Business Statistics
Exam Answer Key
Course Introduction
Business Statistics introduces students to the fundamental concepts and methods of statistical analysis as applied in the business environment. The course covers topics such as descriptive statistics, probability distributions, sampling techniques, hypothesis testing, regression analysis, and data-driven decision making. Through practical examples and real-world business scenarios, students develop skills in interpreting and analyzing quantitative data, making evidence-based decisions, and communicating statistical findings effectively. Emphasis is placed on using statistical software and tools to solve business problems and improve operational efficiency.
Recommended Textbook
Essentials of Business Statistics 1st Canadian Edition by Ken Black
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15 Chapters
1055 Verified Questions
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Page 2
Chapter 1: Introduction to Statistics
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Sample Questions
Q1) Variables and measurement data are interchangeable terms.
A)True
B)False
Answer: False
Q2) What is the first stage in statistics?
A) Organize data.
B) Identify the population to be studied.
C) Analyze data.
D) Summarize data.
Answer: B
Q3) Which of the following statements about business statistics is not true?
A) Virtually every area of business uses statistics in decision making.
B) Presenting business statistics always requires the use of a specific graph called a bar chart.
C) There is a wide variety of uses and applications of statistics in business.
D) Business statistics can be used to forecast future values and predict trends.
Answer: B
Q4) List the four key elements of business statistics.
Answer: Collect data, analyze data, interpret data, and present findings.
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Chapter 2: Organizing and Visualizing Data
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Sample Questions
Q1) The total energy consumption (in kWh) for the month of July 2017 for a sample of 28 houses in a certain city is shown below:
573 466 622 539 480 653 512 784 438 841 592 482 605 553 492 733 536 428 545 477 624 510 672 434 581 506 570 487. Beginning the first class at 400 and using a class with of 50, develop a cumulative frequency distribution for the data.
Answer: 11ea645c_71c4_99f5_9252_13bbe5a3e5da_TB1679_00
Q2) A person has decided to construct a frequency distribution for a set of data containing 60 numbers. The lowest number is 23 and the highest number is 68. If 5 classes are used, the class width should be approximately ___.
A) 4
B) 12
C) 8
D) 5
E) 9
Answer: E
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Page 4
Chapter 3: Descriptive Statistics
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Sample Questions
Q1) The spread or dispersion of a set of data is called
A) range
B) coefficient of variation
C) measures of variation
D) mean absolute deviation
Answer: C
Q2) ___ are used to describe the data set.
A) Quantiles
B) Quartiles
C) Percentiles
D) Qucentiles
Answer: C
Q3) If the mean of a distribution is greater than the median, then the distribution is positively skewed.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Gathering Data
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Sample Questions
Q1) Alice Zhong is the VP of operations at Pearl Financial Services. She wants to measure customer satisfaction after a new website and other changes were introduced a few months ago. For this purpose, she instructs her staff to prepare a questionnaire and send it to the first 200 clients in their alphabetical list of active clients. This is an example of
A) simple random sample
B) systematic sample
C) convenience sample
D) stratified sample
E) cluster sample
Q2) Albert Abbasi, VP of Operations at Ingleside International Bank, is evaluating the service level provided to walk-in customers. Accordingly, he plans a sample of waiting times for walk-in customers. Albert instructs his staff to record the waiting times for the first 45 walk-in customers arriving after the noon hour. Albert's sample is a ___.
A) simple random sample
B) systematic sample
C) convenience sample
D) stratified sample
E) cluster sample
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6
Chapter 5: Probability
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Sample Questions
Q1) Which of the following statements is \(\textbf{ not }\) true regarding probabilities:
A) probability is the basis for inferential statistics.
B) probabilities are subjective measures with limited value in business.
C) probabilities are used to determine the likelihood of certain outcomes.
D) probabilities can inform many business decisions.
Q2) Given P(A) = 0.45, P(B) = 0.30, P(A and B) = 0.05. Which of the following is true?
A) A and B are independent.
B) A and B are mutually exclusive.
C) A and B are collectively exhaustive.
D) A and B are not independent.
E) A and B are complimentary.
Q3) If the occurrence of one event does \(\textbf{ not }\) affect the occurrence of another event, then the two events are mutually exclusive.
