TEST BANK for Business Statistics: Communicating with Numbers 4Th Edition by Sanjiv Jaggia and Aliso by welldoneassistant

CHAPTER 01 – 4e 1) The following data represent a sample of non-elementary mathematics teachers in Bergen County, New Jersey. Identify the qualitative and quantitative variables, the categories associated with each qualitative variable, and the measurement scales for all variables. School Brookside E.S. Program 3-Emotionally Distur. Program 3-Emotionally Distur. Program 3-Emotionally Distur. Program 3-Emotionally Distur. Program 5-Life Skills Program 5-Life Skills Bergen AcademiesHackensack Bergen AcademiesHackensack Bergen AcademiesHackensack

Degree Masters Masters

Years Experience 8 25

Salary $ 67,945 $ 82,910

Classes Taught 6 4

Bachelors

$ 86,030

Bachelors

$ 62,690

Masters

$ 82,620

Masters Masters Masters

11 41 31

$ 82,330 $ 79,790 $ 82,626

5 4 5

Masters

$ 82,626

Masters

$ 98,291

Source: http://php.app.com/edstaff/results2.php?county=BERGEN&district=%25&school=%25&lname= &fname=&job1=Math+Non-Elementary&Submit=Submit

2) The following data concern a sample of employees of the U.S. Marshals in the state of New York. Identify the qualitative and quantitative variables, the categories associated with each qualitative variable, and the measurement scales for all variables. Country New York

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Station NEW YORK-NY

Title MISCELLANEOUS CLERK AND

Grade GS 07

Salary $ 51,030

Country New York Country Kings Country Erie Country Onondaga Country New York Country Onondaga Country Erie Country New York Country Kings Country

NEW YORK-NY NEW YORKKINGS BUFFALO SYRACUSE NEW YORK-NY SYRACUSE BUFFALO NEW YORK-NY NEW YORKKINGS

ASSISTANT MISCELLANEOUS CLERK AND ASSISTANT ACCOUNTING TECHNICIAN

GS 07

$ 55,405

GS 07

$ 45,196

ADMINISTRATIVE OFFICER BUDGET ANALYSIS

GS 13 GS 09

$ 95,023 $ 53,773

GENERAL BUSINESS AND INDUSTRY GENERAL BUSINESS AND INDUSTRY MISCELLANEOUS ADMINISTRATION AND PROGRAM MISCELLANEOUS ADMINISTRATION AND PROGRAM GENERAL BUSINESS AND INDUSTRY

GS 11

$ 66,887

GS 11

$ 74,628

GS 09

$ 59,962

GS 09

$ 57,065

GS 11

$ 66,887

Source: http://php.app.com/fed_employees10/results.php?fullname=&agency_name=U.S.+MARSHALS +SERVICE&statename=New+York&countyname=%25&Submit=Search

3) Why do we spend time on inspecting and preparing the data before performing statistical analysis?

The following data represent a sample of information on our customers.

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Name Al Brooks Beth Gloria Mary King Bob Julissa

Gender Male Female Female Male

Date of Birth 09/17/1986 05/27/1983 08/01/1981 07/08/1962

Phone Number 205-228-5876 760-301-3657 708-326-7311

Income $ 19,000 $ 125,025 $ 100,700 $ 164,032

Ed Taylor

Male

04/07/1977

413-212-4506

$ 76,048

What data preparation task is most appropriate to answer the following questions? A. Are there missing values in Phone Number? B. How many customers do we have? C. How many of our customers are female? D. Who is our youngest customer? E. How do our male customers compare to our female customers?

The study of statistics is NOT about A) the language of data. B) the art and science of getting information from data. C) the study of collecting, analyzing, presenting, and interpreting data. D) the study of mind and consciousness.

When reading published statistics (numerical facts), you should

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A) never believe what you read, because all statistics are lies. B) only believe those statistics that are adequately supported. C) believe what you read, because they wouldn’t be published if they weren’t correct. D) only believe those statistics that are presented in so-called quality publications.

The two branches of the study of statistics are generally referred to as A) descriptive and inferential statistics. B) inferential and differential statistics. C) descriptive and referential statistics. D) differential and descriptive statistics.

Population parameters are difficult to calculate due to

A) cost prohibitions on data collection. B) the infeasibility of collecting data on the entire population. C) the fact that samples are difficult to draw due to the nature of the data. D) both cost prohibitions on data collection and the infeasibility of collecting data on the entire population.

9) The teachers’ union in California wants to know the average salary for high school teachers throughout the country. What is the teachers’ union presumably planning to calculate? A) Sample statistic B) Sample parameter C) Population statistic D) Population parameter

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10)

A population consists of A) all items of interest in a sample. B) a subject of interest in a sample. C) all items of interest in a statistical problem. D) a subject of interest in a statistical problem.

11)

In inferential statistics, we calculate statistics of sample data to A) estimate unknown population parameters. B) conduct tests about unknown population parameters. C) Both of these choices are correct. D) Neither of these choices is correct.

12)

Which of the following represents a population and a sample from that population? A) Residents of Albany, New York, and registered voters in Albany, New York B) Teachers of a high school and members of the parent-teacher group C) Fans at a concert who purchase T-shirts, and fans at a concert who purchase soda D) Freshmen at St. Joseph’s University and basketball players at St. Joseph’s University

13)

Which of the following represents a population and a sample from that population?

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A) Attendees at a sporting event, and those who purchased popcorn at said sporting event B) Full-time employees at a marketing firm, and temporary summer interns at the marketing firm C) Seniors at Boston College and students in a first-semester business statistics course D) Stocks available on the NYSE and stocks on the NASDAQ

14)

Which of the following is an example of cross-sectional data? A) GDP of the United States from 1990–2010 B) Daily price of DuPont stock during the first quarter C) Quarterly housing starts collected over the last 60 years D) Results of market research testing consumer preferences for soda

15)

Which of the following is an example of time series data? A) The sale prices of town houses sold last year B) Quarterly housing stats collected over the last 60 years C) Results of market research testing consumer preferences for soda D) Starting salaries of recent business graduates at Penn State University

16)

The estimation of which of the following requires sampling? A) U.S. unemployment rate B) Total rainfall in Phoenix, Arizona, in 2010 C) The Cleveland Indians’ hitting percentage in 2010 D) The average SAT score of incoming freshmen at a university

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17) A company wants to estimate the mean price of oil over the past 10 years. What kind of data does the company need? A) Time series data B) Inferential statistics C) Cross-sectional data D) Descriptive statistics

18)

For which of the following population parameters is sampling not necessary? A) The average height of NBA players B) The average life of light bulbs produced by a manufacturer C) The average content of cereal boxes produced by a manufacturer D) The percentage of the U.S. public school teachers who support Democrats

19) Sampling is used heavily in manufacturing and service settings to ensure high-quality products. In which of the following areas would sampling be inappropriate? A) Computer assembly B) Custom cabinet making C) Cell phone manufacturing D) Technical support by phone

20)

Which of the following is NOT an example of cross-sectional data?

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A) The test scores of students in a class B) The current average prices of regular gasoline in different states C) The sales prices of single-family homes sold last month in California D) The sales prices of single-family homes in Arizona collected since 2008.

21) An analyst studies a data set of the year-end book value per share for all companies listed on the New York Stock Exchange. This data set is best described as A) time series data. B) cross-sectional data. C) neither time series nor cross-sectional data. D) a combination of time series and cross-sectional data.

22)

Which type of data, cross-sectional versus time series, is more important to research?

A) Neither type of data is important. B) Cross-sectional data is more important than time series data. C) Time series data is more important than cross-sectional data. D) Time series data and cross-sectional data are equally as valuable in different types of research.

23)

Which of the following variables is categorical? A) Height B) Gender C) Weight D) Temperature

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24)

Which of the following variables is quantitative? A) Gender B) Temperature C) Marital status D) Religious affiliation

25)

Which of the following is a qualitative variable? A) House age B) House size C) House price D) House district

26) San Francisco 49ers’ linebacker Patrick Willis won the Defensive Rookie of the Year Award in 2007 with a total of 153 tackles. Tackles are measured on what kind of a scale? Is a variable measuring the number of tackles considered continuous or discrete? A) Ratio scale; discrete B) Ratio scale; continuous C) Interval scale; discrete D) Interval scale; continuous

27) San Francisco 49ers’ linebacker Patrick Willis won the Defensive Rookie of the Year Award in 2007 with a total of 174 tackles. Tackles are measured on what kind of a scale? Is a variable measuring the number of tackles considered continuous or discrete?

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A) Ratio scale; discrete B) Interval scale; discrete C) Ratio scale; continuous D) Interval scale; continuous

28)

Which of the following variables is not continuous? A) Height of NBA players B) Time of a flight between Atlanta and Chicago C) Average temperature in the month of July in Orlando D) The number of obtained heads when a fair coin is tossed 20 times

29)

The ordinal scale of data measurement is A) less sophisticated than the nominal scale. B) more sophisticated than the interval scale. C) more sophisticated than the nominal scale. D) as equally sophisticated as the nominal scale.

30)

The interval scale of data measurement is A) less sophisticated than the ratio scale. B) more sophisticated than the ratio scale. C) less sophisticated than the ordinal scale. D) equally sophisticated as the ratio scale because both are appropriate for quantitative

data.

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31) A recent survey of 300 small firms (annual revenue less than $8 million) asked whether an increase in the minimum wage would cause the firm to decrease capital spending. Possible responses to the survey question were: "Yes," "No," or "Don’t Know." This data is best classified as A) interval scale. B) ordinal scale. C) nominal scale. D) ratio scale.

32) A recent survey of 200 small firms (annual revenue less than $10 million) asked whether an increase in the minimum wage would cause the firm to decrease capital spending. Possible responses to the survey question were: "Yes," "No," or "Don’t Know." This data is best classified as A) ratio scale. B) ordinal scale. C) interval scale. D) nominal scale.

33) Which scale of data measurement is appropriate for the names of companies listed on the Dow Jones Industrial Average? A) Ratio scale B) Ordinal scale C) Interval scale D) Nominal scale

34) An analyst collects data on the weekly closing price of gold throughout a year. The scale of this data is

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A) ratio scale. B) ordinal scale. C) interval scale. D) nominal scale.

35) An undergraduate student’s status (freshman, sophomore, junior, or senior) is an example of which scale of measurement? A) Ratio scale B) Ordinal scale C) Interval scale D) Nominal scale

36)

The Fahrenheit scale for measuring temperature would be classified as a(n) A) ratio scale. B) ordinal scale. C) interval scale. D) nominal scale.

37) At the end of a semester college students evaluate their instructors by assigning them to one of the following categories: Excellent, Good, Average, Below Average, and Poor. The measurement scale is a(n) A) ratio scale. B) ordinal scale. C) interval scale. D) nominal scale.

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38)

What is the scale of measurement of the distance between any two locations? A) Ratio scale B) Ordinal scale C) Interval scale D) Nominal scale

39)

Which scales of data measurement are associated with quantitative data? A) Interval and ratio B) Ratio and nominal C) Ordinal and interval D) Nominal and ordinal

40)

Which data scales of measurement are associated with qualitative data? A) Interval and ratio B) Ratio and nominal C) Ordinal and interval D) Nominal and ordinal

41) The data represents the stock price for Google at the end of the past four quarters. Which of the following types of data best describe these values?

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A) Cross-sectional B) Nominal C) Time series D) Ordinal

42) Your business statistics class had a test last week. The average score for the class is an example of A) secondary data B) qualitative data C) descriptive statistics D) inferential statistics

43)

A sample statistic is an estimate of A) population parameter. B) population statistic. C) sample parameter. D) descriptive statistic.

44)

A __________ represents all possible subjects of interest. A) sample B) population C) statistic D) parameter

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45) A major portion of __________ is concerned with the problem of estimating population parameters or testing hypothesis about such parameters. A) descriptive statistics B) population statistics C) inferential statistics D) business statistics

46)

Data that describe a characteristic about a sample is known as a A) population. B) survey. C) parameter. D) statistic.

47) When a characteristic of interest differs among various observations, then it can be termed a A) parameter. B) variable. C) data. D) information.

48) A(n) __________ variable is characterized by infinitely uncountable values and can take any value within interval.

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A) discrete B) infinite C) continuous D) quantitative

49)

Differences between categories are meaningless with __________ data. A) ordinal B) interval C) ratio D) continuous

50)

Which of the following scales represents the strongest level of measurement? A) Ordinal B) Nominal C) Ratio D) Interval

51)

Which of the following scales represents the least sophisticated level of measurement? A) Ordinal B) Nominal C) Ratio D) Interval

52)

The values of data on a(n) __________ scale can be categorized and ranked.

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A) ordinal B) nominal C) ratio D) interval

53)

Which of the following characteristics does the interval scale not have? A) Values can be categorized. B) Values can be ranked. C) There is a true zero point. D) The differences between values are valid.

54)

Which of the following is an example of quantitative data? A) The ZIP code of your home address B) Google’s closing stock price today C) Your gender D) Your Social Security number

55)

Which of the following is an example of qualitative data? A) Today’s high temperature B) The class average of last test C) The amount of time you spent for your homework D) Your last name

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56) A respondent of a survey is asked whether the Philadelphia Flyers’ performance in the last game was excellent, good, fair, or poor. The person indicates that the performance was "good." This is an example of A) nominal data B) ordinal data C) interval data D) ratio data

57)

Which of the following is a data preparation task? A) Collecting relevant data B) Conducting a survey C) Counting relevant variables D) Communicating insights from analysis

58) You have a point-of-sale data set that provides information on time of sale, products bought, and payment methods customers used to complete their purchases. You want to compare purchases made by cash versus those made by credit card. How should the data be best prepared to make comparisons between the two types of purchases? A) Exclude cash and credit card purchases from the data set B) Impute cash and credit card purchases from the data set C) Count the data by method of payment D) Subset the data by method of payment

59) Philadelphia experienced a record amount of rainfall in August. During the last week of the month, the city received additional rain from a hurricane. Because global warming is thought to cause extreme weather patterns, one conclusion that could be drawn is that these patterns are evidence of global warming. What is wrong with this conclusion?

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60) Administrators have concluded that the SAT exam results for 2011 show a distinct change in student capabilities when compared with the year 1991. In 1991 the SAT exam included only multiple choice sections and was later redesigned. What is wrong with this conclusion?

61) A university is interested in tracking the success of its graduates by measuring the length of each graduate’s job search before getting a position in his or her chosen field. How would you define the appropriate population?

62) We would like to determine whether there is a difference between the height of a college team of basketball players at the Ohio State University and the height of the overall student body. Identify the two populations in this study.

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63) In each of the following statements, determine whether the branch of statistics is best classified as descriptive statistics or inferential statistics. A. The average of a data set is equal to 35.7. B. The minimum value of a data set is 78, and the maximum value is 146. C. Because the average age in a sample is 23, it is likely that the average age in the population is about 23. D. Because the values in the sample are so widely dispersed, the spread of the population must be high.

64) A car company wants to know the average age of cars of their brand that are still on the road. How would you define the appropriate population? Will the car company calculate a population parameter or a sample statistic? Why?

65)

What are the primary reasons that sampling is necessary?

66) An investor wants to know today’s average closing price of the stocks listed on the Standard and Poor’s 500 Index. Will the investor calculate a population parameter or sample statistic? Why?

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67) We would like to determine the average height of a college team of basketball players at Ohio State University. Is it necessary to take a sample of basketball players? Explain.

68) We would like to determine the average height of the overall student body at Ohio State University. Does it seem necessary to take a sample from the overall student body?

69) Researchers are interested in completing a study examining trends in the sale of foods in the U.S. They have decided to examine the quantity of organic vegetables sold by supermarkets. Will researchers be able to gather population data?

70) Every 10 years, a census is taken in the U.S. by the Census Bureau. Despite the intent of gathering data on the population of the United States, issues exist that make true population data impossible to gather. Identify at least two issues in collecting these data.

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71) Social networking sites support themselves in large part by selling advertising space. The hit rate on these ads is a critical measure when trying to solicit advertising. The hit rate is used as a measure of success for ads. How would you recommend a social networking site use sampling to evaluate its existing ads?

72) The following table includes the number of white women over the age of 20 in the civilian labor force. Because it is time series data, what would the entries of the first column refer to? ?

Number in Civilian Labor Force 43216 43479 44663 45409 45543 46613 47051 47833 48611 49128 48562

Source: https://data.bls.gov

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73) A study of teen smoking is planned. Researchers are interested in collecting crosssectional data, which allow them to draw conclusions about the likelihood, frequency, and longevity of teen smoking. You have been asked to design this study and will collect no more than five pieces of data. What information will you collect?

74) Define the measurement scale of a car’s fuel efficiency (measured in miles per gallon). Is a car’s fuel efficiency discrete or continuous?

75) A study of teen smoking is planned. Researchers are interested in collecting data which allow them to draw conclusions about the likelihood, frequency, and longevity of teen smoking. The questions asked include: “What is your gender?” “What is your age?” “Do you smoke (yes or no)?” “How many cigarettes per day do you smoke?” “For how long have you smoked (in years)?” What is the measurement scale for each variable?

76) The following data represent a sample of property sales in Cape May County during the year 2000. Identify the qualitative and quantitative variables. What are the natural categories for Town and Class? Identify the measurement scales for all variables. Town Avalon Avalon Wildwood

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Class Residential Residential Commercial

Date 12/28/2000 04/14/2000 05/01/2000

Price $ 500,000 $ 500,000 $ 500,000

Assessment $ 288,600 $ 325,900 $ 250,000

Avalon North Wildwood Avalon North Wildwood Avalon Avalon Wildwood

Residential Commercial Residential Residential Commercial Residential Residential

05/22/2000 06/02/2000 09/16/2000 04/07/2000 01/15/2000 01/15/2000 06/14/2000

$ 500,000 $ 500,000 $ 518,000 $ 520,000 $ 520,000 $ 525,000 $ 525,000

$ 332,500 $ 607,700 $ 269,900 $ 373,100 $ 414,600 $ 373,500 $ 379,600

77)

Statistics is the science of transforming data into useful information. ⊚ true ⊚ false

78)

Statistics is the methodology of extracting unnecessary information from a data set. ⊚ ⊚

true false

79) The branch of statistical studies called descriptive statistics summarizes important aspects of a data set. ⊚ ⊚

true false

80) The branch of statistical studies called inferential statistics refers to drawing conclusions about sample data by analyzing the corresponding population. ⊚ ⊚

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true false

81)

A population is a larger data set than its corresponding sample. ⊚ true ⊚ false

82)

Population parameters are used to estimate corresponding sample statistics. ⊚ true ⊚ false

83)

Typically, it is possible to examine every member of the population. ⊚ ⊚

84)

Cross-sectional data contain values of a characteristic of one subject collected over time. ⊚ ⊚

85)

true false

Time series data contain values of a characteristic of a subject over time. ⊚ ⊚

true false

86) Structured data tends to include numbers, dates, and groups of words and numbers called strings. ⊚ ⊚

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true false

87)

Unstructured data conforms to a predefined row-column format. ⊚ ⊚

true false

88)

Big data is a catchphrase that implies a complete set of population data. ⊚ true ⊚ false

89)

A qualitative variable assumes meaningful numerical values. ⊚ ⊚

90)

true false

Both discrete and continuous variables may assume an uncountable number of values. ⊚ ⊚

true false

91)

A discrete variable cannot assume an infinite number of values. ⊚ true ⊚ false

92)

A continuous variable assumes any value from an interval (or collection of intervals). ⊚ ⊚

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true false

93) A professor's gender (male, female) as well as rank (assistant, associate, full) represent ordinal data. ⊚ ⊚

94)

A professor's rank (assistant, associate, and full), as well as salary, represent ordinal data. ⊚ ⊚

95)

true false

Data and data interpretation do not show up in every facet of life. ⊚ ⊚

98)

true false

The weather forecast cannot be based on only the weather for the last three days. ⊚ ⊚

97)

true false

Many people believe that statistics has no use in real life. ⊚ ⊚

96)

true false

A population is defined as all possible subjects of a specific group.

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⊚ ⊚

99)

true false

Researchers use sample results in an attempt to estimate an unknown population statistic. ⊚ ⊚

true false

100) The recorded body temperature of patients in the group of patients under research study is an example of time series data. ⊚ ⊚

true false

101)

Body weight is an example of a discrete variable. ⊚ true ⊚ false

102)

The mathematical operation of addition can be performed on nominal data. ⊚ ⊚

103)

A ZIP code is an example of numerical data. ⊚ ⊚

104)

true false

Ordinal scale reflects a stronger level of measurement than the nominal scale.

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⊚ ⊚

105)

true false

All mathematical operations can be performed on ratio-scaled data. ⊚ ⊚

true false

106) A respondent to a survey indicates that she drives a Nissan Pathfinder. This is an example of qualitative data. ⊚ ⊚

107)

The zero point of an interval scale reflects a complete absence of what is being measured. ⊚ ⊚

108)

true false

Statistical analysis begins with counting and sorting data. ⊚ ⊚

110)

true false

Nominal and interval scales are used for qualitative variables. ⊚ ⊚

109)

true false

Data subsetting can be used to remove observations that contain missing values.

