DESCRPITIVE STATISTICS

TRUE/FALSE
1. Your age group (1-9; 10-19; 20-29; 30-39; etc.) is an interval variable.
ANS: F

2. Your gender is a nominal variable.

ANS: T

3. Your final grade in a course (A, B, C, D, E) is a nominal variable.

ANS: F

4. Your age is an interval variable.

ANS: T

5. Interval data may be treated as ordinal or nominal.

ANS: T

6. Whether or not you are over the age of 21 is a nominal variable.

ANS: T

7. The values of quantitative data are categories.

ANS: F

8. Interval data, such as heights, weights, and incomes, are also referred to as quantitative or
numerical data.
ANS: T

9. All calculations are permitted on interval data.

ANS: T

10. Nominal data are also called qualitative or categorical data.

ANS: T

11. A variable is some characteristic of a population or sample.

ANS: T

12. With nominal data, there is one and only one way the possible values can be ordered.
ANS: F

13. You cannot calculate and interpret differences between numbers assigned to nominal data.
ANS: T
MULTIPLE CHOICE

14. The classification of student major (accounting, economics, management, marketing, other)
is an example of a(n)
a. nominal random variable.
b. interval random variable.
c. continuous random variable.
d. parameter.

15. The classification of student class designation (freshman, sophomore, junior, senior) is an
example of
a. nominal scale
b. interval scale
c. ordinal scale.
d. a parameter scale.

16. A researcher wishes to estimate the textbook costs of first-year students at Barry University.
To do so, he recorded the textbook cost of 300 first-year students and found that their
average textbook cost was $195 per semester. The variable of interest to the researcher is
a. textbook cost.
b. class rank.
c. number of students.
d. name of university.

17. All calculations are permitted on what type of data?

a. Interval data
b. Nominal data
c. Ordinal data
d. All of these choices are true.

18. Values must represent ordered rankings for what type of data?
a. Interval data
b. Nominal data
c. Ordinal data
d. None of these choices.

19. For what type of data are frequencies the only calculations that can be done?
a. Interval data
b. Nominal data
c. Ordinal data
d. None of these choices.

20. For which type of data are the values arbitrary numbers?
a. Interval data
b. Nominal data
c. Ordinal data
 d. None of these choices.

SHORT ANSWER

21. At the end of a safari, the tour guide asks the vacationers to respond to the questions listed
below. For each question, determine whether the possible responses are interval, nominal,
or ordinal.
a. How many safaris have you taken prior to this one?
b. Do you feel that your tour safari lasted sufficiently long (yes/no)?
c. Which of the following features of the accommodations did you find most
attractive: location, facilities, room size, service, or price?
d. What is the maximum number of hours per day that you would like to spend
traveling?
e. Is your overall rating of this safari: excellent, good, fair, or poor?

ANS:
a. Interval
b. Nominal
c. Nominal
d. Interval
e. Ordinal

22. Before leaving a particular restaurant, customers are asked to respond to the questions
listed below. For each question, determine whether the possible responses are interval,
nominal, or ordinal.
a. What is the approximate distance (in miles) between this restaurant and your
residence?
b. Have you ever eaten at this restaurant before?
c. On how many occasions have you eaten at the restaurant before?
d. Which of the following attributes of this restaurant do you find most attractive:
service, prices, quality of the food, or the menu?
e. What is your overall rating of the restaurant: excellent, good, fair, or poor?

ANS:
a. Interval
b. Nominal
c. Interval
d. Nominal
e. Ordinal

23. For each of the following examples, identify the data type as nominal, ordinal, or interval.
a. The final grade received by a student in a neuro-science class.
b. The number of students in a Physics course.
c. The starting salary of a PhD graduate.
d. The size of an order of fries (small, medium, large, super-size) purchased by a
Burger King customer.
 e. The college you are enrolled in (Arts and Sciences, Business, Education, etc.).

ANS:
a. Ordinal
b. Interval
c. Interval
d. Ordinal
e. Nominal

24. For each of the following, indicate whether the variable of interest is nominal or interval.
a. Your marital status.
b. Whether you are a U.S. citizen.
c. Sally's travel time from her dorm to the student union on campus.
d. The amount of time you spent last week on your homework.
e. The number of cars parked in a certain parking lot at any given time.
f. Kate’s favorite brand of sneakers.

ANS:
a. Nominal
b. Nominal
c. Interval
d. Interval
e. Interval
f. Nominal

25. Provide one example of ordinal data; one example of nominal data; and one example of
interval data.
Ordinal data example: Response to a market research survey question measured on the
Likert scale using the code: 1 = strongly agree, 2 = agree, 3 = neutral, 4 = disagree, and 5 =
strongly disagree.
Nominal data example: Voters’ political party affiliation for using the code: 1 = Democrat, 2
= Republican, and 3 = Independent.
Interval data example: The temperature on a golf course during the U.S. Master’s
Tournament. (Degrees Fahrenheit).

26. Explain why religious preference is not an ordinal variable.

ANS:
The values of religious preference cannot be ranked in order in any way.

27. Explain the difference between ordinal data and interval data.
ANS:
The critical difference between them is that the intervals or differences between values of
interval data are consistent and meaningful. That is, we can calculate the difference and
interpret the results. Because the codes representing ordinal data are arbitrarily assigned
except for the order, we cannot calculate and interpret differences.
 28. Give an example of interval data that can also be treated as ordinal data and nominal data.
ANS:
Example: Your actual age is interval data; your age group (1-17; 18-24; 25-30; etc) is ordinal
data; and whether or not you are over age 25 is nominal data.

