Statistical Methods for Business
Chapter Exam Questions
Course Introduction
Statistical Methods for Business introduces students to the fundamental statistical techniques and concepts essential for data-driven decision making in business environments. The course covers descriptive statistics, probability distributions, hypothesis testing, confidence intervals, regression analysis, and analysis of variance, with an emphasis on practical applications in business contexts such as finance, marketing, operations, and human resources. Through case studies and the use of statistical software, students learn to collect, analyze, interpret, and present data, gaining the skills needed to make informed decisions and solve real-world business problems.
Recommended Textbook
Basic Business Statistics 12th Edition by
Mark L. Berenson
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Page 2
Chapter 1: Introduction
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Q1) Referring to Table 1-2, the 2,150 adults make up
A) the population.
B) the sample.
C) the parameter.
D) the statistic.
Answer: B
Q2) Which of the following is a continuous quantitative (numerical)variable?
A) The color of a student's eyes
B) The number of employees of an insurance company
C) The amount of milk produced by a cow in one 24-hour period
D) The number of gallons of milk sold at the local grocery store yesterday
Answer: C
Q3) An insurance company evaluates many numerical variables about a person before deciding on an appropriate rate for automobile insurance. How long a person has been a licensed driver is an example of a ________ numerical variable.
Answer: continuous
Q4) A personal computer user survey was conducted. The number of years using a personal computer is an example of a ________ numerical variable.
Answer: continuous
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Chapter 2: Organizing and Visualizing Data
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Sample Questions
Q1) Referring to Table 2-12, if the sample is a good representation of the population, we can expect ________ percent of the population will be males.
Answer: 48%
Q2) Referring to Table 2-9, ________ percent of the apartments rented for at least $500.
Answer: 20.8% or 52/250
Q3) Referring to Table 2-13, if a relative frequency or percentage distribution for the detergent data is constructed, using "9.0 but less than 10.0 gallons" as the first class, what percentage of drive-through car wash operations use at least 10 gallons of detergent in a day?
Answer: 88%
Q4) When studying the simultaneous responses to two categorical questions, you should set up a
A) contingency table.
B) frequency distribution table.
C) cumulative percentage distribution table.
D) histogram.
Answer: A
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4
Chapter 3: Numerical Descriptive Measures
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Sample Questions
Q1) Referring to Table 3-11, for the week when the DJIA is high, you will expect the S&P index in that week to
A) be about the same value as the DJIA.
B) be low.
C) be high.
D) have no relationship with the DJIA value.
Answer: C
Q2) Referring to Table 3-1, determine the interquartile range of the ages of the senior citizens.
Answer: 16 years
Q3) Which of the following statistics is not a measure of central tendency?
A) Arithmetic mean
B) Median
C) Mode
D) Q
Answer: D
Q4) Referring to Table 3-9, what is the mean for this population of the five largest bond funds?
Answer: $14.74 billions
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Chapter 4: Basic Probability
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Sample Questions
Q1) Referring to Table 4-6, if a randomly selected student has not passed the ELM, the probability the student is not from northern Texas is ________.
Q2) Referring to Table 4-8, if a randomly selected student lives in the dormitory, what is the probability that the student is a freshman?
Q3) A business venture can result in the following outcomes (with their corresponding chance of occurring in parentheses): Highly Successful (10%), Successful (25%), Break Even (25%), Disappointing (20%), and Highly Disappointing (?). If these are the only outcomes possible for the business venture, what is the chance that the business venture will be considered Highly Disappointing?
A) 10%
B) 15%
C) 20%
D) 25%
Q4) To ethically advertise a school lottery scheme to try to raise money for the athletic department, the organizer of the lottery does not need to explicitly specify the probability of each of the prize in the lottery.
A)True
B)False
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Chapter 5: Discrete Probability Distributions
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Sample Questions
Q1) Referring to Table 5-5, what is the probability out of the 8 new cars it just received that, when each is tested, none of the cars have defective radios?
Q2) Referring to Table 5-3, the standard deviation of the number of retransmissions is ________.
