Statistics for Management Exam Review
Course Introduction
Statistics for Management is designed to equip students with fundamental statistical tools and concepts relevant to managerial decision-making. The course covers topics such as data collection, descriptive statistics, probability distributions, sampling, hypothesis testing, regression analysis, and inferential techniques. Emphasizing practical application, students will learn how to analyze data, interpret outputs, and make informed business decisions based on statistical evidence. Through real-world case studies and data-driven exercises, the course fosters the ability to apply quantitative reasoning to solve management challenges and support strategic planning.
Recommended Textbook
Statistics for Management and Economics 11th Edition by Gerald Keller
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Page 2
Chapter 1: What Is Statistics
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Sample Questions
Q1) Statistical inference is the process of making an estimate,prediction,or decision about a population based on sample data.
A)True
B)False
Answer: True
Q2) The Surgeon General wanted to study malpractice litigation in Chicago.A sample of 32,000 medical records was selected from all 3.5 million patients who were discharged during the year 2011.Using the information from the sample to make conclusions about malpractice litigation in Chicago is an example of doing ____________________ statistics.
Answer: inferential
Q3) The confidence level of a statistical inference measures:
A)the proportion of times a conclusion about a population will be correct.
B)the proportion of times a conclusion about a population will be wrong.
C)the proportion of times an estimation procedure will be correct.
D)the proportion of times an estimation procedure will be wrong.
Answer: C
Q4) What name do we give to a descriptive measure of a population?
Answer: A parameter.
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Chapter 2: Graphical Descriptive Techniques 1
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Sample Questions
Q1) We can summarize nominal data in a table that presents the categories and their counts.This table is called a(n)____________________ distribution.
Answer: frequency
Q2) From a pie chart you are able to find the frequency for each category.
A)True
B)False
Answer: False
Q3) Which of the following techniques can be used to explore relationships between two nominal variables?
A)Comparing the relative frequencies within a cross-classification table.
B)Comparing pie charts,one for each column (or row).
C)Comparing bar charts,one for each column (or row).
D)All of these choices are true.
Answer: D
Q4) Your age group (1-9; 10-19; 20-29; 30-39; etc.)is an interval variable.
A)True
B)False
Answer: False
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4
Chapter 3: Graphical Descriptive Techniques 2
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Sample Questions
Q1) {Test Grades Narrative} Describe the distribution of exam scores.
Answer: The distribution of the data is symmetrical and bell-shaped,with 67.5% of the observations between 50 and 80.The center looks to be around 65.
Q2) Which of the following statements describes a line chart?
A)A line chart is a graph of time-series data.
B)A line chart is a plot of a variable over time.
C)The horizontal axis of a line chart contains time periods.
D)All of these choices are true.
Answer: D
Q3) Which of the following statements illustrates graphical deception?
A)Absolute changes,rather than percentage changes are reported.
B)To reduce clutter,the scales of the axes are not shown.
C)The Y-axis is stretched or shrunk to show the data in their best possible light.
D)All of these choices are true.
Answer: D
Q4) A graph showing trends over time is called a(n)____________________ chart.
Answer: line
Q5) {Insurance Company Narrative} How many homeowners are represented in the sample?
Answer: 9 + 20 + 14 + 13 + 5 + 3 = 64
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Chapter 4: Numerical Descriptive Techniques
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Sample Questions
Q1) {Ages of Jockeys Narrative}
a.Construct a box plot for the ages and identify any extreme values.
b.What does the box plot tell you about the distribution of the data?
Q2) Suppose that a firm's sales were $2,500,000 four years ago,and sales have grown annually by 25%, 15%, 5%,and 10% since that time.What was the geometric mean growth rate in sales over the past four years?
Q3) {Computers Narrative} Compute the median number of computers.
Q4) {Salaries of Office Workers Narrative} Compute the variance and standard deviation of the salaries,and express the numbers in the appropriate units.
Q5) The shape of a distribution helps answer which question about the data?
A)Where is the approximate center of the distribution?
B)Are the observations close to one another,or are they widely dispersed?
C)Is the distribution symmetric?
