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