Business Statistics
Exam Questions
Course Introduction
Business Statistics introduces students to the fundamental concepts and techniques of statistical analysis as they apply to business decision-making. The course covers topics such as descriptive statistics, probability distributions, sampling, hypothesis testing, regression analysis, and data interpretation. Emphasis is placed on applying statistical methods to real-world business problems, enabling students to analyze data, draw meaningful conclusions, and make informed decisions. Through a combination of theoretical understanding and practical application, students develop the quantitative skills necessary for success in various business fields.
Recommended Textbook
Essentials of Business Statistics 1st Canadian Edition by Ken Black
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Page 2
Chapter 1: Introduction to Statistics
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Sample Questions
Q1) Statistics is commonly divided into two branches called descriptive statistics and summary statistics.
A)True
B)False
Answer: False
Q2) A new sales person is paid a commission on each sale. This person made $2,000 his first month on the job. From this he concludes that he will make $24,000 during his first year. This is an example of ___.
A) inferential statistics
B) quantitative data
C) descriptive statistics
D) deferential statistics
E) categorical data
Answer: A
Q3) A census is the process of gathering data on all the entities in the population.
A)True
B)False
Answer: True
Q4) List the four key elements of business statistics.
Answer: Collect data, analyze data, interpret data, and present findings.
Page 3
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Chapter 2: Organizing and Visualizing Data
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Sample Questions
Q1) There are four majors in the School of Business Administration at UDS, Accounting, Finance, Marketing and Management. 240 students are in Accounting major, 160 in Finance major, 80 in marketing major and 320 are in Management major. Develop a relative pie chart for the data.
Answer: 11ea645c_71c4_72e4_9252_c3cf2d9b8163_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
Q3) A cumulative frequency polygon is also called an ogive.
A)True
B)False
Answer: True
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4
Chapter 3: Descriptive Statistics
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Sample Questions
Q1) Skewness and kurtosis of a data set are measures of the shape of the distribution.
A)True
B)False
Answer: True
Q2) A commuter travels many kilometres to work each morning. She has timed this trip 5 times during the last month. The time (in minutes) required to make this trip was 34, 39, 41, 35, and 41. The modal time required for this trip was ___.
A) 39
B) 41
C) 37.5
D) 38
E) 35
Answer: B
Q3) The range and interquartile range don't take into account all of the values in a data set when describing variation.
A)True
B)False
Answer: True
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Chapter 4: Gathering Data
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Sample Questions
Q1) On Saturdays, cars arrive at David Zebda's Scrub and Shine Car Wash at the rate of 80 cars per hour during the ten-hour shift. David wants a sample of 40 Saturday customers to answer the long version of his quality service questionnaire. He randomly selects 9 as a starting point and instructs the crew to select the 9th customer and each customer at intervals of 20 (9, 29, 49, etc.). His sample is a ___.
A) convenience sample
B) simple random sample
C) unsystematic sample
D) stratified sample
E) systematic sample
Q2) Which one of the following is a reason for conducting a census instead of taking a sample?
A) The sample can save money.
B) The sample can save time.
C) The population is difficult to access.
D) The safety of the consumer.
E) none of the above
Q3) What is the difference between a census and a sample?
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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) The department in which you work in your company has 24 employees. A team of 3 employees must be selected to represent the department at a companywide meeting in the headquarters of the company. How many different teams of 3 can be selected?
Q3) Suppose that 3% of all TVs made by some company in 2012 are defective. If 2 of these TVs are randomly selected what is the probability that both are defective?
A) 0.0009
B) 0.0025
C) 0.0900
D) 0.0475
E) 0.19
Q4) Name the branch of statistics that is supported by probability.
Q5) What are the three methods of assigning probabilities?
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Chapter 6: Decision Analysis and Expected Value
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Sample Questions
Q1) The expected monetary payoff of perfect information is the value of perfect information.
A)True
B)False
Q2) The amount of time a patient waits in a doctor's office is an example of a continuous random variable.
A)True B)False
Q3) To compute the variance of a discrete distribution, it is \(\textbf{ not }\) necessary to know the mean of the distribution.
A)True
B)False
Q4) In a decision-making under risk scenario, the expected monetary value of a decision alternative is the arithmetic average of the payoffs to the decision alternative in each state of the nature.
A)True B)False
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Chapter 7: Discrete Probability Distributions
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Q1) The number of cars arriving at a toll booth in five-minute intervals is Poisson distributed with a mean of 3 cars arriving in five-minute time intervals. The probability of 3 cars arriving over a five-minute interval is ___.
A) 0.2700
B) 0.0498
C) 0.2240
D) 0.0001
E) 0.0020
Q2) At A-Life Corporation, managers begin at $35/hour until they reach $50/hour. If the variable x = hourly wage has a discrete uniform distribution, what is the probability that a manager's wage is between $42 and $45?
Q3) In a hypergeometric distribution the population, N, is finite and known. A)True B)False
Q4) A binomial distribution is better than a Poisson distribution to describe the occurrence of major oil spills in the Gulf of Mexico. A)True B)False
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Chapter 8: Continuous Distributions
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Sample Questions
Q1) Suppose the mean time to fill a routine prescription at a local pharmacy is 35 minutes based on the time the physician places the order to the time it is dispensed. Assume the standard deviation is 11 minutes and the z score is -1.3. What is x?
