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Applicable Fall 10 Exam 1 Solutions

Notes: The Fall 2010 semester was the first time that the true/false problems were incorporated on this exam. Dr. Thompson provided students with a formula sheet for this exam (it is supposedly posted on e-learning) On this exam, Dr. Thompson was a bit of a stickler about rounding, so try to make your estimates to about 4 or 5 decimal places where you can. This is, without a doubt, the most difficult QMB exam I have ever seen (so dont feel bad if you struggle with it).

1. Answer: (C) When constructing an interval for the median, we use the given formula .4n 2 i.e. .4(18) 2 = 5.2 rounds to 5. Therefore, we will select the 5th smallest value from the sample (since the question only wants the lower bound). Unfortunately, the numbers are not in order but if you go searching, you will find that the 5th lowest value overall is 13.3 2. Answer: (B) If we are testing for the idea that the firs mean moisture content is lower than pines we must be testing the alternative H1: Pine < Fir H1: Pine Fir < 0 (and thus H0: Pine Fir > 0)

3. Answer: (A) Since we can assume equal variance, we will use the pooled procedure, but first we have to get the pooled variance
2 sp = 2 2 (n1 1)s1 + (n2 1)s2

n1 + n2 2

(10 1)3.885 2 + (8 1)3.366 2 10 + 8 2

= 13.4468

Now that we have the value of the pooled variance, lets use it in the SE for independent means
2 SE = sp

4. Answer: (B) As per the formula sheet, we know that to find the t statistic for two independent means, we find the difference in sample means and divide by the SE

1 1 1 1 + = 13.4468 + = 1.7394 8 10 n1 n2


x1 x2

Note: Remember that this question deals with two independent samples of observations. Therefore, we should NOT use the given mean of the differences. We only look at the differences when we are dealing with paired samples. Those differences are completely unnecessary and are meant to confuse/distract you.

1 1 2 sp + n1 n2

t =

x1 x2


t =

14.13 19.0375 1.91

= 2.5694

5. Answer: (B) Since we are conducting a one-sided confidence interval for a proportion, we will use the z distribution i.e. df = and we will be careful as to how we get the critical value. Since we are doing a one-sided interval, we do NOT use the confidence levels that we listed at the top of the t table. Instead, we use our own (written in) onesided confidence levels. 1sided df 90% 95% 97.5% 99% 99.5% CI : : : : : 100-up 1.282 1.645 1.960 2.326 2.576 From the problem, we know that p = 67/157 = .426752 Using the formula for a one-sided CI for a proportion with the FPCF p z*

p (1 p ) N n n N 1

.426752 + 1.645

.426752 (1 .426752 ) 1350 157 157 1350 1

= .4878

6. Answer: (A) Since there are N = 1,350 students, we estimate that at most (.4238)(1,350) = 572.13 572 of them will take the exam. Note: The actual value of 572.13 is off solely due to rounding error i.e. we cannot have .13 people take the exam so we round to the closest whole number.

7. Answer: (B) Considering Kohler as group 1 and Russell as group 2, we will use the information regarding two independent proportions with the following sample values p1 = 27/150 = .18 and p2 = 25/200 = .125 As per the formula sheet, we know that the standard error for two independent proportions is given as SE =

p1 (1 p1 ) n1

p2 ( 1 p2 ) n2

.18 (1 .18 ) 150

.125 (1 .125 ) 200

= .03913

8. Answer: (D) Since the interval goes from negative to positive values (i.e. it crosses zero) we do NOT believe that there is a significant difference in the proportion of defects for these two methods. 9. Answer: (B) As per the review, we know that the degrees of freedom used when we can assume EQUAL variances is df = n1 + n2 2 = 14 + 9 2 = 21 Note: The df that we use when we cannot assume equal variances is generally less than the df that we use when we can assume equal variances (or, at least, it cannot be larger). 10. Answer: (A) IQR = Q3 Q1 = 55 25 = 30 Note: We can get the values of Q3 and Q1 by looking at the right and left edges of the boxplot, respectively.

11. Answer: (B) In order to determine if outliers exist, we can do an outlier check by computing the upper and lower fences lower fence = Q1 1.5(IQR) = 25 1.5(55 25) = 20 upper fence = Q3 + 1.5(IQR) = 55 + 1.5(55 25) = 100 Therefore, if we have any observations below 20 or above 100, these values will be considered outliers. Since we have no observations this large, it looks as though we do not have any outliers. 12. Answer: (A) Recall that the Wilcoxon Rank Sum test is testing the medians of these two groups i.e. this test acquires its test statistic by ranking all values. As per the output, we can determine that the mean of the ranks for one group is 217.5/14 = 15.54 and the mean of the ranks for the other group is 58.5/9 = 6.5 However, how do we know which one is which??? Well, by looking at the box plots, we can see that the values for the West are generally lower than those for Central. Therefore, the lower mean rank should be associated to the lower group i.e. the West. 13. Answer: (A) Though it is not explicitly stated in the question, we can reasonably assume that the hypotheses being tested are as follows H0: The median for West and Central are the same vs. H1: The median for West is lower Since the pvalue = .00182 < = .05, we reject H0 and conclude that service times are generally lower in the West i.e. the median for the West is lower. Note: Since no level was given in the problem, we can assume = .05 5

