1.
1. The median is often a better representative
of the central value of a data set when the data set:
Is
bimodal.
Has
a high standard deviation.
Is
highly skewed.
2. The data in the Excel spreadsheet linked
below provide information on the nutritional content (in grams per serving) of
some leading breakfast cereals.
For which nutrients is the mean nutrient content
per serving greater than the median nutrient content per serving?
Proteins
only.
Complex
carbohydrates only.
Both
nutrients.
Neither
nutrient.
Has no outliers.
3.
3 The histogram below plots the carbon
monoxide (CO) emissions (in pounds/minute) of 40 different airplane models at
take-off.
The distribution is best described as is:
Uniform.
Heteroskedastic.
Normal.
Skewed right.
4.
4. The histogram below plots the carbon
monoxide (CO) emissions (in pounds/minute) of 40 different airplane models at
take-off.
Which of the following statements is the best inference that can be
drawn from this histogram?
The
mean amount of carbon monoxide emissions is greater than the median amount of
carbon monoxide emissions.
The
mean amount of carbon monoxide emissions is less than the median amount of
carbon monoxide emissions.
The
mean and median amounts of carbon monoxide emissions are about equal.
The relative sizes
of the mean and median amounts of carbon monoxide emissions cannot be inferred
from the histogram
5. In the data set shown below, the correlation
coefficient of the two variables is:
-1.0.
-0.5
0.0
None of the above
6.
The data in the Excel spreadsheet linked below
give the ages and salaries of the chief executive officers of 59 companies with
sales between $5 million and $350 million.
The correlation between age and
salary can be characterized as:
Strong
and positive.
Strong
and negative.
Weak
and positive.
Weak and negative.
7.
For a given set of data, the standard deviation
measures:
The
difference between the mean and the data point farthest from the mean.
The
difference between the mean and the data point nearest to the mean.
The
difference between the mean and the median.
None of the above.
8.
The data in the Excel spreadsheet linked below
give the average exchange rates of four currencies to the US dollar during
October 2002.
Over this period, which currency was most volatile relative to
the US dollar, as measured by the coefficient of variation?
The
Brazilian Real.
The
Euro.
The
Japanese Yen.
The South Korean
Won.
9.
A national business magazine intends to survey
its subscribers to determine who they think is the "CEO of the
Century." Subscribers are invited to complete an online survey.
Based
only on this information, which of the following can be inferred about the
survey results?
They
will be biased because the magazine's subscribers are unqualified to determine
who the CEO of the century is.
They
will accurately reflect the opinion of the nation as a whole about who the CEO
of the century is.
They
will be unbiased because the respondents will be self-selected.
They will be biased
because subscribers who have access to the online survey are not representative
of the population of subscribers as a whole.
10. A political consultant conducts a survey to
determine what position the mayoral candidate she works for should take on a
proposed smoking ban in restaurants.
Which of the following survey questions
will deliver an unbiased response?
Should
the city ban smoking in restaurants to protect our children from second-hand
smoke?
Should
tobacco smoke, a known cause of lung cancer, be banned from public spaces such
as restaurants?
Does
the city have the right to restrict recreational activities, such as moderate
consumption of alcohol or tobacco, on the premises of privately-owned
businesses?
None of the above
11.
In a recently administered IQ test, the scores
were distributed normally, with mean 100 and standard deviation 15.
What
proportion of the test takers scored between 70 and 130?
About
68%.
About
84%.
About
95%.
About 99.5%.
12.
Which of the following is not true about the
Normal Distribution?
It
is symmetric.
Its
mean and median are equal.
It
is completely described by its mean and its standard deviation.
It is bimodal.
13. The histogram below shows the underlying
distribution pattern of the results of a rolled die. Suppose the die is rolled
50 times and the results are averaged. Suppose this process — rolling 50 dice
and averaging their results — is repeated 100 times.
Which of the following
best describes the distribution of these 100 averages?
Skewed
right.
Skewed
left.
Normal.
Uniform.
14.
A nutrition researcher wants to determine the
mean fat content of hen's eggs. She collects a sample of 40 eggs. She
calculates a mean fat content of 23 grams, with a sample standard deviation of
8 grams. From these statistics she calculates a 90% confidence interval of
[20.9 grams, 25.1 grams].
What can the researcher do to decrease the width of
the confidence interval?
Increase
the confidence level.
Decrease
the confidence level.
Decrease
the sample size
None
of the above
15.
In a random sample of 321 senior citizens, 61
were found to own a home computer.
Based on this sample, the 95% confidence interval
for the proportion of computer-owners among senior citizens is:
[2.6%;
7.4%].
[13.4%;
24.6%].
[14.7%;
23.3%].
