Course Introduction
Statistical Decision Making Exam Preparation
Guide
Statistical Decision Making explores the principles and methodologies used to make informed decisions under conditions of uncertainty by applying statistical reasoning and analysis. The course examines decision theory, probability models, hypothesis testing, Bayesian inference, and utility theory, equipping students with the analytical skills to evaluate risks, interpret data, and choose among alternative courses of action. Emphasis is placed on real-world applications across disciplines such as business, economics, engineering, and the social sciences, enabling students to translate statistical evidence into sound decisions.
Recommended Textbook
Statistics for Business and Economics 8th Edition by Betty Newbold
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17 Chapters
3406 Verified Questions
3406 Flashcards
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Page 2
Chapter 1: Describing Data: Graphical
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247 Verified Questions
247 Flashcards
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Sample Questions
Q1) Construct a relative frequency and percent distributions of the data.
Answer: 11ea5b8a_b6b0_1936_b1f3_a7aa1a9c3df6_TB2968_00
Q2) The bar chart that best identifies major causes of problems or defects by displaying the frequency of defect causes is called a:
A)pie chart.
B)scatter plot.
C)stem-and-leaf display.
D)Pareto diagram.
Answer: D
Q3) Shoe size is an example of interval scale.
A)True
B)False
Answer: True
Q4) Construct a relative frequency and percent distributions of the data.
Answer: 11ea5b8a_b6b4_d43f_b1f3_536162c08599_TB2968_00
Q5) A cable company,based on a survey of its customers,reports that 48% of all the television audience watch Larry King Live daily.Is this an example of descriptive or inferential statistics?
Answer: Inferential statistics
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Chapter 2: Describing Data: Numerical
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326 Flashcards
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Sample Questions
Q1) What is the relationship among the mean,median,and mode in a positively skewed distribution?
A)They are all equal.
B)The mean is always the smallest value.
C)The mean is always the largest value.
D)The mode is the largest value.
Answer: B
Q2) The geometric mean of a set of 10 positive numbers is the 10<sup>th</sup> root of the product of the 10 values.
A)True
B)False
Answer: True
Q3) Which of the following statements is true?
A)The correlation coefficient is always greater than the covariance.
B)The covariance is always greater than the correlation coefficient.
C)The covariance may be equal to the correlation coefficient.
D)Neither the covariance nor the correlation coefficient can be equal to zero.
Answer: C
Q4) Find the median time to learn this task.
Answer: Median = 5.5 flu shots
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Chapter 3: Probability
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Sample Questions
Q1) Calculate P(A<sub>1</sub> B<sub>1</sub>).
Answer: P(A<sub>1</sub> B<sub>1</sub>)= P(A<sub>1</sub> B<sub>1</sub>)/ P(B<sub>1</sub>)= 0.15 / 0.60 = 0.25
Q2) Are the events "does not support U.S,policy in Iraq" and "female" statistically independent? Why or why not?
Answer: Event S: Supports US policy in Iraq,Event F: Female. US Policy in Iraq
11ea5b8a_b6ed_4946_b1f3_65a9a46e52eb_TB2968_00
P(F)= P(F S)+ P(F 11ea5b8a_b6ed_4947_b1f3_b76cc4beab46_TB2968_11
)= 0.53 0.53 = 0.2438 + P(F 11ea5b8a_b6ed_4948_b1f3_f1c79e5818e8_TB2968_11 ) P(F 11ea5b8a_b6ed_7059_b1f3_dd6512c55f2d_TB2968_11 )= 0.2862.
P(F | 11ea5b8a_b6ed_705a_b1f3_2fab9bd8b81f_TB2968_11
)= P(F 11ea5b8a_b6ed_705b_b1f3_5bde221ca99f_TB2968_11 )/ P( 11ea5b8a_b6ed_705c_b1f3_e9649a5187e7_TB2968_11
)= 0.2862/0.38 = 0.753 and P(F)= 0.53
Since P(F | 11ea5b8a_b6ed_976d_b1f3_e31baa7908c9_TB2968_11 ) P(F),the events " does not support US policy in Iraq" and "female" are not statistically independent.
