According to J.D. Power and Associates’ 2006 Initial Quality Study, consumers reported on average 1.7 problems per vehicle with new 2006 Volkswagens. In a randomly selected new Volkswagen, find the probability of (a) at least one problem; (b) no problems; (c) more than three problems. (d) Construct the probability distribution using Excel or Appendix B, make a graph of its PDF, and describe its shape. (Data are from J.D. Power and Associates 2006 Initial Quality Study SM.)
> The weekly demand for Papa Chubby’s pizzas on a Friday night is a random variable with mean 235 and standard deviation 10. Find the value(s) of X for each event. Show your work. a. Lowest 50 percent b. Highest 25 percent c. 90th percentile d. Middle 8
> The default rate on government-guaranteed student loans at a certain private 4-year institution is 7 percent. The college extends 10 such loans. (a) What is the probability that none of them will default? (b) That at least three will default? (c) What is
> Tired of careless spelling and grammar, a company decides to administer a test to all job applicants. The test consists of 20 sentences. Applicants must state whether each sentence contains any grammar or spelling errors. Half the sentences contain error
> Passengers using New York’s MetroCard system must swipe the card at a rate between 10 and 40 inches per second, or else the card must be re-swiped through the card reader. Research shows that actual swipe rates by subway riders are uniformly distributed
> On average, 40 percent of U.S. beer drinkers order light beer. (a) What is the probability that none of the next eight customers who order beer will order light beer? (b) That one customer will? (c) Two customers? (d) Fewer than three? (e) Construct the
> (a) State the values that X can assume in each hypergeometric scenario. (b) Use the hypergeometric PDF formula to find the probability requested. (c) Check your answer by using Excel. i. N = 10, n = 3, s = 4, P(X = 3) ii. N = 20, n = 5, s = 3, P(X = 2)
> In a certain Kentucky Fried Chicken franchise, half of the customers typically request “crispy” instead of “original.” (a) What is the probability that none of the next four customers will request “crispy”? (b) At least two? (c) At most two? (d) Construc
> The probability that an American CEO can transact business in a foreign language is .20. Ten American CEOs are chosen at random. (a) What is the probability that none can transact business in a foreign language? (b) That at least two can? (c) That all 10
> A sample of 20 pages was taken from a Yellow Pages directory. On each page, the mean area devoted to display ads was measured (a display ad is a large block of multicolored illustrations, maps, and text). The data (in square millimeters) are shown below:
> There is a 14 percent chance that a Noodles & Company customer will order bread with the meal. Use Excel to find the probability that in a sample of 10 customers (a) more than five will order bread; (b) no more than two will; (c) none of the 10 will ord
> Consider the Bernoulli model. What would be a typical probability of success (π) for (a) free throw shooting by a good college basketball player? (b) Hits by a good baseball batter? (c) Passes completed by a good college football quarterback? (d) Incorre
> A random sample of 10 miniature Tootsie Rolls was taken from a bag. Each piece was weighed on a very accurate scale. The results in grams were (a) Construct a 90 percent confidence interval for the true mean weight. (b) What sample size would be necess
> Use Excel to generate 1,000 random integers in the range 1 through 5. (a) What are the expected mean and standard deviation? (b) Show the Excel formula you used.
