CS1 – ACTUARIAL STATISTICS

Basic Probability

1. In a group of 25 people, 18 have mortgage, 13 own some shares and 2 people have neither a
mortgage nor any shares. How many people have both? (8)

2. One card is picked from an ordinary pack of 52 playing cards. What is the probability of obtaining:

(i) a diamond

(ii) an ace

(iii) a jack, queen or king. (1/4, 1/13, 3/13)

3. A contestant on a game show is asked 2 questions. The probability that she gets the first question
correct is 0.3 and the probability that she gets the second question correct is 0.4. Given that the
probability that she gets both the questions correct is 0.1, calculate the probability that:

(i) she gets either the first, the second or both questions right.

(ii) she gets both questions wrong. (0.6, 0.4)

4. Customers at a restaurant may order any combination of chips, salad or onion rings. The
probability that a customer chooses onion rings is 0.3, salad 0.4, chips and salad 0.15, chips and
onion rings 0.15, salad or onion rings 0.55, all three 0.05, None of the above 0.2. Calculate the
probability a customer chooses:

(i) chips

(ii) chips only (0.5, 0.25)

5. In a group of 24 actuaries, 20 have worked for life office A and 12 have worked for life office B.
Everyone in the group has worked for atleast one of the 2 companies.

What is the probability that an actuary picked at random has worked for:

(i) Life office A and Life office B

(ii) Life office A given that they have worked for Life Office B? (1/3, 2/3)

CA PRAVEEN PATWARI 1 JAI SHREE SHYAM

CS1 – ACTUARIAL STATISTICS
6. A card is picked from an ordinary pack of 52 cards, without replacement, and then another card is
picked. What is the probability of picking:

(i) two red cards

(ii) one of each colour? (25/102, 26/51)

7. A box of chocolates contains 8 milk chocolates and 4 plain chocolates. A chocoholic eats three
chocolates. Calculate the probability that:

(i) all three are milk chocolates.

(ii) exactly one is a plain chocolate. (14/55, 28/55)

8. Students at a performing arts college can choose to study one or more classes of acting, dance or
singing. The probability that a student is studying acting is 0.5, dance 0.65, singing 0.55, acting or
dancing 0.8, acting and singing 0.25, dancing and singing 0.25. Find the probability that a student
studies all the 3 classes. (0.15)

9. Two dice are thrown . Find the probability of rolling a 5 on both dice? (1/36)

10. The number 9 bus is never on time – it is either early or late. The probability that the bus is late
on any day is 0.6, independent of which day it is. What is the probability that the number 9 bus is :

(i) late on Monday, Tuesday and Wednesday. (0.216)

(ii) early on Monday, Tuesday, Wednesday, Thursday and Friday. (0.01024)

(iii) early on Monday, Wednesday and Friday and late on Tuesday and Thursday. (0.023)

11. A fruit machine has two wheels. The wheels spin and then stop to reveal an object. The
probability of getting a cherry on the first wheel is 3/10, whereas the probability of getting a cherry
on the second wheel is 2/5. Find the probability of getting:

(i) a cherry on the first wheel and on the second wheel. (3/25)

(ii) a cherry on the second wheel but not on the first. (7/25)

(iii) no cherries on both of the two wheels. (21/50)

CA PRAVEEN PATWARI 2 JAI SHREE SHYAM

CS1 – ACTUARIAL STATISTICS
Random Variables
Question 1: For each of the following, determine whether the given values can serve as the
probability distribution of a random variable with the given range:
𝑥−2
a) 𝑓(𝑥) = 5
𝑓𝑜𝑟 𝑥 = 1,2,3,4,5;

𝑥2
b) 𝑓(𝑥) = 30 𝑓𝑜𝑟 𝑥 = 1,2,3,4;
𝑥
c) 𝑓(𝑥) = 5 𝑓𝑜𝑟 𝑥 = 1,2,3,4,5;
1
d) 𝑓(𝑥) = 𝑓𝑜𝑟 𝑥 = 1,2,3,4;
4

2𝑥
Question 2: Verify that 𝑓(𝑥) = for 𝑥 = 1,2,3, … , 𝑘 can serve as the probability distribution of
𝑘(𝑘+1)
random variables with the given range.

Question 3: For each of the following, determine c so that the function can serve as the probability
distribution of a random variable with the given range:

a) 𝑓(𝑥) = 𝑐𝑥 𝑓𝑜𝑟 𝑥 = 1,2,3,4,5;

5
b) 𝑓(𝑥) = 𝑐 ( ) 𝑓𝑜𝑟 𝑥 = 1,2,3,4,5;
𝑥

1 𝑥
c) 𝑓(𝑥) = 𝑐 (4) 𝑓𝑜𝑟 𝑥 = 1,2,3, … ..

