Decision Science Question Bank
Course Introduction
Decision Science explores the systematic study of decision-making processes, equipping students with frameworks and analytical tools to make informed choices in complex and uncertain environments. The course covers foundational concepts from probability, statistics, economics, psychology, and operations research to analyze individual and group decision-making behavior. Students will learn methods for structuring decisions, evaluating alternatives, modeling risk and uncertainty, and applying quantitative techniques to real-world scenarios in business, public policy, and everyday life. Through case studies and practical applications, the course aims to develop critical thinking and problem-solving skills essential for effective and rational decision-making.
Recommended Textbook
Business Statistics Communicating with Numbers 3rd Edition by Sanjiv Jaggia
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20 Chapters
2578 Verified Questions
2578 Flashcards
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Chapter 1: Statistics and Data
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102 Verified Questions
102 Flashcards
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Sample Questions
Q1) The ordinal scale of data measurement is
A) less sophisticated than the nominal scale.
B) more sophisticated than the interval scale.
C) more sophisticated than the nominal scale.
D) as equally sophisticated as the nominal scale.
Answer: C
Q2) Which of the following represents a population and a sample from that population?
A) Attendees at a sporting event, and those who purchased popcorn at said sporting event
B) Full-time employees at a marketing firm, and temporary summer interns at the marketing firm
C) Seniors at Boston College and students in a first-semester business statistics course
D) Stocks available on the NYSE and stocks on the NASDAQ
Answer: A
Q3) Body weight is an example of a discrete variable.
A)True
B)False
Answer: False
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3
Chapter 2: Tabular and Graphical Methods
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Sample Questions
Q1) A stem-and-leaf diagram most resembles a(n) ________.
Answer: histogram
Q2) When constructing a pie chart, only a few, the most frequent, categories must be included in the pie.
A)True
B)False
Answer: False
Q3) For quantitative data, a cumulative relative frequency distribution records the proportion (fraction) of values that fall below the upper limit of each class.
A)True
B)False
Answer: True
Q4) The percent frequency of a category equals the frequency of the category multiplied by 100%.
A)True
B)False
Answer: False
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Chapter 3: Numerical Descriptive Measures
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152 Flashcards
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Sample Questions
Q1) What is the interquartile range?
A) Q3 - Q1
B) Max - Min
C) Mean - Median
D) All values between Q1 and Q3
Answer: A
Q2) The Boom company has recently decided to raise the salaries of all employees by 10%. Which of the following is (are) expected to be affected by this raise?
A) Mean and mode only
B) Mean and median only
C) Mode and median only
D) Mean, median, and mode
Answer: D
Q3) Chebyshev's theorem is applicable when the data are ________.
A) any shape
B) skewed to the left
C) skewed to the right
D) approximately symmetric and bell-shaped
Answer: A
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Page 5
Chapter 4: Introduction to Probability
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Sample Questions
Q1) An experiment consists of tossing a fair coin and rolling a fair die. Find the probability of tossing a head and rolling a 6.
Q2) How many ways can a committee of four students be selected from a 15-member club?
A) 15!/44!
B) 15!/(11! × 4!)
C) 15 × 14 × 13
D) 15!/(11! × 4!) and 15 × 14 × 13
Q3) Mutually exclusive events may share common outcomes of a sample space. A)True B)False
Q4) Mutually exclusive and collectively exhaustive events ________.
A) contain all outcomes in a sample space and may share common outcomes
B) contain all outcomes in a sample space and do not share common outcomes
C) do not have to contain all outcomes in a sample space but do not share common outcomes
D) do not have to contain all outcomes in a sample space and may share common outcomes
Q5) The likelihood of rain has been reported at 80% for next week. Find the odds for rain occurring.
Page 6
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Chapter 5: Discrete Probability Distributions
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158 Flashcards
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Sample Questions
Q1) What is a characteristic of the mass function of a discrete random variable X?
A) The sum of probabilities P(X = x) over all possible values x is 1.
B) For every possible value x, the probability P(X = x) is between 0 and 1.
C) Describes all possible values x with the associated probabilities P(X = x).
D) All of the above.
Q2) Forty-four percent of consumers with credit cards carry balances from month to month. Four consumers with credit cards are randomly selected. What is the probability that all consumers carry a credit card balance?
A) 0.1015
B) 0.0375
C) 0.3133
D) 0.1390
Q3) The relationship between the variance and the standard deviation is such that the standard deviation is the positive square root of the variance.
