Q1 A can hit a target 3 times in 5 shots; B, 2 times in 5 shots; C, 3 times in 4 shots. They fire a volley.

What is
the probability that 2 shots hit?

Q2 There are three brands, say X, Y, and Z of an item available in the market. A consumer chooses exactly
one of them for his use. He never buys two or more brands simultaneously. The probabilities that he
buys brands X, Y, and X and Z are 0.20, 0.16, and 0.45.
(a) What is the probability that he does not buy any of the brands?
(b) Given that a customer bus some brand, what is the probability that he buys brand X?

Q3 An investment consultant predicts that the odds against the price of a certain stock going up during the
next week are 2 : 1 and odds in favour of the price remaining the same are 1 : 3. What is the probability
that the price of the stock will go down during the next week?

Q4 In a colour preference experiment, eight toys are placed in a container. The toys are identical except for
colour two are red, and six are green. A child is asked to choose two toys at random. What is the
probability that the child chooses the two red toys?

Q5 A survey of executives dealt with their loyalty to the company. One of the questions was, ‘If you were
given an offer by another company equal to or slightly better than your present position, would you
remain with the company? The responses of 200 executives in the survey cross-classified with their
length of service with the company are shown below.
Length of Service
Less than 1-5 6 - 10 More than Total
Loyalty 1 Year Years Years 10 Years

Would
remain : 10 30 5 75 120
Would
not remain : 25 15 10 30 80

What is the probability of randomly selecting an executive who is loyal to the company (would remain)
and who has more than 10 years of service.

Q6 A salesman is found to complete a sale with 10 per cent of potential customers contacted. If the sales
man randomly selects two potential customers and calls on them, then (a) what is the probability that
both the calls will result in sales? and (b) what is the probability that the two calls will result in exactly
one sale?
Q7 A departmental store has been the target of many shoplifters during the past month, but owing to
increased security precautions, 250 shoplifters have been caught. Each shoplifter’s sex is noted, also
noted is whether he/she was a first-time or repeat offender. The data are summarized in the table below:

Sex First-Time Offender Repeat Offender

Male 60 70

1
 Female 44 76
Assuming that an apprehended shoplifter is chosen at random, find:
(a) The probability that the shoplifter is male.
(b) The probability that the shoplifter is a first-time offender, given that the shoplifter is male.
(c) The probability that the shoplifter is female, given that the shoplifter is a repeat offender.
(d) The probability that the shoplifter is female, given that the shoplifter is a first time offender.

Q8 The Deputy Commissioner of Police is trying to decide whether to schedule additional patrol units in two
sensitive areas, A and B, in his district. He knows that on any given day during the past year, the
probabilities of major crimes and minor crimes being committed in area A were 0.478 and 0.602,
respectively, and that the corresponding probabilities in area B were 0.350 and 0.523. Assume that
major and minor crimes occur independently of each other and likewise that crimes in the two areas are
independent of each other.
(a) What is the probability that no crime of either type will be committed in the area A on a given
day?
(b) What is the probability that a crime of either type will be committed in the area B on a given
day?
(c) What is the probability that no crime of either type will be committed in either area s on a given
day?

Q9 The result of conducting an examination in two papers, A and B, or 20 candidates were recorded as
under: 8 passed in paper A, 7 passed in paper B, failed, 8 failed in both papers. If out of these candidates
one is selected at random, find the probability that the candidate (a) passed in both A and B, (b) failed
only in A, and (c) failed in A or B.

Q10 Suppose 5 men out of 100 and 25 women out of 1000 are colour blind. A colour blind person is chosen
at random. What is the probability of his being male (assuming that male and females are equal in
proportion).

Q11 A pharmaceutical company through an advertisement in a magazine, estimates that I percent of the
subscribers will buy products. They also estimate that 05 percent of the subscribers will buy products.
They also estimate that 05 percent of nonsubscribers will buy the product and that there is one chance
in 20 that a person is subscriber.
(a) Find the probability that a randomly selected person will buy the products.
(b) If a person buts the products what is the probability he subscribes to the magazine?
(c) If a person does not buy the products what is the probability he subscribes to magazine?