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⊚ ⊚

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true false

Answer Key Test name: Chap 01_4e 1) Qualitative: School, Degree; Quantitative: Years Experience, Salary, Classes Taught Categories for School: Brookside E.S., Program 3Emotionally Distur., Program 5-Life Skills, and Berger AcademiesHackensack; Categories for Degree: Bachelors and Masters Nominal: School; Ordinal: Degree; Ratio: Years Experience, Classes Taught, and Salary 2) Qualitative: County, Station, Title, and Grade; Quantitative: Salary Categories for County: New York County, Kings County, Erie County, and Onondaga County; Categories for Station: NEW YORK - NY, NEW YORK - KINGS, BUFFALO, and SYRACUSE; Categories for Title: MISCELLANEOUS CLERK AND ASSISTANT, ACCOUNTING TECHNICIAN, ADMINISTRATIVE OFFICER, BUDGET ANALYSIS, GENERAL BUSINESS AND INDUSTRY, MISCELLANEOUS ADMINISTRATION AND PROGRAM Categories for Grade: GS 07, GS 13, GS 09, GS 11 Nominal: County, Station, and Title; Ordinal: Grade; Ratio: Salary 3) We want to ensure that the data is complete so that there are no missing values for important variables. We also want to review the range of values for each variable so that there are no outliers.

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4) A. Counting the number of blanks in Phone Number; B. Counting the number of observations in the data; C. Counting the number of observations having Female as the value ofvalue of Gender. D. Sorting the data by Date of Birth in ascending order; E. Subsetting the data by Gender. 5) D 6) B 7) A 8) D 9) A 10) C 11) C 12) A 13) A 14) D 15) B 16) A 17) A 18) A 19) B 20) D 21) B 22) D 23) B 24) B 25) D Version 1

26) A 27) A 28) D 29) C 30) A 31) C 32) D 33) D 34) A 35) B 36) C 37) B 38) A 39) A 40) D 41) C 42) C 43) A 44) B 45) C 46) D 47) B 48) C 49) A 50) C 51) B 52) A 53) C 54) B 55) D Version 1

56) B 57) C 58) D 59) The existence or nonexistence of climate change cannot be based on one month’s worth of data. We must instead look at long-term trends. 60) The redesign of the exam makes any conclusions comparing 1991 to 2011 invalid. 61) The population should include all graduates of the university within a specified time period. 62) Varsity basketball players at OSU, all students at OSU 63) Descriptive Statistics: The average of a data set is equal to 35.7 and the minimum value of a data set is 78, and the maximum value is 146. Inferential Statistics: Because the average age in a sample is 23, it is likely that the average age in the population is about 23, and because the values in the sample are so widely dispersed, the spread of the population must be high. 64) The population includes all cars of their brand still on the road. The car company will calculate a sample statistic. It would be very costly to find the age of every car of their brand on the road. 65) Gathering population data can sometimes be impossible, very timeconsuming, or very expensive. 66) The investor will calculate a population parameter. It is easy to gather all the prices for the firms on the Standard and Poor’s 500 Index. 67) No, it is a small population and it is very easy to get the heights of the entire basketball team. 68) Yes, it would be very difficult and expensive to collect the heights of so many students. 69) No, population data would be very impractical and expensive to gather.

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70) Homeless population not surveyed, people providing intentionally false responses, illegal immigrants not wanting to be counted, no enforcement on returning completed survey, new homes being missed or demolished homes being counted, etc. 71) The existing ads should be split into categories of like products. Then some number of ads from each category could be selected for the sample to determine the average number of hits for the relevant category. Any other logical sampling methods are acceptable. 72) Time measured in years, quarters, months, etc.

73) “What is your gender?” “What is your age?” “Do you smoke?” “How many cigarettes per day do you smoke?” “For how long have you smoked?” (Other reasonable answers are acceptable.) 74) Fuel efficiency is measured on a ratio scale. The number zero is meaningful. Fuel efficiency is a continuous variable. 75) Gender: nominal; Age: ratio; Smoking: nominal; Number of cigarettes per day: ratio; Time of smoking: ratio 76) Qualitative variables: Town, Class; Quantitative variables: Date, Price, Assessment Town categories: Avalon, Wildwood, and North Wildwood; Class categories: Residential and Commercial Nominal: Town and Class; Interval: Date; Ratio: Price and Assessment 77) TRUE 78) FALSE 79) TRUE 80) FALSE 81) TRUE 82) FALSE 83) FALSE 84) FALSE 85) TRUE 86) TRUE

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87) FALSE 88) FALSE 89) FALSE 90) FALSE 91) FALSE 92) TRUE 93) FALSE 94) FALSE 95) FALSE 96) TRUE 97) FALSE 98) TRUE 99) FALSE 100) FALSE 101) FALSE 102) FALSE 103) FALSE 104) TRUE 105) TRUE 106) TRUE 107) FALSE 108) FALSE 109) FALSE 110) TRUE

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CHAPTER 02 – 4e 1) For a categorical variable, a frequency distribution groups its values into __________ and records the number of __________.

2) Graphically, we can show a(n) __________ __________ for a categorical variable by constructing a pie chart or a bar chart.

3) When constructing a frequency distribution for a numerical variable, classes are mutually __________ and __________.

4) A __________ __________ is a table that shows the number of data observations that fall into specific interval.

5) The shape of most data distributions can be categorized as either __________ or __________.

A stem-and-leaf diagram most resembles a(n) __________.

7) A scatterplot depicts a positive __________ relationship, if as x increases, y tends to increase at an increasing rate.

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8) Using a scatterplot above we observe a __________ linear relationship between two variables: Education and Income.

9) Using the contingency table below, we observe that most of the __________ have High School as their highest level of education. Employed Associate No Yes All

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4 7 11

Highest Education Bachelors Doctorate High School 4 4 7 5 5 5 9 9 12

Masters

All

4 5 9

23 27 50

10) Using the stacked column chart below, we observe that more __________ than __________ have a Masters degree.

11)

Frequency distributions may be used to describe which of the following types of data? A) Nominal and ordinal data only B) Nominal and interval data only C) Nominal, ordinal, and interval data only D) Nominal, ordinal, interval, and ratio data

12)

In order to summarize a categorical variable, a useful tool is a __________.

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A) histogram B) frequency distribution C) stem-and-leaf diagram D) line chart

13) For both categorical and numerical variables, what is the difference between the relative frequency and the percent frequency? A) The relative frequency equals the percent frequency multiplied by 100. B) The percent frequency equals the relative frequency multiplied by 100. C) As opposed to the relative frequency, the percent frequency is divided by the number of observations in the data set. D) As opposed to the percent frequency, the relative frequency is divided by the number of observations in the data set.

14)

For which of the following data sets will a pie chart be most useful? A) Heights of high school freshmen B) Ambient temperatures in the U.S. Capitol Building C) Percentage of net sales by product for Lenovo in Year 1 D) Growth rates of firms in a particular industry

15) An auto parts chain asked customers to complete a survey rating the chain's customer service as average, above average, or below average. The following shows the results from the survey: Average

Below Average

Average

Above Average

Below Average

Average

Below Average

Average

Below Average

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{MISSING IMAGE}Click here for the Excel Data File The proportion of customers who felt the customer service was Average is the closest to _______. A) 0.20 B) 0.33 C) 0.46 D) 0.53

16) An auto parts chain asked customers to complete a survey rating the chain's customer service as average, above average, or below average. The following table shows the results from the survey. Average

Below Average

Average

Above Average

Below Average

Average

Below Average

Average

Below Average

{MISSING IMAGE}Click here for the Excel Data File A rating of Average or Above Average accounted for what number of responses to the survey? A) 3 B) 7 C) 8 D) 10

17) 1.

The following is a list of five of the world's busiest airports by passenger traffic for Year Name

Location

Number of Passengers (in millions)

Hartsfield-Jackson

Atlanta, Georgia, United States

Capital International

Beijing, China

London Heathrow

London, United Kingdom

O’Hare

Chicago, Illinois, United

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States Tokyo

Tokyo, Japan

The percentage of passenger traffic in the five busiest airports that occurred in Asia is the closest to ___________. A) 18% B) 21% C) 25% D) 38%

18) 1.

The following is a list of five of the world's busiest airports by passenger traffic for Year Name

Location

Number of Passengers (in millions)

Hartsfield-Jackson

Atlanta, Georgia, United States

Capital International

Beijing, China

London Heathrow

London, United Kingdom

O’Hare

Chicago, Illinois, United States

Tokyo

Tokyo, Japan

How many more millions of passengers flew out of Atlanta than flew out of Chicago? A) 13 B) 21 C) 23 D) 25

19) A city in California spent $7 million repairing damage to its public buildings in Year 1. The following table shows the categories where the money was directed. Cause Termites Water Damage

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Percent 30% 5%

Mold Earthquake Other

19% 35% 11%

How much did the city spend to fix damage caused by mold? A) $2,660,000 B) $1,330,000 C) $2,100,000 D) $665,000

20) A city in California spent $6 million repairing damage to its public buildings in Year 1. The following table shows the categories where the money was directed. Cause Termites Water Damage Mold Earthquake Other

Percent 22% 6% 12% 27% 33%

How much did the city spend to fix damage caused by mold? A) $360,000 B) $720,000 C) $1,440,000 D) $1,800,000

21) A city in California spent $6 million repairing damage to its public buildings in Year 1. The following table shows the categories where the money was directed. Cause Termites Water Damage Mold Earthquake Other

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Percent 22% 6% 12% 27% 33%

How much more did the city spend to fix damage caused by termites compared to the damage caused by water? A) $360,000 B) $720,000 C) $960,000 D) $1,320,000

22) Students in Professor Smith's business statistics course have evaluated the overall effectiveness of the professor's instruction on a five-point scale, where a score of 1 indicates very poor performance and a score of 5 indicates outstanding performance. The raw scores are displayed in the accompanying table: 2

{MISSING IMAGE}Click here for the Excel Data File What is the most common score given in the evaluations? A) 5 B) 1 C) 3 D) 2

23) Students in Professor Smith's business statistics course have evaluated the overall effectiveness of the professor's instruction on a five-point scale, where a score of 1 indicates very poor performance and a score of 5 indicates outstanding performance. The raw scores are displayed in the accompanying table: 1

{MISSING IMAGE}Click here for the Excel Data File What is the most common score given in the evaluations?

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A) 2 B) 3 C) 4 D) 5

24) Students in Professor Smith's business statistics course have evaluated the overall effectiveness of the professor's instruction on a five-point scale, where a score of 1 indicates very poor performance and a score of 5 indicates outstanding performance. The raw scores are displayed in the accompanying table. 1

{MISSING IMAGE}Click here for the Excel Data File What percentage of students gave Professor Smith an evaluation higher than 3? A) 20% B) 30% C) 50% D) 80%

25) Students in Professor Smith's business statistics course have evaluated the overall effectiveness of the professor's instruction on a five-point scale, where a score of 1 indicates very poor performance and a score of 5 indicates outstanding performance. The raw scores are displayed in the accompanying table. 1

{MISSING IMAGE}Click here for the Excel Data File What percentage of students gave Professor Smith an evaluation of 2 or less?

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A) 6.7% B) 13.3% C) 20% D) 80%

26) Students in Professor Smith's business statistics course have evaluated the overall effectiveness of the professor's instruction on a five-point scale, where a score of 1 indicates very poor performance and a score of 5 indicates outstanding performance. The raw scores are displayed in the accompanying table: 1

{MISSING IMAGE}Click here for the Excel Data File What is the relative frequency of the students who gave Professor Smith an evaluation of 3? A) 0.3 B) 0.5 C) 9 D) 15

27) In the following pie chart representing a collection of cookbooks, which author has more titles?

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A) Jeff Smith B) Julia Child C) Rachael Ray D) Paula Deen

28) The accompanying chart shows the numbers of books written by each author in a collection of cookbooks. What type of chart is this?

A) Bar chart for qualitative data B) Bar chart for quantitative data C) Frequency histogram for qualitative data D) Frequency histogram for quantitative data

29) The accompanying chart shows the number of books written by each author in a collection of cookbooks. What type of data is being represented?

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A) Quantitative, ordinal B) Quantitative, ratio C) Qualitative, nominal D) Qualitative, ordinal

30)

Horizontal bar charts are constructed by placing __________.

A) each category on the vertical axis and the appropriate range of values on the horizontal axis B) each category on the horizontal axis and the appropriate range of values on the vertical axis C) each interval of values on the vertical axis and the appropriate range of values on the horizontal axis D) each interval of values stacking on top of one another

31) When constructing a frequency distribution for a numerical variable, it is important to remember that __________. A) classes are mutually exclusive B) classes are overlapping C) the total number of classes cannot be 15 D) the total number of classes should be at least 100

32)

Which of the following best describes a frequency distribution for a categorical variable?

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A) It groups data into histograms and records the proportion (fraction) of observations in each histogram. B) It groups data into categories and records the number of observations in each category. C) It groups data into intervals called classes and records the proportion (fraction) of observations in each class. D) It groups data into intervals called classes and records the number of observations in each class.

33) What graphical tool is best used to display the relative frequency of a numerical variable? A) Ogive B) Pie chart C) Bar chart D) Histogram

34)

The following data represent scores on a pop quiz in a statistics section. 34

{MISSING IMAGE}Click here for the Excel Data File Suppose the data on quiz scores will be grouped into five classes. The width of the classes for a frequency distribution or histogram is the closest to __________. A) 14 B) 16 C) 18 D) 12

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35)

The following data represent scores on a pop quiz in a statistics section. 45

36)

The following data represent scores on a pop quiz in a statistics section: 45

{MISSING IMAGE}Click here for the Excel Data File Suppose the data are grouped into five classes, and one of them will be "30 up to 44"—that is, {x; 30 ≤ x < 44}. The frequency of this class is __________. A) 0.20 B) 0.25 C) 4 D) 5

37)

The following data represent scores on a pop quiz in a statistics section. 45

{MISSING IMAGE}Click here for the Excel Data File Suppose the data are grouped into five classes, and one of them will be "30 up to 44"—that is, {x; 30 ≤ x < 44}. The relative frequency of this class is _____.

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A) 0.20 B) 0.25 C) 4 D) 5

38) The following data represent the recent sales price (in $1,000s) of 24 homes in a Midwestern city. 199

124

145

163

216

128

207

227

220

138

180

210

224

178

118

177

133

166

179

243

113

228

173

263

{MISSING IMAGE}Click here for the Excel Data File Suppose the data on house prices will be grouped into five classes. The width of the classes for a frequency distribution or histogram is the closest to __________. A) 30 B) 35 C) 25 D) 20

39) The following data represent the recent sales price (in $1,000s) of 24 homes in a Midwestern city. 187

125

165

170

230

139

195

229

239

135

188

210

228

172

127

139

122

181

196

237

115

199

170

239

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A) 15 B) 20 C) 25 D) 30

40) The following data represent the recent sales price (in $1,000s) of 24 homes in a Midwestern city 187

125

165

170

230

139

195

229

239

135

188

210

228

172

127

139

122

181

196

237

115

199

170

239

{MISSING IMAGE}Click here for the Excel Data File Suppose the data are grouped into five classes, and one of them will be "115 up to 140"—that is, {x; 115 ≤ x < 140}. The relative frequency of this class is __________. A) 6/24 B) 7/24 C) 6 D) 7

41) The following data represent the recent sales price (in $1,000s) of 24 homes in a Midwestern city. 187

125

165

170

230

139

195

229

239

135

188

210

228

172

127

139

122

181

196

237

115

199

170

239

{MISSING IMAGE}Click here for the Excel Data File Suppose the data are grouped into five classes, and one of them will be "165 up to 190"—that is, {x; 165 ≤ x < 190}. The frequency of this class is __________. A) 6/24 B) 7/24 C) 6 D) 7

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42) Thirty students at Eastside High School took the SAT on the same Saturday. Their raw scores are given next. 2,030

1,900

2,120

1,740

1,630

2,160

2,340

2,350

1,910

1,770

2,030

2,110

2,010

1,460

1,850

2,360

2,010

2,040

2,380

2,160

1,840

1,780

2,180

1,490

2,190

2,320

1,980

2,350

1,770

{MISSING IMAGE}Click here for the Excel Data File Consider a frequency distribution of the data that groups the data in classes of 1,400 up to 1,600, 1,600 up to 1,800, 1,800 up to 2,000, and so on. How many students scored at least 1,800 but less than 2,000? A) 7 B) 3 C) 2 D) 5

43) Thirty students at Eastside High School took the SAT on the same Saturday. Their raw scores are given next. 1,450

1,620

1,800

1,740

1,650

1,710

1,900

1,910

1,950

1,820

1,800

2,010

1,780

1,840

1,490

1,590

2,350

2,260

1,870

1,530

1,620

1,480

2,390

1,640

1,830

1,950

2,000

1,830

1,980

2,100

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44) Thirty students at Eastside High School took the SAT on the same Saturday. Their raw scores are given next. 1,450

1,620

1,800

1,740

1,650

1,710

1,900

1,910

1,950

1,820

1,800

2,010

1,780

1,840

1,490

1,590

2,350

2,260

1,870

1,530

1,620

1,480

2,390

1,640

1,830

1,950

2,000

1,830

1,980

2,100

{MISSING IMAGE}Click here for the Excel Data File Consider a frequency distribution of the data that groups the data in classes of 1,400 up to 1,600, 1,600 up to 1,800, 1,800 up to 2,000, and so on. What percent of students scored less than 2,200? A) 10% B) 20% C) 80% D) 90%

45) Thirty students at Eastside High School took the SAT on the same Saturday. Their raw scores are given next. 1,450

1,620

1,800

1,740

1,650

1,710

1,900

1,910

1,950

1,820

1,800

2,010

1,780

1,840

1,490

1,590

2,350

2,260

1,870

1,530

1,620

1,480

2,390

1,640

1,830

1,950

2,000

1,830

1,980

2,100

{MISSING IMAGE}Click here for the Excel Data File Consider a frequency distribution of the data that groups the data in classes of 1,400 up to 1,600, 1,600 up to 1,800, 1,800 up to 2,000, and so on. What is the approximate relative frequency of students who scored more than 1,600 but less than 1,800? A) 0.17 B) 0.23 C) 0.40 D) 0.77

46) Thirty students at Eastside High School took the SAT on the same Saturday. Their raw scores are given next. 1,450

1,620

1,800

1,740

1,650

1,710

1,900

1,910

1,950

1,820

1,800

2,010

1,780

1,840

1,490

1,590

2,350

2,260

1,870

1,530

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1,620

1,480

2,390

1,640

1,830

1,950

2,000

1,830

1,980

2,100

{MISSING IMAGE}Click here for the Excel Data File Consider a frequency distribution of the data that groups the data in classes of 1,400 up to 1,600, 1,600 up to 1,800, 1,800 up to 2,000, and so on. What graphical tool would you use to display the cumulative relative frequency of the grouped data? A) Ogive B) Polygon C) Pie chart D) Bar chart

47)

Consider the following frequency distribution. Class

Frequency

12 up to 15

15 up to 18

18 up to 21

21 up to 24

24 up to 27

The total number of observations in the frequency distribution is __________. A) 19 B) 20 C) 34 D) 38

48)

Consider the following frequency distribution. Class

Frequency

12 up to 15

15 up to 18

18 up to 21

21 up to 24

24 up to 27

The total number of observations in the frequency distribution is __________.

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A) 5 B) 6 C) 20 D) 24

49)

Consider the following frequency distribution. Class

Frequency

12 up to 15

15 up to 18

18 up to 21

21 up to 24

24 up to 27

How many observations are at least 15 but less than 18? A) 3 B) 4 C) 5 D) 6

50)

Consider the following frequency distribution. Class

Frequency

12 up to 15

15 up to 18

18 up to 21

21 up to 24

24 up to 27

How many observations are less than 21? A) 6 B) 12 C) 18 D) 24

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51)

Consider the following frequency distribution. Class

Frequency

12 up to 15

15 up to 18

18 up to 21

21 up to 24

24 up to 27

What proportion of the observations are at least 15 but less than 18? A) 0.20 B) 0.25 C) 0.30 D) 0.35

52)

Consider the following frequency distribution. Class

Frequency

12 up to 15

15 up to 18

18 up to 21

21 up to 24

24 up to 27

What proportion of the observations are less than 21? A) 0.30 B) 0.60 C) 0.90 D) 1.00

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53) The following histogram represents the number of pages in each book within a collection. What is the frequency of books containing at least 250 but fewer than 300 pages?

A) 5 B) 6 C) 7 D) 12

54) The following histogram represents the number of pages in each book within a collection. What is the frequency of books containing at least 200 but fewer than 250 pages?

A) 4 B) 5 C) 6 D) 7

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55) The following histogram represents the number of pages in each book within a collection. What is the frequency of books containing at least 250 but fewer than 400 pages?

A) 7 B) 10 C) 11 D) 12

56) An analyst constructed the following frequency distribution on the monthly returns for 50 selected stocks. Class (in percent)

Frequency

–10 up to 0

0 up to 10

10 up to 20

20 up to 30

The number of stocks with returns of 0% up to 10% is __________. A) 8 B) 18 C) 5 D) 22

57) An analyst constructed the following frequency distribution on the monthly returns for 50 selected stocks.

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Class (in percent)

Frequency

−10 up to 0

0 up to 10

10 up to 20

20 up to 30

The number of stocks with returns of 0% up to 10% is __________. A) 2 B) 8 C) 15 D) 25

58) An analyst constructed the following frequency distribution on the monthly returns for 50 selected stocks. Class (in percent)

Frequency

−10 up to 0

0 up to 10

10 up to 20

20 up to 30

The number of stocks with returns of less than 10% is __________. A) 8 B) 25 C) 33 D) 48

59) An analyst constructed the following frequency distribution on the monthly returns for 50 selected stocks: Class (in percent)

Frequency

−10 up to 0

0 up to 10

10 up to 20

20 up to 30

The proportion of stocks with returns of 0% up to 10% is __________.

