh. 2.5 - In the article An Investigation of the...Ch. 2.5 - Prob. 14ECh. 2.5 - Prob. 15ECh. 2.5 - The thickness X of a wooden shim (in mm) has...Ch. 2.5 - Prob. 17ECh. 2.5 - Prob. 18ECh. 2.6 - In a certain community, levels of air pollution...Ch. 2.6 - Prob. 2ECh. 2.6 - Refer to Exercise 1. a. Find the conditional...Ch. 2.6 - Prob. 4ECh. 2.6 - Refer to Exercise 4. The total number of...Ch. 2.6 - Refer to Exercise 4. a. Find the conditional...Ch. 2.6 - Refer to Exercise 4. Assume that the cost of...Ch. 2.6 - The number of customers in line at a supermarket...Ch. 2.6 - Prob. 9ECh. 2.6 - Refer to Exercise 9. a. Find the mean of the total...Ch. 2.6 - Refer to Exercise 9. a. Find the conditional...Ch. 2.6 - Prob. 12ECh. 2.6 - Refer to Exercise 12. Let Z = X + Y represent the...Ch. 2.6 - Refer to Exercise 12. Assume that the cost of an...Ch. 2.6 - Automobile engines and transmissions are produced...Ch. 2.6 - Prob. 16ECh. 2.6 - Prob. 17ECh. 2.6 - A production facility contains two machines that...Ch. 2.6 - Prob. 19ECh. 2.6 - Prob. 20ECh. 2.6 - The lifetime of a certain component, in years, has...Ch. 2.6 - Prob. 22ECh. 2.6 - An investor has 100 to invest, and two investments...Ch. 2.6 - Prob. 24ECh. 2.6 - Let R denote the resistance of a resistor that is...Ch. 2.6 - Prob. 26ECh. 2.6 - Prob. 27ECh. 2.6 - Prob. 28ECh. 2.6 - Let X and Y be jointly distributed random...Ch. 2.6 - Prob. 30ECh. 2.6 - Prob. 31ECh. 2.6 - Prob. 32ECh. 2.6 - Prob. 33ECh. 2 - A system consists of four components connected as...Ch. 2 - A fair coin is tossed until a head appears. What...Ch. 2 - Silicon wafers are used in the manufacture of...Ch. 2 - Two production lines are used to pack sugar into 5...Ch. 2 - Prob. 5SECh. 2 - In a certain type of automobile engine, the...Ch. 2 - An electronic message consists of a string of bits...Ch. 2 - The reading given by a thermometer calibrated in...Ch. 2 - Two dice are rolled. Given that two different...Ch. 2 - In a lot of 10 components, 2 are sampled at random...Ch. 2 - Prob. 11SECh. 2 - Prob. 12SECh. 2 - A snowboard manufacturer has three plants, one in...Ch. 2 - The article Traps in Mineral ValuationsProceed...Ch. 2 - Six new graduates are hired by an engineering...Ch. 2 - Prob. 16SECh. 2 - Let X and Y be independent random variables with x...Ch. 2 - Prob. 18SECh. 2 - Prob. 19SECh. 2 - Prob. 20SECh. 2 - Prob. 21SECh. 2 - A certain plant runs three shifts per day. Of all...Ch. 2 - Prob. 23SECh. 2 - Prob. 24SECh. 2 - Prob. 25SECh. 2 - A stock solution of hydrochloric acid (HC1)...Ch. 2 - Prob. 27SECh. 2 - Prob. 28SECh. 2 - A penny and a nickel are tossed. The penny has...Ch. 2 - Prob. 30SECh. 2 - Prob. 31SECh. 2 - Prob. 32SECh. 2 - Prob. 33SECh. 2 - Prob. 34SECh. 2 - Blood is taken from each of n individuals to be...
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