SB Test Bank Chapter 7

Chapter 07
Continuous Probability Distributions

True / False Questions

1. A continuous uniform distribution is always symmetric.

True False

2. The height and width of a continuous uniform distribution's PDF are the same.

True False

3. A continuous uniform distribution U(0,800) will have μ = 400 and σ = 230.94.

True False

4. A continuous uniform distribution U(100,200) will have the same standard deviation as a
continuous uniform distribution U(200,300).

True False

5. For a continuous uniform distribution U(200,400), the parameters are μ = 300 and σ = 100.

True False

6. The exponential distribution describes the number of arrivals per unit of time.

True False

7. The exponential distribution is always skewed right.

True False

8. If arrivals follow a Poisson distribution, waiting times follow the exponential distribution.

True False

9. The triangular distribution is used in "what-if" analysis for business planning.

True False

10. The triangular distribution is symmetric.

True False

11. The triangular distribution T(0,10,20) is skewed left.

True False

12. A triangular distribution can be skewed either left or right.

True False

13. For a continuous random variable, the total area beneath the PDF will be greater than zero
but less than one.

True False

14. The exponential distribution is continuous and the Poisson distribution is discrete, yet the
two distributions are closely related.

True False

15. The mean, median, and mode of a normal distribution will always be the same.

True False

16. There is a simple formula for normal areas, but we prefer a table for greater accuracy.

True False

17. Normal distributions differ only in their means and variances.

True False

18. Any normal distribution has a mean of 0 and a standard deviation of 1.

True False

19. We would use a normal distribution to model the waiting time until the next Florida
hurricane strike.

True False

20. Experience suggests that 4 percent of all college students have had a tonsillectomy. In a
sample of 300 college students, we need to find the probability that at least 10 have had a
tonsillectomy. It is acceptable to use the normal distribution to estimate this probability.

True False

21. The normal is a good approximation to the binomial when n is greater than or equal to 10.

True False

22. The true proportion of accounts receivable with some kind of error is 4 percent for Venal
Enterprises. If an auditor randomly samples 50 accounts receivable, it is acceptable to use the
normal approximation to estimate the probability that fewer than two will contain errors.

True False

23. The normal distribution is a good approximation to the binomial if both π ≥ 10 and n ≥ 10.

True False

24. The normal distribution is a good approximation to the binomial if n = 200 and π = .03.

True False


True False

26. The exponential distribution can be either right-skewed or left-skewed, depending on λ.

True False

27. The number of lightning strikes in a day in Miami is a continuous random variable.

True False

28. The area under a normal curve is 1 only if the distribution is standardized N(0,1).

True False

29. The area under an exponential curve can exceed 1 because the distribution is right-skewed.

True False

Multiple Choice Questions

30. A machine dispenses water into a glass. Assuming that the amount of water dispensed
follows a continuous uniform distribution from 10 ounces to 16 ounces, the average amount
of water dispensed by the machine is:

A. 12 ounces.
B. 13 ounces.
C. 14 ounces.
D. 16 ounces.

follows a continuous uniform distribution from 10 ounces to 16 ounces, the standard
deviation of the amount of water dispensed is about:

A. 1.73 ounces.
B. 3.00 ounces.
C. 0.57 ounce.
D. 3.51 ounces.

follows a continuous uniform distribution from 10 ounces to 16 ounces, what is the
probability that 13 or more ounces will be dispensed in a given glass?

A. .1666
B. .3333
C. .5000
D. .6666

33. A random variable X is best described by a continuous uniform distribution from 20 to 45
inclusive. The mean of this distribution is:

A. 30.5.
B. 31.5.
C. 32.5.
D. 33.5.

inclusive. The standard deviation of this distribution is approximately:

A. 52.1.
B. 32.5.
C. 6.85.
D. 7.22.

inclusive. What is P(30 ≤ X ≤ 40)?

A. .20
B. .40
C. .60
D. .80

36. The Excel function =800*RAND() would generate random numbers with standard deviation
approximately equal to:

A. 200.
B. 188.
C. 231.
D. 400.

37. The Excel function =40*RAND() would generate random numbers with standard deviation
approximately equal to

A. 13.33.
B. 20.00.
C. 11.55.
D. 19.27.

38. If arrivals occur at a mean rate of 3.6 events per hour, the exponential probability of waiting
more than 0.5 hour for the next arrival is:

A. .2407.
B. .1653.
C. .1222.
D. .5000.

39. If arrivals occur at a mean rate of 3.6 events per hour, the exponential probability of waiting
less than 0.5 hour for the next arrival is:

A. .7122.
B. .8105.
C. .8347.
D. .7809.

40. If arrivals occur at a mean rate of 2.6 events per minute, the exponential probability of
waiting more than 1.5 minutes for the next arrival is:

A. .0202.
B. .0122.
C. .0535.
D. .2564.

waiting less than 1 minute for the next arrival is:

A. .2019.
B. .7104.
C. .8812.
D. .7981.

42. Bob's z-score for the last exam was 1.52 in Prof. Axolotl's class BIO 417, "Life Cycle of the
Ornithorhynchus." Bob said, "Oh, good, my score is in the top 10 percent." Assuming a
normal distribution of scores, is Bob right?

A. Yes.
B. No.
C. Must have n to answer.

43. The lengths of brook trout caught in a certain Colorado stream are normally distributed with
a mean of 14 inches and a standard deviation of 3 inches. What proportion of brook trout
caught will be between 12 and 18 inches in length?

A. .6563
B. .6826
C. .2486
D. .4082

a mean of 14 inches and a standard deviation of 3 inches. The first quartile for the lengths of
brook trout would be:

A. 16.01 inches.
B. 11.00 inches.
C. 11.98 inches.
D. 10.65 inches.

a mean of 14 inches and a standard deviation of 3 inches. What lower limit should the State
Game Commission set on length if it is desired that 80 percent of the catch may be kept by
fishers?

A. 12.80 inches
B. 11.48 inches
C. 12.00 inches
D. 9.22 inches

46. In Melanie's Styling Salon, the time to complete a simple haircut is normally distributed with
a mean of 25 minutes and a standard deviation of 4 minutes. What percent of customers
require less than 32 minutes for a simple haircut?

A. 95.99 percent
B. 99.45 percent
C. 97.72 percent
D. 45.99 percent

a mean of 25 minutes and a standard deviation of 4 minutes. The slowest quartile of
customers will require longer than how many minutes for a simple haircut?

A. 3(n + 1)/4 minutes

B. 26 minutes
C. 25.7 minutes
D. 27.7 minutes

a mean of 25 minutes and a standard deviation of 4 minutes. For a simple haircut, the middle
90 percent of the customers will require:

A. between 18.4 and 31.6 minutes.

B. between 19.9 and 30.1 minutes.
C. between 20.0 and 30.0 minutes.
D. between 17.2 and 32.8 minutes.

49. The area under the normal curve between z = 0 and z = 1 is ______________ the area under
the normal curve between z = 1 and z = 2.

A. less than
B. greater than
C. equal to

50. The price-earnings ratio for firms in a given industry follows the normal distribution. In this
industry, a firm whose price-earnings ratio has a standardized value of z = 1.00 is
approximately in the highest ______ percent of firms in the industry.

A. 16 percent
B. 34 percent
C. 68 percent
D. 75 percent

51. A student's grade on an examination was transformed to a z value of 0.67. Assuming a
normal distribution, we know that she scored approximately in the top:

A. 15 percent.
B. 50 percent.
C. 40 percent.
D. 25 percent.

52. The MPG (miles per gallon) for a certain compact car is normally distributed with a mean of
31 and a standard deviation of 0.8. What is the probability that the MPG for a randomly
selected compact car would be less than 32?

