BNAD 277 Ch05-Ch-07-Prep-Questions

Ch05 - Ch 7. prep questions
Analytical Methods for Business (University of Arizona)
lOMoARcPSD|3013804
ch05
Student:
1. A random variable is a function that assigns numerical values to the outcomes of a random experiment.
True False
2. A discrete random variable X may assume an (infinitely) uncountable number of distinct values. True False
3. A continuous random variable X assumes an (infinitely) uncountable number of distinct values. True False
4. A probability distribution of a continuous random variable X gives the probability that X takes on a particular value x, P(X = x).
True False
5. A cumulative probability distribution of a random variable X is the probability P(X = x), where X is equal to a particular value x.
True False
6. The expected value of a random variable X can be referred to as the population mean. True False
7. The variance of a random variable X provides us with a measure of central location of the distribution of
X.
True False
8. The relationship between the variance and the standard deviation is such that the standard deviation is the positive square root of the variance.
True False
9. A risk-averse consumer may decline a risky prospect even if it offers a positive expected value. True False
10. A risk averse consumer ignores risk and makes his/her decisions solely on the basis of expected value.
True False
11. Given two random variables X and Y, the expected value of their sum, , is equal to the sum of
their individual expected values, . True False
12. A Bernoulli process consists of a series of n independent and identical trials of an experiment such that in each trial there are three possible outcomes and the probabilities of each outcome remain the same.
True False
13. A binomial random variable is defined as the number of successes achieved in n trials of a Bernoulli process.
True False
14. A Poisson random variable counts the number of successes (occurrences of a certain event) over a given interval of time or space.

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