STAT 125-HK. Business Statistics Midterm Exam

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STAT 125-HK. Business Statistics Midterm Exam

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Business Statistics

Midterm Exam

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Questi

Sav

2 points

on 1

e

The probability that house sales will increase in the next 6 months is estimated to be

0.25. The probability that the interest rates on housing loans will go up in the same

period is estimated to be 0.74. The probability that house sales or interest rates will

go up during the next 6 months is estimated to be 0.89. The probability that house

sales will increase but interest rates will not during the next 6 months is:

a. 0.065

b. 0.15

c. 0.51

d. 0.89

Questi

2 points

on 2

The process of using sample statistics to draw conclusions about true population

parameters is called

Sav

e

a. statistical inference.

c. sampling.

d. descriptive statistics.

Questi

2 points

on 3

Which of the following is NOT a reason for obtaining data?

Sav

e

Questi

Sav

2 points

on 4

e

A catalog company that receives the majority of its orders by telephone conducted a

study to determine how long customers were willing to wait on hold before ordering

a product. The length of time was found to be a random variable best approximated

by an exponential distribution with a mean equal to 3 minutes. What proportion of

customers having to hold more than 1.5 minutes will hang up before placing an

order?

a. 0.86466

b. 0.60653

c. 0.39347

d. 0.13534

Questi

2 points

on 5

Selection of raffle tickets from a large bowl is an example of

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e

c. subjective probability.

Questi

2 points

on 6

The width of each bar in a histogram corresponds to the

a. differences between the boundaries of the class.

Sav

e

Questi

2 points

on 7

If two events are mutually exclusive and collectively exhaustive, what is the

probability that one or the other occurs?

Sav

e

a. 0.

b. 0.50.

c. 1.00.

Questi

2 points

on 8

Which of the following is not an element of descriptive statistical problems?

Sav

e

Questi

2 points

on 9

Which of the following statistics is not a measure of central tendency?

Sav

e

a. Mean.

b. Median.

c. Mode.

d. Q3.

Questi

Sav

2 points

on 10

e

Major league baseball salaries averaged $1.5 million with a standard deviation of

$0.8 million in 1994. Suppose a sample of 100 major league players was taken. Find

the approximate probability that the average salary of the 100 players exceeded $1

million.

a. Approximately 0

b. 0.2357

c. 0.7357

d. Approximately 1

Questi

2 points

on 11

If two equally likely events A and B are mutually exclusive and collectively

exhaustive, what is the probability that event A occurs?

a. 0.

b. 0.50.

Sav

e

c. 1.00.

Questi

Sav

2 points

on 12

e

TABLE 2-6

A sample of 200 students at a Big-Ten university was taken after the midterm to ask

them whether they went bar hopping the weekend before the midterm or spent the

weekend studying, and whether they did well or poorly on the midterm. The

following table contains the result.

Did Well on Midterm

80

20

30

70

Referring to Table 2-6, of those who did well on the midterm in the sample,

_______ percent of them went bar hopping the weekend before the midterm.

a. 15

b. 27.27

c. 30

d. 50

Questi

2 points

on 13

Sav

e

TABLE 2-5

The following are the durations in minutes of a sample of long-distance phone calls

made within the continental United States reported by one long-distance carrier.

Time (in Minutes)

Relative Frequency

0.37

0.22

0.15

0.10

0.07

0.07

30 or more

0.02

a. 1 minute

b. 5 minutes

c. 2%

d. 100%

Questi

Sav

2 points

on 14

e

According to a survey of American households, the probability that the residents

own 2 cars if annual household income is over $25,000 is 80%. Of the households

surveyed, 60% had incomes over $25,000 and 70% had 2 cars. The probability that

annual household income is over $25,000 if the residents of a household do not own

2 cars is:

a. 0.12

b. 0.18

c. 0.40

d. 0.55

Questi

Sav

2 points

on 15

e

A study is under way in Yosemite National Forest to determine the adult height of

American pine trees. Specifically, the study is attempting to determine what factors

aid a tree in reaching heights greater than 60 feet tall. It is estimated that the forest

contains 25,000 adult American pines. The study involves collecting heights from

250 randomly selected adult American pine trees and analyzing the results. Identify

the population from which the study was sampled.

a. The 250 randomly selected adult American pine trees.

Questi

2 points

on 16

Sav

e

When extreme values are present in a set of data, which of the following descriptive

summary measures are most appropriate?

a. CV and range.

Questi

Sav

2 points

on 17

e

A population frame for a survey contains a listing of 72,345 names. Using a table of

random numbers, how many digits will the code numbers for each member of your

population contain?

a. 3

b. 4

c. 5

d. 6

Questi

2 points

on 18

A recent survey of banks revealed the following distribution for the interest rate

being charged on a home loan (based on a 30-year mortgage with a 10% down

payment).

Interest Rate:

7.0%

7.5%

8.0%

8.5%

Sav

e

Probability

0.12

0.23

0.24

0.35

If a bank is selected at random from this distribution, what is the chance that the

interest rate charged on a home loan will exceed 8.0%?

a. 0.06

b. 0.41

c. 0.59

d. 1.00

Questi

2 points

on 19

Referring to the histogram from Table 2-3, how many graduating seniors attended

the luncheon?

Sav

e

a. 4

b. 152

c. 275

d. 388

Questi

Sav

2 points

on 20

e

TABLE 2-4

A survey was conducted to determine how people rated the quality of programming

available on television. Respondents were asked to rate the overall quality from 0

(no quality at all) to 100 (extremely good quality). The stem-and-leaf display of the

Stem

Leaves

24

03478999

0112345

12566

01

Referring to Table 2-4, what percentage of the respondents rated overall television

quality with a rating between 50 and 75?

a. 0.11

b. 0.40

c. 0.44

d. 0.56

Questi 2 points

Sav

on 21

e

The Central Limit Theorem is important in statistics because

a. for a large n, it says the population is approximately normal.

b. for any population, it says the sampling distribution of the sample mean is approximately

normal, regardless of the sample size.

c. for a large n, it says the sampling distribution of the sample mean is approximately normal,

regardless of the shape of the population.

d. for any sized sample, it says the sampling distribution of the sample mean is approximately

normal.

