Business Analytics
Exam Solutions
Course Introduction
Business Analytics is a comprehensive course designed to equip students with the knowledge and skills necessary to analyze data and make informed business decisions. The course introduces key concepts in data collection, statistical analysis, predictive modeling, and data visualization, using real-world business scenarios and relevant software tools. Students will learn how to apply analytical techniques to interpret business data, identify trends, optimize processes, and drive strategic decision-making. By the end of the course, students will be able to convert raw data into actionable insights, supporting organizational objectives across various industries.
Recommended Textbook
Statistical Techniques in Business and Economics 15th Edition by Douglas A. Lind
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20 Chapters
2492 Verified Questions
2492 Flashcards
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Page 2
Chapter 1: What Is Statistics
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79 Verified Questions
79 Flashcards
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Sample Questions
Q1) A bank asks customers to evaluate the drive-thru service as good, average, or poor. Which level of measurement is this classification?
A) Nominal
B) Ordinal
C) Interval
D) Ratio
Answer: B
Q2) Based on a sample of 3,000 people, the civilian unemployment rate in the United States was 5.5%. 5.5% is referred to as a statistic.
A)True
B)False
Answer: True
Q3) Your height and weight are examples of which level of measurement?
A) Nominal
B) Ordinal
C) Interval
D) Ratio
Answer: D
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Chapter 2: Describing Data: Frequency Tables, Frequency
Distributions, and Graphic Presentation
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Sample Questions
Q1) Refer to the following ages (rounded to the nearest whole year) of employees at a large company that were grouped into a distribution with class limits:
20 up to 30
30 up to 40
40 up to 50
50 up to 60
60 up to 70
What is the class interval? ______
Answer: 10
Q2) What is the difference in application between a bar chart and a pie chart?
Answer: A bar chart shows the frequency for the distribution of a qualitative variable. A pie chart shows the relative frequency for the distribution of a qualitative variable. The pie chart is also a great way to make a visual message of the proportions that each variable contributes to the total observations.
Q3) To construct a pie chart, relative class frequencies are used to graph the "slices" of the pie.
A)True
B)False
Answer: True
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Chapter 3: Describing Data: Numerical Measures
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132 Flashcards
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Sample Questions
Q1) The weekly sales from a sample of ten computer stores yielded a mean of $25,900; a median $25,000 and a mode of $24,500. What is the shape of the distribution?
Answer: Positively skewed
Q2) The mean monthly income of a group of college students is $500; the standard deviation is $20. According to Chebyshev's theorem, at least what percent of the incomes will lie between $400 and $600? _______________________
Answer: 75%
Q3) According to Chebyshev's Theorem, at least what percent of the observations lie within plus and minus 1.75 standard deviations of the mean?
A) 56%
B) 95%
C) 67%
D) Cannot compute because it depends on the shape of the distribution
Answer: C
Q4) What measure of central location cannot be determined if the distribution has an open-ended class? ____________________
Answer: Arithmetic mean
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Page 5
Chapter 4: Describing Data: Displaying and Exploring Data
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108 Flashcards
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Sample Questions
Q1) A scatter diagram of sales versus production may be constructed by plotting the minimum, first quartile, median, third quartile, and the maximum values of each variable.
A)True
B)False
Q2) What chart or graph uses several rows of data to show a frequency distribution?
Q3) In a distribution, the second quartile corresponds with the A) Mean.
B) Median.
C) Mode.
D) Variance.
Q4) What statistic can be used to measure the relative symmetry of a distribution?
Q5) The coefficient of skewness is a measure of ____________ symmetry.
Q6) What chart or graph uses dots to show frequencies? ________________
Q7) Quartiles divide a frequency distribution into _______ equal parts.
Q8) What graph shows the interquartile range? ___________
Q9) What type of graph clearly shows outliers? ___________
Q10) Percentiles divide a frequency distribution into _________ equal parts.
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Chapter 5: A Survey of Probability Concepts
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Sample Questions
Q1) A rug manufacturer has decided to use 7 compatible colors in her rugs. However, in weaving a rug, only 5 spindles can be used. In advertising, the rug manufacturer wants to indicate the number of different color groupings for sale. How many color groupings using the seven colors taken five at a time are there? (This assumes that 5 different colors will go into each rug, i.e., there are no repetitions of color.)
A) 120
B) 2,520
C) 6,740
D) 36
Q2) Bayes' theorem is a method to revise the probability of an event given additional information.
