Quantitative Methods for Business Chapter Exam Questions
Course Introduction
Quantitative Methods for Business is designed to equip students with essential analytical tools and techniques used in business decision-making. The course covers a range of topics including data analysis, probability, statistical inference, forecasting, linear programming, optimization, and decision analysis. Through practical applications and case studies, students learn to interpret quantitative data, construct models, and use software tools to solve real-world business problems. Emphasis is placed on developing critical thinking and problem-solving skills necessary for effective and data-driven management across various business functions.
Recommended Textbook
Statistical Techniques in Business and Economics 17th Edition by Douglas Lind
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Chapter 1: What Is Statistics
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Q1) The order in which runners finish in a race would be an example of continuous data.
A)True
B)False Answer: False
Q2) The ordinal level of measurement is considered the "lowest" level of measurement.
A)True
B)False Answer: False
Q3) What level of measurement is the Centigrade temperature scale?
A)Nominal
B)Ordinal
C)Interval
D)Ratio Answer: C
Q4) An ordinal level of measurement implies some sort of ranking.
A)True
B)False
Answer: True
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Chapter 2: Describing Data: Frequency Tables, Frequency
Distributions, and Graphic Presentation
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Q1) For a relative frequency distribution,relative frequency is computed as
A)the class width divided by the class interval.
B)the class midpoint divided by the class frequency.
C)the class frequency divided by the class interval.
D)the class frequency divided by the number of observations.
Answer: D
Q2) To construct a pie chart,relative class frequencies are used to graph the "slices" of the pie.
A)True
B)False
Answer: True
Q3) To convert a frequency distribution to a relative frequency distribution,divide each class frequency by the sum of the class frequencies.
A)True
B)False
Answer: True
Q4) The midpoint of a class is halfway between the lower and upper limits.
A)True
B)False
Answer: True
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Chapter 3: Describing Data: Numerical Measures
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Q1) What is the relationship among the mean,median,and mode in a symmetric distribution?
A)They are all equal.
B)The mean is always the smallest value.
C)The mean is always the largest value.
D)The mode is the largest value.
Answer: A
Q2) For any data set,which measures of central location have only one value?
A)Mode and median
B)Mode and mean
C)Mode and standard deviation
D)Mean and median
Answer: D
Q3) In a sample of 10 people,3 persons earn $8 an hour,6 earn $9 an hour,and 1 earns $12 an hour. The weighted mean hourly wage is $9.
A)True
B)False
Answer: True
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Chapter 4: Describing Data: Displaying and Exploring Data
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Q1) A dot plot is useful for showing the range of the data.
A)True
B)False
Q2) Quartiles divide a distribution into 10 equal parts.
A)True
B)False
Q3) A relationship between two nominal variables is summarized by a contingency table.
A)True
B)False
Q4) A stem-and-leaf display includes the following row: 5 | 10 11 31 52 79 98. Assume that the data are rounded to the nearest whole number.
A)The frequency of the class is 7.
B)The minimum value in the class is 5.
C)The maximum value in the class is 98.
D)The class interval is 100.
Q5) A box plot graphically shows the 10th and 90th percentiles.
A)True
B)False
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Chapter 5: A Survey of Probability Concepts
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Q1) The first card selected from a standard 52-card deck was a king. If it is returned to the deck,what is the probability that a king will be drawn on the second selection?
A)1/4 or 0.25
B)1/13 or 0.077
C)12/13 or 0.923
D)1/3 or 0.33
Q2) The National Center for Health Statistics reported that of every 883 deaths in recent years,24 resulted from an automobile accident,182 from cancer,and 333 from heart disease. What is the probability that a particular death is due to an automobile accident?
A)24/883 or 0.027
B)539/883 or 0.610
C)24/333 or 0.072
D)182/883 or 0.206
Q3) If there are "m" ways of doing one thing,and "n" ways of doing another thing,the multiplication formula states that there are (m)× (n)ways of doing both.
A)True
B)False
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Chapter 6: Discrete Probability Distributions
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Q1) The mean or expected value for a binomial probability distribution is ________.
A) = n (1 )
B) = (1 )
C) = n(1 n)
D) = n
Q2) David's gasoline station offers 4 cents off per gallon if the customer pays in cash and does not use a credit card. Past evidence indicates that 40% of all customers pay in cash. During a one-hour period,15 customers buy gasoline at this station. This situation is an example of what type of discrete probability distribution?
A)Continuous probability distribution
B)Poisson probability distribution
C)Binomial probability distribution
D)Hypergeometric probability distribution
Q3) In a Poisson distribution,the probability of success may vary from trial to trial.
A)True
B)False
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Chapter 7: Continuous Probability Distributions
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Sample Questions
Q1) An analysis of the grades on the first test in History 101 revealed that they approximate a normal curve with a mean of 75 and a standard deviation of 8. The instructor wants to award the grade of A to the upper 10% of the test grades. To the nearest percent,what is the dividing point between an A and a B grade?
