Mathematical Statistics with Applications
7th Edition
ISBN: 9781133384380
Author: Dennis Wackerly; William Mendenhall; Richard L. Scheaffer
Publisher: Cengage Learning US
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Chapter 2.8, Problem 101E
Articles coming through an inspection line are visually inspected by two successive inspectors. When a defective article comes through the inspection line, the
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Chapter 2 Solutions
Mathematical Statistics with Applications
Ch. 2.3 - Suppose a family contains two children of...Ch. 2.3 - Suppose that A and B are two events. Write...Ch. 2.3 - Prob. 3ECh. 2.3 - Prob. 4ECh. 2.3 - Refer to Exercise 2.4. Use the identities...Ch. 2.3 - Suppose two dice are tossed and the numbers on the...Ch. 2.3 - A group of five applicants for a pair of identical...Ch. 2.3 - From a survey of 60 students attending a...Ch. 2.4 - The proportions of blood phenotypes. A, B, AB, and...Ch. 2.4 - The proportions of blood phenotypes. A, B, AB, and...
Ch. 2.4 - A sample space consists of five simple events. E1,...Ch. 2.4 - A vehicle arriving at an intersection can turn...Ch. 2.4 - Americans can be quite suspicious, especially when...Ch. 2.4 - A survey classified a large number of adults...Ch. 2.4 - An oil prospecting firm hits oil or gas on 10% of...Ch. 2.4 - Prob. 16ECh. 2.4 - Hydraulic landing assemblies coming from an...Ch. 2.4 - Suppose two balanced coins are tossed and the...Ch. 2.4 - A business office orders paper supplies from one...Ch. 2.4 - The following game was played on a popular...Ch. 2.4 - If A and B are events, use the result derived in...Ch. 2.4 - If A and B are events and B A, use the result...Ch. 2.4 - Prob. 23ECh. 2.4 - Use the result in Exercise 2.22 and the Axioms in...Ch. 2.5 - A single car is randomly selected from among all...Ch. 2.5 - According to Websters New Collegiate Dictionary, a...Ch. 2.5 - In Exercise 2.12 we considered a situation where...Ch. 2.5 - Four equally qualified people apply for two...Ch. 2.5 - Two additional jurors are needed to complete a...Ch. 2.5 - Three imported wines are to be ranked from lowest...Ch. 2.5 - A boxcar contains six complex electronic systems....Ch. 2.5 - A retailer sells only two styles of stereo...Ch. 2.5 - The Bureau of the Census reports that the median...Ch. 2.5 - Patients arriving at a hospital outpatient clinic...Ch. 2.6 - An airline has six flights from New York to...Ch. 2.6 - Prob. 36ECh. 2.6 - A businesswoman in Philadelphia is preparing an...Ch. 2.6 - An upscale restaurant offers a special fixe prix...Ch. 2.6 - An experiment consists of tossing a pair of dice....Ch. 2.6 - A brand of automobile comes in five different...Ch. 2.6 - Prob. 41ECh. 2.6 - Prob. 42ECh. 2.6 - A fleet of nine taxis is to be dispatched to three...Ch. 2.6 - Refer to Exercise 2.43. Assume that taxis are...Ch. 2.6 - Prob. 45ECh. 2.6 - Ten teams are playing in a basketball tournament....Ch. 2.6 - Refer to Exercise 2.46. If 2n teams are to be...Ch. 2.6 - Prob. 48ECh. 2.6 - Students attending the University of