cost of the shares. How much is your
total
gain or loss on the sale of the 80 shares?
[3]
ANSWER:
3.
In a product liability case, a company has two options: settle out of court or go to trial.
•
The cost of settling out of court is $350,000.
•
If they go to trial and are found liable, they will have to pay $700,000 to the plaintiff.
If found not liable they will pay nothing. Their lawyers estimate the probability of a
not-liable verdict to be 80%.
If they go to trial they will incur $80,000 in legal fees.
(a)
Including legal fees, calculate the expected cost to the company for taking the case to
court (i.e. by going to trial).
[4 marks]
ANSWER:
(b)
Should the company settle out of court?
Why or why not? [1 mark]
ANSWER:

OPMT 1197
Myra Andrews
Business Statistics
Winter 2021
Pg 15 of 24
4.
Statistics Canada did a study on the incidence of asthma among children aged 12 to 17.
The
children were asked if they had asthma and if they had at least one household member who
smoked
.
From the study they found the following:
•
9.5% of children have asthma.
•
25% of children have at least one household member who smokes.
•
4% of children have asthma and
at least one household member who smokes.
(a)
Set up a 2×2 probability table.
[4 marks]
Total
Total
(b)
A randomly selected child has asthma.
What is the probability that this child has a
household member who smokes?
[2 marks]
ANSWER (4 decimal places):
(c)
For children who have a household member who smokes, what percentage has asthma?
[2 marks]
ANSWER (Percentage, 2 decimal places):
(d)
Is whether or not a child has asthma related to whether or not they have at least one
household member who smokes?
Explain with probabilities.
[3 marks]

OPMT 1197
Myra Andrews
Business Statistics
Winter 2021
Pg 16 of 24
5.
A survey asked BCIT Accounting and Marketing students how often they went for peer
tutoring in the last month. The results are shown in the table below.
Number of times students went for peer tutoring
Program
Never
One time
2 to 3 times
4 of more times
Total
Accounting
210
53
27
10
300
Marketing
30
47
48
75
200
Total
240
100
75
85
500
(a)
What percentage of students never went for peer tutoring?
[2 marks]
ANSWER (Percentage, 2 decimal places):
(b)
What percentage of Accounting students never went for peer tutoring?
[2 marks]
ANSWER (Percentage, 2 decimal places):
(c)
A student is in the Marketing program. What is the probability that he/she went for peer
tutoring at least once?
[3 marks]
ANSWER (4 decimal places):
(d)
Among the group who went at least once for peer tutoring, what percentage of them
are
Marketing students?
[3 marks]
ANSWER (Percentage, 2 decimal places):
(e)
Which group of students are more likely to go for peer tutoring?
Accounting or
Marketing students?
Explain using probabilities.
[3 marks]

OPMT 1197
Myra Andrews
Business Statistics
Winter 2021
Pg 17 of 24
6.
Past experience has shown that only 90% of the passengers who purchase a ticket actually
show up for the flight.
So PuddleJumper Airlines always sells 20 tickets for their plane that
has 19 seats while BigBob Airways always sells 40 tickets for their plane that has 38 seats.