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
people’s reactions to the service and quality of food that they experienced at
Emirl Lagasse’s 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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