Statistics for Business: Decision Making and Analysis, 3rd Edition

You Do It

1. 35.

   μ	σ
   X/3	40	5
   2X − 100	140	30
   X + 2	122	15
   X − X	0	0

2. 37.

   1. Outcome	P(X)	X
      Both increase 80% to $18,000	0.25	$36,000
      One increases	0.5	$22,000
      Both fall 60% to $4,000	0.25	$8,000

   2. E(X) = $22,000

   3. Yes, the probability is symmetric around the mean gain of $22,000.

3. 39.

   1. Let the random variable X denote the earned profits. Then p(0) = P(X = 0) = 0.05, p(20,000) = 0.75, p(50,000) = 0.20.

   2. $25,000

   3. σ ≈ $13,229

4. 41.

   1. 2.25 reams

   2. σ ≈ 1.26 reams

   3. 17.75 reams

   4. 1.26 reams

   5. E(500 X) = 1125 pages; SD(500 X) ≈ 630 pages

5. 43.

   1. $359,000

   2. No. Dividing the cost in bolivars by the expected value of the exchange rate gives 1,000,000/3.29 ≈ $304,000. The error is that E(1/R) > 1/E(R).

6. 45.

   1. It has to double.

   2. It needs to increase ...