STATISTICAL TECHNIQUES FOR BUSINESS AND
STATISTICAL TECHNIQUES FOR BUSINESS AND
17th Edition
ISBN: 9781307261158
Author: Lind
Publisher: MCG/CREATE
bartleby

Concept explainers

bartleby

Videos

Question
Book Icon
Chapter 7, Problem 35E

a.

To determine

Explain if the problem meets the requirements of a binomial problem.

a.

Expert Solution
Check Mark

Answer to Problem 35E

Yes, the problem qualifies as a binomial problem.

Explanation of Solution

In order to qualify as a binomial problem it must satisfy the following conditions:

  • The number of trials is fixed that is 500 new members.
  • There are only two mutually exclusive outcomes, overweight and not overweight.
  • The probability is constant for each trial that is 0.30.
  • The trials are independent to each other.

Since the problem satisfies all the conditions of a binomial distribution.

Hence, the problem is qualified as a binomial problem.

b.

To determine

Find the probability that 175 or more of the new members are 15 pounds overweight.

b.

Expert Solution
Check Mark

Answer to Problem 35E

The probability that 175 or more of the new members are 15 pounds overweight is 0.0085.

Explanation of Solution

It is given that 30% of its new members are 15 pounds overweight and the total number of new members in a metropolitan area is 500.

That is, n=500 and π=0.30.

The mean can be obtained as follows:

μ=nπ=500(0.30)=150

The standard deviation can be obtained as follows:

σ=nπ(1π)=500(0.30)(10.30)=500(0.30)(0.70)=105=10.25

The probability that 175 or more of the new members are 15 pounds overweight can be obtained as follows:

P(X175)=P(X>1750.5)      [Apply the continuity correction factor]=P(X>174.5)=P(Xμσ>174.515010.25)=P(Z>24.510.25)=P(Z>2.39)=1P(Z<2.39)

Step-by-step procedure to obtain the probability using Excel:

  • Click on the Formulas tab in the top menu.
  • Select Insert function. Then from category box, select Statistical and below that NORM.S.DIST.
  • Click Ok.
  • In the dialog box, Enter Z value as 2.39.
  • Enter Cumulative as TRUE.
  • Click Ok, the answer appears in the spreadsheet.

Output obtained using Excel is represented as follows:

STATISTICAL TECHNIQUES FOR BUSINESS AND, Chapter 7, Problem 35E , additional homework tip  1

From the above output, the probability of Z less than 2.39 is 0.9915.

Now consider,

P(X175)=1P(Z<2.39)=10.9915=0.0085

Therefore, the probability that 175 or more of the new members are 15 pounds overweight is 0.0085.

c.

To determine

Find the probability that 140 or more of the new members are 15 pounds overweight.

c.

Expert Solution
Check Mark

Answer to Problem 35E

The probability that 140 or more of the new members are 15 pounds overweight is 0.8462.

Explanation of Solution

The probability that 140 or more of the new members are 15 pounds overweight can be obtained as follows:

P(X140)=P(X>1400.5)      [Apply the continuity correction factor]=P(X>139.5)=P(Xμσ>139.515010.25)=P(Z>10.510.25)=P(Z>1.02)=1P(Z<1.02)

Step-by-step procedure to obtain the probability using Excel:

  • Click on the Formulas tab in the top menu.
  • Select Insert function, then from category box, select Statistical and below that NORM.S.DIST.
  • Click Ok.
  • In the dialog box, Enter Z value as –1.02.
  • Enter Cumulative as TRUE.
  • Click Ok, the answer appears in the spreadsheet.

Output obtained using Excel is represented as follows:

STATISTICAL TECHNIQUES FOR BUSINESS AND, Chapter 7, Problem 35E , additional homework tip  2

From the above output, the probability of Z less than –1.02 is 0.1538.