Q12 The mean of binomial distribution is 40 and standard deviation 6. Calculate n, p, and q.
Q13 The normal rate of infection of certain disease in animals is known to be 25 per cent. In an experiment
with 6 animals injected with a new vaccine it was observed that none of the animals caught infection.
Calculate the probability of the observed result.

2
Q14 A famous advertising slogan claims that 4 out of 5 housewives cannot distinguish between two
particular brands of butter. If this claim is valid and 5000 housewives are tested in groups of 5, how many
of these groups will contain 0, 1, 2, 3, 4, and 5 housewives who do not distinguish between the two
products? Assume that the capacity to distinguish between the two brands is randomly distributed so
that Bernoulli trial conditions are satisfied.

Q15 In a town 10 accidents took place in a span of 50 days. Assuming that the number of accidents per day
follows the Poisson distribution, find the probability that there will be three or more accidents in a day.

Q16 The distribution of typing mistakes committed by a typist is given below. Assuming a Poisson distribution,
find out the expected frequencies:
No. of mistakes

Per page : 0 1 2 3 4 5
No. of pages : 142 156 69 27 5 1

Q17 It is given that 30 per cent of electric bulbs manufactured by a company are defective. Find the
probability that a sample of 100 bulbs will contain (i) no defective, and (ii) exactly one defective.

Q18 Suppose that a manufactured product has 2 defects per unit of product inspected. Using Poisson
distribution, calculate the probabilities of finding a product without any defect, 3 defects, and 4
defects.(Given e-2 = 0.135)

Q19 The useful life of certain brand of radial tyre has been found to follow a normal distribution with mean µ
= 38,000 Km and standard deviations = 3000 Km. If a dealer orders 500 tyres for sale, then
(a) Find the probability that a randomly chosen tyre will have a useful life of at least 35,000 Km.
(b) Find the approximate number of tyres that will last between 40,000 and 45,000 Km.
(c) If an individual buys 2 tyres, then what is the probability that these tyres will last at least 38,000
Km each?

Q20 The amount of time consumed by an individual at a bank ATM is found t be normally distributed with
mean µ = 130 seconds and standard deviation σ =5 seconds.
(a) What is the probability that a randomly selected individual will consume less than 100 seconds
at the ATM?
(b) What is the probability that a randomly selected individual will spend between 2 to 3 minutes at
the ATM?
(c) Within what length of time do 20 per cent of individuals complete their job at the ATM?
(d) What is the least amount of time required for individuals with top 5 per cent of required time?

Q21 An aptitude test for selecting officers in a bank was conducted on 1000 candidates. The average score is
42 and the standard deviation of scores is 24. Assuming normal distribution for the scores, find the
(a) Number of candidates whose scores exceed 58.
(b) Number of candidates whose scores lies between 30 and 66.
3
Q22 In a binomial distribution consisting of 5 independent trials, the probability of 1 and 2 successes are
0.4096 and 0.2048, respectively. Find the parameter p of the distribution

Q23 A firm uses a large fleet of delivery vehicles. Their record over a period of time (during which fleet size
utilization may be assumed to have remained suitably constant) shows that the average number of
vehicle unserviceable per day is 3. Estimate the probability on a given day when
(a) All vehicles will be serviceable.
(b) More than 2 vehicles will be unserviceable.

Q24 The Vice-President, HRD of an insurance company, has developed a new training programme that is
entirely self-placed. New employees work at various stages at their own pace; completion occurs when
the material is learned. The programme has been especially effective in speeding up the training process,
as an employee’s salary during training is only 67 per cent of that earned upon completion of the
programme. In the last several years, the average completion time of the programme has been in 44
days, with a standard deviation of 12 days.
(a) What is the probability that an employee will finish the programme between 33 and 42 days?
(b) What is the probability of finishing the programme in fewer than 30 days?

Q25 A diameter of component produced on a semiautomatic machine is known t be distributed normally

with a mean of 10 mm and a standard deviation of 0.1 mm. If a random sample of size 5 is picked up,
what is the probability that the sample mean will be between 9.95 mm and 10.05 mm?

Q26 A marketing research team has determined the standard error of sampling distribution of mean for a
proposed market research sample size of 100 consumers, However, this standard error is twice the level
that the management of the organization considers acceptable. What can be done to achieve an
acceptable standard error for mean?