Q3) Referring to Table 5-8, if you decide to choose Design A for 70% of the production lines and Design B for the remaining production lines, what is the coefficient of variation of your investment?
Q4) Referring to Table 5-7, what is the covariance of the two houses?
Q5) Suppose the probability of a power outage at a nuclear power plant on a single day is the same every day of the year. Also the probability of having a power outage on a single day does not increase or decrease the probability of a power outage on another day. Which of the following distributions would you use to determine the probability that a power outage will occur next Monday?
A) Binomial distribution
B) Poisson distribution
C) Normal distribution
D) Hypergeometric distribution
Q6) Referring to Table 5-3, the probability of no retransmissions is ________.
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Chapter 6: The Normal Distribution and Other Continuous Distributions
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Sample Questions
Q1) Referring to Table 6-3, the probability is 75% that the time interval between two consecutive defective light bulbs will fall between which two values that are the same distance from the mean?
Q2) Suppose the light bulbs in a factory burn out at a rate of 50 bulbs per month. Which of the following distributions would you use to determine the probability that the next two light bulbs will burn out 2 days apart?
A) Hypergeometric distribution
B) Poisson distribution
C) Uniform distribution
D) Exponential distribution
Q3) Referring to Table 6-6, find the probability that the annual return of a random year will be less than 11.5%.
Q4) Suppose Z has a standard normal distribution with a mean of 0 and standard deviation of 1. The probability that Z is more than -0.98 is ________.
Q5) The interval between patients arriving at an outpatient clinic follows an exponential distribution at a rate of 15 patients per hour. What is the probability that a randomly chosen arrival to be between 5 minutes and 15 minutes?
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Chapter 7: Sampling and Sampling Distributions
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Sample Questions
Q1) Which of the following sampling methods will more likely be susceptible to ethical violation?
A) Simple random sample
B) Cluster sample
C) Convenience sample
D) Stratified sample
Q2) Items or individuals in a judgment sample are chosen according to their probability of occurrence.
A)True
B)False
Q3) The standard deviation of the sampling distribution of a sample proportion is where \( \sqrt{\frac{\pi(1-\pi)}{n}} \) is the population proportion.
A)True
B)False
Q4) Referring to Table 7-5, what proportion of the samples will have between 20% and 30% of customers who will make a purchase after visiting the website?
Q5) Referring to Table 7-3, what is the probability that the sample mean selling price was between $113,000 and $117,000?
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Chapter 8: Confidence Interval Estimation
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Sample Questions
Q1) Referring to Table 8-11, we are 99% confident that the total numbers of the student population who feel comfortable reporting cheating by their fellow students is between 0.4557 and 0.5043.
A)True
B)False
Q2) The head librarian at the Library of Congress has asked her assistant for an interval estimate of the mean number of books checked out each day. The assistant provides the following interval estimate: from 740 to 920 books per day. What is an efficient, unbiased point estimate of the number of books checked out each day at the Library of Congress?
A) 740
B) 830
C) 920
D) 1,660
Q3) Referring to Table 8-7, we are 99% confident that the average number of rooms rented daily in a given month is somewhere between 24.64 and 49.36.
A)True
B)False
Q4) Referring to Table 8-2, the confidence interval goes from ________ to ________.
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Chapter 9: Fundamentals of Hypothesis Testing:
One-Sample Tests
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Sample Questions
Q1) Referring to Table 9-9, the parameter the president is interested in is
A) the mean number of entering students to his university this year.
B) the mean number of entering students to all U.S. universities this year.
C) the mean SAT score of the entering students to his university this year.
D) the mean SAT score of the entering students to all U.S. universities this year.
Q2) Referring to Table 9-1, the manager can conclude that there is sufficient evidence to show that the mean number of defective bulbs per case is greater than 20 during the morning shift with no more than a 1% probability of incorrectly rejecting the true null hypothesis.
A)True
B)False
Q3) Referring to Table 9-5, the null hypothesis would be rejected at a significance level of = 0.05.
A)True
B)False
Q4) If a researcher does not reject a true null hypothesis, she has made a ________ decision.