> A random sample of 21 nickels measured with a very accurate micrometer showed a mean diameter of 0.834343 inch with a standard deviation of 0.001886 inch. (a) Why would nickel diameters vary? (b) Construct a 99 percent confidence interval for the true me
> The number of blueberries in a blueberry muffin baked by Earth Harvest Bakeries can range from 18 to 30 blueberries. (a) Use the Empirical Rule to estimate the standard deviation of the number of blueberries in a muffin. (b) What assumption did you make
> The average time a Boulder High varsity lacrosse player plays in a game is 30 minutes with a standard deviation of 7 minutes. Nolan’s playing time in last week’s game against Fairview was 48 minutes. (a) Calculate the z-score for Nolan’s playing time aga
> Three percent of the letters placed in a certain postal drop box have incorrect postage. Suppose 200 letters are mailed. (a) For this binomial, what is the expected number with incorrect postage? (b) For this binomial, what is the standard deviation? (c)
> Find the data value that corresponds to each of the following z-scores. a. Final exam scores: Allison’s z-score = 2.30, μ = 74, σ = 7 b. Weekly grocery bill: James’ z-score = 21.45, μ = $53, σ = $12 c. Daily video game play time: Eric’s z-score = 20.79,
> SAT scores for the entering class of 2010 at Oxnard University were normally distributed with a mean of 1340 and a standard deviation of 90. Bob’s SAT score was 1430. (a) Find Bob’s standardized z-score. (b) By the Empirical Rule, is Bob’s SAT score unus
> Based on experience, the Ball Corporation’s aluminum can manufacturing facility in Ft. Atkinson, Wisconsin, knows that the metal thickness of incoming shipments has a mean of 0.2731 mm with a standard deviation of 0.000959 mm. (a) A certain shipment has
> Bags of jelly beans have a mean weight of 396 gm with a standard deviation of 5 gm. Use Chebyshev’s Theorem to find a lower bound for the number of bags in a sample of 200 that weigh between 386 and 406 gm.
> During a rock concert, the noise level (in decibels) in front row seats has a mean of 95 dB with a standard deviation of 8 dB. Without assuming a normal distribution, find the minimum percentage of noise level readings within 3 standard deviations of the
> For each data set: (a) Find the mean, median, and mode. (b) Which, if any, of these three measures is the weakest indicator of a “typical” data value? Why? a. 100 m dash times (n = 6 top runners): 9.87, 9.98, 10.0
> If the mean asset turnover for retail firms is 2.02 with a standard deviation of 0.22, without assuming a normal distribution, within what range will at least 75% of retail firms’ asset turnover fall?
> (a) For each data set, calculate the mean, median, and mode. (b) Which, if any, of these three measures is the weakest indicator of a “typical” data value? Why? a. Number of e-mail accounts (12 students): 1, 1, 1, 1, 2, 2, 2, 3, 3, 3, 3, 3 b. Number of
> Prior to starting a recycling program, a city decides to measure the quantity of garbage produced by single-family homes in various neighborhoods. This experiment will require weighing garbage on the day it is set out. (a) What sampling method would you
> The National Claims History (NCH) contains records for 999,645 Medicare patients who were discharged from acute care hospitals in October 2008. The Department of Health and Human Services performed a detailed audit of adverse medical events on a random s
> On hot, sunny, summer days, Jane rents inner tubes by the river that runs through her town. Based on her past experience, she has assigned the following probability distribution to the number of tubes she will rent on a randomly selected day. (a) Calcula
> Examine each of the following statistics. Which sampling method was most likely to have been used (simple random, systematic, stratified, cluster)? a. A survey showed that 30 percent of U.S. businesses have fi red an employee for inappropriate web surfi
> A financial magazine publishes an annual list of major stock funds. Last year, the list contained 1,699 funds. What method would you recommend to obtain a sample of 20 stock funds to estimate the 10-year percent return?
> Would you expect Noodles & Company to use a sample or census to measure each of the following? Explain. a. The annual average weekly revenue of each Noodles restaurant. b. The average number of weekly lunch visits by customers. c. The customer satisfact
> Would you expect Starbucks to use a sample or census to measure each of the following? Explain. a. The percentage of repeat customers at a certain Starbucks on Saturday mornings. b. The number of chai tea latte orders last Saturday at a certain Starbuck
> Arsenic (a naturally occurring, poisonous metal) in home water wells is a common threat. (a) What sampling method would you use to estimate the arsenic levels in wells in a rural county to see whether the samples violate the EPA limit of 10 parts per bil
> The General Accounting Office conducted random testing of retail gasoline pumps in Michigan, Missouri, Oregon, and Tennessee. The study concluded that 49 percent of gasoline pumps nationwide are mislabeled by more than one-half of an octane point. What k
> The IRS estimates that the average taxpayer spent 3.7 hours preparing Form 1040 to fi le a tax return. Could a census be used to update this estimate for the most recent tax year? Why or why not?