Questi

Sav

2 points

on 22

e

If you were constructing a 99% confidence interval of the population mean based on

a sample of n = 25 where the standard deviation of the sample s = 0.05, the critical

value of t will be

a. 2.7969

b. 2.7874

c. 2.4922

d. 2.4851

Questi

2 points

on 23

A statistics student found a reference in the campus library that contained the

median family incomes for all 50 states. She would report her data as being

collected using

Sav

e

a. a designed experiment.

b. observational data.

c. a random sample.

d. a published source.

Questi

Sav

2 points

on 24

e

TABLE 2-5

The following are the durations in minutes of a sample of long-distance phone calls

made within the continental United States reported by one long-distance carrier.

Time (in Minutes)

Relative Frequency

0.37

0.22

0.15

0.10

0.07

0.07

30 or more

0.02

Referring to Table 2-5, if 10 calls lasted 30 minutes or more, how many calls lasted

less than 5 minutes?

a. 10

b. 185

c. 295

d. 500

Questi

Sav

2 points

on 25

e

The employees of a company were surveyed on questions regarding their

educational background and marital status. Of the 600 employees, 400 had college

degrees, 100 were single, and 60 were single college graduates. The probability that

an employee of the company is single or has a college degree is:

a. 0.10

b. 0.25

c. 0.667

d. 0.733

Questi

Sav

2 points

on 26

e

The probability that house sales will increase in the next 6 months is estimated to be

0.25. The probability that the interest rates on housing loans will go up in the same

period is estimated to be 0.74. The probability that house sales or interest rates will

go up during the next 6 months is estimated to be 0.89. The probability that neither

house sales nor interest rates will increase during the next 6 months is:

a. 0.11

b. 0.195

c. 0.89

d. 0.90

Questi

Sav

2 points

on 27

e

A confidence interval was used to estimate the proportion of statistics students that

are females. A random sample of 72 statistics students generated the following 90%

confidence interval: (0.438, 0.642). Based on the interval above, is the population

proportion of females equal to 0.60?

a. No, and we are 90% sure of it.

c. Maybe. 0.60 is a believable value of the population proportion based on the information

above.

Questi

2 points

on 28

Since a _______ is not a randomly selected probability sample, there is no way to

know how well it represents the overall population.

a. simple random sample

Sav

e

b. quota sample

c. stratified sample

d. cluster sample

Questi

Sav

2 points

on 29

e

TABLE 2-6

A sample of 200 students at a Big-Ten university was taken after the midterm to ask

them whether they went bar hopping the weekend before the midterm or spent the

weekend studying, and whether they did well or poorly on the midterm. The

following table contains the result.

Did Well on Midterm

80

20

30

70

Referring to Table 2-6, _______ percent of the students in the sample went bar

hopping the weekend before the midterm and did well on the midterm.

a. 15

b. 27.27

c. 30

d. 50

Questi

2 points

on 30

The collection of all possible events is called

Sav

e

a. a simple probability.

b. a sample space.

c. a joint probability.

Questi

Sav

2 points

on 31

e

A lab orders 100 rats a week for each of the 52 weeks in the year for experiments

that the lab conducts. Suppose the mean cost of rats used in lab experiments turned

out to be $13.00 per week. Interpret this value.

a. Most of the weeks resulted in rat costs of $13.00.

c. The expected or average cost for all weekly rat purchases is $13.00.

d. The rat cost that occurs more often than any other is $13.00.

Questi

2 points

on 32

Which of the following is not true about the Students t distribution?

Sav

e

a. It has more area in the tails and less in the center than does the normal distribution.

b. It is used to construct confidence intervals for the population mean when the population

standard deviation is known.

d. As the number of degrees of freedom increases, the t distribution approaches the normal

distribution.

Questi

2 points

on 33

If two events are mutually exclusive, what is the probability that one or the other

occurs?

Sav

e

a. 0.

b. 0.50.

c. 1.00.

Questi

Sav

2 points

on 34

e

Tim was planning for a meeting with his boss to discuss a raise in his annual salary.

In preparation, he wanted to use the Consumer Price Index to determine the

percentage increase in his salary in terms of real income over the last three years.

Which of the 4 methods of data collection was involved when he used the

Consumer Price Index?

a. Published sources

b. Experimentation

c. Surveying

d. Observation

Questi

Sav

2 points

on 35

e

A professor of economics at a small Texas university wanted to determine what year

in school students were taking his tough economics course. Shown below is a pie

chart of the results. What percentage of the class took the course prior to reaching

their senior year?

a. 14%

b. 44%

c. 54%

d. 86%

Questi

Sav

2 points

on 36

e

TABLE 2-5

The following are the durations in minutes of a sample of long-distance phone calls

made within the continental United States reported by one long-distance carrier.

Time (in Minutes)

Relative Frequency

0.37

0.22

0.15

0.10

0.07

0.07

30 or more

0.02

Referring to Table 2-5, if 100 calls were randomly sampled, how many calls lasted

15 minutes or longer?

a. 10

b. 14

c. 26

d. 74

Questi

Sav

2 points

on 37

e

The chancellor of a major university was concerned about alcohol abuse on her

campus and wanted to find out the portion of students at her university who visited

campus bars every weekend. Her advisor took a random sample of 250 students.

The portion of students in the sample who visited campus bars every weekend is an

example of __________.

a. a categorical random variable.

c. a parameter.

d. a statistic.

Questi

2 points

on 38

Which of the following statements about the median is not true?

Sav

e

c. It is equal to Q2.

