1. 1st: Suppose that a judge’s decisions follow a binomial distribution and that his verdict is
incorrect 10% of the time. In his next 10 decisions, the probability that he makes fewer than 2
incorrect verdicts is 0.736.
2nd: Suppose that the number of airplanes arriving at an airport per minute is a Poisson process.
The mean number of airplanes arriving per minute is 3. The probability that exactly 6 planes
arrive in the next minute is 0.05041.
 true, true
 true, false
 false, true
 false, false
2. The Department of Commerce in a state has determined that the number of small businesses
that declare bankruptcy per month is approximately a Poisson distribution with a mean of 6.4.
Find the probability that more than 3 bankruptcies occur next month
ANSWR = 0.9537
3. If the outcome of event A is not affected by event B, then events A and B are said to be
 mutually exclusive.
 independent
 collectively exhaustive.
 None of the above
4. Suppose that history shows that 60% of college students prefer Brand C cola. A sample of 5
students is to be selected. The probability that at least 1 prefers brand C is ________
ANSWR = 0.9898
5. Phone calls arrive at the rate of 50 per hour at the reservation desk for Queen City Airways. The
desk manager has asked you for an analysis of the call rates and probabilities to better
understand the operation and determine if more call desk workers are needed.
What is the probability of receiving exactly three calls in a 6 minute period?
ANSWR = 0.1404
6. Suppose A and B are independent events where P(A) = 0.4 and P(B) = 0.5. Then P (A and B)
ANSWR = 0.2
7. What type of probability distribution will most likely be used to analyze warranty repair needs
on new cars in the following problem?
The service manager for a new automobile dealership reviewed dealership records of the past
20 sales of new cars to determine the number of warranty repairs he will be called on to
perform in the next 90 days. Corporate reports indicate that the probability any one of their
new cars needs a warranty repair in the first 90 days is 0.05. The manager assumes that calls
for warranty repair are independent of one another and is interested in predicting the number
of warranty repairs he will be called on to perform in the next 90 days for this batch of 20 new
cars sold.




binomial distribution.
Poisson distribution.
Either of the above
none of the above
8. The probability that a new advertising campaign will increase sales is assessed as being 0.80. The
probability that the cost of developing the new ad campaign can be kept within the original
budget allocation is 0.40. If the two events are independent, the probability that the cost is kept
within budget and the campaign will increase sales is
 0.20
 0.32
 0.40
 0.88
9. A professor receives, on average, 24.7 e-mails from students the day before the midterm exam.
To compute the probability of receiving at least 10 e-mails on such a day, he will use what type
of probability distribution?
 binomial distribution.
 Poisson distribution
 Either of the above
 none of the above.
10. The closing price of a company’s stock tomorrow can be lower, higher or the same as today’s
closing price. Based on the closing price of the stock collected over the last month, 25% of the
days the closing price was higher than previous day’s closing price, 45% was lower than previous
day’s and 30% was the same as previous day’s. Based on this information, the probability that
tomorrow’s closing price will be higher than today’s is 25%. This is an example of using which of
the following probability approach?
 A priori probability
 Empirical probability
 Subjective probability
 Conditional probability
11. In a game called Taxation and Evasion, a player rolls a pair of dice. If, on any turn, the sum is 7,
11, or 12, the player gets audited. Otherwise, she avoids taxes. Suppose a player takes 5 turns at
rolling the dice. The probability that she does not get audited is ________.
ANSWR = 0.2373
12. The closing price of a company’s stock tomorrow can be lower, higher or the same as today’s
closed. Without any prior information that may affect the price of the stock tomorrow, the
probability that it will close higher than today’s close is 1/3. This is an example of using which
of the following probability approach?
 A priori probability
 Empirical probability
 Subjective probability
 Conditional probability
13. 1st: When A and B are mutually exclusive, P (A or B) can be found by adding P(A) and P(B).
2nd: The collection of all the possible events is called a sample space
 true, true
 true, false
 false, true
 false, false
14. Phone calls arrive at the rate of 50 per hour at the reservation desk for Queen City Airways. The
desk manager has asked you for an analysis of the call rates and probabilities to better
understand the operation and determine if more call desk workers are needed.
What is the probability of receiving exactly 10 calls in a 12-minute period?
ANSWR = 48
15. In a game called Taxation and Evasion, a player rolls a pair of dice. If on any turn the sum is 7,
11, or 12, the player gets audited. Otherwise, she avoids taxes. Suppose a player takes 5 turns at
rolling the dice. The variance of the number of times she will be audited is
ANSWR = 0.9375
16. What type of probability distribution will the consulting firm most likely employ to analyze the
insurance claims in the following problem?
An insurance company has called a consulting firm to determine if the company has an
unusually high number of false insurance claims. It is known that the industry proportion for
false claims is 3%. The consulting firm has decided to randomly and independently sample
100 of the company’s insurance claims. They believe the number of these 100 that are false
will yield the information the company desires.
 binomial distribution.
 Poisson distribution.
 Either of the above
 none of the above.
17. Phone calls arrive at the rate of 50 per hour at the reservation desk for Queen City Airways. The
desk manager has asked you for an analysis of the call rates and probabilities to better
understand the operation and determine if more call desk workers are needed.
What is the expected number of calls when calculating the probability of receiving nine calls in
a 12-minute period?
ANSWR = 25
18. 1st: If P(A) = 0.4 and P(B) = 0.6, then A and B must be mutually exclusive.
2nd: If P (A or B) = 1.0, then A and B must be mutually exclusive.