> There are 327 official ports of entry in the United States. The Department of Homeland Security selects 15 ports of entry at random to be audited for compliance with screening procedures of incoming travelers through the primary and secondary vehicle and
> A certain health maintenance organization (HMO) is studying its daily office routine. They collect information on three variables: the number of patients who visit during a day, the patient’s complaint, and the waiting time until each patient sees a doct
> Recently, researchers estimated that 76.8 percent of global e-mail traffic was spam. Could a census be used to update this estimate? Why or why not?
> At an outpatient mental health clinic, appointment cancellations occur at a mean rate of 1.5 per day on a typical Wednesday. Let X be the number of cancellations on a particular Wednesday. (a) Justify the use of the Poisson model. (b) What is the probabi
> Is each of the following a parameter or statistic? a. The number of visits to a pediatrician’s office last week. b. The number of copies of John Grisham’s most recent novel sold to date. c. The total revenue realized from sales of John Grisham’s most re
> Is each of the following a parameter or a statistic? If you are uncertain, explain the issues. a. The number of cans of Campbell’s soup sold last week at your local supermarket. b. The proportion of all soup in the United States that was sold under the
> Would you use a sample or census to measure each of the following? a. The number of workers currently employed by Campbell Soup Company. b. The average price of a can of Campbell’s Cream of Mushroom soup. c. The total earnings of workers employed by Cam
> Would you use a sample or a census to measure each of the following? Why? If you are uncertain, explain the issues. a. The number of cans of Campbell’s soup on your local supermarket’s shelf today at 6:00 p.m. b. The proportion of soup sales last week i
> Identify the following data as either time series or cross-sectional. a. The number of rooms booked each night for the month of January 2014 at a Vail Resorts hotel. b. The amount spent on books at the start of this semester by each student in your stat
> Identify the following data as either time series or cross-sectional. a. The 2014 CEO compensation of the 500 largest U.S. companies. b. The annual compensation for the CEO of Coca-Cola Enterprises from 2000 to 2014. c. The weekly revenue for a Noodles
> Below are five questions from a survey of MBA students. Answers were written in the blank at the left of each question. For each question, state the data type (categorical, discrete numerical, or continuous numerical) and measurement level (nominal, ordi
> Below are five questions from a survey of MBA students. Answers were written in the blank at the left of each question. For each question, state the data type (categorical, discrete numerical, or continuous numerical) and measurement level (nominal, ordi
> Below are five questions from a survey of MBA students. Answers were written in the blank at the left of each question. For each question, state the data type (categorical, discrete numerical, or continuous numerical) and measurement level (nominal, ordi
> Which measurement level (nominal, ordinal, interval, ratio) is each of the following variables? a. Number of annual office visits by a particular Medicare subscriber. b. Daily caffeine consumption by a six-year-old child. c. Type of vehicle driven by a
> Which measurement level (nominal, ordinal, interval, ratio) is each of the following variables? a. A customer’s ranking of five new hybrid vehicles. b. Noise level 100 meters from the Dan Ryan Expressway at a randomly chosen moment. c. Number of occupan
> Which type of data (categorical, discrete numerical, continuous numerical) is each of the following variables? a. Number of spectators at a randomly chosen Wimbledon tennis match. b. Water consumption (liters) by a randomly chosen Wimbledon player durin
> Which type of data (categorical, discrete numerical, continuous numerical) is each of the following variables? a. Age of a randomly chosen tennis player in the Wimbledon tennis tournament. b. Nationality of a randomly chosen tennis player in the Wimbled
> The first Rose Bowl (football) was played in 1902. The next was not played until 1916, but a Rose Bowl has been played every year since then. The margin of victory in each of the 95 Rose Bowls from 1902 through 2011 is shown below (0 indicates a tie). (a
> A study of 40 U.S. cardiac care centers showed the following ratios of nurses to beds. (a) Prepare a dot plot. (b) Prepare a frequency distribution and histogram (you may either specify the bins yourself or use automatic bins). (c) Describe the distribut
> A research study showed that adolescents who watched more than 4 hours of TV per day were more than five times as likely to start smoking as those who watched less than 2 hours a day. The researchers speculate that TV actors’ portrayals of smoking as per
> (a) Use Excel to prepare a line chart to display the skier/snowboarder data. Modify the default colors, fonts, etc., to make the display effective. (b) Describe the pattern, if any. U.S. Skier/Snowboarder Visits (Millions), 1984–2007 Season Visits S
> A European study of thousands of men found that the PSA screening for prostate cancer reduced the risk of a man’s dying from prostate cancer from 3.0 percent to 2.4 percent. “But it’s already a small risk. I don’t think a difference of less than 1 percen
> “Lacrosse helmets are not needed,” said Tom. “None of the guys on my team have ever had head injuries.” Is there a fallacy in Tom’s reasoning? Explain.