A)80
B)85
C)90
D)95
Q2) A binomial distribution has 100 trials (n = 100)with a probability of success of 0.25 ( = 0.25). To apply the normal distribution to approximate the binomial,what are the mean and standard deviation?
A)µ= 100 and = 0.25
B)µ = 25 and = 100
C)µ = 25 and = 4.33
D)µ= 100 and = 2500
Q3) For a uniformly distributed random variable,x,P(x)= 1/(b a).
A)True
B)False
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Chapter 8: Sampling Methods and the Central Limit
Theorem
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Q1) According to the central limit theorem,________.
A)sample size is important when the population is not normally distributed
B)increasing the sample size decreases the dispersion of the sampling distribution
C)the sampling distribution of the sample means is uniform
D)the sampling distribution of the sample means will be skewed
Q2) The central limit theorem states that for a sufficiently large sample,the sampling distribution of the means of all possible samples of size n generated from the population will be approximately normally distributed with the mean of the sampling distribution equal to <sup>2 </sup>and the variance equal to <sup>2</sup>/n.
A)True
B)False
Q3) Suppose we select every fifth invoice in a file. What type of sampling is this?
A)Random
B)Cluster
C)Stratified
D)Systematic
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Chapter 9: Estimation and Confidence Intervals
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Q1) A random sample of 85 supervisors revealed that they worked an average of 6.5 years before being promoted. The population standard deviation was 1.7 years. Using the 0.95 degree of confidence,what is the confidence interval for the population mean?
A)6.99 and 7.99
B)4.15 and 7.15
C)6.14 and 6.86
D)6.49 and 7.49
Q2) When using the t-distribution to calculate a confidence interval,we assume that the population of interest is normal or nearly normal.
A)True B)False
Q3) The finite population correction factor is applied when the population size is known. A)True B)False
Q4) A point estimate is a single value used to estimate a population parameter. A)True B)False
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Chapter 10: One-Sample Tests of Hypothesis
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Q1) For a one-tailed test with a 0.05 level of significance,the critical z-statistic is 1.645,but the critical t-statistic is 1.96.
A)True
B)False
Q2) A hypothesis regarding the weight of newborn infants at a community hospital is that the mean is 6.6 pounds. A sample of seven infants is randomly selected and their weights at birth are recorded as 9.0,7.3,6.0,8.8,6.8,8.4,and 6.6 pounds. If = 0.05,what is the critical t-value?
A) 2.365
B)±1.96
C)±2.365
D)±2.447
Q3) What are the critical z-values for a two-tailed hypothesis test if = 0.01?
A)±1.960
B)±2.326
C)±2.576
D)±1.645
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Chapter 11: Two-Sample Tests of Hypothesis
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Q1) When testing the difference between two dependent population means,the test statistic is based on a ________.
A)pooled variance
B)standard deviation of the differences
C)pooled proportion
D)sum of the population variances
Q2) A statistics professor wants to compare grades in two different classes of the same course. This is an example of a paired sample.
A)True
B)False
Q3) If we are testing for the difference between two population means,it is assumed that the sample observations from one population are independent of the sample observations from the other population.
A)True
B)False
Q4) When dependent samples are used to test for differences in the means,we compute paired differences.
A)True
B)False
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Chapter 12: Analysis of Variance
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Q1) If the computed value of F is 0.99 and the F critical value is 3.89,we would not reject the null hypothesis.
A)True
B)False
Q2) In a two-way ANOVA with interaction,a significant interaction term indicates that
A)the response variable is interactive
B)a blocking factor is present
C)both factors are unrelated
D)both factors have a combined effect on the response variable
Q3) When a blocking effect is included in an ANOVA,the result is a smaller error sum of squares.
A)True B)False
Q4) The F-distribution's curve is positively skewed. A)True B)False
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Chapter 13: Correlation and Linear Regression
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Q1) A sales manager for an advertising agency believes that there is a relationship between the number of contacts that a salesperson makes and the amount of sales dollars earned. What is the independent variable?
A)Salesperson
B)Number of contacts
C)Amount of sales
D)Sales manager
Q2) Which of the following statements regarding the coefficient of correlation is true?
A)It ranges from 0.0 to + 1.0 inclusive.
B)It describes the relationship between two variables.
C)A value of 0.00 indicates two variables are related.
D)It is calculated as the square of the slope.
Q3) If the correlation between two variables is close to one,the association between the variables is ________.
A)strong
B)moderate
C)weak
D)zero
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Chapter 14: Multiple Regression Analysis
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Q1) The variance inflation factor can be used to reduce multicollinearity by ________.
A)eliminating variables for a multiple regression model
B)decreasing homoscedasticity
C)evaluating the distribution of residuals
D)testing the null hypothesis that all regression coefficients equal zero
Q2) A researcher is studying the relationship between 10 different variables and a critical measure of business performance. What method can be used to select the best set of variables to predict performance?