A)True
B)False
Q4) What are the three methods of assigning probabilities?
Q5) Name the branch of statistics that is supported by probability.
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Chapter 6: Decision Analysis and Expected Value
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Sample Questions
Q1) In a decision-making under uncertainty scenario, the decision maker chooses the decision alternative that has the minimum expected (i.e., probability-weighted) payoff among all the available alternatives.
A)True
B)False
Q2) The expected monetary payoff of perfect information is the value of perfect information.
A)True
B)False
Q3) The amount of time a patient waits in a doctor's office is an example of a continuous random variable.
A)True
B)False
Q4) The variance of a discrete distribution increases if we add a positive constant to each one of its value.
A)True
B)False
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Chapter 7: Discrete Probability Distributions
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Sample Questions
Q1) One hundred policyholders file claims with CareFree Insurance. Ten of these claims are fraudulent. Claims manager Earl Evans randomly selects four of the one hundred claims for thorough investigation. If x represents the number of fraudulent claims in Earl's sample, x has a ___.
A) normal distribution
B) hypergeometric distribution, but may be approximated by a binomial C) binomial distribution, but may be approximated by a normal D) binomial distribution, but may be approximated by a Poisson E) exponential distribution
Q2) The probability that a student will pass an exam on any trial is 0.7. What is the standard deviation of the number of trials needed to pass the exam?
A) 0.540
B) 0.548
C) 0.782
D) 0.880
E) 0.002
Q3) Suppose 18 major companies operate in Canada and 12 are located in Alberta. If three companies are randomly selected from the entire list, what is the probability that none is from Alberta?
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Page 9
Chapter 8: Continuous Distributions
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Sample Questions
Q1) If x, the time (in minutes) to complete an change job at certain auto service station, is uniformly distributed over the interval 20 to 30, inclusively (20 \(\le\) x \(\le\) 30), then the probability that an oil change job is completed in 25 to 28 minutes, inclusively, i.e., P(25 \(\le\) x \(\le\) 28) is ___.
A) 0.250
B) 0.500
C) 0.300
D) 0.750
E) 81.000
Q2) Let z be a normal random variable with mean 0 and standard deviation 1. What is P(z < -2.1)?
A) 0.4821
B) -0.4821
C) 0.9821
D) 0.0179
E) -0.0179
Q3) Suppose x is uniformly distributed over some interval and the mean value ( ) of x is 2 and its variance ( <sup>2</sup>) is 1/3. Find the probability that x is between 2 and 2.5, P(2 \(\le\) x \(\le\) 2.5).
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Page 10
Chapter 9: Sampling Distributions
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Sample Questions
Q1) Suppose 40% of the population of pre-teens have a TV in their bedroom. If a random sample of 500 pre-teens is drawn from the population, then the probability that 44% or fewer of the pre-teens have a TV in their bedroom is ___.
A) 0.9644
B) 0.4644
C) 0.0356
D) 0.0400
E) 0.9600
Q2) Suppose 30% of the population has green eyes. If a random sample of size 1200 is drawn, then the probability that less than 348 U.S. citizens have green eyes is ___.
A) 0.2236
B) 0.2764
C) 0.2900
D) 0.7764
E) 0.3336
Q3) Let x be a binomial random variable with n = 50 and ? = 0.3. Determine the probability of at most 13 successes, using the normal approximation for binomial distribution.
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Chapter 10: Confidence Intervals
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Sample Questions
Q1) A random sample of 225 items from a population results in 60% possessing a given characteristic. Using this information, the researcher constructs a 90% confidence interval to estimate the population proportion. The resulting confidence interval is ___.
A) 0.546 to 0.654
B) 0.536 to 0.664
C) 0.596 to 0.604
D) 0.571 to 0.629
E) 0.629 to 0.687
Q2) A researcher wants to estimate the proportion of manufacturing companies that use the Six Sigma method. For this purpose, she takes a random sample of 50 manufacturing companies and finds out that 28 of them employ this method. The point estimate for the proportion of the population that uses this method is ___.