true, true
true, false
false, true
false, false
19. Suppose A and B are events where P(A) = 0.4, P(B) = 0.5, and P (A and B) = 0.1. Then P (A or B) =
ANSWR = 0.8
20. The local police department must write, on average, 5 tickets a day to keep department
revenues at budgeted levels. Suppose the number of tickets written per day follows a Poisson
distribution with a mean of 6.5 tickets per day. Interpret the value of the mean.
 The number of tickets that is written most often is 6.5 tickets per day.
 Half of the days have less than 6.5 tickets written, and half of the days have more than
6.5 tickets written.
 If we sampled all days, the arithmetic average or expected number of tickets written
would be 6.5 tickets per day
 The mean has no interpretation since 0.5 ticket can never be written.
21. Phone calls arrive at the rate of 50 per hour at the reservation desk for Queen City Airways. The
desk manager has asked you for an analysis of the call rates and probabilities to better
understand the operation and determine if more call desk workers are needed.
What is the expected number of calls when calculating the probability of receiving three calls in
a 6-minute period?
ANSWR = 5
22. In a game called Taxation and Evasion, a player rolls a pair of dice. If on any turn the sum is 7,
11, or 12, the player gets audited. Otherwise, she avoids taxes. Suppose a player takes 5 turns at
rolling the dice. The standard deviation of the number of times she will be audited is _
ANSWR = 0.968
23. Which of the following about the binomial distribution is not a true statement
 The probability of the event of interest must be constant from trial to trial.
 Each outcome is independent of the other.
 Each outcome may be classified as either "event of interest" or "not event of interest."
 The variable of interest is continuous.
24. 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 will increase but interest rates will not
during the next 6 months is:
 0.065
 0.15


0.51
0.89
25. A certain type of new business succeeds 60% of the time. Suppose that 3 such businesses open
(where they do not compete, so it is reasonable to believe that their relative successes would be
independent). The probability that all 3 businesses succeed is
ANSWR = 0.216
26. A company has 125 personal computers. The probability that any one of them will require repair
on a given day is 0.025. To find the probability that exactly 20 of the computers will require
repair on a given day, one will use what type of probability distribution?
 binomial distribution.
 Poisson distribution.
 Either of the above
 none of the above.
27. A company has 2 machines that produce widgets. An older machine produces 23% defective
widgets, while the new machine produces only 8% defective widgets. In addition, the new
machine produces 3 times as many widgets as the older machine does. What is the probability
that a randomly chosen widget produced by the company is defective?
 0.078
 0.1175
 0.156
 0.310
28. Suppose A and B are events where P(A) = 0.4, P(B) = 0.5, and P (A and B) = 0.1. Then P(B|A) =
ANSWR = 0.25
29. 1st: If either A or B must occur they are called collectively exhaustive.
2nd: If P(A) = 0.4 and P(B) = 0.6, then A and B must be collectively exhaustive.
 true, true
 true, false
 false, true
 false, false
30. If X has a binomial distribution with n = 4 and p = 0.3, then P(X = 1) = __
ANSWR = 0.4116
31. A multiple-choice test has 30 questions. There are 4 choices for each question. A student who
has not studied for the test decides to answer all questions randomly. What type of probability
distribution can be used to figure out his chance of getting at least 20 questions right?
 binomial distribution.
 Poisson distribution.
 Either of the above