Florida can...Ch. 2.6 - Prob. 50ECh. 2.6 - A local fraternity is conducting a raffle where 50...Ch. 2.6 - An experimenter wishes to investigate the effect...Ch. 2.6 - Five firms, F1, F2,, F5, each offer bids on three...Ch. 2.6 - A group of three undergraduate and five graduate...Ch. 2.6 - A study is to be conducted in a hospital to...Ch. 2.6 - A student prepares for an exam by studying a list...Ch. 2.6 - Two cards are drawn from a standard 52-card...Ch. 2.6 - Five cards are dealt from a standard 52-card deck....Ch. 2.6 - Prob. 59ECh. 2.6 - Refer to Example 2.7. Suppose that we record the...Ch. 2.6 - Prob. 61ECh. 2.6 - A manufacturer has nine distinct motors in stock,...Ch. 2.6 - The eight-member Human Relations Advisory Board of...Ch. 2.6 - A balanced die is tossed six times, and the number...Ch. 2.6 - Prob. 65ECh. 2.6 - Refer to Example 2.10. What is the probability...Ch. 2.6 - Refer to Example 2.13. Suppose that the number of...Ch. 2.6 - Show that, for any integer n 1, a (nn)=1....Ch. 2.6 - Prob. 69ECh. 2.6 - Prob. 70ECh. 2.7 - If two events, A and B, are such that P(A) = .5,...Ch. 2.7 - For a certain population of employees, the...Ch. 2.7 - Gregor Mendel was a monk who, in 1865, suggested a...Ch. 2.7 - One hundred adults were interviewed in a telephone...Ch. 2.7 - Prob. 75ECh. 2.7 - A survey of consumers in a particular community...Ch. 2.7 - A study of the posttreatment behavior of a large...Ch. 2.7 - In the definition of the independence of two...Ch. 2.7 - Suppose that A and B are mutually exclusive...Ch. 2.7 - Suppose that A B and that P(A) 0 and P(B) 0....Ch. 2.7 - If P(A) 0, P(B) 0, and P(A) P(A|B), show that...Ch. 2.7 - Suppose that A B and that P(A) 0 and P(B) 0....Ch. 2.7 - If A and B are mutually exclusive events and P(B) ...Ch. 2.8 - If A1, A2, and A3 are three events and...Ch. 2.8 - Prob. 85ECh. 2.8 - Suppose that A and B are two events such that P(A)...Ch. 2.8 - Suppose that A and B are two events such that P(A)...Ch. 2.8 - Suppose that A and B are two events such that P(A)...Ch. 2.8 - Prob. 89ECh. 2.8 - Suppose that there is a 1 in 50 chance of injury...Ch. 2.8 - Can A an B be mutually exclusive if P(A) = .4 and...Ch. 2.8 - Prob. 92ECh. 2.8 - In a game, a participant is given three attempts...Ch. 2.8 - A smoke detector system uses two devices, A and B....Ch. 2.8 - Prob. 95ECh. 2.8 - If A and B are independent events with P(A) = .5...Ch. 2.8 - Consider the following portion of an electric...Ch. 2.8 - With relays operating as in Exercise 2.97, compare...Ch. 2.8 - Suppose that A and B are independent events such...Ch. 2.8 - Show that Theorem 2.6, the additive law of...Ch. 2.8 - Articles coming through an inspection line are...Ch. 2.8 - Diseases I and II are prevalent among people in a...Ch. 2.8 - Refer to Exercise 2.50. Hours after the rigging of...Ch. 2.8 - If A and B are two events, prove that...Ch. 2.8 - If the probability of injury on each individual...Ch. 2.8 - If A and B are equally likely events and we...Ch. 2.8 - Prob. 107ECh. 2.8 - If A, B, and C are three events, use two...Ch. 2.8 - Prob. 