The
answer cannot be determined from the information given.
16.
Preliminary estimates suggest that about 58% of
students at a state university favor implementing an honor code.
To obtain a
95% confidence interval for the proportion of all students at the university
favoring the honor code, what is the minimum sample size needed if the total
width of the confidence interval must be less than 5 percentage points (i.e.,
the confidence interval should extend at most 2.5 percentage points above and
below the sample proportion)?
375.
264.
1,498.
The answer cannot
be determined from the information given.
17.
In a survey of twelve Harbor Business School
graduates, the mean starting salary was $93,000, with a standard deviation of
$17,000.
The 95% confidence interval for the average starting salary among
all Harbor graduates is:
[$83,382;
$102,618].
[$82,727;
$103,327].
[$82,199;
$103,801].
[$59,000;
$127,000].
18.
In a survey of 53 randomly selected patrons of
a shopping mall, the mean amount of currency carried is $42, with a standard
deviation of $78.
What is the 95% confidence interval for the mean amount of
currency carried by mall patrons?
[$39.1;
$44.9].
[$24.4;
$59.6].
[$21.0;
$63.0].
[$14.4;
$69.6].
19.
A filling machine in a brewery is designed to
fill bottles with 355 ml of hard cider. In practice, however, volumes vary
slightly from bottle to bottle. In a sample of 49 bottles, the mean volume of
cider is found to be 354 ml, with a standard deviation of 3.5 ml.
At a
significance level of 0.01, which conclusion can the brewer draw?
The
true mean volume of all bottles filled is 354 ml.
The
machine is not filling bottles to an average volume of 355 ml.
There
is not enough evidence to indicate that the machine is not filling bottles to
an average volume of 355 ml.
The machine is
filling bottles to an average volume of 355 ml.
20. To conduct a one-sided hypothesis test of
the claim that houses located on corner lots (corner-lot houses) have higher
average selling prices than those located on non-corner lots, the following
alternative hypothesis should be used:
The
average selling price of a corner-lot house is higher than it is commonly
believed to be.
The
average selling price of a corner-lot house is higher than the average selling
price of all houses.
The
average selling price of a corner-lot house is the same as the average selling
price of a house not located on a corner lot.
The
average selling price of a corner-lot house is higher than the average selling
price of a house not located on a corner lot.
21. The data in the Excel spreadsheet linked
below indicate the selling prices of houses located on corner lots
("corner-lot houses") and of houses not located on corner lots.
Conduct a one-sided hypothesis test of the claim that corner-lot houses have
higher average selling prices than those located on non-corner lots. Using a
99% confidence level, which of the following statements do the data support?
Upscale,
expensive neighborhoods have more street corners.
The
average selling price of a corner-lot house is higher than that of the average
house not located on a corner lot.
The
average selling price of a corner-lot house is no more than that of the average
house not located on a corner lot.
There
is not enough evidence to support the claim that the average selling price of a
corner-lot house is higher than that of the average house not located on a
corner lot.
22.
Two semiconductor factories are being compared
to see if there is a difference in the average defect rates of the chips they
produce. In the first factory, 250 chips are sampled. In the second factory,
350 chips are sampled. The proportions of defective chips are 4.0% and 6.0%,
respectively.
Using a confidence level of 95%, which of the following
statements is supported by the data?
There
is not sufficient evidence to show a significant difference in the average
defect rates of the two factories.
There
is a significant difference in the average defect rates of the two factories.
The
first factory's average defect rate is lower than the second factory's on 95
out of 100 days of operation.
None of the above.
23.
The regression analysis below relates average
annual per capita beef consumption (in pounds) and the independent variable
"average annual beef price" (in dollars per pound).
The coefficient
on beef price tells us that:
For
every price increase of $1, average beef consumption decreases by 9.31 pounds.
For
every price increase of $1, average beef consumption increases by 9.31 pounds.
For
every price increase $9.31, average beef consumption decreases by 1 pound.
For price increase
of $9.31, average beef consumption increases by 1 pound.
24.
The regression analysis below relates average
annual per capita beef consumption (in pounds) and the independent variable
"average annual beef price" (in dollars per pound).
In a year in
which the average price of beef is at $3.51 per pound, we can expect average
annual per capita beef consumption to be approximately:
55.2
pounds
52.6
pounds
53.6
pounds
117.9 pounds
25.
The regression analysis below relates average
annual per capita beef consumption (in pounds) and the independent variable
"average annual per capita pork consumption" (in pounds).
At what
level is the coefficient of the independent variable pork consumption
significant?
0.10.
0.05.
0.01.
None
of the above.
26.
