1.
2. D
Solution:
The credit rating is not numerical data and so we should not use histogram.
3. C
4. B
Solution:
𝐸(𝑋) = 12000 × 0.15 + 14000 × 0.15 + 20000 × 0.4 + 22000 × 0.2 + 30000 × 0.1
= 19300
5. D
Solution:
The proportion in each bar is almost the same.
6. D
Solution:
A is false because we cannot directly compare the strength of the associations by chi-squared
statistics. We should use Crammer’s V.
B is false because we also need to use Crammer’s V to determine the independence as we do not
know the number of columns and the number of rows.
C is false because we do not know the number of columns and the number of rows. We cannot
convert the chi-squared statistic into Crammer’s V.
7. D
Solution:
It is because the trend is downward. Also, the points are close to a straight line.
8. C
Solution:
𝐴 1
𝐶𝑜𝑣 , 1000𝐵 = ∗ 1000 ∗ 𝐶𝑜𝑣(𝐴, 𝐵) = 𝐶𝑜𝑣(𝐴, 𝐵)
1000 1000
9. D
Solution:
A is incorrect because it is not said by the Law of Large Number. The probability is ½ because
the coin is fair.
B is incorrect because the average just converges to 0.5 for many trials but it is not 100% that the
average must be 0.5. We cannot guarantee the next roll must be head.
C is incorrect because the average can change with the number of rolls but it converges to 0.5 for
many trials.
10. D
Solution:
As it is given that the first time is head, we must get at least one head.
11. A
Solution:
If two numbers are both odd or both even, the sum is even. It is obvious that the probability is 0.5
if we use the table to represent all the outcomes.
12. C
Solution:
𝐴 is not necessary to be the complement of 𝐵.
13. D
Solution:
Let 𝐴 = {𝑠𝑖𝑐𝑘 𝑙𝑒𝑎𝑣𝑒},
𝐵 = {𝑏𝑎𝑑 𝑤𝑒𝑎𝑡ℎ𝑒𝑟}
1 1 1 1
𝑃(𝐴 ∩ 𝐵 ) = 𝑃(𝐴) − 𝑃(𝐴 ∩ 𝐵) = 𝑃(𝐴) − 𝑃(𝐴|𝐵)𝑃(𝐵) = − ∗ (1 − ) =
20 40 3 30
14. B
15. B
Solution:
2 𝑤𝑖𝑡ℎ 𝑝 = 0.09
𝑋 = 0 𝑤𝑖𝑡ℎ 𝑝 = 0.42
−2 𝑤𝑖𝑡ℎ 𝑝 = 0.49
𝐸(𝑋) = 2 ∗ 0.09 + 0 ∗ 0.42 − 2 ∗ 0.49 = −0.8
𝑉𝑎𝑟(𝑋) = (2 + 0.8) ∗ 0.09 + (0 + 0.8) ∗ 0.42 + (−2 + 0.8) ∗ 0.49 = 1.68
16. C
Solution:
−1 ≤ 𝐶𝑜𝑟𝑟(𝑋, 𝑌) ≤ 1
𝐶𝑜𝑣(𝑋, 𝑌)
𝐶𝑜𝑟𝑟(𝑋, 𝑌) =
𝑆𝐷(𝑋)𝑆𝐷(𝑌)
17. A
Solution:
We can see that 𝑋 and 𝑌 are independent as 𝑃(𝑋 = 𝑥, 𝑌 = 𝑦) = 𝑃(𝑋 = 𝑥)𝑃(𝑌 = 𝑦) for any
𝑥 and 𝑦.
18. B
Solution:
𝐸(0.5𝑋 + 0.5𝑌) = 0.5 × 0.12 + 0.5 × 0.17 = 0.145
19. D
Solution:
𝑉𝑎𝑟(0.5𝑋 + 0.5𝑌) = 0.5 × 0.4 + 2 × 0.5 × 0.5 × 0.1 × 0.4 × 0.8 + 0.5 × 0.8 = 0.216
𝑆𝐷(0.5𝑋 + 0.5𝑌) = √0.216 = 0.465
20. C
. .
Sharpe ratio of option A: = 0.175
.
. .
Sharpe ratio of option B: = 0.15
.
. .
Sharpe ratio of option C: = 0.204
.
Option C has the highest Sharpe ratio.
21. C
Solution:
The saved amount of customers is summarized as follows:
Purchased Amount
$100 $150
10% $10 $15
Coupon
off
30% $30 $45
off
50% $50 $75
off
And the corresponding probabilities:
Purchased Amount
$100 $150 Marginal Probability
10% 28/64 14/64 28/32
off
30% 3/64 3/64 3/32
Coupon
off
50% 1/64 1/64 1/32
off
Marginal Probability 50% 50% 100%
The required probability = 3/64 + 1/64 + 1/64 = 5/64
22. C
Solution:
(0)𝑝(0) + (25)𝑝(1) + (50)𝑝(2) + (75)𝑝(3) + 100𝑝(4)
= (0)(0.05) + (25)(0.25) + (50)(0.5) + (75)(0.15) + (100)(0.05) = 47.5
23. A
Solution:
𝐸(𝑋 + 𝑌) = 𝐸(𝑋) + 𝐸(𝑌) = 1.5 + 2.2 = 3.7
𝐶𝑜𝑣(𝑋, 𝑌) = 𝑆𝐷(𝑋) × 𝑆𝐷(𝑌) × 𝜌 = 0.4 × 0.5 × 0.95 = 0.19
𝑉𝑎𝑟(𝑋 + 𝑌) = 𝑉𝑎𝑟(𝑋) + 𝑉𝑎𝑟(𝑌) + 2𝐶𝑜𝑣(𝑋, 𝑌) = 0.16 + 0.25 + 2 × 0.19 = 0.79
𝑆𝐷(𝑋 + 𝑌) = 0.8888
24. D
Solution:
𝐸(70𝑋 + 80𝑌) = 1.5 × 70 + 2.2 × 80 = 281
𝑉𝑎𝑟(70𝑋 + 80𝑌) = 4900𝑉𝑎𝑟(𝑋) + 6400𝑉𝑎𝑟(𝑌) + 2 × 70 × 80 × 𝐶𝑜𝑣(𝑋, 𝑌)
= 4900 × 0.16 + 6400 × 0.25 + 2 × 70 × 80 × 0.19 = 4512
𝑆𝐷(70𝑋 + 80𝑌) ≈ 67
If 𝜌 = 0.5, 𝐶𝑜𝑣(𝑋, 𝑌) = 0.4 × 0.5 × 0.5 = 0.1, the variance will be smaller than before, and so
is the standard deviation.
25. B
Solution:
P(A)+P(B)>1, so they must be inclusive.
26. B
Solution:
The distribution is right-skewed.
27. C
Solution:
Tossing a coin repeatedly is a series of independent events, i.e., the probability of landing a head
is always 1/2 in each time.
28. D
Solution:
1
𝑃(one question is answered correctly) = = 25%
4
𝑃(𝑎t least one question is answered wrongly) =
1 – 𝑃(no question is answered wrongly) = 1 – (0.25)(0.25)(0.25) = 98.4375% (which is
closest to 100%)
29. C
Solution:
1 9
(𝑥) + (−1) = 0 𝑥=9
10 10
30. C
Solution:
The new SD = (𝑌 + 𝑌 ) = √2𝑌