> A recent study showed that women who lived near a freeway had an unusually high rate of rheumatoid arthritis. Sarah said, “They should move away from freeways.” Is there a fallacy in Sarah’s reasoning? Explain.
> Calculate each Poisson probability: a. Fewer than 4 arrivals with λ = 5.8. b. At least 3 arrivals with λ = 4.8. c. At most 9 arrivals with λ = 7.0.
> (a) Use Excel to make a scatter plot of the data for bottled water sales for 10 weeks, placing Price on the X-axis and Units Sold on the Y-axis. Add titles and modify the default colors, fonts, etc., as you judge appropriate to make the scatter plot effe
> Ergonomics is the science of making sure that human surroundings are adapted to human needs. How could statistics play a role in the following: a. Choosing the height of an office chair so that 95 percent of the employees (male and female) will feel it
> Suppose you want to know the ages of moviegoers who attend the latest Hunger Games movie. What kind of sample is it if you (a) survey the first 20 persons to emerge from the theater, (b) survey every tenth person to emerge from the theater, and (c) surve
> Under a recent U.S. Food and Drug Administration (FDA) standard for food contaminants, 3.5 ounces of tomato sauce can have up to 30 fly eggs, and 11 ounces of wheat flour can contain 450 insect fragments. How could statistical sampling be used to see tha
> The target population is all stocks in the S&P 500 index. Is each of the following a parameter or a statistic? a. The average price/earnings ratio for all 500 stocks in the S&P index. b. The proportion of all stocks in the S&P 500 index that had negativ
> Would you use a sample or a census to measure each of the following? Why? If you are uncertain, explain the issues. a. The mean time battery life of your laptop computer in continuous use. b. The number of students in your statistics class who brought l
> (a) Use Excel to prepare a line chart to display the data on housing starts. Modify the default colors, fonts, etc., to make the display effective. (b) Describe the pattern, if any. U.S. Housing Starts (thousands), 1990–2013 Year Starts Year Starts
> Would you use a sample or a census to measure each of the following? Why? a. The model years of the cars driven by each of your five closest friends. b. The model years of the cars driven by each student in your statistics class. c. The model years of t
> A recent study of 231,164 New Jersey heart attack patients showed that those admitted on a weekday had a 12.0 percent death rate in the next three years, compared with 12.9 percent for those admitted on a weekend. This difference was statistically signif
> Vail Resorts uses various types of scales and questions on their surveys. Here is a question from their guest satisfaction survey that uses a five-point scale. (a) Would the measurement level for the data collected from this question be nominal, ordinal,
> Calculate each Poisson probability: a. More than 10 arrivals with λ = 8.0. b. No more than 5 arrivals with λ = 4.0. c. At least 2 arrivals with λ = 5.0
> An ad for a cell phone service claims that it’s percent of “dropped calls” was significantly lower than that of its main competitor. In the fi ne print, the percents were given as 1.2 percent versus 1.4 percent. Is this reduction likely to be important t
> (a) Use Excel to prepare a line chart to display the skier/snowboarder data. Modify the default colors, fonts, etc., to make the display effective. (b) Describe the pattern, if any. U.S. Skier/Snowboarder Visits (Millions), 1984–2007 Season Visits S
> (a) Use Excel to prepare a line chart to display the data on housing starts. Modify the default colors, fonts, etc., to make the display effective. (b) Describe the pattern, if any. U.S. Housing Starts (thousands), 1990–2013 Year Starts Year Starts
> More than 30 percent of the results from major search engines for the keyword phrase “ring tone” are fake pages created by spammers.
