Business Mathematics IHomework 4Solution.Solution.Business Mathematics IHomework 4Prepared forStephen ReyesMath 115a, Section University of Arizona ByTeam #Submitted onDateWe, the undersigned, affirm that all of us participated fully and equally in the completion of this assignment and that the work contained herein is original. Furthermore, we understand that sanctions will be imposed individually as well as jointly if any part of this work is found to violate the Student Code of Conduct, the Code of Academic Integrity, or the policies and procedures established for this course. ______________________________ ______________________________Name (typed) Signature______________________________ ______________________________Name (typed) Signature______________________________ ______________________________Name (typed) Signature______________________________ ______________________________Name (typed) Signature______________________________ ______________________________Name (typed) Signature1. (Exercise 1 from Expected Value) Let X be the sum of the faces obtained by rolling a fair dietwice. Use the sample space, S, to compute)74( XP.Solution. 2. (Exercise 11 from Expected Value) Consider the lottery describe in Example 6. The state plans to keep the same probabilities, but raise the top prize above $1,000,000. How high could the prize go and still give the state an expected value of $0.50 per ticket?Solution. 3. (Exercise 13 from Expected Value) You can invest in either Project A or Project B. If you invest in Project A, there is a 30% chance that you lose $26,000, a 50% chance that you break even, and a 20% chance that you make $68,000. If you invest in Project B, there is a 20% chance that you lose $71,000, a 65% chance that you break even, and a 15% chance thatyou make $143,000. Based on the expected value of each, which investment should you make?Solution. 4. (Exercise 15 from Expected Value) Compute the expected value of a loan work out for your team’s particular borrower’s loan. Use only the full and default values of his or her loan, and the probabilities of a successful or failed work out, based on the complete set of bank records. Does this indicate a work out or foreclosure for your borrower?Solution. 5. (Exercise 16 from Expected Value) Consider your team’s particular loan. What change in the estimated default value of the loan would cause a reversal of the work out or foreclosure decision that was indicated in Problem 4?Solution. )6,6()5,6()4,6()3,6()2,6()1,6()6,5()5,5()4,5()3,5()2,5()1,5()6,4()5,4()4,4()3,4()2,4()1,4()6,3()5,3()4,3()3,3()2,3()1,3()6,2()5,2()4,2()3,2()2,2()1,2()6,1()5,1()4,1()3,1()2,1()1,1(S6. (Exercise 2 from Database Functions and Filtering) Using the Excel file Cars.xls, determine how many of the vehicles in the data were Jeep Cherokees, made in 1998?Solution. 7. (Exercise 7 from Database Functions and Filtering) Let Y be the event that a borrower has the same number of years experience in the business as your team’s particular borrower. Let T be the event that a borrower has the same education level as your team’s particular borrower. Let C be the event that the current economic conditions are the same as those for your team’s particular borrower. For convenience, we will also use these names to represent properties of borrowers in the bank records. (i) Use DCOUNT and the data in Loan Records.xls to find the number of successful work outs at the BR Bank in which Y occurred. Find the number of failed work outs at the BR Bank in which Y occurred. (ii) Carry out similar computations for the Cajun Bank and T. (iii) Carry out similar computations for the DuPont Bank and C.Solution. 8. (Exercise 16 from Database Functions and Filtering) Use the data in Cars.xls to estimate the probability that the repair cost for Ford Explorers will be at least $2,500 but no more than$4,000. Recall that our data contains records of 372
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