Business Data Analysis
Test Bank
Course Introduction
Business Data Analysis introduces students to the essential concepts, tools, and techniques used to interpret and analyze data in a business context. The course covers data collection, data management, and the application of statistical methods for descriptive, predictive, and inferential analysis. Students will learn how to utilize spreadsheets, data visualization software, and statistical packages to uncover trends, make informed decisions, and solve real-world business problems. Emphasis is placed on critical thinking, analytical reasoning, and effective communication of data-driven insights to support strategic business objectives.
Recommended Textbook
Statistical Techniques in Business and Economics 16th Edition by Douglas Lind
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Page 2
Chapter 1: What Is Statistics
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Sample Questions
Q1) The principal difference between the interval and ratio scale of measurement is that the ratio scale has a __________________.
Answer: meaningful zero point
Q2) There are four levels of measurement: qualitative, quantitative, discrete, and continuous.
A)True
B)False
Answer: False
Q3) To infer something about a population, we usually take a sample from the population.
A)True
B)False
Answer: True
Q4) The incomes of 50 loan applicants are obtained. Which level of measurement is income?
A) Nominal
B) Ordinal
C) Interval
D) Ratio
Answer: D
Page 3
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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 information from a frequency distribution for "heights of college women" recorded to the nearest inch: the first two class midpoints are 62.5" and 65.5". What are the class limits for the third class?
A) 64 and up to 67
B) 67 and 69
C) 67 and up to 70
D) 66 and 68
Answer: C
Q2) For a relative frequency distribution, relative frequency is computed as _____________.
A) The class width divided by the class interval
B) The class midpoint divided by the class frequency
C) The class frequency divided by the class interval
D) The class frequency divided by the total frequency
Answer: D
Q3) The suggested class interval for a frequency distribution with data ranges from 100 to 220 with 50 observations would be _______.
Answer: 20
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Chapter 3: Describing Data: Numerical Measures
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Sample Questions
Q1) The relationship between the mean and median in a negatively skewed distribution would be that the _____________.
Answer: mean is less than the median
Q2) A sample of assistant professors on the business faculty at state-supported institutions in Ohio revealed the mean income to be $72,000 for nine months, with a standard deviation of $3,000. Using Chebyshev's theorem, what proportion of the faculty earns more than $66,000, but less than $78,000?
A) At least 50%
B) At least 25%
C) At least 75%
D) At least 100%
Answer: C
Q3) When computing the mean for grouped data, the numerator is the sum of
Answer: the product of class frequencies and midpoints
Q4) For a set of data arranged or sorted in numerical order, the value of the observation in the center is called the weighted mean.
A)True
B)False
Answer: False
Page 5
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Chapter 4: Describing Data: Displaying and Exploring Data
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Sample Questions
Q1) In a symmetric distribution, is the 99<sup>th</sup> percentile is located in the ________ tail.
Q2) If a distribution is negatively skewed, the distribution is not symmetrical and the long tail is to the left.
A)True
B)False
Q3) The research director of a large oil company studied the buying habits of consumers with respect to the amount of gasoline purchased at full-service pumps. The sample mean amount is 11.5 gallons and the median amount is 11.95 gallons. The standard deviation of the sample is 4.5 gallons. What is Pearson's coefficient of skewness here?
Q4) In a stem-and-leaf display, the leaf represents a class of a frequency distribution.
A)True
B)False
Q5) What is the common purpose of a scatter diagram and a contingency table?
Q6) Percentiles divide a distribution into 100 equal parts.
A)True
B)False
Q7) A __________ shows the interquartile range.
Page 6
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Chapter 5: A Survey of Probability Concepts
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Q1) Probabilities are important information when __________.
A) Summarizing a data set with a frequency chart
B) Applying descriptive statistics
C) Computing cumulative frequencies
D) Using inferential statistics
Q2) The joint probability of two events that are not independent, P(A and B), is computed as _______________.
Q3) Complete the following analogy: An experiment relates to outcome, as the role of a die relates to _____.
Q4) In flipping a fair coin, what is the probability of either heads or tails on one toss?
Q5) If two events are mutually exclusive, then P(A and B) = P(A)P(B).
A)True
B)False
Q6) If P(A) = 0.62, P(B) = 0.47, and P(A or B) = 0.88, then P(A and B) = _____.
A) 0.2914
B) 1.9700
C) 0.6700
D) 0.2100
Q7) What is the difference between a permutation and a combination?
