MAT 540 Week 3 Quiz 2 Latest Updated (Jan 20, 2015) 100% Graded

1.      Seventy two percent of all observations fall within 1 standard deviation of the mean if the data is normally distributed.

2.      Probability trees are used only to compute conditional probabilities.

3.      If two events are not mutually exclusive, then P(A or B) = P(A) + P(B)

4.      The equal likelihood criterion assigns a probability of 0.5 to each state of nature, regardless of how many states of nature there are. 

5.      The Hurwicz criterion is a compromise between the maximax and maximin criteria.

6.      The maximin approach involves choosing the alternative with the highest or lowest payoff.

7.      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.

8.      The metropolitan airport commission is considering the establishment of limitations on noise pollution around a local airport.  At the present time, the noise level per jet takeoff in one neighborhood near the airport is approximately normally distributed with a mean of 100 decibels and a standard deviation of 3 decibels.  What is the probability that a randomly selected jet will generate a noise level of more than 105 decibels?

9.      The chi-square test is a statistical test to see if an observed data fit a _________.

10.  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.

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:

12.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:

13.Determining the worst payoff for each alternative and choosing the alternative with the best worst is called

14.The maximin criterion results in the

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.  
 

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. 

17.Consider the following decision tree


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

18.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).

19.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 probabilities of cold weather (S1), warm weather (S2), and rainy weather (S3) are 0.2, 0.4, and 0.4, respectively what is the EVPI for this situation?

20. 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, what is the numerical maximum expected value?