Statistics for Management
Textbook Exam Questions
Course Introduction
Statistics for Management introduces students to the fundamental concepts and methodologies of statistics as applied in managerial decision-making. The course covers topics such as descriptive statistics, probability distributions, sampling techniques, hypothesis testing, regression analysis, and statistical inference. Emphasis is placed on interpreting data, drawing meaningful conclusions, and applying quantitative methods to solve real-world business problems. Through practical examples and case studies, students develop analytical skills essential for informed decision-making in diverse management contexts.
Recommended Textbook
Statistics for Management and Economics 11th Edition by Gerald Keller
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Chapter 1: What Is Statistics
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Q1) Which of the following represents a population,as opposed to a sample?
A)2,000 respondents to a magazine survey which has 600,000 subscribers.
B)The first 15 students in your class completing a final exam.
C)Every fourth student to arrive at the book store on your campus.
D)All registered voters in the state of West Virginia
Answer: D
Q2) The significance 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: B
Q3) 35% of a sample of 300 professional baseball players indicated that their parents did not play baseball.Based on this sample,we estimate that approximately 35% of the parents of all professional baseball players did not play baseball,plus or minus 5%.This is an example of using inferential statistics.
A)True
B)False
Answer: True
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Chapter 2: Graphical Descriptive Techniques 1
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Sample Questions
Q1) A researcher wishes to estimate the textbook costs of first-year students at Barry University.To do so,he recorded the textbook cost of 300 first-year students and found that their average textbook cost was $195 per semester.The variable of interest to the researcher is
A)textbook cost.
B)class rank.
C)number of students.
D)name of university.
Answer: A
Q2) We can summarize nominal data in a table that presents the categories and their counts.This table is called a(n)____________________ distribution.
Answer: frequency
Q3) Which situation identifies when to use pie charts and/or bar charts?
A)You want to describe a single set of data.
B)Your data is nominal.
C)You want to show the number or the percentage of individuals in each category.
D)All of these choices are true.
Answer: D
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Chapter 3: Graphical Descriptive Techniques 2
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Sample Questions
Q1) A pie chart showing 80% yes and 20% no would look the same whether it was based on 10,000 observations or 10 observations.This is one way that pie charts can be deceptive.
A)True
B)False
Answer: True
Q2) A(n)____________________ is best defined as a set of symbols (such as people or animals)used to depict data.It often distorts the actual sizes of the items being portrayed.
Answer: pictogram
Q3) A popular method of creating distorted impressions with bar charts is to construct the bars so that their widths are proportional to their heights.
A)True
B)False
Answer: True
Q4) {Electronics Company Narrative} What is the cumulative relative frequency corresponding to 4 employees?
Answer: This is the total proportion of employees supervising 4 or fewer employees: 40/50 = 0.80 or 80%.
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Chapter 4: Numerical Descriptive Techniques
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Sample Questions
Q1) The interquartile range is the difference between the: A)largest and smallest numbers in the data set.
B)25th percentile and the 75th percentile.
C)median and the mean.
D)None of these choices.
Q2) The ____________________ is the square root of the ____________________.
Q3) In a positively skewed distribution,the percentage of data between the smallest observation and Q<sub>1</sub> is less than the percentage of data between Q<sub>3</sub> and the largest observation.
A)True
B)False
Q4) The interquartile range is a measure of variability in a set of data. A)True
B)False
Q5) In a histogram,the proportion of the total area which must be to the left of the median is less than 0.50 if the distribution is negatively skewed.
A)True
B)False
Q6) {Ages of Jockeys Narrative} Find the upper quartile of the ages.
Page 6
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Chapter 5: Data Collection and Sampling
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Q1) Proper interviewer training helps to reduce ____________________ error.
Q2) Two types of interviews that are used to collect data are ____________________ interviews and ____________________ interviews.
Q3) A simple random sample is chosen in such a fashion that every possible subset of the same size has an equal chance of being selected.