A)True
B)False
Q3) In a study of student preference of energy drinks, the researcher has identified a population of 10 students. To get a quick result, the researcher will select a sample of 2 students. How many different samples are possible?
Q4) One card will be randomly selected from a standard 52-card deck of cards. What is the probability that it will be the jack of hearts? _____
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Page 7
Chapter 6: Discrete Probability Distributions
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Sample Questions
Q1) A random variable with a Poisson distribution has one of _______ mutually exclusive values.
Q2) In a binomial experiment, the probability of a _________ remains constant.
Q3) On a very hot summer day, 5 percent of the production employees at Midland States Steel are absent from work. The production employees are randomly selected for a special in-depth study on absenteeism. What is the probability of randomly selecting 10 production employees on a hot summer day and finding that none of them are absent?
A) 0.002
B) 0.344
C) 0.599
D) 0.100
Q4) If \(\pi\) = 1/5 and n = 100, what is the standard deviation of this binomial distribution? _______
Q5) What must you know to develop a binomial probability distribution?
A) Probability of success
B) Probability of success and the number of trials
C) Probability of success and the number of successes
D) Number of trials and the number of successes
Q6) In a Poisson distribution, the mean and variance are ________________.
Page 8
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Chapter 7: Continuous Probability Distributions
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131 Flashcards
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Sample Questions
Q1) The mean score of a college entrance test is 500; the standard deviation is 75. The scores are normally distributed. What percent of the students scored below 320?
A) About 50.82%
B) About 34.13%
C) About 7.86%
D) About 0.82%
Q2) The average score of 100 students taking a statistics final was 70 with a standard deviation of 7. Assuming a normal distribution, what is the probability that a student scored greater than 65?
A) 0.2611
B) 0.2389
C) 0.7611
D) -0.714
Q3) A sample of 500 evening students revealed that their annual incomes were normally distributed with a mean income of $30,000 and a standard deviation of $3,000. How many students earned more than $36,000? _______
Q4) What proportion of the area under a normal curve is to the left of z = 1.40?
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Chapter 8: Sampling Methods and the Central Limit
Theorem
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Sample Questions
Q1) According to the central limit theorem,
A) Sample size is important when the population is not normally distributed.
B) Increasing sample size decreases the dispersion of the sampling distribution.
C) The sampling distribution of the sample means Uniform.
D) The sampling distribution of the sample means will be skewed.
Q2) Truck tire life is normally distributed with a mean of 60,000 miles and a standard deviation of 4,000 miles. What is the probability that a tire will last 72,000 miles or more?
A) 0.0013
B) 0.9987
C) 0.4987
D) 0.9544
Q3) Sampling from a population may be preferred because studying all the items in a population may be too ____________.
Q4) We can expect some difference between sample statistics and the corresponding population parameters. This difference is called the sampling error.
A)True
B)False
Q5) A population consists of 14 values. How many samples of size five are possible?
Page 10
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Chapter 9: Estimation and Confidence Intervals
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Sample Questions
Q1) A research firm conducted a survey to determine the mean amount people spend at a popular coffee shop during a week. They found the amounts spent per week followed a normal distribution with a population standard deviation of $4. A sample of 49 customers revealed that the mean is $25. What is the 95 percent confidence interval estimate of µ?
Q2) The Nile Superstore is conducting a survey of consumer preferences for a new wireless, e-book reader. A sample of 160 people reveals that 120 would buy the new reader. What is the 99 percent confidence interval for the population proportion?
Q3) A group of statistics students decided to conduct a survey at their university to find the average (mean) amount of time students spent studying per week. Assuming a population standard deviation of 3 hours, what is the required sample size if the error should be less than ½ hour with a 99% level of confidence?
A) 196
B) 240
C) 15
D) 16
Q4) A sample mean is a _______________ of the population mean.
Q5) A confidence interval is narrower when the sample size __________________.
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Chapter 10: One-Sample Tests of Hypothesis
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Sample Questions
Q1) The researcher must decide on the level of significance before formulating a decision rule and collecting sample data.
A)True
B)False
Q2) The average cost of tuition, room and board at small private liberal arts colleges is reported to be $8,500 per term, but a financial administrator believes that the average cost is higher. A study conducted using 350 small liberal arts colleges showed that the average cost per term is $8,745 with a standard deviation of $1,200. Let = 0.05. What is the critical z-value for this test?
A) +1.96
B) -1.96
C) + 1.65
D) -1.65
Q3) If the 1% level of significance is used and the z-test statistic is +6.00, what is our decision?
