Question

1) The waiting time at an elevator is uniformly distributed between 30 and 200 seconds. What is the probability a rider waits less than two minutes?

A) 0.4706

B) 0.5294

C) 0.6000

D) 0.7059

2) For any normally distributed random variable with mean μ and standard deviation σ, the percent of the observations that fall between [μ - 2σ, μ + 2σ] is the closest to ________.

A) 68%

B) 68.26%

C) 95%

D) 99.73%

3) Which of the following can be represented by a continuous random variable?

A) The time of a flight between Chicago and New York

B) The number of defective light bulbs in a sample of five

C) The number of arrivals to a drive-through bank window in a four-hour period

D) The score of a randomly selected student on a five-question multiple-choice quiz

4) An analyst believes that a stock's return depends on the state of the economy, for which she has estimated the following probabilities:

State of the Economy	Probability	Return
Good	0.10	15	%
Normal	0.60	13	%
Poor	0.30	7	%

According to the analyst's estimates, the expected return of the stock is ________.

A) 7.8%

B) 11.4%

C) 11.7%

D) 13.0%

5) How would you characterize a consumer who is risk loving?

A) A consumer who may accept a risky prospect even if the expected gain is negative.

B) A consumer who demands a positive expected gain as compensation for taking risk.

C) A consumer who completely ignores risk and makes his or her decisions solely on the basis of expected values.

D) None of the above.

Answer 1