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Set+2 Normal+Distribution+Functions+of+Random+Variables+ (1) (1) ASSIGNMENT

The document discusses several examples involving normal distributions and functions of random variables: 1) Calculates the probability a car service will take longer than 1 hour given transmission repair times are normally distributed. 2) Looks at the age distribution of employees at an insurance company and determines if certain statements about the distribution are true or false. 3) Compares the distributions of 2X1 and X1 + X2 where X1 and X2 are independent normal random variables. 4) Finds the range of values that contain 99% of the probability for a normal random variable X. 5) Looks at the total annual profit distribution for a company with two divisions, each with independent normal profit distributions, and answers

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Roshini Tv
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687 views

Set+2 Normal+Distribution+Functions+of+Random+Variables+ (1) (1) ASSIGNMENT

The document discusses several examples involving normal distributions and functions of random variables: 1) Calculates the probability a car service will take longer than 1 hour given transmission repair times are normally distributed. 2) Looks at the age distribution of employees at an insurance company and determines if certain statements about the distribution are true or false. 3) Compares the distributions of 2X1 and X1 + X2 where X1 and X2 are independent normal random variables. 4) Finds the range of values that contain 99% of the probability for a normal random variable X. 5) Looks at the total annual profit distribution for a company with two divisions, each with independent normal profit distributions, and answers

Uploaded by

Roshini Tv
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Topics: Normal distribution, Functions of Random Variables

1. The time required for servicing transmissions is normally distributed with  = 45 minutes
and  = 8 minutes. The service manager plans to have work begin on the transmission of a
customer’s car 10 minutes after the car is dropped off and the customer is told that the car
will be ready within 1 hour from drop-off. What is the probability that the service manager
cannot meet his commitment?

A. 0.3875
B. 0.2676
C. 0.5
D. 0.6987
→Probability that the service manager will not meet his demand will be
100-73.4 = 26.6 or 0.2676

2. The current age (in years) of 400 clerical employees at an insurance claims processing center
is normally distributed with mean  = 38 and Standard deviation  =6. For each statement
below, please specify True/False. If false, briefly explain why.
A. More employees at the processing center are older than 44 than between 38 and
44.
→ Probability that the employee will be greater than age of 44 = 100-84.1345 =
15.86%
So the probability of number of employees between 38.44 years of age = pr(X<44)-
0.5=84.1345-0.5 = 34.1345%
Therefore the statement that more employees at the processing center are older
than 44 than between 38 and is TRUE
B. A training program for employees under the age of 30 at the center would be
expected to attract about 36 employees.
→ So number of employees with probability 0.912 of them being under age 30=
0.0912*400=36.48 (36)
Therefore the statement B of the question is also TRUE

3. If X1 ~ N(μ, 2) and X2 ~ N(μ, σ2) are iid normal random variables, then what is the difference
between 2 X1 and X1 + X2? Discuss both their distributions and parameters.
→ As we know that if X ~ N(μ, σ2 ) and Y ~ N(μ2, σ22 ) are two independent Random
variables than X + Y ~ N(μ1 + μ2, σ12 + σ22 ) and X - Y ~ N(μ1 - μ2, σ12 + σ22 )
Similarly if Z = ax +by,Where X and Y are as defined above i.e z is linear combination
of X and Y then Z ~ N(aμ1 + bμ2 a² σ1² + b² σ2² )
therefore in the question
2X1~ N(2µ,4 σ2 ) and
X1 +X2 ~ N(µ + µ, σ2 + σ2 ) ~ N(2µ , 2σ2 )
2X1 – (X1 +X2) = N(4µ ,6 σ2 )
4. Let X ~ N(100, 202). Find two values, a and b, symmetric about the mean, such that the
probability of the random variable taking a value between them is 0.99. 

A. 90.5, 105.9
B. 80.2, 119.8
C. 22, 78
D. 48.5, 151.5
E. 90.1, 109.9
→ Z*σ + µ = X
Z(-0.005)*20+100 = (2.57)*20+100 = 151.4
Z(0.005)*20+100 = (-2.57)*20+100 = 48.6
ANS:- D. 48.5 ,151.5

5. Consider a company that has two different divisions. The annual profits from the two
divisions are independent and have distributions Profit 1 ~ N(5, 32) and Profit2 ~ N(7, 42)
respectively. Both the profits are in $ Million. Answer the following questions about the
total profit of the company in Rupees. Assume that $1 = Rs. 45
A. Specify a Rupee range (centered on the mean) such that it contains 95% probability
for the annual profit of the company.
→ Mean profit is RS 540 Million
Std deviation is RS 225 Million
Range is RS
State norms interval (0.95, 540, 225)
Range is RS 99.0081034 , 980.991896
B. Specify the 5th percentile of profit (in Rupees) for the company
→formula X= X=μ + Zσ; wherein from z table, 5 percentile = -1.645
→ X = 540(-1.645)*225
X = 169.875
C. Which of the two divisions has a larger probability of making a loss in a given year?
→ Probability od division 1 making a loss p(X<0)
Stats. norm. cdf (0, 5, 3)
0.0477903

Probability od division 2 making a loss p(X<0)


Stats. norm. cdf(0, 7, 4)
0.0400591

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