# MGMT 1050 Lecture Notes - Financial Analyst, Startup Company, Insurance Fraud

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Some Important Discrete Probability Distributions 117

CHAPTER 5: SOME IMPORTANT DISCRETE

PROBABILITY DISTRIBUTIONS

1. Thirty-six of the staff of 80 teachers at a local intermediate school are certified in Cardio-

Pulmonary Resuscitation (CPR). In 180 days of school, about how many days can we expect that

the teacher on bus duty will likely be certified in CPR?

a) 5 days

b) 45 days

c) 65 days

d) 81 days

ANSWER:

d

TYPE: MC DIFFICULTY: Moderate

KEYWORDS: binomial distribution, mean

2. A campus program evenly enrolls undergraduate and graduate students. If a random sample of 4

students is selected from the program to be interviewed about the introduction of a new fast food

outlet on the ground floor of the campus building, what is the probability that all 4 students

selected are undergraduate students?

a) 0.0256

b) 0.0625

c) 0.16

d) 1.00

ANSWER:

b

TYPE: MC DIFFICULTY: Difficult

KEYWORDS: binomial distribution

3. A probability distribution is an equation that

a) associates a particular probability of occurrence with each outcome in the sample space.

b) measures outcomes and assigns values of X to the simple events.

c) assigns a value to the variability in the sample space.

d) assigns a value to the center of the sample space.

ANSWER:

a

TYPE: MC DIFFICULTY: Moderate

KEYWORDS: probability distribution

118 Some Important Discrete Probability Distributions

4. The connotation "expected value" or "expected gain" from playing roulette at a casino means

a) the amount you expect to "gain" on a single play.

b) the amount you expect to "gain" in the long run over many plays.

c) the amount you need to "break even" over many plays.

d) the amount you should expect to gain if you are lucky.

ANSWER:

b

TYPE: MC DIFFICULTY: Easy

KEYWORDS: expected value

5. Which of the following about the binomial distribution is not a true statement?

a) The probability of success must be constant from trial to trial.

b) Each outcome is independent of the other.

c) Each outcome may be classified as either "success" or "failure."

d) The random variable of interest is continuous.

ANSWER:

d

TYPE: MC DIFFICULTY: Easy

KEYWORDS: binomial distribution, properties

6. In a binomial distribution

a) the random variable X is continuous.

b) the probability of success p is stable from trial to trial.

c) the number of trials n must be at least 30.

d) the results of one trial are dependent on the results of the other trials.

ANSWER:

b

TYPE: MC DIFFICULTY: Easy

KEYWORDS: binomial distribution, properties

7. Whenever p = 0.5, the binomial distribution will

a) always be symmetric.

b) be symmetric only if n is large.

c) be right-skewed.

d) be left-skewed.

ANSWER:

a

TYPE: MC DIFFICULTY: Moderate

KEYWORDS: binomial distribution, properties

Some Important Discrete Probability Distributions 119

8. Whenever p = 0.1 and n is small, the binomial distribution will be

a) symmetric.

b) right-skewed.

c) left-skewed.

d) None of the above.

ANSWER:

b

TYPE: MC DIFFICULTY: Moderate

KEYWORDS: binomial distribution, properties

9. If n = 10 and p = 0.70, then the mean of the binomial distribution is

a) 0.07

b) 1.45.

c) 7.00

d) 14.29

ANSWER:

c

TYPE: MC DIFFICULTY: Easy

KEYWORDS: binomial distribution, mean

10. If n = 10 and p = 0.70, then the standard deviation of the binomial distribution is

a) 0.07

b) 1.45

c) 7.00

d) 14.29

ANSWER:

b

TYPE: MC DIFFICULTY: Easy

KEYWORDS: binomial distribution, standard deviation

11. If the outcomes of a random variable follow a Poisson distribution, then their

a) mean equals the standard deviation.

b) median equals the standard deviation.

c) mean equals the variance.

d) median equals the variance.

ANSWER:

c

TYPE: MC DIFFICULTY: Easy

KEYWORDS: Poisson distribution, mean, standard deviation, properties