Questi

Sav

2 points

on 39

e

Most analysts focus on the cost of tuition as the way to measure the cost of a college

education. But incidentals, such as textbook costs, are rarely considered. A

researcher at Drummand University wishes to estimate the textbook costs of firstyear students at Drummand. To do so, she monitored the textbook cost of 250 firstyear students and found that their average textbook cost was $300 per semester.

Identify the sample in the study.

a. All Drummand University students.

Questi

Sav

2 points

on 40

e

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. If the head librarian

knows that the population standard deviation is 150 books checked out per day, and

she asked her assistant to use 25 days of data to construct the interval estimate, what

confidence level can she attach to the interval estimate?

a. 99.7%

b. 99.0%

c. 98.0%

d. 95.4%

Questi

Sav

2 points

on 41

e

Which of the following is true regarding the sampling distribution of the mean for a

large sample size?

a. It has the same shape, mean, and standard deviation as the population.

b. It has a normal distribution with the same mean and standard deviation as the population.

c. It has the same shape and mean as the population, but has a smaller standard deviation.

d. It has a normal distribution with the same mean as the population but with a smaller

standard deviation.

Questi

2 points

on 42

A lab orders 100 rats a week for each of the 52 weeks in the year for experiments

that the lab conducts. Prices for 100 rats follow the following distribution:

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e

Price:

$10.00

$12.50

$15.00

Probability:

0.35

0.40

0.25

How much should the lab budget for next years rat orders be, assuming this

distribution does not change?

a. $520

b. $637

c. $650

d. $780

Questi

2 points

on 43

The portfolio expected return of two investments

a. will be higher when the covariance is zero.

Sav

e

Questi

Sav

2 points

on 44

e

According to a survey of American households, the probability that the residents

own 2 cars if annual household income is over $25,000 is 80%. Of the households

surveyed, 60% had incomes over $25,000 and 70% had 2 cars. The probability that

the residents of a household do not own 2 cars and have an income over $25,000 a

year is:

a. 0.12

b. 0.18

c. 0.22

d. 0.48

Questi

2 points

on 45

Which of the following is most likely a parameter as opposed to a statistic?

a. The average score of the first five students completing an assignment.

d. The proportion of trucks stopped yesterday that were cited for bad brakes.

Sav

e

Questi

2 points

on 46

Which of the mean, median, mode, and geometric mean are resistant measures of

central tendency?

Sav

e

Questi

Sav

2 points

on 47

e

The collection and summarization of the socioeconomic and physical characteristics

of the employees of a particular firm is an example of

a. inferential statistics.

b. descriptive statistics.

c. a parameter.

d. a statistic.

Questi

Sav

2 points

on 48

e

A population frame for a survey contains a listing of 6,179 names. Using a table of

random numbers, which of the following code numbers will appear on your list?

a. 06

b. 0694

c. 6946

d. 61790

Questi

2 points

on 49

In left-skewed distributions, which of the following is the correct statement?

Sav

e

b. The distance from the smallest observation to Q1 is larger than the distance from Q3 to the

largest observation.

c. The distance from the smallest observation to Q2 is smaller than the distance from Q2 to the

largest observation.

Questi

2 points

on 50

Why is the Central Limit Theorem so important to the study of sampling

distributions?

Sav

e

a. It allows us to disregard the size of the sample selected when the population is not normal.

b. It allows us to disregard the shape of the sampling distribution when the size of the

population is large.

EXAM

Questi

Sav

2 points

on 1

e

In testing for differences between the means of 2 independent populations, the null

hypothesis is:

a. H0: 1 2 = 2.

b. H0: 1 2 = 0.

c. H0: 1 2 > 0.

d. H0: 1 2 < 2.

Questi

2 points

on 2

A survey claims that 9 out of 10 doctors recommend aspirin for their patients with

headaches. To test this claim against the alternative that the actual proportion of

doctors who recommend aspirin is less than 0.90, a random sample of 100 doctors

results in 83 who indicate that they recommend aspirin. The value of the test

statistic in this problem is approximately equal to:

a. -4.12

b. -2.33

c. -1.86

Sav

e

d. -0.07

Questi

2 points

on 3

If a group of independent variables are not significant individually but are

significant as a group at a specified level of significance, this is most likely due to

Sav

e

a. autocorrelation.

d. collinearity.

Questi

Sav

2 points

on 4

e

TABLE 13-2

A candy bar manufacturer is interested in trying to estimate how sales are influenced

by the price of their product. To do this, the company randomly chooses 6 small

cities and offers the candy bar at different prices. Using candy bar sales as the

dependent variable, the company will conduct a simple linear regression on the data

below:

City

Price

Sales

($)

River

1.30 100

Falls

Hudson 1.60 90

Ellswort

1.80 90

h

Prescott 2.00 40

Rock

2.40 38

Elm

Stillwate

2.90 32

r

Referring to Table 13-2, what is the coefficient of correlation for these data?

a. -0.8854

b. -0.7839

c. 0.7839

d. 0.8854

Questi

2 points

on 5

The Y-intercept (b0) represents the

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e

c. predicted value of Y.

Questi

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2 points

on 6

e

TABLE 14-5

A microeconomist wants to determine how corporate sales are influenced by capital

and wage spending by companies. She proceeds to randomly select 26 large

corporations and record information in millions of dollars. The Microsoft Excel

output below shows results of this ltiple regression.

SUMMARY OUTPUT

Regression Statistics

Multiple R 0.830

R Square 0.689

Adjusted R 0.662

Square

Standard 17501.64

Error

3

Observatio

26

ns

d

ANOVA SS

f

Regressi 15579777

2

on

040

2 70450727

Residual

3 80

2 22624849

Total

5 820

Signi

fF

7789888 25.4 0.00

520

32 01

3063075

12

MS

t

PStat value

Intercep15800.000 6038.299 2.61 0.015

t

0

9

7

4

0.60 0.548

Capital 0.1245

0.2045

9

5

4.80 0.000

Wages 7.0762

1.4729

4

1

Referring to Table 14-5, what are the predicted sales (in millions of dollars) for a

company spending $100 million on capital and $100 million on wages?

