Stat 366 Lab 1 Solutions (September 14, 2006)

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TA: Yury Petrachenko, CAB 484, yuryp@ualberta.ca, http://www.ualberta.ca/yuryp/

Review Questions, Chapters 2, 3, 4, 7, 8

2.105 A study of the residents of region showed that 20% were smokers. The probability of death
due to lung cancer, given that a person smoked, was ten times the probability of death due to
lung cancer, given the person did not smoke. If the probability of death due to lung cancer in
the region is .006, what is the probability of death due to lung cancer given that the person
is a smoker?

Solution. Consider an experiment consisting of a random selection of a late resident in the

area. Some of those who died were smokers. Lets denote S the event that the selected person
smoked. Now, some of the deaths were due to lung cancer. Denote D the event that the
person died because of lung cancer.
It is stated in the problem that P (S) = 0.2 and P (D) = 0.006. We are also given that
P (D|S) = 10 P (D|S), or P (D|S) = 0.1 P (D|S), where S is the event that the person didnt
smoke.
Lets apply the law of total probability to P (D) conditioning on S and S:
P (D) = P (D|S)P (S) + P (D|S)P (S).
Substitute all available information into this equation:
0.006 = P (D|S) 0.2 + 0.1 P (D|S) (1 0.2).
Now, P (D|S) = 0.0021.

3.42 A particular sale involves four items randomly selected from a large lot that is known to
contain 10% of defectives. Let Y denote the number of defectives among the four sold. The
purchaser of the items will return the defectives for repair, and the repair cost is given by
C = 3Y 2 + Y + 2. Find the expected repair cost.

Solution. A binomial model is depicted here. There are n = 4 trials of selecting an item from
a large lot. There are two outcomes each time: an item is either defective or not. Assuming
the lot is large enough, the trials are independent. Since Y is the number of defectives, it
makes sense to consider finding a defective success. Then, p = 0.1 and Y Binomial(n, p).

Stat 366 Lab 1 Solutions (September 14, 2006)

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To find the expected repair cost C, lets use the linearity of expected values:
E[C] = E[3Y 2 + Y + 2] = 3E[Y 2 ] + E[Y ] + E[2].
The expectation of 2 is 2. The expectation of Y is np (since we know the distribution of this
random variable), so E[Y ] = 4 0.1 = 0.4. To find E[Y 2 ] recall the formula

2
V [Y ] = 2 = E[Y 2 ] 2 = E[Y 2 ] E[Y ] .

2
We have E[Y 2 ] = V [Y ] + E[Y ] = npq + (0.4)2 = 0.36 + 0.16 = 0.52. Lets finally plug
everything in: E[C] = 3 0.52 + 0.4 + 2 = 3.96.

3.107 A salesperson has found that the probability of a sale on a single contract is approximately .03.
If the salesperson contacts 100 prospects, what is the approximate probability of making at
least one sale?

Solution. If we ignore the word approximate, we can approach this problem with a binomial
distribution. There are n = 100 prospects, seemingly independent, with the salesperson
making a single sale with the probability p = 0.03 in each of the 100 cases. The question can be
reformulated in terms of probabilities as follows. Find P (Y 1) if Y is distributed binomially
P
with parameters n and p. To answer this question lets use the fact that
P (Y = y) = 1,
and Y takes values from 0, 1, 2, . . . , 100. So,

100
P (Y 1) =
P (Y = y) = 1 P (Y = 0) = 1
(0.03)0 (0.97)100 0.9524.
0
y=1
100
X

To find a truly approximate value, we can use the Poisson distribution. In this case, since p
is close to zero, the variance and expected value doesnt differ much. So, let = np = 3 and
assume that Y follows the Poisson distribution:
P (Y = y) =

y
e ,
y!

y = 0, 1, 2, . . .

With this assumption,

P (Y 1) = 1 P (Y = 0) = 1

30
e = 1 e3 0.9502.
0!

The second method is faster and implements a model with one parameter only.

Stat 366 Lab 1 Solutions (September 14, 2006)

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7.23 An anthropologist wishes to estimate the average height of men for a certain race of people. If
the population standard deviation is assumed to be 2.5 inches and if she randomly samples 100
men, find the probability that the difference between the sample mean and the true population
mean will not exceed .5 inches.

Solution. The anthropologist assumes = 2.5. Because n = 100 is large enough (> 30),
we can use the Central Limit Theorem to justify that the distribution of Y is Normal. Lets
assume that the true population mean is . The investigator wants to know the probability
that the absolute value of the difference between and Y is not larger than 0.5 inches.
By the CLT we have
Y
1
b)
P (a
2
/ n

et

2 /2

dt,

where the right-hand part is just the area below the bell curve. It is available in the tables at
the end of the textbook.
Applying the theorem to our case, we have
P (|Y | 0.5) = P (0.5 Y 0.5)
= P (

Y
0.5
0.5

) P (2 Z 2) 0.9544.
2.5/ 100
2.5/ 100
2.5/ 100

(Z is a standard Normal.) So, the probability is about 95%.

8.2 Suppose that E(1 ) = E(2 ) = , V (1 ) = 12 , and V (2 ) = 22 . Consider the estimator

3 = a1 + (1 a)2 .
(a) Show that 3 is an unbiased estimator for .
(b) If 1 and 2 are independent, how should the constant a be chosen in order to minimize
the variance of 3 ?

Solution. To prove that 3 is unbiased, consider its expectation:

E[3 ] = E[a1 + (1 a)2 ] = aE[1 ] + (1 a)E[2 ] = a + (1 a) = .
To answer (b) we need the formula for the variance of 3 as a function of a. Because 1 and
2 are independent, the variance is additive. Recall also that V [aX] = a2 V [X] We have:
V [3 ] = V [a1 + (1 a)2 ] = a2 V [1 ] + (1 a)2 V [2 ] = a2 12 + (1 a)2 22 .

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We want this function minimized. Denote

f (a) = a2 12 + (1 a)2 22 ,

then

f 0 (a) = 2a12 2(1 a)22 = 0,

and solving for a:
a=

22
.
12 + 22

This value of a minimizes the variance of the third estimator.

8.11 Let Y1 , Y2 , . . . , Yn denote a random sample of size n from a population whose density is given
by

3 3 y 4 , y,
f (y) =

0, elsewhere

where is unknown. Consider the estimator = min(Y1 , Y2 , . . . , Yn ).

(a) Derive the bias of the estimator .

(b) Derive MSE().

Solution. See Prof. Prasads notes.