1) Which of the following is NOT a condition of a discrete probability distribution?
A. The probability of a success (p) must exceed the probability of a failure (q).
B. The probability of each outcome, P(x), must be between 0 and 1.
C. There are two probability distributions: Binomial and Poisson.
D. The sum of the probabilities for all the outcomes in the distribution needs to add up to 1.
2) The local police department must write, on average, 5 tickets a day to keep department revenues at budgeted levels. Suppose the number of tickets written per day follows a Poisson distribution with a mean of 6.5 tickets per day. Interpret the value of the mean.
A. The number of tickets that is written most often is 6.5 tickets per day.
B. The mean has no interpretation since 0.5 ticket can never be written.
C. Half of the days have less than 6.5 tickets written and half of the days have more than 6.5 tickets written.
D. If we sampled all days, the average number of tickets written would be 6.5 tickets per day.
3) A continuous random variable defined over one or more intervals of real numbers can have ____.
A. an infinite number of possible outcomes
B. values that have no physical or natural meaning
C. values that are between 0 and 1 only
D. a fixed number of possible outcomes
4) Assume that the number of pieces of junk mail per day that a person receives in their mailbox averages 3.5 pieces per day. What is the probability that this person will receive at least four pieces of junk mail over the next two days? (Round the answer to 4 decimal places)
A. 0.0912
B. 0.0818
C. 0.9182
D. 0.1730
5) A company that sells annuities must base the annual payout on the probability distribution of the length of life of the participants in the plan. Suppose the probability distribution of the lifetimes for the participants is normally distributed with a mean of 68 years and a standard deviation of 3.5 years. What is the probability of the plan recipients dying before they reach the standard retirement age of 65?
A. 0.8571
B. 0.8051
C. 0.8023
D. 0.1949
6) Calculate the standard deviation of the binomial distribution given n = 10 and p = 0.70. (Round the answer to 2 decimal places)
A. 0.30
B. 2.10
C. 0.70
D. 1.45
7) The Poisson distribution is a version of the discrete distribution used ____.
A. to simulate a continuous distribution
B. as a complement to the Bernoulli distribution
C. to adjust for the likelihood of one event occurring most of the time
D. to measure the number of events occurring in an interval of time
8) According to the Insurance Research Council, 14% of U.S. drivers are uninsured. A random sample of seven drivers was selected. What is the probability that three or more of these drivers are uninsured? (Round the answer to 4 decimal places)
A. 0.0062
B. 0.0260
C. 0.0026
D. 0.0620
9) The normal continuous probability distribution is characterized by two parameters, ____.
A. the median and the standard deviation, σ
B. the mode and the range
C. the mean, μ and the median
D. the mean, μ and the standard deviation, σ
10) Over time, it's been found that 45% of customers at Daily Dose buy the Deluxe Joe. What is the probability that out of the next 10 customers, exactly five will buy the Deluxe Joe? (Round your answer to 4 decimal points)
A. 0.9816
B. 0.5500
C. 1.0000
D. 0.2340