DSS 594
1. Artie Siegel, an MBA student, has been having problems balancing his checkbook. His monthly income is derived from a graduate research...
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1. Artie Siegel, an MBA student, has been having problems balancing his checkbook. His
monthly income is derived from a graduate research assistantship; however, he also makes extra
money in most months by tutoring undergraduates in their quantitative analysis course. His
historical chances of various income levels are shown in the following table:
Monthly Income* ($)
Probability
350
0.40 0-40
400
0.20 40-60
450
0.30 60-90
500
0.10 90-100
*Assume that this income is received at the beginning of each month.
Answer: Used discrete probability distribution to assign each monthly income possibility a range
of numbers. See my range above and below in red.
Siegel's expenditures also vary from month to month, and he estimates that they will follow this
distribution:
Monthly Expenses ($)
Probability
300
0.10 0-10
400
0.45 10-55
500
0.30 55-85
600
0.15 85-100
He begins his final year with $600 in his checking account. Simulate (do not use your computer)
the entire year (12 months) and discuss Siegel's financial picture, i.e., will he be able to keep his
head above water--(out of debt)? What is his expected average profit for the 12 months? Use
the random numbers below.
Random numbers for Income and Expenses
Random numbers
Random numbers
for Income
for Expenses
35
99
54
44
73
1
95
80
9
95
19
72
81
75
2
16
76
32

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