> The probability that a randomly selected student in your class is celebrating a birthday today is 1/365.
> Recently, the same five winning numbers (4, 21, 23, 34, 39) came up both on Monday and on Wednesday in the North Carolina Lottery. “That’s so unlikely that it must be rigged,” said Mary. Which fallacy, if any, do you see in Mary’s reasoning?
> Which type of data (cross-sectional or time series) is each variable? a. Mexico’s GDP for each of the last 10 quarters. b. Unemployment rates in each of the 31 states in Mexico at the end of last year. c. Unemployment rate in Mexico at the end of each o
> Which type of data (cross-sectional or time series) is each variable? a. Value of Standard & Poor’s 500 stock price index at the close of each trading day last year. b. Closing price of each of the 500 stocks in the S&P 500 index on the last trading day
> How can you tell when the point has been reached where you should call for an expert statistician? List some costs and some benefits that would govern this decision.
> “Many college graduates will not use very much statistics during their 40-year careers, so why study it?” (a) List several arguments for and against this statement. Which position do you find more convincing? (b) Replace the word “statistics” with “accou
> Calculate each compound event probability: a. P(X < 10), λ = 11.0 b. P(X > 3), λ = 5.2 c. P(X < 2), λ = 3.7
> Use Excel to generate 100 random integers from (a) 1 through 2, inclusive; (b) 1 through 5, inclusive; and (c) 0 through 99, inclusive. (d) In each case, write the Excel formula. (e) In each case, calculate the mean and standard deviation of the sample o
> What is an antidilutive security? Why are such securities generally excluded from the computation of EPS?
> What is meant by dilution of EPS?
> Under what circumstances should the existence of an environmental liability be considered “probable”?
> What is the two-class method?
> How should contingent liabilities that are reasonably possible of becoming liabilities be reported in the financial statements?
> What international standard governs the accounting for derivatives? How does this standard differ from U.S. GAAP?
> What is the meaning of the if-converted method of computing EPS?
> Convertible debt that is dilutive requires an adjustment to income. What is the nature of the adjustment?
> An enterprise split its common stock 3 for 1 on July 1. Its accounting year ends December 31. Prior to the split, there were 10,000 shares of common stock outstanding. What is the weighted-average number of shares that should be used to compute EPS in th
> Refer to Practice 19-1 and Practice 19-2. What would be the impact on the company’s total cash payment in Year 2 if the pay-fixed, receive-variable interest rate swap had been based on a loan amount of $300,000 instead of $100,000? In other words, what w
> Refer to Practice 19-7 and complete the following: 1. Compute the total amount (including all option-related cash flows) that the shirt company will pay to buy 100,000 pounds of cotton in January of Year 2, assuming that the price of cotton per pound on
> The company makes colorful 100% cotton shirts that are very popular among sophisticated business executives. The company uses 100,000 pounds of cotton each month in its production process. On December 1 of Year 1, the company purchased a call option to b
> Refer to Practice 19-5 and complete the following: 1. Compute the total amount (including all futures-related cash flows) that the mining company will receive to sell 25,000 pounds of copper in January of Year 2, assuming that the price of copper per pou
> The mining company produces 25,000 pounds of copper each month in its mining operations. To eliminate the price risk associated with copper sales, on December 1 of Year 1, the mining company entered into a futures contract to sell 25,000 pounds of copper
> Why are EPS figures adjusted retroactively for stock dividends, stock splits, and reverse stock splits?
> Refer to Practice 19-3 and complete the following: 1. Compute the total amount (including all forward-related cash flows) that the golf course developer will pay to buy 5,000 trees in Year 2, assuming that the price of a tree on January 1 of Year 2 is (
> The company is a golf course developer that constructs approximately 15 courses per year. Next year, the company will buy 5,000 trees to install in the courses it builds. In recent years, the price of trees has fluctuated wildly. To eliminate this uncert