Q5) Referring to Table 9-8, what will be the p-value if these data were used to perform a two-tail test?
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Chapter 10: Two-Sample Tests
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Q1) Referring to Table 10-6, what is the 95% confidence interval estimate for the mean difference in weight before and after the diet?
Q2) Referring to Table 10-11, the null hypothesis will be rejected if the test statistic is
Q3) Referring to Table 10-11, the value of the test statistic is ________.
Q4) Referring to Table 10-4, what is the 90% confidence interval estimate for the difference in the two means?
Q5) Referring to Table 10-13, what is the value of the test statistic for testing if there is evidence of a difference in the variabilities of the amount of time required to reach a customer service representative between the two hotels?
Q6) Referring to Table 10-15, what is the value of the test statistic for testing whether there is evidence of a difference in the variances?
Q7) Referring to Table 10-15, what is(are)the critical value(s)of the relevant hypothesis test if the level of significance is 0.10?
Q8) For all two-sample tests, the sample sizes must be equal in the two groups. A)True B)False
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Chapter 11: Analysis of Variance
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Sample Questions
Q1) Referring to Table 11-1, at a significance level of 1%,
A) there is insufficient evidence to conclude that the mean number of customers bumped by the 4 packages are not all the same.
B) there is insufficient evidence to conclude that the mean number of customers bumped by the 4 packages are all the same.
C) there is sufficient evidence to conclude that the mean number of customers bumped by the 4 packages are not all the same.
D) there is sufficient evidence to conclude that the mean number of customers bumped by the 4 packages are all the same.
Q2) Referring to Table 11-3, using an overall level of significance of 0.05, the critical value of the Studentized range Q used in calculating the critical range for the Tukey-Kramer procedure is ________.
Q3) Referring to Table 11-8, it is appropriate to use the Tukey multiple comparison procedure based on the test result above.
A)True
B)False
Q4) Referring to Table 11-4, the within-group variation or SSW is ________.
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Page 13
Chapter 12: Chi-Square Tests and Nonparametric Tests
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Q1) Referring to Table 12-20, what should be the null and alternative hypotheses of the test?
A) H : M = M = M vs. H : M M M
B) H : M = M = M vs. H : M M = M
C) H : M = M = M vs. H : M = M M
D) H : M = M = M vs. H : Not all M are equal (where j = 1, 2, 3)
Q2) Referring to Table 12-1, if the firm wanted to test whether this proportion has changed from the previous study, which represents the relevant hypotheses?
A) H : - = 0 versus H : - 0
B) H : - 0 versus H : - = 0
C) H : - 0 versus H : - > 0
D) H : - 0 versus H : - < 0
Q3) Referring to Table 12-11, the test will involve ________ degrees of freedom.
Q4) Referring to Table 12-12, how many children in the survey spent less than 2 hours watching TV and no more than 2 hours reading storybooks on average?
A) 8
B) 130
C) 175
D) 687
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Chapter 13: Simple Linear Regression
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Q1) Referring to Table 13-11, what are the lower and upper limits of the 95% confidence interval estimate for population slope?
Q2) Referring to Table 13-11, which of the following is the correct alternative hypothesis for testing whether there is a linear relationship between revenue and the number of downloads?
A) H?: b? = 0
B) H?: b? ? 0
C) H?: ?? = 0
D) H?: ?? ? 0
Q3) Referring to Table 13-4, the prediction for the amount of sales (in $1,000s)for a person who brings 25 new clients into the firm is ________.
Q4) Referring to Table 13-7, to test whether the prison stocks portfolio is negatively related to the S&P 500 index, the p-value of the associated test statistic is
A) 2.94942E-07.
B) 2.94942E-07/2.
C) (2.94942E-07)2.
D) 8.7932E-13.
Q5) Referring to Table 13-4, the total sum of squares (SST)is ________.
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Chapter 14: Introduction to Multiple Regression
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Q1) Referring to Table 14-10, to test the significance of the multiple regression model, what are the degrees of freedom?
Q2) Referring to Table 14-18, what is the estimated probability that a school with an mean SAT score of 1100, a TOEFL criterion that is not at least 550, and the room and board expense of 7 thousand dollars will be a private school?
