OPRE 3360 Exam 2 EXAM QUESTIONS & ANSWERS

OPRE 3360 Exam 2

sample variance (σ^2) - correct answer✔ ✔ (Xi - sample mean)^2 /
(n-1)



sample proportion (p bar) - correct answer✔ ✔ Xi: 0,1 responses



p bar - correct answer✔ ✔ sum of mean of all responses/n



sample error - correct answer✔ ✔ sample statistic - true population
value


x-μ


p bar - p


right skewed (positively skewed) - correct answer✔ ✔ -long right
tail
-large weight on the left
-median < mean

,Xi ~ N (nμ, sqrt(n)σ) - correct answer✔ ✔ ex: mean= 800

n= 40
std dev= 600
what is prob that ______ is >= 40,000


N(40x800, sqrt(40) x 600)= N(32000, 3795)


1-norm.dist(40,000, 32,000, 3795, 1)



sample mean x - correct answer✔ ✔ sum/n ~ N(μ, σ/sqrt(n)



sampling error - correct answer✔ ✔ ~ N(0, σ/sqrt(n))



standard sampling error - correct answer✔ ✔ (x-μ) / (σ- sqrt(n)) ~
N(0,1)



sample proportion - correct answer✔ ✔ special case of sample mean

p bar= # of yes / n Xi= 1(yes), 0(n)


μ= E[Xi] = p
Var[Xi]= p(1-p)

, σ = sqrt(p(1-p))
p bar~ N(p, sqrt(p(1-p)/n)
p(p bar =< #) = p(z =< #-p/p bar)


n>= 30
np>= 5, n(1-p)>= 5



biggest mistake by AIG - correct answer✔ ✔ assumed that the
individual CDS were independent


business model for insurance companies entirely depends on the CLT


point estimate - correct answer✔ ✔ single # computed from sample:
x bar or p bar


confidence interval - correct answer✔ ✔ point estimate -+ margin of
error



confidence lvl - correct answer✔ ✔ (1-α)

-how likely (in repeated trial sense) the interval contains the true value
of the parameter in %
ex: 1-α= .9 (90% confidence)