A) Do not reject H<sub>0</sub>
B) Reject H<sub>0</sub>
C) Reject H<sub>1</sub>
D) None of these
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Page 12
Chapter 11: Two-Sample Tests of Hypothesis
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130 Flashcards
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Sample Questions
Q1) When the standard deviations are equal but unknown, a test for the differences between two population means has n - 1 degrees of freedom.
A)True
B)False
Q2) Two samples, one of size 14 and the second of size 13, are selected to test the difference between two population means. How many degrees of freedom are used to find the critical value? Assume the population standard deviations are equal.
A) 27
B) 26
C) 25
D) 14
E) 13
Q3) If a hypothesis states that one population mean is greater than another population mean, then the test is _______________.
Q4) If two dependent samples of size 100 are used to test the difference between the means, the degrees of freedom for a t-statistic are ____.
Q5) The paired difference test has ___________ degrees of freedom.
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Chapter 12: Analysis of Variance
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Sample Questions
Q1) In a two-way ANOVA, when is an interaction source of variance included?
Q2) What are the minimum and maximum of values of an F distribution? _______ and _______
Q3) Three different fertilizers were applied to a field of celery. In computing F, how many degrees of freedom are there in the numerator?
A) 0
B) 1
C) 2
D) 3
Q4) What is the least number of sources of variation in ANOVA? _________
Q5) The F distribution is a ______________ distribution.
Q6) An F statistic is:
A) a ratio of two means.
B) a ratio of two variances.
C) the difference between three means.
D) a population parameter.
Q7) What is the sum of squares divided by its corresponding degrees of freedom called?
Page 14
Q8) All values in an F distribution must be _____________.
Q9) How many mean square errors are summarized in a two-way ANOVA table?
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Page 15
Chapter 13: Correlation and Linear Regression
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130 Flashcards
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Sample Questions
Q1) What does a coefficient of correlation of 0.70 infer?
A) Almost no correlation because 0.70 is close to 1.0
B) 70% of the variation in one variable is explained by the other
C) Coefficient of determination is 0.49
D) Coefficient of nondetermination is 0.30
Q2) What is the chart called when the paired data (the dependent and independent variables) are plotted?
A) Scatter diagram
B) Bar chart
C) Pie chart
D) Histogram
Q3) Based on the regression equation, we can
A) predict the value of the dependent variable given a value of the independent variable.
B) predict the value of the independent variable given a value of the dependent variable.
C) measure the association between two variables.
D) measure cause and effect.
Q4) Approximately what percent of the values lie within two standard errors of the regression line? ________
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Chapter 14: Multiple Regression Analysis
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Sample Questions
Q1) If there are four independent variables in a multiple regression equation, there are also four
A) Y-intercepts.
B) regression coefficients.
C) dependent variables.
D) constant terms.
Q2) If the null hypothesis, H<sub>o</sub>: \(\beta\)<sub>1</sub> = 0, is rejected, what effect does the independent variable, X<sub>1</sub>, have when predicting the dependent variable? ______
Q3) A multiple regression model includes three independent variables: X<sub>1</sub>, X<sub>2</sub>, and (X<sub>1</sub>)(X<sub>2</sub>). What is (X<sub>1</sub>)(X<sub>2</sub>) called? ________________________
Q4) In a multiple regression equation with three independent variables, X<sub>1</sub>, X<sub>2</sub>, and X<sub>3</sub>, the interaction term is expressed as (Y)(X<sub>1</sub>).
A)True
B)False
Q5) What analysis is used to develop an equation to predict an outcome based on two or more variables? _____________
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Chapter 15: Index Numbers
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Sample Questions
Q1) How can indexes be classified?
A) Price
B) Quantity
C) Value
D) Weighted or unweighted
Q2) Sean McCarthy earns $20,000 a year; John Nowak, $35,000. What is John's income as an index using Sean's income as the base?
A) 175.0
B) 75.0
C) 100.0
D) 57.1
Q3) Suppose your annual 2001 salary was $40,000 and your 2006 salary was $52,000. Assume the annual CPI rose from 177.1 to 202.9 during this period of time. In which year was your "real" income larger? ________
Q4) In a weighted index, what variable is usually the weight?
Q5) What is the index that measures the average change in prices received in the primary markets of the United States by producers of commodities?
