Review Questions (9, 10 and 15)
#'s 9 & 10 refer to the following situation. Fifteen (15) companies all bid on oil leases. The following data is a small part of the records on past bids. All monetary amounts are in millions of dollars.
Proven Value Company 1 Company 2
$105.5 $99.5 $107.4
$107.5 $97.1 $101.5
$98.7 $101.5 $103.7
9. Compute the mean error in the signals.
10. Let R be the continuous random variable giving the error in a geologist's estimate for the value of a lease. Experience allows us to assume that R is normal, with R = 0 and R = 10 million dollars. Suppose that the 15 companies form 3 bidding rings of equal sizes. Let M be the random variable giving the mean of the errors for a set of signals for the companies in one of the bidding rings. Compute the standard deviation, M, for M? Round your answer to 3 decimal places.
Question 15 refers to the following situation. A normal random variable X gives the number of ounces of soda in a randomly selected can from a given canning plant. It is known that the mean of X is close to 8 ounces and that X = 0.2 ounces. Let be the mean of a random sample of size n = 4 soda cans.
15. Compute . Sketch a graph of the probability density function for . Use standard deviations to explain why the mean of a sample of size n = 16 cans would be likely to give a better estimate for X than would the mean of a sample of size n = 4 cans.
These are a series of questions regarding business statistics