Question Details

MAT 540 WEEK 3 QUIZ 1
•	Question 1
If two events are not mutually exclusive, then P(A or B) = P(A) + P(B)
 
			
•	Question 2
Probability trees are used only to compute conditional probabilities. 
 
			
•	Question 3
Seventy two percent of all observations fall within 1 standard deviation of the mean if the data is normally distributed. 
 

•	Question 4
Both maximin and minimin criteria are optimistic.
 

			
•	Question 5
The equal likelihood criterion assigns a probability of 0.5 to each state of nature, regardless of how many states of nature there are. 
 
			
•	Question 6
Using the minimax regret criterion, we first construct a table of regrets. Subsequently, for each possible decision, we look across the states of nature and make a note of the maximum regret possible for that decision. We then pick the decision with the largest maximum regret.
 
			
•	Question 7
The maximin approach involves choosing the alternative with the highest or lowest payoff.
 

•	Question 8
Assume that it takes a college student an average of 5 minutes to find a parking spot in the main parking lot.  Assume also that this time is normally distributed with a standard deviation of 2 minutes. Find the probability that a randomly selected college student will take between 2 and 6 minutes to find a parking spot in the main parking lot.
		
•	Question 9
A professor would like to utilize the normal distribution to assign grades such that 5% of students receive A's.  If the exam average is 62 with a standard deviation of 13, what grade should be the cutoff for an A? (Round your answer.)
		
•	Question 10
The chi-square test is a statistical test to see if an observed data fit a _________.
	
•	Question 11
A business owner is trying to decide whether to buy, rent, or lease office space and has constructed the following payoff table based on whether business is brisk or slow. 
 
             
 
If the probability of brisk business is .40 and for slow business is .60, the expected value of perfect information is:
		
•	Question 12
A group of friends are planning a recreational outing and have constructed the following payoff table to help them decide which activity to engage in.  Assume that the payoffs represent their level of enjoyment for each activity under the various weather conditions.                    
 
                        Weather
                  Cold    Warm  Rainy
                  S1      S2               S3
Bike:   A1      10          8           6
Hike:  A2      14        15           2
Fish:   A3        7          8           9
 
What is the conservative decision for this situation?
		
•	Question 13
A business owner is trying to decide whether to buy, rent, or lease office space and has constructed the following payoff table based on whether business is brisk or slow. 
 
 The maximax strategy is:
			
•	Question 14
A group of friends are planning a recreational outing and have constructed the following payoff table to help them decide which activity to engage in.  Assume that the payoffs represent their level of enjoyment for each activity under the various weather conditions.                    
 
                        Weather
                  Cold    Warm  Rainy
                  S1      S2               S3
Bike:   A1      10          8           6
Hike:  A2      14        15           2
Fish:   A3        7          8           9
 
If the group chooses to minimize their maximum regret, what activity will they choose?
			
•	Question 15
A life insurance company wants to update its actuarial tables. Assume that the probability distribution of the lifetimes of the participants is approximately a normal distribution with a mean of 71 years and a standard deviation of 3.5 years. What proportion of the plan participants are expected to see their 75th birthday? Note: Write your answers with two places after the decimal, rounding off as appropriate.  
 
			
•	Question 16
A brand of television has a lifetime that is normally distributed with a mean of 7 years and a standard deviation of 2.5 years. What is the probability that a randomly chosen TV will last more than 8 years? Note: Write your answers with two places after the decimal, rounding off as appropriate. 


•	Question 17
The quality control manager for ENTA Inc. must decide whether to accept (a1), further analyze (a2) or reject (a3) a lot of incoming material. Assume the following payoff table is available. Historical data indicates that there is 30% chance that the lot is poor quality (s1), 50 % chance that the lot is fair quality (s2) and 20% chance that the lot is good quality (s3). 
 
             
 
What is the numerical value of the maximin?
		
•	Question 18
A manager has developed a payoff table that indicates the profits associated with a set of alternatives under 2 possible states of nature. 
 
            Alt       S1           S2
            1          10             2
            2          -2              8
            3            8             5
 
What is the highest expected value? Assume that the probability of S2 is equal to 0.4. 	

			
•	Question 19
The quality control manager for ENTA Inc. must decide whether to accept (a1), further analyze (a2) or reject (a3) a lot of incoming material. Assume the following payoff table is available. Historical data indicates that there is 30% chance that the lot is poor quality (s1), 50 % chance that the lot is fair quality (s2) and 20% chance that the lot is good quality (s3). 
 
             
 
What is the numerical value of the minimax regret?

			
•	Question 20
Consider the following decision tree. 
 
   
 


 
What is the expected value for the best decision? Round your answer to the nearest whole number.
	
			
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