Managerial Statistics Practice Exam
Course Introduction
Managerial Statistics is a course designed to equip students with the essential statistical tools and analytical frameworks required for effective decision-making in business environments. The course covers fundamental concepts such as data collection, probability theory, descriptive statistics, inferential statistics, regression analysis, and hypothesis testing. Emphasis is placed on interpreting statistical results and applying quantitative reasoning to solve real-world managerial problems. Through a combination of lectures, hands-on exercises, and case studies, students learn how to use statistical software, critically evaluate data, and communicate findings to support strategic business decisions.
Recommended Textbook
Business Statistics A Decision Making Approach 8th Edition by David F. Groebner
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2260 Verified Questions
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Chapter 1: The Where, why, and How of Data Collection
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Sample Questions
Q1) In order to determine a parameter (such as a mean)of a population you would need to conduct a
A)population.
B)random sample.
C)census.
D)statistic.
Answer: C
Q2) In Excel,what procedure is used to select random numbers?
A)The random numbers function
B)Click on the Tools tab,then click on Data Analysis,then click on Sampling
C)Click on the Tools tab,then click on Data Analysis,then click on Random Number Generation
D)Random numbers are not available in Excel.
Answer: C
Q3) What is the underlying common element of all statistical sampling techniques?
Answer: The basis for all statistical sampling techniques is that the items selected in the sample are chosen at random from the population.This provides the potential to perform an objective analysis of the data and reach objective conclusions about the population based on the sample.
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Chapter 2: Graphs,charts and Tablesdescribing Your Data
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Sample Questions
Q1) The managers at Harris Pizza in Boston have tracked the tips received by their drivers along with the total bill to the customer.An appropriate graph for analyzing the relationship between these two variables is:
A)a scatter diagram.
B)a line chart.
C)a histogram.
D)a pie chart.
Answer: A
Q2) Recently a survey was conducted in which customers of a large insurance company were asked to indicate the number of speeding tickets they had received in the past three years.The data in this case would most likely be analyzed using a frequency distribution with the data grouped into classes such as 0-2,3-5,6-8,etc.
A)True
B)False
Answer: False
Q3) A histogram can be created for discrete or continuous data.
A)True
B)False
Answer: True
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Chapter 3: Describing Data Using Numerical Measures
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Sample Questions
Q1) A sample of people who have attended a college football game at your university has a mean = 3.2 members in their family.The mode number of family members is 2 and the median number is 2.0.Based on this information:
A)the population mean exceeds 3.2.
B)the distribution is bell-shaped.
C)the distribution is right-skewed.
D)the distribution is left-skewed.
Answer: C
Q2) If a distribution for a quantitative variable is thought to be nearly symmetric with very little variation,and a box and whisker plot is created for this distribution,which of the following is true?
A)The box will be quite wide but the whisker will be very short.
B)The left and right-hand edges of the box will be approximately equal distance from the median.
C)The whiskers should be about half as long as the box is wide.
D)The upper whisker will be much longer than the lower whisker.
Answer: B
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Chapter 4: Using Probability and Probability Distributions
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Sample Questions
Q1) The Crystal Window Company makes windows at three locations: Reno,Las Vegas,and Boise.Some windows made by the company contain a visible defect and must be replaced.Each defect costs the company $45.00.The Reno plant makes 40 percent of all windows while the Las Vegas and Boise plants split the remaining production evenly.A recent quality study shows that 8 percent of the Reno windows contain a defect,11 percent of the Las Vegas windows contain a defect,while 4 percent of the windows made in Boise have a defect.Once the windows are made,they are shipped to a central warehouse where they are commingled and the location where they were made is lost.
Based on this information,the percentage of the defective cost that should be allocated to the Reno plant is approximately 42 percent.
A)True
B)False
Q2) When a construction company bids on a contract,the events will be win or lose.The closer the probability is to 0.50,the greater the uncertainty about whether the company will win or lose the bid.
