Posted: April 5th, 2021
Q1. Which of the following is true regarding the sampling distribution of the mean for a large sample size?
a. It has the same shape, mean, and standard deviation as the population.
b. It has a normal distribution with the same mean and standard deviation as the population.
c. It has the same shape and mean as the population, but has a smaller standard deviation.
d. It has a normal distribution with the same mean as the population but with a smaller standard deviation.
Q2. According to a survey of American households, the probability that the residents own 2 cars if annual household income is over $25,000 is 80%. Of the households surveyed, 60% had incomes over $25,000 and 70% had 2 cars. The probability that annual household income is over $25,000 if the residents of a household do not own 2 cars is:
a. 0.12
b. 0.18
c. 0.40
d. 0.55
Q3. The collection and summarization of the socioeconomic and physical characteristics of the employees of a particular firm is an example of:
a. inferential statistics.
b. descriptive statistics.
c. a parameter.
d. a statistic.
Q4. The head librarian at the Library of Congress has asked her assistant for an interval estimate of the mean number of books checked out each day. The assistant provides the following interval estimate: from 740 to 920 books per day.
If the head librarian knows that the population standard deviation is 150 books checked out per day, and she asked her assistant to use 25 days of data to construct the interval estimate, what confidence level can she attach to the interval estimate?
a. 99.7%
b. 99.0%
c. 98.0%
d. 95.4%
Q5. Referring to the histogram, how many graduating seniors attended the luncheon?
a. 4
b. 152
c. 275
d. 388
Q6. The following are the durations in minutes of a sample of longdistance phone calls made within the continental United States reported by one longdistance carrier.
Time (in Minutes) 
Relative Frequency 
0 but less than 5 
0.37 
5 but less than 10 
0.22 
10 but less than 15 
0.15 
15 but less than 20 
0.10 
20 but less than 25 
0.07 
25 but less than 30 
0.07 
30 or more 
0.02 
Referring to the table, if 10 calls lasted 30 minutes or more, how many calls lasted less than 5 minutes?
a. 10
b. 185
c. 295
d. 500
Q7. The collection of all possible events is called:
a. a simple probability.
b. a sample space.
c. a joint probability.
d. the null set.
Q8. A lab orders 100 rats a week for each of the 52 weeks in the year for experiments that the lab conducts. Prices for 100 rats follow the following distribution:
Price: 
$10.00 
$12.50 
$15.00 
Probability: 
0.35 
0.40 
0.25 
How much should the lab budget for next year’s rat orders be, assuming this distribution does not change?
a. $520
b. $637
c. $650
d. $780
Q9. A professor of economics at a small Texas university wanted to determine what year in school students were taking his tough economics course. Shown below is a pie chart of the results. What percentage of the class took the course prior to reaching their senior year?
a. 14%
b. 44%
c. 54%
d. 86%
Q10. Since a _______ is not a randomly selected probability sample, there is no way to know how well it represents the overall population.
a. simple random sample
b. quota sample
c. stratified sample
d. cluster sample
Q11. A study is under way in Yosemite National Forest to determine the adult height of American pine trees. Specifically, the study is attempting to determine what factors aid a tree in reaching heights greater than 60 feet tall. It is estimated that the forest contains 25,000 adult American pines. The study involves collecting heights from 250 randomly selected adult American pine trees and analyzing the results. Identify the population from which the study was sampled.
a. The 250 randomly selected adult American pine trees in the forest.
b. The 25,000 adult American pine trees in the forest.
c. All the adult American pine trees taller than 60 feet in the world.
d. All American pine trees, of any age, in the forest.
Q12. A population frame for a survey contains a listing of 72,345 names. Using a table of random numbers, how many digits will the code numbers for each member of your population contain?
a. 3
b. 4
c. 5
d. 6
Q13. The chancellor of a major university was concerned about alcohol abuse on her campus and wanted to find out the portion of students at her university who visited campus bars every weekend. Her advisor took a random sample of 250 students. The portion of students in the sample who visited campus bars every weekend is an example of a __________.
a. categorical random variable
b. discrete random variable
c. parameter
d. statistic
Q14. The following are the durations in minutes of a sample of longdistance phone calls made within the continental United States reported by one longdistance carrier.
Time (in Minutes) 
Relative Frequency 
0 but less than 5 
0.37 
5 but less than 10 
0.22 
10 but less than 15 
0.15 
15 but less than 20 
0.10 
20 but less than 25 
0.07 
25 but less than 30 
0.07 
30 or more 
0.02 
Referring to Table 25, if 100 calls were randomly sampled, how many calls lasted 15 minutes or longer?
a. 10
b. 14
c. 26
d. 74
Q15. If two events are mutually exclusive, what is the probability that one or the other occurs?
a. 0
b. 0.50
c. 1.00
d. Cannot be determined from the information given.
Q16. According to a survey of American households, the probability that the residents own 2 cars if annual household income is over $25,000 is 80%. Of the households surveyed, 60% had incomes over $25,000 and 70% had 2 cars. The probability that the residents of a household do not own 2 cars and have an income over $25,000 a year is:
a. 0.12
b. 0.18
c. 0.22
d. 0.48
Q17. If two events are mutually exclusive and collectively exhaustive, what is the probability that one or the other occurs?
a. 0.
b. 0.50.
c. 1.00.
d. Cannot be determined from the information given.
Q18. Why is the Central Limit Theorem so important to the study of sampling distributions?
a. It allows us to disregard the size of the sample selected when the population is not normal.
b. It allows us to disregard the shape of the sampling distribution when the size of the population is large.
c. It allows us to disregard the size of the population we are sampling from.
d. It allows us to disregard the shape of the population whennis large.
Q19. A sample of 200 students at a BigTen university was taken after the midterm to ask them whether they went bar hopping the weekend before the midterm or spent the weekend studying, and whether they did well or poorly on the midterm. The following table contains the result.

