Business Statistics Practice Questions - 3406 Verified Questions

Business Statistics

Practice Questions

Course Introduction

Business Statistics introduces students to the fundamental concepts and techniques used to analyze data and make informed business decisions. The course covers descriptive statistics, probability theory, sampling distributions, hypothesis testing, regression analysis, and correlation, with a focus on interpreting results within a business context. Through real-world case studies and practical applications, students learn how to collect, organize, and summarize data, identify trends, and draw meaningful conclusions to drive strategic planning and operational improvements across various business functions.

Recommended Textbook

Statistics for Business and Economics 8th Edition by Betty Newbold

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17 Chapters

3406 Verified Questions

3406 Flashcards

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Chapter 1: Describing Data: Graphical

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Sample Questions

Q1) One important principle that must be followed in the sample selection process is randomness.

A)True

B)False

Answer: True

Q2) A researcher randomly picks the first item or subject from a population,N then selects each j^th subject where j is the ratio of the population size,N to the desired sample size,n.In this case,the researcher is using:

A)random sampling.

B)systematic random sampling.

C)population sampling.

D)parameter sampling.

Answer: B

Q3) All graphic representations of sets of data need to be completely self-explanatory.That includes a descriptive meaningful title and identification of the vertical and horizontal scales.

A)True

B)False

Answer: True

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Chapter 2: Describing Data: Numerical

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Sample Questions

Q1) For any set of numerical data values arranged in an ascending or descending order,the value of the observation in the center is called the weighted mean.

A)True

B)False

Answer: False

Q2) What is the smallest measure of central tendency in a positively skewed distribution?

A)the arithmetic mean

B)the median

C)the mode

D)None of the above

Answer: C

Q3) A sample of size 100 from a bell-shaped population has a mean of 110 and a standard deviation of 10.0.Using the Empirical Rule,about how many items of the sample will be above 130?

Answer: Approximately 2 to 3 items

Q4) What conclusions can you draw about the relationship between age and net wealth?

Answer: It appears that as you get older,at first your wealth increases until the age of 65,then starts to decrease.

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Chapter 3: Probability

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Sample Questions

Q1) What is the probability that an executive who speaks a foreign language fluently has traveled internationally?

Answer: T = Traveled internationally

S = Speaks a foreign language

Since P(T S)= 0.46,P(S / 11ea5b8a_b6f5_fc07_b1f3_5d94cd172dbd_TB2968_11 )= 0.10,and P(T S)= 0.04.Hence,P(T)+ P(S)= 0.50,and we know P(S)= P(T S)+ P( 11ea5b8a_b6f6_2318_b1f3_e33ce1ff0625_TB2968_11

S),after solving these two equations we get P(S)= 0.10 and P(T)= 0.40.

P(T | S)= P(T S)/ P(S)= 0.04 / 0.10 = 0.40

Q2) What is the probability that an executive does not speak a foreign language fluently?

Answer: T = Traveled internationally

S = Speaks a foreign language

Since P(T S)= 0.46,P(S / 11ea5b8a_b6f6_bf59_b1f3_b108013ae9fd_TB2968_11 )= 0.10,and P(T S)= 0.04.Hence,P(T)+ P(S)= 0.50,and we know P(S)= P(T S)+ P( 11ea5b8a_b6f6_bf5a_b1f3_3321bd39c6bd_TB2968_11

S),after solving these two equations we get P(S)= 0.10 and P(T)= 0.40. P( 11ea5b8a_b6f6_e66b_b1f3_9bc04683b112_TB2968_11 )= 1 - P(S)= 1 - 0.10 = 0.90

Q3) Calculate the marginal probabilities of events A_i.

Answer: P(A₁)= 0.25,P(A₂)= 0.40,P(A₃)= 0.35

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Chapter 4: Discrete Random Variables and Probability

Distributions

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Sample Questions

Q1) The expected value of a discrete random variable can be shown to be the weighted average over all possible outcomes.

A)True

B)False

Q2) For a binomial probability distribution,the probability of success must always be greater than the probability of failure.

A)True

B)False

Q3) A true-false quiz consists of ten questions.If you guess the answer to each question,what is the probability of getting all ten questions correct?

A)0.0010

B)0.0439

C)0.2051

D)0.2461

Q4) What is P(X 2)?

Q5) Find the probability the next inspected disk will have no missing pulse.

Q6) Compute the covariance between X and Y.

Q8) Calculate the variances of X and Y. Page 6

Q7) Calculate the conditional distribution of X given Y.

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Chapter 5: Continuous Random Variables and Probability

Distributions

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Sample Questions

Q1) The total area under the curve of the probability density function for a continuous random variable depends on the shape of the probability distribution of the random variable.

A)True

B)False

Q2) Let X₁,X₂,...... ,X_k be a set of k continuous random variables.The function F(x₁,x₂,..... ,x_k)which defines the probability that simultaneously X₁ < x₁,X₂ < x₂ and so on is called a:

A)marginal distribution function.

B)marginal cumulative distribution function.

C)joint cumulative distribution function.

D)normal distribution function.