109ECh. 2.9 - Of the items produced daily by a factory, 40% come...Ch. 2.9 - Prob. 111ECh. 2.9 - Three radar sets, operating independently, are set...Ch. 2.9 - Consider one of the radar sets of Exercise 2.112....Ch. 2.9 - A lie detector will show a positive reading...Ch. 2.9 - Prob. 115ECh. 2.9 - A communications network has a built-in safeguard...Ch. 2.9 - A slate auto-inspection station has two inspection...Ch. 2.9 - Prob. 118ECh. 2.9 - Suppose that two balanced dice are tossed...Ch. 2.9 - Suppose that two defective refrigerators have been...Ch. 2.9 - Prob. 121ECh. 2.10 - Applet Exercise Use the applet Bayes Rule as a...Ch. 2.10 - Prob. 123ECh. 2.10 - A population of voters contains 40% Republicans...Ch. 2.10 - A diagnostic test for a disease is such that it...Ch. 2.10 - Prob. 126ECh. 2.10 - Prob. 127ECh. 2.10 - Use Theorem 2.8, the law of total probability, to...Ch. 2.10 - Males and females are observed to react...Ch. 2.10 - A study of Georgia residents suggests that those...Ch. 2.10 - Prob. 131ECh. 2.10 - A plane is missing and is presumed to have equal...Ch. 2.10 - A student answers a multiple-choice examination...Ch. 2.10 - Two methods, A and B, are available for teaching a...Ch. 2.10 - Of the travelers arriving at a small airport, 60%...Ch. 2.10 - Prob. 136ECh. 2.10 - Five identical bowls are labeled 1, 2, 3, 4, and...Ch. 2.10 - Prob. 138ECh. 2.11 - Refer to Exercise 2.112. Let the random variable Y...Ch. 2.11 - Refer to Exercise 2.120. Let the random variable Y...Ch. 2.11 - Refer again to Exercise 2.120. Let the random...Ch. 2.11 - A spinner can land in any of four positions, A, B,...Ch. 2 - Show that Theorem 2.7 holds for conditional...Ch. 2 - Let S contain four sample points, E1, E2, E3, and...Ch. 2 - Prob. 145SECh. 2 - Prob. 146SECh. 2 - Prob. 147SECh. 2 - A bin contains three components from supplier A,...Ch. 2 - A large group of people is to be checked for two...Ch. 2 - 2.149 A large group of people is to be checked for...Ch. 2 - Prob. 151SECh. 2 - Prob. 152SECh. 2 - Prob. 153SECh. 2 - a A drawer contains n = 5 different and...Ch. 2 - A group of men possesses the three characteristics...Ch. 2 - The accompanying table lists accidental deaths by...Ch. 2 - Prob. 157SECh. 2 - A bowl contains w white balls and b black balls....Ch. 2 - Prob. 159SECh. 2 - A machine for producing a new experimental...Ch. 2 - Prob. 161SECh. 2 - Prob. 162SECh. 2 - Relays used in the construction of electric...Ch. 2 - Prob. 164SECh. 2 - Refer to Exercise 2.163 and consider circuit B. If...Ch. 2 - Prob. 166SECh. 2 - Prob. 167SECh. 2 - As in Exercises 2.166 and 2.167, eight tires of...Ch. 2 - Three beer drinkers (say I, II, and III) are to...Ch. 2 - Prob. 170SECh. 2 - Prob. 171SECh. 2 - Prob. 172SECh. 2 - Prob. 173SECh. 2 - Prob. 174SECh. 2 - Prob. 175SECh. 2 - Prob. 176SECh. 2 - Refer to Exercise 2.90(b) where a friend claimed...Ch. 2 - Suppose that the probability of exposure to the...Ch. 2 - Two gamblers bet 1 each on the successive tosses...Ch. 2 - Prob. 180SECh. 2 - Suppose that n indistinguishable balls are to be...