Did Well on Midterm 
Did Poorly on Midterm 
Studying for Exam 
80 
20 
Went Bar Hopping 
30 
70 
Referring to the table, of those who did well on the midterm in the sample, _______ percent of them went bar hopping the weekend before the midterm.
a. 15
b. 27.27
c. 30
d. 50
Q20. Tim was planning for a meeting with his boss to discuss a raise in his annual salary. In preparation, he wanted to use the Consumer Price Index to determine the percentage increase in his salary in terms of real income over the last three years. Which method of data collection was involved when he used the Consumer Price Index?
a. Published sources
b. Experimentation
c. Surveying
d. Observation
Q21. A survey was conducted to determine how people rated the quality of programming available on television. Respondents were asked to rate the overall quality from 0 (no quality at all) to 100 (extremely good quality). The stemandleaf display of the data is shown below.
Stem 
Leaves 
3 
24 
4 
3478999 
5 
112345 
6 
12566 
7 
1 
8 

9 
2 
Referring to the table, what percentage of the respondents rated overall television quality with a rating between 50 and 75?
a. 0.11
b. 0.40
c. 0.44
d. 0.56
Q22. The process of using sample statistics to draw conclusions about true population parameters is called:
a. statistical inference.
b. the scientific method.
c. sampling.
d. descriptive statistics.
Q23. If two equally likely events A and B are mutually exclusive and collectively exhaustive, what is the probability that event A occurs?
a. 0
b. 0.50
c. 1.00
d. Cannot be determined from the information given.
Q24. Which of the following is most likely a parameter as opposed to a statistic?
a. The average score of the first five students completing an assignment.
b. The proportion of females registered to vote in a county.
c. The average height of people randomly selected from a database.
d. The proportion of trucks stopped yesterday that were cited for bad brakes.
Q25. Selection of raffle tickets from a large bowl is an example of:
a. sampling with replacement.
b. sampling without replacement.
c. subjective probability.
d. None of the above.
Q26. The portfolio expected return of two investments
a. will be higher when the covariance is zero.
b. will be higher when the covariance is negative.
c. will be higher when the covariance is positive.
d. does not depend on the covariance.
Q27. Given the numbers: 1, 3, 5, 7, 8 what are the average and the median?
a. Average = 4.8; Median = 5.0
b. Average = 5.0; Median = 5.0
c. Average = 4.8; Median = 4.8
d. Average = 5.0; Median = 4.8
Q28. The employees of a company were surveyed on questions regarding their educational background and marital status. Of the 600 employees, 400 had college degrees, 100 were single, and 60 were single college graduates. The probability that an employee of the company is single or has a college degree is:
a. 0.10
b. 0.25
c. 0.667
d. 0.733
Q29. A catalog company that receives the majority of its orders by telephone conducted a study to determine how long customers were willing to wait on hold before ordering a product. The length of time was found to be a random variable best approximated by an exponential distribution with a mean equal to 3 minutes. What proportion of customers having to hold more than 1.5 minutes will hang up before placing an order?
a. 0.86466
b. 0.60653
c. 0.39347
d. 0.13534
Q30. The following are the durations in minutes of a sample of longdistance phone calls made within the continental United States reported by one longdistance carrier.
Time (in Minutes) 
Relative Frequency 
0 but less than 5 
0.37 
5 but less than 10 
0.22 
10 but less than 15 
0.15 
15 but less than 20 
0.10 
20 but less than 25 
0.07 
25 but less than 30 
0.07 
30 or more 
0.02 
Referring to the table, what is the width of each class?
a. 1 minute
b. 5 minutes
c. 2%
d. 100%
Q31. The probability that
· house sales will increase in the next 6 months is estimated to be 0.25.
· the interest rates on housing loans will go up in the same period is estimated to be 0.74
· house sales or interest rates will go up during the next 6 months is estimated to be 0.89
The probability that house sales will increase but interest rates will not during the next 6 months is:
a. 0.065
b. 0.15
c. 0.51
d. 0.89
Q32. Which of the mean, median, mode, and geometric mean are resistant measures of central tendency?
a. The mean and median.
b. The median and mode.
c. The mode and geometric mean.
d. The mean and mode.
Q33. The probability that
· house sales will increase in the next 6 months is estimated to be 0.25
· the interest rates on housing loans will go up in the same period is estimated to be 0.74
· house sales or interest rates will go up during the next 6 months is estimated to be 0.89
The probability that neither house sales nor interest rates will increase during the next 6 months is:
a. 0.11
b. 0.195
c. 0.89
d. 0.90
Q34. Which of the following statistics is not a measure of central tendency?
a. Mean.
b. Median.
c. Mode.
d. Q3.
Q35. The width of each bar in a histogram corresponds to the:
a. differences between the boundaries of the class.
b. number of observations in each class.
c. midpoint of each class.
d. percentage of observations in each class.
Q36. In leftskewed distributions, which of the following is the correct statement?
a. The distance from Q1 to Q2 is smaller than the distance from Q2 to Q3.
b. The distance from the smallest observation to Q1 is larger than the distance from Q3 to the largest observation.
c. The distance from the smallest observation to Q2 is smaller than the distance from Q2 to the largest observation.
d. The distance from Q1 to Q3 is twice the distance from Q1 to Q2.
Q37. The Central Limit Theorem is important in statistics because:
a. for a largen, it says the population is approximately normal.
b. for any population, it says the sampling distribution of the sample mean is approximately normal, regardless of the sample size.
c. for a largen, it says the sampling distribution of the sample mean is approximately normal, regardless of the shape of the population.
d. for any sized sample, it says the sampling distribution of the sample mean is approximately normal.
Q38. A sample of 200 students at a BigTen university was taken after the midterm to ask them whether they went bar hopping the weekend before the midterm or spent the weekend studying, and whether they did well or poorly on the midterm. The following table contains the result.