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A) 0.30 B) 0.50 C) 0.66 D) 0.80

60) An analyst constructed the following frequency distribution on the monthly returns for 50 selected stocks. Class (in percent)

Frequency

−10 up to 0

0 up to 10

10 up to 20

20 up to 30

The proportion of stocks with returns of less than 10% is __________. A) 0.30 B) 0.50 C) 0.66 D) 0.80

61) Automobiles traveling on a road with a posted speed limit of 65 miles per hour are checked for speed by a state police radar system. The following table is a frequency distribution of speeds. Speed (miles per hour)

Frequency

45 up to 55

55 up to 65

316

65 up to 75

266

75 up to 85

How many of the cars traveled less than 75 miles per hour? A) 315 B) 265 C) 640 D) 665

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62) Automobiles traveling on a road with a posted speed limit of 65 miles per hour are checked for speed by a state police radar system. The following table is a frequency distribution of speeds. Speed (miles per hour)

Frequency

45 up to 55

55 up to 65

325

65 up to 75

275

75 up to 85

How many of the cars traveled less than 75 miles per hour? A) 275 B) 325 C) 650 D) 675

63) Automobiles traveling on a road with a posted speed limit of 65 miles per hour are checked for speed by a state police radar system. The following table is a frequency distribution of speeds. Speed (miles per hour)

Frequency

45 up to 55

55 up to 65

325

65 up to 75

275

75 up to 85

What proportion of the cars traveled at least 55 but less than 65 miles per hour? A) 0.33 B) 0.48 C) 0.56 D) 0.80

64)

When using a polygon to visualize a numerical variable, what does each point represent?

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A) The lower limit of a particular class and its width B) The midpoint of a particular class and its associated frequency or relative frequency C) The midpoint of a particular class and its associated cumulative frequency or cumulative relative frequency D) The upper limit of a particular class and its associated cumulative frequency or cumulative relative frequency

65)

The accompanying table shows students' scores from the final exam in a history course. Scores

Cumulative Frequency

50 up to 60

60 up to 70

70 up to 80

80 up to 90

90 up to 100

100

How many of the students scored at least 70 but less than 90? A) 60 B) 29 C) 36 D) 93

66)

The accompanying table shows students' scores from the final exam in a history course. Scores

Cumulative Frequency

50 up to 60

60 up to 70

70 up to 80

80 up to 90

90 up to 100

100

How many of the students scored at least 70 but less than 90?

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A) 24 B) 31 C) 55 D) 88

67) The following table shows the number of payroll jobs the government added during the years it added jobs (since 1973). The jobs are in thousands. Jobs Added

Frequency

100 up to 200

200 up to 300

300 up to 400

400 up to 500

500 up to 600

Approximately what percent of the time did the government add 200,000 or more jobs? A) 19% B) 50% C) 77% D) 81%

68) The accompanying relative frequency distribution represents the last year car sales for the sales force at Kelly's Mega Used Car Center. Car Sales

Relative Frequency

35 up to 45

0.08

45 up to 55

0.19

55 up to 65

0.30

65 up to 75

0.26

75 up to 85

0.17

If Kelly's employs 100 salespeople, how many of these salespeople have sold at least 35 but fewer than 45 cars in the last year?

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A) 6 B) 11 C) 16 D) 8

69) The accompanying relative frequency distribution represents the last year car sales for the sales force at Kelly's Mega Used Car Center. Car Sales

Relative Frequency

35 up to 45

0.07

45 up to 55

0.15

55 up to 65

0.31

65 up to 75

0.22

75 up to 85

0.25

If Kelly's employs 100 salespeople, how many of these salespeople have sold at least 35 but fewer than 45 cars in the last year? A) 5 B) 7 C) 10 D) 15

70) The accompanying relative frequency distribution represents the last year car sales for the sales force at Kelly's Mega Used Car Center. Car Sales

Relative Frequency

35 up to 45

0.07

45 up to 55

0.15

55 up to 65

0.31

65 up to 75

0.22

75 up to 85

0.25

If Kelly's employs 100 salespeople, how many of these salespeople have sold at least 45 but fewer than 65 cars in the last year?

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A) 15 B) 31 C) 40 D) 46

71) The accompanying relative frequency distribution represents the last year car sales for the sales force at Kelly's Mega Used Car Center. Car Sales

Relative Frequency

35 up to 45

0.07

45 up to 55

0.15

55 up to 65

0.31

65 up to 75

0.22

75 up to 85

0.25

If Kelly's employs 100 salespeople, how many of these salespeople have sold at least 65 cars in the last year? A) 22 B) 25 C) 31 D) 47

72)

When visualizing a numerical variable, what is an ogive used to plot?

A) Frequency or relative frequency of each class against the midpoint of the corresponding class B) Cumulative frequency or cumulative relative frequency of each class against the upper limit of the corresponding class C) Frequency or relative frequency of each class against the midpoint of the corresponding class and cumulative frequency or cumulative relative frequency of each class against the upper limit of the corresponding class D) Cumulative frequency or cumulative relative frequency of each class against the lower limit of the corresponding class

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73)

How does an ogive differ from a polygon?

A) An ogive is used for qualitative data, while a polygon is used for numerical data. B) An ogive is used for quantitative data, while a polygon is used for categorical data. C) An ogive is a graphical depiction of a frequency or relative distribution, while a polygon is a graphical depiction of a cumulative frequency or cumulative relative frequency distribution. D) An ogive is a graphical depiction of a cumulative frequency or cumulative relative frequency distribution, while a polygon is a graphical depiction of a frequency or relative frequency distribution.

74) Recent home sales in a suburb of Washington, D.C., are shown in the accompanying ogive.

Approximate the percentage of houses that sold for less than $600,000. A) 60% B) 70% C) 80% D) 90%

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75) Recent home sales in a suburb of Washington, D.C., are shown in the accompanying ogive.

Approximate the percentage of houses that sold for more than $500,000. A) 40% B) 50% C) 60% D) 70%

76) The organization of the Girl Scouts has completed its annual cookie drive. The sales are reported in the accompanying ogive.

Approximate the percentage of girls who sold fewer than 90 boxes of cookies.

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A) 45% B) 55% C) 65% D) 75%

77) The organization of the Girl Scouts has completed its annual cookie drive. The sales are reported in the accompanying ogive.

Approximate the percentage of girls who sold more than 70 boxes of cookies. A) 45% B) 55% C) 65% D) 75%

78) A stem-and-leaf diagram is constructed by separating each value of a data set into two parts. What are these parts? A) Stem consisting of the last digit and leaf consisting of the leftmost digits B) Stem consisting of the leftmost digits and leaf consisting of the second digit C) Stem consisting of the second digit and leaf consisting of the last digit D) Stem consisting of the leftmost digits and the leaf consists of the remaining digits.

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79) In the accompanying stem-and-leaf diagram, the values in the stem and leaf portions represent 10s and 1s digits, respectively. Stem

Leaf

1 2 2 4 5 7

0 4 4 5 5 7 7 7 7 8 8 9

0 0 4 7 8

0 7

Which of the following numbers appears in the stem-and-leaf diagram? A) 3,000 B) 30 C) 300 D) 3.0

80) In the accompanying stem-and-leaf diagram, the values in the stem and leaf portions represent 10s and 1s digits, respectively. Stem

Leaf

3 5 6 8 8 9

0 1 2 2 3 5 6 6 8 8 8 9

0 1 2 2 8

2 2

Which of the following numbers appears in the stem-and-leaf diagram? A) 3800 B) 380 C) 38 D) 3.8

81) In the accompanying stem-and-leaf diagram, the values in the stem-and-leaf portions represent 10s and 1s digits, respectively. Stem 1

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Leaf 3 5 6 8 8 9 34

0 1 2 2 3 5 6 6 8 8 8 9

0 1 2 2 8

2 2

What would be the frequency of the class 35 up to 45, that is {x; 35 ≤ x < 45}? A) 0 B) 1 C) 2 D) 3

82) In the accompanying stem-and-leaf diagram, the values in the stem-and-leaf portions represent 10s and 1s digits, respectively. Stem

Leaf

3 5 6 8 8 9

0 1 2 2 3 5 6 6 8 8 8 9

0 1 2 2 8

2 2

How many values are at least 25 but less than 35? A) 10 B) 11 C) 12 D) 13

83) In the accompanying stem-and-leaf diagram, the values in the stem-and-leaf portions represent 10s and 1s digits, respectively. Stem

Leaf

3 5 6 8 8 9

0 1 2 2 3 5 6 6 8 8 8 9

0 1 2 2 8

2 2

Find the frequency associated with data values that are more than 28.

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A) 8 B) 9 C) 10 D) 11

84) In the accompanying stem-and-leaf diagram, the values in the stem-and-leaf portions represent 10s and 1s digits, respectively. Stem

Leaf

3 5 6 8 8 9

0 1 2 2 3 5 6 6 8 8 8 9

0 1 2 2 8

2 2

The stem-and-leaf diagram shows that the distribution is __________. A) symmetric B) positively skewed C) negatively skewed D) bimodal

85) The following stem-and-leaf diagram shows the speeds in miles per hour (mph) of 14 cars approaching a toll booth on a bridge in Oakland, California. Stem

Leaf

2 4 6 8 9

2 2 2 4 8

0 0 7 9

How many of the cars were traveling faster than 25 mph but slower than 40 mph?

A) 7 B) 8 C) 9 D) 11

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86) The following stem-and-leaf diagram shows the speeds in miles per hour (mph) of 14 cars approaching a toll booth on a bridge in Oakland, California. Stem

Leaf

5 6 6 7 9

4 7 7 8 9

0 0 2 3

How many of the cars were traveling faster than 25 mph but slower than 40 mph? A) 8 B) 9 C) 10 D) 12

87) The following stem-and-leaf diagram shows the last 20 dividend payments (in cents) paid by Procter and Gamble. Stem

Leaf

1 5 5 5 5

0 0 0 0 4 4 4 4 4 8 8 8

3 3 3

The most common dividend payment is __________. A) 0.35 B) 0.40 C) 0.44 D) 0.48

88)

What may NOT be revealed from a scatterplot?

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A) No relationship between two variables B) A linear relationship between two variables C) A curvilinear relationship between two variables D) A causal relationship between two variables

89)

What type of relationship is indicated in the scatterplot?

A) No relationship B) A negative linear relationship C) A negative curvilinear relationship D) A positive linear or curvilinear relationship

90)

What type of relationship is indicated in the scatterplot?

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A) No relationship B) A negative linear relationship C) A positive linear relationship D) A positive curvilinear relationship

91)

Use the following data to construct a scatterplot. What type of relationship is implied? x

{MISSING IMAGE}Click here for the Excel Data File A) No relationship B) A positive relationship C) A negative relationship D) There is not enough information to answer

92)

Use the following data to construct a scatterplot. What type of relationship is implied? x

{MISSING IMAGE}Click here for the Excel Data File A) No relationship B) A positive relationship C) A negative relationship D) Not enough information to answer

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93) A car dealership created a scatterplot showing the manufacturer's retail price and profit margin for the cars they have on their lot.

As the manufacturer's suggested retail price increases, the profit margin tends to __________. A) increase B) decrease C) stay the same D) oscillate

94) The statistics professor has kept attendance records and recorded the number of absent students per class. The recorded data is displayed in the following bar chart with the frequency of each number of absent students shown above the bars.

How many statistics classes had three or more students absent?

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A) 8 B) 13 C) 22 D) 43

95) The following table shows the percentage of e-mail that is sent each day of the business week according to an Intermedia survey. Day Monday Tuesday Wednesday Thursday Friday

Percentage 15% 23% 22% 21% 19%

Which of the following best displays this data? A) Horizontal bar chart B) Vertical bar chart C) Pie chart D) Histogram

96) The following frequency distribution displays the weekly sales of a certain brand of television at an electronics store. Number Sold

Frequency

01-05

06-10

11-15

16-20

21-25

How many weeks of data are included in this frequency distribution?

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A) 72 B) 47 C) 94 D) 22

97) The following frequency distribution displays the weekly sales of a certain brand of television at an electronics store. Number Sold

Frequency

01-05

06-10

11-15

16-20

21-25

How many weeks of data are included in this frequency distribution? A) 25 B) 50 C) 75 D) 100

98) The following frequency distribution shows the frequency of the asking price, in thousands of dollars, for current homes on the market in a particular city. Asking Price

Frequency

$350 up to $400

$400 up to $450

$450 up to $500

$500 up to $550

$550 up to $600

What percentage of houses has an asking price between $350,000 and under $400,000?

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A) 34.0% B) 45.5% C) 43.1% D) 28.6%

99) The following frequency distribution shows the frequency of the asking price, in thousands of dollars, for current homes on the market in a particular city. Asking Price

Frequency

$350 up to $400

$400 up to $450

$450 up to $500

$500 up to $550

$550 up to $600

What percentage of houses has an asking price between $350,000 and under $400,000? A) 16.4% B) 21.8% C) 30.9% D) 33.3%

100) The following frequency distribution shows the frequency of the asking price, in thousands of dollars, for current homes on the market in a particular city. Asking Price

Frequency

$350 up to $400

$400 up to $450

$450 up to $500

$500 up to $550

$550 up to $600

What percentage of houses has an asking price under $550,000?

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A) 50.5% B) 69.1% C) 89.1% D) 95.0%

101) A survey conducted by CBS news asked 1,026 respondents: "What would you do with an unexpected tax refund?" The responses are summarized in the following table. Category Pay off debts Put it in the bank Spend it I never get a refund Other

Percentage 47% 30% 11% 10% 2%

How many people will either put it in the bank or spend it? A) 421 B) 411 C) 113 D) 482

102) The manager at a water park constructed the following frequency distribution to summarize attendance in July and August. Attendance

Frequency

1,000 up to 1,250

1,250 up to 1,500

1,500 up to 1,750

1,750 up to 2,000

2,000 up to 2,250

2,250 up to 2,500

What of the following is the most likely attendance range?

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A) 2,000 up to 2,500 B) 1,000 up to 1,750 C) 1,250 up to 1,750 D) 1,750 up to 2,000

103) The Statistical Abstract of the United States provided the following frequency distribution of the number of people who live below the poverty level by region. Region

Number of People (in 1000s)

Northeast

6,166

Midwest

7,237

South

15,501

West

8,372

What is the percentage of people who live below the poverty level in the West or Midwest? A) 35.96% B) 41.87% C) 41.58% D) 31.96%

104)

Consider the following stem-and-leaf diagram.

Stem

Leaf

1 1 1 4 5

4 6 7

0 0 4 5 6 6 8 9

1 3 3 6

Which data value occurs most often? A) 1 B) 56 C) 31 D) 63

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105)

Consider the following stem-and-leaf diagram.

Stem

Leaf

1 1 1 4 5

4 6 7

0 0 4 5 6 6 8 9

1 3 3 6

Which of the following statements is correct? A) There is a total of 10 data values in this data set. B) The data value that occurs most often is 50. C) This largest data value is 59. D) The range 50-59 contains the most values.

106) Which of the following methods best describe the relationship between two categorical variables? A) A pie chart B) A bar chart C) A stacked column chart D) A column chart

107) The Chief Diversity Officer of an accounting firm wants to make sure gender equity is achieved among all levels of positions of the firm. The Officer has information on an employee’s gender, position level, and marital status as shown below: Employee 1 2 : 5000

Gender Male Female : Male

Position Level Top Bottom : Middle

Marital Status Widowed Married : Single

Which of the following methods is best to help determine the firm’s status on gender equity?

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A) A contingency table by Gender and Position Level. B) A stacked column chart by Gender and Marital Status. C) A frequency distribution of Position Level. D) A column chart by Gender.

108)

Which of the following is not a graphical technique to display numerical data? A) stem-and-leaf B) histogram C) scatterplot D) bar chart

109) A survey of 400 unemployed people was completed at a job fair. Each person was asked to categorize his or her job interests. The accompanying relative frequency distribution was constructed. Field

Relative Frequency

Management

0.15

Business and financial operations

0.20

Computer and mathematical

0.10

Life, physical, and social science

0.30

Community and social service

0.25

a. Outside of Connect, construct the corresponding frequency distribution. How many of these people designated that the computer and mathematical industry was their job interest? b. By hand or in Excel, construct a pie chart.

110) A hair stylist records the hair color of her 25 most recent appointments, classifying the color as blonde, brown, black, or red. Her data set is displayed next. Red

Version 1

Blonde

Black

Red

Blonde 47

Blonde

Black

Blonde

Red

Blonde

Brown

Black

Red

Blonde

Brown

Red

Black

Red

Brown

Black

Brown

Blonde

{MISSING IMAGE}Click here for the Excel Data File a. Outside of Connect, construct a frequency and relative frequency distribution of the hair color of the stylist's customers. What is the frequency and relative frequency of each hair color? b. By hand or in Excel, construct a pie chart. Which hair color is the most common among the stylist's customers? c. By hand or in Excel, create a bar chart to display the frequency distribution. How many customers had black hair?

111) The following table lists some of the busiest ports in the world based on the number of containers in Year 1. Location of Port

Number of Containers (in millions)

Shanghai

Singapore

Hong Kong

Rotterdam

Los Angeles

New York

By hand or in Excel, construct a pie chart to summarize the data. Approximately what percent of the total number of containers go through Hong Kong?

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112) Johnson and Johnson (JNJ) is a consumer staples company. Consumer staples are products people need and buy even during times of financial hardship. Do you think JNJ will have a volatile stock price? Does the accompanying graph accurately depict the volatility of JNJ stock? Explain.

113) Each month the Bureau of Labor Statistics reports the number of people (in thousands) employed in the United States by age. The accompanying frequency distribution shows the results for August. Age

Frequency

16 to 19

4,794

20 to 24

13,273

25 to 34

30,789

35 to 44

30,021

45 to 54

32,798

55 and over

28,660

a. Outside of Connect, construct a relative frequency distribution. What proportion of workers is between 20 and 24 years old? b. Outside of Connect, construct a cumulative relative frequency distribution. What proportion of workers is younger than 35 years old? c. By hand or in Excel, construct a relative frequency histogram.

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114) The following table displays the top 40 American League batting averages of the last season. Player

Batting Average Player

Batting Average

Miguel Cabrera

0.344

Yunel Escobar

0.290

Adrian Gonzalez

0.338

Vladimir Guerrero

0.290

Michael Young

0.338

Alberto Callaspo

0.288

Victor Martinez

0.33

Howard Kendrick

0.285

Jacoby Ellsbury

0.321

Jeff Francoeur

0.285

David Ortiz

0.309

Nick Markakis

0.284

Dustin Pedroia

0.307

Michael Cuddyer

0.284

Casey Kotchman

0.306

Adam Jones

0.280

Melky Cabrera

0.305

Elvis Andrus

0.279

Alex Gordon

0.303

Erick Aybar

0.279

Jose Bautista

0.302

Juan Pierre

0.279

Robinson Cano

0.302

Matt Joyce

0.277

Paul Konerko

0.300

Asdrubal Cabrera

0.273

Jhonny Peralta

0.299

Edwin Encarnacion

0.272

Josh Hamilton

0.298

Ichiro Suzuki

0.272

Derek Jeter

0.297

Peter Bourjos

0.271

Adrian Beltre

0.296

J.J. Hardy

0.269

Alex Avila

0.295

Alexei Ramirez

0.269

Eric Hosmer

0.293

Ben Zobrist

0.269

Billy Butler

0.291

Delmon Young

0.268

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{MISSING IMAGE}Click here for the Excel Data File a. Outside of Connect, construct frequency, relative frequency, and cumulative relative frequency distributions that group the data in classes of 0.265 up to 0.280, 0.280 up to 0.295, 0.295 up to 0.310, and so on. b. How many of these players have a batting average above 0.340? What proportion of these players has a batting average of at least 0.280 but below 0.295? What percentage of these players has a batting average below 0.325? c. Construct a relative frequency histogram. Is the distribution symmetric? If not, is it positively or negatively skewed? d. By hand or in Excel, construct an ogive. Using the ogive, approximately what proportion of the players in this group has a batting average above 0.290?

115) The following table shows analyst sentiment ratings for the 30 stocks listed in the Dow Jones Industrial Average. 7

{MISSING IMAGE}Click here for the Excel Data File a. Outside of Connect, construct a frequency distribution, relative frequency distribution, cumulative frequency distribution, and relative cumulative frequency distribution using classes of 2 up to 4, 4 up to 6, 6 up to 8, and 8 up to 10. b. Outside of Connect, construct a histogram that summarizes the data. What percentage of the stocks in the Dow Jones Industrial Average received a sentiment rating less than 8? c. What percentage of the stocks in the Dow Jones Industrial Average received a sentiment rating of 6 or more?

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116) The accompanying cumulative relative frequency distribution shows a summary of the scores from an Algebra II exam at a local high school. Twenty students took the exam. Class

Cumulative Relative Frequency

51 - 60

0.05

61 - 70

0.20

71 - 80

0.45

81 - 90

0.80

91 - 100

1.00

a. Outside of Connect, construct the relative frequency distribution. What proportion of students scored between 81 and 90? b. Outside of Connect, construct the frequency distribution. How many students scored between 71 and 80? c. By hand or in Excel, construct an ogive. What is the approximate percentage of students that scored less than 85?

