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2 Sigma Probability Calculations

1) The standard error of the mean for a sample of size 25 taken from a population with a standard deviation of 5 pounds is 1 pound. 2) According to the Central Limit Theorem, the average of many sample means will tend toward the population mean of 720, even if the underlying data is not normally distributed. 3) For a sample size of 25 taken from a population with a mean of 25 views and standard deviation of 50 views, the standard error is 10 views. The probability that a randomly selected Facebook friend has 20 views or fewer is 30.1%.

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114 views2 pages

2 Sigma Probability Calculations

1) The standard error of the mean for a sample of size 25 taken from a population with a standard deviation of 5 pounds is 1 pound. 2) According to the Central Limit Theorem, the average of many sample means will tend toward the population mean of 720, even if the underlying data is not normally distributed. 3) For a sample size of 25 taken from a population with a mean of 25 views and standard deviation of 50 views, the standard error is 10 views. The probability that a randomly selected Facebook friend has 20 views or fewer is 30.1%.

Uploaded by

rajeev sishodia
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© © All Rights Reserved
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SMMD: Practice Problem Set 2 Solutions

1. (B) We essentially have to find out the SE( X ) = σ/n. Here σ = 5 and n = 25. Thus SE( X
) = 5 /sqrt(25) = 1 lb. Note that the number of days is not relevant in this calculation.

 2 
2. (D) From Central Limit Theorem and related information, X ~ N   ,  . Hence, the
 n 
average of many sample means will tend to the population mean, which is 720.

3. (A) This is an application of Central Limit Theorem. The underlying random variable is
the number of views of a randomly chosen Facebook friend. Here,  = 25, σ = 50, n = 25,
which gives  x  10. All other numbers are not relevant. Based on these, z-value
corresponding to 20 is (20-25)/10 = -0.5 and from the z-table, the corresponding
probability is 30.1%.

4. (D) Here,  = 50, σ = 40, n = 100. Note that the probability of investigation is the same as

probability that the sample mean is beyond $45 and $55. From Central Limit Theorem,

 2 
we know that X ~ N   ,  . We first calculate the standard error of the mean, which is
 n 


 4 . Then, we calculate the z-values corresponding to 45 and 55, which are -1.25 and
n

 
+1.25. Therefore, P 45  X  55  P 1.25  Z  1.25  0.79. Consequently, probability

that the sample mean is beyond the limits is 1 - 0.79 = 0.21.

 
5. (D) In this case, we know that P 45  X  55  0.95 . Thus, the z-value corresponding to
45 and 55 is -1.96 and +1.96 respectively. Using the definition of z-value, we get
55  50
1.96  . Thus,  x  2.55. Finally, using the definition of  x , we obtain
x
40
 2.55, which gives n = 245.86. We choose 250 as the closest integer greater than this
n
number since choosing anything lower will yield a probability of investigation higher
than 0.05.

6. (D) Let Xbar_1 be the 1st sample mean and Xbar_2 be the 2nd sample mean. Both have the
same normal distribution due to CLT with mean 2 and variance of 2^2/ 25 = 0.16. We
are interested in P(Xbar_1>2*Xbar_2), which is the same as P(Xbar_1-2*Xbar_2>0).

Define a new variable Y = Xbar_1-2*Xbar_2, which is also normally distributed because


of the linear combination of random variables, and has mean of -2 and variance of
0.16+4*0.16 = 0.8. Thus, the standard deviation is sqrt(0.8) 0.9. Using the normal
distribution calculations, we get z-value = (0-(-2))/0.9 = 2.22. Thus, P(Y>0) = P(Z>2.22) =
1 – P(Z<=2.22) = 1 – 0.99 = 0.01.

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