d) 𝑓(𝑥) = 𝑐𝑥 2 𝑓𝑜𝑟 𝑥 = 1,2,3, … , 𝑘

Question 4: For each of the following whether the given values can serve as the values of a
distribution function variable with the range x = 1, 2, 3 and 4:

a) 𝐹(1) = 0.3, 𝐹(2) = 0.5, 𝐹(3) = 0.8 𝑎𝑛𝑑 𝐹(4) = 1.2;

b) 𝐹(1) = 0.5, 𝐹(2) = 0.4, 𝐹(3) = 0.7 𝑎𝑛𝑑 𝐹(4) = 1.0;

c) 𝐹(1) = 0.25, 𝐹(2) = 0.61, 𝐹(3) = 0.83 𝑎𝑛𝑑 𝐹(4) = 1.0

Question 5: If X has the distribution function

0 𝑓𝑜𝑟 𝑥 < 1
1
𝑓𝑜𝑟 1 ≤ 𝑥 < 4
3
1
𝐹(𝑥) = 𝑓𝑜𝑟 4 ≤ 𝑥 < 6
2
5
𝑓𝑜𝑟 6 ≤ 𝑥 < 10
6
{ 1 𝑓𝑜𝑟 𝑥 ≥ 10

CA PRAVEEN PATWARI 3 JAI SHREE SHYAM

CS1 – ACTUARIAL STATISTICS
Find:

a) 𝑃(2 < 𝑋 ≤6) d) 𝑃(𝑋 > 4)

b) 𝑃(𝑋 = 4) e) 𝑃(𝑋 ≥ 4)

c) 𝑃(𝑋 ≥ 10)

Question 6: If X has the distribution function

0 𝑓𝑜𝑟 𝑥 < −1
1
𝑓𝑜𝑟 − 1 ≤ 𝑥 < 1
4
1
𝐹(𝑋) = 𝑓𝑜𝑟 1 ≤ 𝑥 < 3
2
3
𝑓𝑜𝑟 3 ≤ 𝑥 < 5
4
{ 1 𝑓𝑜𝑟 𝑥 ≥ 5
Find:

a) 𝑃(𝑋 ≤ 3) d) 𝑃(𝑋 ≥ 1) g) 𝑃(3 < 𝑋 < 5)

b) 𝑃(𝑋 = 3) e) 𝑃(−0.4 < 𝑋 < 4) h) 𝑃(3 ≤ 𝑋 < 5)

c) 𝑃(𝑋 < 3) f) 𝑃(𝑋 = 5) i) 𝑃(3 ≤ 𝑋 ≤ 5)

Question 7: Given that the discrete random variable X has the distribution function
𝑥
𝑓𝑜𝑟 𝑥 = 1,2,3;
𝑓(𝑥) = {6
0 𝑒𝑙𝑠𝑒𝑤ℎ𝑒𝑟𝑒
Find 𝐹(𝑥).

Question 8: A random variable X has the following probability function:

X 0 1 2 3 4 5 6
f(x) k 3k 5k 7k 9k 11k 13k
i) Find k;

ii) Find 𝑃(𝑋 ≥ 5), 𝑃(3 < 𝑋 ≤ 6), 𝑃(𝑋 < 4)

Question 9: A random variable X has the following PDF:

X 0 1 2 3 4 5 6 7
f(x) 0 k 2k 2k 3k 𝑘2 2𝑘 2 7𝑘 2 + 𝑘
i) Find k.

ii) Evaluate 𝑃(𝑋 < 6), 𝑃(𝑋 ≥ 6) and 𝑃(0 < 𝑋 < 5)

iii) Determine the CDF of X.

CA PRAVEEN PATWARI 4 JAI SHREE SHYAM

CS1 – ACTUARIAL STATISTICS
Question 10: If X has the probability density function
−3𝑥
𝑓(𝑥) = {𝑘𝑒 ; 𝑥 > 0
0 𝑜𝑡ℎ𝑒𝑟𝑤𝑖𝑠𝑒
Find k and 𝑃(0.5 ≤ 𝑋 ≤ 1).

Question 11: 𝑓(𝑥) = 𝑒 −𝑥 ; 𝑥 > 0, Find 𝑃(𝑋 > 1).

Question 12: The distribution function of the random variable X is given by

1 − (1 + 𝑥)𝑒 −𝑥 𝑓𝑜𝑟 𝑥 > 0
𝐹(𝑥) = {
0 𝑓𝑜𝑟 𝑥 ≤ 0
Find

i) 𝑃(𝑋 ≤ 2) ii) 𝑃(1 < 𝑋 < 3) iii) 𝑃(𝑋 > 4)

Question 13: The probability density of the random variable Y is given by

1
𝑓(𝑦) = {8 (𝑦 + 1) 𝑓𝑜𝑟 2 < 𝑥 < 4
0 𝑒𝑙𝑠𝑒𝑤ℎ𝑒𝑟𝑒
Find 𝑃(𝑌 < 3.2) and 𝑃(2.9 < 𝑌 < 3.2)

Question 14: The density function of the random variable X is given by

6𝑥(1 − 𝑥) 𝑓𝑜𝑟 0 < 𝑥 < 1
𝑔(𝑥) = {
0 𝑒𝑙𝑠𝑒𝑤ℎ𝑒𝑟𝑒
1 1
Find 𝑃 (𝑋 < 4) and 𝑃 (𝑋 > 2)

Question 15:

a) Show that: 𝑓(𝑥) = 3𝑥 2 for 0 < 𝑥 < 1 represents a density function.

b) Calculate the probability that (0.1 < 𝑋 < 0.5)

