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Probability and Statistical Analysis Assignment: Evaluating Real-World Scenarios

Applies probability and statistical analysis to real-world cases.

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    Probability and Statistical Analysis Assignment: Evaluating Real - World Scenarios 1. The probability that house sales will increase in the next 6 months is estimated to be 0.25. The probability that the interest rates on housing loans will go up in the same period is estimated to be 0.74. The probability that house sales or interest rates will go up during the next 6 months is estimated to be 0.89. The probability that house sales do not increase AND interest rates do not increase during the next 6 months is a) 0.11 b) 0.26 c) 0.45 d) 0.64 e) 0.15 f) 0.10 2. Suppose each sample of air has a 10% chance of containing a particular rare molecule. Find the probability that, in a collection of 20 independent samples, at least one sample contains the rare molecule. a) 0.555 b) 0.440 c) 0.878 d) 0.265 e) 0.098 3. Two assets have variances of 24 (asset A) and 16 (asset B). The covariance between them is - 10. If a portfolio is composed of the two assets in the proportions 60% in A and 40% in B the portfolio standard deviation will be: a) 14.4 b) 2.19 c) 4.8 d) 2.53 e) 6.4 4. Its time to create a contract for football running back Reggie Bush for the New England Patriots. The Patriots offer him the following incentive package: Rush for 0 to 900 yards in 2015, earn a bonus of $0 Rush for over 900 and up to 1500 yards, earn a bonus of $500,000 Rush for over 1500 yards, earn a bonus of $1,000,000 Assuming that his rushing performance follows a normal distribution with a mean of 750 yards and a standard deviation of 320 yards, what is his expected bonus to be paid? [the answers are rounded so choose the closest answer to what you calculate]. a) $321,000 b) $350,000 c) $227,000 d) $303,000 e) $275,000 None are correct

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