A. 0.3944
B. 0.8944
C. 0.1056
D. 0.5596

53. The probability is .80 that a standard normal random variable is between -z and +z. The value
of z is approximately:

A. 1.28.
B. 1.35.
C. 1.96.
D. 1.45.

54. The time required for a citizen to complete the 2010 U.S. Census "long" form is normally
distributed with a mean of 40 minutes and a standard deviation of 10 minutes. What
proportion of the citizens will require less than one hour?

A. 0.4772
B. 0.9772
C. 0.9974
D. 0.9997

distributed with a mean of 40 minutes and a standard deviation of 10 minutes. The slowest
10 percent of the citizens would need at least how many minutes to complete the form?

A. 27.2
B. 35.8
C. 52.8
D. 59.6

distributed with a mean of 40 minutes and a standard deviation of 10 minutes. What is the
third quartile (in minutes) for the time required to complete the form?

A. 44.75
B. 46.75
C. 47.50
D. 52.50

57. Exam scores were normal in BIO 200. Jason's exam score was one standard deviation above
the mean. What percentile is he in?

A. 68th
B. 75th
C. 78th
D. 84th

58. Compared to the area between z = 1.00 and z = 1.25, the area between z = 2.00 and z = 2.25
in the standard normal distribution will be:

A. smaller.
B. larger.
C. the same.
D. impossible to compare without knowing μ and σ.

59. A large number of applicants for admission to graduate study in business are given an
aptitude test. Scores are normally distributed with a mean of 460 and standard deviation of
80. What fraction of applicants would you expect to have scores of 600 or above?

A. 0.0401
B. 0.4599
C. 0.5401
D. 0.0852

80. What fraction of the applicants would you expect to have a score of 400 or above?

A. 0.2734
B. 0.7734
C. 0.7266
D. 0.7500

80. The top 2.5 percent of the applicants would have a score of at least (choose the nearest
integer):

A. 606.
B. 617.
C. 600.
D. 646.

62. If the random variable Z has a standard normal distribution, then P(1.25 ≤ Z ≤ 2.17) is:

A. 0.0906.
B. 0.9200.
C. 0.4700.
D. 0.3944.

63. If the random variable Z has a standard normal distribution, then P(Z ≤ -1.37) is:

A. 0.9147.
B. 0.4147.
C. 0.5016.
D. 0.0853.

64. Assume that X is normally distributed with a mean μ = $64. Given that P(X ≥ $75) = 0.2981,
we can calculate that the standard deviation of X is approximately:

A. $20.76.
B. $13.17.
C. $5.83.
D. $7.05.

65. The standard deviation of a normal random variable X is $20. Given that P(X ≤ $10) =
0.1841. From this we can determine that the mean of the distribution is equal to:

A. $13.
B. $26.
C. $20.
D. $28.

66. The random variable X is normally distributed with mean of 80 and variance of 36. The 67th
percentile of the distribution is:

A. 72.00.
B. 95.84.
C. 90.00.
D. 82.64.

67. The area under the normal curve between the 20th and 70th percentiles is equal to:

A. 0.7000.
B. 0.5000.
C. 0.9193.

68. The variable in a normal distribution can assume any value between

A. -3 and +3
B. -4 and +4
C. -1 and +1
D. -∞ and
+∞

69. What are the mean and standard deviation for the standard normal distribution?

A. μ = 0, σ = 0
B. μ = 1, σ = 1
C. μ = 1, σ = 0
D. μ = 0, σ = 1

70. Any two normal curves are the same except for their:

A. standard deviations.
B. means.
C. standard deviations and means.
D. standard deviations, means, skewness, and kurtosis.

71. Light bulbs are normally distributed with an average lifetime of 1000 hours and a standard
deviation of 250 hours. The probability that a light bulb picked at random will last less than
1500 hours is about:

A. 97.72 percent.
B. 95.44 percent.
C. 75.00 percent.
D. 68.00 percent.

72. To convert a normally distributed variable X into a standard Z score we would:

A. subtract the mean from the original observation and divide the result by the variance.
B. subtract the mean from the original observation and divide the result by the standard
deviation.
C. add the mean and the original observation, then divide by the variance.
D. subtract the mean from the standard deviation and divide by the variance.

73. Regarding continuous probability distributions, which statement is incorrect?

A. The triangular distribution may be skewed left or right.

B. The uniform distribution is never skewed.
C. The normal distribution is sometimes skewed.
D. The exponential distribution is always skewed right.

74. Which model best describes your waiting time until you get the next nonworking web URL
("This page cannot be displayed") as you click on various websites for Florida condo
rentals?

A. Triangular
B. Uniform
C. Normal
D. Exponential

75. On average, a major earthquake (Richter scale 6.0 or above) occurs 3 times a decade in a
certain California county. What is the probability that less than six months will pass before
the next earthquake?

A. .1393
B. .8607
C. .0952
D. .9048

76. If the mean time between in-flight aircraft engine shutdowns is 12,500 operating hours, the
90th percentile of waiting times to the next shutdown will be:

A. 20,180 hours.
B. 28,782 hours.
C. 23,733 hours.
D. 18,724 hours.

77. On average, 15 minutes elapse between discoveries of fraudulent corporate tax returns in a
certain IRS office. What is the probability that less than 30 minutes will elapse before the
next fraudulent corporate tax return is discovered?

A. .1353
B. .6044
C. .7389
D. .8647

78. If the mean time between unscheduled maintenance of LCD displays in a hospital's CT scan
facility is 4,000 operating hours, what is the probability of unscheduled maintenance in the
next 5,000 hours?

A. .8000
B. .7135
C. .2865
D. .5000

79. A certain assembly line at Vexing Manufacturing Company averages 30 minutes between
breakdowns. What is the probability that less than 6 minutes will elapse before the next
breakdown?

A. .8187
B. .0488
C. .1813
D. .2224

breakdowns. The median time between breakdowns is:

A. 30.0 minutes.
B. 35.7 minutes.
C. 25.4 minutes.
D. 20.8 minutes.

81. Which probability model is most appropriate to describe the waiting time (working days)
until an office photocopier breaks down (i.e., requires unscheduled maintenance)?

A. Normal
B. Uniform
C. Exponential
D. Poisson

82. Bob's z-score for the last exam was -1.15 in FIN 417, "Capital Budgeting Strategies." Bob
said, "Yipe! My score is within the bottom quartile." Assuming a normal distribution, is Bob
right?

A. Yes
B. No
C. Must know the class size to answer

83. Exam scores were normal in MIS 200. Jason's exam score was 1.41 standard deviations
above the mean. What percentile is he in?

A. 68th
B. 75th
C. 84th
D. 92nd

84. Compared to the area between z = 0.50 and z = 0.75, the area between z = 1.50 and z = 1.75
in the standard normal distribution will be:

A. smaller
B. larger
C. the same

85. If GMAT scores for applicants at Oxnard Graduate School of Business are N(500, 50) then
the top 5 percent of the applicants would have a score of at least (choose the nearest integer):

A. 575.
B. 582.
C. 601.
D. 608.


A. 0.1091.
B. 0.1203.
C. 0.2118.
D. 0.3944.


A. 0.9573.
B. 0.0446.
C. 0.5016.
D. 0.0427.

88. Excel's =100*RAND() function produces continuous random numbers that are uniformly
distributed between 0 and 100. The standard deviation of this distribution is approximately:

A. 50.00.
B. 28.87.
C. 33.33.
D. 25.00.

89. Excel's =RAND() function produces random numbers that are uniformly distributed between
0 and 1. The mean of this distribution is approximately

A. .5000
B. .2500
C. .3333
D. .2887

90. Excel's =RAND() function produces random numbers that are uniformly distributed from 0
to 1. What is the probability that the random number exceeds .75?