Coeff

StdError

a. 15,800.00

b. 16,520.07

c. 17,277.49

d. 20,455.98

Questi

Sav

2 points

on 7

e

If we are performing a two-tailed test of whether = 100, the probability of

detecting a shift of the mean to 105 will be ________ the probability of detecting a

shift of the mean to 110.

a. less than

b. greater than

c. equal to

d. not comparable to

Questi

Sav

2 points

on 8

e

TABLE 11-1

Psychologists have found that people are generally reluctant to transmit bad news to

their peers. This phenomenon has been termed the M effect. To investigate the

cause of the M effect, 40 undergraduates at Duke University participated in an

experiment. Each subject was asked to administer an IQ test to another student and

then provide the test taker with his or her percentile score. Unknown to the subject,

the test taker was a bogus student who was working with the researchers. The

experimenters manipulated two factors: subject visibility and success of test taker,

each at two levels. Subject visibility was either visible or not visible to the test

taker. Success of the test taker was either visible or not visible to the test taker.

Success of the test taker was either top 20% or bottom 20%. Ten subjects were

randomly assigned to each of the 2 x 2 = 4 experimental conditions, then the time

(in seconds) between the end of the test and the delivery of the percentile score from

the subject to the test taker was measured. (This variable is called the latency to

feedback.) The data were subjected to appropriate analyses with the following

results.

PR >

F

Subject

1380.2

0.04

1 1380.24

4.26

visibility

4

3

Test taker

1325.1

0.05

1 1325.16

4.09

success

6

0

Interactio

3385.8 10.4 0.00

1 3385.80

n

0

5

2

3 11,664.0

Error

324.00

6 0

3 17,755.2

Total

9 0

Source

df SS

MS

Referring to Table 11-1, in the context of this study, interpret the statement: Subject

visibility and test taker success interact.

a. The difference between the mean feedback time for visible and nonvisible subjects depends

on the success of the test taker.

b. The difference between the mean feedback time for test takers scoring in the top 20% and

bottom 20% depends on the visibility of the subject.

c. The relationship between feedback time and subject visibility depends on the success of the

test taker.

Questi

Sav

2 points

on 9

e

TABLE 13-1

A large national bank charges local companies for using their services. A bank

official reported the results of a regression analysis designed to predict the banks

charges (Y) measured in dollars per month for services rendered to local

companies. One independent variable used to predict service charge to a company is

the companys sales revenue (X) measured in millions of dollars. Data for 21

companies who use the banks services were used to fit the model:

E(Y) = 0 + 1X

The results of the simple linear regression are provided below.

Y = -2,700+20X, syx = 65, two-tailed p value = 0.034 (for testing 1)

Referring to Table 13-1, interpret the p value for testing whether 1 exceeds 0.

a. There is sufficient evidence (at the = 0.05) to conclude that sales revenue (

linear predictor of service charge (Y).

b. There is insufficient evidence (at the = 0.10) to conclude that sales revenue (

linear predictor of service charge (Y).

d. For every $1 million increase in sales revenue, we expect a service charge to increase

$0.034.

Questi

2 points

on 10

TABLE 14-1

A manager of a product sales group believes the number of sales made by an

employee (Y) depends on how many years that employee has been with the

company (X1) and how he/she scored on a business aptitude test (X2). A random

sample of 8 employees provides the following:

Sav

e

EmployeeY X1 X2

1

100 10 7

2

90 3

10

3

80 8

9

4

70 5

4

5

60 5

8

6

50 7

5

7

40 1

4

8

30 1

1

Referring to Table 14-1, for these data, what is the estimated coefficient for the

variable representing years an employee has been with the company, b1?

a. 0.998

b. 3.103

c. 4.698

d. 21.293

Questi

Sav

2 points

on 11

e

The Journal of Business Venturing reported on the activities of entrepreneurs during

entrepreneurs were interviewed and divided into 3 groups: those that were

successful in founding a new firm (n1 = 34), those still actively trying to establish a

firm (n2 = 21), and those who tried to start a new firm but eventually gave up (n3 =

16). The total number of activities undertaken (e.g., developed a business plan,

sought funding, looked for facilities) by each group over a specified time period

during organization creation was measured. The objective is to compare the mean

number of activities of the 3 groups of entrepreneurs. Because of concerns over

necessary assumption of the parametric analysis, it was decided to use a

nonparametric analysis. Identify the nonparametric method that would be used to

analyze the data.

a. Wilcoxon Rank Sums Test

Questi

Sav

2 points

on 12

e

TABLE 15-4

In Hawaii, condemnation proceedings are under way to enable private citizens to

own the property that their homes are built on. Until recently, only estates were

permitted to own land, and homeowners leased the land from the estate. In order to

comply with the new law, a large Hawaiian estate wants to use regression analysis

to estimate the fair market value of the land. Each of the following 3 models were fit

to data collected for n = 20 properties, 10 of which are located near a cove.

Model 1: Y = 0 + 1X1 + 2X2 + 3X1X2 + 4X12 + 5X12X2 +

where

Y = Sale price of property in thousands of dollars

X1 = Size of property in thousands of square feet

X2 = 1 if property located near cove, 0 if not

Using the data collected for the 20 properties, the following partial output obtained

from Microsoft Excel is shown:

Regression Statistics

Multiple R 0.985

R Square

0.970

Standard

9.5

Error

Observations 20

ANOVA df SS

MS

Regressio

5 28324 5664

n

Residual 14 1279 91

Total

19 29063

Signif

F

62.20.0001

StdErro t

Pr

Stat value

Intercept

-32.1 35.7

0.3834

0.90

Size

12.2 5.9

2.05 0.0594

Cove

53.5

0.0715

104.3

1.95

Size*Cove 17.0 8.5

1.99 0.0661

SizeSq

-0.3 0.2

0.2204

1.28

SizeSq*Cov

-0.3 0.3

0.2749

e

1.13

Referring to Table 15-4, given a quadratic relationship between sale price (Y) and

property size (X1), what test should be used to test whether the curves differ from

cove and non-cove properties?