Question 16: The probability density of the continuous random variable X is given by
1
𝑓(𝑥) = {5 𝑓𝑜𝑟 2 < 𝑥 < 7
0 𝑒𝑙𝑠𝑒𝑤ℎ𝑒𝑟𝑒
Find 𝑃(3 < 𝑋 < 5)

Question 17: The distribution function of the random variable Y is given by

9
1− 𝑓𝑜𝑟 𝑦 > 3
𝐹(𝑦) = { 𝑦2
0 𝑒𝑙𝑠𝑒𝑤ℎ𝑒𝑟𝑒
Find 𝑃(𝑌 ≤ 5) and 𝑃(𝑌 > 8)

CA PRAVEEN PATWARI 5 JAI SHREE SHYAM

CS1 – ACTUARIAL STATISTICS
Question 18: The probability density of the random variable Z is given by
2
𝑘𝑧𝑒 −𝑧 𝑓𝑜𝑟 𝑧 > 0
𝑓(𝑧) = {
0 𝑓𝑜𝑟 𝑧 ≤ 0

Find k.

Question 19: If the probability density of X is given by

−3
𝑓(𝑥) = {2𝑥 𝑓𝑜𝑟 𝑥 > 1
0 𝑒𝑙𝑠𝑒𝑤ℎ𝑒𝑟𝑒
Check whether it’s mean and variance exists.

Question 20: A random variable X has the following probability distribution

X -2 -1 0 1 2
P(X) 1/6 p 1/4 p 1/6
i) Find the value of p.

ii) Calculate 𝐸(𝑋 + 2), 𝐸(2𝑋 2 + 3𝑋 + 5)

Question 21: If X is the number of point rolled with a balanced die, find the expected value of
𝑔(𝑥) = 2𝑋 2 + 1

Question 22: Let X be a random variable with the following probability function

X -3 6 9
P(X=x) 1/6 1/2 1/3
Find 𝐸(𝑋) and 𝐸(𝑋 2 ) and evaluate 𝐸(2𝑋 + 1)2 .

Question 23: If the probability density of X is given by

2(1 − 𝑥) 𝑓𝑜𝑟 0 < 𝑥 < 1
𝑓(𝑥) = {
0 𝑒𝑙𝑠𝑒𝑤ℎ𝑒𝑟𝑒
2
a) Show that 𝐸(𝑋 𝑟 ) =
(𝑟+1)(𝑟+2)

b) And use the result to evaluate 𝐸[(2𝑋 + 1)2 ].

Question 24: Find the expected value of the random variable Y whose probability density is given by
1
𝑓(𝑦) = {8 (𝑦 + 1) 𝑓𝑜𝑟 − 1 < 𝑦 < 1
0 𝑒𝑙𝑠𝑒𝑤ℎ𝑒𝑟𝑒

Question 25: A continuous random variable X has the PDF:

2)
𝑓(𝑥) = {𝑎(1 + 𝑥 𝑓𝑜𝑟 − 1 < 𝑥 < 1
0 𝑜𝑡ℎ𝑒𝑟𝑤𝑖𝑠𝑒

CA PRAVEEN PATWARI 6 JAI SHREE SHYAM

CS1 – ACTUARIAL STATISTICS
i) Find a.

ii) Find 𝐸(𝑋).

Question 26: Let X be a random variable denoting the hours of life in an electric light bulb. Suppose X
is distributed with density function
1 𝑥
𝑓(𝑥) = 𝑒 −1000 𝑓𝑜𝑟 𝑥 > 0
1000
Find the expected life time of such a bulb.

1
Question 27: 𝑓(𝑥) = 2 (𝑥 + 1); −1 < 𝑥 < 1. Find the variance of X.

Question 28: 𝑓(𝑥) = 𝜆𝑒 −𝜆𝑥 , 0 < 𝑥 < ∞. Find the variance of X.

Question 29: A claim size distribution is modelled using a simple distribution with density of the form
𝑘(100 − 𝑥), 0 ≤ 𝑥 ≤ 100
𝑓(𝑥) = {
0, 𝑜𝑡ℎ𝑒𝑟𝑤𝑖𝑠𝑒
i) Verify that k = 0.0002

ii) Determine the mean of this claim size distribution.

iii) Calculate the probability that an individual claim size is greater than 50.

iv) Calculate the probability that an individual claim size is less than 60 given that it is greater than
50.

Question 30: If the probability density of X is given by

6𝑥(1 − 𝑥)𝑓𝑜𝑟 0 < 𝑥 < 1
𝑓(𝑥) = {
0 𝑒𝑙𝑠𝑒𝑤ℎ𝑒𝑟𝑒
Find the PDF of 𝑌 = 𝑋 3 .

Question 31: If the probability density of X is given by

𝑥
𝑓𝑜𝑟 0 < 𝑥 < 2
𝑓(𝑥) = {2
0 𝑒𝑙𝑠𝑒𝑤ℎ𝑒𝑟𝑒
Find the PDF of 𝑌 = 𝑋 3

Question 32: Let X is a continuous random variable with PDF

𝑥
𝑓𝑜𝑟 1 < 𝑥 < 5
𝑓(𝑥) = {12
0 𝑜𝑡ℎ𝑒𝑟𝑤𝑖𝑠𝑒
Find the PDF of 𝑌 = (2𝑋 − 3).