117) The dividend yields of the stocks in an investor's portfolio are shown in the following cumulative relative frequency distribution. Dividend Yields

Cumulative Relative Frequency

0% up to 2%

0.55

2% up to 4%

0.85

4% up to 6%

0.90

6% up to 8%

0.96

8% up to 10%

1.00

Version 1

By hand or in Excel, construct an ogive. Approximately what percent of the stocks had a dividend yield of 3% or larger?

118)

Outside of Connect, construct a stem-and-leaf diagram with the following data set.

3.2

1.3

2.1

2.4

4.3

3.1

3.2

1.1

1.4

2.5

2.4

2.9

3.8

1.7

2.3

1.2

3.2

1.4

1.5

2.6

{MISSING IMAGE}Click here for the Excel Data File Is the distribution symmetric? Stem

Leaf

1 2 3 4 4 5 7

1 3 4 4 5 6 9

1 2 2 2 8

119)

Outside of Connect, construct a stem-and-leaf diagram for the following data set.

{MISSING IMAGE}Click here for the Excel Data File Is the distribution symmetric? Stem

Leaf

3 3 6 8

2 3 4 5 7 9

2 2 4 4 5 7 8 9 9

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120) The following table shows average wind speeds (in miles per hour) during 15 major fires in California. 44

{MISSING IMAGE}Click here for the Excel Data File Outside of Connect, construct a stem-and-leaf diagram. Were most of these storms fueled by 45+ mile-per-hour winds? Explain.

121) The following table shows the prices (in $1,000s) of the last 15 trucks sold at a Toyota dealership. 32

{MISSING IMAGE}Click here for the Excel Data File Outside of Connect, construct a stem-and-leaf diagram. Given this diagram, estimate the price that a potential buyer would likely pay for a Toyota truck.

122) The following data represent the ages of patients in the cardiac section of the local hospital. Outside of Connect, construct a stem-and-leaf diagram. Comment on whether or not the distribution is symmetric. 48

{MISSING IMAGE}Click here for the Excel Data File Outside of Connect, construct a stem-and-leaf diagram. Comment on whether or not the distribution is symmetric.

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123) A high school football league recorded the average points scored per game, as well as the winning percentage, for the 10 teams in the league. Points per Game 24 21 27 13 16 18 15 17 19 22

Winning Percentage 88% 66% 78% 28% 32% 52% 30% 44% 32% 50%

{MISSING IMAGE}Click here for the Excel Data File Outside of Connect, construct a scatterplot. Does scoring more points appear to be associated with a higher winning percentage?

124) A statistics instructor computes the grade and percentage of classes that each of his students attends. Outside of Connect, construct a scatterplot from the data displayed next. Does a relationship exist between attendance and grade? Attendance

100

Grade

{MISSING IMAGE}Click here for the Excel Data File

125) A grocery store manager wants to know how the annual demand for wild-caught versus farm-raised salmon changes over time. He has demand data for the two types of salmon from 2010 to 2020: Year 2010

Version 1

Wild-caught ('000 lbs.) 15.25

Farm-raised ('000 lbs.) 18.54

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

13.63 18.00 19.34 18.71 25.08 28.44 28.70 30.11 39.54 40.06

20.37 20.25 20.15 20.06 19.98 17.91 18.82 19.70 17.59 16.47

{MISSING IMAGE}Click here for the Excel Data File By hand or in Excel, construct a line chart to show the changes in demand over time for the two types of salmon. Which type of salmon has an upward trend in demand?

126) You want to examine if there is a performance difference between online and traditional students in your Business Statistics class. The data below shows information on a student’s grade and whether he/she is an online student: Student 1 2 3 : 50

Online Yes Yes No : Yes

Grade A B A : A

{MISSING IMAGE}Click here for the Excel Data File Outside of Connect, construct a contingency table that cross-classifies the data by Online and Grade. How many are online students? How many online students earned an A/B grade? How many traditional students earn an A/B grade? How many online students earned an E grade? How many traditional students earned an E grade? Outside of Connect, construct a stacked column chart. Does there appear to be a performance gap for online students?

Version 1

127) A frequency distribution for a categorical variable groups these data into classes called intervals and records the total number of observations in each class. ⊚ true ⊚ false

128) The relative frequency of a category is calculated by dividing the category's frequency by the total number of observations. ⊚ true ⊚ false

129) The percent frequency of a category equals the frequency of the category multiplied by 100%. ⊚ true ⊚ false

130) A pie chart is a segmented circle that portrays the categories and relative sizes of some numerical variable. ⊚ true ⊚ false

131) A bar chart depicts the frequency or relative frequency of each category of the categorical variable as a bar rising vertically from the horizontal axis. It is also acceptable for the bar to extend horizontally from the vertical axis. ⊚ true ⊚ false

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132)

A bar chart may be displayed horizontally. ⊚ true ⊚ false

133)

A contingency table shows the frequencies for two categorical variables. ⊚ ⊚

true false

134) A stacked column chart is an advanced version of a bar chart designed to visualize one numerical variable only. ⊚ ⊚

true false

135) To approximate the width of a class in the creation of a bar chart, we may use this formula: (Maximum value − Minimum value) / Number of classes ⊚ true ⊚ false

136) For a numerical variable, a relative frequency distribution identifies the proportion of observations that fall into each class. ⊚ true ⊚ false

137) For a numerical variable, a cumulative relative frequency distribution records the proportion (fraction) of values that fall below the upper limit of each class. Version 1

⊚ ⊚

true false

138) A histogram is a series of rectangles where the width and height of each rectangle represent the frequency (or relative frequency) and the width of the respective class. ⊚ true ⊚ false

139) A polygon connects a series of neighboring points where each point represents the midpoint of a particular class and its associated frequency or relative frequency. ⊚ true ⊚ false

140) An ogive is a graph that plots the cumulative frequency (or the cumulative relative frequency) of each class above the lower limit of the corresponding class. ⊚ true ⊚ false

141) A stem-and-leaf diagram is useful in that it gives an overall picture of where the observations of a numerical variable are centered and how the data are dispersed from the center. ⊚ true ⊚ false

142) A scatterplot is a graphical tool that helps determine whether or not two numerical variables are related. ⊚ true ⊚ false

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143) When constructing a scatterplot for two numerical variables, we usually refer to one variable as x and another one as y. Typically, we graph x on the vertical axis and y on the horizontal axis. ⊚ true ⊚ false

144) When constructing a pie chart, only a few, the most frequent, categories must be included in the pie. ⊚ true ⊚ false

145) When visualizing a numerical variable, it is always better to have up to 30 classes in a frequency distribution. ⊚ ⊚

true false

146) Scatterplot is a graphical tool that is useful to show the relationship between two numerical variables, but has no way to incorporate a categorical variable. ⊚ ⊚

Version 1

true false

Answer Key Test name: Chap 02_4e 1) [categories, observations] 2) frequency distribution 3) [exclusive, exhaustive] 4) frequency distribution 5) [symmetric, skewed] 6) histogram 7) curvilinear 8) positive 9) unemployed 10) [males, females] 11) D 12) B 13) B 14) C 15) B 16) C 17) D 18) C 19) B 20) B 21) C 22) A 23) B 24) C 25) C 26) A Version 1

27) B 28) A 29) C 30) A 31) A 32) B 33) D 34) B 35) C 36) C 37) A 38) A 39) C 40) B 41) D 42) D 43) C 44) D 45) B 46) A 47) C 48) C 49) D 50) B 51) C 52) B 53) C 54) B 55) C 56) D Version 1

57) D 58) C 59) B 60) C 61) C 62) C 63) B 64) B 65) A 66) C 67) D 68) D 69) B 70) D 71) D 72) B 73) D 74) C 75) C 76) D 77) B 78) D 79) B 80) C 81) D 82) B 83) A 84) B 85) B 86) B Version 1

87) C 88) D 89) D 90) B 91) C 92) B 93) A 94) D 95) C 96) B 97) B 98) A In this case, ({{[a(6)]:#,###}} + {{[a(7)]:#,###}} + {{[a(8)]:#,###}} + {{[a(9)]:#,###}}) / ({{[a(6)]:#,###}} + {{[a(7)]:#,###}} + {{[a(8)]:#,###}} + {{[a(9)]:#,###}} + {{[a(10)]:#,###}}) = {{[a(12)]:#,###}}/{{[a(11)]:#,###}} = {{[a(14)]:#,###.00}}%. 99) B In this case, 12 / (12 + 9 + 17 + 11 + 6) = 12/55 = 21.8% 100) C In this case, (12 + 9 + 17 + 11) / (12 + 9 + 17 + 11 + 6) = 49/55 = 89.1% 101) A In this case, 1026 × (0.30 + 0.11) = 420.66 102) B 103) B In this case, (7237 + 8372)/(sum of all regions) = 15609/37276 = 41.87% 104) C 105) D 106) C 107) A Version 1

108) D 109) a. See the table below for the frequency distribution. Forty people designated that the computer and mathematical field was their job interest. Field

Relative Frequency

Frequency

Management

0.15

Business and financial operations

0.20

Computer and mathematical

0.10

Life, physical, and social science

0.30

120

Community and social service

0.25

100

b. [MISSING IMAGE: A pie chart shows the survey of 400 unemployed people. Management: 15%. Business and financial operations: 20%. Computer and mathematical: 10%. Life, physical and social science: 30%. Community and social service: 25%., A pie chart shows the survey of 400 unemployed people. Management: 15%. Business and financial operations: 20%. Computer and mathematical: 10%. Life, physical and social science: 30%. Community and social service: 25%. ]

110) a. Hair Color Black Blonde Brown Red

Frequency 6 8 5 6

Relative Frequency 0.24 0.32 0.20 0.24

b. The most common hair color is Blonde. [MISSING IMAGE: A pie chart shows the record of hair color. Red: 24%. Blonde: 32%. Brown: 20%. Black: 24%., A pie chart shows the record of hair color. Red: 24%. Blonde: 32%. Brown: 20%. Black: 24%. ] c. Six customers have black hair. [MISSING IMAGE: A pie chart records the hair color of customers. Red: 6. Blonde: 8. Brown: 5. Black: 6., A pie chart records the hair color of customers. Red: 6. Blonde: 8. Brown: 5. Black: 6. ]

Version 1

111) Twenty-three percent of the containers traveled through Hong Kong. [MISSING IMAGE: A pie chart shows the number of containers in millions. Shanghai: 28%. Singapore: 27%. Hong Kong: 23%. Rotterdam: 10%. Los Angeles: 7%. New York: 5%., A pie chart shows the number of containers in millions. Shanghai: 28%. Singapore: 27%. Hong Kong: 23%. Rotterdam: 10%. Los Angeles: 7%. New York: 5%. ]

112) Consumer staples companies tend to have stable stocks. No, the graph does not accurately depict the volatility of JNJ stock. The vertical axis starts at 54 and should start at zero.

113) a. 0.095. b. 0.348. Age

Frequency

Relative Frequency

Cumulative Relative Frequency

16 to 19

4,794

0.034

20 to 24

13,273

0.095

0.129

25 to 34

30,789

0.219

0.348

35 to 44

30,021

0.214

0.562

45 to 54

32,798

0.234

0.796

55 and over

28,660

0.204

1.000

c. [MISSING IMAGE: A histogram plots relative frequency versus age of unemployed worker. The horizontal axis is labeled age of unemployed worker. It is marked from left to right as follows: 16 to 19, 20 to 24, 25 to 34, 35 to 44, 45 to 54, and 55 and over. The vertical axis is labeled relative frequency. It ranges from 0 to 0.25 in increments of 0.05. 16 to 19: 0.04. 20 to 24: 0.09. 25 to 34: 0.23. 35 to 44: 0.22. 45 to 54: 0.24. 55 and over: 0.19., A histogram plots relative frequency versus age of unemployed worker. The horizontal axis is labeled age of unemployed worker. It is marked from left to right as follows: 16 to 19, 20 to 24, 25 to 34, 35 to 44, 45 to 54, and 55 and over. The vertical axis is labeled relative frequency. It ranges from 0 to 0.25 in increments of 0.05. 16 to 19: 0.04. 20 to 24: 0.09. 25 to 34: 0.23. 35 to 44: 0.22. 45 to 54: 0.24. 55 and over: 0.19. ]

114) a. Batting Average

Frequency

Relative Frequency

Cumulative Relative Frequency

0.265 – 0.280

0.300

0.280 – 0.295

0.250

0.550

0.295 – 0.310

0.325

0.875

0.310 – 0.325

0.025

0.900

Version 1

0.325 – 0.340

0.075

0.975

0.340 – 0.355

0.025

1.000

b. One player has a batting average above 0.340; 25% of the players have a batting average of at least 0.280 but less than 0.295; 90% of the players have batting averages below 0.325. c. The distribution is not symmetric; it is positively skewed. [MISSING IMAGE: A histogram plots relative frequency versus batting average. The horizontal axis is labeled batting average. It is labeled from left to right as follows: .265 to .280, .280 to .295, .295 to .310, .310 to .325, .325 to 340, and .340 to .355. The vertical axis is labeled relative frequency. It ranges from 0 to 14 in increments of 2. .265 to .280: 12. .280 to .295: 10. .295 to .310: 13. .310 to .325: 1. .325 to .340: 3. .340 to .355: 0.8., A histogram plots relative frequency versus batting average. The horizontal axis is labeled batting average. It is labeled from left to right as follows: .265 to .280, .280 to .295, .295 to .310, .310 to .325, .325 to 340, and .340 to .355. The vertical axis is labeled relative frequency. It ranges from 0 to 14 in increments of 2. .265 to .280: 12. .280 to .295: 10. .295 to .310: 13. .310 to .325: 1. .325 to .340: 3. .340 to .355: 0.8. ] d. [MISSING IMAGE: A graph plots cumulative relative frequency versus batting average. The graph shows a curve that begins at the bottom left, goes up and to the right with increasing steepness until a point, and then continues to go up and to the right with decreasing steepness., A graph plots cumulative relative frequency versus batting average. The graph shows a curve that begins at the bottom left, goes up and to the right with increasing steepness until a point, and then continues to go up and to the right with decreasing steepness. ] e. Approximately 0.55 115) b. 23/30 ≈ 0.77 or about 77%. See cumulative relative frequency distribution in part a. c. 15/30 = 0.5 or 50%. See cumulative relative frequency distribution in part a.

116) a. 0.35 b. 5 Class

Cumulative Relative Frequency

Relative Frequency

Frequency

51 - 60

0.05

61 - 70

0.20

0.15

71 - 80

0.45

0.25

81 - 90

0.80

0.35

91 - 100

1.00

0.20

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c. Approximately 60% of students scored less than 85. [MISSING IMAGE: A graph plots relative frequency versus scores. The horizontal axis is labeled scores. It ranges from 0 to 120 in increments of 20. The vertical axis is labeled relative frequency. It ranges from 0 to 1 in increments of 0.1. The graph shows a curve that begins at (50, 0), passes through (60, 0.05), (70, 0.2), (80, 0.5), (90, 0.8), and ends at (100, 1)., A graph plots relative frequency versus scores. The horizontal axis is labeled scores. It ranges from 0 to 120 in increments of 20. The vertical axis is labeled relative frequency. It ranges from 0 to 1 in increments of 0.1. The graph shows a curve that begins at (50, 0), passes through (60, 0.05), (70, 0.2), (80, 0.5), (90, 0.8), and ends at (100, 1). ]

117)

[MISSING IMAGE: A graph plots relative frequency versus dividend yield. The horizontal axis is labeled dividend yield. It ranges from 0 to 0.1 in increments of 0.02. The vertical axis is labeled relative frequency. It ranges from 0 to 1 in increments of 0.1. The graph shows a curve that begins at (0, 0), passes through (0.02, 0.55), (0.04, 0.85), (0.06, 0.9), (0.08, 0.95), and ends at (0.1, 1)., A graph plots relative frequency versus dividend yield. The horizontal axis is labeled dividend yield. It ranges from 0 to 0.1 in increments of 0.02. The vertical axis is labeled relative frequency. It ranges from 0 to 1 in increments of 0.1. The graph shows a curve that begins at (0, 0), passes through (0.02, 0.55), (0.04, 0.85), (0.06, 0.9), (0.08, 0.95), and ends at (0.1, 1). ]

Approximately 30% of the stocks had a dividend yield of 3% or greater. 118) No, the distribution is positively skewed. 119) No, the distribution is negatively skewed. 120) No, most of the time the average wind speed was below 45 mph; only 4 out of the 15 storms had average wind speeds exceeding 45 mph. Stem

Leaf

2 4 7 9

2 2 3 8 9

1 4 7

1 5 8

121) A potential buyer of a Toyota truck is likely to pay in the low to mid $20s (in thousands). Stem

Leaf

7 8 9

1 2 2 3 3 4 5 6

1 2 3 5

122) Stem

Leaf

Version 1

0 1 2 3

0 0 2 7 8 9

0 2 7 8

The distribution is not symmetric; it is slightly negatively skewed due to patient who is 48 years old. 40s

50s

60s

60, 61, 62, 63

70s

70, 70, 72, 77, 78, 79

80s

80, 82, 87, 88

90s

123) Teams with higher points per game tend to have a higher winning percentage. [MISSING IMAGE: A scatter plot shows winning percentage versus average points per game. The horizontal axis is labeled average points per game. It ranges from 0 to 30 in increments of 5. The vertical axis is labeled winning percentage. It ranges from 0% to 100% in increments of 10%. The relationship between winning percentage and average points per game is positive and linear., A scatter plot shows winning percentage versus average points per game. The horizontal axis is labeled average points per game. It ranges from 0 to 30 in increments of 5. The vertical axis is labeled winning percentage. It ranges from 0% to 100% in increments of 10%. The relationship between winning percentage and average points per game is positive and linear. ] 124) [MISSING IMAGE: A scatter plot shows grade out of 100 versus attendance in percentage of classes attended. The horizontal axis is labeled attendance in percentage of classes attended. It ranges from 0 to 100 in increments of 20. The vertical axis is labeled grade out of 100. It ranges from 0 to 100 in increments of 20. The relationship between grade out of 100 and attendance is positive and linear., A scatter plot shows grade out of 100 versus attendance in percentage of classes attended. The horizontal axis is labeled attendance in percentage of classes attended. It ranges from 0 to 100 in increments of 20. The vertical axis is labeled grade out of 100. It ranges from 0 to 100 in increments of 20. The relationship between grade out of 100 and attendance is positive and linear. ]

Yes, there appears to be a positive relationship. 125) The wild-caught salmon has an upward trend in demand. 126)

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Grade A B C D E Grand Total

Online-No 11 8 4 4 1 28

Online-Yes 7 4 5 3 3 22

Grand Total 18 12 9 7 4 50

There are 22 online students; 11 online students earn an A/B grade; 19 traditional students earn an A/B grade; 3 online student earned an E grade; 1 traditional students earned an E grade. [MISSING IMAGE: A stacked bar graph shows the count of students attending online classes. Grade A. Online, yes: 11. Online, no: 7. Grade B. Online, yes: 7. Online, no: 5. Grade C. Online, yes: 4. Online, no: 5. Grade D. Online, yes: 4. Online, no: 3. Grade E. Online, yes: 1. Online, no: 3., A stacked bar graph shows the count of students attending online classes. Grade A. Online, yes: 11. Online, no: 7. Grade B. Online, yes: 7. Online, no: 5. Grade C. Online, yes: 4. Online, no: 5. Grade D. Online, yes: 4. Online, no: 3. Grade E. Online, yes: 1. Online, no: 3. ]

[MISSING IMAGE: A stacked bar graph shows the count of students attending online classes. Grade A. Online, yes: 2. Online, no: 3. Grade B. Online, yes: 2. Online, no: 1. Grade C. Online, yes: 2. Online, no: 1. Grade D. Online, yes: 1., A stacked bar graph shows the count of students attending online classes. Grade A. Online, yes: 2. Online, no: 3. Grade B. Online, yes: 2. Online, no: 1. Grade C. Online, yes: 2. Online, no: 1. Grade D. Online, yes: 1. ] There appears to be a performance gap for online students. There are fewer A/Bs and more Es for online students as opposed to traditional students.

127) FALSE 128) TRUE 129) FALSE 130) FALSE 131) TRUE 132) TRUE 133) TRUE 134) FALSE 135) FALSE 136) TRUE Version 1

137) TRUE 138) FALSE 139) TRUE 140) FALSE 141) TRUE 142) TRUE 143) FALSE 144) FALSE 145) FALSE 146) FALSE

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CHAPTER 03 – 4e 1)

Which are characteristic(s) of the coefficient of variation? A) It adjusts for differences in the magnitude of means. B) It has the same units of measurement as the observations. C) It allows for direct comparisons across different data sets. D) It is a measure of central location.

The median is defined as the __________. A) middle point in a data set. B) geometric average of a data set. C) arithmetic average of a data set. D) most common value of a data set.

The mode is defined as the __________. A) middle point in a data set. B) geometric average of a data set. C) arithmetic average of a data set. D) most frequent value in a data set.

Which of the following is the most influenced by outliers? A) Mode B) Median C) 75th percentile D) Arithmetic mean

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How do we find the median if the number of observations in a data set is odd? A) By averaging the first and the third quartile B) By taking the middle value in the sorted data set C) By averaging the minimum and maximum values D) By taking the middle value in the sorted data set after eliminating outliers

Is it possible for a data set to have no mode? A) Yes, if two observations occur twice. B) No, unless there is an odd number of observations. C) No, if the data set is nonempty, there is always a mode. D) Yes, if there are no observations that occur more than once.

