Statistics for Business and Economics
8th Edition
ISBN: 9780132745659
Author: Paul Newbold, William Carlson, Betty Thorne
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 3.4, Problem 65E
(a)
To determine
Proportion of predictions for unusually high earnings.
(b)
To determine
Proportion of outcomes for unusually high earnings.
(c)
To determine
Probability for unusually high earnings firm to predict it correctly.
(d)
To determine
Probability for materializing the unusually high earnings prediction.
(e)
To determine
Probability for unusually low earnings for a firm with unusually high earnings prediction.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
5
Historical data indicates that only 35% of cable customers are willing to switch companies. If a binomial process is assumed, then in a sample of 12 cable customers, what is the probability that between 3 and 5 (inclusive) customers are willing to switch companies? (Use TI 84 and round answer to at least 3 decimal places)
Two cards are drawn from a standard deck without replacement. What is the probability that the first card is a diamond and the second card is red? (Round your answer to three decimal places.)
A law school is trying to gain a better understanding of the determinants of bar passage rates. Suppose that they the following facts were uncovered:
1. The probability with which a randomly selected graduate has received an A in Economic Foundations of Legal Studies (EFLS) is 0.3;2. The probability with which a randomly selected graduate has passed the bar exam is 0.81;3. The probability with which a randomly selected graduate has received an A in EFLS and has passed the bar exam is 0.27.
Which of the following statements is true regarding the events X and Y, defined as follows:
X = “a randomly selected graduate having received an A in EFLS”; andY = “a randomly selected student having passed the bar exam”?
A) X and Y are independent events, and this can be verified by noting that P(X|Y) = 0.3.B) X and Y are not independent events, and this can be verified by noting that P(X|Y) = 0.3.C) X and Y are not independent events, and this can be verified by noting that P(X|Y) =.333.D) X and Y…
Chapter 3 Solutions
Statistics for Business and Economics
Ch. 3.1 - Prob. 1ECh. 3.1 - Prob. 2ECh. 3.1 - Prob. 3ECh. 3.1 - Prob. 4ECh. 3.1 - Prob. 5ECh. 3.1 - Prob. 6ECh. 3.1 - Prob. 7ECh. 3.2 - Prob. 8ECh. 3.2 - Prob. 9ECh. 3.2 - Prob. 10E
Ch. 3.2 - Prob. 11ECh. 3.2 - In a city of 180,000 people there are 20,000 legal...Ch. 3.2 - Prob. 13ECh. 3.2 - Prob. 14ECh. 3.2 - Prob. 15ECh. 3.2 - Prob. 16ECh. 3.2 - Prob. 17ECh. 3.2 - Prob. 18ECh. 3.3 - Prob. 19ECh. 3.3 - Prob. 20ECh. 3.3 - Prob. 21ECh. 3.3 - Prob. 22ECh. 3.3 - Prob. 23ECh. 3.3 - Prob. 24ECh. 3.3 - Prob. 25ECh. 3.3 - Prob. 26ECh. 3.3 - Prob. 27ECh. 3.3 - Prob. 28ECh. 3.3 - Prob. 29ECh. 3.3 - Prob. 30ECh. 3.3 - Prob. 31ECh. 3.3 - Prob. 32ECh. 3.3 - Prob. 33ECh. 3.3 - Prob. 34ECh. 3.3 - Prob. 35ECh. 3.3 - Prob. 36ECh. 3.3 - Prob. 37ECh. 3.3 - Prob. 38ECh. 3.3 - Prob. 39ECh. 3.3 - Prob. 40ECh. 3.3 - Prob. 41ECh. 3.3 - Prob. 42ECh. 3.3 - Prob. 43ECh. 3.3 - Prob. 44ECh. 3.3 - Prob. 45ECh. 3.3 - Prob. 46ECh. 3.3 - Prob. 47ECh. 3.3 - Prob. 48ECh. 3.3 - Prob. 49ECh. 3.3 - Prob. 50ECh. 3.3 - Prob. 51ECh. 3.4 - Prob. 52ECh. 3.4 - Prob. 53ECh. 3.4 - Prob. 54ECh. 3.4 - Prob. 55ECh. 3.4 - Prob. 56ECh. 3.4 - Prob. 57ECh. 3.4 - Prob. 58ECh. 3.4 - Prob. 59ECh. 3.4 - Prob. 60ECh. 3.4 - Prob. 61ECh. 3.4 - Prob. 62ECh. 3.4 - Prob. 63ECh. 3.4 - Prob. 64ECh. 3.4 - Prob. 65ECh. 3.4 - Prob. 66ECh. 3.4 - Prob. 67ECh. 3.4 - Prob. 68ECh. 3.4 - Prob. 69ECh. 3.4 - Prob. 70ECh. 3.4 - Prob. 71ECh. 3.4 - Prob. 72ECh. 3.4 - Prob. 73ECh. 3.4 - Prob. 74ECh. 3.4 - Prob. 75ECh. 3.4 - Prob. 76ECh. 3.4 - Prob. 77ECh. 3.5 - Prob. 78ECh. 3.5 - Prob. 79ECh. 3.5 - Prob. 80ECh. 3.5 - Prob. 81ECh. 3.5 - Prob. 82ECh. 3.5 - Prob. 83ECh. 3.5 - Prob. 84ECh. 3.5 - Prob. 85ECh. 3.5 - Prob. 86ECh. 3.5 - Prob. 87ECh. 3 - Prob. 88ECh. 3 - Prob. 89ECh. 3 - Prob. 90ECh. 3 - Prob. 91ECh. 3 - Prob. 92ECh. 3 - Prob. 93ECh. 3 - Prob. 94ECh. 3 - Prob. 95ECh. 3 - Prob. 96ECh. 3 - Prob. 97ECh. 3 - Prob. 98ECh. 3 - Prob. 99ECh. 3 - Prob. 100ECh. 3 - Prob. 101ECh. 3 - Prob. 102ECh. 3 - Prob. 103ECh. 3 - Prob. 104ECh. 3 - Prob. 105ECh. 3 - Prob. 106ECh. 3 - Prob. 107ECh. 3 - Prob. 108ECh. 3 - Prob. 109ECh. 3 - Prob. 110ECh. 3 - Prob. 111ECh. 3 - Prob. 112ECh. 3 - Prob. 113ECh. 3 - Prob. 114ECh. 3 - Prob. 115ECh. 3 - Prob. 116ECh. 3 - Prob. 117ECh. 3 - Prob. 118ECh. 3 - Prob. 119ECh. 3 - Prob. 120ECh. 3 - Prob. 121ECh. 3 - Prob. 122E