Coeff

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TABLE 10-2

A researcher randomly sampled 30 graduates of an MBA program and recorded data

concerning their starting salaries. Of primary interest to the researcher was the effect

of gender on starting salaries. Analysis of the mean salaries of the females and

males in the sample is given below.

Size

Mean

Std Dev

Females

18

48,266.7

13,577.63

Males

12

55,000

11,741.29

Referring to Table 10-2, the researcher was attempting to show statistically that the

female MBA graduates have a significantly lower mean starting salary than the male

MBA graduates. According to the test run, which of the following is an appropriate

alternative hypothesis?

a. H1: females > males

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TABLE 10-3

The use of preservatives by food processors has become a controversial issue.

Suppose 2 preservatives are extensively tested and determined safe for use in meats.

A processor wants to compare the preservatives for their effects on retarding

spoilage. Suppose 15 cuts of fresh meat are treated with preservative A and 15 are

treated with preservative B, and the number of hours until spoilage begins is

recorded for each of the 30 cuts of meat. The results are summarized in the table

below.

Referring to Table 10-3, what assumptions are necessary for a comparison of the

population variances to be valid?

a. Both sampled populations are normally distributed.

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In testing for the differences between the means of 2 independent populations where

the variances in each population are unknown but assumed equal, the degrees of

freedom are

a. n 1.

b. n1 + n2 1.

c. n1 + n2 2.

d. n 2.

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TABLE 12-1

A study published in the American Journal of Public Health was conducted to

determine whether the use of seat belts in motor vehicles depends on ethnic status in

San Diego County. A sample of 792 children treated for injuries sustained from

motor vehicle accidents was obtained, and each child was classified according to (1)

ethnic status (Hispanic or non-Hispanic) and (2) seat belt usage (worn or not worn)

during the accident. The number of children in each category is given in the table

below.

Hispanic

Non-Hispanic

31

148

283

330

Referring to Table 12-1, which test would be used to properly analyze the data in

this experiment?

a. test for independence in a two-way contingency table.

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If the p value is less than in a two-tailed test,

a. the null hypothesis should not be rejected.

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TABLE 14-1

A manager of a product sales group believes the number of sales made by an

employee (Y) depends on how many years that employee has been with the

company (X1) and how he/she scored on a business aptitude test (X2). A random

sample of 8 employees provides the following:

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EmployeeY X1 X2

1

100 10 7

2

90 3

10

3

80 8

9

4

70 5

4

5

60 5

8

6

50 7

5

7

40 1

4

8

30 1

1

Referring to Table 14-1, for these data, what is the estimated coefficient for the

variable representing scores on the aptitude test, b2?

a. 0.998

b. 3.103

c. 4.698

d. 21.293

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TABLE 10-9

A buyer for a manufacturing plant suspects that his primary supplier of raw

materials is overcharging. In order to determine if his suspicion is correct, he

contacts a second supplier and asks for the prices on various materials. He wants to

compare these prices with those of his primary supplier. The data collected is

presented in the table below, with some summary statistics presented (all of these

might not be necessary to answer the questions which follow). The buyer believes

that the differences are normally distributed and will use this sample to perform an

appropriate test at a level of significance of 0.01.

Material

Primary

Supplier

Secondary

Supplier

Difference

$55

$45

$10

$48

$47

$1

$31

$32

-$1

$83

$77

$6

$37

$37

$0

$55

$54

$1

Sum:

$309

$292

$17

Sum of Squares:

$17,573

$15,472

$139

a. pooled-variance t test for differences in 2 means.

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TABLE 10-4

A real estate company is interested in testing whether, on average, families in

Gotham have been living in their current homes for less time than families in

Metropolis have. A random sample of 100 families from Gotham and a random

sample of 150 families in Metropolis yield the following data on length of residence

in current homes.

Referring to Table 10-4, what is the standardized value of the estimate of the mean

of the sampling distribution of the difference between sample means?

a. -8.75

b. -3.75

c. -2.33

d. -1.96

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on 21

In a multiple regression model, the adjusted r2

a. cannot be negative.

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e

The owner of a local nightclub has recently surveyed a random sample of n = 250

customers of the club. She would now like to determine whether or not the mean

age of her customers is over 30. If so, she plans to alter the entertainment to appeal

to an older crowd. If not, no entertainment changes will be made. If she wants to be

99% confident in her decision, what rejection region should she use?

a. Reject H0 if t Z < -2.33.

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e

A campus researcher wanted to investigate the factors that affect visitor travel time

in a complex, multilevel building on campus. Specifically, he wanted to determine

whether different building signs (building maps versus wall signage) affect the total

amount of time visitors require to reach their destination and whether that time

depends on whether the starting location is inside or outside the building. Three

subjects were assigned to each of the combinations of signs and starting locations,

and travel time in seconds from beginning to destination was recorded. How should

the data be analyzed?

Starting Room

Interior

Exterior

Wall Signs

Map

141

224

119

339

238

139

85

226

94

129

126

130

c. 2 x 2 factorial design

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TABLE 12-4

A few years ago, Pepsi invited consumers to take the Pepsi Challenge. Consumers

were asked to decide which of two sodas, Coke or Pepsi, they preferred in a blind

taste test. Pepsi was interested in determining what factors played a role in peoples

taste preferences. One of the factors studied was the gender of the consumer. Below

are the results of analyses comparing the taste preferences of men and women with

the proportions depicting preference for Pepsi.