Is it possible for a data set to have more than one mode?

A) No, there must always be a single mode, or else there is no mode. B) Yes, if two or more values in a data set occur the same number of times. C) Yes, if there are at least two different values in a data set, there is always more than one mode. D) Yes, if two or more values in a data set occur with the most frequency and the frequency is greater than one.

8) The Boom company has recently decided to raise the salaries of all employees by 10%. Which of the following is (are) expected to be affected by this raise? A) Mean and mode only B) Mean and median only C) Mode and median only D) Mean, median, and mode

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9) The owner of a company has recently decided to raise the salary of one employee, who was already making the highest salary, by 20%. Which of the following is(are) expected to be affected by this raise? A) Mean only B) Median only C) Mean and median only D) Mean, median, and mode

10) The manager of a nationwide department store wants to compare average store sales by region to identify which region has the lowest store sales. Which of the following numerical descriptive measures is best for this purpose? A) The arithmetic mean B) The subsetted mean C) The geometric mean D) The weighted mean

11) The table below gives the deviations of a portfolio’s annual total returns from its benchmark’s annual returns, for a six-year period ending in Year 6. Portfolio’s deviations from Benchmark Return, Year 1 – Year 6 Year 1 −7.62% Year 2 2.37% Year 3 −9.11% Year 4 0.55% Year 5 5.48% Year 6 −1.67%

{MISSING IMAGE}Click here for the Excel Data File The arithmetic mean return and median return are the closest to __________.

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A) mean = −2.00% and median = −4.28%. B) mean = −2.00% and median = −1.67%. C) mean = −1.67% and median = −0.56%. D) mean = −1.67% and median = 0.56%.

12)

Which of the following statements is most accurate when defining percentiles? A) The pth percentile divides a data set into equal parts. B) Approximately p% of the observations are greater than the pth percentile. C) Approximately (100 − p)% of the observations are less than the pth percentile. D) Approximately (100 − p)% of the observations are greater than the pth percentile.

13)

Which five values are graphed on a box plot? A) Min, Quintile 1, Mean, Quintile 3, Max B) Min, Quartile 1, Mean, Quartile 3, Max C) Min, Quintile 1, Median, Quintile 3, Max D) Min, Quartile 1, Median, Quartile 3, Max

14)

What is the interquartile range? A) Q3 – Q1 B) Max – Min C) Mean – Median D) All values between Q1 and Q3

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15) Consider the following data: 1, 2, 4, 5, 10, 12, 18. The 30th percentile is the closest to __________. {MISSING IMAGE}Click here for the Excel Data File A) 2.0 B) 2.4 C) 2.8 D) 5.0

16) Calculate the interquartile range from the following data: 1, 2, 4, 5, 10, 12, 18. {MISSING IMAGE}Click here for the Excel Data File A) 5 B) 6 C) 10 D) 17

17) As of September 30, the earnings per share (EPS) of five firms in the beverages industry are as follows: 1.13

2.41

1.52

1.40

0.41

{MISSING IMAGE}Click here for the Excel Data File The 25th percentile and the 75th percentile of the EPS are the closest to __________. A) 0.77 and 1.97 B) 0.91 and 1.77 C) 1.77 and 0.91 D) 1.97 and 0.77

18)

In what way(s) is(are) the concept of geometric mean useful?

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A) In evaluating investment returns B) In calculating average growth rates C) In assessing the dispersion of the data D) Both in evaluating investment returns and in calculating average growth rates

19)

What is(are) characteristic(s) of the geometric mean?

A) It is always greater than the arithmetic mean. B) It is the mathematical equivalent to the median. C) It is always less than or equal to the arithmetic mean. D) Both it is the mathematical equivalent to the median and it is always less than or equal to the arithmetic mean.

20) Sales for Adidas grew at a rate of 0.5196 in Year 1, 0.0213 in Year 2, 0.0485 in Year 3, and −0.0387 in Year 4. The average growth rate for Adidas during these four years is the closest to __________. A) 3.49% B) 11.83% C) 13.77% D) 14.02%

21) Total revenue for Apple Computers (in millions) was $42,905 in Year 1, $65,225 in Year 2, and $108,249 in Year 3. The average growth rate of revenue during these three years is the closest to __________. A) 36.13% B) 39.33% C) 58.84% D) 58.99%

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22)

The following data represent monthly returns (in percent):

−7.24

1.64

3.48

−2.49

9.30

{MISSING IMAGE}Click here for the Excel Data File The geometric mean return is the closest to __________. A) −0.43% B) 0.78% C) 0.94% D) 4.79%

23) A portfolio manager generates a 5% return in Year 1, a 12% return in Year 2, a negative 6% return in Year 3, and a return of 2% (nonannualized) in the first quarter in Year 4. The annualized return for the entire period is the closest to __________. A) 3.05% B) 3.25% C) 3.50% D) 3.77%

24)

The range is defined as __________. A) Q3 − Q1 B) Max− Q1 C) Max− Min D) Max− Median

25)

What is(are) the most widely used measure(s) of dispersion?

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A) Range B) Interquartile range C) Variance and standard deviation D) Covariance and the correlation coefficient

26)

What is the relationship between the variance and the standard deviation? A) The standard deviation is the absolute value of the variance. B) The variance is the absolute value of the standard deviation. C) The variance is the positive square root of the standard deviation. D) The standard deviation is the positive square root of the variance.

27)

Which of the following statements about variance is the most accurate? A) Variance is the square root of the standard deviation. B) Variance can be both, positive or negative. C) Variance is denominated in the same units as the original data. D) Variance is the average of the squared deviations from the mean.

28) Which of the following statements about the mean absolute deviation (MAD) is the most accurate? A) It is the square root of the standard deviation. B) It can be a positive number or a negative number. C) It is measured in the same units as the original data. D) It is the arithmetic mean of the squared deviations from the mean.

29) An analyst gathered the following information about the net profit margins of companies in two industries: Version 1

Net Profit Margin Mean Standard deviation Range

Industry A 15.0% 2.0% 10.0%

Industry B 5.0% 0.8% 15%

Compared with the other industry, the relative dispersion of net profit margins is smaller for Industry __________. A) B, because it has a smaller mean deviation. B) B, because it has a smaller range of variation. C) A, because it has a smaller standard deviation. D) A, because it has a smaller coefficient of variation.

30)

Consider a population with data values of 12

{MISSING IMAGE}Click here for the Excel Data File The population mean is __________. A) 12 B) 14 C) 18 D) 22

31)

Consider a population with data values of 12

{MISSING IMAGE}Click here for the Excel Data File The median is __________. A) 12 B) 14 C) 18 D) 22

32)

Consider a population with data values of

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{MISSING IMAGE}Click here for the Excel Data File The mode is __________. A) 12 B) 14 C) 18 D) 22

33)

Consider a population with data values of 12

{MISSING IMAGE}Click here for the Excel Data File The population variance is the closest to __________. A) 8.00 B) 8.64 C) 64.00 D) 74.67

34)

Consider a population with data values of 12

{MISSING IMAGE}Click here for the Excel Data File The population standard deviation is the closest to __________. A) 8.00 B) 8.64 C) 64.00 D) 74.67

35) The sample data below shows the number of hours spent by five students over the weekend to prepare for Monday’s Business Statistics exam. 3

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{MISSING IMAGE}Click here for the Excel Data File The mean and the median of the numbers of hours spent by the five students are __________. A) 2 hours and 3 hours, respectively B) 3 hours and 5 hours, respectively C) 5 hours and 2 hours, respectively D) 5 hours and 3 hours, respectively

36) The sample data below shows the number of hours spent by five students over the weekend to prepare for Monday’s Business Statistics exam. 3

{MISSING IMAGE}Click here for the Excel Data File The sample standard deviation of the number of hours spent by the five students is the closest to __________. A) 3.6 hours B) 4.1 hours C) 13.2 hours D) 16.5 hours

37) The sample data below shows the number of hours spent by five students over the weekend to prepare for Monday’s Business Statistics exam. 3

{MISSING IMAGE}Click here for the Excel Data File The 75th percentile of the data is the closest to __________. A) 3 hours B) 4.5 hours C) 8.5 hours D) 10 hours

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38) The sample data below shows the number of hours spent by five students over the weekend to prepare for Monday’s Business Statistics exam. 3

{MISSING IMAGE}Click here for the Excel Data File The interquartile range of the data is the closest to __________. A) 4 hours B) 6 hours C) 10 hours D) 12 hours

39)

A bowler’s scores for a sample of seven games were

172

168

188

190

172

182

174

{MISSING IMAGE}Click here for the Excel Data File The bowler’s average score is __________. A) 172 B) 174 C) 178 D) 190

40)

A bowler’s scores for a sample of six games were

172

168

188

190

172

182

174

{MISSING IMAGE}Click here for the Excel Data File The bowler’s median score is __________. A) 172 B) 174 C) 178 D) 190

41)

A bowler’s scores for a sample of six games were

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172

168

188

190

172

182

174

The bowler’s modal score is __________. A) 172 B) 174 C) 178 D) 190

42)

A bowler’s scores for a sample of six games were

172

168

188

190

172

182

174

{MISSING IMAGE}Click here for the Excel Data File The sample standard deviation is the closest to __________. A) 8.00 B) 8.64 C) 64.00 D) 74.67

43) Professors at a local university earn an average salary of $80,000 with a standard deviation of $6,000. With the beginning of the next academic year, all professors will get a 2% raise. What will be the average and the standard deviation of their new salaries? A) $80,000 and $6,120. B) $81,600 and $6,000. C) $81,600 and $6,120. D) $82,000 and $6,200.

44) The annual returns (in percent) for a sample of stocks in the technology industry over the past year are as follows: 4.2

−9.4

2.8

−16.0

−6.6

{MISSING IMAGE}Click here for the Excel Data File The average return is the closest to __________.

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A) −6.6 B) −5 C) 0 D) 2.8

45) The annual returns (in percent) for a sample of stocks in the technology industry over the past year are as follows: 4.2

−9.4

2.8

−16.0

−6.6

{MISSING IMAGE}Click here for the Excel Data File The median return is the closest to __________. A) −6.6 B) −5 C) 0 D) 2.8

46) The annual returns (in percent) for a sample of stocks in the technology industry over the past year are as follows: 4.2

−9.4

2.8

−16.0

−6.6

{MISSING IMAGE}Click here for the Excel Data File The sample standard deviation is the closest to __________. A) 7.59 B) 8.49 C) 57.61 D) 72.01

47)

The coefficient of variation is best described as __________.

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A) a relative measure of dispersion B) an absolute measure of dispersion C) a relative measure of central location D) an absolute measure of central location

48) The mean return on equity (ROE) for a group of firms in an industry is 15% with a variance of 9%. The coefficient of variation of the industry's ROE is __________. A) 0.2 B) 0.6 C) 1.7 D) 5.0

49) The advantage of using mean absolute deviation rather than variance as a measure of dispersion is that mean absolute deviation __________. A) is less sensitive to extreme deviations B) requires fewer observations to be a valid measure C) is a relative measure rather than an absolute measure of risk D) considers only unfavorable (negative) deviations from the mean

50) A college professor collected data on the number of hours spent by his 100 students over the weekend to prepare for Monday’s Business Statistics exam. He processed the data by Excel and the following incomplete output is available. Mean

Sample Variance

7.23

Skewness

1.08

The median is most likely to be __________.

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A) about 10 hours B) Cannot tell from the information provided C) greater than 10 hours D) less than 10 hours

51) A college professor collected data on the number of hours spent by his 100 students over the weekend to prepare for Monday’s Business Statistics exam. He processed the data by Excel and the following incomplete output is available. Mean

Sample Variance

7.84

Skewness

1.17

The median is most likely to be __________. A) about 7 hours B) less than 7 hours C) greater than 7 hours D) Cannot tell from the information provided

52) A college professor collected data on the number of hours spent by his 100 students over the weekend to prepare for Monday’s Business Statistics exam. He processed the data by Excel and the following incomplete output is available. Mean

Sample Variance

7.84

Skewness

1.17

The coefficient of variation in the data is __________. A) 40% B) 90% C) 111% D) 243%

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53) The price to earnings ratio, also called the P/E ratio of a stock, is a measure of the price of a share relative to the annual net income per share earned by the firm. Suppose the P/Es for a firm’s common stock during the past four quarters are 10, 12, 15, and 11, respectively. The standard deviation of the P/E ratio over the four quarters is __________. A) 1.87 B) 2.16 C) 3.50 D) 4.67

54) As of September 30, the earnings per share (EPS) of five firms in the biotechnology industry are 1.51

2.34

2.13

1.70

0.18

{MISSING IMAGE}Click here for the Excel Data File The sample mean and the sample standard deviation are the closest to __________. A) 1.73 and 0.74 B) 1.73 and 0.85 C) 1.57 and 0.85 D) 1.57 and 0.74

55) As of September 30, the earnings per share (EPS) of five firms in the biotechnology industry are 1.53

2.29

2.07

1.69

0.07

{MISSING IMAGE}Click here for the Excel Data File The sample mean and the sample standard deviation are the closest to __________. A) 1.53 and 0.76 B) 1.53 and 0.87 C) 1.69 and 0.76 D) 1.69 and 0.87

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56)

A portfolio’s annual total returns (in percent) for a five-year period are:

−6.92

1.58

2.37

−2.53

9.54

{MISSING IMAGE}Click here for the Excel Data File The median and the standard deviation for this sample are the closest to __________. A) 2.46 and 6.13 B) 1.58 and 5.48 C) 1.58 and 6.13 D) 0.71 and 5.48

57)

A portfolio’s annual total returns (in percent) for a five-year period are:

−7.14

1.62

2.50

−2.50

9.27

{MISSING IMAGE}Click here for the Excel Data File The median and the standard deviation for this sample are the closest to __________. A) 0.75 and 5.46 B) 1.62 and 5.46 C) 1.62 and 6.11 D) 2.50 and 6.11

58)

The Sharpe ratio measures __________. A) the extra reward per unit of risk B) the extra risk per unit of reward C) the increase in mean per unit of risk D) the extra variance per unit of reward

59) The table below gives statistics relating to a hypothetical 10-year record of two portfolios. Assume other statistics relating to these portfolios are the same and the risk-free rate is 3.5%.

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Arithmetic Mean Return Portfolio A Portfolio B

15.3% 10.2%

Standard Deviation of Return 22.8% 15.9%

Using the coefficient of variation and the Sharpe ratio, the fund that is preferred in terms of relative risk and return per unit of risk is __________. A) Portfolio A because it has a higher coefficient of variation and a lower Sharpe ratio B) Portfolio A because it has a lower coefficient of variation and a higher Sharpe ratio C) Portfolio B because it has a higher coefficient of variation and a lower Sharpe ratio D) Portfolio B because it has a lower coefficient of variation and a higher Sharper ratio

60) The following table summarizes selected statistics for two portfolios for a 10-year period. Assume that the risk-free rate is 4% over this period. Arithmetic Mean Fund A Fund B

11.64% 12.58%

Standard Deviation of Return 12.65% 18.44%

As measured by the Sharpe ratio, the fund with the superior risk-adjusted performance during this period is __________. A) Fund A because it has a lower positive Sharpe ratio than Fund B B) Fund B because it has a lower positive Sharpe ratio than Fund A C) Fund A because it has a higher positive Sharpe ratio than Fund B D) Fund B because it has a higher positive Sharpe ratio than Fund A

61) For k> 1, Chebyshev’s theorem is useful in estimating the proportion of observations that fall within __________. A) k standard deviations from the mean B) k2 standard deviations from the mean C) (1 − 1/k) standard deviations from the mean D) (1− 1/k2) standard deviations from the mean

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62)

Chebyshev’s theorem is applicable when the data are __________. A) any shape B) skewed to the left C) skewed to the right D) approximately symmetric and bell-shaped

63)

Which of the following capabilities does Analysis of Relative Location provide?

A) They make statements regarding the shape of the data. B) They make statements regarding the central location of the data. C) They make statements regarding the dispersion of the data around the median. D) They make statements regarding the percentage of data values that fall within some number of standard deviations from the mean.

64)

What is the difference between Chebyshev’s Theorem and the Empirical Rule?

A) The empirical rule applies to all data sets, whether their distributions are symmetric and bell-shaped or not. B) Chebyshev’s theorem applies to all data sets except those that have approximately a symmetric and bell-shaped distribution. C) The empirical rule applies to all data sets, whereas Chebyshev’s theorem is appropriate when the data have approximately a symmetric and bell-shaped distribution. D) Chebyshev’s theorem applies to all data sets, whereas the empirical rule is only appropriate when the data have approximately a symmetric and bell-shaped distribution.

65)

In its standard form, Chebyshev’s theorem provides a lower bound on __________.

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A) the number of observations lying within a certain interval B) the number of observations lying outside a certain interval C) the proportion (or percentage) of observations lying within a certain interval D) the proportion (or percentage) of observations lying outside a certain interval

66)

The empirical rule can be used to estimate some proportions __________. A) when data has any shape. B) when it is skewed to the left. C) when it is skewed to the right. D) when it is approximately symmetric and bell-shaped.

67) When applicable, the empirical rule provides the approximate percentage of observations that fall within A) 1, 2, or 3 standard deviations. B) 2, 3, or 4 standard deviations. C) k standard deviations for every k > 1. D) 1 − 1/k2 standard deviations for every k > 1.

68)

Which of the following is true when using the empirical rule for a set of sample data? A) Almost all observations are in the interval B) Approximately 68% of all observations are in the interval C) Approximately 95% of all observations are in the interval D) Approximately 68% of all observations are in the interval

69)

When using the empirical rule, which of the following assumptions is made?

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A) The data only comes from a sample. B) The data only comes from a population. C) The data are exactly symmetric and bell-shaped. D) The data are approximately symmetric and bell-shaped.

70) In a marketing class of 60 students, the mean and the standard deviation of scores was 70 and 5, respectively. Use Chebyshev's theorem to determine the number of students who scored less than 60 or more than 80. A) At least 45 B) At most 15 C) At most 45 D) At least 15

71) In an accounting class of 200 students, the mean and standard deviation of scores was 70 and 5, respectively. Use the empirical rule to determine the number of students who scored less than 65 or more than 75. A) It is about 32. B) It is about 64. C) It is about 68. D) It is about 136.

72) Professors at a local university earn an average salary of $80,000 with a standard deviation of $6,000. Using Chebyshev’s inequality, the percentage of salaries falling between $68,000 and $92,000 is at least __________.

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A) 68% B) 65% C) 75% D) 95%

73) Professors at a local university earn an average salary of $80,000 with a standard deviation of $6,000. The salary distribution cannot be regarded as bell-shaped. What can be said about the percentage of salaries that are less than $68,000 or more than or more than $92,000? A) It is at least 75%. B) It is at most 75%. C) It is at least 25%. D) It is at most 25%.

74) Professors at a local university earn an average salary of $80,000 with a standard deviation of $6,000. The salary distribution is approximately bell-shaped. What can be said about the percentage of salaries that are less than $68,000 or more than $92,000? A) It is about 5%. B) It is about 32%. C) It is about 68%. D) It is about 95%.

75) Professors at a local university earn an average salary of $80,000 with a standard deviation of $6,000. The salary distribution is approximately bell-shaped. What can be said about the percentage of salaries that are at least $74,000? A) It is about 68%. B) It is about 84%. C) It is about 95%. D) It is about 97.5%.

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76) Professors at a local university earn an average salary of $80,000 with a standard deviation of $6,000. The salary distribution is approximately bell-shaped. Because of budget limitations, it has been decided that only those whose salaries are approximately in the bottom 2.5% would get a raise. What is the maximum current salary that qualifies for the raise? A) It is about $58,000. B) It is about $62,000. C) It is about $68,000. D) It is about $74,000.

77) Amounts spent by a sample of 200 customers at a retail store are summarized in the following relative frequency distribution. Amount Spent (in $)

Frequency

0 up to 10

10 up to 20

20 up to 30

30 up to 40

{MISSING IMAGE}Click here for the Excel Data File The mean amount spent by customers is the closest to __________. A) $17.50 B) $20.00 C) $22.50 D) $50.00

78) Amounts spent by a sample of 200 customers at a retail store are summarized in the following relative frequency distribution. Amount Spent (in $)

Frequency

0 up to 10

10 up to 20

20 up to 30

30 up to 40

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{MISSING IMAGE}Click here for the Excel Data File The median amount will fall in the following class interval __________. A) 0 up to 10 B) 10 up to 20 C) 20 up to 30 D) 30 up to 40

79) Amounts spent by a sample of 50 customers at a retail store are summarized in the following relative frequency distribution. Amount Spent (in $)

Relative Frequency

0 up to 10

0.20

10 up to 20

0.40

20 up to 30

0.30

30 up to 40

0.10

{MISSING IMAGE}Click here for the Excel Data File The mean amount spent by customers is the closest to __________. A) $0.36 B) $18.00 C) $20.00 D) $25.00

80) Amounts spent by a sample of 50 customers at a retail store are summarized in the following relative frequency distribution. Amount Spent (in $)

Relative Frequency

0 up to 10

0.20

10 up to 20

0.40

20 up to 30

0.30

30 up to 40

0.10

{MISSING IMAGE}Click here for the Excel Data File The median amount will fall in the following class interval __________.

