The project may be done in groups consisting of no more than 4 people.

Organize into the

groups and send me an e-mail with the names of the members of the groups, then I will
provide you with the numbers P, Q, S, T, U, V, X, Y. Submit your solutions (hard copy) till
Sunday, December 21st. Late submissions will be not accepted!

PROBLEM 1 (10 points) A survey found that the monthly cell phone bill is P SAR for an
average user and Q SAR for a user who uses advanced features. Assuming that monthly cell
phone bills follow a normal distribution with the respective means and a standard deviation
of S SAR, find the probability
a) that an average users cell phone bill is less than T SAR per month;
b) that a user of advanced features is able to keep his cell phone bill less than U SAR per
month;
c) that an average users cell phone bill is above V SAR per month.
d) What percentage of advanced features users will pay more than the amount that the
top 90% of average users pay?
PROBLEM 2 (10 points) The file Bond Funds (which you may find on books website
http://media.pearsoncmg.com/ph/bp/bridgepages/bp_levine_bridge
page/bs_6e/index.html following the link Excel Data Files)
contains information regarding eight variables from a sample 184 bond mutual funds:
Type Type of bonds comprising the bond mutual fund (intermediate government or
short term corporate)
Assets In millions of dollars
Fees Sales charges (no or yes)
Expense ratio Ratio of expenses to net assets in percentage
Return 2009 twelve-month return in 2009
Three-year return Annualized return, 2007-2009
Five-year return Annualized return, 2005-2009
Risk Risk-of-loss factor of the mutual fund (below average, average, or above
average)
For the expense ratio, three-year return, and five-year return, decide whether the data are
approximately normally distributed by
a) comparing data characteristics to theoretical properties;
b) constructing a normal probability plot.
PROBLEM 3 (10 points) The Agency for Healthcare Research and Quality reports that medical
errors are responsible for injury to 1 out of every 25 hospital patients in the United States.
These errors are tragic and expensive. Preventable health care-related errors cost an

estimated $29 billion each year in the United States. Suppose that you select a sample of X
U.S. hospital patients.
a) What is the probability that the sample percentage reporting injury due to medical
errors will be above 5%?
b) The probability is 99% that the sample percentage will be within what symmetrical
limits of the population percentage?
c) The probability is 99% that the sample percentage will be less than what limits of the
population percentage?
d) Suppose you selected a sample of Y U.S. hospital patients. How does it change your
answers in (a) and (c)?