A)True
B)False
Q3) Explain what is meant by the term mutually exclusive events.Cite an example.
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Chapter 5: Discrete Probability Distributions
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Sample Questions
Q1) The Vardon Exploration Company is getting ready to leave for South America to explore for oil.One piece of equipment requires 10 batteries that must operate for more than 2 hours.The batteries being used have a 15 percent chance of failing within 2 hours.The exploration leader plans to take 15 batteries.Assuming that the conditions of the binomial apply,the probability that the supply of batteries will not contain enough good ones to operate the equipment is:
A)0.0449.
B)0.0132.
C)0.9832.
D)0.0168.
Q2) The number of calls to an Internet service provider during the hour between 6:00 and 7:00 p.m.is described by a Poisson distribution with mean equal to 15.Given this information,the expected number of calls in the first 30 minutes is 7.5 calls.
A)True
B)False
Q3) Explain what the expected value of a discrete random variable measures.
Q4) Explain how to determine whether the binomial distribution can be used in a particular application.
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Chapter 6: Introduction to Continuous Probability
Distributions
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Sample Questions
Q1) For a normal distribution,the probability of a value being between a positive z-value and its population mean is the same as that of a value being between a negative z-value and its population mean.
A)True
B)False
Q2) A study of cars arriving at a parking structure at the local airport shows that the time between arrivals is 1.2 minutes and is exponentially distributed.The probability that more than 2 minutes will elapse between the arrivals of cars is about 0.81.
A)True
B)False
Q3) An electronics repair shop has determined that the time between failures for a particular electronic component part is exponentially distributed with a mean time between failures of 200 hours.Based on this information,the probability that a part will fail in the first 20 hours is approximately 0.095.
A)True
B)False
Q4) What is the difference between a normal distribution and the standard normal distribution?
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Chapter 7: Introduction to Sampling Distributions
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Sample Questions
Q1) Suppose it is known that 93 percent of all parts in an inventory of 18,900 parts are in workable order.If a sample of n = 100 parts were selected from the inventory,based on the concept of sampling distributions of proportions,it can be assumed that the sample proportion of workable parts will also be 0.93.
A)True
B)False
Q2) A major textbook publisher has a contract with a printing company.Part of the contract stipulates that no more than 5 percent of the pages should have any type of printing error.As a quality control measure,the publisher periodically selects a random sample of n = 100 pages.Then,depending on the proportion of pages with errors,they either say nothing to the printer or they complain that the quality has slipped.Suppose the publisher wants no more than a .10 chance of mistakenly blaming the printer for poor quality,what should the cut-off proportion be?
A)About 0.0279
B)Approximately 0.0779
C)About 0.0221
D)About 0.10
Q3) Explain the impact of the size of the sample on the shape of the sampling distribution.
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Chapter 8: Estimating Single Population Parameters
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Sample Questions
Q1) In developing a confidence interval estimate for the population mean,which of the following is true?
A)The larger the sample standard deviation,the wider will be the interval estimate,all other things being equal.
B)If the population standard deviation is unknown,the appropriate critical value should be obtained from the t-distribution.
C)The confidence interval developed from a smaller sample size will have a larger margin of error than one obtained using a larger sample size,all other things being equal.
D)All of the above are true.
Q2) A confidence interval will contain the true population value as long as the point estimate is within the lower to upper limits.
A)True
B)False
Q3) The higher the level of confidence,the wider the confidence interval must be.
A)True
B)False
Q4) Under what circumstances would you wish to select a pilot sample?
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Chapter 9: Introduction to Hypothesis Testing
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Sample Questions
Q1) A report recently submitted to the managing partner for a market research company stated "the hypothesis test may have resulted in either a Type I or a Type II error.We won't know which one occurred until later." This statement is one that we might correctly make for any hypothesis that we have conducted.
A)True
B)False
Q2) Hypothesis testing and confidence interval estimation are essentially two totally different statistical procedures and share little in common with each other.