D)All of these choices are true.
Q6) The magnitude of the correlation measures the ____________________ of a linear relationship.
Q7) {Weights of Workers Narrative} Find the median number of workers.
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Chapter 5: Data Collection and Sampling
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Sample Questions
Q1) Cluster samples typically cost less but they also increase sampling error.
A)True
B)False
Q2) Sampling error refers to the difference between the sample and the population that exists only because of the observations that happened to be selected for the sample.
A)True
B)False
Q3) Self-administered surveys usually have a high response rate.
A)True
B)False
Q4) Selection bias is a systematic tendency to favor including individuals with particular characteristics,while excluding individuals with other characteristics.
A)True
B)False
Q5) In a self-administered survey,the individuals in the sample are typically contacted by ____________________.
Q6) ____________________ error is due to mistakes made in the acquisition of data.
Q7) A survey is an example of a(n)____________________ study.
Page 7
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Chapter 6: Probability
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Sample
Questions
Q1) Which of the following statements is correct if the events A and B have nonzero probabilities?
A)A and B cannot be both independent and disjoint
B)A and B can be both independent and disjoint
C)A and B are always independent
D)A and B are always disjoint
Q2) {GPA and Class Narrative} What is the probability that the student has GPA over 3.0?
Q3) In general,a posterior probability is calculated by adding the prior and likelihood probabilities.
A)True
B)False
Q4) If events A and B are mutually exclusive and collectively exhaustive,what is the probability that event A occurs?
A)0.25
B)0.50
C)1.00
D)Cannot be determined from the information given.
Q5) P(A|B)is the conditional probability of ____________________ given
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Chapter 7: Random Variables and Discrete Probability
Distributions
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Sample Questions
Q1) The Poisson distribution is applied to events for which the probability of occurrence over a given span of time,space,or distance is very small.
A)True
B)False
Q2) {Mobile Phones Sales Narrative} Find the probability distribution of X + Y.
Q3) If n = 10 and p = 0.60,then the mean of the binomial distribution is
A)0.06
B)2.65
C)6.00
D)5.76
Q4) {Mobile Phones Sales Narrative} Find the marginal probability distribution of the number of iPhones sold daily.
Q5) {Golfing Store Narrative} Determine the marginal probability distributions of X and Y.
Q6) If X has a binomial distribution with n = 4 and p = 0.3,find the probability that X is at most one.
Q7) If X and Y are independent variables,then COV(X,Y)> 0.
A)True
B)False
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Chapter 8: Continuous Probability Distributions
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Sample Questions
Q1) Suppose X has a normal distribution with mean 40 and standard deviation 2.Shifting all the X values to the right 10 units results in a normal distribution with mean ____________________ and standard deviation ____________________.
Q2) Given that Z is a standard normal random variable,a negative value (z)on its distribution would indicate:
A)z is to the left of the mean.
B)the standard deviation of this Z distribution is negative.
C)the area between zero and the value z is negative.
D)None of these choices.
Q3) {Counter Sales Narrative} Use the appropriate exponential distribution to find the probability that the next customer will arrive within 1.5 minutes.
Q4) The probability that a standard normal random variable Z is less than 3.5 is approximately 0.
A)True
B)False
Q5) {Phone Orders Narrative} Find the waiting time at which only 10% of the customers will continue to hold.
Q6) P(Z > 3.00)is approximately ____________________.
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Chapter 9: Sampling Distributions
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Sample Questions
Q1) If the sample size increases,the standard error of the mean also increases.
A)True
B)False
Q2) The amount of time it takes to complete a final examination is negatively skewed distribution with a mean of 70 minutes and a standard deviation of 8 minutes.If 64 students were randomly sampled,the probability that the sample mean of the sampled students exceeds 73.5 minutes is approximately 0.
A)True
B)False
Q3) {DVD Rental Store Narrative} Describe the shape of the sampling distribution of proportion of customers who are under age 21.
Q4) In general,the binomial probability P(X = x)is approximated by the area under a normal curve between x .5 and x + .5.
A)True
B)False
Q5) A sampling distribution is a probability distribution for a statistic,not a parameter.