The regression analysis below relates average
annual per capita beef consumption (in pounds) and the independent variable
"average annual per capita pork consumption" (in pounds).
Which of
the following statements is true?
Beef
consumption can never be less than 65.09 pounds.
Beef
consumption can never be greater than 65.09 pounds.
The
y-intercept of the regression line is 65.09 pounds.
The x-intercept of
the regression line is 65.09 pounds.
27.
The regression analysis at the bottom relates
average annual per capita beef consumption (in pounds) and the independent
variables "average annual per capita pork consumption" (in pounds)
and "average annual beef price" (in dollars per pound).
Which of
the independent variables is significant at the 0.01 level?
Beef
price only.
Pork
consumption only.
Both
independent variables.
Neither
independent variable.
28.
The regression analysis at the bottom relates
average annual per capita beef consumption (in pounds) and the independent
variables "annual per capita pork consumption" (in pounds) and
"average annual beef price" (in dollars per pound).
The coefficient
for beef price, -12, tells us that:
For
every $1 increase in beef price, average beef consumption decreases by 12 lbs,
not controlling for pork consumption.
For
every $12 drop in beef price, average beef consumption decreases by 1 lbs, not
controlling for pork consumption.
For
every $1 increase in beef price, average beef consumption decreases by 12 lbs,
controlling for pork consumption, i.e. holding pork consumption constant.
For
every $12 decrease in beef price, average beef consumption decreases by 1 lbs,
controlling for pork consumption, i.e. holding pork consumption constant.
29.
The data in the Excel spreadsheet linked below
give the seasonally adjusted value of total new car sales (in millions of
dollars) in the United States, total national wage and salary disbursements
(referred to here as "compensation") (in billions of dollars), and
the employment level in the non-agricultural sector (in thousands) for 44
consecutive quarters. An auto industry executive wants to know how well she can
predict new car sales two quarters in advance using the current quarter's
compensation data.
How many data points can she use in a regression analysis
using the data provided?
41.
42.
43.
44.
30.
The Excel spreadsheet linked below contains the
simple regressions of total new car sales (in millions of dollars) on each of
two independent variables: "compensation" (in billions of dollars)
and "employment level in the non-agricultural sector" (in thousands)
.
Which of the following independent variables explains more than 90 percent
of the observed variation in new car sales?
Compensation
only.
Employment
level only.
Both
independent variables.
Neither independent variable.
31.
The regression analysis below relates the value
of new car sales (in millions of dollars) to compensation (in billions of
dollars) and the employment level in the non-agricultural sector (in thousands)
for 44 consecutive quarters.
Which of the two independent variables is
statistically significant at the 0.05 level?
Compensation
only.
Employment
level only.
Both
independent variables.
Neither independent variable.
32.
The regression analysis below relates the value
of new car sales (in millions of dollars) and the independent variables
"compensation" (in billions of dollars) and "employment level in
the non-agricultural sector" (in thousands) for 44 consecutive quarters.
Compare this multiple regression to the simple regressions with compensation
and employment level as the respective independent variables.
Which of the
following is the likely culprit of the dramatic increase in the p-value for
employment level in the multiple regression?
Multicollinearity.
Heteroskedasticity.
Nonlinearity.
None of the above.
33.
The regression analysis below relates the value
of new car sales (in millions of dollars) and the independent variables "compensation"
(in billions of dollars) and "employment level in the non-agricultural
sector" (in thousands) for 44 consecutive quarters.
The coefficient for
employment level, 0.21, describes:
The
behavior of car sales as the employments level changes, controlling for
compensation.
The
behavior of the employment level as car sales change, not controlling for
compensation.
The
behavior of car sales as the employment level changes, not controlling for
compensation.
The behavior of the
employment level as car sales change, controlling for compensation.
34.
A new blood pressure treatment is being tested.
The regression analysis below describes the relationship between the 41 test
subjects' diastolic blood pressure and the dummy variable
"medication." When a test subject is taking the new drug, the value
of medication is 1, when not, the value of medication is 0.
Which of the
following can be inferred from the regression analysis?
The
medication has no statistically significant effect (at a 0.01 significance
level).
The
use of medication accounts for around 42% of the variation in diastolic blood
pressure.
On
average, test subjects taking the medication report a diastolic blood pressure
level about 5 points lower than those not taking the medication.
None of the above.
35.
In a regression analysis, a residual plot is:
A
scatter diagram that plots the values of the residuals against the values of
the dependent variable.
A
scatter diagram that plots the values of the residuals against the values of an
independent variable.
A
histogram that plots the frequency of certain value ranges of the residuals.
None of the above.
36.
In a regression analysis, if a new independent variable is added and
R-squared increases and adjusted R-squared decreases precipitously, what can be
concluded?