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Page 5
Chapter 4: Discrete Random Variables and Probability
Distributions
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257 Flashcards
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Sample Questions
Q1) Which of the following can be used to approximate the binomial distribution when the number of trials n is large and the probability of success P is small such that nP 7?
A)Poisson distribution
B)hypergeometric distribution
C)any discrete distribution
D)any distribution with a mean equals 7
Q2) Using the Poisson approximation to the binomial,how likely is it to get exactly four defects out of 100?
Q3) The number of rainy days per month at Seattle follows a Poisson distribution with a mean value of 4.5 days.What is the probability that it will rain 3 days next month?
A)0.3604
B)0.2222
C)0.1687
D)0.2521
Q4) Portfolio analysis and construction is conducted using probability distributions.
A)True
B)False
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Chapter 5: Continuous Random Variables and Probability
Distributions
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239 Verified Questions
239 Flashcards
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Sample Questions
Q1) Find the mean and standard deviation of the number of successes.
Q2) The distribution of annual incomes of a sample of college graduates is normally distributed with a mean of $52,000 and a standard deviation of 1,000.About 68 percent of the incomes lie between what two income levels?
A)52,000 and 62,000
B)50,000 and 60,000
C)51,000 and 53,000
D)53,000 and 57,000
Q3) Let the random variable Z follow a standard normal distribution,and let z<sub>1</sub>be a possible value of Z that is representing the 75th percentile of the standard normal distribution.Find the value of z<sub>1.</sub>
A)0.67
B)-0.67
C)1.28 D)-1.28
Q4) Find the probability that X is greater than 36 and less than 60.
Q5) Find the mean and standard deviation of the proportion of successes.
Q6) What is P(-0.44 < Z < 1.2)?
Q7) Find the 95<sup>th</sup> percentile.
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Chapter 6: Sampling and Sampling Distributions
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Sample Questions
Q1) What is the probability that the sample standard deviation is more than 70% of the population standard deviation?
Q2) What is the probability that the sample mean is greater than 123?
Q3) What is the mean of the sampling distribution of the sample proportion of returns leading to refunds?
Q4) The length of time it takes a stock analyst to complete an evaluation of a company's earnings forecast is normally distributed with a mean of 6.7 hours.From looking at the time spent by an analyst evaluating 36 randomly selected stocks you find that the sample mean was 6.4 hours.If you are told that the probability of getting a sample mean this small or smaller is 0.10,what must the population standard deviation have been?
Q5) What is the probability that the sample mean is greater than 203?
Q6) If the standard error of the sampling distribution of the sample proportion is 0.02049 for samples of size 500,then the population proportion must be either:
A)0.2 or 0.8
B)0.5 or 0.5
C)0.3 or 0.7
D)0.6 or 0.4
Q7) Find the population mean and population standard deviation.
Page 8
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Chapter 7: Estimation: Single Population
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151 Flashcards
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Sample Questions
Q1) Show that both the estimators are unbiased.
Q2) Calculate the standard error of the 95% confidence interval.
A)0.40
B)3.46
C)13.69
D)2.50
Q3) In a survey of 472 personnel directors,63% thought that they would be hiring new personnel over the next three months.Which of the following represents a 98% confidence interval for the proportion of all personnel directors planning to hire personnel over the next three months?
A)0.63 ± 0.057
B)0.63 ± 0.047
C)0.63 ± 0.042
D)0.63 ± 0.052
Q4) Without doing the calculations,explain whether a 95% confidence interval for the mean weight of all bricks produced this day would be wider than,narrower than,or the same width as that of a 99% confidence interval.
Q5) Calculate the sample standard deviation.
Q6) Find a point estimate of the population mean that is unbiased and efficient.
Page 9
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Chapter 8: Estimation: Additional Topics
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Sample Questions
Q1) Estimate with 95% confidence the difference between the two population mean scores.Do not assume equal population variances.
Q2) Find a 95% confidence interval for the difference in average functioning time before recharging the two models.
Q3) What is the upper confidence limit of the 99% confidence interval for the difference between the two population proportions?