Knowledge Booster
Similar questions
- Portsmouth Bank has foreclosed on a home mortgage and is selling the house at auction. There are three bidders for the house, Emily, Anna, and Olga. Portsmouth Bank does not know the willingness to pay of these three bidders for the house, but on the basis of its previous experience, the bank believes that each of these bidders has a probability of 1/3 of valuing it at $600,000, a probability of 1/3 of valuing at $500,000, and a probability of 1/3 of valuing it at $200,000. Portsmouth Bank believes that these probabilities are independent among buyers. If Portsmouth Bank sells the house by means of a second- bidder, sealed- bid auction (Vicktey auction), what will be the bank's expected revenue from the sale?arrow_forwardYou are modeling a qualitative variable that takes on two classes (classes 1 and 2). In trying to classify observation 11 (out of 20) you compute the conditional probability for class 1 as 0.51. How would you classify this observation?arrow_forwardA Bank has foreclosed on a home mortgage and is selling the house at auction. There are two bidders for the house, Zeke and Heidi. The bank does not know the willingness to pay of these three bidders for the house, but on the basis of its previous experience, the bank believes that each of these bidders has a probability of 1/3 of valuing it at $800,000, a probability of 1/3 of valuing at $600,000, and a probability of 1/3 of valuing it at $300,000. The bank believes that these probabilities are independent among buyers. If the bank sells the house by means of a second- bidder, sealed-bid auction, what will be the bank’s expected revenue from the sale? The answer is 455, 556. Please show the steps in details thank you!arrow_forward
- Apple and Google are interested in hiring a new CEO. Both firms have the same set of final candidates for the CEO position: Indra, Cao, and Virginia. Both firms need to decide who to make a job offer to, and the hiring process is such that they each only make one job offer.If, say, Apple makes a job offer to Indra and Google makes a job offer to one of the other candidates, then Apple’s probability of success in hiring Indra is pIndra. The same is true for Google. If they both make a job offer to Indra, each has probability pIndra/2 of success. It has been estimated that pIndra = 20%, and pCao = pVirginia = 30% (Note that these probabilities need not add up to 100%).Suppose that both Apple and Google attach a valuation of 10 to successfully hiring Indra, and a valuation of 7 to successfully hiring each of the other candidates. A hiring attempt, if unsuccessful, has a valuation of zero. (a) Convert this story into a game by completing the following game table;GoogleIndra Cao…arrow_forwardApple and Google are interested in hiring a new CEO. Both firms have the same set of final candidates for the CEO position: Indra, Cao, and Virginia. Both firms need to decide who to make a job offer to, and the hiring process is such that they each only make one job offer. If, say, Apple makes a job offer to Indra and Google makes a job offer to one of the other candidates, then Apple’s probability of success in hiring Indra is pIndra. The same is true for Google. If they both make a job offer to Indra, each has probability pIndra/2 of success. It has been estimated that pIndra = 20%, and pCao = pVirginia = 30% (Note that these probabilities need not add up to 100%). Suppose that both Apple and Google attach a valuation of 10 to successfully hiring Indra, and a valuation of 7 to successfully hiring each of the other candidates. A hiring attempt, if unsuccessful, has a valuation of zero. Convert this story into a game by completing the following game table; Google…arrow_forwardADVERSE SELECTIONSomet Health Insurance Company wants to sell a health insurance product for $700 permonth. There is no requirement for healthy people to have insurance coverage. Thecompany conducts a survey to see how different populations respond to the proposed cost.People with no illnesses and disabilities, generally the young and healthy, respond that theydo not spend $700 on healthcare in an entire year, and most feel they would not waste somuch money on premiums when the chance of needing surgery or expensive healthcaretreatments is so small. However, older, sicker people think that $700 per month is a greatdeal, as most of them spend far in excess of this amount on healthcare. It seems like agreat deal for them. What will happen to the costs of the health insurance if only the older, sicker peopleenroll?arrow_forward