Did Well on the midterm 
Did Poorly on Midterm 
Studying for Exam 
80 
20 
Went Bar Hopping 
30 
70 
Referring to the table, _______ percent of the students in the sample went bar hopping the weekend before the midterm and did well on the midterm.
a. 15
b. 27.27
c. 30
d. 50
Q39. Which of the following statements about the median is not true?
a. It is more affected by extreme values than the mean.
b. It is a measure of central tendency.
c. It is equal to Q2.
d. It is equal to the mode in bellshaped “normal” distributions.
Q40. A confidence interval was used to estimate the proportion of statistics students that are females. A random sample of 72 statistics students generated the following 90% confidence interval: (0.438, 0.642). Based on the interval above, is the population proportion of females equal to 0.60?
a. No, and we are 90% sure of it.
b. No. The proportion is 54.17%.
c. Maybe. 0.60 is a believable value of the population proportion based on the information above.
Q1. The sample correlation coefficient between X and Y is 0.375. It has been found out that the pvalue is 0.256 when testing H_{0}: ρ = 0 against the twosided alternative H_{1}: ρ ≠ 0. To test H_{0}: ρ = 0 against the onesided alternative H_{1}: ρ > 0 at a significance level of 0.193, the pvalue is
a. 0.256/2
b. 0.256
c. 1 – 0.256
d. 1 – 0.256/2
Q2. A researcher randomly sampled 30 graduates of an MBA program and recorded data concerning their starting salaries. Of primary interest to the researcher was the effect of gender on starting salaries. Analysis of the mean salaries of the females and males in the sample is given below.
Size 
Mean 
Std Dev 

Females 
18 
48,266.7 
13,577.63 
Males 
12 
55,000 
11,741.29 
Std Error = 4,764.82 

Means Diff = 6,733.3 

Z = 1.4528 2tailed p value = 0.1463 

T = 1.4221 2tailed p value = 0.1574 
Referring to the table, the researcher was attempting to show statistically that the female MBA graduates have a significantly lower mean starting salary than the male MBA graduates. What assumptions were necessary to conduct this hypothesis test?
a. Both populations of salaries (male and female) must have approximate normal distributions.
b. The population variances are approximately equal.
c. The samples were randomly and independently selected.
d. All of the above assumptions were necessary.
Q3. The Yintercept (b_{0}) represents the:
a. predicted value of Y when X = 0.
b. change in estimated average Y per unit change in X.
c. predicted value of Y.
d. variation around the sample regression line.
Q4. A local real estate appraiser analyzed the sales prices of homes in 2 neighborhoods to the corresponding appraised values of the homes. The goal of the analysis was to compare the distribution of saletoappraised ratios from homes in the 2 neighborhoods. Random and independent samples were selected from the 2 neighborhoods from last year’s homes sales, 8 from each of the 2 neighborhoods. Identify the nonparametric method that would be used to analyze the data.
a. the Wilcoxon SignedRanks Test, using the test statistic Z
b. the Wilcoxon SignedRanks Test, using the test statistic W
c. the Wilcoxon Rank Sum Test, using the test statistic T_{1}
d. the Wilcoxon Rank Sum Test, using the test statistic Z
Q5. A survey claims that 9 out of 10 doctors recommend aspirin for their patients with headaches. To test this claim against the alternative that the actual proportion of doctors who recommend aspirin is less than 0.90, a random sample of 100 doctors results in 83 who indicate that they recommend aspirin. The value of the test statistic in this problem is approximately equal to:
a. 4.12
b. 2.33
c. 1.86
d. 0.07
Q6. A realtor wants to compare the average salestoappraisal ratios of residential properties sold in four neighborhoods (W, X, Y, and Z). Four properties are randomly selected from each neighborhood and the ratios recorded for each, as shown below.
W: 1.2, 1.1, 0.9, 0.4
X: 2.5, 2.1, 1.9, 1.6
Y: 1.0, 1.5, 1.1, 1.3
Z: 0.8, 1.3, 1.1, 0.7
Interpret the results of the analysis summarized in the following table:
Source 
df 
SS 
MS 
F 
PR > F 
Neighborhoods 
2.97 
0.990 
8.31 
0.0260 