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Chapter 16: Time Series and Forecasting
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Sample Questions
Q1) What transformation should be used for a time series that increases by equal percentages over time? __________________
Q2) For an annual time series extending from 2000 through 2010, how many years would be lost in a three year moving average?
A) 2 at the start and 1 at the end
B) 1 at the start and 1 at the end
C) 2 at the start and 0 at the end
D) 0 at the start and 2 at the end
Q3) For a five-year moving average, how many values will be lost at the beginning and end of the time series?
A) 0 at the start and 4 at the end
B) 3 at the start and 3 at the end
C) 2 at the start and 2 at the end
D) 0 at the start and 5 at the end
Q4) What type of analysis predicts the future on the basis of past data?
Q5) A useful method for eliminating fluctuations in a time series is computing a
Q6) What is the difference between seasonal and cyclical variation in a time series?
Page 19
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Chapter 17: Nonparametric Methods: Goodness-Of-Fit Tests
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Sample Questions
Q1) For any goodness-of-fit test, the null hypothesis is that there is ____ difference between the expected and observed distributions.
Q2) To test for a normal distribution of a frequency distribution with 5 classes, we compute probabilities for each class based on a
A) standard normal distribution.
B) chi-square distribution.
C) student's t distribution.
D) F distribution.
Q3) What does a significantly large chi-square statistic infer about the differences between the observed and expected frequencies in a goodness-of-fit test?
Q4) What is the shape of the chi-square distribution? ___________________
Q5) There is not one, but a family of chi-square distributions. There is a chi-square distribution for 1 degree of freedom, another for 2 degrees of freedom, another for 3 degrees of freedom, and so on.
A)True
B)False
Q6) What is the degree of freedom for a chi-square goodness-of-fit test?
Page 20
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Chapter 18: Nonparametric Methods: Analysis of Ranked
Data
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Sample Questions
Q1) The Wilcoxon Rank-Sum compares two populations based on the sum of the
Q2) One difference between the Kruskal-Wallis method and one-way ANOVA is that the Kruskal-Wallace tests do not require the population ___________ to be the same.
Q3) In a sign test, the test statistic is based on the _______________ distribution.
Q4) For a given set of twelve ranked data values, the sum of the squared differences is 63.18. What is Spearman's coefficient of rank correlation for the data?
A) +.7791
B) -.7791
C) +.2209
D) -.2209
Q5) To apply the large-sample procedure for the sign test, the sample size should be at least
A) 2
B) 8
C) 100
D) 10
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Q6) In testing the significance of Spearman's rank-order coefficient, what is the alternate hypothesis? ______________________
Chapter 19: Statistical Process Control and Quality Management
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Sample Questions
Q1) A major distributor buys shoes from a supplier. The distributor randomly samples the shoes to inspect for quality. The distributor's specifications state that a delivery of 100 pairs of shoes will be accepted only if the number of defective pairs of shoes in a sample of 10 pairs is two or less. Based on the sampling plan, what is the probability of accepting the delivery of 100 pairs of shoes if the actual percent defective is 0.05?
Q2) A subassembly is inspected and the number of defects recorded. A new group of assemblers began work Monday morning. The number of defects per subassembly for the first 10 they produced was: 3, 2, 0, 5, 4, 6, 0, 7, 7, and 6. What are the upper and lower limits for the c bar chart?
A) 15 and 0
B) 10 and 0
C) 1.12 and 0
D) 6 and -2
Q3) If the binomial distribution is used to develop an operating characteristic curve for an acceptance sampling plan, then the trials must be ________________.
Q4) In acceptance sampling, usually 100% of the incoming lot is checked.
A)True
B)False
Page 22
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Chapter 20: An Introduction to Decision Theory
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Sample Questions
Q1) Which of the following is NOT a component of the decision-making process?
A) Alternatives
B) Payoff
C) States of nature
D) Seasonal indexes
Q2) The manager of Paul's fruit and vegetable store is considering the purchase of a new seedless watermelon from a wholesale distributor. Since this seedless watermelon costs $4, will sell for $7, and is highly perishable, he only expects to sell between 6 and 9 of them. What is the payoff value for the purchase of 6 watermelons when the demand is for 7 or more watermelons?
A) 18
B) 21
C) 28
D) 49
Q3) Which decision making strategy maximizes the minimum gain? _____________
Q4) To compute an expected monetary value, it requires that ______________ are estimated for each state of nature.
Q5) In decision theory, a payoff is expressed as a profit or a ______.
Q6) In a payoff table, what is another name for alternatives? _______
Page 23
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