(A) What Are the Appropriate Probability Distributions to Model the Number

question 63

Essay

(A) What are the appropriate probability distributions to model the number of faculty members showing up in each lot?
(B) Given the current situation, estimate the probability that on a peak day, at least one faculty member with a sticker will be unable to find a parking space. Assume that the number who shows up at each lot is independent of the number who shows up at the other two lots.
(C) Suppose that faculty members are allowed to park in any lot. Does this help solve the problem? Why or why not?
(D) Suppose that the numbers of faculty who show up at the three lots are correlated, with each correlation equal to 0.80. Does your answer to (C) change? Why or why not?

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Definitions:

Expected Monetary Value

A decision-making tool in risk management that combines the probabilities of different outcomes with the monetary gains or losses they would produce, to estimate the average outcome.

PHStat

An Excel add-in that enhances and expands upon the statistical capabilities provided by Microsoft Excel.

Return To Risk Ratio

A financial metric used to evaluate the potential return of an investment relative to its risk.

PHStat

An Excel add-in designed to perform statistical analysis.