PROBABILITY

TRUE/FALSE
29. The relative frequency approach to probability uses long term frequencies, often based on
past data.
ANS: T

30. Predicting the outcome of a football game is using the subjective approach to probability.
ANS: T

31. You think you have a 90% chance of passing your next advanced financial accounting exam.
This is an example of subjective approach to probability.
ANS: T

32. P(A) + P(B) = 1 for any events A and B that are mutually exclusive.
ANS: F

33. The collection of all the possible outcomes of a random experiment is called a sample space.
ANS: T

34. If events A and B cannot occur at the same time, they are called mutually exclusive.
ANS: T

35. If either event A or event B must occur, they are called mutually exclusive.
ANS: F

36. If either event A or event B must occur, then A and B are mutually exclusive and collectively
exhaustive events.
ANS: T

37. If P(A) = 0.4 and P(B) = 0.6, then A and B must be collectively exhaustive.
ANS: F

38. If P(A) = 0.4 and P(B) = 0.6, then A and B must be mutually exclusive.
ANS: F
MULTIPLE CHOICE
39. Of the last 500 customers entering a supermarket, 50 have purchased a wireless phone. If
the relative frequency approach for assigning probabilities is used, the probability that the
next customer will purchase a wireless phone is
a. 0.10
b. 0.90
c. 0.50
d. None of these choices.

40. If A and B are mutually exclusive events with P(A) = 0.75, then P(B):
a. can be any value between 0 and 1.
b. can be any value between 0 and 0.75.
c. cannot be larger than 0.25.
d. equals 0.25.

41. If you roll a balanced die 50 times, you should expect an even number to appear:
a. on every other roll.
b. exactly 50 times out of 100 rolls.
c. 25 times on average, over the long term.
d. All of these choices are true.

42. An approach of assigning probabilities which assumes that all outcomes of the experiment
are equally likely is referred to as the:
a. subjective approach
b. objective approach
c. classical approach
d. relative frequency approach

43. The collection of all possible outcomes of an experiment is called:

a. a simple event
b. a sample space
c. a sample
d. a population

44. Which of the following is an approach to assigning probabilities?

a. Classical approach
b. Relative frequency approach
c. Subjective approach
d. All of these choices are true.

45. A sample space of an experiment consists of the following outcomes: 1, 2, 3, 4, and 5. Which
of the following is a simple event?
a. At least 3
b. At most 2
c. 3
d. 15
46. Which of the following is a requirement of the probabilities assigned to outcome Oi?
a. P(Oi) ≤ 0 for each i
b. P(Oi) ≥ 1 for each i
c. 0 ≤ P(Oi) ≤ 1 for each i
d. P(Oi) = 1 for each i

47. If an experiment consists of five outcomes with P(O1) = 0.10, P(O2) = 0.20, P(O3) = 0.30, P(O4) =
0.25, then P(O5) is
a. 0.75
b. 0.15
c. 0.50
d. Cannot be determined from the information given.

48. If two events are collectively exhaustive, what is the probability that one or the other
occurs?
a. 0.00
b. 0.50
c. 1.00
d. Cannot be determined from the information given.

49. If two events are mutually exclusive, what is the probability that both occur at the same
time?
a. 0.00
b. 0.50
c. 1.00
d. Cannot be determined from the information given.

50. If two events are collectively exhaustive, what is the probability that both occur at the same
time?
a. 0.00
b. 0.50
c. 1.00
d. Cannot be determined from the information given.

51. If two events are mutually exclusive and collectively exhaustive, what is the probability that
both occur?
a. 0.00
b. 0.50
c. 1.00
d. Cannot be determined from the information given.

52. If the two events are mutually exclusive and collectively exhaustive, what is the probability
that one or the other occurs?
a. 0.00
b. 0.50
 c. 1.00
d. Cannot be determined from the information given.

53. If events A and B are mutually exclusive and collectively exhaustive, what is the probability
that event A occurs?
a. 0.25
b. 0.50
c. 1.00
d. Cannot be determined from the information given.

54. If two equally likely events A and B are mutually exclusive and collectively exhaustive, what is
the probability that event A occurs?
a. 0.00
b. 0.50
c. 1.00
d. Cannot be determined from the information given.

55. If event A and event B cannot occur at the same time, then A and B are said to be
a. mutually exclusive
b. independent
c. collectively exhaustive
d. None of these choices.

56. The collection of all possible events is called

a. an outcome
b. a sample space
c. an event
d. None of these choices.

SHORT ANSWER
57. Alana, Eva, and Stephanie, three candidates for the presidency of a college's student body,
are to address a student forum. The forum's organizer is to select the order in which the
candidates will give their speeches, and must do so in such a way that each possible order is
equally likely to be selected.
a. What is the random experiment?
b. List the outcomes in the sample space.
c. Assign probabilities to the outcomes.
d. What is the probability that Stephanie will speak first?
e. What is the probability that Alana will speak before Stephanie does?