CA PRAVEEN PATWARI 7 JAI SHREE SHYAM

CS1 – ACTUARIAL STATISTICS
Probability Distribution

Question 1: Let 𝑋 = 𝛽(𝑛, 𝑝) with n = 25 and p = 0.2. Find P[𝑋 < 𝜇 − 2𝜎]. [𝟎. 𝟖𝟐𝟓 ]

𝟏
Question 2: Let 𝑋 = 𝛽(𝑛, 𝑝). If 𝐸(𝑋) = 5, 𝑣𝑎𝑟(𝑋) = 4. Find n and p. [𝑵 = 𝟐𝟓, 𝑷 = 𝟓]

Question 3: 𝑋 = 𝑃(𝜆) such that 𝑃 (𝑋 = 0) = 𝑃(𝑋 = 1). Find 𝐸(𝑋). [𝑬(𝑿) = 𝟏]

Question 4: 𝑋 = 𝑃(𝜆) such that 𝑃(𝑋 = 0) = 0.5 find 𝐸(𝑋). [𝑬(𝑿) = 𝒍𝒐𝒈𝟐]

Question 5: If 𝑀𝑥 (𝑡) = exp(𝑒 𝑡 − 1), what is 𝐸(𝑋). [𝑬(𝑿) = 𝟏]

Question 6: Name of a distribution which is:

(1) 𝜇𝑥 ≥ 𝑉𝑎𝑟(𝑋) (2) 𝜇𝑥 = 𝑉𝑎𝑟(𝑋) (3) 𝜇𝑥 ≤ 𝑉𝑎𝑟(𝑋)

[(1) 𝑩(𝒏, 𝒑) (2) 𝑷(𝝀) (3) 𝑵𝒆𝒈𝒂𝒕𝒊𝒗𝒆 𝑩𝒊𝒏𝒐𝒎𝒊𝒏𝒂𝒍]

Question 7: If 1% Gillette blades are defective, what is the probability that a cartoon of 50 Gillette
blades has at least 2 defective blades? [𝟏 − 𝒆−𝟎.𝟓 (𝟏 + 𝟎. 𝟓)]

Question 8: The average no. of calls arriving at a telephone exchange is 30 per hour. What is the
probability that

(i) No calls arrive in a 3 min period. [𝒆−𝟏.𝟓 ]

(ii) More than 5 calls arrive in a 5 min period. [𝟎. 𝟎𝟒𝟐𝟎𝟐]

Question 9: Suppose that flows in plywood occur at an average of one flow per [Link]. What is the
probability that 4 X 8 ft, sheet will have?

(i) No flows [𝒆−𝟎.𝟔𝟒 ]

(ii) At most one flow. [𝒆−𝟎.𝟔𝟒 (𝟏 + 𝟎. 𝟔𝟒)]

CA PRAVEEN PATWARI 8 JAI SHREE SHYAM

CS1 – ACTUARIAL STATISTICS
Question 10: An insurance company finds that .005 of the population die from a certain kind of
accident each year. What is the probability that the company must pay off 3 or more than 3 of
10,000 insured risk against such accident in a given year. [𝑷(𝑿 ≥ 𝟑) = 𝟏]

Question 11: Assume that the number of fatal car accidents in a certain state obeys a Poisson
distribution with an average of one per day. What is the probability of more than 10 such accidents
in a week? [𝟎. 𝟎𝟗𝟖𝟓𝟐]

Question 12: A die is cast until 6 appear. What is the probability that it must be cast more than five
times? [𝟎. 𝟒𝟎𝟏𝟖𝟕𝟖]

Question 13: A mask man is required to shoot at a target until he scores 5 bulls eye is X. The
probability that he hits the bull’s eyes on any trial is 0.3. What is the probability that he requires 8
shots? [𝟎. 𝟎𝟐𝟗𝟏𝟕]

Question 14: Find the probability of getting five heads and seven tails in 12 flips of a balanced coin.

[𝟎. 𝟏𝟗𝟑𝟒]

Question 15: Find the probability that 7 of 10 persons will recover from a tropical disease if we can
assume independence and the probability is 0.80 that any one of them will recover from the disease.

[𝟎. 𝟐𝟎]

1
Question 16: If X has the discrete uniform distribution 𝑓(𝑥) = 𝑘 for 𝑥 = 1,2, … , 𝑘 ,show that:
𝑘+1
(a) Its mean is 𝜇 = 2

𝑘 2 −1
(b) its variance is 𝜎 2 = 12

Question 17: If the probability is 0.40 that a child exposed to a certain contiguous disease will catch
it, what is the probability that the tenth child exposed to the disease will be the third to catch it?

[𝟎. 𝟎𝟔𝟒𝟓]

Question 18: If the probability is 0.75 that an applicant for a driver’s license will pass the road test on
any given try, what is the probability that an applicant will finally pass the test on the fourth try?

