Business Statistics
Midterm Exam
Course Introduction
Business Statistics introduces students to the fundamental concepts and methods of statistical analysis as applied to business decision-making. The course covers topics such as data collection, descriptive statistics, probability distributions, sampling, hypothesis testing, regression analysis, and interpretation of statistical results. Emphasis is placed on using statistical tools for solving business problems, making data-driven decisions, and effectively communicating findings through graphical and numerical methods. Through practical examples and the use of statistical software, students will develop the skills necessary to analyze business data and support managerial decisions in a variety of business contexts.
Recommended Textbook
Business Statistics For Contemporary Decision Making 9th Edition by Ken Black
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19 Chapters
1767 Verified Questions
1767 Flashcards
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Page 2
Chapter 1: Introduction to Statistics
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Sample Questions
Q1) A large manufacturing company in Indianapolis produces valves for the chemical industry. According to specifications,one particular valve is supposed to have a five-inch opening on the side.Quality control inspectors take random samples of these valves just after the hole is bored. They measure the size of the hole in an effort to determine if the machine is out?of?adjustment.
The measurement of the diameter of the hole represents which level of data?
A) Interval level
B) Ordinal level
C) Nominal level
D) Central level
E) Ratio level
Answer: E
Q2) Which of the following operations is meaningful for processing nominal data?
A) Addition
B) Multiplication
C) Ranking
D) Counting
E) Division
Answer: D
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Page 3
Chapter 2: Charts and Graphs
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Sample Questions
Q1) Your company is doing market research to assess the feasibility of a new product.The market research team gathers pricing information of the 60 existing products in the market that would compete with your company's product.The most expensive brand is priced at $22.95,and the least expensive one at $20.59.If the relative frequency of the first class is 0.05 and the cumulative frequency for the second class is 10,then the relative frequency for the second class is
A) 0.05
B) 0.11
C) 0.12
D) 0.17
E) 1.67
Answer: C
Q2) One advantage of a stem and leaf plot over a frequency distribution is that the values of the original data are retained.
A)True
B)False
Answer: True
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Chapter 3: Descriptive Statistics
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Sample Questions
Q1) According to Chebyshev's Theorem,approximately how many values in a large data set will be within 2 standard deviations of the mean?
A) At least 75%
B) At least 68%
C) At least 95%
D) At least 89%
E) At least 99%
Answer: A
Q2) A commuter travels many miles 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 44,39,41,35,and 41. What is the mean absolute deviation for this sample data?
A) 0
B) 12
C) 3
D) 2.4
E) 1.2
Answer: D
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Page 5
Chapter 4: Probability
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Sample Questions
Q1) Abel Alonzo,Director of Human Resources,is exploring employee absenteeism at the Plano Power Plant. Ten percent of all plant employees work in the finishing department; 20% of all plant employees are absent excessively; and 7% of all plant employees work in the finishing department and are absent excessively. A plant employee is selected randomly; F is the event "works in the finishing department;" and A is the event "is absent excessively." P(F|A)= _____________.
A) 0.35
B) 0.70
C) 0.13
D) 0.37
E) 0.10
Q2) 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
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Chapter 5: Discrete 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) If sampling is performed without replacement,the hypergeometric distribution should be used. However,the binomial may be used to approximate this if _______.
A) n > 5%N
B) n < 5%N
C) the population size is very small
D) there are more than two possible outcomes of each trial
E) the outcomes are continuous
Q3) The number of successes in a hypergeometric distribution is unknown
A)True
B)False
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Page 7
Chapter 6: Continuous Distributions
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Sample Questions
Q1) The normal distribution is an example of _______.
A) a discrete distribution
B) a continuous distribution
C) a bimodal distribution
D) an exponential distribution
E) a binomial distribution
Q2) If x,the time (in minutes)to complete an oil change job at certain auto service station,is uniformly distributed over the interval 20 to 30,inclusively (20 \(\le\) x \(\le\) 30),then the height of this distribution,f(x),is __________________.
A) 1/10
B) 1/20
C) 1/30
D) 12/50
E) 1/60
Q3) The height of the rectangle depicting a uniform distribution is the probability of each outcome and it same for all of the possible outcomes
A)True
B)False
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8
Chapter 7: Sampling and Sampling Distributions
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Sample Questions
Q1) 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
Q2) Suppose 40% of all college students have a computer at home and a sample of 100 is taken.What is the probability that more than 50 of those in the sample have a computer at home?