A. 75 percent
B. 50 percent
C. 25 percent

91. Which is the correct Excel formula for the 80th percentile of a distribution that is N(475, 33)?

A. =NORM.DIST(80, 475, 33,1)

B. =NORM.INV(0.80, 475, 33)
C. =NORM.S.INV((80 - 475)/33)

92. If arrivals follow a Poisson distribution with mean 1.2 arrivals per minute, find the 75th
percentile of waiting times until the next arrival (i.e., 75 percent below).

A. 1.155 minutes (69.3 seconds)

B. 0.240 minute (14.4 seconds)
C. 1.919 minutes (115.1 seconds)

93. A software developer makes 175 phone calls to its current customers. There is an 8 percent
chance of reaching a given customer (instead of a busy signal, no answer, or answering
machine). The normal approximation of the probability of reaching at least 20 customers is:

A. .022.
B. .007.
C. .063.
D. .937.

94. For Gardyloo Manufacturing, the true proportion of accounts receivable with some kind of
error is .20. If an auditor randomly samples 225 accounts receivable, what is the approximate
normal probability that 39 or fewer will contain errors?

A. .1797
B. .2097
C. .1587
D. .0544

95. A letter is mailed to a sample of 500 homeowners. Based on past experience, the probability
of an undeliverable letter is 0.06. The normal approximation to the binomial probability of 40
or more undeliverable letters is:

A. 0.9632
B. 0.0368
C. 0.2305
D. 0.7695

96. In a T-F exam with 100 questions, passing requires a score of at least 60. What is the
approximate normal probability that a "guesser" will score at least 60 points?

A. .0287
B. .4713
C. .0251
D. .0377

97. A multiple choice exam has 100 questions. Each question has five choices. What would be
the approximate probability that a "guesser" could achieve a score of 30 or more?

A. 0.0088
B. 0.0062
C. 0.0015
D. 0.4913

98. For which binomial distribution would a normal approximation be most acceptable?

A. n = 50, π = 0.05

B. n = 100, π = 0.04
C. n = 40, π = 0.25
D. n = 400, π = 0.02

99. Historically, the default rate on a certain type of commercial loan is 20 percent. If a bank
makes 100 of these loans, what is the approximate probability that at least 26 will result in
default?

A. 0.2000
B. 0.0668
C. 0.0846
D. 0.0336

100. A company employs 300 employees. Each year, there is a 30 percent turnover rate for
employees. We want to do a normal approximation to the binomial distribution of the
number of employees who leave each year. For this normal approximation, the mean is
______ and the standard deviation is _____.

A. 90, 63
B. 90, 7.937
C. 90, 30
D. 90, 15

101. The probability that a rental car will be stolen is 0.001. If 25,000 cars are rented from Hertz,
what is the normal approximation to the probability that fewer than 20 will be stolen?

A. .2577
B. .1335
C. .1128
D. .8335

102. If adult male heights are normally distributed with a mean of 180 cm and a standard
deviation of 7 cm, how high should an aircraft lavatory door be to ensure that 99.9 percent
of adult males will not have to stoop as they enter?

A. 195.7 cm
B. 201.6 cm
C. 207.3 cm
D. 201.4 cm

103. TotCo is developing a new deluxe baby bassinet. If the length of a newborn baby is
normally distributed with a mean of 50 cm and a standard deviation of 5 cm, what should be
the interior length of the bassinet to ensure that 99 percent of newborn babies will fit, with a
safety margin of 15 cm on each end of the bassinet?

A. 95.45 cm
B. 85.22 cm
C. 91.63 cm
D. 98.92 cm

104. The triangular distribution T(4, 12, 26) has a mean of:

A. 14.
B. 18.
C. 12.
D. 13.

105. The triangular distribution T(0, 10, 20) has a standard deviation of:

A. 4.082.
B. 3.775.
C. 3.024.
D. 2.994.


A. 23.
B. 30.
C. 33.
D. 35.


A. 9.498.
B. 9.225.
C. 8.498.
D. 7.710.

108. Which statement is incorrect?

A. The triangular distribution always has a single mode.

B. The mean of the triangular distribution is (a + b + c)/3.
C. The triangular distribution is right-skewed.

109. Bob used a triangular distribution of T(20, 30, 61) to represent his daily commute time
(minutes). Which statement is incorrect?

A. The distribution is right-skewed.

B. The mode of the distribution exceeds the mean.
C. The mean of the distribution is 37.
D. The midrange of the distribution is 40.5.

110. Phyllis used a triangular distribution of T(10, 15, 20) to represent her daily commute time


B. The mode of the distribution is at the mean.
D. The midrange of the distribution is 15.

111. In a continuous distribution:

A. P(X < 5) is the same as P(X ≤ 5).

B. P(X < 5) is less than P(X ≤ 5).
C. P(X < 5) is more than P(X ≤ 5).

112. In a continuous distribution the

A. PDF is usually higher than the CDF.

B. CDF is used to find left-tail probabilities.
C. PDF shows the area under the curve.
D. CDF is usually the same as the PDF.

113. If the mean waiting time for the next arrival is 12 minutes, what is the median waiting
time?

A. 7.2 minutes
B. 8.3 minutes
C. 9.1 minutes
D. 12 minutes

114. If the mean waiting time for the next arrival is 18 minutes, what is the first quartile (25th
percentile) for waiting times?

A. 13 minutes
B. 7.9 minutes
C. 5.2 minutes
D. 3.1 minutes

115. Could this function be a PDF?

A. Yes.
B. No.
C. It depends on x.


A. Yes.
B. No.
C. It depends on x.

117. The ages of job applicants for a security guard position are uniformly distributed between
25 and 65. Could a 25-year-old job applicant be two standard deviations below the mean (or
more than two standard deviations)?

A. Yes.
B. No.
C. Impossible to determine from given information.

Chapter 07 Continuous Probability Distributions Answer Key

True / False Questions

1. A continuous uniform distribution is always symmetric.

TRUE
The PDF is the same height for all X values.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-02 Calculate uniform probabilities.
Topic: Uniform Continuous Distribution

2. The height and width of a continuous uniform distribution's PDF are the same.

FALSE
The PDF height must be 1/(b - a) so that the total area is unity.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy

3. A continuous uniform distribution U(0,800) will have μ = 400 and σ = 230.94.

TRUE
Apply the formulas for the mean and standard deviation.

AACSB: Analytic
Blooms: Apply
Difficulty: 2 Medium

4. A continuous uniform distribution U(100,200) will have the same standard deviation as a
continuous uniform distribution U(200,300).

TRUE
In the standard deviation formula, (b - a)2 is the same for both these examples.

AACSB: Analytic
Blooms: Apply

5. For a continuous uniform distribution U(200,400), the parameters are μ = 300 and σ =
100.

FALSE
The standard deviation is [(400 - 200)2/12]1/2 = 57.7.

AACSB: Analytic
Blooms: Apply

6. The exponential distribution describes the number of arrivals per unit of time.

FALSE
Arrivals per unit of time would be Poisson (but waiting time is exponential).