[𝟎. 𝟎𝟏𝟏𝟕]

CA PRAVEEN PATWARI 9 JAI SHREE SHYAM

CS1 – ACTUARIAL STATISTICS
Question 19: As part of an air pollution survey, an inspector decides to examine the exhaust of 6 of
company’s 24 trucks. If four of the company’s trucks emit excessive amount of pollutants, what is
the probability that none of them will be included in the inspector’s sample? [𝟎. 𝟐𝟖𝟖𝟎]

Question 20: Among the 120 applicants for a job only 80 are actually qualified. If five of the
applicants are randomly selected for an in – depth interview, find the probability that only two of
the five will be qualified for the job by using

a. The formula for the hyper geometric distribution.

b. The formula for the binomial distribution with 𝜃 = 80/120 as an approximation

[(𝒂) 𝟎. 𝟏𝟔𝟒, (𝒃) 𝟎. 𝟏𝟔𝟓]

Question 21: If 2% of the books bound at a certain bindery have defective binding. Use the Poisson
approximation to the binomial distribution to determine the probability that 5 of 400 books bound
by this bindery will have detective bindings. [𝟎. 𝟎𝟗𝟏𝟔]

Question 22: Records show that the probability is 0.00005 that a car will have a flat tire while
crossing a certain bridge. Use the Poisson distribution to approximate the binomial probabilities that
among 10,000 cars crossing this bridge

a. Exactly two will have a flat tire. [𝟎. 𝟎𝟕𝟓𝟖]

b. At most two will have a flat tire [𝟎. 𝟗𝟖𝟓𝟔]

Question 23: The average number of trucks arriving on any one day at a truck depot in a certain city
is known to be 12. What is the probability that on a given day fewer than nine trucks will arrive at
the depot? [𝟎. 𝟏𝟓𝟓𝟎]

Question 24: A certain kind of sheet metal has, on the average, five defects per 10 square feet. If we
assume a Poisson distribution, what is the probability that a 15 – square foot sheet of the metal will
have at least six defects? [𝟎. 𝟕𝟓𝟖𝟔 (𝑯𝒊𝒏𝒕 𝝀 = 𝟕. 𝟓)]

Question 25: Derive the formulas for the mean and the variance of the Poisson distribution by first
evaluating E(X) and E[X(X – 1)].

Question 26: If the probability is 0.75 that a person will believe a rumor about the transgressions of a
certain politician, find the probabilities that

a. The eighth person to hear the rumor will be the fifth to believe it. [𝟎. 𝟏𝟐𝟗𝟖]

CA PRAVEEN PATWARI 10 JAI SHREE SHYAM

CS1 – ACTUARIAL STATISTICS
b. The fifteenth person to hear the rumor will be the tenth to believe it. [𝟎. 𝟏𝟏𝟎𝟎𝟗]

Question 27: When taping a television commercial, the probability is 0.30 that a certain actor will get
his lines straight on any one take. What is probability that he will get his lines straight for the first
time on the sixth take? [𝟎. 𝟎𝟓𝟎𝟒𝟐𝟏]

Question 28: Records show that the probability is 0.0012 that a person will get food poisoning
spending a day at a certain state fair. Use the Poisson approximation to the binomial distribution to
find the probability that among 1000 persons attending the fair at most two will get food poisoning.

[𝟎. 𝟖𝟕𝟗𝟒𝟗]

Question 29: Find the probabilities that the value of a random variable will exceed 4 if has a gamma
distribution with

a. 𝛼 = 2 and 𝜆 = 3 [𝟎. 𝟎𝟎𝟎𝟏]

b. 𝛼 = 3 and 𝜆 = 4 [𝟎]

Question 30: Find the probabilities that random variable having the standard normal distribution will
take on a value

a. Less than 1.72 [𝟎. 𝟗𝟓𝟕𝟐𝟖]

b. Less than – 0.88 [𝟎. 𝟏𝟖𝟗𝟒𝟑]

c. Between 1.30 and 1.75 [𝟎. 𝟎𝟓𝟔𝟕𝟒]

d. Between – 0.25 and 0.45 [𝟎. 𝟐𝟕𝟐𝟑𝟓]

Question 31: Suppose that the time in days between services calls on an office copying machine
follows an exponential distribution with mean 50 days.

I. What is the probability that the time until the machine again requires services exceeds 60 days?

[𝟎. 𝟑𝟎𝟏𝟐]

II. Find the probability that the time until the machine again require service is longer than 50 + 2s,
where ‘s’ is the standard deviation of the distribution. [𝟎. 𝟎𝟒𝟗𝟖]

Question 32: The time (in minutes) between telephone calls at an insurance claims office has the
following exponential distribution
1 𝑥
𝑓(𝑥) = 𝑒 −3 0≤𝑥≤∞
3

CA PRAVEEN PATWARI 11 JAI SHREE SHYAM

CS1 – ACTUARIAL STATISTICS
i. What is the mean time interval between consecutive telephone calls?

ii. What is probability of having 6 or more minutes without a telephone call?

iii. What is the probability of receiving a telephone call between 6 and 9 minutes just after the
receipt of a call? [(𝒊) 𝟑 𝒎𝒊𝒏 (𝒊𝒊) 𝟎. 𝟏𝟑𝟓𝟑 (𝒊𝒊𝒊) 𝟎. 𝟎𝟖𝟓𝟓𝟒𝟖]

Question 33: The average time a subscriber spends reading ‘THE HINDU’ are 49 minutes. Assume
that the standard deviation is 16 minutes and that the times are normally distributed.

i. What is the probability that a subscriber will spend at least 1 hour reading the paper? [𝟎. 𝟐𝟒𝟓𝟏]

ii. What the probability that a subscriber will spend no more than 30 minutes reading the paper?