A)True
B)False
Q3) To calculate beta requires making a "what if" assumption about the true population parameter,where the "what-if" value is one that would cause the null hypothesis to be false.
A)True
B)False
Q4) Choosing an alpha of 0.01 will cause beta to equal 0.99.
A)True
B)False
Q5) Explain what is meant by a p-value.
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Chapter 10: Estimation and Hypothesis Testing for Two Population Parameters
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Sample Questions
Q1) If a manager wishes to develop a confidence interval estimate for estimating the difference between two population means,an increase in the size of the samples used will result in:
A)an increase in the size of the critical value.
B)a wider confidence interval.
C)a more precise confidence interval.
D)a less precise confidence interval
Q2) To find a confidence interval on the difference between the means of independent samples,when the variances are unknown but assumed equal,the sample sizes of the two groups must be the same.
A)True
B)False
Q3) In comparing two populations using paired differences,after the difference is found for each pair,the method for testing whether the mean difference is equal to 0 becomes the same as was used for a one-group hypothesis test with unknown standard deviation.
A)True
B)False
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Chapter 11: Hypothesis Tests and Estimation for Population
Variances
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Sample Questions
Q1) The F test statistic for testing whether the variances of two populations are the same is always positive.
A)True
B)False
Q2) If the variance of the contents of cans of orange juice is significantly more than 0.003,the manager has to order to stop the filling machine.A sample of 26 cans of orange juice showed a standard deviation of 0.06 ounces.Based on the sample and at the 0.05 level of significance,the filling machine should be A)stopped.
B)kept going.
C)upgraded.
D)downgraded.
Q3) Assume a sample of size n = 12 has been collected.To perform a hypothesis test of a population variance using a 0.05 level of significance,where the null hypothesis is: H<sub>o</sub><sub> </sub>: <sup>2</sup> = 25.
The upper tail critical value is 21.92.
A)True
B)False
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Chapter 12: Analysis of Variance
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Sample Questions
Q1) A test is conducted to compare three difference income tax software packages to determine whether there is any difference in the average time it takes to prepare income tax returns using the three different software packages.Ten different people's income tax returns are done by each of the three software packages and the time is recorded for each.Given this format and testing using an alpha level equal to 0.05,the critical value associated with the primary hypothesis test is:
A)3.555.
B)2.456.
C)19.385.
D)4.256.
Q2) The within sample variation is the dispersion that exists because the sample means for the various factor levels are not all equal.
A)True
B)False
Q3) In conducing one-way analysis of variance,the population distributions are assumed normally distributed.
A)True
B)False
Q4) What are the assumptions for a one-way analysis of variance design?
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Chapter 13: Goodness-Of-Fit Tests and Contingency Analysis
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Sample Questions
Q1) In a contingency analysis,we expect the actual frequencies in each cell to approximately match the corresponding expected cell frequencies when H<sub>0</sub> is true.
A)True
B)False
Q2) In a contingency analysis,the greater the difference between the actual and the expected frequencies,the more likely:
A)H<sub>0</sub> should be rejected.
B)H<sub>0</sub> should be accepted.
C)we cannot determine H<sub>0.</sub>
D)the smaller the test statistic will be.
Q3) A researcher is using a chi-square test to determine whether there are any preferences among 4 brands of orange juice.With alpha = 0.05 and n = 30,the critical region for the hypothesis test would have a boundary of:
A)7.81.
B)8.71.
C)8.17.
D)42.25.
Q4) Explain the basic logic behind the chi-square goodness-of-fit test.
Page 15
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Chapter 14: Introduction to Linear Regression and Correlation Analysis
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Sample Questions
Q1) When constructing a scatter plot,the dependent variable is placed on the vertical axis and the independent variable is placed on the horizontal axis.
A)True
B)False
Q2) In a simple regression model,the slope coefficient represents the average change in the independent variable for a one-unit change in the dependent variable.
A)True
B)False
Q3) When the intercept in a regression equation is deemed not significantly different from 0,then in making predictions for y,0.0 should be used as the value of the intercept rather than the estimated intercept value.