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-07 Find the exponential probability for a given x.
Topic: Exponential Distribution

7. The exponential distribution is always skewed right.

TRUE
The PDF clearly shows extreme right-skewness.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy

8. If arrivals follow a Poisson distribution, waiting times follow the exponential distribution.

TRUE
Review the definition of an exponential distribution.

AACSB: Analytic
Blooms: Understand
Difficulty: 1 Easy

9. The triangular distribution is used in "what-if" analysis for business planning.

TRUE
Simplicity in visualizing planning scenarios is an attraction of the triangular distribution.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-09 Use the triangular distribution for "what-if" analysis (optional).
Topic: Triangular Distribution (Optional)

10. The triangular distribution is symmetric.

FALSE
Triangular distribution is symmetric only if the mode is at the axis midpoint.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy

11. The triangular distribution T(0,10,20) is skewed left.

FALSE
Only left-skewed if the mode is right of the axis midpoint.

AACSB: Analytic
Blooms: Apply

12. A triangular distribution can be skewed either left or right.

TRUE
Left-skewed if the mode is right of the axis midpoint, and vice versa.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy

13. For a continuous random variable, the total area beneath the PDF will be greater than zero
but less than one.

FALSE
The total area must be 1 if it is a PDF.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-01 Define a continuous random variable.
Topic: Describing a Continuous Distribution

14. The exponential distribution is continuous and the Poisson distribution is discrete, yet the
two distributions are closely related.

TRUE
Poisson arrivals (discrete) imply exponential waiting times (continuous).

AACSB: Analytic
Blooms: Understand

15. The mean, median, and mode of a normal distribution will always be the same.

TRUE
A normal distribution is perfectly symmetric.

AACSB: Analytic
Blooms: Remember
Learning Objective: 07-03 Know the form and parameters of the normal distribution.
Topic: Normal Distribution

16. There is a simple formula for normal areas, but we prefer a table for greater accuracy.

FALSE
We have a formula for the PDF, but there is no exact formula for areas under the curve.

AACSB: Analytic
Blooms: Understand

17. Normal distributions differ only in their means and variances.

TRUE
All normal distributions look the same except for scaling.

AACSB: Analytic
Blooms: Understand
Difficulty: 1 Easy

18. Any normal distribution has a mean of 0 and a standard deviation of 1.

FALSE
Only the standardized normal is N(0,1).

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy

19. We would use a normal distribution to model the waiting time until the next Florida
hurricane strike.

FALSE
Hurricane arrivals might be regarded as Poisson events, so waiting times are exponential.

AACSB: Analytic
Blooms: Apply

20. Experience suggests that 4 percent of all college students have had a tonsillectomy. In a
sample of 300 college students, we need to find the probability that at least 10 have had a
tonsillectomy. It is acceptable to use the normal distribution to estimate this probability.

TRUE
The quick rule is nπ ≥ 10 and n(1 - π) ≥ 10, which is the case in this example.

AACSB: Analytic
Blooms: Apply
Learning Objective: 07-06 Use the normal approximation to a binomial or a Poisson.
Topic: Normal Approximations

21. The normal is a good approximation to the binomial when n is greater than or equal to 10.

FALSE
The quick rule is nπ ≥ 10 and n(1 - π) ≥ 10.

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy

22. The true proportion of accounts receivable with some kind of error is 4 percent for Venal
Enterprises. If an auditor randomly samples 50 accounts receivable, it is acceptable to use
the normal approximation to estimate the probability that fewer than two will contain
errors.

FALSE
The quick rule is nπ ≥ 10 and n(1 - π) ≥ 10, which is not fulfilled in this case.

AACSB: Analytic
Blooms: Apply

23. The normal distribution is a good approximation to the binomial if both π ≥ 10 and n ≥
10.

FALSE
The quick rule is nπ ≥ 10 and n(1 - π) ≥ 10.

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy


FALSE
The quick rule is nπ ≥ 10 and n(1 - π) ≥ 10, which is not fulfilled in this case.

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy


TRUE
The quick rule is nπ ≥ 10 and n(1 - π) ≥ 10, which is fulfilled in this case.

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy

26. The exponential distribution can be either right-skewed or left-skewed, depending on λ.

FALSE
The PDF of the exponential shows that it is always right-skewed.

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy

27. The number of lightning strikes in a day in Miami is a continuous random variable.

FALSE
The "number of . . ." anything is discrete.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy

28. The area under a normal curve is 1 only if the distribution is standardized N(0,1).

FALSE
Any normal distribution has a total area of one under the PDF.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy

29. The area under an exponential curve can exceed 1 because the distribution is right-
skewed.

FALSE
If it's a PDF, the total area under the PDF is one.

AACSB: Analytic
Blooms: Apply

Multiple Choice Questions

follows a continuous uniform distribution from 10 ounces to 16 ounces, the average
amount of water dispensed by the machine is:

A. 12 ounces.
B. 13 ounces.
C. 14 ounces.
D. 16 ounces.
The mean is halfway between the end points of the distribution.

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy

follows a continuous uniform distribution from 10 ounces to 16 ounces, the standard
deviation of the amount of water dispensed is about:

A. 1.73 ounces.
B. 3.00 ounces.
C. 0.57 ounce.
D. 3.51 ounces.

AACSB: Analytic
Blooms: Apply

follows a continuous uniform distribution from 10 ounces to 16 ounces, what is the
probability that 13 or more ounces will be dispensed in a given glass?

A. .1666
B. .3333
C. .5000
D. .6666
Half the area is above 13.

AACSB: Analytic
Blooms: Apply

inclusive. The mean of this distribution is:

A. 30.5.
B. 31.5.
C. 32.5.
D. 33.5.
The mean is halfway between the end points of the distribution.

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy

inclusive. The standard deviation of this distribution is approximately:

A. 52.1.
B. 32.5.
C. 6.85.
D. 7.22.

AACSB: Analytic
Blooms: Apply

inclusive. What is P(30 ≤ X ≤ 40)?

A. .20
B. .40
C. .60
D. .80
The desired area is 10/25 = .40.

AACSB: Analytic
Blooms: Apply

36. The Excel function =800*RAND() would generate random numbers with standard
deviation approximately equal to:

A. 200.
B. 188.
C. 231.
D. 400.

AACSB: Analytic
Blooms: Apply

37. The Excel function =40*RAND() would generate random numbers with standard
deviation approximately equal to

A. 13.33.
B. 20.00.
C. 11.55.
D. 19.27.

AACSB: Analytic
Blooms: Apply

38. If arrivals occur at a mean rate of 3.6 events per hour, the exponential probability of
waiting more than 0.5 hour for the next arrival is:

A. .2407.
B. .1653.
C. .1222.
D. .5000.
P(X > .50) = exp(-3.6 × 0.50) = .1653.

AACSB: Analytic
Blooms: Apply

39. If arrivals occur at a mean rate of 3.6 events per hour, the exponential probability of
waiting less than 0.5 hour for the next arrival is:

A. .7122.
B. .8105.
C. .8347.
D. .7809.
P(X < .50) = 1 - exp(-3.6 × 0.50) = 1 - .1653 = .8347.

AACSB: Analytic
Blooms: Apply

waiting more than 1.5 minutes for the next arrival is:

A. .0202.
B. .0122.
C. .0535.
D. .2564.
P(X > 1.5) = exp(-2.6 × 1.50) = .0202.

AACSB: Analytic
Blooms: Apply

waiting less than 1 minute for the next arrival is:

A. .2019.
B. .7104.
C. .8812.
D. .7981.
(X < 1) = 1 - exp(-1.6 × 1) = 1 - .2019 = .7981.

AACSB: Analytic
Blooms: Apply

42. Bob's z-score for the last exam was 1.52 in Prof. Axolotl's class BIO 417, "Life Cycle of
the Ornithorhynchus." Bob said, "Oh, good, my score is in the top 10 percent." Assuming
a normal distribution of scores, is Bob right?

