Probability Theory and Past Due Accounts

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  • Topic: Probability theory, Conditional probability, Bayesian probability
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MAT540 - Quantitative Methods(Homework # 2)

Section ATrue/False
Indicate whether the sentence or statement is true or false.

__F__1.Two events that are independent cannot be mutually exclusive.

__F__2.A joint probability can have a value greater than 1.

__F__3.The intersection of A and Ac is the entire sample space.

__T__4.If 50 of 250 people contacted make a donation to the city symphony, then the relative frequency method assigns a probability of .2 to the outcome of making a donation.

__T__5.An automobile dealership is waiting to take delivery of nine new cars. Today, anywhere from zero to all nine cars might be delivered. It is appropriate to use the classical method to assign a probability of 1/10 to each of the possible numbers that could be delivered.

__T__6.When assigning subjective probabilities, use experience, intuition, and any available data.

__F__7.P (A„xB) „d P (A)

__F__8.If P (A|B) = .4 and P (B) = .6, then P (A„xB) = .667.

__T__9.Bayes' theorem provides a way to transform prior probabilities into posterior probabilities.

__T__10.If P (A„yB) = P (A) + P (B), then A and B are mutually exclusive.

Section BMultiple Choice
Identify the letter of the choice that best completes the statement or answers the question.

__C__11.Which of the following is not a valid representation of a probability? a.35%

__A__12.A list of all possible outcomes of an experiment is called a.the sample space.
b.the sample point.
c.the experimental outcome.
d.the likelihood set.

__B__13.Which of the following is not a proper sample space when all undergraduates at a university are considered? a.S = {in-state, out-of-state}
b.S = {freshmen, sophomores}
c.S = {age under 21, age 21 or over}
d.S = {a major within business, no business major}

__B__14.In the set of all past due accounts, let the event A mean the account is between 31 and 60 days past due and the...
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