A)0.249
B)0.222
C)0.265
D)0.278
Q4) What is the lower confidence limit of the 95% confidence interval for the difference between the means?
A)5.72
B)6.37
C)8.45
D)9.20
Q5) Calculate the width of the interval for a 90% confidence interval.
Q6) Calculate the width of the interval for a 95% confidence interval.
Q7) Find the width of the 99% confidence interval.
Page 10
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Chapter 9: Hypothesis Testing: Single Population
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164 Flashcards
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Sample Questions
Q1) What are the null and alternative hypotheses for the environmental group's test?
A)H<sub>0</sub> : P = 0.634 and H<sub>1</sub> : P > 0.634
B)H<sub>0</sub> : P = 0.634 and H<sub>1</sub> : P 0.634
C)H<sub>0</sub> : P = 0.634 and H<sub>1</sub> : P < 0.634
D)H<sub>0</sub> : P > 0.634 and H<sub>1</sub> : P 0.634
Q2) Calculate the sample mean and sample standard deviation.
Q3) An assembly line will be shut down for maintenance if the defect rate exceeds 2.3%.Suppose you adopt a 5% significance level and take a random sample of 200 items from the assembly line and compute the proportion of defective items.For what values of the sample proportion will the assembly line be shut down?
A)0.034
B)0.038
C)0.036
D)0.040
Q4) If a level of significance is less than or equal to the p-value,the null hypothesis is not rejected.
A)True
B)False
Q5) Calculate the sample variance.
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Chapter 10: Hypothesis Testing: Additional Topics
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103 Flashcards
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Sample Questions
Q1) Which of the following is an appropriate null hypothesis?
A)H<sub>0</sub> : <sub>x</sub> - <sub>y</sub> 0
B)H<sub>0</sub> : P<sub>x</sub><sub> </sub>> P<sub>y</sub>
C)H<sub>0</sub> : <sub>x</sub> - <sub>y</sub> < 0
D)H<sub>0</sub><sub> </sub>: <sup>2</sup><sub>x</sub><sub> </sub> = <sup>2</sup><sub>y</sub>
Q2) If testing for the difference between the means of two related populations,the appropriate null hypothesis is:
A)H<sub>0</sub> : <sub>D</sub><sub> </sub> 0
B)H<sub>0</sub> : <sub>D</sub> = 0
C)H<sub>0</sub> : <sub>D</sub> < 0
D)H<sub>0</sub> : <sub>D</sub> > 0
Q3) State the appropriate null and alternative hypotheses to determine whether there is a significant difference in time to completion of medical school between women and men.
Q4) The F distribution is constructed as the ratio of two Student's t random variables;each divided by its degrees of freedom.
A)True
B)False
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Chapter 11: Simple Regression
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Sample Questions
Q1) How would you interpret the slope coefficient b<sub>1</sub>?
Q2) Compute the value of the coefficient of determination.
A)3.47
B)2.67
C)0.80
D)0.63
Q3) The correlation coefficient is:
A)-0.6834
B)0.5412
C)0.6834
D)-0.5412
Q4) Which of the following will not tend to increase the standard error of the slope?
A)increase the sample size
B)decrease the variation in x
C)decrease the SSE
D)decrease in the standard error of the estimate
Q5) Develop a scatter diagram for these data.
Q6) Calculate the coefficient of correlation.
Q7) Compute the regression sum of squares,SSR.
13
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Chapter 12: Multiple Regression
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Sample Questions
Q1) In multiple regression analysis,it is possible that the multiple coefficient of determination will be equal to -0.50.
A)True
B)False
Q2) What is the approximate p-value associated with the hypothesis test for <sub>2</sub>?
A)0)027
B)0)05
C)0)10
D)0)25
Q3) In multiple regression analysis involving 10 independent variables and 80 observations,the critical value of t for testing individual coefficients in the model will have:
A)70 degrees of freedom.
B)10 degrees of freedom.
C)69 degrees of freedom.
D)9 degrees of freedom.
Q4) What factors would tend to increase the difference between the coefficient of determination R<sup>2</sup> and the adjusted R<sup>2</sup> for a multiple regression?