14. Answer: (D) Since each golfer is driving the ball with both cubs, the data values must be paired. As per the formula sheet, we know that the formula for a confidence interval for paired means is

d t*

sd nd

ME = t *

sd nd

If we look on the t table with 95% confidence and df = nd 1 = 9, we get a critical t value of 2.262 80% 90% 95% 98% 99% Clevel df : : : : : : 9 1.383 1.833 2.262 2.821 3.250 ME = t *

sd nd

= 2.262

3.26 10

= 2.332

Note: Recall that when the data values are paired, we are ONLY concerned with the differences. 15. Answer: (B or D) Since the company wishes to prove that the new club can drive a gold ball longer than the leader, this must be the alternative hypothesis H1: NewClub > Leader NewClub Leader > 0 d > 0 thus, H0: NewClub < Leader NewClub Leader < 0 d < 0 Therefore, both (B) and (D) are equally correct answers.

16. Answer: (A) Note: This question is asking us to effectively test the hypotheses laid out in the previous question. In testing the previous hypotheses, our t test statistic would be


d H0 value sd nd

2.810 0 = 2.7258 3.26 10

So, we know that the second half of this statement is true. Now, lets determine the critical t value using the one-tailed = .05 .10 .05 .025 .01 .005 1Tail df : : : : : : 9 1.383 1.833 2.262 2.821 3.250 Therefore, both of these statements are correct. Notes: We know that this is a one-tailed test because we are testing H1: NewClub > Leader (that is, our alternative hypothesis has a greater than or less than symbol in it) This question is a bit tricky because Dr. T claims that the critical value is 1.8331 (which he most likely got from a computer) even though the table rounds this value to 1.833

Notes on Questions #1720 In my opinion, this question is written in a somewhat vague/poor fashion in that its not entirely clear what is going on. What we are supposed to take away from this question is that this company sells merchandise to most everyone at full price but occasionally people qualify for a discount. However, if someone qualifies for a discount and simply doesnt ask for it, they will NOT receive the discount. Therefore, all invoices that have a difference of 0 were those in which the merchandise was sold at the correct price. This occurs if either (1) the customer simply does not qualify for a discount (and thus paid full price) or (2) the customer qualifies for a discount and asks for/gets it. Thus, the only differences that are in the data set result from those customers who do qualify for a discount but subsequently do not ask for/acquire it. 17. Answer: (B) As per the output, there are 158 data points that have a difference of 0. However, as per what is discussed above, this occurs if the customer either does not qualify for a discount or does qualify for a discount and asks for it. Therefore, to claim that there were 158 invoices that had no discount available is not entirely correct. 18. Answer: (A) As per the output, we see there were 17 differences that did not = 0 i.e. these are invoices in which the customer DID qualify for a discount but did not get it. Therefore, we know that 17/175 = .0971 = 9.71% of customers qualified for discount but did no get it.

19. Answer: (A) As per the output (under the intermediate calculations), we see that the sum of the differences is $1,265.94 i.e. there were $1,265.94 worth of discounts that were NOT taken. Therefore, the mean discount not taken per these invoices is $1,265.94/17 = $74.47 Note: We CANNOT use the value that is the average discount in the sample of 7.233 because this includes all the differences of zero in their calculations. That is, this value is computed from 1265.94/175 = 7.233 20. Answer: (B) As per the output, we know that the upper limit for the TOTAL difference (i.e. the total monetary value of discounts foregone by customers) is $39.960.33 21. Answer: (E) As per the formula sheet, we know that the formula for a confidence interval for one proportion is given as p z *

p (1 p ) n

p ME ME = z *

p (1 p ) n

Therefore, we will compute the margin of error with p = 38/188 = .2021 and z* = 1.96 (i.e. match 95% confidence and df = on the t table) ME = z *

p (1 p ) n

= "#$%

#&'&" " ! #&'&" "((

) = .0574

22. Answer: (B) Lets use the confidence interval formula from the previous question p z *

p (1 p ) n

p ME .2021 + .0574 .1447 to .2595

That is, we are 95% confident that between 14.47% and 25.95% of the homes in this community have a computer but no internet access. That is, we do NOT believe that 28% of homes have a computer but no internet access because the interval does NOT include .28 or 28% 23. Answer: (B) As per the formula sheet, the standard error (for one mean w/ FPCF) is given as SE =

N n

24. Recall that the shortcut to create a confidence interval for a TOTAL is to simply create the confidence interval for the mean and then multiple by the population size. In the formula, we need to acquire the critical t value with 95% confidence and df = n 1 = 27 1 = 26 and we get a critical t of t* = 2.056

n N 1 27 Answer: (D)


663 27 663 1

= 7.2567

x t*

s n

N n N 1

x t *SE 172.45 + (2.056)(7.2567) 157.53 to 187.37

Since this is the confidence interval for the mean, we can get the confidence interval for the total by multiplying by the population size i.e. 157.53(663) to 187.37(663) $104,442.39 to $124,226.31


25. Answer: (B) As per the review, we generally do not incorporate the FPCF unless the sample represents more than 5% of the population. However, this only holds true for a confidence interval for one mean (and one proportion). In #24, however, we NEED the population size in order to create the confidence interval for the population total. Therefore, it does make an impact. Note: In my opinion, this is a poor/deceptive question in that it tricks you into referencing what you know about the FPCF but then turns it on its end because the population size is a necessity in determining the population total.