A)True
B)False
Q4) List one advantage and one disadvantage of a personal interview as a method of data collection.
Q5) A nonsampling error can be caused by the wording of a question. A)True B)False
Q6) In a self-administered survey,the individuals in the sample are typically contacted by ____________________.
Q7) ____________________ error is due to mistakes made in the acquisition of data.
Q8) ____________________ error refers to differences between the sample and the population.
Q9) A survey is an example of a(n)____________________ study. Page 7
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Chapter 6: Probability
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Q1) Which of the following is equivalent to P(B)if A and B are independent?
A)P(A and B)
B)P(B|A)
C)P(A)/P(B)
D)None of these choices.
Q2) If P(A)= .30,P(B)= .60,and P(A and B)= .20,then P(A|B)= .40.
A)True
B)False
Q3) Although there is a formula defining Bayes' law,you can also use a probability tree to conduct calculations.
A)True B)False
Q4) The outcomes of a sample space must be ____________________,which means that all possible outcomes must be included.
Q5) {Club Members Narrative} What is the probability that a club member owns neither a car nor a house?
Q6) {Construction Bids Narrative} What is the probability that the company will win neither contract?
Q7) {Cysts Narrative} What is the probability that the patient will test negative?
Page 9
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Chapter 7: Random Variables and Discrete Probability
Distributions
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Q1) {Number of Motorcycles Narrative} Apply the laws of expected value and variance to find the following:
a.V(3X)
b.V(3X 2)
c.V(3)
d.V(3X) 2
Q2) Which of the following is not a characteristic of a binomial experiment?
A)Each trial results in two or more outcomes.
B)There is a sequence of identical trials.
C)The trials are independent of each other.
D)The probability of success p is the same from one trial to another.
Q3) The variance of a binomial distribution for which n = 50 and p = 0.20 is 8.0.
A)True
B)False
Q4) Which of the following is a discrete random variable?
A)The Dow Jones Industrial average.
B)The volume of water in Michigan Lakes.
C)The time it takes you to drive to school.
D)The number of employees of a soft drink company.
Q5) {Golfing Store Narrative} Calculate E(XY).
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Chapter 8: Continuous Probability Distributions
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Sample Questions
Q1) The Student t distribution with parameter v = 4 has a variance V(t)equal to:
A)4
B)0
C)2
D)1
Q2) {Phone Orders Narrative} Find the time at which 50% of the customers will continue to hold?
Q3) If the random variable X has a uniform distribution between 40 and 50,then P(35 X 45)is:
A)1.0
B)0.5
C)0.1
D)undefined.
Q4) The probability that a standard normal random variable Z is less than 3.5 is approximately 0.
A)True
B)False
Q5) An exponential random variable is an example of a(n)____________________ random variable.
Q6) The shape of an F distribution is ____________________.
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Chapter 9: Sampling Distributions
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Q1) {Barack Obama Narrative} What is the probability that the number of voters in the sample who will vote for Barack Obama in the year 2012 is between 340 and 350?
Q2) To find the binomial probability P(X 4)we calculate the area under the normal curve to the ____________________ (left/right)of the number ____________________.
Q3) If all possible samples of size n are drawn from an infinite population with standard deviation 8,then the standard error of the sample mean equals 1.0 if the sample size is 64.
A)True
B)False
Q4) If the population distribution is unknown,in most cases the sampling distribution of the mean can be approximated by the normal distribution if the samples contain at least 30 observations.
A)True
B)False
Q5) (Retirees Narrative} Find the mean and standard error of the sampling distribution of the sample mean.
Q6) {Retirees Narrative} What is the probability that the mean age is at most 73 years?
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Chapter 10: Introduction to Estimation
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Q1) {College Dean Narrative} What sample size should be used if the standard deviation is changed to 50?
Q2) If the population standard deviation is guesstimated,and it turned out to be larger than you assumed,then the sample size you calculated is ____________________ than it needs to be.
Q3) Which of the following is a characteristic for a good estimator?