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Chapter 13: Additional Topics in Regression Analysis
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Sample Questions
Q1) Suppose we want to estimate the model Y = <sub>0</sub> + <sub>1</sub>x<sub>1</sub><sub>t</sub><sub> </sub>+ <sub>2</sub>x<sub>2</sub><sub>t</sub> + <sub>3</sub>x<sub>3</sub><sub>t</sub> + <sub>4</sub>x<sub>4</sub><sub>t</sub> + .There is reason to believe,however,that the error term is autocorrelated.How can we estimate the parameters for this regression?
Q2) If omitted variables are uncorrelated with the other independent variables,a bias in the estimation of coefficients occurs.
A)True
B)False
Q3) When the errors in a regression model are correlated,the coefficient estimates are biased and efficient.
A)True
B)False
Q4) ________ occurs when errors are not independently distributed.
A)Linearity
B)Multicollinearity
C)Autocorrelation
D)Heteroscedasticity
Q5) Develop the ANOVA table.
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Chapter 14: Analysis of Categorical Data
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Sample Questions
Q1) Test whether the students did better on the second exam than the first.
Q2) Is there evidence that the consumers rated the new fragrance higher?
Q3) In a chi-square test of a contingency table,the value of the test statistic was <sup>2</sup> = 12.678,and the critical value at = 0.025 was 14.4494.Thus:
A)we don't have enough evidence to accept or reject the null hypothesis at = 0.025.
B)we should decrease the level of significance in order to reject the null hypothesis.
C)we fail to reject the null hypothesis at = 0.025.
D)we reject the null hypothesis at = 0.025.
Q4) Test the null hypothesis of no association between the amount of overtime incurred over a week and the total level of output for the week against the alternative of positive association.
Q5) For a large sample,the Wilcoxon rank sum test can be approximated by the Student's t distribution with (n - 1)degrees of freedom.
A)True
B)False
Q6) Which nonparametric method is appropriate for analyzing these data?
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Page 16
Chapter 15: Analysis of Variance
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Sample Questions
Q1) What value should replace "E"?
A)11.344
B)10.886
C)9.568
D)8.822
Q2) In an ANOVA analysis with K number of groups,H number of blocks,and m number of observations per cell,the degree of freedom for SSG is given by K.
A)True
B)False
Q3) The Kruskal-Wallis test for the difference in population means is based on the ranks of the sample observations.
A)True
B)False
Q4) What is the value of "C"?
A)6
B)5
C)3
D)2
Q5) Complete the ANOVA table.
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Chapter 16: Time-Series Analysis and Forecasting
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Sample Questions
Q1) The method of moving averages is used to:
A)smoothen a time series.
B)plot a time series.
C)exponentiate a time series.
D)represent a time series as an additive model.
Q2) What is the forecast for the year 1896?
A)103.89
B)106.01
C)109.35
D)104.95
Q3) What is the value of the mean absolute percentage error?
A)46.57
B)19.96
C)75.46
D)26.56
Q4) The estimate of the level for ________ is 453 units,approximately.
A)week 6
B)week 4
C)week 5
D)week 8
18
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Chapter 17: Additional Topics in Sampling
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Sample Questions
Q1) What is quota sampling? States its advantages and disadvantages.
Q2) A questionnaire was mailed to 1000 registered municipal voters selected at random.Only 600 questionnaires were returned,and of the 600 returned,450 respondents were strongly opposed to a surcharge proposed to support the city's Parks and Recreation Department.Can the 75% figure be accepted as a valid estimate of the percentage in the city who are opposed to the surcharge?
Q3) Find a 95% confidence interval for the mean monthly expenditures.
Q4) An automobile company with 3500 employees needs to take a simple random sample in order to estimate the employee population's average satisfaction level on a scale of 0-100.From previous experience,it is estimated that the population standard deviation is approximately 8.0.A 95 % confidence interval for the population mean must extend 3.0 on each side of the sample mean.How many employees need to be sampled to achieve this objective?
Q5) Find a 90% confidence interval for the total expenditures.
Q6) Explain cluster sampling and state its advantages.
Page 19
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