A)True
B)False
Q4) A high coefficient of determination (R<sup>2</sup>)implies that the regression model will be a good predictor for future values of the dependent variable given the value of the independent variable.
A)True
B)False
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Chapter 15: Multiple Regression Analysis and Model Building
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Sample Questions
Q1) The three components of the regression model building process are model specification,model fitting,and model diagnosis.
A)True
B)False
Q2) In a second-order polynomial regression model,the regression coefficient,B<sub>2</sub>,will be positive if the parabola opens downward and negative when the parabola opens upward.
A)True
B)False
Q3) A correlation matrix shows the correlation between each independent variable and the dependent variable but gives no information about the potential for multicollinearity problems.
A)True
B)False
Q4) Stepwise regression is the approach that is always taken when developing a regression model to fit a curvilinear relationship between the dependent and potential independent variables.
A)True
B)False
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Chapter 16: Analyzing and Forecasting Time-Series Data
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Sample Questions
Q1) Which of the following time-series components is almost always present in sales data for electronics companies?
A)Random
B)Trend
C)Seasonal
D)All of the above.
Q2) Herb Criner,an analyst for the Folgerty Company,recently gave a report in which he stated that the annual sales forecast based on 20 years of annual sales data was done using a seasonally adjusted,trend-based forecasting technique.Given the information presented here,this statement has the potential to be credible.
A)True
B)False
Q3) If a time series contains substantial irregular movement,the smoothing constant for a single exponential smoothing model that is close to 1.0 will result in forecasts that are not as smoothed out as those that would occur if a smaller smoothing constant was used.
A)True
B)False
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Chapter 17: Introduction to Nonparametric Statistics
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Sample Questions
Q1) The Wilcoxon signed rank test is used to test which of the following type of hypotheses?
A)Tests about a single population median
B)Tests involving three or more population medians
C)Tests about the variances of two or more populations
D)Tests about two or more population proportions
Q2) The Kruskal-Wallis test is usually limited to comparing sample values from ________ or more populations.
A)2
B)3
C)4
D)5
Q3) In employing the Mann-Whitney U test,the sample data from the two populations are first combined and the ranks of the data are determined,but we keep track of which population each ranked item came from.
A)True
B)False
Q4) Under what conditions should a decision maker use a nonparametric statistical procedure?
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Chapter 18: Introduction to Quality and Statistical Process Control
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Sample Questions
Q1) Juran argued that by employing the Pareto principle,companies could focus their quality efforts on the few most important areas for improvement.
A)True
B)False
Q2) If you wish to display quantitative data in a way that will allow others to see how the data are distributed around the center of the data,a scatter plot is useful.
A)True
B)False
Q3) If a manager has collected over one thousand time measurements showing how long customers had to wait for service at her bank,a tool for presenting the data effectively would be:
A)a process flow chart.
B)a Pareto chart.
C)a histogram.
D)a process control chart.
Q4) The tools of quality are a key part of Deming's 14 points.
A)True
B)False
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Chapter 19: Introduction to Decision Analysis
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Sample Questions
Q1) Assume that you have a riding lawn mower that is in need of repairs.You can choose to repair or replace it.You are interested in your net cost over the next two years.If you choose to repair,it will cost $300 and there is a 50/50 chance of whether or not it will need additional repairs within the next two years.If it does need additional repairs,there is a 40 percent chance of needing another $400 of repairs,and a 60 percent chance of needing another $200 of repairs.At the end of the two years you estimate that the repaired mower would be worthless. If you choose to replace the mower by trading in the old mower,the cost after deducting the trade in value is $1500.At the end of the two years you estimate there is a 75 percent chance you could resell it for $1000,and a 25 percent chance that you can resell it for $1300.
After constructing the decision tree and folding it back you should choose to repair the mower because the expected value is a cost of $140.
A)True B)False
Q2) The maximax criterion is a nonprobabilistic decision criterion.
A)True B)False
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