Q27 Assume that the height of 300 soldiers in an army battalion are normally distributed with mean 68
inches and standard deviation 3 inches. If 80 samples consisting of 25 soldiers each are taken, what
would be the expected mean and standard deviation of the resulting sampling distribution of means if
the sampling is done (a) with replacement and (b) without replacement?

Q28 Out of 20,000 customer’s ledger accounts, a sample of 600 accounts was taken to test the accuracy of
posting and balancing where in 45 mistakes were found. Assign limits within which the number of
defective cases can be expected at 95 per cent level of confidence.

Q29 In an attempt to control the quality of output for a manufactured part, a sample of parts is chosen
randomly and examined in order to estimate the population proportion of parts that are defective. The
manufacturing process operated continuously unless it must be stopped for inspection or adjustment. In
the latest sample of 90 parts, 15 defectives are found. Determine a point estimate and interval estimate
at 98 per cent confidence of population proportion defective.

4
Q30 A TV channel conducted a survey on political stability in the country. Out of 14 adults a total of 562
responded ‘yes’ to the question: Do you feel things are going well in the country these days?
(a) Determine the margin of error at 90 per cent confidence level.
(b) What is the 90 per cent confidence interval for the proportion of the adult population that feels
things are going well in the country?

Q31 A ball pen manufacturer makes a lot of 10,000 refills. The procedure desires some control over these lots
so that no lot will contain an excessive number of defective refills. He decides to take a random sample
of 400 refills for inspection from a lot of 10,000 and finds 9 defectives. Obtain a 90 per cent confidence
interval for the number of defectives in the entire lot.

Q32 Given a population with a standard deviation of 8.6. What sample size is needed to estimate the mean of
population within ±0.5 with 99 per cent confidence?

Q33 An agency responsible for electricity distribution would like to estimate the average electric bills for a
particular month for single- family homes in a large city. Based on studies conducted in other cities, the
standard deviation is assumed to be Rs 40. The agency would like to estimate the average bill for that
month to within ± Rs 10 of the true average. If 95 per cent confidence is desired, then what sample size
is necessary?

Q34 A private TV channel would like to estimate the proportion of voters who vote for a particular political
party’s candidate in the next general election for the Lok Sabha. If he wants to have 95 per cent
confidence that his prediction is within ±0.08 of the population proportion, than what sample size is
needed, considering sampling error of ±0.03?

Q35 A company manufacturing a certain type of breakfast cereal claims that 60 per cent of all housewives
prefer that type to any other. A random sample of 3000 housewives contains 165 who do prefer that
type. At 5 percent level of significance, test the claim of the company.

Q36 A sales clerk in the department store claims that 60 per cent of the shoppers entering the store leave
without making a purchase. A random sample of 50 shoppers showed that 35 of them left without
buying anything. Are these sample results consistent with the claim of the sales clerk? Use a significance
level of 0.05.

Q37 In a random sample of 500 persons belonging to urban areas, 200 are found to be using public transport.
In another sample of 400 persons belonging to rural area 200 area found to be using public transport. Do
the data reveal a significant difference between urban and rural areas so far as the proportion of
commuters of public transport is concerned (use 1 per cent level of significance).

Q38 Nine items a sample had the following values: 45, 47, 50, 52, 48, 47, 49, 53, and 50. The mean is 49 and
the sum of the square of the deviation from mean is 52. Can this sample be regarded as taken from the
population having 47 as mean? Also obtain 95 per cent and 99 percent confidence limits of the
population mean.
5
Q39 The electric bulbs of 10 random samples from a large consignment gave the following data:

Item Life in ‘000 hours

1 4.2
2 4.6
3 3.9
4 4.1
5 5.2
6 3.8
7 3.9
8 4.3
9 4.4
10 5.6
Can we accept the hypothesis that the average life time of the bulbs is 4000 hours.
Q40 Two salesmen A and B are working in a certain district. From a sample survey conducted by the Head
Office, the following results were obtained. State whether there is any significant difference in the
average sales between the two salesmen.
Salesman
A B
No. of samples : 20 18
Average of sales (Rs in thousand) : 170 205
Standard deviation (Rs in thousand) : 20 25

