Statistics for Managers
Exam Answer Key
Course Introduction
Statistics for Managers is designed to equip future business leaders with essential statistical tools and methodologies necessary for effective decision-making in managerial contexts. The course covers fundamental concepts such as descriptive statistics, probability distributions, hypothesis testing, regression analysis, and data interpretation. Emphasis is placed on the practical application of statistical techniques to real-world business scenarios, enabling students to analyze data, interpret results, and make informed managerial decisions. Utilizing case studies and hands-on exercises, students learn how to leverage data-driven insights in areas such as marketing, finance, operations, and strategic planning, fostering critical thinking and analytical skills crucial for modern management.
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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Sample Questions
Q1) You are the owner of a camping site and want to evaluate the feasibility of opening earlier during the year.For this analysis,you obtain the average maximum and minimum local daily temperatures for early spring.This is an example of _______.
A) interval level data
B) ordinal level data
C) nominal level data
D) ratio level data
E) relative level data
Answer: A
Q2) Which of the following statements is correct?
A) Business researchers rarely give attention to collecting meaningful data.
B) Variables are data that can be directly used for decision making.
C) Valid data are the lifeblood of business statistics.
D) Measurements never need to be defined by the business researcher.
E) Business statistics are extremely complex and hard to use for decision making.
Answer: C
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3
Chapter 2: Charts and Graphs
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Sample Questions
Q1) A histogram can be described as a type of vertical bar chart.
A)True
B)False
Answer: True
Q2) Your company is doing market research to assess the feasibility of a new product.The market research team gathers pricing information of the 60 existing products in the market 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 the relative frequency of the first class is 0.05 and the cumulative frequency for the second class is 10,then the relative frequency for the second class is
A) 0.05
B) 0.11
C) 0.12
D) 0.17
E) 1.67
Answer: C
Q3) A cumulative frequency polygon is also called an ogive.
A)True
B)False
Answer: True
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Chapter 3: Descriptive Statistics
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Sample Questions
Q1) A nonzero value of the skewness indicates asymmetry of the distribution of the data.
A)True
B)False Answer: True
Q2) The most frequently occurring value in a set of data is called the mode.
A)True
B)False Answer: True
Q3) A statistics student made the following grades on the first 6 tests: 76,82,92,95,79,86.The total number of tests for the semester is 7.What could be her median score for the whole semester?
A) It's not possible to answer without knowing the score on the last test.
B) 76
C) 82
D) 92
E) 95
Answer: C
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Chapter 4: Probability
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Sample Questions
Q1) Bayes' rule is a rule to assign probabilities under the relative frequency method.
A)True
B)False
Q2) Let F be the event that a student is enrolled in a finance course,and let S be the event that a student is enrolled in a statistics course. It is known that 40% of all students are enrolled in an finance course and 35% of all students are enrolled in statistics. Included in these numbers are 15% who are enrolled in both statistics and finance. Find P(S).
A) 0.15
B) 0.35
C) 0.40
D) 0.55
E) 0.60
Q3) An event that cannot be broken down into other events is called a certainty outcome.
A)True
B)False
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Chapter 5: Discrete Distributions
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Sample Questions
Q1) For the Poisson distribution the mean and the variance are the same.
A)True
B)False
Q2) The variance of a discrete distribution increases if we add a positive constant to each one of its value.
A)True
B)False
Q3) Suppose that during a given week,20 new customers have signed up for a specialized service your company provides.Eight of these new customers are automotive companies,and the remaining twelve are financial services firms.If a random sample of 5 of these new customers will be selected for a study of customer satisfaction in one month,what is the probability that 2 of the selected customers are financial services firms?
A) 0.232
B) 0.234
C) 0.236
D) 0.238
E) 0.240
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Chapter 6: Continuous Distributions
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Sample Questions
Q1) Since a normal distribution curve extends from minus infinity to plus infinity,the area under the curve is infinity.
A)True
B)False
Q2) Within a range of z scores from -1 to +1,you can expect to find _______ per cent of the values in a normal distribution.
A) 95
B) 99
C) 68
D) 34
E) 100
Q3) Let z be a normal random variable with mean 0 and standard deviation 1.The 50<sup>th</sup> percentile of z is ____________.
A) 0.6700
B) -1.254
C) 0.0000
D) 1.2800
E) 0.5000
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Chapter 7: Sampling and Sampling Distributions
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Sample Questions
Q1) The standard deviation of a sampling distribution of the sample means is commonly called the standard error of the mean.