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A) 0 up to 10 B) 10 up to 20 C) 20 up to 30 D) 30 up to 40

81) The following frequency distribution represents the number of hours studied per week by a sample of 60 students. Amount Spent (in $)

Midpoint

Frequency

2.5 less than 5.5

5.5 less than 8.5

8.5 less than 11.5

{MISSING IMAGE}Click here for the Excel Data File The mean number of hours studied is __________. A) 7 B) 8 C) 22.8 D) 480

82) You buy 50 stocks of Company A, 30 of Company B, and 20 of Company C. The annual returns of these companies are 8%, 12%, and 10% respectively. The average return for one year is the closest to __________. A) 9.1% B) 9.6% C) 10.0% D) 10.5%

83) The mean grade of the 30 students in Section 1 is 80. The mean grade of the 40 students in Section 2 is 85. The mean grade of the 30 students in Section 3 is 80. What is the mean grade of all students from the three sections combined?

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A) 80.00 B) 81.67 C) 82.00 D) 85.00

84) An investor bought common stock of Blackstone Company on several occasions at the following prices. The following frequency distribution represents the number of shares and its price per share. Number of Shares 100

Price per Share $ 31

200

$ 29

400

$ 38

{MISSING IMAGE}Click here for the Excel Data File The average price per share at which the investor bought these shares of common stock was the closest to __________. A) $35.67 B) $34.43 C) $33.00 D) $36.00

85) An investor bought common stock of Blackstone Company on several occasions at the following prices. The following frequency distribution represents the number of shares and its price per share. Number of Shares 100 200 400

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Price per Share $ 34 $ 30 $ 28

{MISSING IMAGE}Click here for the Excel Data File The average price per share at which the investor bought these shares of common stock was the closest to __________. A) $28.00 B) $29.43 C) $30.67 D) $31.00

86) Automobiles traveling on a road with a posted speed limit of 65 miles per hour are checked for speed by a state police radar system. The following is a frequency distribution of speeds. Speed (miles per hour)

Frequency

45 up to 55

55 up to 65

325

65 up to 75

275

75 up to 85

{MISSING IMAGE}Click here for the Excel Data File The mean speed of the automobiles traveling on this road is the closest to __________. A) 55.0 B) 57.8 C) 64.1 D) 65.0

87)

What does the covariance measure? A) The direction of a linear relationship between two variables. B) The direction of a curvilinear relationship between two variables. C) The direction of a linear relationship between two or more variables. D) The direction of a curvilinear relationship between two or more variables.

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88) When interpreting the covariance between variables x and y, which of the following statements is the most accurate? A) A negative value of covariance that, on average, if x is below its mean, then y tends to be below its mean. B) A positive value of covariance indicates that, on average, if x is above its mean, then y tends to be above its mean. C) A positive value of covariance indicates that, on average, if x is above its mean, then y tends to be below its mean. D) A negative value of covariance indicates that, on average, if x is above its mean, then y tends to be above its mean.

89)

What is an advantage of the correlation coefficient over the covariance?

A) It falls between 0 and 1. B) It falls between −1 and 1. C) It is a unit-free measure, therefore making it easier to interpret. D) Both answers—that it falls between −1 and 1 and that it is a unit-free measure—are correct.

90) Which of the following relationships cannot be concluded from examining the correlation coefficient? A) No relationship B) A positive relationship C) A curvilinear relationship D) A negative relationship

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91) The covariance between the returns of A and B is −0.175. The standard deviation of the rates of return is 0.33 for stock A and 0.74 for stock B. The correlation of the rates of return between A and B is the closest to ______. A) −0.72 B) −2.07 C) 0.72 D) 2.07

92) The covariance between the returns of A and B is −0.112. The standard deviation of the rates of return is 0.26 for stock A and 0.81 for stock B. The correlation of the rates of return between A and B is the closest to __________. A) −1.88 B) −0.53 C) 0.53 D) 1.88

93) The covariance between the returns on two assets is negative. This occurs when __________. A) the variance of one asset has a negative linear relationship with the variance of the other asset B) the standard deviation of one asset has a positive linear relationship with the standard deviation of the other asset C) on average, the return on one asset is below its expected value and the return on the other asset is above its expected value D) on average, the return on one asset is below its expected value and the return on the other asset is below its expected value

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94) The covariance between the returns of stock A and stock B is −125. The standard deviation of the rates of return is 20 for stock A and 10 for stock B. The correlation coefficient of the rates of return between A and B is closest to __________. A) −0.625 B) −0.375 C) 0.375 D) 0.625

95)

The daily high temperature in Philadelphia over an eight-day period is shown below. 69

{MISSING IMAGE}Click here for the Excel Data File The median for this data set is __________. A) 69 B) 70 C) 73.5 D) 77

96)

The following data represents the actual talk time, in hours, for the iPhone for 11 users.

22.0 10.4 11.1 26.9 13.3 30.0 10.5 26.8 16.4 15.1 19.0

{MISSING IMAGE}Click here for the Excel Data File The 60thpercentile of this data set is ________. A) 16.4 B) 19.6 C) 15.1 D) 18.3

97)

The following data represents the actual talk time, in hours, for the iPhone for 11 users.

25.1

Version 1

19.1

21.6

9.5

20.3

18.0

24.6

25.2

21.9

29.7

28.5 31

{MISSING IMAGE}Click here for the Excel Data File The 60th percentile of this data set is __________. A) 21.6 B) 21.9 C) 23.3 D) 24.7

98) The following data represent the wait time, in minutes, for customers calling Dell technical support. 14

{MISSING IMAGE}Click here for the Excel Data File The interquartile range is __________.

A) 13.5 minutes B) 17 minutes C) 19 minutes D) 30.5 minutes

99) The following data represent the wait time, in minutes, for customers calling Dell technical support. 14

{MISSING IMAGE}Click here for the Excel Data File The upper limit for determining outliers for a box-and-whisker plot is __________. A) 17 minutes B) 30.5 minutes C) 56 minutes D) 62.5 minutes

100) The __________ identifies the number of standard deviations a particular value is from the mean of its distribution.

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A) coefficient of variation B) z-score C) median D) empirical rule

101)

Which of the following is not true concerning the attributes of z-scores?

A) z-scores are positive for data values above the mean of the distribution. B) z-scores are negative for data values below the mean of the distribution. C) z-scores can be positive or negative for data values above the mean of the distribution. D) z-scores are equal to zero for data values equal to the mean of the distribution.

102) The average class size this semester in the business school of a particular university is 38.1 students with a standard deviation of 13.4 students. The z-score for a class with 20 students is _____. A) 1.49 B) 0 C) 1.35 D) 0.78

103) The average class size this semester in the business school of a particular university is 38.1 students with a standard deviation of 12.9 students. The z-score for a class with 21 students is __________. A) −1.33 B) 0 C) 0.8 D) 1.51

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104) Suppose the wait to pass through immigration at JFK Airport in New York is thought to be bell-shaped and symmetrical with a mean of 23 minutes. It is known that 68% of travelers will spend between 17 and 29 minutes waiting to pass through immigration. The standard deviation for the wait time through immigration is _________. A) 10 minutes B) 8 minutes C) 6 minutes D) 9 minutes

105) Suppose the wait to pass through immigration at JFK Airport in New York is thought to be bell-shaped and symmetrical with a mean of 22 minutes. It is known that 68% of travelers will spend between 16 and 28 minutes waiting to pass through immigration. The standard deviation for the wait time through immigration is __________. A) 6 minutes B) 8 minutes C) 9 minutes D) 10 minutes

106) Suppose the dealer incentive per vehicle for Honda’s Acura brand is thought to be bellshaped and symmetrical with a mean of $3,280 and a standard deviation of $250. Based on this information, what interval of dealer incentives would we expect approximately 99.7% of vehicles to fall within? A) $2,280 to $4,280 B) $2,780 to $3,780 C) $3,030 to $3,530 D) $2,530 to $4,030

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107) Suppose the dealer incentive per vehicle for Honda’s Acura brand is thought to be bellshaped and symmetrical with a mean of $2,500 and a standard deviation of $300. Based on this information, what interval of dealer incentives would we expect approximately 99.7% of vehicles to fall within? A) $2,200 to $2,800 B) $1,900 to $3,100 C) $1,600 to $3,400 D) $1,300 to $3,700

108) Suppose the average price for new cars has a mean of $30,100, a standard deviation of $5,600 and is normally distributed. Based on this information, what interval of prices would we expect at least 95% of new car prices to fall within? A) $24,500 to $35,700 B) $18,900 to $41,300 C) $13,300 to $46,900 D) $7.700 to $52,500

109) There are five rows of students seated in a marketing class. The following table shows the number of students in each row and the average score of the most recent test for that row. Row

Number of Students

Row Average Score

82.3

91.4

85.0

78.3

89.1

{MISSING IMAGE}Click here for the Excel Data File What is the average test score for this class?

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A) 84.7 B) 85.7 C) 83.0 D) 86.8

110) The director of graduate admissions is analyzing the relationship between scores in the Graduate Record Examination (GRE) and student performance in graduate school, as measured by a student’s GPA. The table below shows a sample of 10 students. GRE

1,500

1,400

1,000

1,050

1,100

1,250

800

850

950

1,350

GPA

3.4

3.5

3.0

2.9

3.0

3.3

2.7

2.8

3.2

3.3

{MISSING IMAGE}Click here for the Excel Data File The covariance is __________. A) 53.5 B) 51.75 C) 57.5 D) 58.75

111) The director of graduate admissions is analyzing the relationship between scores in the GRE and student performance in graduate school, as measured by a student’s GPA. The table below shows a sample of 10 students. GRE

1,840

1,160

130

1,050

1,040

1,350

800

650

910

930

GPA

2.2

4.1

3.9

2.9

2.4

2.1

3.6

2.1

2.8

3.5

{MISSING IMAGE}Click here for the Excel Data File Which of the following statements is correct? A) The correlation between GRE and GPA is positive and strong. B) The correlation between GRE and GPA is positive and weak. C) The correlation between GRE and GPA is negative and strong. D) The correlation between GRE and GPA is negative and weak.

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112) The director of graduate admissions is analyzing the relationship between scores in the GRE and student performance in graduate school, as measured by a student’s GPA. The table below shows a sample of 10 students. GRE

1,500

1,400

1,000

1,050

1,100

1,250

800

850

950

1,350

GPA

3.4

3.5

3.0

2.9

3.0

3.3

2.7

2.8

3.2

3.3

{MISSING IMAGE}Click here for the Excel Data File Which of the following statements is correct? A) The correlation between GRE and GPA is negative and weak. B) The correlation between GRE and GPA is positive and weak. C) The correlation between GRE and GPA is negative and strong. D) The correlation between GRE and GPA is positive and strong.

113)

Which of the following is true regarding the weighted mean formula: for i = 1, ..., n A) B) C) D)

114)

=1 1 1

Calculate the mean, median, and mode of the sample data below.

{MISSING IMAGE}Click here for the Excel Data File

115) Janice Anooshian asks eight of her friends about the number of hours they spend daily on Facebook. Their responses are: 2

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{MISSING IMAGE}Click here for the Excel Data File Calculate the mean, median, and mode numbers of hours her friends spent on Facebook. Does the mean accurately reflect the center of the data?

116)

The following represent the sizes of fleece jackets for kids sold at a local Old Navy Store.

{MISSING IMAGE}Click here for the Excel Data File Calculate the mean, median, and mode size of fleece jackets for kids. Which of these measures of the central location represents the age that the store would like to target for advertisement dollars.

117) The following data are a list of the magnitudes of six of Alaska’s largest recorded earthquakes. 9.2

7.9

8.7

8.6

7.9

8.1

{MISSING IMAGE}Click here for the Excel Data File Calculate the mean, median, and mode of the magnitude of Alaska’s earthquakes.

118) The following is a list of the number of touchdowns LaDainian Tomlinson scored in five nonconsecutive years as a running back in the NFL. 10

{MISSING IMAGE}Click here for the Excel Data File Calculate the mean and the median of the number of touchdowns LT scored. Does the mean accurately reflect the center of the data?

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119) The following sample data shows the starting salaries of six graduates from the accounting program at California Polytechnic State University. The data are in thousands of dollars. 24

{MISSING IMAGE}Click here for the Excel Data File a. Calculate and interpret the 25th, 50th, and 75th percentiles. b. Are there any outliers? Is the distribution symmetric? If not, comment on its skewness.

120) John lives in Los Angeles and hates the traffic. He asked a sample of six of his coworkers who live all over Los Angles how many hours they spend commuting every year. These are their responses in hours per year. 20

240

260

300

310

570

{MISSING IMAGE}Click here for the Excel Data File a. Calculate and interpret the 30th, 50th, and 70th percentiles. b. Are there any outliers? Is the distribution symmetric? If not, comment on its skewness.

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121) The following are daily returns for the Dow Jones Industrial Average during the week of October 13. The returns are rounded to the nearest whole number. 11%

−1.00%

−8.00%

5.00%

−1.00%

{MISSING IMAGE}Click here for the Excel Data File a. Calculate the arithmetic mean return. b. Calculate the geometric mean return.

122) The Yearly Prices (rounded to the nearest dollar) for GLD (a gold exchange traded fund) and SLV (a silver exchange traded fund) are reported in the following table. Year January-08 January-09 January-10 January-11

GLD $ 83 $ 87 $ 110 $ 139

SLV $ 15 $ 11 $ 17 $ 30

{MISSING IMAGE}Click here for the Excel Data File a.Calculate the sample variance and sample standard deviation for the GLD ETF and SLV ETF. b.Which asset had a greater variance? c.Which asset had the greater relative dispersion?

123) The following is a list of average wind speeds at a local surf spot in California over the last week. 8

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{MISSING IMAGE}Click here for the Excel Data File a. What is the range in wind speed? b. What is the Mean Absolute Deviation of the wind speed?

124) The data show operating expenses (in millions) for British Petroleum for the years Year 1 to Year 3. Year Operating Expenses (Millions)

Year 1 $ 331,814

Year 2 $ 219,712

Year 3 $ 312,630

a. Use the growth rates from Year 1 − 2 and Year 2 − Year 3 to calculate the average growth rate. b. Calculate the average growth rate directly from sales.

125) Three investment options are under consideration for inclusion in a mutual fund. Given that the return on a one-year T-bill is 4.5%, use the Sharpe ratio to select the best option. Option A B C

Mean Return 11.3% 7.7% 5.5%

Variance 1,246.35(%)2 843.92(%)2 134.83(%)2

{MISSING IMAGE}Click here for the Excel Data File

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126) The following is return data for a retail sector ETF and energy sector ETF for the years, Year 1 to Year 5. Year

Retail Sector ETF

Energy Sector ETF

−0.27

0.45

−0.31

−0.44

0.72

0.33

0.29

0.13

0.1

−0.03

{MISSING IMAGE}Click here for the Excel Data File a. What is the arithmetic mean return for each ETF? b. What is the geometric mean return for each ETF? c. What is the sample standard deviation for each ETF? Which ETF was riskier over this time period? d. Given a risk-free rate of 5%, what is the Sharpe Ratio for each ETF? Which investment had a better return per unit of risk over this time period?

127) The following table shows the annual returns (in percent) of Chevron and Caterpillar for Year 1–4. Year 1 2 3 4

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Chevron 35% −20% 3% 15%

Caterpillar 14% −30% 30% 55%

{MISSING IMAGE}Click here for the Excel Data File a. Which fund had the higher arithmetic average return? b. Which fund was riskier over this time period? c. Given a risk-free rate of 1%, which fund has the higher Sharpe ratio? What does this imply?

128)

The following gives summary measures for Google and Apple for Year 1–5.

a. Which fund had the higher arithmetic average return? b. Which fund was riskier over this time period? c. Given a risk-free rate of 1%, which fund has the higher Sharpe ratio? What does this imply?

129) The mean starting salary of recent business graduates at a university is $52,000 with a standard deviation of $16,000. The distribution of starting salaries is unknown. a. What proportion of business graduates has a starting salary between $20,000 and $84,000? b. Suppose 600 business graduates from this university got hired. How many of them started with a salary between $20,000 and $84,000?

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130) Your used car is expected to last an average of 200,000 miles with a standard deviation of 25,000 miles before it requires a new transmission. a. Use Chebyshev’s theorem to approximate the probability that the engine will last between 150,000 miles and 250,000 miles. b. Assume a symmetric bell-shaped distribution to approximate the probability that the engine will last between 150,000 miles and 250,000 miles.

131) The mean starting salary of recent business graduates at a university is $52,000 with a standard deviation of $16,000. The distribution of starting salaries is assumed to be symmetric and bell-shaped. a. What proportion of business graduates has a starting salary between $20,000 and $84,000. b. Suppose 600 business graduates from this university got hired. How many of them started with a salary between $20,000 and $84,000?

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132) The following data represent motor vehicle theft rates per 100,000 people for the cities of Detroit, Michigan; Newark, New Jersey; St. Louis, Missouri; Oakland, California; Atlanta, Georgia; and Fresno, California. These six cities had the highest per-capita motor vehicle theft rates in the nation. City

State

Avg Vehicle Theft Rate

Detroit

Michigan

1400

Newark

New Jersey

1290

St. Louis

Missouri

1200

Oakland

California

1130

Atlanta

Georgia

940

Fresno

California

940

{MISSING IMAGE}Click here for the Excel Data File a. What are the mean and median per capita theft rates of the above cities? b. Given that the standard deviation of the per capita crime rate in Detroit is 200 thefts per 100,000, use the empirical rule to calculate the probability Detroit has more than 1,800 thefts per 100,000 next year?

133) A luxury apartment complex in South Beach Miami is for sale. The owner has received the following offers in millions of dollars. 64

{MISSING IMAGE}Click here for the Excel Data File a. What is the mean offer price? What is the median offer price? Is the mean a good measure of central location? b. What is the sample standard deviation of the offers? c. What is equivalent to a 75th percentile offer?

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134) The following data represent the number of unique visitors and the revenue a website generated for the months of July through December. Unique Visitors

Revenue

July

2.2

August

3.4

September

6.2

October

8.6

November

5.6

December

5.8

{MISSING IMAGE}Click here for the Excel Data File a. What is the sample standard deviation for the number of unique visitors and the revenue? b. Calculate the coefficient of variations. Which variable has a higher relative dispersion? c. Calculate the sample correlation coefficient between the number of unique visitors and Revenue. d. Comment on the strength of the linear relationship. What does this mean for the owner of the website?

135) The following is a list of GPA ranges and frequencies from a high school. Use 1.5 as the midpoint of the 2.0 or less category. GPA

ƒi

2.0 or less

2.0-2.5

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2.5-3.0

3.0-3.5

3.5-4.0

{MISSING IMAGE}Click here for the Excel Data File What is the mean GPA?

136) A surfer visited his favorite beach 50 times and recorded the wave height each time in the following table. Heights of waves in feet

Frequency

0 to 2

3 to 5

6 to 8

9 to 11

Total

{MISSING IMAGE}Click here for the Excel Data File Calculate the average wave height.

137) A large city in Southern California collected data on education and the unemployment rate for its residents with a survey. The following is the survey data. Education Level

Frequency

Average Unemployment Rate

Less than High School

0.12

High School Grad

0.09

Some College

0.08

College Grad

0.05

{MISSING IMAGE}Click here for the Excel Data File Calculate the mean unemployment rate for the city.

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138) Yearly returns (rounded to the nearest percent) for GLD (a gold exchange traded fund) and SLV (a silver exchange traded fund) are reported in the following table. Year 1 2 3 4 5

GLD 38% 5% 26% 26% 12%

SLV 25% −27% 55% 76% −4%

{MISSING IMAGE}Click here for the Excel Data File a. Calculate the covariance between GLD and SLV. b. Calculate and interpret the correlation coefficient.

139) The following is data a veterinarian collected from some of her clients. It is a rough estimate of a dog’s weight and how long the dog lived. Estimated of Dog's Weight 20

100

130

sWeight = 44.70

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Life Span

sLife Span = 3.05

{MISSING IMAGE}Click here for the Excel Data File a. Calculate the covariance between a dog’s weight and its life span. b. Calculate and interpret the correlation coefficient.

140) The marketing analyst uses information on 100 sales associates that includes each associate’s level of experience, and yearly number of new customers acquired by region to examine the performance of the associates. A portion of the data is shown below: Sales Associate 1 2 : 100

Experience

Northeast

Southwest

West

Southeast

Midwest

Low High : Low

15 43 : 68

45 80 : 27

40 95 : 36

30 93 : 96

30 40 : 41

{MISSING IMAGE}Click here for the Excel Data File a. Which region has the highest average yearly number of new customers acquired? b. Which region has the lowest average yearly number of new customers acquired? c. Find the average yearly number of new customers acquired for high-experience versus lowexperience associates by region. Which subgroup acquired more customers for each region?

141) The term central location refers to the way numerical data tend to cluster around some middle or central value.

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⊚ ⊚

true false

142)

The arithmetic mean is the middle value of a data set. ⊚ true ⊚ false

143)

Approximately 60% of the observations in a data set fall below the 60th percentile. ⊚ true ⊚ false

144)

The median is not always the 50th percentile. ⊚ true ⊚ false

145) set.

In a data set, an outlier is a large or small value regarded as an extreme value in the data ⊚ ⊚

true false

146) A box plot is useful when comparing similar information gathered at different places or times. ⊚ true ⊚ false

147) The geometric mean is a multiplicative average of a data set used to measure values over a period of time.