Q41 Eight students were given a test in statistics, and after one month’s coaching, they were given another
test of the similar nature. The following table gives the increase in their marks in the second test over
the first.
Roll No. Increase in marks
1 2
2 -2
3 6
4 -8
5 12
6 5
6
 7 -7
8 2

Q42 An IQ test was administered to 5 persons before and after they were trained. The results are given
below:
Candidate I II III IV V
IQ before training : 110 120 123 132 125
IQ after training : 120 118 25 136 121

Q43 Two tyres of drugs were used on 5 and 7 patients for reducing their weight. Drugs A was imported and
drug B indigenous. The decrease in the weights after using the drugs for six months was as follows:
Drugs A : 10 12 13 11 14 10 9
Drugs B : 8 9 12 14 15

Is there a significant difference in the efficacy of the two drugs? If not, which drug should you buy?

Q44 A company is interested in finding out if there is any difference in the average salary received by the
mangers of two divisions. Accordingly, samples of 12 managers of the first division and 10 mangers of
the second division where selected at random. The results are given below:

First Second
Division Division
Sample size 12 10
Average monthly salary 12,500 11,200
Standard deviation 320 480

Apply the t-test to find out whether there is a significant difference in the average salary.

Q45 The sales data of an item in six shops before and after a special promotional campaign promotional
campaign are as under:

Shops : A B C D E F
Before campaign : 53 28 31 48 50 42
After campaign : 58 29 30 55 56 45

Can the campaign be judged to be a success? Test at 5 per cent level of significance.

Q46 In an experiment on immunization of cattle from tuberculosis, the following results were obtained:

Affected Not Affected

7
 Inoculated 12 26
Not inoculated 16 6

Calculate the χ2 and discuss the effect of vaccine in controlling susceptibility to tuberculosis.

Q47 From the data given below about the treatment of 250 patient suffering from a disease, state whether
the new treatment is superior to the conventional treatment.

Treatment No. of Patients

Favourable Not Favourable Total
New 140 30 170
Conventional 60 20 80
Total 200 50 250

Q48 1000 students at college level are graded according to their IQ and their economic conditions. Use
chi-square test to find out whether there is any association between economic conditions and the level
of IQ.

Economic IQ Level
Conditions High Medium Low Total
Rich 160 300 140 600
Poor 140 100 160 400
Total 300 400 300 1000

Q49 200 digits are chosen at random from a set of tables. The frequencies of the digits are as follows:

Digit : 0 1 2 3 4 5 6 7 8 9
Frequency : 18 19 23 21 16 25 22 20 21 15
Use the χ2 test to assess the correctness of the hypothesis that the digits were distributed in equal
numbers in the tables from which they were chosen.
Q50 A sample analysis of examination results of 500 students was made. It was found that 220 students had
failed, 170 had secured a third class, 90 were placed in second class, and 20 got a first class. Are these
figures commensurate with the general examination result which is in the ration of 4 : 3 : 2 : 1 for the
various categories respectively.
Q51 A set of 5 coins is tossed 3200 times, and the number of heads appearing each time is noted. The results
are given below:
No. of heads : 0 1 2 3 4 5
Frequency : 80 570 1100 900 50 50
Test the hypothesis that the coins are unbiased.
Q52 The number of scooter accidents per week in a certain town were as follows:
12 8 20 2 14 10 15 6 9 4
Are these frequencies in agreement with the belief that accident conditions were the same during this
10-week period?
8
Q53 Calculate the coefficient of correlation from the following data:
x : 100 200 300 400 500 600 700
y : 30 50 60 80 100 110 130

Q54 Find the coefficient of correlation from the following data:

Cost : 39 65 62 90 82 75 25 98 36 78
Sales : 47 53 58 86 62 68 60 91 51 84

Q55 The coefficient of correlation between two variables x and y is 0.3. The covariance is 9. The variance of x
is 16. Find the standard deviation of y series.

Q56 The ranking of 10 students in accordance with their performance in two subjects A and B are as follows:
A : 6 5 3 10 2 4 9 7 8 1
B : 3 8 4 9 1 6 10 6 5 2
Calculate the rank correlation coefficient and comment on its value.