ANS:
a. The random experiment is to observe the order in which the three candidates
give their speeches.
b. S = {ABC, ACB, BAC, BCA, CAB, CBA}, where A = Alana, B = Eva, and C = Stephanie.
 c. The probability assigned to each outcome is 1/6.
d. P(CAB, CBA) = 1/3
e. P(ABC, ACB, BAC) = 1/2

58. There are three approaches to determining the probability that an outcome will occur:
classical, relative frequency, and subjective. For each situation that follows, determine which
approach is most appropriate.
a. A Russian will win the French Open Tennis Tournament next year.
b. The probability of getting any single number on a balanced die is 1/6.
c. Based on the past, it's reasonable to assume the average book sales for a certain
textbook is 6,500 copies per month.

ANS:
a. subjective
b. classical
c. relative frequency

NARRBEGIN: Hobby Shop Sales

Hobby Shop Sales
Sales records of a hobby shop showed the following number of radio controlled trucks sold
weekly for each of the last 50 weeks.
Number of Trucks Sold Number of Weeks
0 20
1 15
2 10
3 4
4 1
NARREND
59. {Hobby Shop Sales Narrative} Define the random experiment of interest to the store.
ANS:
The random experiment consists of observing the number of trucks sold in any given week.

60. {Hobby Shop Sales Narrative} List the outcomes in the sample space.
ANS:
S = {0, 1, 2, 3, 4}

61. {Hobby Shop Sales Narrative} What approach would you use in determining the probabilities
for next week's sales? Assign probabilities to the outcomes.
ANS:
The relative frequency approach was used.
Number of Trucks Prob.
0 0.40
1 0.30
2 0.20
3 0.08
4 0.02
62. {Hobby Shop Sales Narrative} What is the probability of selling at least two trucks in any
given week?
ANS:
P{2, 3, 4} = 0.30

63. {Hobby Shop Sales Narrative} What is the probability of selling between 1 and 3 (inclusive)
trucks in any given week?
ANS:
P{1,2,3} = 0.58

NARRBEGIN: Mutual Fund Price

Mutual Fund Price
An investor estimates that there is a 75% chance that a particular mutual fund’s price will
increase to $100 per share over the next three weeks, based past data.

64. {Mutual Fund Price Narrative} Which approach was used to produce this figure?
ANS:
The relative frequency approach

65. {Mutual Fund Price Narrative} Interpret the 75% probability.

ANS:
We interpret the 75% figure to mean that if we had an infinite number of funds with exactly
the same economic and market characteristics as the one the investor will buy, 75% of them
will increase in price to $100 over the next three weeks.

66. The sample space of the toss of a balanced coin is S = {1, 2, 3, 4, 5, 6}. If the die is balanced,
each simple event (outcome) has the same probability. Find the probability of the following
events:
a. Rolling an odd number
b. Rolling a number less than or equal to 3
c. Rolling a number greater than or equal to 5
d. Rolling a number between 2 and 5, inclusive.

ANS:
a. 3/6
b. 3/6
c. 2/6
d. 4/6
 NARRBEGIN: Equity Loan Rates
Equity Loan Rates
A survey of banks estimated the following probabilities for the interest rate being charged on
a equity loan based on a 30-year loan, based on past records.
Interest Rate 6.0% 6.5% 7.0% 7.5% >7.5%
Probability 0.20 0.23 0.25 0.28 .04
NARREND

67. {Equity Loan Rates Narrative} if a bank is selected at random from this distribution, what is
the probability that the interest rate charged on a home loan exceeds 7.0%?
ANS:
0.32

68. {Equity Loan Rates Narrative} what is the most common interest rate?
ANS:
7.5%, since it occurred 28% of the time.

69. {Equity Loan Rates Narrative} what approach was used in estimating the probabilities for the
interest rates?
ANS:
Relative frequency approach

TRUE/FALSE

70. The probability of the intersection is called a joint probability.

ANS: T

71. Two or more events are said to be independent when the occurrence of one event has no
effect on the probability that another will occur.
ANS: T

72. The union of events A and B is the event that occurs when either A or B or both occur. It is
denoted as 'A or B'.
ANS: T

73. If A and B are independent events with P(A) = 0.35 and P(B) = 0.55, then P(A|B) is 0.35/0.55 =
.64.
ANS: F

74. Two events A and B are said to be independent if P(A|B) = P(B).

ANS: F

75. The conditional probability of event B given event A is denoted by P(A|B).

ANS: F
 76. If A and B are independent events with P(A) = .40 and P(B) = .50, then P(A and B) = .20.
ANS: T

77. The intersection of two events A and B is the event that occurs when both A and B occur.
ANS: T

78. Two events A and B are independent if P(A and B) = 0.

ANS: F

79. The union of events A and B is the event that occurs when either A or B occurs but not both.
ANS: F

80. If A and B are independent, then P(A|B) = P(A) or P(B|A) = P(B).

ANS: T

81. If P(A) = .30, P(B) = .60, and P(A and B) = .20, then P(A|B) = .40.
ANS: F

82. Suppose the probability that a person owns both a cat and a dog is 0.10. Also suppose the
probability that a person owns a cat but not a dog is 0.20. The marginal probability that
someone owns a cat is 0.30.
ANS: T

MULTIPLE CHOICE

83. The probability of the intersection of two events A and B is denoted by P(A and B)
and is called the:
a. marginal probability
b. joint probability
c. conditional probability of A given B
d. conditional probability of B given A

84. The intersection of events A and B is the event that occurs when:
a. either A or B occurs but not both
b. neither A nor B occur
c. both A and B occur
d. All of these choices are true.