A)Being unbiased
B)Being consistent
C)Having relative efficiency
D)All of these choices are true.
Q4) In determining the sample size n needed to estimate the population mean,n decreases as the desired width of the confidence interval decreases.
A)True
B)False
Q5) An unbiased estimator is ____________________ if its variance gets smaller as n gets larger.
Q6) Increasing the value of 1 narrows a confidence interval.
A)True
B)False
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Chapter 11: Introduction to Hypothesis Testing
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Q1) Using the confidence interval when conducting a two-tail test for the population mean ,we do not reject the null hypothesis if the hypothesized value for falls between the lower and upper confidence limits.
A)True
B)False
Q2) Think about a situation where you have a test for a virus.First,you are tested positive or negative.Second,you either really do have the virus or you don't.
a.If you actually have the virus but the test did not catch it,which error has been made and what is the impact of that error?
b.If you actually don't have the virus but the test says you did,which error is being made and what is the impact of this error?
c.Which error is the worst one to commit in this situation and why?
Q3) If we reject the null hypothesis,we conclude that there is enough statistical evidence to infer that the alternative hypothesis is true.
A)True
B)False
Q4) {Watching the News Narrative} Interpret the result.
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Chapter 12: Inference About a Population
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Q1) Because of the greater uncertainty,the t-statistic will display greater ____________________ than the z-statistic.
Q2) A life insurance representative believes that the mean age of people who buy their first life insurance plan is less than 35.To test his belief he takes a random sample of 15 customers who have just purchased their first life insurance.Their ages are 42,43,28,34,30,36,25,29,32,33,27,30,22,37,and 40.There is not enough evidence to say the data are nonnormal.Can we conclude at the 1% significance level that the insurance representative is correct?
Q3) A pharmaceutical company has just developed a new capsule to alleviate the symptoms of allergies and colds.However,they are concerned about the variability in the amount of time until the drug becomes effective.In a random sample of 10 individuals who suffer from allergies,the amount of time (in hours)for the capsule to take effect was recorded and listed as follows: 5,7,6,10,9,12,8,17,4,and 16.Estimate with 90% confidence the variance of the time for the drug to become effective.
Q4) {Sinus Drug Narrative} We want to test their claim and find out whether the actual percentage is not 10%.State the appropriate null and hypotheses.
Q5) {Single Mothers' Ages Narrative} Estimate the population mean with 90% confidence. To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 13: Inference About Comparing Two Populations
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Sample Questions
Q1) For testing the difference between two population proportions,the pooled proportion estimate should be used to compute the value of the test statistic when the: A)populations are normally distributed.
B)sample sizes are small.
C)null hypothesis states that the two population proportions are equal.
D)samples are independently drawn from the populations.
Q2) When testing the equality of two population variances the number in the null hypothesis is 0.
A)True
B)False
Q3) If you are testing to see if a weight loss program is working,and you subtract the weights before after for a group of 10 people,the alternative hypothesis is that the mean difference is ____________________ 0.
Q4) We compare two population variances by examining their
Q5) A matched pairs experiment decreases variability (compared to two independent samples).
A)True
B)False
Q6) {Senatorial Election Narrative} What is the p-value of the test?
Page 16
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Chapter 14: Analysis of Variance
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Q1) SSE in the independent samples design is equal to the sum of SS____________________ and SS____________________ in the randomized block design.
Q2) {GMAT Scores Narrative} Can he infer at the 10% significance level that the GMAT scores differ among the three schools?
Q3) Which of the following is a required condition for ANOVA?
A)The populations are normally distributed.
B)The population variances are equal.
C)The samples are independent.
D)All of these choices are required conditions for ANOVA.
Q4) The F-test in ANOVA requires that the random variable be ____________________ distributed with equal ____________________.
Q5) The analysis of variance is a procedure that allows statisticians to compare two or more population:
A)proportions.
B)means.
C)variances.
D)standard deviations.
Q6) SSE measures the variation ____________________ treatments.