Q57 Seven methods of imparting business education were ranked by the MBA students of two universities as
follows:
Method of Teaching : 1 2 3 4 5 6 7
Rank by students
Of Univ. A : 2 1 5 3 4 7 6
Rank by students
Of Univ. B : 1 3 2 4 7 5 6

Calculate the rank correlation coefficient and comment on its value.

Q58 The personnel department is interested in comparing the ratings of job applicants when measured by a
variety of standard tests. The ratings of 9 applicants on interviews and standard psychological test are
shown below:
Applicant : A B C D E F G H I
Interview : 5 2 9 4 3 6 1 8 7
Standard test : 8 1 7 5 3 4 2 9 6

Calculate Spearman’s rank correlation coefficient and comment on its value.

Q59 The following data give the experience of machine operators and their performance ratings given by the
number of good parts turned out per 100 pieces:
Operator : 1 2 3 4 5 6 7 8
Experience(x) : 16 12 18 4 3 10 5 12
Performance
Ratings (y) : 87 88 89 68 78 80 75 83

9
 Calculate the regression lines of performance ratings on experience and estimate the probable
performance if an operator has 7 years experience.

Q60 The following table gives the aptitude test scores and productivity indices of 10 workers selected at
random:
Aptitude
Scores (x) : 60 62 65 70 72 48 53 73 65 82
Productivity
index (y) : 68 60 62 80 85 40 52 62 60 81
Calculate the two regression equations and estimate (a) the productivity index of a worker
whose test score is 92, (b) the test score of worker whose productivity index is 75.

Q61 The following data relates to the scores obtained by a salesmen of a company in an intelligence test and
their weekly sales (in Rs. 1000’s):
Salesman
intelligence : A B C D E F G H I
Test score : 50 60 50 60 80 50 80 40 70
Weekly sales : 30 60 40 50 60 30 70 50 60

(a) Obtain the regression equation of sales on intelligence test scores of the salesmen.
(b) If the intelligence test score of a salesman is 65, what would be his expected weekly sales?

Q62 you are given below the following information about advertisement expenditure and sales:

Adv. Exp. (x) Sales (y)

(Rs in crore) (Rs in crore)
Mean 20 120
Standard deviation 5 25

Correction coefficient 0.8

(a) Calculate the two regression equations.
(b) Find the likely sales when advertisement expenditure is Rs 25 crore.
(c) What should be the advertisement budget if the company wants to attain sales target of Rs 150
crore?

Q63 A financial analyst has gathered the following data about the relationship between income and
investment in securities in respect of 8 randomly selected families:
Income : 8 12 9 24 43 37 19 16
10
 (Rs in 1000’s)
Per cent invested
In securities : 36 25 33 15 28 19 20 22
(a) Develop an estimating equation that best describes these data.
(b) Find the coefficient of determination and interpret it.
(c) Calculate the standard error of estimate for this relationship.
(d) Find an approximate 90 per cent confidence interval for the percentage of income invested
in securities by a family earning Rs. 25,000 annually.

Q64 The equation of regression line is

Ŷ = 50.506 – 1.646x
and the data are as follows:
x: 5 7 11 12 19 25
y: 47 38 32 24 22 10
Solve for residuals and graph a residual plot. Do these data seem to violate any of the assumptions of
regression?

Q65 The following matrix gives the payoff (in Rs) of different strategies (alternatives) S1 , S2 , and S3 against
conditions (events) N1 , N2 , N3 , and N4 .

States of Nature
Strategy N1 N2 N3 N4
S1 4000 - 100 6000 18000
S2 20,000 5000 400 0
S3 20,000 15,000 -2000 1000

Indicate the decision taken under the following approaches: (a) Pessimistic, (b) Optimistic, (c) Equal
probability, (d) Regret, (e) Hurwicz criterion. The degree of optimism being 0.7.

