A Machine Is Set to Pump Cleanser into a Process

question 265

Multiple Choice

A machine is set to pump cleanser into a process at the rate of 6 gallons per minute. Upon inspection, it is learned that the machine actually pumps cleanser at a rate described by the uniform distribution over the interval 5.5 to 9.5 gallons per minute. Find the variance of the distribution.

• A) 0.75
• B) 1.33
• C) 18.75
• D) 3.00

---

Definitions:

Interest Paid

The amount paid by a borrower to a lender for the privilege of using borrowed money, typically expressed as an annual percentage of the loan outstanding.

Bond Discount

The gap between the nominal value of a bond and the price it fetches on the market when it is sold for an amount lower than its nominal value.

Straight-Line Amortization

A method of systematically reducing the cost value of an intangible asset over its useful life by charging equal expense amounts to each accounting period.

Effective-Interest Method

A method of calculating the interest expense on a bond or loan by applying the constant interest rate to the outstanding balance of the debt for each period.