85. The probability of event A given event B is denoted by

a. P(A and B)
b. P(A or B)
c. P(A|B)
d. P(B|A)

86. Which of the following best describes the concept of marginal probability?
a. It is a measure of the likelihood that a particular event will occur, regardless of
 whether another event occurs.
b. It is a measure of the likelihood that a particular event will occur, if another
event has already occurred.
c. It is a measure of the likelihood of the simultaneous occurrence of two or more
events.
d. None of these choices.

87. If two events are independent, what is the probability that they both occur?
a. 0
b. 0.50
c. 1.00
d. Cannot be determined from the information given

88. If the outcome of event A is not affected by event B, then events A and B are said to
be
a. mutually exclusive
b. independent
c. collectively exhaustive
d. None of these choices.

89. If A and B are disjoint events with P(A) = 0.70, then P(B):
a. can be any value between 0 and 1
b. can be any value between 0 and 0.70
c. cannot be larger than 0.30
d. cannot be determined with the information given

If P(A) = 0.65, P(B) = 0.58, and P(A and B) = 0.76, then P(A or B) is:
a. 1.23
b. 0.47
c. 0.18
d. 0.11

90. A and B are disjoint events, with P(A) = 0.20 and P(B) = 0.30. Then P(A and B) is:
a. 0.50
b. 0.10
c. 0.00
d. 0.06

91. If P(A) = 0.35, P(B) = 0.45, and P(A and B) = 0.25, then P(A|B) is:
a. 1.4
b. 1.8
c. 0.714
d. 0.556

92. If A and B are independent events with P(A) = 0.60 and P(A|B) = 0.60, then P(B) is:
a. 1.20
 b. 0.60
c. 0.36
d. cannot be determined with the information given

93. If A and B are independent events with P(A) = 0.20 and P(B) = 0.60, then P(A|B) is:
a. 0.20
b. 0.60
c. 0.40
d. 0.80

94. If P(A) = 0.25 and P(B) = 0.65, then P(A and B) is:
a. 0.25
b. 0.40
c. 0.90
d. cannot be determined from the information given

Suppose X = the number of cars owned by a family in the U.S. The probability
distribution of X is shown in the table below.
X 0 1 2 3
Probability 0.56 0.23 0.12 0.09

95. {Car Narrative} what is the chance that a family owns more than one car?
a. 0.23
b. 0.21
c. 0.44
d. None of these choices.

96. {Cars Narrative} suppose you choose two families at random. What is the
chance that they each own one car? (That means family A owns a car and family B
owns a car.)
a. 0.23
b. 0.23 + 0.23 = 0.46
c. 0.23 + 0.23  (0.23)*(0.23) = .4071
d. (0.23)*(0.23) = 0.0529

SHORT ANSWER
Suppose 55 percent of adults drink tea, 45 percent drink seltzer, and 10 percent drink both

97. {Tea and Seltzer Narrative} What is the probability that a randomly chosen adult does not
drink seltzer?
ANS: 0.55
98. {Tea and Seltzer Narrative} What is the probability that a randomly chosen adult drinks seltzer
 or tea or both?
ANS: 0.90
99. {Tea and Seltzer Narrative} What is the probability that a randomly chosen adult doesn't drink
tea or seltzer?
ANS: 0.10

Club Members

A survey of a club’s members indicates that 50% own a home, 80% own a car, and 90% of the
homeowners who subscribe also own a car.

100. {Club Members Narrative} What is the probability that a subscriber owns both a car and a
house? ANS: 0.45

101. {Club Members Narrative} What is the probability that a club member owns a car or a house,
or both? ANS: 0.85

102. {Club Members Narrative} What is the probability that a club member owns neither a car nor a
house? ANS: 0.15

Business Majors
Suppose 30% of business majors major in accounting. You take a random sample of 3 business
majors.

103. {Business Majors Narrative} What is the chance that they all major in accounting?
ANS: 0.027

104. {Business Majors Narrative} What is the chance that at least one majors in accounting?
ANS: 0.657

105. {Business Majors Narrative} What is the chance that exactly one majors in accounting?
ANS: 0.441

106. {Business Majors Narrative} What is the chance that none of them major in accounting?
ANS: 0.343

Drunk Drivers
Five hundred accidents that occurred on a Saturday night were analyzed. Two items noted were
the number of vehicles involved and whether alcohol played a role in the accident. The numbers
are shown below:
Number of Vehicles Involved
Did alcohol play a role? 1 2 3 Totals
Yes 75 125 50 250
No 50 225 75 350
Totals 125 350 125 600
107. {Drunk Drivers Narrative} What proportion of accidents involved more than one vehicle?
ANS: 475/600 or 0.79

108. {Drunk Drivers Narrative} What proportion of accidents involved alcohol and single vehicle?
ANS: 75/600 or 0.125

109. {Drunk Drivers Narrative} What proportion of accidents involved alcohol or a single vehicle?
ANS: 300/600 or 0.50

110. {Drunk Drivers Narrative} Given alcohol was involved, what proportion of accidents involved a
single vehicle?
ANS: 75/250 or 0.30

111. {Drunk Drivers Narrative} If multiple vehicles were involved, what proportion of accidents
involved alcohol?
ANS: 175/475 or 0.37

112. {Drunk Drivers Narrative} If 3 vehicles were involved, what proportion of accidents involved
alcohol?
ANS: 50/125 or 0.40

113. {Drunk Drivers Narrative} If alcohol was not involved, what proportion of the accidents were
single vehicle?
ANS: 50/350 or 0.142

