Quantitative Methods for Business Exam Materials
Course Introduction
Quantitative Methods for Business introduces students to the mathematical and statistical techniques essential for effective decision-making in the business environment. The course covers topics such as descriptive statistics, probability theory, regression analysis, forecasting, linear programming, and decision analysis. Emphasis is placed on practical applications of quantitative methods to solve real-world business problems, interpret data, and support managerial decisions. By utilizing analytical tools and computer software, students learn to translate data into actionable strategies, enhancing their problem-solving and critical-thinking skills within various business contexts.
Recommended Textbook
Business Statistics For Contemporary Decision Making 9th Edition by Ken Black
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Chapter 1: Introduction to Statistics
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Q1) Which scale of measurement has these two properties: linear distance is meaningful and the location of origin (or zero point)is arbitrary?
A) Interval level
B) Ordinal level
C) Nominal level
D) Ratio level
E) Minimal level
Answer: A
Q2) Nominal and ordinal data are sometimes referred to as qualitative data.
A)True
B)False
Answer: True
Q3) A level of data measurement that has an absolute zero is called _______.
A) interval level
B) ordinal level
C) nominal level
D) ratio level
E) relative level
Answer: D
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Chapter 2: Charts and Graphs
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Sample Questions
Q1) Your company is doing market research to assess the feasibility of a new product.The market research team gathers pricing information of all the existing products that would compete with your company's product.The most expensive brand is priced at $22.95,and the least expensive one at $20.59.If a class width of 0.25 is used,then the number of classes will be
A) 9
B) 9.4
C) undetermined, so you can choose either 9 or 10
D) undetermined, so you must choose another class width
E) 10
Answer: E
Q2) One advantage of a stem and leaf plot over a frequency distribution is that the values of the original data are retained.
A)True
B)False
Answer: True
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4
Chapter 3: Descriptive Statistics
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Sample Questions
Q1) Jessica Salas,president of Salas Products,is reviewing the warranty policy for her company's new model of automobile batteries. Life tests performed on a sample of 100 batteries indicated: (1)an average life of 75 months,(2)a standard deviation of 5 months,and (3)a bell shaped battery life distribution.Approximately 68% of the batteries will last between ________________.
A) 70 and 80 months
B) 60 and 90 months
C) 65 and 85 months
D) 55 and 95 months
E) 60 and 100 months
Answer: A
Q2) Statistical measures used to yield information about the center or the middle parts of a group of numbers are called the measures of central tendency.
A)True
B)False
Answer: True
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Chapter 4: Probability
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Sample Questions
Q1) If two events are mutually exclusive,then the two events are also independent.
A)True
B)False
Q2) An analysis of personal loans at a local bank revealed the following facts: 10% of all personal loans are in default (D),90% of all personal loans are not in default (D ),20% of those in default are homeowners (H | D),and 70% of those not in default are homeowners (H | D ). If a personal loan is selected at random P (H \(\cap\) D')= ___________.
A) 0.20
B) 0.63
C) 0.90
D) 0.18
E) 0.78
Q3) Given two events,A and B,if the probability of either A or B occurring is 0.6,then the probability of neither A nor B occurring is -0.6.
A)True
B)False
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Chapter 5: Discrete Distributions
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Sample Questions
Q1) A variable that can take on values at any point over a given interval is called a discrete random variable
A)True
B)False
Q2) The probability of selecting 2 baseball players and 3 basketball players for an intermural competition at a small sports camp would best be modeled with the
A) binomial distribution
B) hypergeometric distribution
C) Poisson distribution
D) hyperbinomial distribution
E) exponential distribution
Q3) A Poisson distribution is characterized by one parameter.
A)True
B)False
Q4) For the Poisson distribution the mean and the variance are the same.
A)True
B)False
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Chapter 6: Continuous Distributions
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Sample Questions
Q1) Many human characteristics such as height and weight and many measurements such as variables such as household insurance and cost per square foot of rental space are normally distributed.
A)True
B)False
Q2) A correction for continuity must be made when approximating the binomial distribution problems using a normal distribution.
A)True
B)False
Q3) If x is uniformly distributed over the interval 8 to 12,inclusively (8 \(\le\) x \(\le\) 12),then the probability,P(9 \(\le\) x \(\le\) 11)is __________________.
A) 0.250
B) 0.500
C) 0.333
D) 0.750
E) 1.000
Q4) For an exponential distribution,the mean is always equal to its variance.
A)True
B)False
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Chapter 7: Sampling and Sampling Distributions
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Sample Questions
Q1) Albert Abbasi,VP of Operations at Ingleside International Bank,is evaluating the service level provided to walk-in customers. Accordingly,he plans a sample of waiting times for walk-in customers. Albert instructs his staff to record the waiting times for the first 45 walk-in customers arriving after the noon hour. Albert's sample is a ________.