Q3) Referring to Table 14-5, what fraction of the variability in sales is explained by spending on capital and wages?
A) 27.0%
B) 50.9%
C) 68.9%
D) 83.0%
Q4) Referring to 14-16, the 0 to 60 miles per hour acceleration time of a sedan is predicted to be 0.1252 seconds higher than that of an SUV.
A)True
B)False
Q5) Referring to Table 14-8, the value of the F-statistic for testing the significance of the entire regression is ________.
Q6) Referring to Table 14-7, the net regression coefficient of X is ________.
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Chapter 15: Multiple Regression Model Building
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Q1) Referring to Table 15-6, what is the value of the Mallow's Cp statistic for the model that includes X , X , X and X ?
Q2) Referring to Table 15-2, given a quadratic relationship between sale price (Y)and property size (X ), what null hypothesis would you test to determine whether the curves differ from cove and non-cove properties?
A) H : = = = 0
B) H : = = 0
C) H : = = 0
D) H : = 0
Q3) Referring to Table 15-6, the model that includes X?, X?, X? and X? should be among the appropriate models using the Mallow's Cp statistic.
A)True
B)False
Q4) Referring to Table 15-5, what is the value of the variance inflationary factor of Sedan?
Q5) Referring to Table 15-6, what is the value of the Mallow's Cp statistic for the model that includes X , X , X and X ?
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Chapter 16: Time-Series Forecasting
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Q1) Referring to Table 16-14, the best interpretation of the coefficient of Q (0.617)in the regression equation is
A) the number of contracts in the third quarter of a year is approximately 62% higher than the average over all 4 quarters.
B) the number of contracts in the third quarter of a year is approximately 62% higher than it would be during the fourth quarter.
C) the number of contracts in the third quarter of a year is approximately 314% higher than the average over all 4 quarters.
D) the number of contracts in the third quarter of a year is approximately 314% higher than it would be during the fourth quarter.
Q2) Referring to Table 16-13, what is your forecast for the 13 month using the first-order autoregressive model?
Q3) Referring to Table 16-13, what is the exponentially smoothed value for the first month using a smoothing coefficient of W = 0.5?
Q4) Referring to Table 16-11, using the first-order model, the forecast of mean attendance for month 17 is ________.
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Chapter 17: Statistical Applications in Quality Management
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Sample Questions
Q1) Referring to Table 17-3, suppose the analyst constructs an \(\bar { X }\) chart to see if the production process is in-control. What is the center line for this chart?
A) 64.3
B) 59.5
C) 58.0
D) 57.1
Q2) Referring to Table 17-9, construct an \(\bar { X }\) chart for the weight.
Q3) Referring to Table 17-8, an R chart is to be constructed for the time required to register. The upper control limit for this data set is ________.
Q4) Referring to Table 17-6, the estimate of the proportion of poor quality bags of candy is ________.
Q5) Referring to Table 17-1, which expression best characterizes the p chart?
A) Cycles
B) Increasing trend
C) In-control
D) Individual outliers
Q6) Referring to Table 17-8, construct an \(\bar { X }\) chart for the time required to register.
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Chapter 18: A Roadmap for Analyzing Data
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Sample Questions
Q1) An agronomist wants to compare the crop yield of 3 varieties of chickpea seeds. She plants all 3 varieties of the seeds on each of 5 different patches of fields. She then measures the crop yield in bushels per acre. Which of the following tests will be the most appropriate to find out if there is any difference in crop yield among the 3 varieties?
A) Paired t test
B) One-way ANOVA F test for differences among more than two means
C) Randomized block F test for differences among more than two means
D) Two-way ANOVA F test for the variety effect
Q2) An economist is interested to see how consumption for an economy (in $ billions)is influenced by gross domestic product ($ billions)and aggregate price (consumer price index). Annual data from 30 years were collected. Which of the following would be the most appropriate analysis to perform?
A) Simple linear regression
B) Multiple linear regression
C) Exponential smoothing
D) Autoregressive modeling for trend fitting and forecasting
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