114. {Drunk Drivers Narrative} If alcohol was not involved, what proportion of the accidents were
multiple vehicle?
ANS: 300/350 or 0.857

115. Suppose A and B are two independent events for which P(A) = 0.20 and P(B) = 0.60.
a. Find P(A|B).
b. Find P(B|A).
ANS:
a. 0.20
b. 0.60

GPA and Class

A college professor classifies his students according to their grade point average (GPA) and their
class rank. GPA is on a 0.0-4.0 scale, and class rank is defined as the underclass (freshmen and
sophomores) and the upper class (juniors and seniors). One student is selected at random.
GPA
Class Under 2.0 2.0 - 3.0 Over 3.0
Under 0.05 0.25 0.10
Upper 0.10 0.30 0.20
116. {GPA and Class Narrative} If the student selected is in the upper class, what is the probability
that her GPA is between 2.0 and 3.0?
ANS: 0.50

117. {GPA and Class Narrative} If the GPA of the student selected is over 3.0, what is the probability
that the student is in the lower class?
ANS: 0.333

118. {GPA and Class Narrative} What is the probability that the student is in the upper class?
ANS: 0.60

119. {GPA and Class Narrative} What is the probability that the student has GPA over 3.0?
ANS: 0.30

120. {GPA and Class Narrative} What is the probability that the student is in the lower class?
ANS: 0.40.

121. {GPA and Class Narrative} What is the probability that the student is in the lower class and has
GPA over 3.0?
ANS: 0.10

122. {GPA and Class Narrative} What is the probability that the student is in the upper class and has
GPA under 2.0?
ANS: 10

123. {GPA and Class Narrative} Are being in the upper class and having a GPA over 3.0 related?
Explain.

ANS: Yes, since the product of the probabilities of the two events is not equal to the joint
probability.

Marital Status
An insurance company has collected the following data on the gender and marital status of
600 customers.
Marital Status
Gender Single Married Divorced
Male 50 250 30
Female 100 100 40
Suppose that a customer is selected at random.

124. {Marital Status Narrative} Develop the joint probability table.

ANS:
Gender Single Married Divorced
Male .083 .417 .100
Female .167 .167 .067
125. {Marital Status Narrative} Find the probability that the customer selected is a married female.
ANS: 0.167

126. {Marital Status Narrative} Find the probability that the customer selected is
a. female and single
b. Married if the customer is male.
c. not single
ANS:
a. 0.167
b. 0.695
c. 0.750

Financial Consultants
A Financial Consultant has classified his clients according to their gender and the composition of
their investment portfolio (primarily bonds, primarily stocks, or a balanced mix of bonds and stocks).
The proportions of clients falling into the various categories are shown in the following table:
Portfolio Composition
Gender Bonds Stocks Balanced
Male 0.18 0.20 0.25
Female 0.12 0.10 0.15

One client is selected at random, and two events A and B are defined as follows:
A: The client selected is male.
B: The client selected has a balanced portfolio.

127. {Financial Consultants Narrative} Find the following probabilities:

a. P(A)
b. P(B)
ANS:
a. 0.63
b. 0.40

128. {Financial Consultants Narrative} Express each of the following events in words:
a. A or B
b. A and B
ANS:
a. The client selected either is male or has a balanced portfolio or both.
b. The client selected is male and has a balanced portfolio.

TRUE/FALSE

129. Julius and Gabe go to a show during their Spring break and toss a balanced coin to see who
will pay for the tickets. The probability that Gabe will pay three days in a row is 0.125.
ANS: T

130. If events A and B have nonzero probabilities, then they can be both independent and mutually
exclusive.
 ANS: F

131. If the event of interest is A, the probability that A will not occur is the complement of A.
ANS: T

132. Assume that A and B are independent events with P(A) = 0.30 and P(B) = 0.50. The
probability that both events will occur simultaneously is 0.80.
ANS: F

133. Two events A and B are said to be independent if P(A) = P(A|B).

ANS: T

134. When A and B are mutually exclusive, P(A or B) can be found by adding P(A) and P(B).
ANS: T

135. Two events A and B are said to be independent if P(A|B) = P(B).

ANS: F

136. If A and B are two independent events with P(A) = 0.9 and P(B|A) = 0.5, then P(A and B) =
0.45.
ANS: T

137. Two events A and B are said to be independent if P(A|B) = P(B|A).

ANS: F

138. The probability of the union of two mutually exclusive events A and B is 0.
ANS: F

139. Two events A and B are said to be mutually exclusive if P(A and B) = 1.0.
ANS: F

140. If P(A and B) = 1, then A and B must be mutually exclusive.

ANS: F

141. Events A and B are either independent or mutually exclusive.

ANS: F

142. If P(B) = .7 and P(B|A) = .4, then P(A and B) must be .28.
ANS: F

143. If P(B) = .7 and P(A|B) = .7, then P(A and B) = 0.

ANS: F

MULTIPLE CHOICE
144. If the events A and B are independent with P(A) = 0.35 and P(B) = 0.45, then the probability
that both events will occur simultaneously is:
a. 0
b. 0.16
 c. 0.80
d. Not enough information to tell.