Referring to Table 12-4, suppose that the two-tailed p value was 0.0734. State the

proper conclusion.

a. At = 0.05, there is sufficient evidence to indicate the proportion of males preferring Pepsi

differs from the proportion of females preferring Pepsi.

b. At = 0.10, there is sufficient evidence to indicate the proportion of males preferring Pepsi

differs from the proportion of females preferring Pepsi.

c. At = 0.05, there is sufficient evidence to indicate the proportion of males preferring Pepsi

equals the proportion of females preferring Pepsi.

Pepsi differs from the proportion of females preferring Pepsi.

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If a test of hypothesis has a Type I error probability () of 0.01, we mean

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TABLE 10-2

A researcher randomly sampled 30 graduates of an MBA program and recorded data

concerning their starting salaries. Of primary interest to the researcher was the effect

of gender on starting salaries. Analysis of the mean salaries of the females and

males in the sample is given below.

Size

Mean

Std Dev

Females

18

48,266.7

13,577.63

Males

12

55,000

11,741.29

Referring to Table 10-2, the researcher was attempting to show statistically that the

female MBA graduates have a significantly lower mean starting salary than the male

MBA graduates. From the analysis in Table 10-2, the correct test statistic is:

a. 4,634.72

b. -1.4221

c. -1.4528

d. -6,733.33

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e

If we wish to determine whether there is evidence that the proportion of successes is

higher in group 1 than in group 2, the appropriate test to use is

a. the Z test.

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TABLE 11-4

A campus researcher wanted to investigate the factors that affect visitor travel time

in a complex, multilevel building on campus. Specifically, he wanted to determine

whether different building signs (building maps versus wall signage) affect the total

amount of time visitors require to reach their destination and whether that time

depends on whether the starting location is inside or outside the building. Three

subjects were assigned to each of the combinations of signs and starting locations,

and travel time in seconds from beginning to destination was recorded. An Excel

output of the appropriate analysis is given below:

ANOVA

Source

of

SS

df MS

FP-value F crit

Variation

14008.3 14008.3

5.31764

Signs

0.11267

3

3

5

Starting

2.78439

5.31764

12288

0.13374

Location

5

5

Interactio

0.91950 5.31764

48

48

n

6

5

35305.3 4413.16

Within

3

7

61649.6 1

Total

7

1

Referring to Table 11-4, the within (error) degrees of freedom is

a. 1

b. 4

c. 8

d. 11

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e

A local real estate appraiser analyzed the sales prices of homes in 2 neighborhoods

to the corresponding appraised values of the homes. The goal of the analysis was to

compare the distribution of sale-to-appraised ratios from homes in the 2

neighborhoods. Random and independent samples were selected from the 2

neighborhoods from last years homes sales, 8 from each of the 2 neighborhoods.

Identify the nonparametric method that would be used to analyze the data.

a. the Wilcoxon Signed-Ranks Test, using the test statistic Z

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TABLE 12-13

Parents complain that children read too few storybooks and watch too ch television

nowadays. A survey of 1,000 children reveals the following information on average

time spent watching TV and average time spent reading storybooks

Average

time

spent

reading storybooks

Less BetweenMore

than 1 and 2 than

1 hour hours 2 hours

watching

TV

Less than 2

90

85

130

hours

More than 2

655 32

8

hours

Referring to Table 12-13, to test whether there is any relationship between average

time spent watching TV and average time spent reading storybooks, the value of the

measured test statistic is

a. -12.59

b. 1.61

c. 481.49

d. 1,368.06

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TABLE 10-2

A researcher randomly sampled 30 graduates of an MBA program and recorded data

concerning their starting salaries. Of primary interest to the researcher was the effect

of gender on starting salaries. Analysis of the mean salaries of the females and

males in the sample is given below.

Size

Mean

Std Dev

Females

18

48,266.7

13,577.63

Males

12

55,000

11,741.29

Referring to Table 10-2, the researcher was attempting to show statistically that the

female MBA graduates have a significantly lower mean starting salary than the male

MBA graduates. What assumptions were necessary to conduct this hypothesis test?

a. Both populations of salaries (male and female) must have approximate normal distributions.

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2 points

on 32

Testing for the existence of correlation is equivalent to

a. testing for the existence of the slope (1).

Sav

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TABLE 14-3

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). The Microsoft Excel output of this regression is partially reproduced

below.

SUMMARY OUTPUT

Regression Statistics

Multiple R 0.991

R Square

0.982

Adjusted R

0.976

Square

Standard

0.299

Error

Observations 10

d

SS

f

Regressio 33.416

2

n

3

Residual 7 0.6277

34.044

Total

9

0

ANOVA

Coeff

Signif

F

16.708 186.32 0.000

2

5

1

0.0897

MS

StdErro

t Stat P-value

r

t

0.0861

GDP

0.76540.0574 13.340 0.0001

Price

0.0028 -0.219 0.8330

0.0006

Referring to Table 14-3, one economy in the sample had an aggregate consumption

level of $4 billion, a GDP of $6 billion, and an aggregate price level of 200. What is

the residual for this data point?

a. $4.39 billion

b. $0.39 billion

c. -$0.39 billion

d. -$1.33 billion

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on 34

e

A ____________ is a numerical quantity computed from the data of a sample and is

used in reaching a decision on whether or not to reject the null hypothesis.

a. significance level

b. critical value

c. test statistic

d. parameter

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TABLE 13-7

An investment specialist claims that if one holds a portfolio that moves in opposite

direction to the market index like the S&P 500, then it is possible to reduce the

variability of the portfolios return. In other words, one can create a portfolio with

positive returns but less exposure to risk.

A sample of 26 years of S&P 500 index and a portfolio consisting of stocks of

private prisons, which are believed to be negatively related to the S&P 500 index, is

collected. A regression analysis was performed by regressing the returns of the

prison stocks portfolio (Y) on the returns of S&P 500 index (X) to prove that the

private prisons stock portfolio is negatively related to the S&P 500 index at a 5%

level of significance. The results are given in the following EXCEL output.