A) simple random sample
B) systematic sample
C) convenience sample
D) stratified sample
E) cluster sample
Q2) The directory or map from which a sample is taken is called the census.
A)True
B)False
Q3) Systematic sampling is a type of random sampling technique.
A)True
B)False
Q4) A major limitation of nonrandom samples is that they are not appropriate for most statistical methods.
A)True
B)False
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Chapter 8: Statistical Inference: Estimation for Single Populations
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Q1) A researcher wants to estimate the proportion of the population which possesses a given characteristic.A random sample of size 1800 is taken resulting in 450 items which possess the characteristic.The point estimate for this population proportion is _______.
A) 0.55
B) 0.45
C) 0.35
D) 0.25
E) 0.15
Q2) A study is going to be conducted in which a mean of a lifetime of batteries produced by a certain method will be estimated using a 90% confidence interval.The estimate needs to be within +/- 2 hours of the actual population mean.The population standard deviation is estimated to be around 25.The necessary sample size should be at least
A) 100
B) 21
C) 923
D) 35
E) 423
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Chapter 9: Statistical Inference: Hypothesis Testing for
Single Populations
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Sample Questions
Q1) In a two-tailed hypothesis about a population mean with a sample size of 100,\(\alpha\) is known,and = 0.10,the rejection region would be _______.
A) z > 1.64
B) z > 1.28
C) z < -1.28 and z > 1.28
D) z < -1.64 and z > 1.64
E) z < -2.33 and z > 2.33
Q2) A company believes that it controls more than 30% of the total market share for one of its products.To prove this belief,a random sample of 144 purchases of this product is contacted.It is found that 50 of the 144 purchased this company's brand of the product.If a researcher wants to conduct a statistical test for this problem,the test would be
A) a one-tailed test
B) a two-tailed test
C) an alpha test
D) a finite population test
E) a finite sample test
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Chapter 10: Statistical Inferences About Two Populations
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Sample Questions
Q1) A researcher is interested in testing to determine if the mean price of a casual lunch is different in the city than it is in the suburbs. The null hypothesis is that there is no difference in the population means (i.e.the difference is zero). The alternative hypothesis is that there is a difference (i.e.the difference is not equal to zero). He randomly selects a sample of 9 lunch tickets from the city population resulting in a mean of $14.30 and a standard deviation of $3.40.He randomly selects a sample of 14 lunch tickets from the suburban population resulting in a mean of $11.80 and a standard deviation $2.90.He is using an alpha value of .10 to conduct this test.Assuming that the populations are normally distributed,the critical t value from the table is _______.
A) 1.323
B) 1.721
C) 1.717
D) 1.321
E) 2.321
Q2) The F test of two population variances is extremely robust to the violations of the assumption that the populations are normally distributed.
A)True
B)False
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Chapter 11: A Nalysis of Variance and Design of Experiments
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Sample Questions
Q1) While reviewing staffing plans for a new pilot plant,Colin Chenaux,VP of Operations at Clovis Chemicals,Inc.,designed an experiment to test the effects of "supervisor's style" and "training method" on the productivity of operators.The treatment levels were: (1)authoritarian,and participatory for supervisor's style,and (2)technical manuals,training films,and multimedia for training method.Three qualified applicants were randomly selected and assigned to each of the six cells.Colin's experimental design is
A) random block design
B) normalized block design
C) completely randomized design
D) factorial design
E) fractional design
Q2) The Tukey-Kramer procedure allows us to simultaneously examine all pairs of population means after the ANOVA test has been completed without increasing the true level.
A)True
B)False
Q3) An experimental design contains only independent variables.
A)True
B)False
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Chapter 12: Simple Regression Analysis and Correlation
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Sample Questions
Q1) The coefficient of determination is the proportion of variability of the dependent variable (y)accounted for or explained by the independent variable (x).
A)True
B)False
Q2) In a regression analysis if SST = 150 and SSR = 100,r <sup>2</sup> = _________.
A) 0.82
B) 1.22
C) 1.50
D) 0.67
E) -1.00
Q3) A simple regression model developed for ten pairs of data resulted in a sum of squares of error,SSE = 125.The standard error of the estimate is _______.
A) 12.5
B) 3.5
C) 15.6
D) 3.95
E) 25
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Chapter 13: Multiple Regression Analysis
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Sample Questions
Q1) The model y = \(\beta\)<sub> 0</sub> + \(\beta\)<sub> 1</sub>x<sub>1</sub> + \(\beta\)<sub> 2</sub>x<sub>2</sub> + \(\varepsilon\) is a second-order regression model.
A)True
B)False
Q2) Minitab and Excel output for a multiple regression model show the F test for the overall model,but do not provide the t tests for the regression coefficients.