A) 20.7
B) 0.0
C) -14.3
D) 14.3
E) -20.7
Q2) The expected (mean) life of a particular type of light bulb is 1,000 hours with a standard deviation of 50 hours. The life of this bulb is normally distributed. What is the probability that a randomly selected bulb would last fewer than 940 hours?
A) 0.3849
B) 0.8849
C) 0.1151
D) 0.6151
E) 0.6563
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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) According to the central limit theorem, if a sample of size 100 is drawn from a population with a mean of 80, the mean of all sample means would equal ___.
A) 0.80
B) 8
C) 80
D) 100
E) 120
Q3) The normal approximation for binomial distribution can be used when n = 10 and =1/5.
A)True
B)False
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Chapter 10: Confidence Intervals
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Sample Questions
Q1) An assumption underlying the use of t statistic in sample-based estimation is that the population is normally distributed.
A)True
B)False
Q2) The z value associated with a two?sided 80% confidence interval is ___.
A) 1.645
B) 1.28
C) 0.84
D) 0.29
E) 2.00
Q3) The t score (or table value for Student's t distribution) associated with the upper 5% and 48 degrees of freedom is ___.
A) 1.677
B) 1.687
C) 1.697
D) 1.707
E) 1.717
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Chapter 11: Hypothesis Testing for Single Populations
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Sample Questions
Q1) 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
Q2) A null hypothesis is \(\mu\) \(\le\) 500. To test this hypothesis, a sample of 40 is taken and alpha is set at 0.01. If the true mean is 524 and population standard deviation is 115, what is the power of the test?
A) 0.16
B) 0.45
C) 0.67
D) 0.84
E) 0.99
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13
Chapter 12: Hypothesis Testing for Two Populations
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Sample Questions
Q1) Maureen McIlvoy, owner and CEO of a mail order business for wind surfing equipment and supplies, is reviewing the order filling operations at her warehouses. Her goal is 100% of orders shipped within 24 hours. In previous years, neither warehouse has achieved the goal, but the East Coast Warehouse has consistently out-performed the West Coast Warehouse. Her staff randomly selected 200 orders from the West Coast Warehouse (population 1) and 400 orders from the East Coast Warehouse (population 2), and reports that 190 of the West Coast Orders were shipped within 24 hours, and the East Coast Warehouse shipped 372 orders within 24 hours. Assuming \(\alpha\) = 0.05, the appropriate decision is ___.
A) do not reject the null hypothesis
\(\mu\)<sub>1</sub> - \(\mu\)<sub>2</sub> = 0
B) do not reject the null hypothesis <sub>1</sub> - <sub>2</sub> = 0
C) reject the null hypothesis \(\mu\)<sub>1</sub> - \(\mu\)<sub>2</sub> = 0
D) reject the null hypothesis p<sub>1</sub> - p<sub>2</sub> = 0
E) do not reject the null hypothesis <sub>1</sub> - <sub>2</sub> 0
Q2) The difference in two sample means is normally distributed for sample sizes 30, only if the populations are normally distributed.
A)True
B)False
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Page 14
Chapter 13: Analysis of Variance Anova
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Sample Questions
Q1) BigShots, Inc. is a specialty e-tailer that operates 87 catalogue websites on the Internet. Kevin Conn, Sales Director, feels that the style (colour scheme, graphics, fonts, etc.) of a website may affect its sales. He chooses three levels of design style (neon, old world, and sophisticated) and randomly assigns six catalogue websites to each design style. Kevin's null hypothesis is ___.
A) \(\mu\)<sub>1</sub> \(\ge\)\(\mu\)<sub>2</sub> \(\ge\) \(\mu\)<sub>3</sub>
B) \(\mu\)<sub>1</sub>\(\neq\)\(\mu\)<sub>2</sub> \(\neq\)\(\mu\)<sub>3</sub>
C) \(\mu\)<sub>1</sub> = \(\mu\)<sub>2</sub> =\(\mu\)<sub>3</sub>
D)\(\mu\)<sub>1</sub> \(\le\)\(\mu\)<sub>2</sub> \(\le\) \(\mu\)<sub>3</sub>
E) \(\mu\)<sub>1</sub> \(\le\) \(\mu\)<sub>2</sub> \(\mu\)<sub>3</sub>
Q2) The statistical methods of analysis of variance assume that the populations are normally distributed.
A)True
B)False
Q3) In analysis of variance tests a F distribution forms the basis for making the decisions.
A)True
B)False
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Page 15
Chapter 14: Linear Correlation and Simple Linear Regression Analysis
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Sample Questions
Q1) In a simple regression the coefficient of correlation is the square root of the coefficient of determination.
A)True
B)False
Q2) For the regression line, y = 21 5x, 21 is the y-intercept of the line.
A)True
B)False
Q3) The assumption of constant error variance in regression analysis is called ___.
A) heteroscedasticity
B) homoscedasticity
C) residuals
D) linearity
E) nonnormality
Q4) Given a set of paired data, {X, Y}, if Y is independent of X, you would expect that the correlation coefficient is ___.
A) negative
B) zero
C) positive
D) any value between 1.0 and 1.0
E) any value between 0.5 and 0.5
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Chapter 15: Categorical Versus Categorical: Tests
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Sample Questions
Q1) A goodness-of-fit test is to be performed to see if consumers prefer any of three package designs (A, B, and C) more than the other two. A sample of 60 consumers is used. What is the expected frequency for category A?
A) 1/3
B) 20
C) 60
D) 10
E) 30
Q2) The null hypothesis for a chi-square test of independence is that the two variables are not related.
A)True
B)False
Q3) 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
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