Q66 The following is a payoff (in rupees) table for three strategies and two states of nature:

State of Nature
Strategy N1 N2
S1 40 60
S2 10 -20
S3 -40 150

Q67 A manufacture’s representative has been offered a new product line. If he accepts the new line he can
handle it in one of the two ways. The best way according to the manufacturer would be to have a
separate sales force to handle the new line exclusively. This would involve an initial investment of Rs
1,00,000 in the office, equipment, and the hiring and training of the salesmen. On the other hand, if the
new line could be handled by the existing sales force using the existing facilities, the initial investment
would be only Rs 30,000, principally for training of his present salesmen.
11
 The new product sells for Rs 250. The representative normally receives 20 per cent of the sale price
on each unit sold of which 10 per cent is paid as commission to handle the new product. The
manufacturer offers to pay 60 per cent of the sale price of each unit sold to the representative if the
representative sets up a separate sale organization. Otherwise the normal 20 per cent will be paid. In
either case the salesman gets a 10 per cent commission. Based on the size of the territory and
experience with other products, the representative estimates the probabilities of annual sales of the
new product:

Sales (in units) Probability

1000 0.10
2000 0.15
3000 0.40
4000 0.30
5000 0.05

(a) Set up a regret table.

(b) Find the expected regret of each course of action.
(c) Which course of action would have been best under the maximin criterion?

Q68 A manufacturing company has just developed a new product. On the basis of past experience, a product
such as this will either be successful, with an expected gross return of Rs. 1, 00,000, or unsuccessful, with
an expected gross return of Rs 20,000. Similar products manufactured by the company have a record of
being successful about 50 per cent of the time. The production and marketing costs of the new product
are expected to be Rs. 50,000.
The company is considering whether to market this new product or to drop it. Before making its
decision, a test marketing effort can be conducted at a cost of Rs 10,000. Based on past experience, test
marketing result have been favorable about 70 per cent of the time. Furthermore, products favorably
tested have been successful 80 per cent of the time. However, when the test marketing result has been
unfavorable, the product has been successful only 30 per cent of the time. What course of action should
the company pursue?

Q69 The XYZ Company manufactures guaranteed tennis balls are defective. A defective ball leaving the
factory costs the company Rs. 0.05 to honour its guarantee. Assume that all defective balls are returned.
At a cost of Re 0.10 per ball, the company can conduct a test, which always correctly identifies both good
and bad tennis balls.
(a) Draw a decision tree and determine the optimal course of action and its expected cost.
(b) At what testing cost should the company be indifferent to testing?

12
Q70 XYZ company, dealing with a newly invented telephone device, is faced with the problem of selecting on
of the following courses of action available:-
(a) Manufacture the device itself; or
(b) Be paid on a royalty basis by another manufacture; or
(c) Sell the rights for its invention for a lump sum.
The profit (Rs in ‘000s) which can be expected in each case and the probabilities associated with the
level of sales are shown in the following table:

Outcome Prob Manufacture Royalties Sell all

Itself Right
High sales 0.1 75 35 15
Medium sales 0.3 25 20 15
Low sales 0.6 -10 10 15

Represent the company’s problem in the form of a decision tree. Redraw the decision tree further by
introducing the following additional information:
(a) If it manufactures itself and sales are medium or high, then company has the opportunity of
developing a new version of the telephone;
(b) From past experience the company estimates that there is a 50 per cent chance of successful
development.
(c) The cost of development is Rs 15 and returns after deduction of development cost are Rs 30 and
Rs 10 for high and medium sales, respectively.

Q71 You are given the following payoffs of three acts A1, A2, and A3 and the events E1, E2, E3.

States of Three Acts

Nature A1 A3 A3
E1 25 -10 -125
E2 400 440 400
E3 650 740 750
The probabilities of the states of nature are 0.1, 0.7, and 0.2 respectively. Calculate and tabulate, EMV
and conclude which of the course of action can be chosen as the best.

Q72 A grocery with a bakery department is faced with the problem of how many cakes to buy in order to
meet the day’s demand. The grocer prefers not to sell day-old goods in competition with fresh products;
leftover cakes are, therefore, a complete loss. On the other hand, if a customer desires a cake and all of
them have been sold, the disappointed customer will buy form elsewhere and the sale will be lost. The
grocer has, therefore, collected information on the past sales on a selected 100-day period as shown in
table below:
Sales per Day No. of Days Probability
25 10 0.10
26 30 0.30
27 50 0.50
13
 28 10 0.10
Construct the payoff table and the opportunity loss table. What is the optimal number of cakes that
should be bought each day? Also find and interpret the EVPI (Expected Value of Perfect Information). A
cake costs Re 0.80 and sells for Re 1.

14