A)True
B)False
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Chapter 10: Introduction to Estimation
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Sample Questions
Q1) If the bound on the error of estimation decreases,the sample size
Q2) Which of the following is not a part of the formula for constructing a confidence interval estimate of the population mean?
A)A point estimate of the population mean.
B)The standard error of the sampling distribution of the sample mean.
C)The confidence level.
D)The value of the population mean.
Q3) {Time Spent Playing Computer Games Narrative} Determine and interpret the 99% confidence interval estimate of the population mean.
Q4) Knowing that an estimator is unbiased only assures us that its expected value equals the parameter,but it does not tell us how close the estimator is to the parameter. A)True B)False
Q5) An interval estimate is a range of values within which the actual value of the population parameter,such as ,may fall.
A)True B)False
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Chapter 11: Introduction to Hypothesis Testing
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Sample Questions
Q1) {Rechargeable Batteries Narrative} Recalculate if n is increased from 25 to 40.
Q2) By ____________________ the significance level,you increase the probability of a Type II error.
Q3) {Marathon Runners Narrative} Compute the value of the test statistic and specify the rejection region associated with 5% significance level.
Q4) {Rechargeable Batteries Narrative} Review the results of the previous questions.What is the effect of increasing the sample size on the value of ?
Q5) In a criminal trial,a Type II error is made when:
A)a guilty defendant is acquitted.
B)an innocent person is convicted.
C)a guilty defendant is convicted.
D)an innocent person is acquitted.
Q6) {LSAT Scores Narrative} Calculate the p-value.
Q7) The power of the test refers to the probability of rejecting a false null hypothesis.
A)True
B)False
Q8) The ____________________ of a test is a measure of its performance.
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Chapter 12: Inference About a Population
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Sample Questions
Q1) {Socialist Voters Narrative} Test the hypotheses at the 5% significance level.
Q2) The t-distribution is used to develop a confidence interval estimate of the population mean when the population standard deviation is unknown.
A)True
B)False
Q3) If the sampled population is nonnormal,the t-test of the population mean is still valid,provided that the condition is not extreme.
A)True
B)False
Q4) {Socialist Voters Narrative} Construct a 95% confidence interval estimate of the population proportion and explain how to use it to test the hypotheses.
Q5) Which of the following would be an appropriate alternative hypothesis?
A)The population proportion is less than 0.65.
B)The sample proportion is less than 0.65.
C)The population proportion is equal to 0.65.
D)The sample proportion is equal to 0.65.
Q6) {Sinus Drug Narrative} Explain how to use this confidence interval to test the hypotheses.
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Chapter 13: Inference About Comparing Two Populations
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Sample Questions
Q1) {Additives Narrative} Determine the rejection region at = .05 and write the proper conclusion.
Q2) {Antioxidants Narrative} Explain how to use the 95% confidence interval for testing the equality of the two population variances at the 5% level.
Q3) {Clinic Waiting Time Narrative} Estimate with 95% confidence the ratio of the two population variances and interpret.
Q4) The difference in two sample proportions is a(n)____________________ estimator of the difference in their respective population proportions.
Q5) {Undergraduates' Test Scores Narrative} Explain how to use the interval estimate to test the hypotheses.
Q6) If the sample sizes are large enough so the conditions are met,the difference between two sample proportions has an approximate ____________________ distribution.
Q7) The pooled proportion estimate is used when the null hypothesis states that the two population proportions differ by some non-zero number.
A)True
B)False
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Chapter 14: Analysis of Variance
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Sample Questions
Q1) In a(n)____________________ factorial experiment,data for all possible combinations of the levels of the factors are gathered.
Q2) {Arthritis Pain Formulas Narrative} Set up the ANOVA Table.Use = 0.05 to determine the critical value.
Q3) We use the analysis of variance (ANOVA)technique to compare two or more population means.
A)True
B)False
Q4) In employing the randomized block design,the primary interest lies in reducing sum of squares for ____________________.
Q5) In ANOVA,a criterion by which the populations are classified is called a factor. A)True
B)False
Q6) The Bonferroni adjustment decreases the experimentwise Type I error rate,but it increases the probability of a Type II error.