Page 7
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Chapter 6: Discrete Probability Distributions
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Sample Questions
Q1) A company is studying the number of daily debit card purchases. There were 20 purchases and the probability of a debit card purchase is 0.5. Of the 20 purchases, what is the expected value of the number of debit card purchases?
Q2) A company is studying the number of daily debit card purchases. There were 20 purchases and the probability of a debit card purchase is 0.5. Based on the shape of the distribution, approximately 99.7% of the purchases should be between _______ and
Q3) Judging from recent experience, 5% of the computer keyboards produced by an automatic, high-speed machine are defective. If six keyboards are randomly selected, what is the probability that none of the keyboards are defective?
A) 0.001
B) 0.167
C) 0.735
D) 0.500
Q4) In a Poisson distribution, the mean and variance are ________________.
Q5) In a Poisson distribution, each trial is ___________________.
Q6) A probability distribution shows the outcomes of an experiment and the ___________________ of each one occurring.
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Chapter 7: Continuous Probability Distributions
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Sample Questions
Q1) A sample of 500 part-time students revealed that their annual incomes were normally distributed with a mean income of $30,000 and a standard deviation of $3,000. The number of students that earned between $27,000 and $33,000 is _____.
Q2) In a standard normal distribution, µ = ______ and = _____.
Q3) A binomial distribution has 50 trials (n = 50) with a probability of success of 0.50 ( = 0.50). We would like to find the probability of 34 or more successes using the normal distribution to approximate the binomial. Applying the continuity correction factor, what z-score should be used?
A) 2.404
B) 2.546
C) 2.687
D) 0.50
Q4) If an average of 12 customers is served per hour, what is the probability that the next customer will arrive in 3 minutes or less?
A) 0.55
B) 0.30
C) 0.45
D) 0.39
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Page 9
Chapter 8: Sampling Methods and the Central Limit
Theorem
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Sample Questions
Q1) A university has 1,000 computers available for students to use. Each computer has a 250-gigabyte hard drive. The university wants to estimate the space occupied on the hard drives. A random sample of 100 computers showed a mean of 115 gigabytes used with a standard deviation of 20 gigabytes. What is the probability that a sample mean is greater than 200 gigabytes?
Q2) If the size of a sample equals the size of the population, the sampling error is
Q3) The size of the standard deviation of the sampling distribution of the mean relative to the standard deviation of the population under study is __________.
Q4) When deciding to collect sample information rather than collecting information from the population, the amount of time required to collect the information is unimportant.
A)True B)False
Q5) The mean of all possible sample means is equal to the population mean. A)True B)False
Page 10
Q6) A population consists of 12 values. How many samples of size six are possible?
Q7) A population consists of 14 values. How many samples of size five are possible?
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Chapter 9: Estimation and Confidence Intervals
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Sample Questions
Q1) A bank wishes to estimate the mean credit card balance owed by its customers. The population standard deviation is estimated to be $300. If a 98% confidence interval is used and an interval of $75 is desired, how many customers should be sampled?
A) 44
B) 212
C) 629
D) 87
Q2) What is the interpretation of a 96% confidence level?
A) There's a 96% chance that the given interval includes the true value of the population parameter.
B) Approximately 96 out of 100 such intervals would include the true value of the population parameter.
C) There's a 4% chance that the given interval does not include the true value of the population parameter.
D) The interval contains 96% of all sample means.
Q3) To calculate the sample size required to estimate a population mean, we must know or estimate the ______________ of the population distribution.
Q4) A confidence interval becomes narrower when the sample size _________.
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Chapter 10: One-Sample Tests of Hypothesis
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Sample Questions
Q1) A tire manufacturing company is reviewing its warranty for their rainmaker tire. The warranty is for 40,000 miles. The distribution of tire wear is normally distributed with a population standard deviation of 15,000 miles. The tire company believes that the tire actually lasts more than 40,000 miles. A sample of 49 tires revealed that the mean number of miles is 45,000 miles. What is H<sub>1</sub>:?
Q2) A hypothesis regarding the weight of newborn infants at a community hospital is that the mean is 6.6 pounds. A sample of seven infants is randomly selected and their weights at birth are recorded as 9.0, 7.3, 6.0, 8.8, 6.8, 8.4, and 6.6 pounds. If = 0.05, what is the critical t value?
A) -2.365
B) ±1.96
C) ±2.365
D) ±2.447
Q3) A ____________ hypothesis test is indicated if the alternate hypothesis does not specify a direction.