[𝟎. 𝟏𝟏𝟕𝟎]

Question 34: Phone calls arrive at the rate of 48 per hour at the reception desk for an insurance
company. Find

i. The probability of receiving exactly 10 calls in 15 minutes. [𝟎. 𝟏𝟎𝟒𝟖]

ii. The probability of receiving three calls in a 5 minutes interval of time. [𝟎. 𝟏𝟗𝟓𝟑]

Question 35: At a certain large restaurant in a city it takes an average 10 minutes to receive the
order after placing. If the service time is exponentially distribution, find the probability that the
customer waiting time is

i. More than 10 minutes [𝟎. 𝟑𝟔𝟕𝟗]

ii. 3 minutes or less [𝟎. 𝟐𝟓𝟗𝟐]

Question 36: Towards recruiting actuarial professional, an insurance company is conducting

entrance examination. The test score for the examination are normally distributed with mean 450
and a standard deviation of 100.

i. Suppose someone receive a score of 630, what percentage of people taking the test scores better?

[𝟎. 𝟎𝟑𝟓𝟗]
ii. If the insurance company will not recruit any one scoring 420, what percentage of the person
taking the test would be acceptable to the company? [𝟎. 𝟔𝟏𝟕𝟗]

Question 37: An insurance company found that only 0.01% of the population is involved in a certain
type of accident each year. If its 1000 policyholders can be regarded as randomly selected from the
population. What is the probability that not more than two of its clients are involved in such
accidents? [𝟎. 𝟗𝟗𝟗𝟖]

CA PRAVEEN PATWARI 12 JAI SHREE SHYAM

CS1 – ACTUARIAL STATISTICS

Question 38: In a certain metropolitan city the daily consumption of electric power (in million
kilowatt hour (MKH)) may be regarded as a random variable having Gamma distribution with
parameter (3, 1⁄2). If the power plant has a daily capacity of 12 MKH, what is the probability that this
power supply will be inadequate on any given day? [𝟎. 𝟎𝟔𝟐]

Question 39: On the averages 8 calls per hours are received in a telephone board. Assuming that the
number of calls received in the board in a given length of time is a Poisson process, find the
probability that

i. 6 calls received in 2 hours. [𝟎. 𝟎𝟎𝟐𝟔]

ii. At least 2 calls in the next 20 minutes. [𝟎. 𝟕𝟒𝟓𝟐]

Question 40: The random variable 𝑌 = 𝐿𝑜𝑔 𝑋 has 𝑁(10, 4) distribution. Find

𝟏
𝟏 𝟏 𝐥𝐨𝐠 𝒙−𝟏𝟎 𝟐
a. The PDF of X [𝒂 . 𝐞𝐱𝐩 [ ( 𝟐 ) ]] ; 𝒙>𝟎
√𝟐𝝅 𝒙 𝟐

b. Mean and variance of X. [𝑬(𝑿) = 𝟏𝟔𝟐𝟕𝟓𝟒. 𝟕𝟗𝟏𝟒, 𝑽(𝑿) = 𝟓𝟑. 𝟓𝟗𝟖𝒆𝟐𝟒 ]

c. 𝑃(𝑋 ≤ 1000). [𝟎. 𝟎𝟔𝟏𝟎𝟑𝟗]

Question 41: A multiple choice test consists of 8 questions and 3 options to each question (of which
only one is correct). If a student answer each question by rolling a balanced die and checking the
first answer if he gets 1 or 2, the second answer if he gets 3 or 4 and the third answer if he gets 5 or
6, what is the probability that he will get exactly 4 correct answer? [𝟎. 𝟏𝟕𝟎𝟕]

Question 42: An automobile safety engineer claims that 1 in 10 automobile accidents is due to driver
fatigue. What is the probability that at least 3 of 5 automobile accidents are due to driver fatigue?

[𝟎. 𝟎𝟎𝟖𝟔]

Question 43: If 40% of the mice used in an experiment will become very aggressive with in 1 minute
after having been administered an experimental drug, find the probability that exactly six of the 15
mice that have been administered the drug will become very aggressive with in 1 minute? [𝟎. 𝟐𝟎𝟔𝟔]

Question 44: In a certain city, incompatibility is given as the legal reason in 70% of all divorce cases.
Find the probability that 5 of the next 6 divorce cases files in the city will claim incompatibility as
reason. [𝟎. 𝟑𝟎𝟐𝟓]

CA PRAVEEN PATWARI 13 JAI SHREE SHYAM

CS1 – ACTUARIAL STATISTICS
Question 45: A social scientist claims that only 50% of all high school seniors capable of doing college
work actually go to college. Assuming that this claim is true, find the probabilities that among 18
high school seniors capable of doing college work

i. Exactly 10 will go to college. [𝟎. 𝟏𝟔𝟔𝟗]

ii. At least 10 will go to college. [𝟎. 𝟒𝟎𝟕𝟑]

iii. At most 8 will go to college. [𝟎. 𝟒𝟎𝟕𝟑]

Question 46: (a) To reduce the standard deviation of the binomial distribution by half, what change
must be made in the number of trials?