none of the above.
32. If either event A or event B must occur, then events A and B are said to be
 mutually exclusive
 independent.
 collectively exhaustive.
 None of the above
33. 1st: If P (A or B) = 1.0, then A and B must be collectively exhaustive.
2nd: If P (A and B) = 0, then A and B must be mutually exclusive.
 true, true
 true, false
 false, true
 false, false
34. If the outcomes of a variable follow a Poisson distribution, then the
 mean equals the standard deviation.
 median equals the standard deviation.
 mean equals the variance
 median equals the variance.
35. Suppose A and B are mutually exclusive events where P(A) = 0.4 and P(B) = 0.5. Then P (A and B)
=
ANSWR = 0
36. 1st: If P (A and B) = 0, then A and B must be collectively exhaustive.
2nd: If P (A and B) = 1, then A and B must be collectively exhaustive.
 true, true
 true, false
 false, true
 false, false
37. The collection of all possible events is called
 a simple probability
 a sample space
 a joint probability.
 the null set.
38. A probability distribution is an equation that
 associates a probability of occurrence with each outcome.
 measures outcomes and assigns values of X to the simple events.
 assigns a value to the variability of the set of events.
 assigns a value to the center of the set of events.
39. The employees of a company were surveyed on questions regarding their educational
background (college degree or no college degree) and marital status (single or married).
Of the 600 employees, 400 had college degrees, 100 were single, and 60 were single college
graduates. The probability that an employee of the company is single or has a college degree is:
 0.10
 0.25
 0.667
 0.733
40. Suppose A and B are mutually exclusive events where P(A) = 0.4 and P(B) = 0.5. Then P (A or B) =
ANSWR = 0.9
41. A major hotel chain keeps a record of the number of mishandled bags per 1,000 customers. In a
recent year, the hotel chain had 4.06 mishandled bags per 1,000 customers. Assume that the
number of mishandled bags has a Poisson distribution.
What is the probability that in the next 1,000 customers, the hotel chain will have no
mishandled bags?
ANSWR = 0.O172
42. Suppose A and B are independent events where P(A) = 0.4 and P(B) = 0.5. Then P (A or B) =
ANSWR = O.7
43. 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 both house sales and interest
rates will increase during the next 6 months is:
0.10
 0.185
 0.705
 0.90
44. Suppose that history shows that 60% of college students prefer Brand C cola. A sample of 5
students is to be selected. The probability that exactly 1 prefers brand C is _______
ANSWR= 0.0768
45. 1st:The number of customers arriving at a department store in a 5-minute period has a binomial
distribution.
2nd: The number of customers arriving at a department store in a 5-minute period has a Poisson
distribution.
 true, true



true, false
false, true
false, false
46. 1st: If A and B cannot occur at the same time they are called mutually exclusive.
2nd: If either A or B must occur they are called mutually exclusive.
 true, true
 true, false
 false, true
 false, false
47. If X has a binomial distribution with n = 4 and p = 0.3, then P(X > 1) =__
ANSWR = 0.348
48. Suppose A and B are events where P(A) = 0.4, P(B) = 0.5, and P (A and B) = 0.1. Then P(A|B) =
 mutually exclusive.
 independent.
 collectively exhaustive.
 None of the above.
49. If event A and event B cannot occur at the same time, then events A and B are said to be
 mutually exclusive.
 independent.
 collectively exhaustive.
 None of the above.
50. What type of probability distribution will most likely be used to analyze the number of blue
chocolate chips per bag in the following problem?
The quality control manager of a candy plant is inspecting a batch of chocolate chip bags.
When the production process is in control, the mean number of blue chocolate chips per bag
is 6.0. The manager is interested in analyzing the probability that any bag being inspected has
fewer than 5.0 blue chocolate chips.
 binomial distribution.
 Poisson distribution.
 Either of the above
 none of the above.