A)True
B)False
Q2) Financial analyst Larry Potts needs a sample of 100 securities listed on the New York Stock Exchange. In the current issue of the Wall Street Journal,2,531 securities are listed in the "New York Exchange Composite Transactions," an alphabetical listing of all securities traded on the previous business day. Larry uses a table of random numbers to select 100 numbers between 1 and 2,531. His sample is a ____________.
A) quota sample
B) simple random sample
C) systematic sample
D) stratified sample
E) cluster sample
Q3) 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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Sample Questions
Q1) Given the error we are willing to tolerate,the sample size is determined by the meanµ of the population and the confidence level.
A)True
B)False
Q2) Brian Vanecek,VP of Operations at Portland Trust Bank,is evaluating the service level provided to walk-in customers.Accordingly,his staff recorded the waiting times for 45 randomly selected walk-in customers,and calculated that their mean waiting time was 15 minutes.If Brian concludes that the average waiting time for all walk-in customers is 15 minutes,he is using a ________.
A) a range estimate
B) a statistical parameter
C) an interval estimate
D) a point estimate
E) an exact estimate
Q3) In order to find values in the t distribution table,you must determine the appropriate degrees of freedom based on the sample sizes.
A)True
B)False
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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) When using the t test to test a hypothesis about a population mean with an unknown population standard deviation ( \(\sigma\) )the degrees of freedom is defined as n - 1.
A)True
B)False
Q3) Increasing the sample size reduces the probability of committing a Type I and Type II simultaneously.
A)True
B)False
Q4) When a true null hypothesis is rejected,the researcher has made a Type I error.
A)True
B)False
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Chapter 10: Statistical Inferences About Two Populations
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Sample Questions
Q1) Collinsville Construction Company purchases steel rods for its projects. Based on previous tests,Claude Carter,Quality Assurance Manager,has recommended purchasing rods from Redding Rods,Inc.(population 1),rather than Stockton Steel (population 2),since Redding's rods had less variability in length. Recently,Stockton revised it rod shearing operation,and Claude has sampled the outputs from Redding's and Stockton's rod manufacturing processes. The results for Redding were s<sub>1</sub><sup>2</sup><sup> </sup>= 0.15 with n<sub>1</sub> = 8,and,for Stockton,the results were s<sub>2</sub><sup>2</sup> = 0.04 with n<sub>2</sub> = 10. Assume that rod lengths are normally distributed in the population If \(\alpha\) = 0.05,the observed F value is ___________.
A) 0.27
B) 0.52
C) 1.92
D) 3.75
E) 4.25
Q2) Hypothesis tests conducted on sets of matched samples are sometimes referred to as correlated t tests.
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) Determining the table value for the F distribution requires two values for degrees of freedom.
A)True
B)False
Q2) BigShots,Inc.is a specialty e-tailer that operates 87 catalog Web sites on the Internet. Kevin Conn,Sales Director,feels that the style (color scheme,graphics,fonts,etc.)of a Web site may affect its sales. He chooses three levels of design style (neon,old world and sophisticated)and randomly assigns six catalog Web sites to each design style.In Kevin's experiment "style" is _______.
A) the dependent variable
B) a treatment variable
C) a concomitant variable
D) a blocking variable
E) a response variable
Q3) The statistical methods of analysis of variance assume equal sample means.
A)True B)False
Q4) An experimental design contains only independent variables.
A)True
B)False
Page 13
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Chapter 12: Simple Regression Analysis and Correlation
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Sample Questions
Q1) A manager wants to predict the cost (y)of travel for salespeople based on the number of days (x)spent on each sales trip.The following model has been developed: y = $400 + 120x.If a trip took 3 days,the predicted cost of the trip is _____________.
A) 760
B) 360
C) 523
D) 1560
E) 1080
Q2) 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
Q3) Data points that lie apart from the rest of the points are called deviants..
A)True
B)False
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Chapter 13: Multiple Regression Analysis
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Sample Questions
Q1) A slope in a multiple regression model is known as a partial slope because it ignores the effects of other explanatory variables.
A)True
B)False
Q2) In the regression equation y = 1959.71 0.46 x<sub>1</sub> + 2.16 x<sub>2</sub>,suppose that the you are considering the point (x<sub>1</sub>,x<sub>2</sub>)= (1.5,0.5),and furthermore,suppose that the variable x<sub>1</sub><sub> </sub>increases by a factor of 2 (i.e.,it doubles).What must be the change in the variable x<sub>2</sub> so that y remains unchanged?