Q3) You are the Webmaster for your firm's Website.From your records,you know that the probability that a visitor will buy something from your firm is 0.23.If the number of visitors in one day is 952,what is the probability that less than 200 of them will buy something from your firm? Use the normal approximation for the binomial.

Q4) Find the probability that the number of successes is less than 700.

Q5) Find the probability that X is less than 52.

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Chapter 6: Sampling and Sampling Distributions

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Sample Questions

Q1) What is the probability that more than 1.5% of the 60 items have some form of defect?

Q2) Find any pair of numbers,a and b,to complete the following sentence: The probability is 0.95 that the sample variance is between a% and b% of the population variance.

Q3) Which of the following distributions is used to determine the sampling distribution of the sample variance?

A)normal distribution

B)binomial distribution

C)chi-square distribution

D)Poisson distribution

Q4) The probability is 0.10 that for a sample of 30 bottles,the sample variance is less than what number?

Q5) Develop the sampling distribution for the mean number of points you receive from flipping four coins.

Q6) The probability is 95% that the average waiting time for a random sample of ten customers is greater than how many minutes?

Q7) What is the probability that the sample mean selling price was more than $116,000?

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Chapter 7: Estimation: Single Population

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Sample Questions

Q1) A mother who is interested in the true proportion of R-rated movies shown on pay TV by a cable system randomly selects 98 listings and finds 14 of them are R-rated movies.In her report to the subcommittee she wants to be 98% confident that the true proportion will be in an interval which she states.She has asked you to assist her by preparing a 98% confidence interval based on the data she collected.What should she report?

Q2) Find a 95% confidence interval for the population mean.

Q3) How large the sample is needed to estimate the population proportion if ME = 0.09,a = 0.05?

Q4) Find a point estimate of the population mean and population standard deviation of the weight losses.

Q5) The margin of error can be reduced by decreasing the sample size.

A)True

B)False

Q6) Determine the 95% confidence interval estimate of the population mean.

Q7) The value of the standard error of the mean is determined by dividing the total error by the sample size.

A)True

B)False

Page 10

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Chapter 8: Estimation: Additional Topics

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Sample Questions

Q1) Find the width of the 99% confidence interval.

Q2) Find the 90% confidence interval for the difference in the means of the two populations.

Q3) Find the width of the 95% confidence interval.

A)2.29

B)3.86

C)4.58

D)5.92

Q4) Calculate the width of the interval for a 90% confidence interval.

Q5) What is the width of the interval?

A)4.86

B)2.56

C)3.24

D)6.48

Q6) What is the margin of error at 95% Confidence interval?

A)2.76

B)1.62

C)1.25

D)2.00

Q7) Calculate the width of the interval for a 95% confidence interval.

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Chapter 9: Hypothesis Testing: Single Population

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Sample Questions

Q1) Calculate the p-value for this test.

Q2) Explain carefully the distinction between null and alternative hypotheses.

Q3) List out the features of a power function in hypothesis testing.

Q4) If the p-value of a two-sided test for the mean of a population is .005,then the null hypothesis will be rejected at a level of significance of .01.

A)True

B)False

Q5) How is hypothesis testing used in problems that have high variance levels?

Q6) What is the appropriate decision rule?

A)Reject H₀ if t statistic > t_,_n_-1

B)Reject H₀ if t statistic < -t_n_{-1, /2}or > t_n_{-1, /2}

C)Reject H₀ if t statistic = t_,n_-1

D)Reject H₀ if t statistic < -t_,n_-1

Q7) Increasing the probability of a Type I error by one percent decreases the probability of a Type II error by one percent.

A)True

B)False

Q8) Test the hypothesis at the 5% level.

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Chapter 10: Hypothesis Testing: Additional Topics

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Sample Questions

Q1) State the appropriate null and alternative hypotheses to determine whether the two population means differ at 10% significance level.

Q2) What assumptions are necessary for a comparison of the population variances to be valid?

A)At least one of the population variances is known.

B)The samples are correlated.

C)One of the samples follows normal distribution and the other follows F distribution.

D)Both sampled populations are normally distributed.

Q3) When testing for the differences between the means of two independent populations,only a two-tailed test can be used.

A)True

B)False

Q4) Use Excel or Minitab to conduct a two-sample t-test for data in the table above.

Q5) Perform the appropriate test of hypothesis to determine whether there is a significant difference in time to completion of medical school between women and men.Test using = 0.05.

Q6) What is the test statistic?

Q7) Calculate an estimate of the common proportion.

Page 13

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Chapter 11: Simple Regression

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Sample Questions

Q1) Compute the regression sum of squares,SSR.

Q2) Determine the slope of the least squares regression line.

A)10.48

B)18.05

C)3.57

D)0.46

Q3) Which of the following is used to plot the dependent variable versus the independent variable?

A)a histogram

B)a bar chart

C)a pie chart

D)a scatter diagram

Q4) Calculate the regression sum of squares.

Q5) Compute the value of the model error variance.

A)18.05

B)1.50

C)10.48

D)0.63

Q6) What is the correlation coefficient for the stock returns of the two years? What sign does it have? Why?