Page 17
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Chapter 15: Chi-Squared Tests
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Q1) Which of the following tests is appropriate for nominal data if the problem objective is to compare two populations and the number of categories exceeds 2?
A)The z-test for one proportion,p,or difference of two proportions,p<sub>1</sub> p<sub>2</sub>.
B)The chi-squared goodness-of-fit test.
C)The chi-squared test of a contingency table.
D)All of these choices are true.
Q2) If each element in a population is classified into one and only one of several categories,the population is:
A)normal.
B)multinomial.
C)chi-squared.
D)None of these choices.
Q3) A test for whether one proportion is higher than the other can be performed using the chi-squared distribution.
A)True
B)False
Q4) What statistic do we get when we square the value of z?
Q5) The values of a chi-squared distribution are always ____________________ zero.
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Chapter 16: Simple Linear Regression and Correlation
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Q1) We can often detect autocorrelation by graphing the residuals against
Q2) {Wayne Newton Concert Narrative} Which interval in the previous two questions is narrower: the confidence interval estimate of the expected value of y or the prediction interval for the same given value of x (10 years)and same confidence level? Why?
Q3) {Accidents and Rain Narrative} What other variables might be associated with accidents,besides or along with rain?
Q4) {Grateful Dead Concert Narrative} Calculate the Pearson correlation coefficient and interpret.
Q5) The least squares method for determining the best fit minimizes:
A)total variation in the dependent variable
B)sum of squares for error
C)sum of squares for regression
D)All of these choices are true.
Q6) {Accidents and Rain Narrative} Estimate the number of accidents in a day with 0.25 inches of rain.
Q7) {Rock Concert Revenues Narrative} Determine the coefficient of determination and discuss what its value tells you about the two variables.
Page 19
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Chapter 17: Multiple Regression
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Q1) If the value of the Durbin-Watson statistic,d,satisfies the inequality d<sub>L</sub> d d<sub>U</sub>,where d<sub>L</sub> and d<sub>U</sub> are the critical values for d,then the test for positive first-order autocorrelation is inconclusive.
A)True
B)False
Q2) Small values of the Durbin-Watson statistic d (d < 2)indicate a negative first-order autocorrelation.
A)True B)False
Q3) {Life Expectancy Narrative} Interpret the coefficient b<sub>1</sub>.
Q4) If the value of the Durbin-Watson test statistic,d,satisfies the inequality d > 4 d<sub>L</sub>,we conclude that positive first-order autocorrelation exists.
A)True B)False
Q5) {Real Estate Builder Narrative} Which of the following values for the level of significance is the smallest for which all explanatory variables are significant individually: = .01,.05,.10,or .15?
Q6) {Life Expectancy Narrative} Interpret the coefficient b<sub>3</sub>.
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Chapter 18: Model Building
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Q1) The stepwise regression procedure begins by computing the simple regression model for each independent variable.
A)True
B)False
Q2) {Computer Training Narrative} Determine if there is sufficient evidence at the 5% significance level to infer that the relationship between x and y is positive and significant.
Q3) {Silver Prices Narrative} Is there sufficient evidence at the 1% significance level to conclude that the price of a barrel of oil and the price of silver are linearly related?
Q4) The model y = <sub>0</sub> + <sub>1</sub>x<sub>1</sub> + <sub>2</sub>x<sub>2</sub> + <sub>3</sub>x<sub>1</sub>x<sub>2</sub> + is referred to as a second-order model with two predictor variables with interaction.
A)True
B)False
Q5) The model y = <sub>0</sub> + <sub>1</sub>x<sub>1</sub> + <sub>2</sub>x<sub>2</sub> + is a(n)____________________-order polynomial model with ____________________ predictor variable(s).
Q6) A second-order polynomial model is shaped like a(n)____________________.
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Chapter 19: Nonparametric Statistics
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Q1) The population Spearman correlation coefficient is labeled ____________________ and the sample statistic used to estimate its value is labeled ____________________.
