## Statistics- MBA 5008 Name: _____ homework 6 Fall 2015

MBA

5008 Name:

_________________________________________

homework

6 Fall 2015

Directions: Answer all

questions. The value of each question,

and part thereof, is as given. Show

all work and clearly indicate your

answers. If you are unable to

solve a portion of a problem and need that solution for subsequent sections of

the problem, make a reasonable assumption regarding the answer that you need

and clearly state the assumption that

you are making.

If you are using excel,

1.

make sure that the formula you are using is entered into

the cell where the solution is given.

E.g., =average(location of data).

2.

Use, and label, the tabs at the bottom of the spreadsheet

indicating which problem is being done rather than submitting multiple excel

files.

1. (20) Use the data

from the stock that you chose for the first homework assignment to solve this

problem.

a. (10) Determine a 95% confidence interval for the

true average stock price based on your data. Use your data!!For the two of you who did not submit

the homework, use the Disney data provided here to calculate the confidence

interval.

Day

9/1

9/2

9/3

9/4

9/8

9/9

9/10

9/11

9/14

9/15

9/16

Closing

Price

99.16

99.55

101.46

100.36

100.36

101.68

101.33

102.20

102.99

101.83

102.75

Day

9/17

9/18

9/21

9/22

9/23

9/24

9/25

9/28

9/29

9/30

Closing

Price

103.75

102.39

102.46

101.48

101.38

99.24

99.58

98.30

97.77

100.5

b. (10) The table below shows the 52 week high for

the stock that you used in the first homework assignment. Test to determine if the average stock price

differs from the 52 week high use α = 0.05.

Use your

data!!For the two of you who did not submit

the homework or if yours is not here, use the Disney data provided here to

calculate the confidence interval.

Avon

Nordstrom

ISIS Pharm

J&J

Kellogg

Coca Cola

FedEx

Microsoft

Apple

BBY

Disney

10.65

83.16

62.54

109.49

72.34

53.79

168.33

54.98

134.54

42.00

122.08

2. (20) Physicians at the

local hearing clinic are testing a new procedure that they hope will help

people who experience hearing loss either due to work environment or due to

age. Prior testing has shown that 80% of

individuals who have had the procedure have experienced hearing

improvement.

a. (3) If fifteen

individuals have the procedure, what is the probability that they all will

experience hearing improvement?

b. (4) What is the

probability that between 6 and 13 inclusive experience hearing improvement?

c. (4) What is the

probability that ten or more experience improvement in their hearing?

d. (3) What is the

probability that exactly eight experience improvement in their hearing?

e. (6) If more people

are told about the procedure and 75 people have the procedure, what is the

expected number who will experience hearing improvement? What is the variance and standard deviation

of the number of people who benefit?

3. (15) The local housing authority is attempting to

analyze the implications of the change from rent-controlled housing to

rent-stabilized housing. A total of

250,000 people live in rent-stabilized housing.

The table below shows the percentages of individuals who live in each

unit.

Number of People in housing unit

1

2

3

4

5

6

Percent of total

0.41

0.30

0.14

0.11

0.03

0.01

a. (7) What is the

expected number of individuals in each unit?

b. (8)

What are the variance and standard deviation of the number of

individuals in each unit?

4. (25) For borrowers with good credit scores, the

mean debt for revolving and installment accounts is $15,015. If the standard deviation is $3540 and the

debts are normally distributed:

a. (3)

What is the probability that the debt a borrower with good credit is

more than $22,000?

b. (3)

What is the probability that the debt a borrower with good credit is

less than $10,000?

c. (4) What is the probability that the debt for a

borrower with good credit is between $12,500 and $19,500?

d. (3) What is the probability that the debt for a

borrower with good credit is no more than $13,000?

e. (4) If one hundred people with good credit scores are selected,

what is the distribution of the credit scores?

f. (4) What is the

probability that the average of the one hundred selected individuals is more

than 14,500?

g. (4) What is the

probability that the average of the one hundred selected individuals is more

than 15,800?

5. (5) The following table provides information on

peopleâs reactions to the service and quality of food that they experienced at

Emirl Lagasseâs restaurant in New Orleans.

They rated the service as Poor (P), Fair (F), Good (G), Very Good (VG)

or excellent (E).

P

E

E

E

VG

G

E

G

VG

VG

VG

G

E

E

E

VG

G

F

VG

E

F

G

VG

VG

E

VG

E

G

VG

E

E

VG

F

E

G

E

P

VG

E

VG

Show the frequency and

relative frequency distributions for these data.

6. (15) The cost of automobile accidents has been

estimated to be $162 billion annually.

The average cost per person for crashes in Charlotte, NC are reported to

be $1650. Suppose that this average is

based on a sample of 50 individuals. It

is also known that the variance of the cost of an accident is 360,000.

a. What is the margin

of error for a 99% confidence interval for the true cost of automobile

accidents ?

b. Construct the

confidence interval.

c. What would you

recommend if the study required a margin of error of $150 or less?

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