A firm uses trend projection and seasonal factors to simulate sales for a given time period. It assigns "0" if sales fall, "1" if sales are steady, "2" if sales rise moderately, and "3" if sales
Rise a lot. The simulator generates the following output.
$0~1~0~2~2~0~0~2~3~2~0~2~0~2~2~1~2~3~1~2~2~2~0~3~0~0~2~1~2~1$
Estimate the probability that sales will rise at least moderately.
A) 0.613
B) 0.516
C) 0.512
D) 0.452

Question

A firm uses trend projection and seasonal factors to simulate sales for a given time period. It assigns "0" if sales fall, "1" if sales are steady, "2" if sales rise moderately, and "3" if sales
Rise a lot. The simulator generates the following output. 
$0~1~0~2~2~0~0~2~3~2~0~2~0~2~2~1~2~3~1~2~2~2~0~3~0~0~2~1~2~1$
Estimate the probability that sales will rise at least moderately.
A) 0.613
B) 0.516
C) 0.512
D) 0.452

Quizplus · Accepted Answer

The probability that sales will rise at least moderately (2 or 3) is calculated by counting the number of 2s and 3s and dividing by the total number of observations. There are 16 occurrences of 2 and 3 out of 31 total observations, giving a probability of 16/31 ≈ 0.516.

A Firm Uses Trend Projection and Seasonal Factors to Simulate 0 1 0 2 2 0 0 2 3 2 0 2 0 2 2 1 2 3 1 2 2 2 0 3 0 0 2 1 2 10~1~0~2~2~0~0~2~3~2~0~2~0~2~2~1~2~3~1~2~2~2~0~3~0~0~2~1~2~10 1 0 2 2 0 0 2 3 2 0 2 0 2 2 1 2 3 1 2 2 2 0 3 0 0 2 1 2 1

A Firm Uses Trend Projection and Seasonal Factors to Simulate $0~1~0~2~2~0~0~2~3~2~0~2~0~2~2~1~2~3~1~2~2~2~0~3~0~0~2~1~2~1$