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⊚ ⊚

true false

148) The mean absolute deviation (MAD) is a less effective measure of variation when compared with the average deviation from the mean. ⊚ true ⊚ false

149) The variance and standard deviation are the most widely used measures of central location. ⊚ true ⊚ false

150)

The standard deviation is the positive square root of the variance. ⊚ true ⊚ false

151)

The variance is an average squared deviation from the mean. ⊚ true ⊚ false

152)

The coefficient of variation is a unit-free measure of dispersion. ⊚ true ⊚ false

153) Mean-variance analysis suggests that investments with lower average returns are also associated with higher risks.

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⊚ ⊚

true false

154)

The Sharpe ratio measures the extra reward per unit of risk. ⊚ true ⊚ false

155)

Chebyshev’s theorem is only applicable for sample data. ⊚ true ⊚ false

156)

The empirical rule is only applicable for approximately bell-shaped data. ⊚ true ⊚ false

157)

Z-scores can always be used to detect outliers. ⊚ true ⊚ false

158)

The formula for a z-score is = ⊚ true ⊚ false

159)

Outliers are extreme values above or below the mean that require special consideration. ⊚ true ⊚ false

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160) Mark’s grade on the recent business statistics test was an 85 on a scale of 0–100. Based on this information we can conclude that Mark’s grade was in the 85th percentile in his class. ⊚ true ⊚ false

161)

Geometric mean is greater than the arithmetic mean. ⊚ true ⊚ false

162) In quality control settings, businesses prefer a larger standard deviation, which is an indication of more consistency in the process. ⊚ true ⊚ false

163) The z-score has no units even though the original values will normally be expressed in units such as dollars, years, pounds, or calories. ⊚ true ⊚ false

164) When working with frequency distribution, the interval median is the value in the middle of the interval and can be found by taking the average of the endpoints for the interval. ⊚ true ⊚ false

165)

There is no meaningful measure of central location to describe a categorical variable. ⊚ true ⊚ false

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166) The weighted mean of observations in a sample is calculated differently than observations in a population. ⊚ true ⊚ false

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Answer Key Test name: Chap 03_4e 1) [A, C] 2) A 3) D 4) D 5) B 6) D 7) D 8) D 9) A 10) B 11) C 12) D 13) D 14) A 15) C 16) C 17) A 18) D 19) C 20) B =QUARTILE.EXC(<data>,1) = 0.77 and =QUARTILE.EXC(<data>,3) = 1.97.

21) C =(108,249/42,905)^(1/2) − 1 = 58.84%

22) B =GEOMEAN(1−0.0724,1+0.0164,1+0.0348,1−0.0249,1+0.0930)−1 = 0.78%

23) D

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= (1.05× 1.12× 0.94× 1.02)^(1/3.25) − 1 (Note: Since these returns are not for full years, the Excel command GEOMEAN cannot be used here.)

24) C 25) C 26) D 27) D 28) C 29) D Coefficient of Variation: A = 2/15 = 0.133; B = 0.8/5 = 0.16.

30) C In Excel, the function used is =AVERAGE(12,8,28,22,12,30,14) = 18

31) B In Excel, the function used is =MEDIAN(12,8,28,22,12,30,14) = 14

32) A In Excel, the function used is =MODE(12,8,28,22,12,30,14) = 12

33) C In Excel, the function used is =VAR.P(12,8,28,22,12,30,14) = 64; Wrong answer would be using the sample variance of =VAR.S().

34) A In Excel, the function used is =STDEV.P(12,8,28,22,12,30,14) = 8; Wrong answer would be using the sample standard deviation of =STDEV.S()

35) D In Excel, the function used is =AVERAGE(3,12,2,3,5) = 5; =MEDIAN(3,12,2,3,5) = 3

36) B In Excel, the function used is =STDEV.S(3,12,2,3,5) = 4.1

37) C In Excel, the function used is =QUARTILE.EXC(<data>,3)

38) B In Excel, the function used is =QUARTILE.EXC(<data>,3)−QUARTILE.EXT(<data>,1) = 6

39) C In Excel, the function used is =AVERAGE(172,168,188,190,172,182,174) = 178

40) B In Excel, the function used is =MEDIAN(172,168,188,190,172,182,174) = 174

41) A Version 1

In Excel, the function used is =MODE(172,168,188,190,172,182,174) = 172 42) B In Excel, the function used is =STDEV.S(172,168,188,190,172,182,174) = 8.64

43) C 44) B In Excel, the function used is =AVERAGE(4.2,−9.4,2.8,−16.0,−6.6) = −5

45) A In Excel, the function used is =MEDIAN(4.2,-9.4,2.8,−16.0,−6.6) = −6.6

46) B In Excel, the function used is =STDEV.S(4.2,−9.4,2.8,−16.0,−6.6) = 8.49

47) A 48) A First, standard deviation =SQRT(9) = 3. Then, CV = 3/15 = 0.20. 49) A 50) D 51) B 52) A Coefficient of Variation = SQRT(7.84)/7 = 0.40 53) B The Excel function used is =STDEV.S(10,12,15,11) = 2.16.

54) C In Excel, the function used is =AVERAGE({{[a(1)]:#,###.00}},{{[a(2)]:#,###.00}},{{[a(3)]:#,###.00}},{{[a(4)]:#,###.00}}, {{[a(5)]:#,##0.00}}) = {{[a(6)]:#,###.00}} and =STDEV.S({{[a(1)]:#,###.00}},{{[a(2)]:#,###.00}},{{[a(3)]:#,###.00}},{{[a(4)]:#,###.00}},{{ [a(5)]:#,##0.00}}) = {{[a(7)]:#,##0.00}}.

55) B In Excel, the function used is =AVERAGE(1.53,2.29,2.07,1.69,0.07) = 1.53 and =STDEV.S(1.53,2.29,2.07,1.69,0.07) = 0.87

56) C

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In Excel, the function used is =MEDIAN({{[a(1)]:#,###.00}},{{[a(2)]:#,###.00}},{{[a(3)]:#,###.00}},{{[a(4)]:#,###.00}},{{ [a(5)]:#,###.00}}) = {{[a(6)]:#,###.00}} and =STDEV.S({{[a(1)]:#,###.00}},{{[a(2)]:#,###.00}},{{[a(3)]:#,###.00}},{{[a(4)]:#,###.00}},{{ [a(5)]:#,###.00}}) = {{[a(7)]:#,###.00}}.

57) C In Excel, the function used is =MEDIAN(−7.14,1.62,2.50,−2.50,9.27) = 1.62 and =STDEV.S(−7.14,1.62,2.50,−2.50,9.27) = 6.11

58) A 59) B 60) C The Sharpe Ratio for Fund A is (11.64 − 4)/12.65 = 0.6040 and Fund B is (12.58 − 4)/18.44 = 0.4653.

61) A 62) A 63) D 64) D 65) C 66) D 67) A 68) B 69) D 70) B 71) B 72) C 73) D 74) A 75) B 76) C 77) C 78) C Version 1

79) B = 5 × 0.20 + 15 × 0.40 + 25 × 0.30 + 35 × 0.10 = $18.00.

80) B 81) B 82) B 83) C 84) B 85) B 86) C 87) A 88) B 89) D 90) C 91) A 92) B 93) C 94) A 95) C 96) B =PERCENTILE.EXC(<data>,{{[a(30)]:#,##0.00}}) = {{[a(25)]:#,###.0}}.

97) D Version 1

=PERCENTILE.EXC(<data>,0.60) = 24.7

98) B 99) C 100) B 101) C 102) C z = ({{[a(3)]:#,###}} − {{[a(1)]:#,###.0}})/{{[a(2)]:#,###.0}} = {{[a(4)]:#,##0.00}}.

103) A z = (21 − 38.1)/12.9 = −1.33

104) C Since 68% is one standard deviation from the mean, then {{[a(4)]:#,###}} − {{[a(1)]:#,###}} = {{[a(5)]:#,###}} or {{[a(1)]:#,###}} − {{[a(3)]:#,###}} = {{[a(5)]:#,###}} minutes.

105) A Since 68% is one standard deviation from the mean, then 28 − 22 = 6 or 22 − 16 = 6 minutes

106) D ${{[a(1)]:#,###}} +/− 3 × ${{[a(2)]:#,###}} = ${{[a(4)]:#,###}} to ${{[a(5)]:#,###}}.

107) C $2,500 +/− 3 × $300 = $1,600 to $3,400

108) B $30,100 ±2 × $5,600 = $18,900 to $41,300

109) B 110) C =COVARIANCE.S(<GRE data>,<GPA data>) = 57.5

111) D =CORREL(<GRE data>,<GPA data>) = {{[a(24)]:#,##0.000}}.

112) D =CORREL(<GRE data>,<GPA data>) = 0.894

113) A =CORREL(<GRE data>,<GPA data>) = 0.894 114) Mean = 5.25, Median = 5.5, Mode = 3 115) Mean = 2.25 hours, Median = 1.5, Mode = 1. No. Since the mean is significantly higher than the median in this set of data, the median will be a better measure of center for reporting purposes.

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116) Mean = 4.45; Median = 4; Mode = 4 Since the mean and median are very close, the best measure of central location for targeting advertisement dollars is the mean or approximately 6 years old. 117) Mean = 8.4, Median = 8.35, Mode = 7.9 118) Mean = 15, Median = 12. No, it is sensitive to the outlier of 28. Since the mean is significantly higher than the median in this set of data, the median will be a better measure of center for reporting purposes. 119) a. 25th percentile is 46; 50th percentile is 52; 75th percentile is 58. b. Lower Limit = 46 − 1.5 × (58 − 46) = 28. Since 24 < 28, the value of 24 is considered an outlier and the distribution is negatively skewed. 120) a. 30th percentile =PERCENTILE.EXC(<data>,0.30) 50th percentile =PERCENTILE.EXC(<data>,0.50) or =MEDIAN() 70th percentile =PERCENTILE.EXC(<data>,0.70) b. 25th quartile =QUARTILE.EXC(<data>,1) = 185 75th quartile =QUARTILE.EXC(<data>,3) = 375 IQR = 375 − 185 = 190 Lower Limit = 185 − 1.5 × 190 = −100 Upper Limit = 375 + 1.5 × 190 = 660 Based on the lower and upper limit, there are no outliers. The graph is very symmetric. 121) a. 1.2% Arithmetic Mean =AVERAGE(<data>) = 0.012 b. 1.00% Geometric Mean =GEOMEAN(1+0.11,1−0.011,1−0.08,1+0.05,1−0.01)−1 = 0.00977 or 1.0% 122) For GLD: =AVERAGE(<data>) = 104.75 For SLV: =AVERAGE(<data>) = 18.25 a. For GLD: s2 = 662.92; s = 25.75. For SLV: s2 = 67.58; s = 8.22 b. GLD had a greater variance c. For GLD, CV = 0.25; for SLV, CV = 0.45; Silver had the greater relative dispersion. 123) a. Range = 16 Range = 19 − 3 = 16 b. MAD = 4.65 =AVERAGE(<data>) = 10.57 MAD =AVEDEV(<data>) = 4.65 Version 1

124) a) Growth from Year 1-2: Growth from Year 2-3: b) Average: =GEOMEAN(1−0.3378,1+0.4229)−1 = −0.0293 125) Option A Ratio: Option B Ratio: Option C Ratio: Option A offers the best reward per unit of risk. 126) a) Arithmetic Mean ● Retail =AVERAGE(<data>) = 0.106 ● Energy =AVERAGE(<data>) =0.088 For retail ETF, the mean = 10.60%; for Energy ETF, the mean = 8.80% b) Geometric Mean ● Retail =GEOMEAN(1−0.27,1−0.31,1+0.72,1+0.29,1+0.1)−1 = 0.0422 ● Energy =GEOMEAN(1+0.45,1−0.44,1+0.33,1+0.13,1−0.03)−1 = 0.0343 For retail ETF, the geometric mean return = 4.22%; for Energy ETF, the geometric mean return = 3.43%. c) Standard Deviation ● Retail =STDEV.S(<data>) = 0.4258 ● Energy =STDEV.S(<data>) = 0.3479 For retail ETF, the standard deviation = 0.42; for Energy ETF, the standard deviation = 0.34. The Retail ETF is riskier. d) Sharpe Ratio ● Retail =(10.6 − 5)/42.58 = 0.1315 ● Energy =(8.8 − 5)/34.79 = 0.1092 For retail ETF, the Sharpe ratio = 0.13; for Energy ETF, the Sharpe ratio = 0.11. The Retail ETF has a higher return per unit of risk.

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127) a) Arithmetic Mean ● Chevron =AVERAGE(<data>)=0.0825 ● Caterpilla =AVERAGE(<data>)=0.1725 Caterpillar has the higher average return. b) Standard Deviation ● Chevron =STDEV.S(<data>)=0.22998 ● Caterpillar =STDEV.S(<data>)=0.34734 Caterpillar has higher risk. c) Sharpe Ratio ● Chevron =(8.25− 1)/22.998=0.3152 ● Caterpillar =(17.25 − 1)/34.734=0.4547 SRChevron = 0.32; SRCaterpillar = 0.45. So Caterpillar has better risk per unit of reward. 128) a. Apple b. Apple c. Sharpe Ratio: ● Apple = (66-1)/89=0.7313 ● Google = (20-1)/60.5=0.3140 Apple has better return per unit of risk.

129) a. At least 75% $20,000 & $84,000 are 2 standard deviations below/above the mean $52,000± 2 × $16,000 Chebyshev’s Theorem: 1 − 1/(22) = 75% b. At least 450 600 × 0.75 = 450 130) a. At least 75% of the time. 150,000 & 250,000 are 2 standard deviations below/above the mean 200,000 ±2 × 25,000 Chebyshev’s Theorem: 1 − 1/(22) = 75% b. About 95% of the time 131) a. At least 95% of the time. $20,000 & 84,000 are 2 standard deviations below/above the mean $52,000 ±2 × 16,000 so above 95% of the distribution b. 600 × 0.95 = 570 Version 1

132) a. Median = 1,165 ● Mean =AVERAGE(<data>) = 1,150 ● Median =MEDIAN(<data>) = 1,165 b. 2.5% With mean of 1,400 and standard deviation of 200, 1,800 is two standard deviations from the mean (1,800 − 1,400) = 400/200 = 2. Therefore, 95% of the data falls in the middle of the curve leaving 2.5% above 1,800. 133) a. Mean = 70. Yes, it is a good measure of central location; No outliers; Median = 69 Mean =AVERAGE(<data>) = 70 Median =MEDIAN(<data>) = 69 b. Sample Standard Deviation ≈ 9. Standard Deviation=STDEV.S(<data>) = 9.033 c. 75th percentile is 79 75th Percentile: =QUARTILE.EXC(<data>,3) = 79 134) a. The sample standard deviation for the number of visitors = 24.41; the sample standard deviation for revenue = 2.25. b. The coefficient of variation for the number of visitors = 0.70; the coefficient of variation for revenue = 0.42; the number of visitors had a higher relative dispersion. c. The correlation coefficient between the number of visitors and revenue = 0.089. d. The linear relationship is weak. The number of unique visitors is not the major driver of revenue. 135) a. Mean GPA = 2.70. First, 136) a) First, 137) 138) a. sxy = 0.0375 ● =COVARIANCE.S(<GLD data>,<SLV data>) = 0.0375 b. rxy = 0.69; strong positive correlation. ● =CORREL(<GLD data>,<SLV data>) = 0.69

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139) a. sxy = −135 ● =COVARIANCE.S(<GLD data>,<SLV data>) = −135 b. rxy= −0.99 very strong negative correlation. ● =CORREL(<GLD data>,<SLV data>) = −0.9899 140) a. Southeast b. Southwest c. The high-experience associates acquired more customers than the less-experience counterpart for all five regions:

Northeast 56.11

Southwest 49.15

West 59.98

Southeast 60.29

Midwest 59.75

141) TRUE 142) FALSE 143) TRUE 144) FALSE 145) TRUE 146) TRUE 147) TRUE 148) FALSE 149) FALSE 150) TRUE 151) TRUE 152) TRUE 153) FALSE 154) TRUE 155) FALSE 156) TRUE 157) FALSE 158) FALSE Version 1

159) TRUE 160) FALSE 161) FALSE 162) FALSE 163) TRUE 164) FALSE 165) FALSE 166) FALSE

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CHAPTER 04 – 4e 1)

A(n) _____ _____ of an experiment records all possible outcomes of the experiment.

The intersection of two events is the event consisting of all outcomes in A ____ B.

3) A(n) ________ probability is calculated as the relative frequency with which an event occurs.

4) According to the ________, if we flip a fair coin a large number of times, tails will shows up ______% of the time.

If A and B are _______ ________ events, then the addition rule is defined as

6) Events are considered _________ if the occurrence of one is related to the probability of the occurrence of the other.

7) An intuitive way to express the total probability rule is with the help of a _______________.

What is probability?

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A) Any value between 0 and 1 is always treated as a probability of an event. B) A numerical value assigned to an event that measures the number of its occurrences. C) A value between 0 and 1 assigned to an event that measures the likelihood of its occurrence. D) A value between 0 and 1 assigned to an event that measures the unlikelihood of its occurrence.

For an experiment in which a single die is rolled, the sample space is __________. A) {1, 1, 3, 4, 5, 6}. B) {2, 1, 3, 6, 5, 4}. C) {1, 2, 3, 4, 4, 5}. D) {3, 5, 5, 6, 4, 2}.

10)

A sample space contains _________________. A) outcomes of the relevant events. B) several outcomes of an experiment. C) all possible outcomes of an experiment. D) one of several outcomes of an experiment.

11)

What is a simple event? A) An event that contains all outcomes of a sample space B) An event that contains several outcomes of a sample space C) An event that contains only one outcome of a sample space D) An event that contains the most probable outcome of a sample space

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12) Which of the following is not an event when considering the sample space of tossing two coins? A) {HH, HT} B) {HH, TT, HT} C) {HH, TT, HTH} D) {HH, HT, TH, TT}

13)

Events are collectively exhaustive if _____________. A) they include all events B) they are included in all events C) they contain all outcomes of an experiment D) they do not share any common outcomes of an experiment

14)

Mutually exclusive events _____________. A) contain all possible outcomes B) may share common outcomes C) do not share common outcomes D) do not contain all possible outcomes

15) Which of the following are mutually exclusive events of an experiment in which two coins are tossed? A) {TT, HH} and {TT} B) {HT, TH} and {TH} C) {TT, HT} and {HT} D) {TT, HH} and {TH}

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16) In an experiment in which a coin is tossed twice, which of the following represents mutually exclusive and collectively exhaustive events? A) {TT, HH} and {TT, HT} B) {HT, TH} and {HH, TH} C) {TT, HH} and {TH, HT} D) {TT, HT} and {HT, TH}

17) Which of the following sets of outcomes described below in I and II represent mutually exclusive events? 1. "Your final course grade is an A"; "Your final course grade is a B." 2. "Your final course grade is an A"; "Your final course grade is a Pass."

A) Neither I nor II represent mutually exclusive events. B) Both I and II represent mutually exclusive events. C) Only I represents mutually exclusive events. D) Only II represents mutually exclusive events.

19)

Mutually exclusive and collectively exhaustive events ______________.

A) contain all outcomes in a sample space and may share common outcomes B) contain all outcomes in a sample space and do not share common outcomes C) do not have to contain all outcomes in a sample space but do not share common outcomes D) do not have to contain all outcomes in a sample space and may share common outcomes

20)

The union of events A and B, denoted by

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, ____________.

A) contains all outcomes that are in A or B B) contains all outcomes of an experiment C) contains no outcomes that are in A and B D) consists only of outcomes that are in A and B

21)

The intersection of events A and B, denoted by

, ___________.

A) contains outcomes that are either in A or B B) contains outcomes that are both in A and B C) does not contain outcomes that are either in A or B D) does not contain outcomes that are both in A and B

22) The intersection of events A = {apple pie, peach pie, pumpkin pie} and B = {cherry pie, blueberry pie, pumpkin pie} is ____________. A) {pumpkin pie} B) {apple pie, peach pie, cherry pie, blueberry pie} C) {apple pie, peach pie, pumpkin pie, cherry pie, blueberry pie} D) {apple pie, peach pie, pumpkin pie, cherry pie, blueberry pie, pumpkin pie}

23) The union of events A = {apple pie, peach pie, pumpkin pie} and B = {cherry pie, blueberry pie, pumpkin pie} is ________. A) {pumpkin pie} B) {apple pie, peach pie, cherry pie, blueberry pie} C) {apple pie, peach pie, pumpkin pie, cherry pie, blueberry pie} D) {apple pie, peach pie, pumpkin pie, cherry pie, blueberry pie, pumpkin pie}

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24) The complement of an event A, within the sample space S, is the event consisting of ____________. A) all outcomes in A that are in S B) all outcomes in S that are in A C) all outcomes in S that are not in A D) all outcomes in A that are not in S

25) For the sample space S = {apple pie, cherry pie, peach pie, pumpkin pie}, what is the complement of A = {pumpkin pie, cherry pie}? A) {apple pie} B) {peach pie} C) {apple pie, peach pie} D) {pumpkin pie, cherry pie}

26) Assume the sample space S = {yes, no}. Select the choice that fulfills the requirements of the definition of probability. A) P({yes}) = 0.7, P({no}) = 0.3 B) P({yes}) = 0.5, P({no}) = −0.5 C) P({yes}) = 0.7, P({no}) = 0.2 D) P({yes}) = 1.0, P({no}) = 0.1

27) Assume the sample space S = {win, loss}. Select the choice that fulfills the requirements of the definition of probability. A) P({win}) = 0.7, P({loss}) = 0.2 B) P({win}) = 0.7, P({loss}) = 0.3 C) P({win}) = 1.0, P({loss}) = 0.1 D) P({win}) = 0.5, P({loss}) = −0.5

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28) A probability based on logical analysis rather than on observation or personal judgment is best referred to as a(n) _______________. A) classical probability B) empirical probability C) subjective probability D) finite probability

29) An analyst believes the probability that U.S. stock returns exceed long-term corporate bond returns over a five-year period is based on personal assessment. This type of probability is best characterized as a(n) ___________. A) classical probability B) empirical probability C) objective probability D) subjective probability

30)

Which of the following represents a subjective probability? A) The probability of rolling a 2 on a single die is one in six. B) Based on a conducted experiment, the probability of tossing a head on an unfair coin

is 0.6. C) A skier believes she has a 10% chance of winning a gold medal. D) Based on past observation, a manager believes there is a three-in-five chance of retaining an employee for at least one year.