Q4) For a two-tailed hypothesis test, the computed test statistic is z = 2.65. What is the p-value?
Q5) How is a significance level determined and how is it related to Type I error?
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Chapter 11: Two-Sample Tests of Hypothesis
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Q1) If we are testing for the difference between two population proportions, it is assumed that the sample observations from one population are _____________ of the sample observations from the other population.
Q2) If two dependent samples of size 20 are used to test the difference between the means, the degrees of freedom for a t-statistic are 19.
A)True
B)False
Q3) Twenty randomly selected statistics students were given 15 multiple-choice questions and 15 open-ended questions, all on the same material. The professor was interested in determining if students scored higher on the multiple-choice questions. This experiment is an example of ________________.
A) A one-sample test of means
B) A two-sample test of means
C) A paired t-test
D) A test of proportions
Q4) When testing the null hypothesis that two population means are equal, the hypothesized difference between the population means is ________________.
Q5) The paired t test is especially appropriate when the two samples are ________.
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Chapter 12: Analysis of Variance
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Sample Questions
Q1) If a confidence interval for the difference between a pair of treatment means includes 0, then we reject the null hypothesis that there is no difference in the pair of treatment means.
A)True
B)False
Q2) In a study of protein breakfast bars, five bars from each of three brands were tested to see if the mean amount of protein per bar differs among the brands. If the sum of squares for the brands is 0.07, the mean square for brands is _____.
Q3) Below is the information for a completely randomized experimental design involving four treatments, where 12 observations were recorded for each treatment for a total of 48 observations. SST = 210 (Sum of Squares Between Groups)
SS Total = 840 (Sum of Squares Total)
The computed value of F, or the test statistic, is ______.
A) 0.25
B) 12.0
C) 4.88
D) 8.0
Q4) The shape of the F distribution is _____________________.
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Chapter 13: Correlation and Linear Regression
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Sample Questions
Q1) A confidence interval can be determined for the mean value of Y for a given value of X.
A)True
B)False
Q2) In plotting paired data in a scatter diagram, the dependent variable is scaled on the __________________.
Q3) The Pearson product-moment correlation coefficient, r, requires that variables be measured with _____________.
A) an interval or ratio scale
B) an ordinal or ratio scale
C) a nominal or ordinal scale
D) a nominal or ratio scale
Q4) Consider the following regression equation: Y = 30 + 8X. If SSE = 720 and SS Total = 1,200, then the correlation coefficient is _______.
A) -0.632
B) 0.70
C) 0.632
D) -0.70
Q5) The population correlation coefficient is represented by ____.
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Chapter 14: Multiple Regression Analysis
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Sample Questions
Q1) A researcher is studying the effect of 10 different variables on a critical measure of business performance. A multiple regression analysis including all 10 variables is performed. What criterion could be used to eliminate 1 of the 10 variables?
A) Multiple R<sup>2</sup>
B) Largest p-value
C) Smallest p-value
D) Smallest regression coefficient
Q2) If a data set of 10 observations is used in a multiple regression analysis with 10 independent variables, then ____________.
A) R<sup>2</sup> will be equal to 1.0
B) The multiple standard error of the estimate will be 1.0
C) The independent variables will be correlated
D) The regression coefficients will all equal 1.0
Q3) When does multicollinearity occur in a multiple regression analysis?
A) When the dependent variables are highly correlated
B) When the regression coefficients are correlated
C) When the independent variables are highly correlated
D) When the independent variables have no correlation
Q4) In multiple regression, the ________ is used to test the global hypothesis.
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Chapter 15: Nonparametric Methods: Nominal Level
Hypothesis Tests
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Sample Questions
Q1) The variance of the chi-square distribution is equal to one. A)True
B)False
Q2) If the computed value of a chi-square statistic is greater than the critical value, the null hypothesis is ________.
Q3) In a contingency table analysis, the decision to reject the null hypothesis is based on a __________ test statistic.
Q4) If the decision is to reject the null hypothesis of no difference between two population proportions at the 5% level of significance, what are the alternative hypothesis and rejection region?
A) H<sub>1</sub>: <sub>1</sub> <sub>2</sub>; z > +1.645 and z < -1.645
B) H<sub>1</sub>: <sub>1</sub> <sub>2</sub>; z > +1.960 and z < -1.960
C) H<sub>1</sub>: <sub>1</sub> > <sub>2</sub>; z < -1.645
D) H<sub>1</sub>: <sub>1</sub> > <sub>2</sub>; z < -1.960
Q5) If we are testing for the difference between two population proportions, it is assumed that the two samples are large enough that the binomial distribution can be approximated by ______.