A) 0.4793
B) 0.9793
C) 0.0207
D) 0.5207
E) 0.6754
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9
Chapter 8: Statistical Inference: Estimation for Single Populations
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Sample Questions
Q1) 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 95% confidence interval for the proportion of manufacturing companies that use six sigma is ______.
A) 0.462 to 0.628
B) 0.452 to 0.638
C) 0.442 to 0.648
D) 0.432 to 0.658
E) 0.422 to 0.668
Q2) Suppose a random sample of 16 is selected from a population with a normal distribution with a known population standard deviation of 10.Assume that the sample mean is 4.2.Based on a 90% confidence interval for the population mean,we can conclude that 0.1 is a plausible number for the population mean .
A)True
B)False
Q3) A t-distribution is similar to a normal distribution,but with flatter tails.
A)True
B)False
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Chapter 9: Statistical Inference: Hypothesis Testing for
Single Populations
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Sample Questions
Q1) Suppose you are testing the null hypothesis that a population mean is less than or equal to 46,against the alternative hypothesis that the population mean is greater than 46.If the sample size is 25, \(\sigma\) is known,and = .01,the critical value of z is
A) 1.645 B) -1.645 C) 1.28
-2.33 E) 2.33
Q2) The probability of committing a Type II error changes for each alternative value of the parameter.
A)True
B)False
Q3) Hypotheses are tentative explanations of a principle operating in nature. A)True B)False
Q4) When a false null hypothesis is rejected,the researcher has made a Type II error. A)True
B)False
11
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Chapter 10: Statistical Inferences About Two Populations
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Sample Questions
Q1) If a 98% confidence interval for the difference in the two population means does not contain zero,then the null hypothesis of zero difference between the two population means cannot be rejected at a 0.02 level of significance.
A)True
B)False
Q2) Tamara Hill,fund manager of the Hill Value Fund,manages a portfolio of 250 common stocks. Tamara is searching for a 'low risk' issue to add to the portfolio,i.e.,one with a price variance less than that of the S&P 500 index. Moreover,she assumes an issue is not 'low risk' until demonstrated otherwise. Her staff reported that during the last nine quarters the price variance for the S&P 500 index (population 1)was 25,and for the last seven quarters the price variance for XYC common (population 2)was 6. Assume that stock prices are normally distributed in the population.Using \(\alpha\) = 0.05,the observed F value is _______.
A) 17.36
B) 2.04
C) 0.24
D) 4.77
E) 4.17
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Page 12
Chapter 11: A Nalysis of Variance and Design of Experiments
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Sample Questions
Q1) Cindy Ho,VP of Finance at Discrete Components,Inc.(DCI),theorizes that the discount level offered to credit customers affects the average collection period on credit sales. Accordingly,she has designed an experiment to test her theory using four sales discount rates (0%,2%,4%,and 6%)by randomly assigning five customers to each sales discount rate.In Cindy's experiment,"average collection period" is ________.
A) the dependent variable
B) a treatment variable
C) a blocking variable
D) a concomitant variable
E) a constant
Q2) In experimental design,a characteristic of the subjects that was present prior to the experiment and is not the result of the experimenter's manipulations or control is called a classification variable.
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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13
Chapter 12: Simple Regression Analysis and Correlation
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Sample Questions
Q1) A cost accountant is developing a regression model to predict the total cost of producing a batch of printed circuit boards as a linear function of batch size (the number of boards produced in one lot or batch).The slope of the accountant's model is
A) batch size
B) unit variable cost
C) fixed cost
D) total cost
E) total variable cost
Q2) A simple regression model developed for 12 pairs of data resulted in a sum of squares of error,SSE = 246.The standard error of the estimate is _______.
A) 24.6
B) 4.96
C) 20.5
D) 4.53
E) 12.3
Q3) For the regression line,y = 21 5x,21 is the y-intercept of the line.
A)True
B)False
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Page 14
Chapter 13: Multiple Regression Analysis
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Sample Questions
Q1) A market analyst is developing a regression model to predict monthly household expenditures on groceries as a function of family size,household income,and household neighborhood (urban,suburban,and rural).The response variable in this model is _____.
A) family size
B) expenditures on groceries
C) household income
D) suburban
E) household neighborhood
Q2) The mean square error (MS<sub>err</sub>)is calculated by dividing the sum of squares error (SS<sub>err</sub>)by the number of observations in the data set (N).
A)True
B)False
Q3) In a multiple regression model,the partial regression coefficient of an independent variable represents the increase in the y variable when that independent variable is increased by one unit if the values of all other independent variables are held constant.