Consider,

P(X140)=1P(Z<1.02)=10.1538=0.8462

Therefore, the probability that 140 or more of the new members are 15 pounds overweight is 0.8462.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Problem 3. Pricing a multi-stock option the Margrabe formula The purpose of this problem is to price a swap option in a 2-stock model, similarly as what we did in the example in the lectures. We consider a two-dimensional Brownian motion given by W₁ = (W(¹), W(2)) on a probability space (Q, F,P). Two stock prices are modeled by the following equations: dX = dY₁ = X₁ (rdt+ rdt+0₁dW!) (²)), Y₁ (rdt+dW+0zdW!"), with Xo xo and Yo =yo. This corresponds to the multi-stock model studied in class, but with notation (X+, Y₁) instead of (S(1), S(2)). Given the model above, the measure P is already the risk-neutral measure (Both stocks have rate of return r). We write σ = 0₁+0%. We consider a swap option, which gives you the right, at time T, to exchange one share of X for one share of Y. That is, the option has payoff F=(Yr-XT). (a) We first assume that r = 0 (for questions (a)-(f)). Write an explicit expression for the process Xt. Reminder before proceeding to question (b): Girsanov's theorem…
Problem 1. Multi-stock model We consider a 2-stock model similar to the one studied in class. Namely, we consider = S(1) S(2) = S(¹) exp (σ1B(1) + (M1 - 0/1 ) S(²) exp (02B(2) + (H₂- M2 where (B(¹) ) +20 and (B(2) ) +≥o are two Brownian motions, with t≥0 Cov (B(¹), B(2)) = p min{t, s}. " The purpose of this problem is to prove that there indeed exists a 2-dimensional Brownian motion (W+)+20 (W(1), W(2))+20 such that = S(1) S(2) = = S(¹) exp (011W(¹) + (μ₁ - 01/1) t) 롱) S(²) exp (021W (1) + 022W(2) + (112 - 03/01/12) t). where σ11, 21, 22 are constants to be determined (as functions of σ1, σ2, p). Hint: The constants will follow the formulas developed in the lectures. (a) To show existence of (Ŵ+), first write the expression for both W. (¹) and W (2) functions of (B(1), B(²)). as (b) Using the formulas obtained in (a), show that the process (WA) is actually a 2- dimensional standard Brownian motion (i.e. show that each component is normal, with mean 0, variance t, and that their…
The scores of 8 students on the midterm exam and final exam were as follows.   Student Midterm Final Anderson 98 89 Bailey 88 74 Cruz 87 97 DeSana 85 79 Erickson 85 94 Francis 83 71 Gray 74 98 Harris 70 91   Find the value of the (Spearman's) rank correlation coefficient test statistic that would be used to test the claim of no correlation between midterm score and final exam score. Round your answer to 3 places after the decimal point, if necessary. Test statistic: rs =

