Tutorial - Week 6

# 0850 0413 0723 103 0126 0367 1156 0803 1397 0764 b do

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-0.850 0.413 -0.723 1.03 -0.126 -0.367 -1.156 -0.803 -1.397 -0.764 b) Do you think your answer to part (a) provides a good estimate? Why or why not. Question 2 An insurance company estimates that it should make an annual profit of \$150 on each homeowner’s policy written, with a standard deviation of \$6000. a) Why is the standard deviation so large? b) If the company writes only two of these policies, what are the mean and standard deviation of the annual profit? c) If the company writes 1000 of the policies, what are the mean and standard deviation of the annual profit? d) What circumstances would violate the assumption of independence of the policies?

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Part II – The (Standard) Normal Distribution Question 1 The final marks in an undergraduate statistics course are normally distributed with a mean of 70 and a standard deviation of 10. The professor must convert all marks to letter grades. She decides that she wants 10% A’s, 30% B’s, 40% C’s, 15% D’s, and 5% F’s. a) Determine the cut-offs for each letter grade. Round to the nearest integers. b) What percentage of grades are 85% or higher? c) Give a range within which about 95% of the grades would lie. Question 2 One of the most popular products of a retailer of computing equipment is the HP Laser Printer. The average weekly demand is 200 and the standard deviation is 30. Lead time for a new order from the manufacturer to arrive is 1 week. How many HP Laser Printers should the retailer order so that the probability of running short in any week is no more than 6%?
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