A. Yes.
B. No.
C. Must have n to answer.
P(Z < 1.52) = .9357.

AACSB: Analytic
Blooms: Apply
Learning Objective: 07-04 Find the normal probability for given z or x using tables or Excel.
Topic: Standard Normal Distribution

43. The lengths of brook trout caught in a certain Colorado stream are normally distributed
with a mean of 14 inches and a standard deviation of 3 inches. What proportion of brook
trout caught will be between 12 and 18 inches in length?

A. .6563
B. .6826
C. .2486
D. .4082
P(12 < X < 18) = P(-.67 < Z < 1.33) = .6568 (from Appendix C) or .6563 using Excel.

AACSB: Analytic
Blooms: Apply

with a mean of 14 inches and a standard deviation of 3 inches. The first quartile for the
lengths of brook trout would be:

A. 16.01 inches.
B. 11.00 inches.
C. 11.98 inches.
D. 10.65 inches.
Using Excel =NORM.INV(.25,14,3) = 11.98, or Q1 = 14 - 0.675(3) = 11.975 using

Appendix C.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 07-05 Solve for z or x for a given normal probability using tables or Excel.

with a mean of 14 inches and a standard deviation of 3 inches. What lower limit should
the State Game Commission set on length if it is desired that 80 percent of the catch may
be kept by fishers?

A. 12.80 inches
B. 11.48 inches
C. 12.00 inches
D. 9.22 inches
Using Excel =NORM.INV(.20,14,3) = 11.475, or X = 14 - 0.84(3) = 11.48 using

Appendix C.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

46. In Melanie's Styling Salon, the time to complete a simple haircut is normally distributed
with a mean of 25 minutes and a standard deviation of 4 minutes. What percent of
customers require less than 32 minutes for a simple haircut?

A. 95.99 percent
B. 99.45 percent
C. 97.72 percent
D. 45.99 percent
Using Excel =NORMDIST(32,25,4,1) = 0.9599, or use z = (32 - 25)/4 = 1.75 with

Appendix C.

AACSB: Analytic
Blooms: Apply

with a mean of 25 minutes and a standard deviation of 4 minutes. The slowest quartile of
customers will require longer than how many minutes for a simple haircut?

A. 3(n + 1)/4 minutes

B. 26 minutes
C. 25.7 minutes
D. 27.7 minutes
Using Excel =NORM.INV(.75,25,4) = 27.698, or Q3 = 25 + 0.675(4) = 27.7 using

Appendix C.

AACSB: Analytic
Blooms: Apply

with a mean of 25 minutes and a standard deviation of 4 minutes. For a simple haircut, the
middle 90 percent of the customers will require:

A. between 18.4 and 31.6 minutes.

B. between 19.9 and 30.1 minutes.
C. between 20.0 and 30.0 minutes.
D. between 17.2 and 32.8 minutes.
The 90 percent range is μ ± 1.645σ.

AACSB: Analytic
Blooms: Apply

49. The area under the normal curve between z = 0 and z = 1 is ______________ the area
under the normal curve between z = 1 and z = 2.

A. less than
B. greater than
C. equal to
The standard normal PDF grows closer to the axis as z increases to the right of zero.

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy

50. The price-earnings ratio for firms in a given industry follows the normal distribution. In
this industry, a firm whose price-earnings ratio has a standardized value of z = 1.00 is
approximately in the highest ______ percent of firms in the industry.

A. 16 percent
B. 34 percent
C. 68 percent
D. 75 percent
About 15.86 percent of the area is above one standard deviation.

AACSB: Analytic
Blooms: Apply

51. A student's grade on an examination was transformed to a z value of 0.67. Assuming a
normal distribution, we know that she scored approximately in the top:

A. 15 percent.
B. 50 percent.
C. 40 percent.
D. 25 percent.
P(Z > 0.67) = 1 - P(Z < 0.67) = 1 - .2514 = .7486.

AACSB: Analytic
Blooms: Apply

52. The MPG (miles per gallon) for a certain compact car is normally distributed with a mean
of 31 and a standard deviation of 0.8. What is the probability that the MPG for a randomly
selected compact car would be less than 32?

A. 0.3944
B. 0.8944
C. 0.1056
D. 0.5596
P(X < 32) = P(Z < 1.25) = .8944.

AACSB: Analytic
Blooms: Apply

53. The probability is .80 that a standard normal random variable is between -z and +z. The
value of z is approximately:

A. 1.28.
B. 1.35.
C. 1.96.
D. 1.45.
For tail areas of .1000 we would use z = 1.282.

AACSB: Analytic
Blooms: Apply

distributed with a mean of 40 minutes and a standard deviation of 10 minutes. What
proportion of the citizens will require less than one hour?

A. 0.4772
B. 0.9772
C. 0.9974
D. 0.9997
P(X < 60) = P(Z < 2.00) = .9772.

AACSB: Analytic
Blooms: Apply

55. The for a citizen to complete the 2010 U.S. Census "long" form is normally distributed
with a mean of 40 minutes and a standard deviation of 10 minutes. The slowest 10 percent
of the citizens would need at least how many minutes to complete the form?

A. 27.2
B. 35.8
C. 52.8
D. 59.6
Using Excel =NORM.INV(.90,40,10) = 52.82, or 40 + 1.282(10) = 52.82 using Appendix

C.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

distributed with a mean of 40 minutes and a standard deviation of 10 minutes. What is the
third quartile (in minutes) for the time required to complete the form?

A. 44.75
B. 46.75
C. 47.50
D. 52.50
Using Excel =NORM.INV(.75,40,10) = 46.75, or Q3 = 40 + 0.675(10) = 46.75 using

Appendix C

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

57. Exam scores were normal in BIO 200. Jason's exam score was one standard deviation

A. 68th
B. 75th
C. 78th
D. 84th
About 15.87 percent of the area lies above one standard deviation.

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy

58. Compared to the area between z = 1.00 and z = 1.25, the area between z = 2.00 and z =
2.25 in the standard normal distribution will be:

A. smaller.
B. larger.
C. the same.
D. impossible to compare without knowing μ and σ.
The normal PDF approaches the axis as z increases beyond zero.