145. Two events A and B are said to be mutually exclusive if:

a. P(A|B) = 1
b. P(A|B) = P(A)
c. P(A and B) =1
d. P(A and B) = 0

146. If P(A) = 0.84, P(B) = 0.76, and P(A or B) = 0.90, then P(A and B) is:
a. 0.06
b. 0.14
c. 0.70
d. 0.83

147. Which of the following statements is always correct?

a. P(A and B) = P(A) * P(B)
b. P(A or B) = P(A) + P(B)
c. P(A) = 1 − P(Ac)
d. None of these choices.

148. If P(A) = 0.20, P(B) = 0.30, and P(A and B) = 0, then A and B are:
a. dependent events
b. independent events
c. mutually exclusive events
d. complementary events

149. If P(A) = 0.65, P(B) = 0.58, and P(A and B) = 0.76, then P(A or B) is:
a. 1.23
b. 0.47
c. 0.24
d. None of these choices.

150. Suppose P(A) = 0.30. The probability of the complement of A is:

a. 0.30
b. 0.70
c. −0.30
d. None of these choices.

151. If events A and B are independent then:

a. P(A and B) = P(A) * P(B)
b. P(A and B) = P(A) + P(B)
c. P(B|A) = P(A)
d. None of these choices.

152. If A and B are mutually exclusive events, with P(A) = 0.20 and P(B) = 0.30, then the
probability that both events will occur simultaneously is:
a. 0.50
b. 0.06
 c. 0
d. None of these choices.

153. If A and B are independent events with P(A) = 0.60 and P(B) = 0.70, then P(A or B) equals:
a. 1.30
b. 0.88
c. 0.42
d. Cannot tell from the given information.

154. If A and B are mutually exclusive events with P(A) = 0.30 and P(B) = 0.40, then P(A or B) is:
a. 0.10
b. 0.12
c. 0.70
d. None of these choices

155. If A and B are any two events with P(A) = .8 and P(B|A) = .4, then P(A and B) is:
a. .40
b. .32
c. 1.20
d. None of these choices.

156. If A and B are any two events with P(A) = .8 and P(B|Ac) = .7, then P(Ac and B) is
a. 0.56
b. 0.14
c. 1.50
d. None of these choices.

SHORT ANSWER
167. Suppose A and B are two independent events for which P(A) = 0.20 and P(B) = 0.60.
a. Find P(A and B).
b. Find P(A or B).
ANS:
a. 0.12
b. 0.68

A Ph.D. graduate has applied for a job with two colleges: A and B. The graduate feels that she
has a 60% chance of receiving an offer from college A and a 50% chance of receiving an offer
from college B. If she receives an offer from college B, she believes that she has an 80%
chance of receiving an offer from college A. Let A = receiving an offer from college A, and let
B = receiving an offer from college B.

168. {College Professorship Narrative} What is the probability that both colleges will make her an
offer?
ANS: (.5)(.8) = 0.40

169. {College Professorship Narrative} What is the probability that at least one college will make
her an offer?
 ANS: 6 + .5 − .4 = 0.7

170. {College Professorship Narrative} If she receives an offer from college B, what is the
probability that she will not receive an offer from college A?
ANS: 1 − 0.8 = 0.2.

171. Suppose P(A) = 0.50, P(B) = 0.40, and P(B|A) = 0.30.

a. Find P(A and B).
b. Find P(A or B).
c. Find P(A|B).
ANS:
a. 0.15
b. 0.75
c. 0.375

172. A survey of a magazine's subscribers indicates that 50% own a house, 80% own a car, and
90% of the homeowners also own a car. What proportion of subscribers:
a. own both a car and a house?
b. own a car or a house, or both?
c. own neither a car nor a house?

ANS:
a. 0.45
b. 0.85
c. 0.15

173. Suppose A and B are two mutually exclusive events for which P(A) = 0.30 and P(B) = 0.40.
a. Find P(A and B).
b. Find P(A or B).
c. Are A and B independent events? Explain using probabilities.
ANS:
a. 0
b. 0.70
c. No. P(A and B) = 0 because they are mutually exclusive events. If they were
independent events, you would have P(A and B) = P(A) * P(B) = 0.12.

174. Suppose P(A) = 0.30, P(B) = 0.50, and P(B|A) = 0.60.

a. Find P(A and B).
b. Find P(A or B).
c. Find P(A|B).
ANS:
a. 0.18
b. 0.62
c. 0.36

175. Is it possible to have two events for which P(A) = 0.40, P(B) = 0.50, and P(A or B) = 0.30?
Explain.
ANS: Yes. In this situation, if P(A and B) = 0.60 it works.
176. A pharmaceutical firm has discovered a new diagnostic test for a certain disease that has
infected 1% of the population. The firm has announced that 95% of those infected will show a
positive test result, while 98% of those not infected will show a negative test result.
a. What proportion of people don't have the disease?
b. What proportion who have the disease test negative?
c. What proportion of those who don't have the disease test positive?
d. What proportion of test results are incorrect?
e. What proportion of test results are correct?

ANS:
a. 0.99
b. 0.05
c. 0.02
d. 0.0203
e. 0.9797

Marital Status
An insurance company has collected the following data on the gender and marital status of
300 customers.
Marital Status
Gender Single Married Divorced
Male 25 125 30
Female 50 50 20
Suppose that a customer is selected at random.

177. {Marital Status Narrative} Find the probability that the customer selected is female or
divorced.
ANS: 0.50

178. {Marital Status Narrative} Are gender and marital status mutually exclusive? Explain using
probabilities.
ANS: No, since P(female and married) = 0.167 > 0. (Any other combination shows this also.)