Error 
12 

Total 
4.40 
Referring to the table, the within group mean squares is
a. 0.119
b. 0.990
c. 1.109
d. 8.31
Q7. If a group of independent variables are not significant individually but are significant as a group at a specified level of significance, this is most likely due to:
a. autocorrelation.
b. the presence of dummy variables.
c. the absence of dummy variables.
d. collinearity.
Q8. In a multiple regression model, the adjusted r^{2}
a. cannot be negative.
b. can sometimes be negative.
c. can sometimes be greater than +1.
d. has to fall between 0 and +1.
Q9. Why would you use the TukeyKramer procedure?
a. To test for normality.
b. To test for homogeneity of variance.
c. To test independence of errors.
d. To test for differences in pairwise means.
Q10. A campus researcher wanted to investigate the factors that affect visitor travel time in a complex, multilevel building on campus. Specifically, he wanted to determine whether different building signs (building maps versus wall signage) affect the total amount of time visitors require to reach their destination and whether that time depends on whether the starting location is inside or outside the building. Three subjects were assigned to each of the combinations of signs and starting locations, and travel time in seconds from beginning to destination was recorded. How should the data be analyzed?

Starting Room 


Interior 
Exterior 
Wall Signs 
141 
224 
119 
339 

238 
139 

Map 
85 
226 
94 
129 

126 
130 
a. Completely randomized design
b. Randomized block design
c. 2 x 2 factorial design
d. KruskalWallis rank test
Q11. As a business statistics project, a student examined the factors that determine parking meter rates throughout the campus and downtown area. The campus is a group of buildings located in the center of downtown, with an open central quadrangle. Data were collected for the price of parking per hour and the number of blocks to the quadrangle. In addition, two dummy variables were coded to indicate the location of the parking meter (See below). The population regression model hypothesized is
Y_{i} = ß_{0} + ß_{1}x_{1i} + ß_{2}x_{2i} + ß_{3}x_{3i} + e_{i}
where
Y is the price per hour
x_{1} is a numerical variable = the number of blocks to the quadrangle
(Note that if x_{1} is less than 2, then the meter is on campus; if x_{1} is less than 3, then the meter is downtown)
x_{2} is a dummy variable = 1 if inside downtown and off campus, 0 otherwise
x_{3} is a dummy variable = 1 if outside downtown and off campus, 0 otherwise
The following Excel results are obtained.
Regression Statistics 

Multiple R 
9.9659 
R Square 
0.9331 
Adjusted R Square 
0.9294 
Standard Error 
0.0327 
Observations 
58 
ANOVA 
df 
SS 
MS 
F 
Signif F 
Regression 
3 
0.8094 
0.2698 
251.1995 
1.0964E31 
Residual 
54 
0.0580 
0.0010 

Total 
57 
0.8675 
Coeff 
StdError 
t Stat 
Pvalue 

Intercept 
0.5118 
0.0136 
37.4675 
2.4904 
X1 
0.0045 
0.0034 
1.3275 
0.1898 
X2 
0.2392 
0.0123 
19.3942 
5.3581E26 
X3 
0.0002 
0.0123 
0.0214 
0.9829 
Referring to the tables, predict the meter rate per hour if one parks outside of downtown and off campus, 3 blocks from the quad.
a. $0.0139
b. $0.2589
c. $0.2604
d. $0.4981
Q12. If we use the chisquared method of analysis to test for the differences among 4 proportions, the degrees of freedom are equal to:
a. 3
b. 4
c. 5
d. 1
Q13. An economist is interested to see how consumption for an economy (in $ billions) is influenced by gross domestic product ($ billions) and aggregate price (consumer price index). The Microsoft Excel output of this regression is partially reproduced below.
SUMMARY OUTPUT
Regression Statistics 

Multiple R 
0.991 
R Square 
0.982 
Adjusted R Square 
0.976 
Standard Error 
0.299 
Observations 
10 
ANOVA 
df 
SS 
MS 
F 
Signif F 
Regression 
2 
33.4163 
16.7082 
186.325 
0.0001 
Residual 
7 
0.6277 
0.0897 