AACSB: Analytic
Blooms: Apply

80. What fraction of applicants would you expect to have scores of 600 or above?

A. 0.0401
B. 0.4599
C. 0.5401
D. 0.0852
P(X > 600) = P(Z > 1.75) = .0401.

AACSB: Analytic
Blooms: Apply

80. What fraction of the applicants would you expect to have a score of 400 or above?

A. 0.2734
B. 0.7734
C. 0.7266
D. 0.7500
P(X > 400) = P(Z > -0.75) = .7734.

AACSB: Analytic
Blooms: Apply

80. The top 2.5 percent of the applicants would have a score of at least (choose the nearest
integer):

A. 606.
B. 617.
C. 600.
D. 646.
Using z = 1.96, we get X = 460 + 1.96 × 80 = 616.8.

AACSB: Analytic
Blooms: Apply


A. 0.0906.
B. 0.9200.
C. 0.4700.
D. 0.3944.
P(Z ≤ 2.17) - P(Z ≤ 1.25) = .0906.

AACSB: Analytic
Blooms: Apply


A. 0.9147.
B. 0.4147.
C. 0.5016.
D. 0.0853.
From Appendix C we get the left tail area of .0853.

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy

64. Assume that X is normally distributed with a mean μ = $64. Given that P(X ≥ $75) =
0.2981, we can calculate that the standard deviation of X is approximately:

A. $20.76.
B. $13.17.
C. $5.83.
D. $7.05.
For a right-tail area of .2981 we need z = -.53, so with x = 75 we set z = (x - μ)/σ and solve
for σ.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

65. The standard deviation of a normal random variable X is $20. Given that P(X ≤ $10) =
0.1841. From this we can determine that the mean of the distribution is equal to:

A. $13.
B. $26.
C. $20.
D. $28.
For a left-tail area of .1841 we need z = -.90, so with x = 10 we set z = (x - μ)/σ and solve
for μ.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

66. The random variable X is normally distributed with mean of 80 and variance of 36. The
67th percentile of the distribution is:

A. 72.00.
B. 95.84.
C. 90.00.
D. 82.64.
Since P(Z < 0.44) = .6700, (from Appendix C) we get 80 + 0.44(6) = 82.64.

AACSB: Analytic
Blooms: Apply

67. The area under the normal curve between the 20th and 70th percentiles is equal to:

A. 0.7000.
B. 0.5000.
C. 0.9193.
Logically, this must be .70 - .20 = .50, as you can verify from Appendix C.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

68. The variable in a normal distribution can assume any value between

A. -3 and +3
B. -4 and +4
C. -1 and +1
D. -∞ and
+∞
Almost all the area is within -3 and +3, but the curve never quite touches the z-axis.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy

69. What are the mean and standard deviation for the standard normal distribution?

A. μ = 0, σ = 0
B. μ = 1, σ = 1
C. μ = 1, σ = 0
D. μ = 0, σ = 1
We have standardized so the mean must be zero.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy

70. Any two normal curves are the same except for their:

A. standard deviations.
B. means.
C. standard deviations and means.
D. standard deviations, means, skewness, and kurtosis.
We write N(μ,σ) so show the similarity of all normals.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy

71. Light bulbs are normally distributed with an average lifetime of 1000 hours and a standard
deviation of 250 hours. The probability that a light bulb picked at random will last less
than 1500 hours is about:

A. 97.72 percent.
B. 95.44 percent.
C. 75.00 percent.
D. 68.00 percent.
P(Z < 1500) = P(Z < 2.00) = .9772 from Appendix C (or from Excel).

AACSB: Analytic
Blooms: Apply

72. To convert a normally distributed variable X into a standard Z score we would:

A. subtract the mean from the original observation and divide the result by the variance.
B. subtract the mean from the original observation and divide the result by the standard
deviation.
C. add the mean and the original observation, then divide by the variance.
D. subtract the mean from the standard deviation and divide by the variance.
Review the z-score transformation.

AACSB: Analytic
Blooms: Understand
Difficulty: 1 Easy

73. Regarding continuous probability distributions, which statement is incorrect?

A. The triangular distribution may be skewed left or right.

B. The uniform distribution is never skewed.
C. The normal distribution is sometimes skewed.
D. The exponential distribution is always skewed right.
Review the characteristics of these four distributions.

AACSB: Analytic
Blooms: Understand

74. Which model best describes your waiting time until you get the next nonworking web
URL ("This page cannot be displayed") as you click on various websites for Florida condo
rentals?

A. Triangular
B. Uniform
C. Normal
D. Exponential
Waiting time until the next event resembles an exponential distribution.

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy

75. On average, a major earthquake (Richter scale 6.0 or above) occurs 3 times a decade in a
certain California county. What is the probability that less than six months will pass
before the next earthquake?

A. .1393
B. .8607
C. .0952
D. .9048
Set λ = 3/120 = 0.025 earthquake/month so P(X < 6) = 1 - exp(-0.025 × 6) = 1 - .8607

= .1393.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

76. If the mean time between in-flight aircraft engine shutdowns is 12,500 operating hours,
the 90th percentile of waiting times to the next shutdown will be:

A. 20,180 hours.
B. 28,782 hours.
C. 23,733 hours.
D. 18,724 hours.
Set λ = 1/12500 and solve for x in left-tail area of 1 - exp(-λx) = .90 by taking logs of both
sides.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 07-08 Solve for x for a given exponential probability.

77. On average, 15 minutes elapse between discoveries of fraudulent corporate tax returns in a
certain IRS office. What is the probability that less than 30 minutes will elapse before the
next fraudulent corporate tax return is discovered?

A. .1353
B. .6044
C. .7389
D. .8647
P(X < 30) = 1 - exp(-λx) = 1 - exp(-(1/15) × 30) = 1 - .1353 = .8647.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

78. If the mean time between unscheduled maintenance of LCD displays in a hospital's CT
scan facility is 4,000 operating hours, what is the probability of unscheduled maintenance
in the next 5,000 hours?

A. .8000
B. .7135
C. .2865
D. .5000
P(X < 5000) = 1 - exp(-λx) = 1 - exp(-(1/4000) × 5000) = 1 - .2865 = .7135.

AACSB: Analytic
Blooms: Apply

breakdowns. What is the probability that less than 6 minutes will elapse before the next
breakdown?

A. .8187
B. .0488
C. .1813
D. .2224
(X < 6) = 1 - exp(-λx) = 1 - exp(-(1/30) × 6) = 1 - .8187 = .1813.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

80. The t line at Vexing Manufacturing Company averages 30 minutes between breakdowns.
The median time between breakdowns is:

A. 30.0 minutes.
B. 35.7 minutes.
C. 25.4 minutes.
D. 20.8 minutes.
Set λ = 1/30 and solve for x in right-tail area of 1 - exp(-λx) = .50 by taking logs of both
sides.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

81. Which probability model is most appropriate to describe the waiting time (working days)
until an office photocopier breaks down (i.e., requires unscheduled maintenance)?

A. Normal
B. Uniform
C. Exponential
D. Poisson
Poisson breakdowns suggest exponential waiting time.

AACSB: Analytic
Blooms: Apply

82. Bob's z-score for the last exam was -1.15 in FIN 417, "Capital Budgeting Strategies." Bob
said, "Yipe! My score is within the bottom quartile." Assuming a normal distribution, is
Bob right?

A. Yes
B. No
C. Must know the class size to answer
The bottom quartile would be below z = -.675 so Bob is indeed below that point.

AACSB: Analytic
Blooms: Apply

83. Exam scores were normal in MIS 200. Jason's exam score was 1.41 standard deviations

A. 68th
B. 75th
C. 84th
D. 92nd
P(Z < 1.41) = .9207.

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy

84. Compared to the area between z = 0.50 and z = 0.75, the area between z = 1.50 and z =
1.75 in the standard normal distribution will be:

A. smaller
B. larger
C. the same
The normal PDF approaches the axis as z increases beyond zero so areas get smaller.

AACSB: Analytic
Blooms: Apply

85. If GMAT scores for applicants at Oxnard Graduate School of Business are N(500, 50)
then the top 5 percent of the applicants would have a score of at least (choose the nearest
integer):

A. 575.
B. 582.
C. 601.
D. 608.
The top 5 percent would require z = 1.645 so x = 500 + 1.645(50) = 582.25.

AACSB: Analytic
Blooms: Apply


A. 0.1091.
B. 0.1203.
C. 0.2118.
D. 0.3944.
Subtract P(Z ≤ 2.26) - P(Z ≤ 1.17).

AACSB: Analytic
Blooms: Apply


A. 0.9573.
B. 0.0446.
C. 0.5016.
D. 0.0427.
Use Appendix C or Excel =NORM.S.DIST(-1.72,1).

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy

88. Excel's =100*RAND() function produces continuous random numbers that are uniformly
distributed between 0 and 100. The standard deviation of this distribution is
approximately:

A. 50.00.
B. 28.87.
C. 33.33.
D. 25.00.
The standard deviation is [(b - a)2/12]1/2 = [(100 - 0)2/12]1/2.

AACSB: Analytic
Blooms: Apply

89. Excel's =RAND() function produces random numbers that are uniformly distributed
between 0 and 1. The mean of this distribution is approximately

A. .5000
B. .2500
C. .3333
D. .2887
The mean is halfway between the end points.

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy

90. Excel's =RAND() function produces random numbers that are uniformly distributed from
0 to 1. What is the probability that the random number exceeds .75?

