Suppose the annual returns of Infosys stocks are

approximately normally distributed with a mean of

35% and a standard deviation of 6%.What is the
probability that in the next one year the return will be
less than 28% approximately?

Suppose the annual returns of Strong Steel Co.

stocks are approximately normally distributed with
a mean of 12% and a standard deviation of 1.5%.
Find the probability that in the next one year the
return will be more than 14.25%.

Suppose that the total value of a portfolio is

normally distributed with mean = 1200 (Rs. in
million) and SD = 120 (Rs. in million). What is
the chance that the total value will differ from the
mean value by more than 140 (Rs. in million)?

Suppose the annual returns of IBM stocks are

approximately normally distributed with a mean
of 65% and a standard deviation of 12%. What is
the approximate 90th percentile of the return
distribution?

Government regulations indicate that the total weight

of cargo in a certain kind of airplane cannot exceed
330 kg. On a particular day a plane is loaded with 100
boxes of goods. If the weight distribution for
individual boxes is normal with mean 3.2 kg and
standard deviation 0.4 kg, what is the probability that
the regulations will not be met?

A random sample of 100 observations is to be

drawn from a population with a mean of 40 and a
standard deviation of 25. What is the probability
that the mean of the sample will exceed 45?

An expert is asked to estimate the characteristics of the

monthly disposable income of a population.
She estimates the average value to be Rs. 1000 and that
75% of the population have a disposable income
between Rs. 600 and Rs.1400.
What is the minimum disposable income of the top 5%
of the population?
If the size of the population is 150000, how many people
have a disposable income below Rs. 500?

A proposal has an immediate investment of Rs. 600000.

The estimated life of the proposal is 6 years. The annual
cash earnings are uncertain with an expected value of
annual cash earnings is Rs. 180000.
The required rate of return is 9% per annum.
The annual earning estimate of Rs. 180000 has a 30%
chance of being off by more than Rs. 30000 in either
direction.
The proposal will not be accepted if there is a 15% or
more chance of losing money. Should the proposal be
accepted?

The maintenance department of a large IT company plans to

ascertain the conditions of PCs and the cost of their repair.
There are altogether 10000 PCs, a list of which is maintained by
the company. From this list, in a pilot survey, a simple random
sample of size 100 PCs was selected without replacements.
Technicians were sent out to examine the conditions of the PCs
selected, and to calculate the cost of needed repairs. The results
of this inspection were as follows: sample average repair cost =
Rs. 830; sample standard deviation of repair cost = Rs. 110.
How many additional PCs must be sampled if the estimate of
the total cost of repairing all PCs (formed by pooling the
observations in the pilot and the planned sample) is to be within
Rs. 100000 of the true total cost with probability 90%?

If you buy a lottery ticket in 50 lotteries, in

each of which your chance of winning a prize is
1/100, what is the (approximate) probability
that you will win a prize (a) at least once, (b)
exactly once, and (c) at least twice?

At least one-half of an airplane's engines are

required to function in order for it to operate. If
each engine independently functions with
probability 0.8, is a 4engine plane more likely
to operate than a 2engine plane?

The following information is available about the graduating

batches of a business school during the period 1997-99.
One student is chosen at random from the graduating batch
of each year. Let X be the number of students, out of the
three so selected, who had secured a job with a
multinational. Obtain P(X = x) for x = 0, 1, 2, 3.
Year

Percentage of students
securing a job with a
multinational

1997 1998
40
20

1999
30

A multinational corporation is considering starting a

subsidiary in an Asian country. Management realizes that
the success of the new subsidiary depends, in part on the
ensuing political climate in the target country. Management
estimates that the probability of success (in terms of
resulting revenues of the subsidiary during its first year of
operation) is 0.55 if the prevailing political situation is
favorable, 0.30 if the situation is neutral, and 0.10 if the
political situation is unfavorable. Management further
believes that the probabilities of favorable, neutral and
unfavorable political situations are 0.6, 0.2 and 0.2
respectively. What is the probability of success of the new
subsidiary?

When the economic situation is high, a certain economic

indicator rises with probability 0.6. When the economic
situation is medium, the economic indicator rises with
probability 0.3. When the economic situation is low, a
certain economic indicator rises with probability 0.1. The
economy is high 15% of the time, it is medium with 70% of
the time and it is low 15% of the time. Given that the
indicator has just gone up, what is the probability that the
economic situation is high?

As accounts manager in your company, you

classify 75% of your customers as "good credit"
and the rest as "risky credit" depending on their
credit rating. Customers in the "risky" category
allow their accounts to go overdue 50% of the time
on average, whereas those in the "good" category
allow their accounts to become overdue only 10%
of the time. What percentage of overdue accounts
does customers in the risky credit category hold?

An electronics goods manufacturer specializes in home music systems. In the

recently concluded Board meeting, it was decided to include automobile
music system in their product line.
On the basis of historical data of competitors and their knowledge about the
home music system market, the manufacturer has estimated that at the time
of entering the market, they can expect a market share of 10% or 20% or
30% with probabilities 50%, 30% and 20% respectively.
In order to verify the probability estimates, they conducted a market
research in which they selected 25 prospective buyers from the target
segment and found that 4 of them indicated willingness to buy their proposed
product.
In light of the market research data, what are the revised probabilities for the
expected market share? The company has decided that if there is a more than
70% chance of achieving a market share of 20% or 30%, it will go ahead and
introduce the product? Should the company introduce the product?