179. {Marital Status Narrative} Is marital status independent of gender? Explain using
probabilities.
ANS: No, since P(married / male) = 0.694 ≠ P(married) = 0.583. (Any other combination
shows this also.)

Construction Bids
A construction company has submitted bids on two separate state contracts, A and B. The
company feels that it has a 60% chance of winning contract A, and a 50% chance of winning
contract B. Furthermore, the company believes that it has an 80% chance of winning contract
A if it wins contract B.

180. {Construction Bids Narrative} What is the probability that the company will win both
contracts?
ANS: P(B and A) = P(B) * P(A|B) = (.50)(.80) = .40
181. {Construction Bids Narrative} What is the probability that the company will win at least one
of the two contracts?
ANS: P(A or B) = P(A) + P(B) − P(A and B) = .60 + .50 − .40 = .70

182. {Construction Bids Narrative} If the company wins contract B, what is the probability that it
will not win contract A?
ANS: P(Ac|B) = 1 − P(A|B) = 1 − .80 = .20

183. {Construction Bids Narrative} What is the probability that the company will win at most one
of the two contracts?
ANS: 1 − P(A and B) = 0.60

184. {Construction Bids Narrative} What is the probability that the company will win neither
contract?
ANS: 1 − P(A or B) = 0.30

Condo Sales and Interest Rates

The probability that condo sales will increase in the next 6 months is estimated to be 0.30. The
probability that the interest rates on condo loans will go up in the same period is estimated to
be 0.75. The probability that condo sales or interest rates will go up during the next 6 months
is estimated to be 0.90.

185. {Condo Sales and Interest Rates Narrative} What is the probability that both condo sales and
interest rates will increase during the next six months?
ANS: 0.15

186. {Condo Sales and Interest Rates Narrative} What is the probability that neither condo sales
nor interest rates will increase during the next six months?

187. {Condo Sales and Interest Rates Narrative} What is the probability that condo sales will
increase but interest rates will not during the next six months?
ANS: 0.15

TRUE/FALSE
188. Bayes' Law is a formula for revising an initial subjective (prior) probability value on the basis
of new results, thus obtaining a new (posterior) probability value.
ANS: T

189. Although there is a formula defining Bayes' law, you can also use a probability tree to conduct
calculations.
ANS: T

190. Bayes' Law allows us to compute conditional probabilities from other forms of probability.
ANS: T

191. Bayes' Law says that P(A|B) = P(B|A)P(A).

 ANS: F

192. Conditional probabilities are also called likelihood probabilities.

ANS: T

193. In applying Bayes' Law, as the prior probabilities increase, the posterior probabilities
decrease.
ANS: F

194. Prior probability of an event is the probability of the event before any information affecting it
is given.
ANS: T

195. Bayes' Law can be used to calculate posterior probabilities, prior probabilities, as well as new
conditional probabilities.
ANS: F

196. Posterior probability of an event is the revised probability of the event after new information
is available.
ANS: T

197. Prior probability is also called likelihood probability.

ANS: F

198. In general, a posterior probability is calculated by adding the prior and likelihood
probabilities.
ANS: F

199. We can use the joint and marginal probabilities to compute conditional probabilities, for
which a formula is available.
ANS: T

200. In problems where the joint probabilities are given, we can compute marginal probabilities by
adding across rows and down columns.
ANS: T

201. If joint, marginal, and conditional probabilities are available, only joint probabilities can be
used to determine whether two events are dependent or independent.
ANS: F

202. Suppose we have two events A and B. We can apply the addition rule to compute the
probability that at least one of these events occurs.
ANS: T

203. Posterior probabilities can be calculated using the addition rule for mutually exclusive events.
ANS: F

204. Prior probabilities can be calculated using the multiplication rule for mutually exclusive
events.
 ANS: F

205. We can apply the multiplication rule to compute the probability that two events occur at the
same time.
ANS: T

MULTIPLE CHOICE

206. Which of the following statements is false?

a. Thomas Bayes first employed the calculation of conditional probability in the
eighteenth century.
b. There is no formula defining Bayes' Law.
c. We use a probability tree to conduct all necessary calculations for Bayes' Law.
d. None of these choices.

207. A posterior probability value is a prior probability value that has been:
a. modified on the basis of new information.
b. multiplied by a conditional probability value.
c. divided by a conditional probability value.
d. added to a conditional probability value.

208. Initial estimates of the probabilities of events are known as:

a. joint probabilities
b. posterior probabilities
c. prior probabilities
d. conditional probabilities

209. Which of the following statements is false regarding a scenario using Bayes' Law?
a. Prior probabilities are called likelihood probabilities.
b. Conditional probabilities are called posterior probabilities.
c. Posterior probabilities are calculated by using prior probabilities that have been
modified based on new information.
d. None of these choices.

210. Bayes' Law is used to compute:

a. prior probabilities.
b. joint probabilities.
c. union probabilities.
d. posterior probabilities.