A. 75 percent
B. 50 percent
C. 25 percent
This is the upper 25 percent.

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy

91. Which is the correct Excel formula for the 80th percentile of a distribution that is N(475,
33)?

A. =NORM.DIST(80, 475, 33,1)

B. =NORM.INV(0.80, 475, 33)
C. =NORM.S.INV((80 - 475)/33)
Review Excel functions in Appendix J.

AACSB: Technology
Blooms: Remember

92. If arrivals follow a Poisson distribution with mean 1.2 arrivals per minute, find the 75th
percentile of waiting times until the next arrival (i.e., 75 percent below).

A. 1.155 minutes (69.3 seconds)

B. 0.240 minute (14.4 seconds)
C. 1.919 minutes (115.1 seconds)
Set λ = 1.2 and solve for x in right-tail area of exp(-λx) = .25 by taking logs of both sides.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

93. A software developer makes 175 phone calls to its current customers. There is an 8
percent chance of reaching a given customer (instead of a busy signal, no answer, or
answering machine). The normal approximation of the probability of reaching at least 20
customers is:

A. .022.
B. .007.
C. .063.
D. .937.
Set n = 175 and π = .08. Calculate μ = nπ = (175)(.08) = 14 and σ = [nπ(1 - π)]1/2 =

[175(.08)(1 - .08)]1/2 = 3.588872. Use x = 19.5 (with the continuity correction) and
calculate the binomial P(X ≥ 20) ≈ P(z ≥ 1.532515) using z = (x - μ)/σ = 1.532515.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

94. For Gardyloo Manufacturing, the true proportion of accounts receivable with some kind
of error is .20. If an auditor randomly samples 225 accounts receivable, what is the
approximate normal probability that 39 or fewer will contain errors?

A. .1797
B. .2097
C. .1587
D. .0544
Set μ = nπ and σ = [nπ(1 - π)]1/2 and convert x = 39.5 (using the continuity correction) to a
z score with z = (x - μ)/σ. Set n = 225 and π = .20. Calculate μ = nπ = (225)(.20) = 45 and
σ = [nπ(1 - π)]1/2 = [225(.20)(1 - .20)]1/2 = 6.000. Use x = 39.5 (with the continuity
correction) and calculate the binomial P(X ≤ 39) ≈ P(z ≤ -.916667) using z = (x - μ)/σ =
-.916667.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

95. A letter is mailed to a sample of 500 homeowners. Based on past experience, the
probability of an undeliverable letter is 0.06. The normal approximation to the binomial
probability of 40 or more undeliverable letters is:

A. 0.9632
B. 0.0368
C. 0.2305
D. 0.7695

[500(.06)(1 - .06)]1/2 = 5.31037. Use x = 39.5 (with the continuity correction) and calculate
the binomial P(X ≥ 40) ≈ P(z ≥ 1.78895) using z = (x - μ)/σ = 1.78895.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

96. In a T-F exam with 100 questions, passing requires a score of at least 60. What is the
approximate normal probability that a "guesser" will score at least 60 points?

A. .0287
B. .4713
C. .0251
D. .0377
A guesser would have a 50 percent chance of a correct answer, so we set π = .50. There
are n = 100 questions, so we calculate μ = nπ = (100)(.50) = 50 and σ = [nπ(1 - π)]1/2 =
[100(.50)(1 - .50)]1/2 = 5. Use x = 59.5 (with the continuity correction) and calculate the
binomial P(X ≥ 60) ≈ P(z ≥ 1.90) using z = (x - μ)/σ = 1.90.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

97. A multiple choice exam has 100 questions. Each question has five choices. What would
be the approximate probability that a "guesser" could achieve a score of 30 or more?

A. 0.0088
B. 0.0062
C. 0.0015
D. 0.4913
A guesser would have a 20 percent chance of a correct answer (1 out of 5) so we set π

= .20. There are n = 100 questions, so we calculate μ = nπ = (100)(.20) = 20 and σ = [nπ(1
- π)]1/2 = [100(.20)(1 - .20)]1/2 = 4. Use x = 29.5 (with the continuity correction) and
calculate the binomial P(X ≥ 30) ≈ P(z ≥ 2.375) using z = (x - μ)/σ = 2.375.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

98. For which binomial distribution would a normal approximation be most acceptable?

A. n = 50, π = 0.05

B. n = 100, π = 0.04
C. n = 40, π = 0.25
D. n = 400, π = 0.02
We want nπ ≥ 10 and n(1 - π) ≥ 10.

AACSB: Analytic
Blooms: Apply

99. Historically, the default rate on a certain type of commercial loan is 20 percent. If a bank
makes 100 of these loans, what is the approximate probability that at least 26 will result in
default?

A. 0.2000
B. 0.0668
C. 0.0846
D. 0.0336

[100(.20)(1 - .20)]1/2 = 4. Use x = 25.5 (with the continuity correction) and calculate the
binomial P(X ≥ 26) ≈ P(z ≥ 1.375) using z = (x - μ)/σ = 1.375.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

100. A company employs 300 employees. Each year, there is a 30 percent turnover rate for
employees. We want to do a normal approximation to the binomial distribution of the
number of employees who leave each year. For this normal approximation, the mean is
______ and the standard deviation is _____.

A. 90, 63
B. 90, 7.937
C. 90, 30
D. 90, 15
Use n = 300 and π = .30, and then calculate μ = nπ and σ = [nπ(1 - π)]1/2.

AACSB: Analytic
Blooms: Apply

101. The probability that a rental car will be stolen is 0.001. If 25,000 cars are rented from
Hertz, what is the normal approximation to the probability that fewer than 20 will be
stolen?

A. .2577
B. .1335
C. .1128
D. .8335
Set n = 25,000 and π = .001. Calculate μ = nπ = (25000)(.001) = 25 and σ = [nπ(1 - π)]1/2 =

[25000(.001)(1 - .001)]1/2 = 4.9975 Use x = 19.5 (with the continuity correction) and
calculate the binomial P(X < 20) ≈ P(z <-1.10055) using z = (x - μ)/σ = -1.10055.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

102. If adult male heights are normally distributed with a mean of 180 cm and a standard
deviation of 7 cm, how high should an aircraft lavatory door be to ensure that 99.9 percent
of adult males will not have to stoop as they enter?

A. 195.7 cm
B. 201.6 cm
C. 207.3 cm
D. 201.4 cm
With Excel we get =NORM.INV(.999,180,7) = 201.63, or Appendix C with z = 3.09.

AACSB: Analytic
Blooms: Apply

103. TotCo is developing a new deluxe baby bassinet. If the length of a newborn baby is
normally distributed with a mean of 50 cm and a standard deviation of 5 cm, what should
be the interior length of the bassinet to ensure that 99 percent of newborn babies will fit,
with a safety margin of 15 cm on each end of the bassinet?

