Explore BrainMass

Statistics - Probability

An oil explorer orders seismic tests to determine whether oil is likely to be found in a certain drilling area. The seismic tests have a known reliability: when oil does exist in the testing area, the test will
indicate so 90% of the time; when oil does not exist in the test area, 5% of the time the test will erroneously indicate that it does exist. The explorer believes that the probability of an oil deposit in the area is 0.4. If a test is conducted and indicates the presence of oil, what is the probability that an oil deposit exists?
a. 0.9231
b. 0.9000
c. 0.8825
d. 0.8573

The amounts of money requested on home loan applications at Easy Federal Savings and Loan Association follow a normal distribution, with a mean of $320,611.00, and a standard deviation of $84,321.00. A loan application is received this morning. What is the probability?

a. The amount requested is $400,000.00 or more.
b. The amount requested is between $300,000.00 and $350,500.00.
c. How would you characterize the symmetric range consisting of 90% of the mortgages.

Solution Summary

A Complete, Neat and Step-by-step Solution is provided in the attached file.