Coefficie Standard

PT Stat

nts

Error

value

Interc 4.866004 0.357436 13.61363 8.7932

ept 258

09

441

E-13

S&P 0.071597 2.9494

0.502513

7.018624

152

2E-07

506

25

Referring to Table 13-7, which of the following will be a correct conclusion?

a. We cannot reject the null hypothesis and, therefore, conclude that there is sufficient

evidence to show that the prison stock portfolio and S&P 500 index are negatively related.

b. We can reject the null hypothesis and, therefore, conclude that there is sufficient evidence to

show that the prison stock portfolio and S&P 500 index are negatively related.

c. We cannot reject the null hypothesis and, therefore, conclude that there is not sufficient

evidence to show that the prison stock portfolio and S&P 500 index are negatively related.

d. We can reject the null hypothesis and conclude that there is not sufficient evidence to show

that the prison stock portfolio and S&P 500 index are negatively related.

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2 points

on 36

Why would you use the Tukey-Kramer procedure?

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TABLE 12-6

One criterion used to evaluate employees in the assembly section of a large factory

is the number of defective pieces per 1,000 parts produced. The quality control

department wants to find out whether there is a relationship between years of

experience and defect rate. Since the job is repetitious, after the initial training

period any improvement due to a learning effect might be offset by a loss of

motivation. A defect rate is calculated for each worker in a yearly evaluation. The

results for 100 workers are given in the table below.

Years Since Training

Period

<1

14 59

Year Years Years

High 6

9

9

Defect

Average9

19

23

Rate

Low

7

8

10

Referring to Table 12-6, find the rejection region necessary for testing at the 0.05

level of significance whether there is a relationship between defect rate and years of

experience.

a. Reject H0 if > 16.919

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on 38

TABLE 12-5

The following EXCEL output contains the results of a test to determine if the

proportions of satisfied guests at two resorts are the same or different.

Hypothesized Difference

Level of Significance

Group 1

Number of Successes

Sample Size

Group 2

Number of Successes

Sample Size

Group 1 Proportion

Group 2 Proportion

0

0.05

163

227

154

262

0.718061674

0.58778626

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Average Proportion

0.648261759

Test Statistic

3.00875353

Two-Tailed Test

Lower Critical Value

-1.959961082

Upper Critical Value

1.959961082

p-Value

0.002623357

Referring to Table 12-5, if you want to test the claim that Resort 1 (Group 1) has

a higher proportion of satisfied guests compared to Resort 2 (Group 2), the p-value

of the test will be

a. 0.00262

b. 0.00262/2

c. 2*(0.00262)

d. 1 (0.00262/2)

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2 points

on 39

TABLE 15-5

As a business statistics project, a student examined the factors that determine

parking meter rates throughout the campus and downtown area. The campus is a

group of buildings located in the center of downtown, with an open central

quadrangle.

Data were collected for the price of parking per hour and the number of blocks to

the quadrangle. In addition, two dummy variables were coded to indicate the

location of the parking meter (See below). The population regression model

hypothesized is

Yi = 0 + 1x1i + 2x2i + 3x3i + i

where

Y is the price per hour

x1 is a numerical variable = the number of blocks to the quadrangle

(Note that

if x1 is less than 2, then the meter is on campus;

if x1 is less than 3, then the meter is downtown)

x2 is a dummy variable = 1 if inside downtown and off campus, 0 otherwise

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The following Excel results are obtained.

Regression Statistics

Multiple R 9.9659

R Square

0.9331

Adjusted R

0.9294

Square

Standard

0.0327

Error

Observations 58

ANOVA df SS MS F

Signif F

Regressio 0.809 0.269 251.199 1.0964E

3

n

4

8

5

-31

5 0.058 0.001

Residual

4 0

0

5 0.867

Total

7 5

StdErro

t Stat P-value

r

Intercep 0.511

37.467

0.0136

2.4904

t

8

5

X1

0.004 0.0034 -1.32750.1898

5

5.3581E

X2

0.239 0.0123 19.394

-26

2

2

X3

0.000 0.0123 -0.02140.9829

2

Referring to Table 15-5, if one is already outside of downtown and off campus but

decides to park an additional 3 blocks from the quadrangle, the estimated average

parking meter rate will

Coeff

a. decrease by 0.0045.

b. decrease by 0.0135.

c. decrease by 0.0139.

d. decrease by 0.4979.

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TABLE 14-4

A real estate builder wishes to determine how house size (House) is influenced by

family income (Income), family size (Size), and education of the head of household

(School). House size is measured in hundreds of square feet, income is measured in

thousands of dollars, and education is in years. The builder randomly selected 50

families and ran the ltiple regression. Microsoft Excel output is provided below:

SUMMARY OUTPUT

Regression Statistics

Multiple R 0.865

R Square

0.748

Adjusted R

0.726

Square

Standard

5.195

Error

Observations 50

ANOVA df SS

Regressio

n

Residual

Total

MS

Signif

F

3605.7736901.4434 0.0001

1214.226426.9828

4

4820.0000

9

Coeff

StdErro

t Stat P-value

r

t

1.6335

Income 0.44850.1137 3.9545 0.0003

Size

4.26150.8062 5.286 0.0001

School

0.4319 -1.509 0.1383

0.6517

Referring to Table 14-4, one individual in the sample had an annual income of

$10,000, a family size of 1, and an education of 8 years. This individual owned a

home with an area of 1,000 square feet (House = 10.00). What is the residual (in

hundreds of square feet) for this data point?

a. 8.10

b. 5.40

c. -5.40

d. -8.10

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The sample correlation coefficient between X and Y is 0.375. It has been found out

that the p-value is 0.256 when testing H0: = 0 against the two-sided alternative H1:

0. To test H0: = 0 against the one-sided alternative H1: > 0 at a significance

level of 0.193, the p-value is

a. 0.256/2

b. 0.256

c. 1 0.256

d. 1 0.256/2

Questi

2 points

on 42

TABLE 15-5

As a business statistics project, a student examined the factors that determine

parking meter rates throughout the campus and downtown area. The campus is a

group of buildings located in the center of downtown, with an open central

quadrangle.