A)True
B)False
Q4) The risk of the portfolio depends not only on the individual risks of the assets but also on the ________ between the asset returns.
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Page 7
Chapter 6: Continuous Probability Distributions
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Sample Questions
Q1) A hedge fund returns on average 26% per year with a standard deviation of 12%. Using the empirical rule, approximate the probability the fund returns over 50% next year.
A) 0.5%
B) 1%
C) 2.5%
D) 5%
Q2) The height of the probability density function f(x) of the uniform distribution defined on the interval [a, b] is ________.
A) 1/(b - a) between a and b, and zero otherwise
B) (b - a)/2 between a and b, and zero otherwise
C) (a + b)/2 between a and b, and zero otherwise
D) 1/(a + b) between a and b, and zero otherwise
Q3) Given normally distributed random variable X with a mean of 12 and a standard deviation of 3.4, find the following probabilities.
A) P(11 < X 16.4)
B) P(9 X < 11.5)
C) P(8.6 < X < 15.4)
D) P(X > 13.6)
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Page 8
Chapter 7: Sampling and Sampling Distributions
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136 Flashcards
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Sample Questions
Q1) Using the central limit theorem, applied to the sampling distribution of the sample proportion, what conditions must be met?
A) np 5 and n(1 - p) 5
B) np 5 and n(1 - p) 5
C) np 5 and n(1 - p) 5
D) np 5 and n(1 - p) 5
Q2) According to the Bureau of Labor Statistics it takes an average of 16 weeks for young workers to find a new job. Assume that the probability distribution is normal and that the standard deviation is two weeks. What is the probability that 20 young workers average less than 15 weeks to find a job?
A) 0.0225
B) 0.0450
C) 0.0375
D) 0.0127
Q3) The ________ variation in the production process is caused by specific events or factors that can usually be identified and eliminated.
Q4) Cluster sampling is preferred when the objective is to ________.
Q5) Stratified random sampling is preferred when the objective is to ________.
Q6) A preferred approach to quality control is the ________ approach.
Page 9
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Chapter 8: Interval Estimation
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131 Flashcards
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Sample Questions
Q1) What is the minimum sample size required to estimate a population mean with 95% confidence when the desired margin of error is E = 1.5? The population standard deviation is known to be 10.75.
A) n = 138
B) n = 139
C) n = 197
D) n = 198
Q2) A basketball coach wants to know how many free throws an NBA player shoots during the course of an average practice. The coach takes a random sample of 43 players and finds the average number of free throws shot per practice was 225 with a standard deviation of 35. Construct a 99% confidence interval for the average number of free throws in practice.
A) [210.5992, 239.4008]
B) [210.6155, 239.3845]
C) [211.2506, 238.7494]
D) [214.2290, 235.7710]
Q3) It is important to know that ________ is increased when we estimate the population standard deviation with the sample standard deviation.
Q4) The parameter p represents the ________ of successes in the population.
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Chapter 9: Hypothesis Testing
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Sample Questions
Q1) The owner of a large car dealership believes that the financial crisis decreased the number of customers visiting her dealership. The dealership has historically had 800 customers per day. The owner takes a sample of 100 days and finds the average number of customers visiting the dealership per day was 750. Assume that the population standard deviation is 350. The population parameter to be tested is ________.
A) the average number of 750 customers per day
B) the proportion of customers visiting the dealership per day
C) the mean number of customers visiting the dealership per day
D) the standard deviation of the number of customers visiting the dealership per day
Q2) When conducting a hypothesis test for a given sample size, if the probability of a Type I error decreases, then the ________.
A) probability of Type II error decreases
B) probability of incorrectly rejecting the null hypothesis increases
C) probability of incorrectly not rejecting the null hypothesis increases
D) probability of incorrectly not rejecting the null hypothesis decreases
Q3) Construct the null and alternative hypotheses for the following claims.
A) "The school's mean GPA differs from 2.50 GPA."
B) "The school's mean GPA is less than 2.50 GPA."
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Chapter 10: Statistical Inference Concerning Two Populations
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Sample Questions
Q1) The confidence interval for the difference <sub>1</sub> - <sub>2</sub> is based on the same approach used in the case of one sample: Point Estimate ± Standard Error.
A)True
B)False
Q2) Suppose you want to perform a test to compare the mean GPA of all freshmen with the mean GPA of all sophomores in a college? What type of sampling is required for this test?