A)True
B)False
Q3) In regression analysis,outliers may be identified by examining the ________.
A) coefficient of determination
B) coefficient of correlation
C) p-values for the partial coefficients
D) residuals
E) R-squared value
Q4) If we reject H<sub>0</sub>: <sub>1</sub>= <sub>2</sub>=0 using the F-test,then we should conclude that both slopes are different from zero.
A)True
B)False
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Chapter 14: Building Multiple Regression Models
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Sample Questions
Q1) Hope Hernandez is the new regional Vice President for a large gasoline station chain.She wants a regression model to predict sales in the convenience stores. Her data set includes two qualitative variables: the gasoline station location (inner city,freeway,and suburbs),and curb appeal of the convenience store (low,medium,and high).The number of dummy variables needed for Hope's regression model is ______.
A) 2
B) 4
C) 6
D) 8
E) 9
Q2) If a qualitative variable has c categories,then only (c - 1)dummy variables must be included in the regression model.
A)True
B)False
Q3) If the variance inflation factor is bigger than 10,the regression analysis might suffer from the problem of multicollinearity.
A)True
B)False
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Chapter 15: Time-Series Forecasting and Index Numbers
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Sample Questions
Q1) The forecast value for August was 22 and the actual value turned out to be 19.Using exponential smoothing with \(\alpha\) = 0.30,the forecast value for September would be ______.
A) 21.1
B) 19.9
C) 18.1
D) 22.9
E) 21.0
Q2) One of the main techniques for isolating the effects of seasonality is decomposition.
A)True
B)False
Q3) In statistics,the Winters' Three Parameter statistic is a test statistic used to detect the presence of autocorrelation in the residuals from a regression analysis.
A)True
B)False
Q4) Autocorrelation in a regression forecasting model can be detected by the F test.
A)True
B)False
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Chapter 16: Analysis of Categorical Data
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Sample Questions
Q1) A market researcher is studying the use of coupons by consumers of varying ages.She classifies consumers into four age categories and counts the number of grocery store customers who use at least one coupon during check out.It is expected that data are uniformly distributed across the four age categories.The observed data results in frequencies of 22,35,32,and 21. Using \(\alpha\) = .05,the critical chi?square value is _______.
A) 13.277
B) 15.086
C) 7.8147
D) 11.070
E) 15.546
Q2) The number of degrees of freedom in a chi-square goodness-of-fit test is the number of categories minus the number of parameters estimated.
A)True
B)False
Q3) When using the chi-square goodness-of-fit test,the type of distribution (uniform,Poisson,normal)being used does not influence the hypothesis test.
A)True
B)False
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Chapter 17: Nonparametric Statistics
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Sample Questions
Q1) A disadvantage of nonparametric statistics is that the probability statements obtained from most nonparametric tests are not exact probabilities.
A)True
B)False
Q2) Suppose a research uses the Mann-Whitney test to determine if there is a difference in the volume of text messages sent by a high school student living in a rural area versus an urban area during the month of December.Eight rural high school students and 9 urban high school students were included in the study. If,among all 17,the sum of the ranks W<sub>2</sub> produced from the urban high school is 88,the U test statistic is
A) 29
B) 45
C) 90
D) 43
E) 20
Q3) The nonparametric counterpart of the t test to compare the means of two independent populations is the Mann-Whitney U test.
A)True
B)False
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Chapter 18: Statistical Quality Control
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Sample Questions
Q1) For a p chart,UCL = 0.64 and LCL = 0.32.Then the overall percentage of compliant items is ______%.
A) There is not enough information to determine q
B) 32
C) 48
D) 52
E) 96
Q2) For a p chart,UCL = 0.64 and LCL = 0.32.Then q = ______.
A) There is not enough information to determine q
B) 0.03
C) 0.04
D) 0.52
E) 0.68
Q3) A Pareto chart is a diagnostic tool that displays possible causes of a quality problem and the interrelationships among the causes.
A)True
B)False
Q4) A quality circle is a round-table of top-level quality managers.
A)True
B)False
Page 20
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Chapter 19: Decision Analysis
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Sample Questions
Q1) In a decision-making under uncertainty scenario,the decision maker chooses the decision alternative that has the minimum expected (i.e.,probability-weighted)payoff among all the available alternatives.
A)True
B)False
Q2) A random person is selected from a large population in which 5% are users of a dangerous illegal drug.A drug test that correctly identifies users 99% of the times and nonusers 95% of the time is administered to this individual and gives a positive result.What is the probability that this individual is actually a user of this drug?
A) 0.99
B) 0.94
C) 0.61
D) 0.53
E) 0.51
Q3) The expected monetary payoff of perfect information is the value of perfect information.
A)True
B)False
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