A)True
B)False
Q7) In a two-factor ANOVA,always test for ____________________ first.
Page 16
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Chapter 15: Chi-Squared Tests
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Sample Questions
Q1) To determine the critical values in the chi-squared distribution table,you need to know the:
A)sample size.
B)degrees of freedom
C)probability of Type II error.
D)All of these choices are true.
Q2) The number of degrees of freedom for a contingency table with 4 rows and 8 columns is
A)32
B)12
C)21
D)10
Q3) The chi-squared test of a(n)____________________ is used to determine whether there is enough evidence to say two nominal variables are related.
Q4) The number of degrees of freedom associated with the chi-squared test for normality is the number of intervals used minus the number of parameters estimated from the data.
A)True
B)False
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Chapter 16: Simple Linear Regression and Correlation
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Sample Questions
Q1) The unbiased estimator of the variance of the error variable is found by taking ____________________ divided by n 2.
Q2) The value of the sum of squares for regression SSR can never be larger than the value of sum of squares for error SSE.
A)True
B)False
Q3) You use a(n)____________________ interval whenever you want to estimate the mean of y when x is a given value.
Q4) In the first-order linear regression model,the population parameters of the y-intercept and the slope are,respectively,
A)b<sub>0</sub> and b<sub>1</sub>
B)b<sub>0</sub> and <sub>1</sub>
C) <sub>0</sub> and b<sub>1</sub>
D) <sub>0</sub> and <sub>1</sub>
Q5) {Oil Quality and Price Narrative} Determine the standard error of estimate and describe what this statistic tells you.
Q6) {Cost of Textbooks Narrative} Determine the least squares regression line.
Q7) {Sales and Experience Narrative} Determine the least squares regression line.
Page 18
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Chapter 17: Multiple Regression
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Sample Questions
Q1) The coefficient of determination ranges from:
A)1.0 to .
B)0.0 to 1.0.
C)1.0 to k,where k is the number of independent variables in the model.
D)1.0 to n,where n is the number of observations in the dependent variable.
Q2) {Life Expectancy Narrative} Is there sufficient evidence at the 5% significance level to infer that the number of points that the individual's blood pressure exceeded the recommended value and the age at death are negatively linearly related?
Q3) To use the Durbin-Watson test to test for positive first-order autocorrelation,the null hypothesis will be H<sub>0</sub>: ____________________ (there is/there is no)first-order autocorrelation.
Q4) {Student's Final Grade Narrative} Interpret the coefficient b<sub>2</sub>.
Q5) In multiple regression analysis,the adjusted coefficient of determination is adjusted for the number of independent variables and the sample size.
A)True
B)False
Q6) {Life Expectancy Narrative} What is the coefficient of determination? What does this statistic tell you?
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Chapter 18: Model Building
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Sample Questions
Q1) When a dummy variable is included in a multiple regression model,the interpretation of the estimated slope coefficient does not make any sense anymore.
A)True
B)False
Q2) Color of truck is a(n)____________________ variable.
Q3) An indicator variable is a nominal variable that can assume _______________ possible values.
Q4) {Senior Medical Students Narrative} Do these results allow us to conclude at the 1% significance level that the model is useful in predicting the fourth-year medical course final grade?
Q5) If a quadratic relationship exists between y and each of x<sub>1</sub> and x<sub>2</sub>,you use a(n)____________________-order polynomial model.
Q6) In regression analysis,a nominal independent variable such as color,with three different categories such as red,white,and blue,is best represented by three indicator variables to represent the three colors.
A)True
B)False
Q7) {Senior Medical Students Narrative} Interpret the coefficient b<sub>3</sub>.
Page 20
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Chapter 19: Nonparametric Statistics
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Sample Questions
Q1) {Coffee Narrative} Which test is appropriate for this situation?
Q2) To apply the Wilcoxon rank sum test to determine whether the location of population 1 is different from the location of population 2,the samples must be:
A)larger than 30.
B)independent.
C)drawn from normal populations.
D)drawn from matched pairs experiment.
