FM015 PART B SET 3

1. Which TWO of the following are NOT features of a normal distribution:

• It is symmetrical
• It is bell-shaped
• The area under the curve is equal to 0.5
• The mean is equal to the mode
• The mean is above the median

2. If the three possible outcomes of a decision are profits of $10, $50 or $80 with probabilities of 0.3, 0.3 and 0.4 respectively, what is the expected profit?

• $40
• $44
• $47
• $50

3. A local council is considering purchasing a snow plough which could cost $20,000 per annum. This would save on outside contractors but the amount would depend on the severity of the winter weather

4. A new product is expected to generate the following profits or losses:

5. What is the probability that a worker earns less than $330?

• 1.3%
• 2.3%
• 3.1%
• 4.6%

6. What is the probability that a worker earns between $370 and $400?

• 1%
• 15%
• 20%
• 25%

7. A baker produces four flavours of their best-selling cupcake (chocolate, vanilla, lemon and strawberry) in equal quantities. For quality checking purposes, one cake is selected from each batch of 100 cakes produced.What is the probability that the cake selected is chocolate flavoured?

8. A company has compiled data on the number of items purchased by a customer in his last 7 orders:

• The arithmetic mean is 13
• The median is 6
• The arithmetic mean is 15
• The median is 14
• The arithmetic mean value is higher than the median value

9. X Company can choose from five mutually exclusive projects. The projects will each last one year only and their net cash inflows will be determined by the prevailing market conditions. The forecast annual cash inflows and their associated probabilities are shown below.

• L
• M
• N
• P

10. A company has a normally distributed sales pattern for one of its products, with a mean of $110. The probability of a sale worth more than $120 is 0.0119 Using normal distribution tables, what is the standard deviation, to two decimal places, associated with sales?

• $4.41
• $4.42
• $4.43
• $4.44