COMPLETION

211. Thomas ____________________ first employed the calculation of conditional probability.

ANS: Bayes

212. Bayes' Law involves three different types of probabilities: 1) prior probabilities; 2) likelihood
probabilities; and 3) ____________________ probabilities.
ANS: posterior
213. Bayes' Law involves three different types of probabilities: 1) ____________________
probabilities; 2) likelihood probabilities; and 3) posterior probabilities.
ANS: prior

214. Bayes' Law involves three different types of probabilities: 1) prior probabilities;
2) ____________________ probabilities; and 3) posterior probabilities.
ANS: likelihood

215. There are situations where we witness a particular event and we need to compute the
probability of one of its possible causes. ____________________ is the technique we use to
do this.
ANS:
Bayes' Law

216. In the scenario of Bayes' Law, P(A|B) is a(n) ____________________ probability, while
P(B|A) is a posterior probability.
ANS: likelihood

217. In the scenario of Bayes' Law, P(A|B) is a posterior probability, while P(B|A) is a(n)
____________________ probability.
ANS: likelihood

218. ____________________ can find the probability that someone with a disease tests positive by
using (among other things) the probability that someone who actually has the disease tests
positive for it.
ANS: Bayes' Law

SHORT ANSWER

Certification Test
A standard certification test was given at three locations. 1,000 candidates took the test at location A,
600 candidates at location B, and 400 candidates at location C. The percentages of candidates from
locations A, B, and C who passed the test were 70%, 68%, and 77%, respectively. One candidate is
selected at random from among those who took the test.
219. {Certification Test Narrative} What is the probability that the selected candidate passed the
test?
ANS: (.5)(.7) + (.3)(.68) + (.2)(.77) = 0.708

220. {Certification Test Narrative} If the selected candidate passed the test, what is the probability
that the candidate took the test at location B?
ANS: (.3)(.68) / .708 = 0.288

221. {Certification Test Narrative} What is the probability that the selected candidate took the test
at location C and failed?
ANS: (.2)(.23) = 0.046

Cysts
After researching cysts of a particular type, a doctor learns that out of 10,000 such cysts examined,
1,500 are malignant and 8,500 are benign. A diagnostic test is available which is accurate 80% of the
time (whether the cyst is malignant or not). The doctor has discovered the same type of cyst in a
patient.

222. {Cysts Narrative} In the absence of any test, what is the probability that the cyst is malignant?
ANS: M = Malignant, P(M) = .15

223. {Cysts Narrative} In the absence of any test, what is the probability that the cyst is benign?
ANS:B = Benign, P(B) = .85

224. {Cysts Narrative} What is the probability that the patient will test positive?
ANS:
P(+) = P(+ and M) + P(+ and B) = P(+/M) · P(M) + P(+/B) · P(B)
= (.80)(.15) + (.20)(.85) = .29

225. {Cysts Narrative} What is the probability that the patient will test negative?
ANS:
P(−) = 1 − P(+) = 1 − .29 = .71 or
P(−) = P(− and M) + P(− and B) = P(−/M) · P(M) + P(−/B) · P(B)
= (.20)(.15) + (.80)(.85) = .71

226. {Cysts Narrative} What is the probability that the patient has a benign tumor if he or she tests
positive?
ANS: P(B/+) = P(+ and B) / P(+) = P(+/B) · P(B) / P(+) = (.20)(.85) / (.29) = .586

227. {Cysts Narrative} What is the probability that the patient has a malignant cyst if he or she
tests negative?
ANS: P(M/−) = P(− and M) / P(−) = P(−/M) · P(M) / P(−) = (.20)(.15) / (.71) = .042

Messenger Service
Three messenger services deliver to a small town in Oregon. Service A has 60% of all the scheduled
deliveries, service B has 30%, and service C has the remaining 10%. Their on-time rates are 80%,
60%, and 40% respectively. Define event O as a service delivers a package on time.

228. {Messenger Service Narrative} Calculate P(A and O).

ANS: P(A and O) = P(A)P(O|A) = (.60)(.80) = 0.48

229. {Messenger Service Narrative} Calculate P(B and O).

ANS: P(B and O) = P(B) P(O|B) = (.30)(.60) = 0.18

230. {Messenger Service Narrative} Calculate P(C and O).

ANS: P(C and O) = P(C)P(O |C) = (.10)(.40) = 0.04

231. {Messenger Service Narrative} Calculate the probability that a package was delivered on
time.
ANS: P(O) = P(A and O) + P(B and O) + P(C and O) = .48 + .18 + .04 = 0.70
232. {Messenger Service Narrative} If a package was delivered on time, what is the probability
that it was service A?
ANS: P(A|O) = P(A and O) / P(O) = 0.48 / 0.70 = 0.686

233. {Messenger Service Narrative} If a package was delivered on time, what is the probability
that it was service B?
ANS: P(B|O) = P(B and O) / P(O) = 0.18 / 0.70 = 0.257

234. {Messenger Service Narrative} If a package was delivered on time, what is the probability
that it was service C?
ANS: P(C|O) = P(C and O) / P(O) = 0.04 / 0.70 = 0.057

235. {Messenger Service Narrative} If a package was delivered 40 minutes late, what is the
probability that it was service A?
ANS: P(A|Oc) = P(A and Oc) / P(Oc) = (0.60)(0.20) / 0.30 = 0.40

236. {Messenger Service Narrative} If a package was delivered 40 minutes late, what is the
probability that it was service B?
ANS: P(B|Oc) = P(B and Oc) / P(Oc) = (0.30)(0.40) / 0.30 = 0.40

237. {Messenger Service Narrative} If a package was delivered 40 minutes late, what is the
probability that it was service C?
ANS: P(C|Oc) = P(C and Oc) / P(Oc) = (0.10)(0.60) / 0.30 = 0.20