Total 
9 
34.0440 
Coeff 
StdError 
t Stat 
Pvalue 

Intercept 
0.0861 
0.5674 
0.152 
0.8837 
GDP 
0.7654 
0.0574 
13.340 
0.0001 
Price 
0.0006 
0.0028 
0.219 
0.8330 
Referring to the tables, one economy in the sample had an aggregate consumption level of $4 billion, a GDP of $6 billion, and an aggregate price level of 200. What is the residual for this data point?
a. $4.39 billion
b. $0.39 billion
c. $0.39 billion
d. $1.33 billion
Q14. Testing for the existence of correlation is equivalent to
a. testing for the existence of the slope (β_{1}).
b. testing for the existence of the Yintercept (β_{0}).
c. the confidence interval estimate for predicting Y.
d. testing for the existence of the slope (β_{10}).
Q15. As a business statistics project, a student examined the factors that determine parking meter rates throughout the campus and downtown area. The campus is a group of buildings located in the center of downtown, with an open central quadrangle. Data were collected for the price of parking per hour and the number of blocks to the quadrangle. In addition, two dummy variables were coded to indicate the location of the parking meter (See below). The population regression model hypothesized is
Y_{i} = ß_{0} + ß_{1}x_{1i} + ß_{2}x_{2i} + ß_{3}x_{3i} + e_{i}
where
Y is the price per hour
x_{1} is a numerical variable = the number of blocks to the quadrangle
(Note that if x_{1} is less than 2, then the meter is on campus; if x_{1} is less than 3, then the meter is downtown)
x_{2} is a dummy variable = 1 if inside downtown and off campus, 0 otherwise
x_{3} is a dummy variable = 1 if outside downtown and off campus, 0 otherwise
The following Excel results are obtained.
Regression Statistics 

Multiple R 
9.9659 
R Square 
0.9331 
Adjusted R Square 
0.9294 
Standard Error 
0.0327 
Observations 
58 
ANOVA 
df 
SS 
MS 
F 
Signif F 
Regression 
3 
0.8094 
0.2698 
251.1995 
1.0964E31 
Residual 
54 
0.0580 
0.0010 

Total 
57 
0.8675 
Coeff 
StdError 
t Stat 
Pvalue 

Intercept 
0.5118 
0.0136 
37.4675 
2.4904 
X1 
0.0045 
0.0034 
1.3275 
0.1898 
X2 
0.2392 
0.0123 
19.3942 
5.3581E26 
X3 
0.0002 
0.0123 
0.0214 
0.9829 
Referring to the tables, if one is already outside of downtown and off campus but decides to park an additional 3 blocks from the quadrangle, the estimated average parking meter rate will:
a. decrease by 0.0045.
b. decrease by 0.0135.
c. decrease by 0.0139.
d. decrease by 0.4979.
Q16. The following EXCEL output contains the results of a test to determine if the proportions of satisfied guests at two resorts are the same or different.
Hypothesized Difference0
Level of Significance 0.05
Group 1
Number of Successes163
Sample Size227
Group 2
Number of Successes154
Sample Size262
Group 1 Proportion0.718061674
Group 2 Proportion0.58778626
Difference in Two Proportions 0.130275414
Average Proportion0.648261759
Test Statistic3.00875353
TwoTailed Test
Lower Critical Value 1.959961082
Upper Critical Value 1.959961082
pValue 0.002623357
Referring to the data above, if you want to test the claim that “Resort 1 (Group 1) has a higher proportion of satisfied guests compared to Resort 2 (Group 2),” the pvalue of the test will be
a. 0.00262
b. 0.00262/2
c. 2*(0.00262)
d. 1 – (0.00262/2)
Q17. A real estate builder wishes to determine how house size (House) is influenced by family income (Income), family size (Size), and education of the head of household (School). House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is in years. The builder randomly selected 50 families and ran the µltiple regression. Microsoft Excel output is provided below:
SUMMARY OUTPUT
Regression Statistics 

Multiple R 
0.865 
R Square 
0.748 
Adjusted R Square 
0.726 
Standard Error 
5.195 
Observations 
50 
ANOVA 
df 
SS 
MS 
F 
Signif F 
Regression 
3605.7736 
901.4434 
0.0001 