A)True
B)False
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15
Chapter 14: Building Multiple Regression Models
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Sample Questions
Q1) A qualitative variable which represents categories such as geographical territories or job classifications may be included in a regression model by using indicator or dummy variables.
A)True
B)False
Q2) If a qualitative variable has c categories,then only (c - 1)dummy variables must be included in the regression model.
A)True
B)False
Q3) If a coefficient of determination for a given model is 0.85,then its variance inflation factor is ______.
A) 8.5
B) 7.7
C) 6.2
D) 4.9
E) 3.6
Q4) Recoding data cannot improve the fit of a regression model.
A)True
B)False
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Chapter 15: Time-Series Forecasting and Index Numbers
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Sample Questions
Q1) If the Year<sub>t</sub> Quarter<sub>q</sub> actual value is 9,885 and the Year<sub>t</sub> Quarter<sub>q</sub> deseasonalized value is 10,112.53,then the Year<sub>t</sub> Quarter<sub>q</sub> seasonal index is ______.
A) 0.022
B) 0.9775
C) 2.22
D) 97.75
E) 102.30
Q2) In exponential smoothing models,the value of the smoothing constant may be any number between ___________.
A) -1 and 1
B) -5 and 5
C) 0 and 1
D) 0 and 10
E) 0 and 100
Q3) An exponential smoothing technique in which the smoothing constant alpha is equal to one is equivalent to a regression forecasting model.
A)True
B)False
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Chapter 16: Analysis of Categorical Data
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Sample Questions
Q1) A chi-square goodness-of-fit test to determine if the observed frequencies in ten categories are Poisson distributed has nine degrees of freedom.
A)True B)False
Q2) In a chi-square goodness-of-fit test,actual frequencies are also called calculated frequencies.
A)True B)False
Q3) A chi-square goodness-of-fit test is being used to test the goodness-of-fit of a uniform distribution for a dataset with "k" categories.This test has (k-3)degrees of freedom.
A)True B)False
Q4) A researcher is interested in using a chi-square test of independence to determine if age is independent of minutes spent reading.Age is divided into four categories while minutes spent reading is classified as high,medium,low.The number of degrees of freedom for this test is 12.
A)True B)False
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Chapter 17: Nonparametric Statistics
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Sample Questions
Q1) The sampling distribution of R,the number of runs,in the one-sample runs test for randomness of the observations in a large sample is approximately normal if H<sub>0</sub> is true.
A)True
B)False
Q2) The alternate hypothesis for a one-sample runs test is __________________.
A) "the observations in the sample are not cross-linked"
B) "the observations in the sample are correlated"
C) "the observations in the sample are not statistically independent"
D) "the observations in the sample are not randomly generated"
E) "the observations are not systematically generated"
Q3) Spearman rank correlation values,r<sub>x</sub>,range between +1 and 0.
A)True
B)False
Q4) The Kruskal-Wallis test is an extension of the HYPERLINK "http://en.wikipedia.org/wiki/Mann%E2%80%93Whitney_U" \o "Mann-Whitney U" Mann-Whitney U test to 3 or more groups.
A)True
B)False
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Chapter 18: Statistical Quality Control
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Sample Questions
Q1) The term Total Quality Management (TQM)was coined by the well-known quality guru,Edward Deming.
A)True
B)False
Q2) Ophelia O'Brien,VP of Consumer Credit of American First Banks (AFB),is designing a p chart to monitor the default rate on personal loans at the AFB member banks. Her data includes the proportion in default for 30 samples of personal loans.Each sample contains 50 loans,and the average of the 30 proportions is 0.05.The upper control limit for Ophelia's p chart is _____________.
A) 0.0925
B) 0.0500
C) 0.0308
D) 0.1825
E) 0.1425
Q3) A schematic representation of all the activities and interactions that occur in a process is called a flowchart.
A)True
B)False
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20
Chapter 19: Decision Analysis
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Sample Questions
Q1) Dan Hein owns the mineral and drilling rights to a 1,000 acre tract of land. If he drills a well and does not strike oil his net loss will be $50,000,but if he drills a well and strikes oil his net gain will be $100,000.If he does not drill,his loss is the cost of the mineral and drilling rights,which amount to $1000.For Dan's decision problem,the variable "oil in the tract" is one of the ___________.
A) payoffs
B) decision alternatives
C) states of nature
D) revised probabilities
E) prior probabilities
Q2) In a decision analysis problem,variables (such as investing in common stocks or corporate bonds)which are under the decision maker's control are called decision alternatives.
A)True
B)False
Q3) The expected monetary payoff of perfect information is the value of perfect information.
A)True
B)False
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