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Solution Ch5

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QUESTION 1 1. You are offered an investment opportunity. Its outcomes and probabilities are presented in the following table. What is your expected return on this investment? . -$400 $0 𝐸 = (−1000)(0.4) + (0)(0.20) + (1000)(0.40) 𝐸=0 $200 $400 $500 QUESTION 2 1. Customers arrival at the drive-thru window at the bank follows a Poisson distribution. It has been established that over a five-minute interval the mean number of cars arriving is 3. The probability of 5 cars arriving over a five-minute interval is __________ . 0.0940 0.0417 0.1500 0.1008 Mean for five minute interval, λ = 3 𝑒 −𝜆 ∙ 𝜆𝑟 Pr(𝑋 = 𝑟) = 𝑟! 𝑒 −3 × 35 Pr(𝑋 = 5) = = 0.1008 5! 0.2890 QUESTION 3 1. Customers' arrival at the drive-thru window at a bank follows a Poisson distribution. It has been established that over a five-minute interval the mean number of cars arriving is 3. The probability of 3 cars arriving over a tenminute interval is __________ . 0.3528 0.6472 0.0892 0.2240 0.9108 Mean for five minute interval, λa = 3 Mean for ten minute interval, λb = 2λa = 2 × 3 = 6 𝑒 −𝜆𝑏 ∙ 𝜆𝑏 𝑟 Pr(𝑋 = 𝑟) = 𝑟! 𝑒 −6 × 63 Pr(𝑋 = 3) = = 0.0892 3! QUESTION 4 1. The following distribution is not a probability distribution because __________________. X -5 -4 -3 -2 -1 P(x) 0.16 0.14 0.43 0.15 0.27 The values of x are negative The probability values are not increasing ∑ 𝑃(𝑥) = 0.16 + 0.14 + 0.43 + 0.15 + 0.27 = 1.15 ∑ ? ...
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