Sav

e

Data were collected for the price of parking per hour and the number of blocks to

the quadrangle. In addition, two dummy variables were coded to indicate the

location of the parking meter (See below). The population regression model

hypothesized is

Yi = 0 + 1x1i + 2x2i + 3x3i + i

where

Y is the price per hour

x1 is a numerical variable = the number of blocks to the quadrangle

(Note that

if x1 is less than 2, then the meter is on campus;

if x1 is less than 3, then the meter is downtown)

x2 is a dummy variable = 1 if inside downtown and off campus, 0 otherwise

x3 is a dummy variable = 1 if outside downtown and off campus, 0 otherwise

The following Excel results are obtained.

Regression Statistics

Multiple R 9.9659

R Square

0.9331

Adjusted R

0.9294

Square

Standard

0.0327

Error

Observations 58

ANOVA df SS MS F

Signif F

Regressio 0.809 0.269 251.199 1.0964E

3

n

4

8

5

-31

5 0.058 0.001

Residual

4 0

0

5 0.867

Total

7 5

StdErro

t Stat P-value

r

Intercep 0.511

37.467

0.0136

2.4904

t

8

5

X1

0.004 0.0034 -1.32750.1898

5

5.3581E

X2

0.239 0.0123 19.394

-26

2

2

X3

0.0123 -0.02140.9829

0.000

Coeff

2

Referring to Table 15-5, predict the meter rate per hour if one parks outside of

downtown and off campus, 3 blocks from the quad.

a. $-0.0139

b. $0.2589

c. $0.2604

d. $0.4981

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on 43

If the Type I error () for a given test is to be decreased, then for a fixed sample

size n

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on 44

TABLE 11-3

A realtor wants to compare the average sales-to-appraisal ratios of residential

properties sold in four neighborhoods (A, B, C, and D). Four properties are

randomly selected from each neighborhood and the ratios recorded for each, as

shown below.

A: 1.2, 1.1, 0.9, 0.4

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C: 1.0, 1.5, 1.1, 1.3

D: 0.8, 1.3, 1.1, 0.7

Interpret the results of the analysis summarized in the following table:

Source

df

Neighborhoods

Error

SS

MS

2.97

0.990

8.31

12

Total

4.40

a. 0.119

b. 0.990

c. 1.109

d. 8.31

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on 45

TABLE 12-5

The following EXCEL output contains the results of a test to determine if the

proportions of satisfied guests at two resorts are the same or different.

Hypothesized Difference

Level of Significance

Group 1

Number of Successes

Sample Size

Group 2

0

0.05

163

227

Sav

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Number of Successes

154

Sample Size

262

Group 1 Proportion

0.718061674

Group 2 Proportion

0.58778626

Difference in Two Proportions 0.130275414

Average Proportion

0.648261759

Test Statistic

3.00875353

Two-Tailed Test

Lower Critical Value

-1.959961082

Upper Critical Value

1.959961082

p-Value

0.002623357

Referring to Table 12-5, if you want to test the claim that Resort 1 (Group 1) has

a lower proportion of satisfied guests compared to Resort 2 (Group 2), you will use

a. a t-test for the difference in two proportions.

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2 points

on 46

If we use the chi-squared method of analysis to test for the differences among 4

proportions, the degrees of freedom are equal to:

a. 3

b. 4

c. 5

d. 1

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TABLE 10-5

To test the effects of a business school preparation course, 8 students took a general

business test before and after the course. The results are given below.

Student

530

670

690

770

910

1,000

700

710

450

550

820

870

820

770

630

610

Referring to Table 10-5, at the 0.05 level of significance, the conclusion for this

hypothesis test would be:

a. the business school preparation course does improve exam score.

b. the business school preparation course does not improve exam score.

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2 points

on 48

How many Kleenex should the Kimberly Clark Corporation package of tissues

contain? Researchers determined that 60 tissues is the average number of tissues

used during a cold. Suppose a random sample of 100 Kleenex users yielded the

following data on the number of tissues used during a cold: = 52, s = 22. Suppose

the alternative we wanted to test was H1: < 60. State the correct rejection region

for = 0.05.

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TABLE 14-5

A microeconomist wants to determine how corporate sales are influenced by capital

and wage spending by companies. She proceeds to randomly select 26 large

corporations and record information in millions of dollars. The Microsoft Excel

output below shows results of this ltiple regression.

SUMMARY OUTPUT

Regression Statistics

Multiple R 0.830

R Square 0.689

Adjusted R

0.662

Square

Standard 17501.64

Error

3

Observatio

26

ns

d

ANOVA SS

f

Regressi 15579777

2

on

040

2 70450727

Residual

3 80

2 22624849

Total

5 820

Signi

fF

7789888 25.4 0.00

520

32 01

3063075

12

MS

t

PStat value

Intercep15800.000 6038.299 2.61 0.015

t

0

9

7

4

0.60 0.548

Capital 0.1245

0.2045

9

5

4.80 0.000

Wages 7.0762

1.4729

4

1

Referring to Table 14-5, which of the following values for is the smallest for

which the regression model as a whole is significant?

Coeff

StdError

a. 0.00005

b. 0.001

c. 0.01

d. 0.05

Questi

Sav

2 points

on 50

e

TABLE 12-3

A computer used by a 24-hour banking service is supposed to randomly assign each

transaction to one of 5 memory locations. A check at the end of a days transactions

gave the counts shown in the table to each of the 5 memory locations, along with the

Memory

1 2 3 4 5

Location:

Number of

82 100 74 92 102

Transactions:

Number of

Reported

11 12 6 9 10

Errors

The bank manager wanted to test whether the proportion of errors in transactions

assigned to each of the 5 memory locations differ.

Referring to Table 12-3, which test would be used to properly analyze the data in

this experiment?

a. test for independence in a two-way contingency table

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