The
new independent variable improves the predictive power of the regression model.
The
new independent variable does not improve the predictive power of the
regression model.
The
regression was performed incorrectly. It is impossible for R-squared to
increase and adjusted R-squared decrease simultaneously.
The new independent
variable's coefficient is not significant at the 0.01 level.
37.
The table below displays data the First Bank of
Silverhaven (FBS) has collected on the personal savings accounts of its
job-holding customers. The table includes data on the distribution of the
number of accounts held by Homeowners vs. Non-Homeowners, and by whether the
customer is Self-Employed or is Employed by a firm in which he or she does not
have an ownership stake.
What is the probability that a given account-holder
is self-employed?
15%
12%
3%
None of the above.
38.
The table below displays data the First Bank of
Silverhaven (FBS) has collected on the personal savings accounts of its
job-holding customers. The table includes data on the distribution of the
number of accounts held by Homeowners vs. Non-Homeowners, and by whether the
customer is Self-Employed or is Employed by a firm in which he or she does not
have an ownership stake.
What is the conditional probability that an
account-holder is employed by a firm in which he or she does not have an
ownership stake, given that the account-holder is a homeowner?
82.9%
68.2%
59.5%
None
of the above.
39.
The table below displays data the First Bank of
Silverhaven (FBS) has collected on the personal savings accounts of its
job-holding customers. The table includes data on the distribution of the
number of accounts held by Homeowners vs. Non-Homeowners, and by whether the
customer is Self-Employed or is Employed by a firm in which he or she does not
have an ownership stake.
Which of the following statements is true?
Home
ownership and employment status are statistically dependent.
The
fact that a given personal account is held by a homeowner tells us nothing
about the account holder's employment status.
The
fact that a given personal account is held by a self-employed person tells us
nothing about the account-holder's home ownership status.
None of the above.
40.
Electronics manufacturer SE must decide whether
or not to invest in the development of a new type of battery. If the
development succeeds, the market for the battery may be large or small. If it
doesn't succeed, the development efforts may or may not generate minor
innovations that would offset some of the battery's development costs. The tree
below summarizes the decision.
What is the expected monetary value of
developing the new battery?
$0.3
million
-$0.5
million
$0.9
million
$1.5 million
41.
Electronics manufacturer SE must decide whether
or not to invest in the development of a new type of battery. If the
development succeeds, the market for the battery may be large or small. If it
doesn't succeed, the development efforts may or may not generate minor
innovations that would offset some of the battery's development costs. The tree
below summarizes the decision.
The EMV of developing the new battery is
$300,000. Based on EMV, SE should develop the battery. If the manager chooses
not to develop the battery, which of the following best describes the manager's
attitude towards this decision?
Risk
averse.
Risk
neutral.
Risk
seeking.
Cowardly.
42.
Electronics manufacturer SE must decide whether
or not to invest in the development of a new type of battery. If the
development succeeds, the market for the battery may be large or small. If it
doesn't succeed, the development efforts may or may not generate minor
innovations that would offset some of the battery's development costs. The tree
below summarizes the decision.
The EMV of developing the new battery is
$300,000. Based on EMV, SE should develop the battery. For what values of p
= Prob[success] does developing the battery have a lower EMV than not
developing the battery?
p
< 25%
p
> 25%
p
< 75%
None of the above
43.
Electronics manufacturer SE must decide whether
or not to invest in the development of a new type of battery. If the
development succeeds, the market for the battery may be large or small. If it
doesn't succeed, the development efforts may or may not generate minor
innovations that would offset some of the battery's development costs. The tree
below summarizes the decision.
The EMV of developing the new battery is
$300,000. Based on EMV, SE should develop the battery. Given that development
is successful, for what endpoint values for a large market does developing the
battery have a lower EMV than not developing the battery?
Less
than $1.2 million.
Greater
than $1.2 million.
Greater
than $0.75 million.
None of the above.
44.
The manager of the Eris Shoe Company must
decide whether or not to contract a controversial sports celebrity as its
spokesperson. The new spokesperson's value to Eris depends heavily on
consumers' perception of him. An initial decision analysis based on available
data reveals that the expected monetary value of contracting the new
spokesperson is $260,000. For $50,000 Eris can engage a market research firm
that will help Eris learn more about how consumers might react to the
celebrity. The EMV of buying this sample information (assuming it is
free) for this decision is $300,000.
The tree below summarizes Eris's
decision. Based on EMV analysis, Eris's manager should:
Hire
the research firm.
Not
hire the research firm, but contract the new spokesperson.
Not
hire the research firm and not contract the new spokesperson.
The answer cannot be
determined from the information provided.
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