1. Central Limit Theorem

2. p. 601 35,36,37,39 p. 603 41,42,43,44

3.  If x ~N (µ x,σ x ) then for ANY fixed sample size n:  X ~ N(µ x,σx/sqr(n))

4.  The time that a technician requires to perform preventive maintenance on an air-conditioning unit it governed by the exponential distribution (very skewed right).  The mean time isµ=1 and σ = 1.  Your company has a contract to maintain 70of these units in an apartment building.  Is it safe to budget an average of 1.1 hours per unit or should you budget 1.25 hours per unit?

5.  If x comes ANY distribution and n>30, then  X ~ N(µ x,σx/sqr(n))

6.  The idea of insurance is that we all face risks that are unlikely but which carry a high cost. Think of a fire destroying your home. So we form a group to share the risk: we all pay a small amount, and the insurance policy pays a large amount to those few of us whose homes burn down. An insurance company looks at the records for millions of homeowners and sees the mean loss from fire in a year is µ= $250 (most of us have no loss, but a few have very large losses.The $250 is the average loss.) So the distribution is strongly skewed right. The standard deviation of the distribution is σ = $300.The company plans to sell fire insurance for $250 plus enough to cover is costs and profit.  A. Explain why it would be poor practice to sell only 12 policies, but selling thousands of policies makes sense.  B. If the company sells $10,000 policies what is the probability that the average payout will be more than $260?m