A) Independent sampling with qualitative data
B) Independent sampling with quantitative data
C) Matched-pairs sampling with qualitative data
D) Matched-pairs sampling with quantitative data
Q3) To use R for solving hypothesis tests for the difference between two means, use the function ________.
Q4) A left-tailed test determines whether <sub>1</sub> is ________ then <sub>2</sub>.
Q5) When constructing a confidence interval for the mean difference <sub>D</sub>, we follow the same general format of point estimate ± ________.
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Q6) A common case of dependent sampling is usually referred to as ________ sampling.
Chapter 11: Statistical Inference Concerning Variance
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Sample Questions
Q1) How does the width of the interval respond to the changes in the confidence level?
A) The width of the interval decreases with an increase in the confidence level.
B) The width of the interval increases with an increase in the confidence level.
C) The width of the interval is halved with the increase in the confidence level.
D) The width of the interval is doubled with the decrease in the confidence level.
Q2) The values taken from a normally distributed population are 21
27 28 35 30 32 33.
Which of the following is a 95% confidence interval for the population variance?
A) [2.03, 16.30]
B) [10.12, 81.43]
C) [9.00, 72.41]
D) [11.39, 91.64]
Q3) The formula for the confidence interval of the population variance <sup>2</sup> is valid only when the random sample is drawn from a ________ distributed population.
Q4) The F distribution depends on ________ degrees of freedom.
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Chapter 12: Chi-Square Tests
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120 Flashcards
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Sample Questions
Q1) For the Jarque-Bera test for normality, the null and alternative hypotheses are
A) H<sub>0</sub>: S < 0 and K > 0, H<sub>A</sub>: S < 0 or K < 0
B) H<sub>0</sub>: S < 0 and K = 0, H<sub>A</sub>: S > 0 or K 0
C) H<sub>0</sub>: S = 0 and K = 0, H<sub>A</sub>: S 0 or K 0
D) H<sub>0</sub>: S = 0 and K > 0, H<sub>A</sub>: S 0 or K < 0
Q2) For the goodness-of-fit test for normality to be applied, what is the minimum number of qualitative intervals the quantitative data can be converted to?
A) 2
B) 4
C) 5
D) 10
Q3) Suppose you want to determine if gender and major are independent. Which of the following tests should you use?
A) Goodness-of-fit test for a multinomial experiment
B) Chi-square test for independence
C) Goodness-of-fit test for normality
D) Jarque-Bera test for normality
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Chapter 13: Analysis of Variance
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Sample Questions
Q1) The variability due to chance, also known as the within-treatments variance, is the estimate of <sup>2</sup> which is not based on the variability ________.
A) between the sample means
B) due to random chance
C) within each sample
D) due to the common population variance
Q2) When two factors interact, the effect of one factor on the mean depends upon the specific value or level for the other factor.
A)True
B)False
Q3) We use ANOVA to test for differences between population means by examining the amount of variability between the samples relative to the amount of variability within the samples.
A)True
B)False
Q4) One-way ANOVA assumes the population standard deviations are unknown and assumed unequal.
A)True
B)False
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Chapter 14: Regression Analysis
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140 Flashcards
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Sample Questions
Q1) Which of the following Excel functions returns the sample correlation coefficient?
A) CORRELATION
B) CORREL
C) CORREL.S
D) COVARIANCE.S
Q2) Unlike the coefficient of determination, the sample correlation coefficient in a simple linear regression ________. A) can be greater than 1
B) measures the percentage of variation explained by the regression line C) indicates whether the slope of the regression line is positive or negative D) is a proportion
Q3) The deterministic component of a linear regression model is due to the omission of relevant factors that influence the response variable.
A)True
B)False
Q4) A residual is the difference between the predicted and observed values of y.
A)True
B)False
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Chapter 15: Inference With Regression Models
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Sample Questions
Q1) If the variance of the error term is not the same for all observations, we ________.
A) get estimators that are biased
B) can perform tests of significance
C) cannot conduct tests of significance
D) Both get estimators that are biased and cannot conduct tests of significance are correct.
Q2) The ________ model is a complete model that imposes no restrictions on the coefficients.
Q3) Multicollinearity is suspected when ________.
A) there is a low R<sup>2</sup> coupled with significant explanatory variables
B) there is a high R<sup>2</sup> coupled with significant explanatory variables
C) there is a low R<sup>2</sup> coupled with insignificant explanatory variables
D) there is a high R<sup>2</sup> coupled with insignificant explanatory variables
Q4) If the confidence interval does not contain the value zero, then the ________ variable associated with the regression coefficient is significant.