A)Stepwise regression
B)ANOVA
C)Simple linear regression
D)Residual analysis
Q3) Which of the following statements about stepwise regression is true?
A)It uses only dependent variables and adds them one by one.
B)It uses independent variables with insignificant regression coefficients.
C)It is a step-by-step method that adds independent variables one by one in order to build a more efficient regression equation.
D)It selects the independent variable with the weakest correlation first.
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Chapter 15: Nonparametric Methods: Nominal Level
Hypothesis Tests
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Sample Questions
Q1) A sample of 100 production workers is obtained. The workers are classified by gender (male,female)and by age (under 20,20 29,30 39,and 40 or over). How many degrees of freedom are there?
A)0
B)3
C)6
D)5
Q2) To test if an observed frequency distribution with five classes is normally distributed,we compute probabilities for each class based on a(n)________.
A)standard normal distribution
B)chi-square distribution
C)student's t-distribution
D)F-distribution
Q3) For a goodness-of-fit test,the following are possible null and alternate hypotheses:
H<sub>0</sub>: Sales are uniformly distributed among the five locations.
H<sub>1</sub>: Sales are not uniformly distributed among the five locations.
A)True
B)False
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Chapter 16: Nonparametric Methods: Analysis of Ordinal
Data
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Q1) A nonparametric equivalent of a version of the ANOVA test,which tests the hypothesis that several population means are equal,is known as the ________.
A)Wilcoxon ranked-sum test
B)Spearman's coefficient of rank correlation
C)Kruskal-Wallis test
D)sign test
Q2) To test the hypothesis,the Wilcoxon signed-rank test uses a ________.
A)z-statistic
B)T-test statistic
C)chi-square statistic
D)student's t-statistic
Q3) Which of the following statements is true regarding the sign test?
A)It is based on the sign of the differences.
B)It is used with independent populations.
C)The chi-square is used as the test statistic.
D)The "T" statistic is the test statistic.
Q4) The sign test is an appropriate nonparametric test for dependent samples.
A)True
B)False
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Chapter 17: Index Numbers
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Q1) Real income is computed by ________.
A)dividing money income by the CPI and multiplying by 100
B)dividing the CPI by money income and multiplying by 100
C)multiplying money income by the CPI
D)subtracting the CPI from money income
Q2) The Consumer Price Index is ________.
A)an annual price index published by the Bureau of Labor Statistics to measure the percent change in stock market indexes such as the DJIA
B)a Laspeyres index that allows consumers to determine the degree to which their purchasing power is being eroded by price increases
C)a monthly price index that measures the change in price of a fixed market basket of goods and services from one period to another
D)both a Laspeyres index that allows consumers to determine the degree to which their purchasing power is being eroded by price increases and a monthly price index that measures the change in price of a fixed market basket of goods and services from one period to another
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Chapter 18: Time Series and Forecasting
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Q1) For the third quarter,the sales are 1,000 units; the seasonal index for the quarter is 1.10. What are the deseasonalized sales for the quarter?
A)1,000
B)1,100
C)909
D)0.90
Q2) In the final step,using the ratio-to-moving-average method,the total of the 12 modified means should theoretically be equal to 12.00 because the average of the 12 months is designated as 1.00.
A)True
B)False
Q3) Which one of the following is not a component of a time series?
A)Secular trend
B)Moving average
C)Seasonal variation
D)Irregular variation
Q4) If the time series trend is nonlinear,a transformation of the data is required.
A)True
B)False
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Chapter 19: Statistical Process Control and Quality Management
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Q1) Random samples of four items are selected from a manufacturing process at regular intervals and a certain quality characteristic is measured. After 25 samples, X = 15,350 and R = 411.4. To construct a mean chart,what is the upper control limit for the mean?
A)614.00
B)411.4
C)626.00
D)3837.5
Q2) In acceptance sampling,if the number of defects in a sample is less than or equal to the acceptance number,then the incoming lot is accepted.
A)True
B)False
Q3) If a company reports that its quarterly earnings will be between $100 million and $125 million,the range is an example of ________ variation.
A)chance
B)external
C)assignable
D)controlled
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Chapter 20: An Introduction to Decision Theory
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Q1) The manager of Paul's fruit and vegetable store is considering the purchase of a new seedless watermelon from a wholesale distributor. Because this seedless watermelon costs $4,will sell for $7,and is highly perishable,he expects only to sell between six and nine of them. What is the payoff value for the purchase of nine watermelons when the demand is for nine watermelons?
A)6
B)13
C)20
D)27
Q2) The manager of Paul's fruit and vegetable store is considering the purchase of a new seedless watermelon from a wholesale distributor. Because this seedless watermelon costs $4,will sell for $7,and is highly perishable,he expects only to sell between six and nine of them. What is the payoff value for the purchase of nine watermelons when the demand is for eight watermelons?
A)6
B)13
C)20
D)27
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