# Quantitative Reasoning for Business Week 6 Final

Week 6 Learning Team Assignment
QRB 501 University of Phoenix
May 16, 2010

Topic 18:   Exploration 3

a.   If a resident of the U.S. is chosen at random, find the probability that he or she is
25 to 44 years old.
= (P(25-44)/Total number of people is 4,486,508.
= X’s/(1,107,108 + 452,196 + 1,270,419 + 1,068,243 + 588,542)/4,486,508
= 1,270,419/4,486,508
= 0.28316 (0.2832 rounded)

b.     If a resident is chosen at random, find the probability that he or she is older
than 24 years old.
= P(24+)/Total number of people older than 24
= (1,270,419 + 1,068,243 + 588,542)/(1,107,108 + 452,196 + 1,270,419 + 1,068,243
+ =   588,542)/4,486,508
=   2,927,204/4,486,508
=   0.6524

c.     In what age category does the median age fall?
The median age falls in the 25 - 44 category.

Chapter 6 problem A6:
A6. (Expected portfolio return) Musumeci Capital Management has invested its portfolio as
shown here. What is Musumeci’s expected portfolio return?

ASSET   PORTFOLIO WEIGHT EXPECTED RETURN
1Money market securities   10% 4%
2Corporate bonds 20 8
3Equities 70 12

Rp = .10(.04) +.20(.08) +.70(12)=
.004   + .016 + .084=0.104 or 10%

Chapter 6: B6

a)
Project # Return Variance Standard Deviation
1 13.4% 4.8% 0.22
2 11.7% 30.8% 0.55
3 10.2% 8.2% 0.29
Return Calculations
(.1*.09)+(.7*.13)+(.2*.17)=.134*100%=13.4%
(.1*.03)+(.7*.10)+(.2*.22)=.117*100%=11.7%
(.1*.15)+(.7*.11)+(.2*.05)=.102*100%=10.2%
Variance Calculations
.1(9-13)2+.7(13-13) 2+.2(17-13) 2=4.8%
.1(3-11.66)2+.7(10-11.66) 2+.2(22-11.66) 2=30.8%
.1(15-10.33)2+.7(11-10.33) 2+.2(5-10.33) 2=8.2%
Standard Deviation Calculations
√(.048)=0.22
√(.308)=0.55
√(.082)=0.29

b)
Project Expected Return Risk
1 1 3
2 2 1
3 3 2

Project 1 would be the best choice because it has the...