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Chapter 12: Multiple Regression

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Sample Questions

Q1) Which of the following would you use to apply multiple regression to situations when independent variables are categorical?

A)correlated variables

B)transformed variables

C)dependent variables

D)dummy variables

Q2) Test against the appropriate one-sided alternative,the null hypothesis that,for fixed family size,milk consumption does not depend linearly on income.Use = 0.025.

Q3) Compute the adjusted coefficient of determination.

Q4) Develop a 95% confidence interval for the population slope ₃.

Q5) What are your hypotheses regarding this model? Explain.Are there any other variables you would have liked to include?

Q6) Test the hypothesis H₀ : ₃ = 0 and interpret your results.

Q7) Interpret the estimated regression coefficient b₃.

Q8) Interpret the coefficient b₁.

Q9) Interpret the estimated regression coefficient b₁.

Q10) Interpret the estimate b₂.

Page 15

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Chapter 13: Additional Topics in Regression Analysis

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Sample Questions

Q1) In multiple regression analysis,when the independent variables are highly correlated,this situation is called:

A)autocorrelation.

B)homoscedasticity.

C)multicollinearity. D)linearity.

Q2) Suppose you model the relationship as Y = ₀ + ₁X₁ + ₂X₂ + ₃X₃ + ₅X₅ + ₆X₆.What effect does being a business student have on hours studying each week?

A) ₅ - ₀

B) ₅

C) ₅ + ₀

D) ₅ _* ₀

Q3) Explain what is meant by specification bias.What effects does specification bias have on the results of a regression?

Q4) Test the hypotheses H₀ : There is no first-order autocorrelation vs.H₁: There is positive first-order autocorrelation,given that: Durbin-Watson

Statistic d = 1.12,n = 45,k = 5,and = 0.05

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Chapter 14: Analysis of Categorical Data

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Sample Questions

Q1) Which of the following statements about nonparametric tests is false?

A)We can safely employ nonparametric tests even when we know nothing at all about the population from which sample data are being drawn.

B)We can conduct nonparametric tests with nominal data.

C)We can conduct nonparametric tests with ordinal data.

D)We can only conduct nonparametric tests with data of a higher order than nominal or ordinal.

Q2) A campus administrator has found that 64% of all students view courses as very useful,20% as somewhat useful,and 16% as worthless.Of a random sample of 150 students taking business courses,105 found the course in question very useful,25 somewhat useful,and 20 worthless.Test at the 10% level the null hypothesis that the population distribution for business courses is the same as that for all courses.Carry out the calculations manually,and verify your answers using statistical software.

Q3) Nonparametric tests are often preferred to parametric tests since they do not rely on the normality assumption of the underlying population distribution.

A)True

B)False

Q4) Briefly discuss some advantages of nonparametric tests.

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Chapter 15: Analysis of Variance

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Sample Questions

Q1) In a one-way ANOVA,all the populations may or may not be normally distributed.

A)True

B)False

Q2) Is there sufficient evidence to reject the null hypothesis that there is no interaction between brokerage houses and stocks' earning forecasts? Use = 0.05.

Q3) Is there sufficient evidence to reject the null hypothesis that there is no difference between different types of brochures? Use = 0.05.

Q4) The value for F_3,15,0.01in a one-way ANOVA is found to be 26.87.

A)True

B)False

Q5) What is the value of "H"?

A)3.66

B)2.95

C)1.24

D)0.81

Q6) Is there sufficient evidence to reject the null hypothesis that the average number of machines per order is the same for different regions of the country?

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Chapter 16: Time-Series Analysis and Forecasting

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Sample Questions

Q1) Use the seasonal index method to seasonally adjust this series.

Q2) Simple exponential smoothing provides a forecast based on a weighted average of current and past values.

A)True

B)False

Q3) The term seasonal variation may refer to the four traditional seasons,or to systematic patterns that occur during a month,a week,or even one day.

A)True

B)False

Q4) The Holt-Winters exponential smoothing procedure:

A)does not allow for trend or seasonality in a time series.

B)does not allow for trend,but allows the cyclic component in a time series.

C)allows for trend,and possibly also seasonality,in a time series.

D)allows seasonality,but does not allow trend in a time series.

Q5) Compute the sales forecast for the 1^st quarter of year 4.

A)approximately 113 units

B)approximately 269 units

C)approximately 164 units

D)approximately 369 units

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Chapter 17: Additional Topics in Sampling

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Sample Questions

Q1) Find a 95% confidence interval for the total amount of the 800 accounts receivable.

A)70,421 ± 3,836.24

B)70,421 ± 4,589.73

C)70,421 ± 2,057.41

D)70,421 ± 5,657.48

Q2) Estimate the mean monthly expenditures.

A)78.26

B)73.74

C)59.82

D)64.67

Q3) Using an unbiased estimation procedure,find an estimate of the variance of the population mean.

A)29.60

B)19.72

C)14.26

D)25.87

Q4) Estimate the proportion of all students going on the field trip.

Q5) If a total sample of 120 students is taken,determine the number of juniors and seniors under the proportional allocation scheme.

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