Q3) The Friedman test is the nonparametric counterpart of the randomized block experimental design of the analysis of variance.
A)True
B)False
Q4) A nonparametric method to compare two populations,when the samples are matched pairs and the data are ordinal,is the:
A)sign test.
B)matched pairs t-test
C)Wilcoxon rank sum test.
D)Wilcoxon signed rank sum test..
Q5) {Advertisement Narrative} Conduct the test at the 5% significance level.
Q6) {Campaign Commercials Narrative} Which test is appropriate for this situation?
Page 21
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Chapter 20: Time-Series Analytics and Forecasting
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Sample Questions
Q1) Which of the following models might be appropriate to describe a new product that has experienced a rapid early growth rate followed by the inevitable leveling off?
A)Autoregressive model
B)Linear model for long-term trend
C)Quadratic model for long-term trend
D)All of these choices are true
Q2) The cyclical variation component of a time series measures the over-all general directional movement over a long period of time.
A)True
B)False
Q3) {Liquor Sales Narrative} Exponential smoothing with a weight or smoothing constant of 0.4 will be used to forecast liquor sales.The forecast for 2019 is ____________________.
Q4) {The Pyramids of Giza Narrative} Use regression analysis to develop the trend line.
Q5) {Liquor Sales Narrative} A centered 5-year moving average is to be constructed for the liquor sales.The moving average for 2016 is ____________________.
Q6) MAD stands for ____________________ absolute deviation.
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Chapter 21: Statistical Process Control
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Sample Questions
Q1) Describe the three essential parts of a control chart.
Q2) To ensure that a manufacturing process is under control,40 samples of size 900 were drawn,and the number of defectives in each sample was counted.The mean of the sample proportion was .025.Then,the lower and upper control limits for the p chart are .0094 and .0406,respectively.
A)True
B)False
Q3) Discuss what we mean by assignable variation in a process and give an example.
Q4) Which of the following is an example of assignable variation in a process?
A)The valve on the machine that fills paint cans has malfunctioned.
B)The operator of the paint filling machine experiences fatigue during his shift.
C)A temperature or humidity change has occurred in the factory.
D)All of these choices are true.
Q5) In statistical process control,a Type I error occurs if we conclude that the process is in control when it actually isn't.
A)True
B)False
Q6) {Diaper Delivery Narrative} At which days is the process out of control?
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Chapter 22: Decision Analysis
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Q1) {Sporting Goods Store Narrative} Determine the EMV decision.
Q2) {Car Audio Store Narrative} Use the prior and likelihood probabilities to calculate the posterior probabilities for the experimental outcome I<sub>2</sub>.
Q3) Which of the following statements is correct?
A)The EMV criterion selects the act with the largest expected monetary value.
B)The EOL criterion selects the act with the smallest expected opportunity loss.
C)The expected value of perfect information (EVPI)equals the smallest expected opportunity loss.
D)All of these choices are true.
Q4) The expected monetary value decision is always the same as the expected opportunity loss decision.
A)True
B)False
Q5) We can use the payoff table to calculate the expected monetary value (EMV)and the expected opportunity loss (EOL)of each act (alternative).
A)True
B)False
Q6) {Demolition Company Narrative} Determine the EMV decision.
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Chapter 23: Conclusion
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Sample Questions
Q1) We can improve the exactitude of a confidence interval estimator by increasing the ____________________.
Q2) There are three types of data: ____________________; ____________________; and ____________________.
Q3) We can decrease the probability of a Type II error by increasing the ____________________.
Q4) How do the requirements of nonparametric and parametric techniques compare?
A)Nonparametric techniques have more restrictions than parametric techniques.
B)Nonparametric techniques have fewer restrictions than parametric techniques.
C)Both types of techniques have the same requirements.
D)There are no requirements for parametric or nonparametric techniques.
Q5) In nonparametric statistics,the population must be normally distributed.
A)True
B)False
Q6) Which of the following is an example of ordinal data?
A)The weight of a newborn baby.
B)The gender of a baby.
C)The number of siblings a baby has.
D)Your order of preference of three baby names.
Page 25
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