Chapter 7 Solutions

STATISTICAL TECHNIQUES FOR BUSINESS AND

Ch. 7 - List the major characteristics of a normal...Ch. 7 - The mean of a normal probability distribution is...Ch. 7 - The mean of a normal probability distribution is...Ch. 7 - The Kamp family has twins, Rob and Rachel. Both...Ch. 7 - Prob. 12ECh. 7 - The temperature of coffee sold at the Coffee Bean...Ch. 7 - A normal population has a mean of 20.0 and a...Ch. 7 - A normal population has a mean of 12.2 and a...Ch. 7 - A recent study of the hourly wages of maintenance...Ch. 7 - The mean of a normal probability distribution is...Ch. 7 - Prob. 5SRCh. 7 - Prob. 17ECh. 7 - A normal population has a mean of 80.0 and a...Ch. 7 - Prob. 19ECh. 7 - Prob. 20ECh. 7 - WNAE, an all-news AM station, finds that the...Ch. 7 - Prob. 22ECh. 7 - Prob. 6SRCh. 7 - A normal distribution has a mean of 50 and a...Ch. 7 - Prob. 24ECh. 7 - Prob. 25ECh. 7 - Prob. 26ECh. 7 - Prob. 27ECh. 7 - Prob. 28ECh. 7 - Prob. 29ECh. 7 - Prob. 30ECh. 7 - Prob. 7SRCh. 7 - Prob. 31ECh. 7 - Prob. 32ECh. 7 - Prob. 33ECh. 7 - Prob. 34ECh. 7 - Prob. 35ECh. 7 - Prob. 36ECh. 7 - Prob. 8SRCh. 7 - Prob. 37ECh. 7 - The lifetime of LCD TV sets follows an exponential...Ch. 7 - Prob. 39ECh. 7 - Prob. 40ECh. 7 - Prob. 41CECh. 7 - Prob. 42CECh. 7 - Prob. 43CECh. 7 - Prob. 44CECh. 7 - Prob. 45CECh. 7 - Prob. 46CECh. 7 - Prob. 47CECh. 7 - Prob. 48CECh. 7 - Shaver Manufacturing Inc. offers dental insurance...Ch. 7 - The annual commissions earned by sales...Ch. 7 - Prob. 51CECh. 7 - Prob. 52CECh. 7 - Management at Gordon Electronics is considering...Ch. 7 - Fast Service Truck Lines uses the Ford Super Duty...Ch. 7 - Prob. 55CECh. 7 - Prob. 56CECh. 7 - Prob. 57CECh. 7 - Prob. 58CECh. 7 - Prob. 59CECh. 7 - Prob. 60CECh. 7 - Prob. 61CECh. 7 - Prob. 62CECh. 7 - The weights of canned hams processed at Henline...Ch. 7 - Prob. 64CECh. 7 - Prob. 65CECh. 7 - The price of shares of Bank of Florida at the end...Ch. 7 - Prob. 67CECh. 7 - Prob. 68CECh. 7 - Prob. 69CECh. 7 - Prob. 70CECh. 7 - Prob. 71CECh. 7 - Prob. 72CECh. 7 - Prob. 73CECh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Prob. 4PCh. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 1.1PTCh. 7 - Prob. 1.2PTCh. 7 - Prob. 1.3PTCh. 7 - Prob. 1.4PTCh. 7 - Prob. 1.5PTCh. 7 - Prob. 1.6PTCh. 7 - Which of the following is NOT a requirement of the...Ch. 7 - Prob. 1.8PTCh. 7 - How many standard normal distributions are there?...Ch. 7 - Prob. 1.10PTCh. 7 - Prob. 1.11PTCh. 7 - Prob. 1.12PTCh. 7 - Prob. 1.13PTCh. 7 - Prob. 1.14PTCh. 7 - Prob. 1.15PTCh. 7 - Prob. 2.1PTCh. 7 - Prob. 2.2PTCh. 7 - Prob. 2.3PTCh. 7 - Prob. 2.4PTCh. 7 - Prob. 2.5PTCh. 7 - Prob. 2.6PTCh. 7 - Prob. 2.7PT
Knowledge Booster
Background pattern image
Statistics
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, statistics and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Holt Mcdougal Larson Pre-algebra: Student Edition...
Algebra
ISBN:9780547587776
Author:HOLT MCDOUGAL
Publisher:HOLT MCDOUGAL
Text book image
College Algebra (MindTap Course List)
Algebra
ISBN:9781305652231
Author:R. David Gustafson, Jeff Hughes
Publisher:Cengage Learning
Text book image
College Algebra
Algebra
ISBN:9781337282291
Author:Ron Larson
Publisher:Cengage Learning
Text book image
College Algebra
Algebra
ISBN:9781938168383
Author:Jay Abramson
Publisher:OpenStax
Statistics 4.1 Point Estimators; Author: Dr. Jack L. Jackson II;https://www.youtube.com/watch?v=2MrI0J8XCEE;License: Standard YouTube License, CC-BY
Statistics 101: Point Estimators; Author: Brandon Foltz;https://www.youtube.com/watch?v=4v41z3HwLaM;License: Standard YouTube License, CC-BY
Central limit theorem; Author: 365 Data Science;https://www.youtube.com/watch?v=b5xQmk9veZ4;License: Standard YouTube License, CC-BY
Point Estimate Definition & Example; Author: Prof. Essa;https://www.youtube.com/watch?v=OTVwtvQmSn0;License: Standard Youtube License
Point Estimation; Author: Vamsidhar Ambatipudi;https://www.youtube.com/watch?v=flqhlM2bZWc;License: Standard Youtube License