A) 2.16
B) 2.16
C) 0.319
D) 0.319
E) 0.638
Q3) The F test is used to determine whether the overall regression model is significant.
A)True
B)False
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Chapter 14: Building Multiple Regression Models
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Sample Questions
Q1) If the variance inflation factor is bigger than 10,the regression analysis might suffer from the problem of multicollinearity.
A)True
B)False
Q2) Recoding data cannot improve the fit of a regression model.
A)True
B)False
Q3) Qualitative data can be incorporated into linear regression models using indicator variables.
A)True
B)False
Q4) If the effect of an independent variable (e.g.,square footage)on a dependent variable (e.g.,price)is affected by different ranges of values for a second independent variable (e.g.,age ),the two independent variables are said to interact.
A)True B)False
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Chapter 15: Time-Series Forecasting and Index Numbers
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Sample Questions
Q1) A stationary time-series data has only trend but no cyclical or seasonal effects.
A)True
B)False
Q2) Use of a smoothing constant value less than 0.5 in an exponential smoothing model gives more weight to ___________.
A) the actual value for the current period
B) the actual value for the previous period
C) the forecast for the current period
D) the forecast for the previous period
E) the forecast for the next period
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) For large datasets,the mean error (ME)and mean absolute deviation (MAD)always have the same numerical value.
A)True
B)False
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Chapter 16: Analysis of Categorical Data
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Sample Questions
Q1) 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
Q2) Ophelia O'Brien,VP of Consumer Credit of American First Banks (AFB),monitors the default rate on personal loans at the AFB member banks. One of her standards is "no more than 5% of personal loans should be in default." On each Friday,the default rate is calculated for a sample of 500 personal loans. Last Friday's sample contained 30 defaulted loans. Using \(\alpha\) = 0.01,critical chi-square value is _______.
A) 6.63
B) 9.21
C) 7.88
D) 10.60
E) 12.34
Q3) In a chi-square goodness-of-fit test,actual frequencies are also called calculated frequencies.
A)True
B)False
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Chapter 17: Nonparametric Statistics
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Sample Questions
Q1) To compare the means of two populations which cannot be assumed to be normally distributed and only ordinal-level data is available from two independent samples,instead of the t-test for independent samples we should use the Mann-Whitney U test.
A)True
B)False
Q2) The appropriate test for comparing the means of two populations using ordinal-level data from two related samples is the Wilcoxon test and not the Mann-Whitney U test.
A)True
B)False
Q3) The nonparametric counterpart of the t test to compare the means of two independent populations is the _______.
A) chi-square goodness of fit test
B) chi-square test of independence
C) Mann-Whitney U test
D) Wilcoxon test
E) Friedman test
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Chapter 18: Statistical Quality Control
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Sample Questions
Q1) Jake Flanaghan,Vice President for inpatient pharmacy,at Great Atlantic Medical Center,is designing a c chart to monitor the number of inpatient medication errors that occur each month. The total number of medication errors for January - December last year was 37. The centerline for Jake's c chart is ___________.
A) 3.08
B) 37
C) 8.35
D) -2.18
E) 0.00
Q2) A fishbone diagram is a ______.
A) quantitative tallying of the numbers and types of defects
B) schematic representation of all the activities and interactions that occur in a process
C) cause-and-effect diagram
D) graphical method for evaluating whether a process is or is not in a state of statistical control
E) type of checklist
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Chapter 19: Decision Analysis
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Sample Questions
Q1) Dan Hein owns the mineral and drilling rights to a 1,000 acre tract of land. If he drills a well and does not strike oil his net loss will be $50,000,but if he drills a well and strikes oil his net gain will be $100,000.If he does not drill,his loss is the cost of the mineral and drilling rights,which amount to $1000.For Dan's decision problem,the variable "oil in the tract" is one of the ___________.
A) payoffs
B) decision alternatives
C) states of nature
D) revised probabilities
E) prior probabilities
Q2) In a decision analysis problem,variables (such as general macroeconomic conditions)which are not under the decision maker's control are called prior probabilities.
A)True
B)False
Q3) The value of sample information is the ratio of the expected monetary value with information to the expected monetary value without information.
A)True
B)False
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