Residual 
1214.2264 
26.9828 

Total 
49 
4820.0000 
Coeff 
StdError 
t Stat 
Pvalue 

Intercept 
1.6335 
5.8078 
0.281 
0.7798 
Income 
0.4485 
0.1137 
3.9545 
0.0003 
Size 
4.2615 
0.8062 
5.286 
0.0001 
School 
0.6517 
0.4319 
1.509 
0.1383 
Referring to the tables, one individual in the sample had an annual income of $10,000, a family size of 1, and an education of 8 years. This individual owned a home with an area of 1,000 square feet (House = 10.00). What is the residual (in hundreds of square feet) for this data point?
a. 8.10
b. 5.40
c. 5.40
d. 8.10
Q18. A manager of a product sales group believes the number of sales made by an employee (Y) depends on how many years that employee has been with the company (X_{1}) and how he/she scored on a business aptitude test (X_{2}). A random sample of 8 employees provides the following:
Employee 
Y 
X_{1} 
X_{2} 
1 
100 
10 
7 
2 
90 
3 
10 
3 
80 
8 
9 
4 
70 
5 
4 
5 
60 
5 
8 
6 
50 
7 
5 
7 
40 
1 
4 
8 
30 
1 
1 
Referring to the table, for these data, what is the estimated coefficient for the variable representing years an employee has been with the company, b_{1}?
a. 0.998
b. 3.103
c. 4.698
d. 21.293
Q19. In testing for differences between the means of 2 independent populations, the null hypothesis is:
a. H_{0}: μ1 – μ2 = 2.
b. H_{0}: μ1 – μ2 = 0.
c. H_{0}: μ1 – μ2 > 0.
d. H_{0}: μ1 – μ2 < 2.
Q20. A manager of a product sales group believes the number of sales made by an employee (Y) depends on how many years that employee has been with the company (X_{1}) and how he/she scored on a business aptitude test (X_{2}). A random sample of 8 employees provides the following:
Employee 
Y 
X_{1} 
X_{2} 
1 
100 
10 
7 
2 
90 
3 
10 
3 
80 
8 
9 
4 
70 
5 
4 
5 
60 
5 
8 
6 
50 
7 
5 
7 
40 
1 
4 
8 
30 
1 
1 
Referring to Table 141, for these data, what is the estimated coefficient for the variable representing scores on the aptitude test, b_{2}?A manager of a product sales group believes the number of sales made by an employee (Y) depends on how many years that employee has been with the company (X_{1}) and how he/she scored on a business aptitude test (X_{2}). A random sample of 8 employees provides the following:
Employee 
Y 
X_{1} 
X_{2} 
1 
100 
10 
7 
2 
90 
3 
10 
3 
80 
8 
9 
4 
70 
5 
4 
5 
60 
5 
8 
6 
50 
7 
5 
7 
40 
1 
4 
8 
30 
1 
1 
Referring to the table, what is the estimated coefficient for the variable representing scores on the aptitude test, b_{2}?
a. 0.998
b. 3.103
c. 4.698
d. 21.293
Q21. To test the effects of a business school preparation course, 8 students took a general business test before and after the course. The results are given below.
Student 
Exam Score Before Course 
Exam Score After Course 
1 
530 
670 
2 
690 
770 
3 
910 
1,000 
4 
700 
710 
5 
450 
550 
6 
820 
870 
7 
820 
770 
8 
630 
610 
Referring to the table, at the 0.05 level of significance, the conclusion for this hypothesis test would be:
a. the business school preparation course does improve exam score.
b. the business school preparation course does not improve exam score.
c. the business school preparation course has no impact on exam score.
d. It cannot be drawn from the information given.
Q22. If the p value is less than α in a twotailed test,
a. the null hypothesis should not be rejected.
b. the null hypothesis should be rejected.
c. a onetailed test should be used.
d. no conclusion should be reached.
Q23. If the Type I error (α) for a given test is to be decreased, then for a fixed sample size n
a. the Type II error (β) will also decrease.
b. the Type II error (β) will increase.
c. the power of the test will increase.
d. a onetailed test must be utilized.
Q24. Psychologists have found that people are generally reluctant to transmit bad news to their peers.
This phenomenon has been termed the “MM effect.” To investigate the cause of the MM effect, 40 undergraduates
at Duke University participated in an experiment. Each subject was asked to administer an IQ test to another student
and then provide the test taker with his or her percentile score. Unknown to the subject, the test taker was a bogus
student who was working with the researchers. The experimenters manipulated two factors: subject visibility and
success of test taker, each at two levels. Subject visibility was either visible or not visible to the test taker. Success of
the test taker was either visible or not visible to the test taker. Success of the test taker was either
top 20% or bottom 20%. Ten subjects were randomly assigned to each of the 2 x 2 = 4 experimental conditions, then
the time (in seconds) between the end of the test and the delivery of the percentile score from the subject to the test
taker was measured. (This variable is called the latency to feedback.) The data were subjected to appropriate analyses
with the following results.
Source 
df 
SS 
MS 
F 
PR > F 
Subject visibility 
1 
1380.24 
1380.24 
4.26 
0.043 
Test taker success 
1 
1325.16 
1325.16 
4.09 
0.050 
Interaction 
1 
3385.80 
3385.80 
10.45 
0.002 
Error 
36 
11,664.00 
324.00 

Total 
39 
17,755.20 
Referring to the table, in the context of this study, interpret the statement: “Subject visibility and test taker success interact.”
a. The difference between the mean feedback time for visible and nonvisible subjects depends on the success of the test taker.
b. The difference between the mean feedback time for test takers scoring in the top 20% and bottom 20% depends on the visibility of the subject.
c. The relationship between feedback time and subject visibility depends on the success of the test taker.
d. All of the above are correct interpretations.
Q25. A candy bar manufacturer is interested in trying to estimate how sales are influenced by the price of their product. To do this, the company randomly chooses 6 small cities and offers the candy bar at different prices. Using candy bar sales as the dependent variable, the company will conduct a simple linear regression on the data below:
City 
Price ($) 
Sales 
River Falls 
1.30 
100 
Hudson 
1.60 
90 
Ellsworth 
1.80 
90 
Prescott 
2.00 
40 
Rock Elm 
2.40 
38 
Stillwater 
2.90 
32 
Referring to the table, what is the coefficient of correlation for these data?
a. 0.8854
b. 0.7839
c. 0.7839
d. 0.8854
Q26. A ____________ is a numerical quantity computed from the data of a sample and is used in reaching a decision on whether or not to reject the null hypothesis.
a. significance level
b. critical value
c. test statistic
d. parameter
Q27. An investment specialist claims that if one holds a portfolio that moves in opposite direction to the market index like the S&P 500, then it is possible to reduce the variability of the portfolio’s return. In other words, one can create a portfolio with positive returns but less exposure to risk.
A sample of 26 years of S&P 500 index and a portfolio consisting of stocks of private prisons, which are believed to be negatively related to the S&P 500 index, is collected. A regression analysis was performed by regressing the returns of the prison stocks portfolio (Y) on the returns of S&P 500 index (X) to prove that the private prisons stock portfolio is negatively related to the S&P 500 index at a 5% level of significance. The results are given in the following EXCEL output.
Coefficients 
Standard Error 
T Stat 
Pvalue 

