Question

A marketing firm is considering making up to three new hires. Given its specific needs, the management feels that there is a 50% chance of hiring at least two candidates. There is only a 10% chance that it will not make any hires and a 18% chance that it will make all three hires.

a. What is the probability that the firm will make at least one hire? (Round your answer to 2 decimal places.) Probability
b. Find the expected value and the standard deviation of the number of hires. (Round your final answers to 2 decimal places.)

i. Expected value
ii. Standard deviation

Answer 1

a) 0.9

b) Mean = 1.58

Standard Deviation = 0.89

Explanation:

We are given the following in the question:

A marketing firm is considering making up to three new hires.

Let X be the variable describing the number of hiring in the company.

Thus, x can take values 0,1 ,2 and 3.

`P(x\geq 2) = 50\%= 0.5\\P(x = 0) = 10\% = 0.1\\P(x = 3) = 18\% = 0.18`

a) P(firm will make at least one hire)

`P(x\geq 2) = P(x=2) + P(x=3)\\0.5 = P(x=2) + 0.18\\ P(x=2) = 0.32`

Also,

`P(x= 0) +P(x= 1) + P(x= 2) + P(x= 3) = 1\\ 0.1 + P(x= 1) + 0.32 + 0.18 = 1\\ P(x= 1) = 1- (0.1+0.32+0.18) = 0.4`

`\text{P(firm will make at least one hire)}\\= P(x\geq 1)\\=P(x=1) + P(x=2) + P(x=3)\\ = 0.4 + 0.32 + 0.18 = 0.9`

b) expected value and the standard deviation of the number of hires.

`E(X) = \displaystyle\sum x_iP(x_i)\\=0(0.1) + 1(0.4) + 2(0.32)+3(0.18) = 1.58`

`E(x^2) = \displaystyle\sum x_i^2P(x_i)\\=0(0.1) + 1(0.4) + 4(0.32) +9(0.18) = 3.3\\V(x) = E(x^2)-[E(x)]^2 = 3.3-(1.58)^2 = 0.80\\\text{Standard Deviation} = √(V(x)) = √(0.8036) = 0.89`