Unformatted text preview: n = 5 and p = 0.4.
a) the probability that x is at most 1
Binomial with Page 2 of 8 b) the probability that x is at least 4 c) the probability that x is less than 1 4. A report issued by the American Association of Building Contractors indicates that 40%
of all home buyers will do some remodeling to their home within the first five years of
home ownership. Assuming this is true, what is the probability that in a random sample
of 20 homeowners, 2 or fewer will remodel their homes.
Binomial with .
(from tables) 5. Magic Valley Memorial Hospital administrators have recently received an internal audit
report that indicates that 15% of all patient bills contain an error of one form or
another. After spending considerable effort to improve the hospital’s billing process, the
administrators are convinced that things have improved. They believe that t he new
error rate is somewhere closer to 0.05.
a) Suppose that recently the hospital randomly sampled 10 patient bills and conducted
a thorough study to determine whether an error exists. It found 3 bills with errors.
Assuming that managers are correct that they have improved the error rate to 0.05,
what is the probability that they would find 3 or more errors in a sample of 10 bills?
Binomial with . Page 3 of 8 b) What is the probability that they would find 3 or more errors in a sample of 10 bills if
the administrators had actually failed in improving the billing process, and the error
rate was still 15%.
Binomial with . c) What conclusion would you reach about the accuracy of the hospital administrators’
claim to have improved the error rate to 5%?
It is very unlikely that we would find so many errors if the error rate had really been
lowered to 5%, with it being more plausible that the error rate is still 15% (or even
that it has...
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This document was uploaded on 03/22/2014.
 Spring '14

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