😱 FUNDAMENTAL EXERCISES FOR FIRST PARTIAL 😱 


(Exercise Session 5 - Pier)

6.14) A random sample of 16 junior managers in the offices of corporations in a

large city center was taken to estimate average daily commuting time for all such
managers. Suppose that the population times have a normal distribution with a
mean of 87 minutes and a standard deviation of 22 minutes.

a. What is the standard error of the sample mean commuting time?

b. What is the probability that the sample mean is fewer than 100 minutes?

c. What is the probability that the sample mean is more than 80 minutes?

d. What is the probability that the sample mean is outside the range 85 to 95
minutes?

e. Suppose that a second (independent) random sample of 50 junior managers is

taken. Without doing the calculations, state whether the probabilities in parts (b),
(c), and (d) would be higher, lower, or the same for the second sample. Sketch
graphs to illustrate your answers.

6.36) A corporation is considering a new issue of convertible bonds. Management

believes that the offer terms will be found attractive by 20% of all its current stock-
holders. Suppose that this belief is correct. A random sample of 130 current
stockholders is taken.

a) What is the standard error of the sample proportion who find this offer
attractive?

b) What is the probability that the sample proportion is more than 0.15?

c) What is the probability that the sample proportion is between 0.18 and 0.22?

d) Suppose that a sample of 500 current stockholders had been taken. Without
doing the calculations, state whether the probabilities in parts (b) and (c) would
have been higher, lower, or the same as those found.

6.66) The scores of all applicants taking an aptitude test required by a law school
have a normal distribution with a mean of 420 and a standard deviation of 100. A
random sample of 25 scores is taken.

a) Find the probability that the sample mean score is higher than 450.

b) Find the probability that the sample mean score is between 400 and 450.

c) The probability is 0.10 that the sample mean score is higher than what
number?

d) The probability is 0.10 that the sample mean score is lower than what number?

e) If a sample of 50 test scores had been taken, would the probability of a sample
mean score higher than 450 be smaller than, larger than, or the same as the
correct answer to part A.? It is not necessary to do the detailed calculations
here. Sketch a graph to illustrate your reasoning.

6.68) In a particular year, the percentage rates of return of U.S. common stock
mutual funds had a normal distribution with a mean of 14.8 and a standard
deviation of 6.3. A random sample of 9 of these mutual funds was taken.

a) What is the probability that the sample mean percentage rate of return is more
than 19.0? [0.02275013]

b) What is the probability that the sample mean percentage rate of return is
between 10.6 and 19.0? [0.9544997]

c) The probability is 0.25 that the sample mean percentage return is less than
what number? [13.38357]

d) If a sample of 20 of these funds was taken, state whether the probability of a

sample mean percentage rate of return of more than 19.0 would be smaller
than, larger than, or the same as the correct answer to part (a). Sketch a graph
to illustrate your reasoning. [smaller!]