A) 0.88
B) 0.56
C) 0.44
D) 0.28
E) 0.22
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Chapter 11: Hypothesis Testing for Single Populations
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Sample Questions
Q1) Hypotheses are tentative explanations of a principle operating in nature.
A)True
B)False
Q2) Ophelia O'Brien, VP of Consumer Credit of Credit First Banks (CFB), monitors the default rate on personal loans at the CFB member banks. One of her standards is "no more than 5% of personal loans should be in default." On each Friday, the default rate is calculated for a sample of 500 personal loans. Last Friday's sample contained 30 defaulted loans. Using \(\alpha\) = 0.10, the test statistic is ___.
A) 1.03
B) -1.03
C) 0.046
D) -0.046
E) 1.33
Q3) When a \(\textbf{ false }\) null hypothesis is rejected, the researcher has made a Type II error.
A)True
B)False
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Chapter 12: Hypothesis Testing for Two Populations
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Sample Questions
Q1) If the populations are normally distributed but the population variances are unknown the z statistic can be used as the basis for statistical inferences about the difference in two population means using two independent random samples.
A)True
B)False
Q2) You are interested in determining whether the mean price of electricity offered by solar companies is different in the southern states than in the northern states. You select a random sample of 8 solar companies from the southern states and 11 from the northern states. For the southern states, the average price is 12.2 cents per kWh (kilowatt hour) and the standard deviation is 0.8 cents per kWh. For the northern states, the average and standard deviation are 11.7 and 1.0 cents per kWh respectively. If you use a significance level = 0.10 and assuming the values are normally distributed in both populations, the critical t value is ___.
A) 1.330
B) 1.729
C) 1.734
D) 1.740
E) 1.747
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Chapter 13: Analysis of Variance Anova
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Sample Questions
Q1) As director of the employee wellness and productivity program in your company, you are interested in comparing the effects of strength training, aerobic training, and yoga on decreasing rates of injury and absenteeism. The company has 9 divisions with roughly the same number of employees, and you randomly assign 3 divisions to participate in strength training, 3 to aerobic training, and 3 to yoga. Your alternative hypothesis is ___.
A)\(\mu\)<sub>1</sub>\(\neq\)\(\mu\)<sub>2</sub>\(\neq\)\(\mu\)<sub>3</sub >
B) \(\mu\)<sub>1</sub> \(\ge\)\(\mu\)<sub>2</sub> \(\ge\) \(\mu\)<sub>3</sub>
C) \(\mu\)<sub>1</sub>\(\le\) \(\mu\)<sub>2</sub> \(\le\)\(\mu\)<sub>3</sub>
D)\(\mu\)<sub>1</sub>=\(\mu\)<sub>2</sub>=\(\mu\)<sub>3</sub>
E) at least one of the means is different from the others
Q2) Determining the table value for the F distribution requires two values for degrees of freedom.
A)True
B)False
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Chapter 14: Linear Correlation and Simple Linear Regression Analysis
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Sample Questions
Q1) A manager wants to predict the cost (y) of travel for salespeople based on the number of days (x) spent on each sales trip. The following model has been developed: y = $400 + 120x. If a trip took 4 days, the predicted cost of the trip is ___.
A) 480
B) 880
C) 524
D) 2080
E) 1080
Q2) The equation of the trend line for the data based on sales (in $1000) of a local restaurant over the years 2005-2010 is Sales= -265575+132.571x where x is the year. Using the trend line, the forecast sales for the year 2012 is ___.
A) $1157.85
B) $1157850
C) $132571
D) $2673304
E) $1000327
Q3) Regression methods can be pursued to estimate trends that are linear in time.
A)True
B)False
Page 16
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Chapter 15: Categorical Versus Categorical: Tests
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Sample Questions
Q1) The number of degrees of freedom in a chi-square goodness-of-fit test is the number of categories minus the number of parameters estimated minus one.
A)True
B)False
Q2) A goodness-of-fit test is to be performed to see if Web Surfers prefer any of four websites (A, B, C and D) more than the other three. A sample of 60 consumers is used.
What is the expected frequency for website A?
A) 1/4
B) 20
C) 15
D) 10
E) 30
Q3) In a chi-square goodness-of-fit test, actual frequencies are also called calculated frequencies.
A)True
B)False
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