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Q6) The degrees of freedom for a chi-square goodness-of-fit test is equal to
Chapter 16: Nonparametric Methods: Analysis of Ordinal
Data
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Sample Questions
Q1) A study was conducted on the percent of total advertising dollars spent by ten local firms for advertising in the press and on cable television. Results were ranked with a resulting sum of squared differences equal to 128. What is Spearman's coefficient of rank correlation?
A) -0.871
B) +0.224
C) +0.234
D) -0.234
Q2) What is the test statistic for the sign test if the sample size is large?
A) Chi-square
B) Standard normal z
C) Binomial
D) Wilcoxon signed-rank
Q3) The Spearman coefficient of rank correlation method ____________ the observations in each sample.
Q4) 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.
Q5) When are nonparametric methods best applied?
Q6) The sign test requires the populations to be _____________.
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Chapter 17: Index Numbers
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Sample Questions
Q1) A company has data on annual revenue for ten years beginning in 1995. The company wants to compute an index using the revenues from 1995, 1996, and 1997 as the base. If the revenues for the three years were (in $millions) $1.5, $1.3, and $2.0, what is the base value?
Q2) There are several indexes that reflect the overall economic activity in the United States. The federal government puts out an index of leading economic indicators. It includes such diverse economic indicators as stock prices, new orders for plants and equipment, and building permits issued. These indexes are usually referred to as _______________.
Q3) In 2000, an executive earned $100,000. In 2009, the executive earned $125,000. The CPI in 2000 was 172.2, and the CPI in 2009 was 214.537. Using the CPI base, 1982-1984 = 100, what was the real income in 2009?
Q4) If the average age was $7.67 per hour in 1998 and $14.90 per hour last month, what is the index of hourly wages for last month based on the 1998 information?
A) 100.0
B) 186.9
C) 151.5
D) 194.3
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Chapter 18: Time Series and Forecasting
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Sample Questions
Q1) If the trend equation is = 10 + 100t, the forecasted value increases 100 units for the next time period, t.
A)True B)False
Q2) If the least squares equation for sales data going from 2004 to 2008 is = 10 + 1.3t (in $millions), what is the value of t and the forecast for 2010?
A) t = 6, = 17.8
B) t = 0, = 10.0
C) t = 7, = 19.1
D) t = 10, = 0.0
Q3) A useful method for eliminating fluctuations in a time series is computing a ______.
Q4) Autocorrelation is measured by the trend component of a time series. A)True B)False
Q5) The __________________ method is most commonly used to compute typical seasonal indexes.
Q6) A graph of a deseasonalized time series does NOT show ________.
Q7) Define autocorrelation.
Page 20
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Chapter 19: Statistical Process Control and Quality Management
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Q1) If the binomial distribution is used to develop an operating characteristic curve for an acceptance sampling plan, then the trials must be ________________.
Q2) Control charts are used to determine if a process is: A) in or out of control. B) measurable. C) fixable.
D) testable.
Q3) A fishbone diagram starts with the definition of a problem and explores its possible
Q4) A statistical quality control chart that is out of control shows what a(n) ___________ variation.
Q5) A Pareto chart is useful because it is based on the theory that 80% of the observations are accounted for by 20% of the ________.
Q6) Pareto charts are based on the 80-20 rule, which says 80% of the factors cause 20% of the problem.
A)True
B)False
Q7) Explain the risks of acceptance sampling.
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Chapter 20: An Introduction to Decision Theory
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Q1) How can the probabilities assigned to states of nature be determined?
Q2) Sensitivity analysis examines the effects that changes in the probabilities for the states of nature have on the expected values of the alternatives or acts, and the corresponding decisions.
A)True
B)False
Q3) What is the purpose of sensitivity analysis in decision theory?
Q4) A graph of all the possible courses of action and their consequent possible outcomes is called a ________________.
Q5) When all the facts are known in a decision-making situation, it can be said that the decision was made under conditions of _____________.
Q6) A minimax regret strategy will always choose the act or alternative that:
A) maximizes the expected monetary value.
B) minimizes the maximum regret or opportunity loss.
C) maximizes the potential payoff regardless of uncertainty.
D) guarantees a payoff for any state of nature.
Q7) The maximax strategy is an ________ strategy for decision making.
Q8) The maximin strategy is a __________ strategy for decision making.
Q9) In decision theory, a payoff is expressed as a profit or a ______.
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