[(𝒂) 𝒏𝒆𝒘 𝒏𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒕𝒓𝒊𝒂𝒍𝒔 𝒂𝒓𝒆 𝒐𝒏𝒆 − 𝒇𝒐𝒖𝒓𝒕𝒉 𝒐𝒇 𝒐𝒓𝒊𝒈𝒊𝒏𝒂𝒍 𝒏𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒕𝒓𝒊𝒂𝒍𝒔 ]
(b) If n is the multiplied by the factor k in the binomial distribution having the parameter n and p,
what statement can be made about the standard deviation of the resulting distribution.

[(𝒃) 𝒏𝒆𝒘 𝒔. 𝒅 𝒊𝒔 𝒔𝒒𝒖𝒂𝒓𝒆 𝒓𝒐𝒐𝒕 𝒐𝒇 𝒌 𝒕𝒊𝒎𝒆𝒔 𝒕𝒉𝒆 𝒐𝒓𝒊𝒈𝒊𝒏𝒂𝒍 𝒔. 𝒅. ]

Question 47: A coffee connoisseur claims that he can distinguish between a cup of instant coffee and
a cup of percolator coffee 75% of the time. It is agreed that his claim will be accepted if he correctly
identifies at least 5 of the 6 cups. Find his chances of having the claim (i) accepted; (ii) rejected,
when he does have the ability he claims. [(𝒊) 𝟎. 𝟓𝟑𝟒 (𝒊𝒊) 𝟎. 𝟒𝟔𝟔 ]

Question 48: in a precision bombing attack there is a 50% chance that any one bomb will strike the
target. Two direct hits are required to destroy the target completely. How many bombs must be
dropped to give a 99% chance or better of completely destroying the target? [Hint: Probability that
out of n bombs, at least two strike the target, is greater than 0.99] [𝒏 = 𝟏𝟏]

Question 49: In a binomial distribution consisting of 5 independent trials, probabilities of 1 and 2

successes are 0.4096 and 0.2048 respectively. Find the parameter “p” of the distribution. [𝒑 = 𝟎. 𝟐]

Question 50: With the usual notations, find p for a binomial variate X, if n = 6 and

9P (X = 4) = P (X = 2) [𝒑 = 𝟎. 𝟐𝟓]

Question 51: The mean and variance of binomial distribution are 4 and 4/3 respectively. Find

P (X>=1) [𝒑 = 𝟎. 𝟗𝟗𝟖𝟔𝟑]

CA PRAVEEN PATWARI 14 JAI SHREE SHYAM

CS1 – ACTUARIAL STATISTICS
Question 52: A manufacturer of cotter pins known that 5% of his product is defective. If he sells
cotter pins in boxes of 100 and guarantees that not more than 10 pins will be defective, what is the
approximate probability that a box will fail to meet the guaranteed quality? [𝟎. 𝟎𝟏𝟑𝟔𝟗𝟓]

Question 53: A car hire firm has two cars, which it hires out day by day. The number of demands for
a car on each day is distributed as a Poisson distribution with mean 1.5. Calculate the proportion of
days on which (i) neither car is used, and (ii) the proportion days on which some demand is refused.

[(𝒊)𝟎. 𝟐𝟐𝟑𝟏 (𝒊𝒊) 𝟎. 𝟏𝟗𝟏𝟏𝟓𝟖]

Question 54: An insurance company insures 4000 people against loss of both eyes in a car accident.
Based on previous data, the rates were computed on the assumption that on the average 10 persons
in 1,00,000 will have car accident each year that result in this type of injury. What is the probability
that more than 3 of the injured will collect on their policy in a given year? [𝟎. 𝟎𝟎𝟎𝟖]

Question 55: A manufacturer, who produces medicine bottles, finds that 0.1% of the bottles are
defective. The bottles are packed in boxes containing 500 bottles. A drug manufacturer buys 100
boxes from the producer of bottles. Using Poisson distribution, find how many boxes will contain; (i)
no defective and (ii) at least two defectives. [(𝒊)𝟔𝟎. 𝟔𝟓 (𝒊𝒊)𝟗. 𝟎𝟐𝟎𝟒]

Question 56: Six coins are tossed 6400 times. Using the Poisson distribution, find the approximate
probability of getting 6 heads r times. [Hint: 𝑝 = 0.56 and n = 6400]

𝒆−𝟏𝟎𝟎 𝟏𝟎𝟎𝒓
[𝑷(𝑿 = 𝒓) = ]
𝒓!