Q5) With the partial F test, we basically analyze the ratio of (SSE<sub>R </sub>SSE<sub>U</sub>) to ________.
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Chapter 16: Regression Models for Nonlinear Relationships
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Sample Questions
Q1) A model in which both the response variable and the explanatory variable have been log transformed is called a(n) ________.
A) exponential model
B) logarithmic model
C) linear model
D) log-log model
Q2) For the exponential model ln(y) = <sub>0</sub> + <sub>1</sub>x + , <sub>1</sub> × 100% is the approximate percentage change in E(y) when x increases by 1%.
A)True
B)False
Q3) What R function is used to fit a quadratic regression model?
A) lm
B) predict
C) summary
D) cor
Q4) The log-log regression model is ________ in the variables.
Q5) A cubic regression model is a polynomial regression model of order 2.
A)True
B)False
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Chapter 17: Regression Models With Dummy Variables
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Sample Questions
Q1) A logit model ensures that the predicted probability of the binary response variable falls between ________.
Q2) For the model y = <sub>0 </sub>+ <sub>1</sub>x + <sub>2</sub>d + <sub>3</sub>xd + , the dummy variable d causes only a shift in intercept.
A)True
B)False
Q3) A model formulated as y = <sub>0</sub> + <sub>1</sub>x + = P(y = 1) + is called a(n) ________ probability model.
Q4) Quantitative variables assume meaningful ________, whereas qualitative variables represent some ________.
A) categories, numeric values
B) numeric values, categories
C) categories, responses
D) responses, categories
Q5) For the logit model, the predicted values of the response variables can always be interpreted as probabilities.
A)True
B)False
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Chapter 18: Time Series and Forecasting
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Sample Questions
Q1) Which of the following is a smoothing technique?
A) Moving average methods
B) Exponential trend models
C) Polynomial trend models
D) Autoregressive models
Q2) If there are T observations to estimate the lagged regression model y<sub>t</sub> = <sub>0</sub> + <sub>1</sub>x<sub>t</sub><sub> - 1</sub> + <sub>t</sub>, what is the actual number of observations used to make the forecast for time period T?
A) T - 1
B) T + 1
C) 1 - T
D) T
Q3) Under which of the following conditions is qualitative forecasting considered attractive?
A) When the forecasts have to be documented.
B) When the forecasts have to be independent of the forecaster's judgment.
C) When past data are either unavailable or are misleading.
D) When the forecasts can be based on reliable data.
Q4) ________ patterns are caused by the presence of a random error term.
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Chapter 19: Returns, Index Numbers, and Inflation
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Sample Questions
Q1) Suppose the simple price index for a good was 112 in 2008, using 2007 as the base year. In 2009 however, the simple price index for the same good was 98.
A) What does this information imply?
B) If the price of the good was $20 in 2008, what was the price in 2009?
Q2) Which of the following correctly identifies the Fisher equation?
A) r = (1 + R) / (1 + i)
B) r = R / (1 + i)
C) 1 + r = R / (1 + i)
D) 1 + r = (1 + R) / (1 + i)
Q3) The income yield from a one-year infrastructure bond purchased today is 0.5%.
Compute the real return from this bond if the inflation rate a year later is expected to be 4% and the capital gains yield is zero.
Q4) Index numbers provide direct comparisons of prices not only with respect to the base year, but also between non-base years.
A)True
B)False
Q5) The ________ component is the capital gain or loss resulting from an increase or decrease in the value of the asset.
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Chapter 20: Nonparametric Tests
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Sample Questions
Q1) The nonparametric test for two population medians under independent sampling is known as ________.
A) Wilcoxon signed-rank test
B) Wilcoxon rank-sum test
C) Kruskal-Wallis test
D) Wald-Wolfowitz runs test
Q2) The Kruskal-Wallis test is always a ________-tailed test.
Q3) Nonparametric tests do not require data of interval or ratio scale.
A)True
B)False
Q4) If we have a matched-pairs sample of ordinal data, we can use the sign test to determine whether there are significant differences between the ________.
Q5) The Wilcoxon signed-rank test for a population median does not assume anything about the distribution of the population.
A)True
B)False
Q6) The method of runs above and below the median is especially useful in detecting trends and cyclical patterns in ________ data.
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