A. 95.45 cm
B. 85.22 cm
C. 91.63 cm
D. 98.92 cm
With Excel we get =NORM.INV(.99,50,5) + 30 = 91.63, or Appendix C with z = 2.33.

AACSB: Analytic
Blooms: Apply


A. 14.
B. 18.
C. 12.
D. 13.
Mean is (4 + 12 + 26)/3.

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy


A. 4.082.
B. 3.775.
C. 3.024.
D. 2.994.
Set a = 0. b = 10, c = 20 and use the triangular standard deviation formula σ = [(a2 + b2 +
c2 - ab - ac - bc)/18]1/2 = 4.082.

AACSB: Analytic
Blooms: Apply


A. 23.
B. 30.
C. 33.
D. 35.
Mean is (5 + 23 + 62)/3.

AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy


A. 9.498.
B. 9.225.
C. 8.498.
D. 7.710.
Set a = 10, b = 20, c = 50 and use the triangular standard deviation formula σ = [(a2 + b2 +
c2 - ab - ac - bc)/18]1/2 = 8.498.

AACSB: Analytic
Blooms: Apply

108. Which statement is incorrect?

A. The triangular distribution always has a single mode.

B. The mean of the triangular distribution is (a + b + c)/3.
C. The triangular distribution is right-skewed.
The triangular distribution may be skewed right or left, and is symmetric only if the mode
is halfway between a and c. Review properties of the triangular distribution.

AACSB: Analytic
Blooms: Remember

109. Bob used a triangular distribution of T(20, 30, 61) to represent his daily commute time


B. The mode of the distribution exceeds the mean.
D. The midrange of the distribution is 40.5.
This triangular distribution is right-skewed. The mean is (20 + 30 + 61)/3 = 37, which
exceeds the mode b = 30. It would be helpful to sketch a graph of the PDF.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

110. Phyllis used a triangular distribution of T(10, 15, 20) to represent her daily commute time


B. The mode of the distribution is at the mean.
D. The midrange of the distribution is 15.
The distribution is symmetric if the mode b lies halfway between the end points. In this
example, (a + c)/2 = (10 + 20)/2 = 15 so the mode b = 15 is halfway between the
minimum and maximum.

AACSB: Analytic
Blooms: Apply

111. In a continuous distribution:

A. P(X < 5) is the same as P(X ≤ 5).

B. P(X < 5) is less than P(X ≤ 5).
C. P(X < 5) is more than P(X ≤ 5).
A point has no area in a continuous CDF.

AACSB: Analytic
Blooms: Understand

112. In a continuous distribution the

A. PDF is usually higher than the CDF.

B. CDF is used to find left-tail probabilities.
C. PDF shows the area under the curve.
D. CDF is usually the same as the PDF.
The CDF shows P(X ≤ x). Review definitions of PDF and CDF.

AACSB: Analytic
Blooms: Understand

113. If the mean waiting time for the next arrival is 12 minutes, what is the median waiting
time?

A. 7.2 minutes
B. 8.3 minutes
C. 9.1 minutes
D. 12 minutes
Set λ = 1/12 minute per arrival and take logs of both sides of exp(-λx) = .50 to solve for x.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

114. If the mean waiting time for the next arrival is 18 minutes, what is the first quartile (25th
percentile) for waiting times?

A. 13 minutes
B. 7.9 minutes
C. 5.2 minutes
D. 3.1 minutes
Set λ = 1/18 minute per arrival and take logs of both sides of exp(-λx) = .75 to solve for x.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard


A. Yes.
B. No.
C. It depends on x.
Area = 1/2 × base × height = .500, which is not 1 so it cannot be a PDF.

AACSB: Analytic
Blooms: Apply


A. Yes.
B. No.
C. It depends on x.
Area = base × height = 2, which is not 1 so it cannot be a PDF.

AACSB: Analytic
Blooms: Apply

117. The ages of job applicants for a security guard position are uniformly distributed between
25 and 65. Could a 25-year-old job applicant be two standard deviations below the mean
(or more than two standard deviations)?

A. Yes.
B. No.
C. Impossible to determine from given information.
Since σ = [(65 - 25)2/12]1/2 = 11.54, we can see that 25 is not 2σ below the mean of 45.

AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard

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Chapter 07

Continuous Probability Distributions

True / False Questions

1. A continuous uniform distribution is always symmetric.

Multiple Choice Questions

A. 3(n + 1)/4 minutes

A. between 18.4 and 31.6 minutes.

A. The triangular distribution may be skewed left or right.

A. =NORM.DIST(80, 475, 33,1)

A. 1.155 minutes (69.3 seconds)

A. n = 50, π = 0.05

A. The triangular distribution always has a single mode.

A. The distribution is right-skewed.

A. The distribution is right-skewed.

A. P(X < 5) is the same as P(X ≤ 5).

A. PDF is usually higher than the CDF.

True / False Questions

1. A continuous uniform distribution is always symmetric.

The PDF is the same height for all X values.

Apply the formulas for the mean and standard deviation.

The standard deviation is [(400 - 200)2/12]1/2 = 57.7.

The PDF clearly shows extreme right-skewness.

Review the definition of an exponential distribution.

Simplicity in visualizing planning scenarios is an attraction of the triangular distribution.

Triangular distribution is symmetric only if the mode is at the axis midpoint.

Only left-skewed if the mode is right of the axis midpoint.

The total area must be 1 if it is a PDF.

Poisson arrivals (discrete) imply exponential waiting times (continuous).

A normal distribution is perfectly symmetric.

All normal distributions look the same except for scaling.

Only the standardized normal is N(0,1).

The quick rule is nπ ≥ 10 and n(1 - π) ≥ 10.

The quick rule is nπ ≥ 10 and n(1 - π) ≥ 10.

The PDF of the exponential shows that it is always right-skewed.

The "number of . . ." anything is discrete.

If it's a PDF, the total area under the PDF is one.

Multiple Choice Questions

The mean is halfway between the end points of the distribution.

The standard deviation is [(16 - 10)2/12]1/2 = 1.73.

Half the area is above 13.

The mean is halfway between the end points of the distribution.

The standard deviation is [(45 - 20)2/12]1/2 = 7.22.

The desired area is 10/25 = .40.

The standard deviation is [(800 - 0)2/12]1/2 = 230.94.

The standard deviation is [(40 - 0)2/12]1/2 = 11.55.

P(X > .50) = exp(-3.6 × 0.50) = .1653.

P(X < .50) = 1 - exp(-3.6 × 0.50) = 1 - .1653 = .8347.

P(X > 1.5) = exp(-2.6 × 1.50) = .0202.

(X < 1) = 1 - exp(-1.6 × 1) = 1 - .2019 = .7981.

P(Z < 1.52) = .9357.

Using Excel =NORM.INV(.25,14,3) = 11.98, or Q1 = 14 - 0.675(3) = 11.975 using

Using Excel =NORM.INV(.20,14,3) = 11.475, or X = 14 - 0.84(3) = 11.48 using

Using Excel =NORMDIST(32,25,4,1) = 0.9599, or use z = (32 - 25)/4 = 1.75 with

A. 3(n + 1)/4 minutes

Using Excel =NORM.INV(.75,25,4) = 27.698, or Q3 = 25 + 0.675(4) = 27.7 using

A. between 18.4 and 31.6 minutes.

The 90 percent range is μ ± 1.645σ.

About 15.86 percent of the area is above one standard deviation.