Question 57: In a book of 520 pages, 390 typo-graphical errors occur. Assuming Poisson law for the
number of errors per page, find the probability that a random sample of 5 pages will contain no
error. [𝟎. 𝟎𝟐𝟑𝟓𝟐]

Question 58: If X and Y are independent Poisson variates with 𝜆1 and 𝜆2 respectively, find the
𝒆−(𝝀𝟏 +𝝀𝟐 ) (𝛌𝟏 +𝝀𝟐 )𝒌
probability that X + Y = k. [𝑷(𝑿 + 𝒀 = 𝒌) = 𝒌!
]

Question 59: If X is uniformly distributed with mean 1 and variance 4/3, find P(X<0). [𝟎. 𝟐𝟓]

Question 60: Show that if a random a variable has a uniform density with the parameters a and b,
the probability it takes values less than a + p (b – a) is equal to p.

CA PRAVEEN PATWARI 15 JAI SHREE SHYAM

CS1 – ACTUARIAL STATISTICS
Question 61: If a random variable X has a uniform density with the parameters a and b, find its
𝒙−𝒂
distribution function. [𝑭(𝒙) = ]
𝒃−𝒂

Question 62: Suppose that the amount of cosmic radiation to which a person is exposed when flying
by jet across the United States is a random variable having a normal distribution with mean of 4.35
MREM and a standard deviation of 0.59 MREM. What is the probability that a person will be exposed
to more than 5.20 MREM of cosmic radiation on such a flight? [𝟎. 𝟎𝟕𝟒𝟗]

Question 63: X is normal variate with mean = 30 and S.D. = 5. Find the probabilities that

(i) 26 < 𝑋 < 40 [𝟎. 𝟕𝟔𝟓𝟑]

(ii) 𝑋 > 45 [𝟎. 𝟎𝟎𝟏𝟑𝟓]

(iii)|𝑋 − 30| > 5 [𝟎. 𝟑𝟏𝟕𝟑]

Question 64: The mean yield for one-acre plot is 662kgs with a SD 32kgs. Assuming normal
distribution, how many one-acre plots in a batch of 1000 plots would you expect to have yield (i)
over 700 kgs; (ii) below 650 kgs. [(𝒊) 𝟏𝟏𝟕 (𝒊𝒊) 𝟑𝟓𝟑]

Question 65: The local authorities in a certain city install 10,000 electric lamps in the streets of the
city. If these lamps have an average life of 1000 burning hours with a standard deviation of 200
hours, assuming the normality, what number of lamps might be expected to fail:

(i) In the first 800 hours [𝟏, 𝟓𝟖𝟕]

(ii) Between 800 and 1200 hours. [𝟔, 𝟖𝟐𝟔]

Question 66: The ratio of the standard deviation to the mean of a random variable is called the
coefficient of variation.

For each of the following distributions, decide whether increasing the mean of the random variable
increases, decreases or has no effect on the value of the coefficient of variation:

(a) Poisson with mean 𝜆.

(b) Exponential with mean 𝜇.

(c) Chi-square with n degrees of freedom.

[(𝒂) 𝒄𝒐𝒆𝒇𝒇𝒊𝒄𝒊𝒆𝒏𝒕 𝒐𝒇 𝒗𝒂𝒓𝒊𝒂𝒕𝒊𝒐𝒏 = (𝑪𝑶𝑽 𝒅𝒆𝒄𝒓𝒆𝒂𝒔𝒆𝒔 𝒂𝒔 𝒎𝒆𝒂𝒏 𝝀 𝒊𝒏𝒄𝒓𝒆𝒂𝒔𝒆𝒔)

(𝒃) 𝒄𝒐𝒆𝒇𝒇𝒊𝒄𝒊𝒆𝒏𝒕 𝒐𝒇 𝒗𝒂𝒓𝒊𝒂𝒕𝒊𝒐𝒏 = 𝟏 (𝒏𝒐 𝒆𝒇𝒇𝒆𝒄𝒕)

CA PRAVEEN PATWARI 16 JAI SHREE SHYAM

CS1 – ACTUARIAL STATISTICS
𝟐
(𝒄)𝒄𝒐𝒆𝒇𝒇𝒊𝒄𝒊𝒆𝒏𝒕 𝒐𝒇 𝒗𝒂𝒓𝒊𝒂𝒕𝒊𝒐𝒏 = √ (𝑪𝑶𝑽 𝒅𝒆𝒄𝒓𝒆𝒂𝒔𝒆𝒔 𝒂𝒔 𝒎𝒆𝒂𝒏 𝒏 𝒊𝒏𝒄𝒓𝒆𝒂𝒔𝒆𝒔)]
𝒏

Question 67: Claim sizes are normally distributed about a mean 𝜇 = £6000 and with standard
deviation 𝜎 = £1000. Calculate the probability that a claim is for more than £7500: given that it is
for more than £6000. [𝟎. 𝟏𝟑𝟑𝟔𝟐]

Question 68: If X ~ Gamma (10, 10) and P(X > L) = 0.01, determine the value of L. [𝑳 = 𝟏. 𝟖𝟕𝟖𝟓]

Question 69: If 𝑙𝑜𝑔 𝑋 ~𝑁(𝜇, 𝜎 2 ) distribution, we say that X has a 𝑙𝑜𝑔 𝑁(𝜇, 𝜎 2 ) distribution. If
𝑌 ~𝑙𝑜𝑔 𝑁 (10, 4), calculate P(Y>200,000). [𝟎. 𝟏𝟑𝟑𝟓𝟎]

CA PRAVEEN PATWARI 17 JAI SHREE SHYAM