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- Question 4. We consider a CRR model with So == 5 and up and down factors u = 1.03 and d = 0.96. We consider the interest rate r = 4% (over one period). Is this a suitable CRR model? (Explain your answer.)arrow_forwardQuestion 3. We want to price a put option with strike price K and expiration T. Two financial advisors estimate the parameters with two different statistical methods: they obtain the same return rate μ, the same volatility σ, but the first advisor has interest r₁ and the second advisor has interest rate r2 (r1>r2). They both use a CRR model with the same number of periods to price the option. Which advisor will get the larger price? (Explain your answer.)arrow_forwardQuestion 5. We consider a put option with strike price K and expiration T. This option is priced using a 1-period CRR model. We consider r > 0, and σ > 0 very large. What is the approximate price of the option? In other words, what is the limit of the price of the option as σ∞. (Briefly justify your answer.)arrow_forward
- Question 6. You collect daily data for the stock of a company Z over the past 4 months (i.e. 80 days) and calculate the log-returns (yk)/(-1. You want to build a CRR model for the evolution of the stock. The expected value and standard deviation of the log-returns are y = 0.06 and Sy 0.1. The money market interest rate is r = 0.04. Determine the risk-neutral probability of the model.arrow_forwardSeveral markets (Japan, Switzerland) introduced negative interest rates on their money market. In this problem, we will consider an annual interest rate r < 0. We consider a stock modeled by an N-period CRR model where each period is 1 year (At = 1) and the up and down factors are u and d. (a) We consider an American put option with strike price K and expiration T. Prove that if <0, the optimal strategy is to wait until expiration T to exercise.arrow_forwardWe consider an N-period CRR model where each period is 1 year (At = 1), the up factor is u = 0.1, the down factor is d = e−0.3 and r = 0. We remind you that in the CRR model, the stock price at time tn is modeled (under P) by Sta = So exp (μtn + σ√AtZn), where (Zn) is a simple symmetric random walk. (a) Find the parameters μ and σ for the CRR model described above. (b) Find P Ste So 55/50 € > 1). StN (c) Find lim P 804-N (d) Determine q. (You can use e- 1 x.) Ste (e) Find Q So (f) Find lim Q 004-N StN Soarrow_forward
- In this problem, we consider a 3-period stock market model with evolution given in Fig. 1 below. Each period corresponds to one year. The interest rate is r = 0%. 16 22 28 12 16 12 8 4 2 time Figure 1: Stock evolution for Problem 1. (a) A colleague notices that in the model above, a movement up-down leads to the same value as a movement down-up. He concludes that the model is a CRR model. Is your colleague correct? (Explain your answer.) (b) We consider a European put with strike price K = 10 and expiration T = 3 years. Find the price of this option at time 0. Provide the replicating portfolio for the first period. (c) In addition to the call above, we also consider a European call with strike price K = 10 and expiration T = 3 years. Which one has the highest price? (It is not necessary to provide the price of the call.) (d) We now assume a yearly interest rate r = 25%. We consider a Bermudan put option with strike price K = 10. It works like a standard put, but you can exercise it…arrow_forwardIn this problem, we consider a 2-period stock market model with evolution given in Fig. 1 below. Each period corresponds to one year (At = 1). The yearly interest rate is r = 1/3 = 33%. This model is a CRR model. 25 15 9 10 6 4 time Figure 1: Stock evolution for Problem 1. (a) Find the values of up and down factors u and d, and the risk-neutral probability q. (b) We consider a European put with strike price K the price of this option at time 0. == 16 and expiration T = 2 years. Find (c) Provide the number of shares of stock that the replicating portfolio contains at each pos- sible position. (d) You find this option available on the market for $2. What do you do? (Short answer.) (e) We consider an American put with strike price K = 16 and expiration T = 2 years. Find the price of this option at time 0 and describe the optimal exercising strategy. (f) We consider an American call with strike price K ○ = 16 and expiration T = 2 years. Find the price of this option at time 0 and describe…arrow_forward2.2, 13.2-13.3) question: 5 point(s) possible ubmit test The accompanying table contains the data for the amounts (in oz) in cans of a certain soda. The cans are labeled to indicate that the contents are 20 oz of soda. Use the sign test and 0.05 significance level to test the claim that cans of this soda are filled so that the median amount is 20 oz. If the median is not 20 oz, are consumers being cheated? Click the icon to view the data. What are the null and alternative hypotheses? OA. Ho: Medi More Info H₁: Medi OC. Ho: Medi H₁: Medi Volume (in ounces) 20.3 20.1 20.4 Find the test stat 20.1 20.5 20.1 20.1 19.9 20.1 Test statistic = 20.2 20.3 20.3 20.1 20.4 20.5 Find the P-value 19.7 20.2 20.4 20.1 20.2 20.2 P-value= (R 19.9 20.1 20.5 20.4 20.1 20.4 Determine the p 20.1 20.3 20.4 20.2 20.3 20.4 Since the P-valu 19.9 20.2 19.9 Print Done 20 oz 20 oz 20 oz 20 oz ce that the consumers are being cheated.arrow_forward
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