- In the game of blackjack as played in casinos in Las Vegas, Atlantic City, and Niagara Falls, as well as in many other cities, the dealer has the advantage. Most players do not play very well. As a result, the probability that the average player wins a hand is about 45%. Find the probability that an average player wins. a.Twice in 5 hands. b. Ten or more times in 25 hands. Arrivals 0 1 2 3 4 5 6 7 8 Frequency 14 31 47 41 29 21 10 5 2arrow_forwardA restaurant manager classifies customers as regular, occasional, or new, and finds that of all customers 50%, 40%, and 10%, respectively, fall into these categories. The manager found that wine was ordered by 70% of the regular customers, by 50% of the occasional customers, and by 30% of the new customers.a. What is the probability that a randomly chosen customer orders wine?b. If wine is ordered, what is the probability that the person ordering is a regular customer?c. If wine is ordered, what is the probability that the person ordering is an occasional customer?arrow_forwardIn the July 29, 2001, issue of The Journal News (Hamilton, Ohio), Lynn Elber of the Associated Press reported that “while 40 percent of American families own a television set with a V-chip installed to block designated programs with sex and violence, only 17 percent of those parents use the device.”(a)Use the report’s results to find an estimate of the probability that a randomly selected American family has used a V-chip to block programs containing sex and violence.find P(V and U)According to the report, more than 50 percent of parents have used the TV rating system (TV-14, etc.) to control their children’s TV viewing. How does this compare to the percentage using the V-chip?arrow_forward
- Bob earn 60,000 a year and an accounting firm each year he receives Reyes Bob has determined that the probability that he receives a 10% raise is .7 the probability that he earns a 3% raise is .2 and the probability that he earns a 2% raise is .1 a competing company has offered Bob a similar position for 65,000 a year Bob wonders if he should take the new job or take his chances with his current job. a. Find the mathematical expectation of the dollar amount of his raise at his current job b.arrow_forwardSuppose the equilibrium price for good quality used cars is $20,000. And the equilibrium price for poor quality used cars is $10,000. Assume a potential used car buyer has imperfect information as to the condition of any given used car. Assume this potential buyer believes the probability a given used car is good quality is .60 and the probability a given used car is low quality is .40. Assume the seller has perfect information on all cars in inventory. If the seller sells the buyer a poor quality car, what is the net-benefit to the seller? a. A net gain of $6,000. b. A net loss of $20,000. c. A net loss of $6,000. d. A net gain of $10,000.arrow_forwardSuppose that there are two types of entrepreneur: skilled and unskilled. Skilled entrepreneurs have a probability p = 2/3 of success if they get the loan. Unskilled entrepreneurs have zero chance of being successful. Despite that, assume that unskilled entrepreneurs want to take up the loan, because it is cool to say you have a startup. The bank does not observe skill. The share of skilled entrepreneurs is s. Question 1: 1A). TRUE OR FALSE: If L = 2, R = 6, and s = 0.5, then the bank would have zero expected profits, but entrepreneurs would never take up the loan. 1B. ) TRUE OR FALSE: If the loan amount is L = 2, the payback amount is R = 3, and the share of skilled entrepreneurs is s = 0.9, then the bank will have positive expected profits.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
