- 20 Marks
QT – Nov 2018 – L1 – Q7 – Probability
Calculate expected returns for investments, determine optimal strategy, and analyze student error distribution.
Question
Royal Driving School is considering investing in a profitable project. The school is given the following investment alternatives and percentage rates of return.
Over the past 300 days, market conditions have been moderate for 150 days and good for 60 days.
Required:
i) Calculate the expected return for each type of investment. (4 marks)
ii) Determine the optimum investment strategy for Royal Driving School. (3 marks)
b) The number of errors made by 294 students of Royal Driving School in their first attempt at a driving test is grouped in the following frequency distribution:
| Number of Errors | Number of Students |
|---|---|
| 7 – 13 | 3 |
| 14 – 20 | 12 |
| 21 – 27 | 23 |
| 28 – 34 | 44 |
| 35 – 41 | 54 |
| 42 – 48 | 56 |
| 49 – 55 | 43 |
| 56 – 62 | 24 |
| 63 – 69 | 23 |
| 70 – 76 | 12 |
Required:
i) Compute an estimate of the mean and mode for the distribution. (3 marks)
ii) Construct an ogive for the distribution. (4 marks)
iii) Using the ogive in (ii) above, estimate the median for the distribution. (3 marks)
iv) Use the ogive in (ii) above to estimate the percentage of errors within one standard deviation of the mean. (3 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Errors, Expected Return, Frequency Distribution, Investment strategy, Ogive, Probability
- Level: Level 1
- Topic: Probability
- Series: NOV 2018