Q2) We can use the Friedman test to determine whether two populations differ.The conclusion will be the same as that produced from the sign test.
A)True
B)False
Q3) The z-test approximation to the Wilcoxon rank sum test for two independent samples requires that both sample sizes are larger than 10.
A)True
B)False
Q4) Nonparametric tests are methods of inference that make no assumptions whatsoever about the nature of underlying population distributions or their parameters. A)True
B)False
Q5) {Advertisement Narrative} What is the most accurate statement that can be made about the p-value of this test?
Q6) {Campaign Commercials Narrative} Which test is appropriate for this situation?
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Chapter 20: Time-Series Analytics and Forecasting
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Q1) A time series can consist of four different components: long-term trend,cyclical variation,seasonal variation,and random variation.
A)True
B)False
Q2) Which of the four time series components is more likely to exhibit the relative steady growth of the population of Las Vegas from 1964 to 2004?
A)Long-term trend
B)Cyclical variation
C)Seasonal variation
D)Random variation
Q3) {Liquor Sales Narrative} A centered 3-year moving average is to be constructed for the liquor sales.The moving average for 2015 is ____________________.
Q4) In time series regressions the random variation component is captured by the error term.
A)True
B)False
Q5) {Monthly Mattress Sales Narrative} Compute the exponentially smoothed sales with w = 0.3 and w = 0.5.
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Chapter 21: Statistical Process Control
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Q1) In statistical process control,a Type I error occurs if we conclude that the process is not in control when it actually is and requires that production is temporarily stopped.
A)True
B)False
Q2) ____________________ variation is caused by specific events or factors that are frequently temporary.
Q3) The letter p in p chart stands for ____________________.
Q4) {Diaper Delivery Narrative} Find the numerical value of the lower control limit for the p chart.
Q5) The process capability index is defined as C<sub>p</sub> = (USL LSL)/ 6,where USL and LSL are the upper and lower specification limits.
A)True
B)False
Q6) Suppose previously your company decided that a process is out of control when the mean shifts by about 1 standard deviation.Now your company wants to declare a process as being out of control when the mean shifts by .50 standard deviations.In order to do this,the samples must be collected ____________________ often and/or the sample sizes must be ____________________.
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Chapter 22: Decision Analysis
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Q1) If EOL(a<sub>1</sub>)= $13,000,EOL(a<sub>2</sub>)= $25,000,and EOL(a<sub>3</sub>)= $20,000,then EOL<sup>*</sup> = $13,000.
A)True
B)False
Q2) What is meant by the expected monetary value (EMV)of a decision alternative?
Q3) {Maintenance Company Narrative} Use the prior and likelihood probabilities to calculate the posterior probabilities for the experimental outcome I<sub>3</sub>.
Q4) {Gross Profits Narrative} If the probability of s<sub>1</sub> is 0.5,then the expected monetary value (EMV)for a<sub>2</sub> is ____________________.
Q5) {Gross Profits Narrative} If the probability of s<sub>1</sub> is 0.2 and s<sub>2</sub> is 0.8,then the expected monetary value (EMV)of a<sub>1</sub> is
Q6) The expected value of perfect information (EVPI)equals the largest expected opportunity loss (EOL<sup>*</sup>).
A)True
B)False
Q7) {Maintenance Company Narrative} What is the expected value of perfect information?
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Chapter 23: Conclusion
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Q1) To ensure the validity of a statistical technique,we must first check the required
Q2) Which of the following data collection methods is more likely to lead to a definitive conclusion?
A)Data collected through observation.
B)Data collected through an experiment.
C)Data collected through the use of volunteers.
D)Data collected through a survey.
Q3) Describe a plan for estimating the average GPA at your university by using inferential statistics.Include which statistical technique you plan to use to draw your conclusions.
Q4) If the probability of making a Type II error decreases,the probability of making a Type I error increases.
A)True
B)False
Q5) In any hypothesis test there are two possible errors,called ____________________ and ____________________.
Q6) The width of a confidence interval ____________________ when more data is collected.
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