Intercept 
4.866004258 
0.35743609 
13.61363441 
8.7932E13 
S&P 
0.502513506 
0.071597152 
7.01862425 
2.94942E07 
Referring to the table, which of the following will be a correct conclusion?
a. We cannot reject the null hypothesis and, therefore, conclude that there is sufficient evidence to show that the prison stock portfolio and S&P 500 index are negatively related.
b. We can reject the null hypothesis and, therefore, conclude that there is sufficient evidence to show that the prison stock portfolio and S&P 500 index are negatively related.
c. We cannot reject the null hypothesis and, therefore, conclude that there is not sufficient evidence to show that the prison stock portfolio and S&P 500 index are negatively related.
d. We can reject the null hypothesis and conclude that there is not sufficient evidence to show that the prison stock portfolio and S&P 500 index are negatively related.
Q28. One criterion used to evaluate employees in the assembly section of a large factory is the number of defective pieces per 1,000 parts produced. The quality control department wants to find out whether there is a relationship between years of experience and defect rate. Since the job is repetitious, after the initial training period any improvement due to a learning effect might be offset by a loss of motivation. A defect rate is calculated for each worker in a yearly evaluation. The results for 100 workers are given in the table below.
Years Since Training Period 

< 1 Year 
1 – 4 Years 
5 – 9 Years 

Defect Rate 
High 
6 
9 
9 
Average 
9 
19 
23 

Low 
7 
8 
10 
Referring to the table, find the rejection region necessary for testing at the 0.05 level of significance whether there is a relationship between defect rate and years of experience.
a. Reject H_{0} if chisquare > 16.919
b. Reject H_{0} if chisquare > 15.507
c. Reject H_{0} if chisquare > 11.143
d. Reject H_{0} if chisquare > 9.488
Q29. A campus researcher wanted to investigate the factors that affect visitor travel time in a complex, multilevel building on campus. Specifically, he wanted to determine whether different building signs (building maps versus wall signage) affect the total amount of time visitors require to reach their destination and whether that time depends on whether the starting location is inside or outside the building. Three subjects were assigned to each of the combinations of signs and starting locations, and travel time in seconds from beginning to destination was recorded. An Excel output of the appropriate analysis is given below:
ANOVA 

Source of Variation 
SS 
df 
MS 
F 
Pvalue 
F crit 
Signs 
14008.33 
14008.33 
0.11267 
5.317645 

Starting Location 
12288 
2.784395 
0.13374 
5.317645 

Interaction 
48 
48 
0.919506 
5.317645 

Within 
35305.33 
4413.167 

Total 
61649.67 
11 
Referring to the table, the within (error) degrees of freedom is
a. 1
b. 4
c. 8
d. 11
Q30. If we wish to determine whether there is evidence that the proportion of successes is higher in group 1 than in group 2, the appropriate test to use is
a. the Z test.
b. the chisquared test.
c. the W test.
d. the X test.
Q31. A researcher randomly sampled 30 graduates of an MBA program and recorded data concerning their starting salaries. Of primary interest to the researcher was the effect of gender on starting salaries. Analysis of the mean salaries of the females and males in the sample is given below.
Size 
Mean 
Std Dev 

Females 
18 
48,266.7 
13,577.63 
Males 
12 
55,000 
11,741.29 
Std Error = 4,764.82 

Means Diff = 6,733.3 

Z = 1.4528 2tailed p value = 0.1463 

T = 1.4221 2tailed p value = 0.1574 
Referring to the table, the researcher was attempting to show statistically that the female MBA graduates have a significantly lower mean starting salary than the male MBA graduates. From the analysis in the table, the correct test statistic is:
a. 4,634.72
b. 1.4221
c. 1.4528
d. 6,733.33
Q32. If we are performing a twotailed test of whether μ = 100, the probability of detecting a shift of the mean to 105 will be ________ the probability of detecting a shift of the mean to 110.
a. less than
b. greater than
c. equal to
d. not comparable to
Q33. Parents complain that children read too few storybooks and watch too µch television nowadays. A survey of 1,000 children reveals the following information on average time spent watching TV and average time spent reading storybooks
Average time spent reading storybooks 

