A drug company is about to start clinical trials of two new drugs that it has developed to help people to quit smoking. Based on experience and current laboratory results, the drug company believes that there is a 60% chance that both drugs will be accepted and a 20% chance only one will be accepted. If both are accepted the drug company will make $10 million. If one is accepted the drug company will make a $4 million profit, while if both are rejected they will lose $2 million. What is the drug companies expected profit? $6.4 million $7.2 million $10.0 million None of the above Question 2 The owner of a small electronics store is interested in the relationship between the price at which an item is sold (retail or sale price) and the customer's decision on whether or not to purchase an extended warranty. The probability that a customer pays retail price is 0.68. The probability that a customer purchases an extended warranty is 0.35. When a customer pays retail price, the probability that purchase an extended warranty is 0.31. Which of the following statements is TRUE? Price paid and the decision on whether to purchase an extended warranty are statistically independent The probability that a customer pays retail price and purchases an extended warranty is 0.2108 The probability that a customer pays retail price or purchases an extended warranty is 0.7205 None of the above Question 3 If the P(A)=0.3, P(B) = 0.4 and the P(A│B) = 0.2 then the P(A and B) equals 0.06 0.08 0.5 None of the above Question 4 A restaurant routinely surveys customers and asks (among other questions) whether he or she would return and to rate the quality of food. Results from a sample of 400 customers are shown below. What is the probability that a randomly selected customer will return or give a rating of fair? Rating Poor Fair Good Excellent Total Customer will return 8 32 140 80 260 Customer will not return 40 36 56 8 140 Total 48 68 196 88 400 8.00% 17.00% 47.06% None of the Above Question 5 A restaurant routinely surveys customers and asks (among other questions) whether he or she would return and to rate the quality of food. Results from a sample of 400 customers are shown below. What is the probability (as a percentage) that a randomly selected customer will return given that they gave a rating of fair? Rating Poor Fair Good Excellent Total Customer will return 8 32 140 80 260 Customer will not return 40 36 56 8 140 Total 48 68 196 88 400 1. 10.05% 48.06% 83.33% None of the above 0.5 points Question 6 Whenever p=0.5, the binomial distribution will Be symmetric only if n is large Be left skewed Always be symmetric None of the above 0.5 points Question 7 In a recent study, it was found that 40% of customers are unsatisfied with their bank. In a sample of 25 customers, what is the probability of finding at least 15 unsatisfied customers? 0.021 0.034 0.043 None of the above 0.5 points Question 8 In a recent study, it was found that 40% of customers are unsatisfied with their bank. In a sample of 25 customers, what is the probability of finding exactly 5 satisfied customers? 0.007 0.020 0.073 None of the above