Average time 
Less than 
Between 
More than 
Less than 2 hours 
90 
85 
130 
More than 2 hours 
655 
32 
8 
Referring to the table, to test whether there is any relationship between average time spent watching TV and average time spent reading storybooks, the value of the measured test statistic is:
a. 12.59
b. 1.61
c. 481.49
d. 1,368.06
Q34. A large national bank charges local companies for using their services. A bank official reported the results of a regression analysis designed to predict the bank’s charges (Y) — measured in dollars per month — for services rendered to local companies. One independent variable used to predict service charge to a company is the company’s sales revenue (X) — measured in millions of dollars. Data for 21 companies who use the bank’s services were used to fit the model:
E(Y) = ß_{0} + ß_{1}X
The results of the simple linear regression are provided below.
Y = 2,700+20X, s_{yx} = 65, twotailed p value = 0.034 (for testing ß_{1})
Referring to Table 131, interpret the _{p} value for testing whether ß_{1} exceeds 0.
a. There is sufficient evidence (at the α = 0.05) to conclude that sales revenue (X) is a useful linear predictor of service charge (Y).
b. There is insufficient evidence (at the α = 0.10) to conclude that sales revenue (X) is a useful linear predictor of service charge (Y).
c. Sales revenue (X) is a poor predictor of service charge (Y).
d. For every $1 million increase in sales revenue, we expect a service charge to increase $0.034.
Q35. A study published in the American Journal of Public Health was conducted to determine whether the use of seat belts in motor vehicles depends on ethnic status in San Diego County. A sample of 792 children treated for injuries sustained from motor vehicle accidents was obtained, and each child was classified according to (1) ethnic status (Hispanic or nonHispanic) and (2) seat belt usage (worn or not worn) during the accident. The number of children in each category is given in the table below.
Hispanic 
NonHispanic 

Seat belts worn 
31 
148 
Seat belts not worn 
283 
330 
Referring to the table, which test would be used to properly analyze the data in this experiment?
a. chisquare test for independence in a twoway contingency table.
b. chisquare test for equal proportions in a oneway table.
c. ANOVA F test for interaction in a 2 x 2 factorial design.
d. chisquare test for a 2 x 2 factorial design.
Q36. The Journal of Business Venturing reported on the activities of entrepreneurs during the organization creation process. As part of a designed study, a total of 71 entrepreneurs were interviewed and divided into 3 groups: those that were successful in founding a new firm (n_{1} = 34), those still actively trying to establish a firm (n_{2} = 21), and those who tried to start a new firm but eventually gave up (n_{3} = 16). The total number of activities undertaken (e.g., developed a business plan, sought funding, looked for facilities) by each group over a specified time period during organization creation was measured. The objective is to compare the mean number of activities of the 3 groups of entrepreneurs. Because of concerns over necessary assumption of the parametric analysis, it was decided to use a nonparametric analysis. Identify the nonparametric method that would be used to analyze the data.
a. Wilcoxon Rank Sums Test
b. Wilcoxon Signed Rank Test
c. KruskalWallis Rank Test for Differences in Medians
d. Oneway ANOVA F test
Q37. A researcher randomly sampled 30 graduates of an MBA program and recorded data concerning their starting salaries. Of primary interest to the researcher was the effect of gender on starting salaries. Analysis of the mean salaries of the females and males in the sample is given below.
Size 
Mean 
Std Dev 

Females 
18 
48,266.7 
13,577.63 
Males 
12 
55,000 
11,741.29 
Std Error = 4,764.82 

Means Diff = 6,733.3 

Z = 1.4528 2tailed p value = 0.1463 

T = 1.4221 2tailed p value = 0.1574 
Referring to the table, the researcher was attempting to show statistically that the female MBA graduates have a significantly lower mean starting salary than the male MBA graduates. According to the test run, which of the following is an appropriate alternative hypothesis?
a. H_{1}: μ_{females} > μ_{males}
b. H_{1}: μ_{females} < μ_{males}
c. H_{1}: μ_{females} ≠ μ_{males}
d. H_{1}: μ_{females} = μ_{males}
Q38. A computer used by a 24hour banking service is supposed to randomly assign each transaction to one of 5 memory locations. A check at the end of a day’s transactions gave the counts shown in the table to each of the 5 memory locations, along with the number of reported errors.
Memory Location: 
1 
2 
3 
4 
5 
Number of Transactions: 
82 
100 
74 
92 
102 
Number of Reported Errors 
11 
12 
6 
9 
10 
The bank manager wanted to test whether the proportion of errors in transactions assigned to each of the 5 memory locations differ. Referring to the table, which test would be used to properly analyze the data in this experiment?
a. chisquare test for independence in a twoway contingency table
b. chisquare test for equal proportions in a oneway table
c. ANOVA F test for main treatment effect
d. Z test for the difference in two proportions
Q39. If a test of hypothesis has a Type I error probability (α) of 0.01, we mean
a. if the null hypothesis is true, we don’t reject it 1% of the time.
b. if the null hypothesis is true, we reject it 1% of the time.
c. if the null hypothesis is false, we don’t reject it 1% of the time.
d. if the null hypothesis is false, we reject it 1% of the time.
Q40. The following EXCEL output contains the results of a test to determine if the proportions of satisfied guests at two resorts are the same or different.
Hypothesized Difference 0
Level of Significance 0.05
Group 1
Number of Successes 163
Sample Size 227
Group 2
Number of Successes 154
Sample Size 262
Group 1 Proportion 0.718061674
Group 2 Proportion 0.58778626
Difference in Two Proportions 0.130275414
Average Proportion 0.648261759
Test Statistic 3.00875353
TwoTailed Test
Lower Critical Value 1.959961082
Upper Critical Value 1.959961082
pValue 0.002623357
Referring to the table, if you want to test the claim that “Resort 1 (Group 1) has a higher proportion of satisfied guests compared to Resort 2 (Group 2),” the pvalue of the test will be
a. 0.00262
b. 0.00262/2
c. 2*(0.00262)
d. 1 – (0.00262/2)
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