31)

Which of the following represents an empirical probability?

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A) The probability of tossing a head on a coin is 0.5. B) The probability of rolling a 2 on a single die is one in six. C) A skier believes she has a 0.10 chance of winning a gold medal. D) Based on past observation, a manager believes there is a three-in-five chance of retaining an employee for at least one year.

32) An analyst has a limit order outstanding on a stock. He argues that the probability that the order will execute before the close of trading is 0.30. What is the probability that the order will execute after the closing of trading? A) 0.70 B) 0.30 C) 1.0 D) 0.75

33) After extensive research examining 10,000 calls from customers on a typical 12-hour day at C&A technical support center, the analyst uses the following table to summarize the frequency distribution of calls: Hours of the Day

Frequency

8 AM to 11 AM

254

11:01 AM to 2 PM

3080

2:01 PM to 5 PM

2541

5:01 PM to 8 PM

4125

What is the probability that a randomly selected call is placed before 2:01 PM? A) 31% B) 25% C) 33% D) 67%

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34) After extensive research examining 10,000 calls from customers on a typical 12-hour day at C&A technical support center, the analyst uses the following table to summarize the frequency distribution of calls: Hours of the Day

Frequency

8 AM to 11 AM

254

11:01 AM to 2 PM

3080

2:01 PM to 5 PM

2541

5:01 PM to 8 PM

4125

What is the probability that a randomly selected call is placed after 2 PM? A) 31% B) 25% C) 33% D) 67%

35) There is a 25% chance that a customer who purchases milk will also purchase bread. The probability of a milk purchase is 70% and the probability of a bread purchase is 50%. What is the probability that a customer will purchase bread given that he/she buys milk? A) 36% B) 50% C) 25% D) 64%

36) An experiment consists of tossing three fair coins. What is the probability of tossing two tails? A) 1/8 B) 1/4 C) 3/8 D) 1/2

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37)

Let P(A) = 0.6, P(B) = 0.3, and P(A∪B)C = 0.1. Calculate P(A∩B). A) 0 B) 0.3 C) 0.9 D) Not enough information to calculate.

38) Given an experiment in which a fair coin is tossed three times, the sample space is S = {HHH, HHT, HTH, THH, HTT, THT, TTH, TTT}. Event A is defined as tossing no tail (T). What is the event Ac and what is the probability of this event? A) Ac = {TTT, HHH, HTH}; P(Ac) = 0.625 B) Ac = {HHT, HTH, THH, HTT, THT, TTH, TTT}; P(Ac) = 0.875 C) Ac = {TTT, THH, HHH, HHT}; P(Ac) = 0.500 D) Ac = {TTT, HHH, HHT, HTH, HTT}; P(Ac) = 0.875

39) Given an experiment in which a fair coin is tossed three times, the sample space is S = {HHH, HHT, HTH, THH, HTT, THT, TTH, TTT}. Event A is defined as tossing one head (H). What is the event Ac and what is the probability of this event? A) Ac = {TTT, HHH, HTH}; P(Ac) = 0.375 B) Ac = {TTT, THH, HHH, HHT}; P(Ac) = 0.500 C) Ac = {TTT, HHH, HHT, HTH, HTT}; P(Ac) = 0.625 D) Ac = {TTT, HHT, HTH, THH, HHH}; P(Ac) = 0.625

40)

Let

Version 1

. Calculate

A) 0.20 B) 0.33 C) 0.40 D) Not enough information to calculate.

41) Alison has all her money invested in two mutual funds, A and B. She knows that there is a 65% chance that fund A will rise in price, and a 80% chance that fund B will rise in price given that fund A rises in price. What is the probability that both fund A and fund B will rise in price? A) 0.40 B) 1.00 C) 0.76 D) 0.52

42) Alison has all her money invested in two mutual funds, A and B. She knows that there is a 40% chance that fund A will rise in price, and a 60% chance that fund B will rise in price given that fund A rises in price. What is the probability that both fund A and fund B will rise in price? A) 0.24 B) 0.40 C) 0.76 D) 1.00

43) Alison has all her money invested in two mutual funds, A and B. She knows that there is a 40% chance that fund A will rise in price, and a 60% chance that fund B will rise in price given that fund A rises in price. There is also a 30% chance that fund B will rise in price. What is the probability that at least one of the funds will rise in price?

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A) 0.24 B) 0.46 C) 0.60 D) 0.76

44) Alison has all her money invested in two mutual funds, A and B. She knows that there is a 40% chance that fund A will rise in price, and a 60% chance that fund B will rise in price given that fund A rises in price. There is also a 20% chance that fund B will rise in price. What is the probability that neither fund will rise in price? A) 0.24 B) 0.36 C) 0.40 D) 0.64

45) A recent survey shows that the probability of a college student drinking alcohol is 0.6. Further, given that the student is over 21 years old, the probability of drinking alcohol is 0.8. It is also known that 30% of the college students are over 21 years old. The probability of drinking or being over 21 years old is __________. A) 0.24 B) 0.42 C) 0.66 D) 0.90

46) Let of P(B|A)?

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Suppose A and B are independent. What is the value

A) 0.12 B) 0.3 C) 0.4 D) 0.7

47)

If A and B are independent events, which of the following is correct? A) B) C) D)

48) Let A and B be two independent events with P(A) = 0.40 and P(B) = 0.20. Which of the following is correct? A) B) C) D)

49) Peter applied to an accounting firm and a consulting firm. He knows that 30% of similarly qualified applicants receive job offers from the accounting firm, while only 20% of similarly qualified applicants receive job offers from the consulting firm. Assume that receiving an offer from one firm is independent of receiving an offer from the other. What is the probability that both firms offer Peter a job? A) 0.05 B) 0.06 C) 0.44 D) 0.50

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50) The likelihood of Company A’s stock price rising is 15%, and the likelihood of Company B’s stock price rising is 40%. Assume that the returns of Company A and Company B stock are independent of each other. The probability that the stock price of at least one of the companies will rise is ______. A) 15% B) 6% C) 49% D) 55%

51) The likelihood of Company A’s stock price rising is 20%, and the likelihood of Company B’s stock price rising is 30%. Assume that the returns of Company A and Company B stock are independent of each other. The probability that the stock price of at least one of the companies will rise is ______. A) 6%. B) 10%. C) 44%. D) 50%.

52)

Find the missing values marked xx and yy in the following contingency table. Age Group

Preferred Form of Exercise

Total

Running

Biking

Swimming

Under 35 years

167

111

369

35 years or older

134

Total

230

150

123

503

A) xx = 102, yy = 89 B) xx = 39, yy = 91 C) xx = 102, yy = 91 D) xx = 39, yy = 89

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53)

Find the missing values marked xx and yy in the following contingency table. Age Group

Preferred Form of Exercise

Total

Running

Biking

Swimming

Under 35 years

157

121

357

35 years or older

159

Total

202

148

166

516

A) xx = 72, yy = 79 B) xx = 27, yy = 77 C) xx = 27, yy = 79 D) xx = 72, yy = 77

54) The contingency table below provides frequencies for the preferred type of exercise for people under the age of 35 and those 35 years of age or older. Find the probability that an individual prefers running. Age Group

Preferred Form of Exercise

Total

Running

Biking

Swimming

Under 35 years

157

121

357

35 years or older

159

Total

202

148

166

516

A) 0.3159 B) 0.3915 C) 0.6085 D) 0.6805

55) The contingency table below provides frequencies for the preferred type of exercise for people under the age of 35 and those 35 years of age or older. Find the probability that an individual prefers running and is under 35 years of age. Age Group

Preferred Form of Exercise Running

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Biking

Total

Swimming

Under 35 years

157

121

357

35 years or older

159

Total

202

148

166

516

A) 0.3042 B) 0.3915 C) 0.4398 D) 0.6918

56) The contingency table below provides frequencies for the preferred type of exercise for people under the age of 35, and those 35 years of age or older. Find the probability that an individual prefers biking given that he or she is 35 years old or older. Age Group

Preferred Form of Exercise

Total

Running

Biking

Swimming

Under 35 years

157

121

357

35 years or older

159

Total

202

148

166

516

A) 0.1698 B) 0.1824 C) 0.8175 D) 0.8302

57) The following probability table shows probabilities concerning Favorite Subject and Gender. What is the probability of selecting an individual who is a female or prefers science? Gender

Favorite Subject

Total

Math

English

Science

Male

0.200

0.050

0.175

0.425

Female

0.100

0.325

0.150

0.575

Total

0.300

0.375

0.325

1.000

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A) 0.250 B) 0.375 C) 0.625 D) 0.750

58) The following probability table shows probabilities concerning Favorite Subject and Gender. What is the probability of selecting an individual preferring science if she is female? Gender

Favorite Subject

Total

Math

English

Science

Male

0.200

0.050

0.175

0.425

Female

0.100

0.325

0.150

0.575

Total

0.300

0.375

0.325

1.000

A) 0.2609 B) 0.4615 C) 0.5385 D) 0.7391

59) Two hundred people were asked if they had read a book in the last month. The accompanying contingency table, cross-classified by age, is produced. Under 30

30+

Yes

The probability that a respondent is at least 30 years old is the closest to ______. A) 0.33 B) 0.46 C) 0.50 D) 0.65

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60) Two hundred people were asked if they had read a book in the last month. The accompanying contingency table, cross-classified by age, is produced. Under 30

30+

Yes

The probability that a respondent read a book in the last month and is at least 30 years old is the closest to _______. A) 0.12 B) 0.33 C) 0.46 D) 0.88

61) Two hundred people were asked if they had read a book in the last month. The accompanying contingency table, cross-classified by age, is produced. Under 30

30+

Yes

Given that a respondent read a book in the last month, the probability that he or she is at least 30 years old is the closest to ________. A) 0.33 B) 0.46 C) 0.65 D) 0.88

62) Mark Zuckerberg, the founder of Facebook, announced that he will eat meat only from animals that he has killed himself (Vanity Fair, November 2011). Suppose 257 people were asked, "Does the idea of killing your own food appeal to you, or not?" The accompanying contingency table, cross-classified by gender, is produced from the 187 respondents.

Yes

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Male

Female

The probability that a respondent to the survey is male is the closest to ____. A) 0.19 B) 0.38 C) 0.49 D) 0.64

63) Mark Zuckerberg, the founder of Facebook, announced that he will eat meat only from animals that he has killed himself (Vanity Fair, November 2011). Suppose 257 people were asked, "Does the idea of killing your own food appeal to you, or not?" The accompanying contingency table, cross-classified by gender, is produced from the 187 respondents. Male

Female

Yes

The probability that a respondent is male and feels that the idea of killing his own food is appealing is the closest to _____. A) 0.19 B) 0.38 C) 0.41 D) 0.59

64) Mark Zuckerberg, the founder of Facebook, announced that he will eat meat only from animals that he has killed himself (Vanity Fair, November 2011). Suppose 257 people were asked, "Does the idea of killing your own food appeal to you, or not?" The accompanying contingency table, cross-classified by gender, is produced from the 187 respondents. Male

Female

Yes

Given that the respondent is male, the probability that he feels that the idea of killing his own food is appealing is the closest to ____.

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A) 0.19 B) 0.38 C) 0.59 D) 0.64

65) The 150 residents of the town of Wonderland were asked their age and whether they preferred vanilla, chocolate, or swirled frozen yogurt. The results are displayed next. Chocolate

Vanilla

Swirl

Under 25 years old

At least 25 years old

What is the probability that a randomly selected customer prefers vanilla? A) 0.37 B) 0.31 C) 0.17 D) 0.44

66) The 150 residents of the town of Wonderland were asked their age and whether they preferred vanilla, chocolate, or swirled frozen yogurt. The results are displayed next. Chocolate

Vanilla

Swirl

Under 25 years old

At least 25 years old

What is the probability that a randomly selected customer prefers vanilla? A) 0.13 B) 0.27 C) 0.33 D) 0.40

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67) The 150 residents of the town of Wonderland were asked their age and whether they preferred vanilla, chocolate, or swirled frozen yogurt. The results are displayed next. Chocolate

Vanilla

Swirl

Under 25 years old

At least 25 years old

What is the probability a randomly selected customer prefers chocolate given he or she is at least 25 years old? A) 0.10 B) 0.20 C) 0.27 D) 0.77

68) The 150 residents of the town of Wonderland were asked their age and whether they preferred vanilla, chocolate, or swirled frozen yogurt. The results are displayed next. Chocolate

Vanilla

Swirl

Under 25 years old

At least 25 years old

What is the probability a randomly selected customer prefers swirled yogurt or is at least 25 years old? A) 0.10 B) 0.20 C) 0.60 D) 0.90

69)

Let

Version 1

, and

. Compute P(A).

A) 0.15 B) 0.30 C) 0.45 D) 0.50

70)

Let P(A∩B) = 0.3, and P(A∩Bc) = 0.10. Compute P(B|A). A) 0.53 B) 0.75 C) 0.41 D) 0.58

71)

Let

, and

. Compute

A) 0.33 B) 0.45 C) 0.5 D) 0.67

72)

Let P(A) = 0.70, P(B|A) = 0.70, and P(B|Ac) = 0.35. Compute P(B). A) 0.375 B) 0.60 C) 0.45 D) 0.40

73)

Let P(A) = 0.4, P(B|A) = 0.5, and P(B|Ac) = 0.25. Compute P(B).

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A) 0.125 B) 0.15 C) 0.20 D) 0.35

74)

Let .

, and

. Compute

A) 0.20 B) 0.50 C) 0.65 D) 0.70

75)

Let P(A) = 0.4, P(B|A) = 0.5, and P(B|Ac) = 0.25. Compute P(A|B) . A) 0.20 B) 0.35 C) 0.57 D) 0.80

76) An analyst expects that 10% of all publicly traded companies will experience a decline in earnings next year. The analyst has developed a ratio to help forecast this decline. If the company is headed for a decline, there is a 70% chance that this ratio will be negative. If the company is not headed for a decline, there is only a 20% chance that the ratio will be negative. The analyst randomly selects a company and its ratio is negative. Based on Bayes’ theorem, the posterior probability that the company will experience a decline is ____. A) 3%. B) 7%. C) 18%. D) 28%.

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77) An analyst expects that 20% of all publicly traded companies will experience a decline in earnings next year. The analyst has developed a ratio to help forecast this decline. If the company is headed for a decline, there is a 90% chance that this ratio will be negative. If the company is not headed for a decline, there is only a 10% chance that the ratio will be negative. The analyst randomly selects a company with a negative ratio. Based on Bayes’ theorem, the posterior probability that the company will experience a decline is A) 18%. B) 26%. C) 44%. D) 69%.

78) Romi, a production manager, is trying to improve the efficiency of his assembly line. He knows that the machine is set up correctly only 60% of the time. He also knows that if the machine is set up correctly, it will produce good parts 80% of the time, but if set up incorrectly, it will produce good parts only 20% of the time. Romi starts the machine and produces one part before he begins the production run. He finds the first part to be good. What is the revised probability that the machine was set up correctly? A) 48% B) 56% C) 86% D) 96%

79) Romi, a production manager, is trying to improve the efficiency of his assembly line. He knows that the machine is set up correctly only 65% of the time. He also knows that if the machine is set up correctly, it will produce good parts 76% of the time, but if set up incorrectly, it will produce good parts only 10% of the time. Romi starts the machine and produces one part before he begins the production run. He finds the first part to be good. What is the revised probability that the machine was set up correctly?

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A) 93.40% B) 16.40% C) 20.70% D) 49.40%

80) Romi, a production manager, is trying to improve the efficiency of his assembly line. He knows that the machine is set up correctly only 70% of the time. He also knows that if the machine is set up correctly, it will produce good parts 95% of the time, but if set up incorrectly, it will produce good parts only 40% of the time. Romi starts the machine and produces one part before he begins the production run. He finds the first part to be good. What is the revised probability that the machine was set up correctly? A) 12% B) 33.5% C) 66.5% D) 84.7%

81)

5! is equal to _______. A) 5 × 4 × 3 × 2 B) 5 × 4 C) 5 × 4 × 3 D) 5 × 4 × 3 × 2 × 1

82)

How many ways can a committee of four students be selected from a 15-member club? A) 15!/44! B) 15!/(11! × 4!) C) 15 ×14 × 13 D) 15!/(11! × 4!) and 15 × 14 × 13

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83) How many ways can a potential four-letter word, whether or not it has a meaning, be created out of 10 available different letters? A) 4 × 3 × 2 × 1 B) 10 × 9 × 8 × 7/(4 × 3 × 2) C) 10 × 9 × 8 × 7 × 6 × 5/(4 × 3 × 2) D) 10 × 9 × 8 × 7

84)

When some objects are randomly selected, which of the following is true?

A) The order in which objects are selected matters in combinations. B) The order in which objects are selected does not matter in permutations. C) The order in which objects are selected does not matter in combinations. D) The order in which objects are selected matters in both permutations and combinations.

85) A small company that manufactures juggling equipment makes seven different types of clubs. The company wants to start an ad campaign that emphasizes the myriad combinations the avid juggler can create with the company’s clubs. If a juggler wishes to juggle four clubs, each of a different type, how many different combinations of the company’s clubs can he or she make? A) 7 B) 28 C) 35 D) 210

86) Boeing currently produces five models of airplanes for commercial sale. The airline that Lauren works for is rapidly expanding and would like to purchase three airplanes of different models to service various routes. Her job is to analyze which three to buy. How many combinations will she have to analyze?

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A) 5 B) 10 C) 15 D) 20

87) How many project teams composed of five students can be created out of a class of 10 students? A) 10 B) 50 C) 252 D) 30,240

88) How many project teams composed of five students can be created out of a class of 10 students, if each of the five students is assigned a specific position in each group such as president, vice president, secretary, treasurer, and social coordinator? A) 10 B) 50 C) 252 D) 30,240

89) A survey of adults who typically work full time from home recorded their current education level. The results are shown in the table below. Education Level

Frequency

Bachelor's degree or higher

Associate degree

High school only

Less than high school

Calculating the probability that a randomly selected adult who works full time from home has an associate degree is using ________ probability.

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A) empirical B) simple C) subjective D) classical

90) A survey of adults who typically work full time from home recorded their current education level. The results are shown in the table below. Education Level

Frequency

Bachelor's degree or higher

Associate degree

High school only

Less than high school

The probability that a randomly selected adult who works full time from home has a bachelor’s degree or higher is ______. A) 0.24. B) 0.29. C) 0.33. D) 0.64.

91) A company is bidding on two projects, A and B. The probability that the company wins project A is 0.40 and the probability that the company wins project B is 0.25. Winning project A and winning project B are independent events. What is the probability that the company wins project A or project B? A) 0.55 B) 0.65 C) 0.30 D) 0.25

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92) A company is bidding on two projects, A and B. The probability that the company wins project A is 0.50 and the probability that the company wins project B is 0.20. Winning project A and winning project B are independent events. What is the probability that the company does not win either project? A) 0.70 B) 0.65 C) 0.30 D) 0.40

93) A company is bidding on two projects, A and B. The probability that the company wins project A is 0.40 and the probability that the company wins project B is 0.25. Winning project A and winning project B are independent events. What is the probability that the company does not win either project? A) 0.35 B) 0.70 C) 0.45 D) 0.75

94) A random sample of computer users was asked which browser they primarily relied on for surfing the Internet and whether this browser was installed on a PC or on a Mac computer. The following contingency table shows these results. Browser

Mac

Internet Explorer

Firefox

Chrome

Safari

Other

Given that the randomly selected computer was a PC, the probability that the computer used the Firefox browser is ______.

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A) 0.235 B) 0.320 C) 0.361 D) 0.443

95) A business statistics class roster includes 14 business major students and 21 students of another major. Sixteen students in this class are male. There are eight female business majors. What is the number of men in the class who are not business majors? A) 6 B) 8 C) 10 D) 11

96) The following contingency table shows the number of customers who bought various brands of digital cameras at Amazon.com and Ritz Camera. Brand

Amazon.com

Ritz Camera

Nikon

Canon

Sony

Other

Given that the camera was purchased at Ritz Camera, the probability that it was a Sony brand is ______. A) 0.148 B) 0.131 C) 0.204 D) 0.216

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97) The following contingency table shows the number of customers who bought various brands of digital cameras at Amazon.com and Ritz Camera. Brand

Amazon.com

Ritz Camera

Nikon

Canon

Sony

Other

Given that the camera was purchased at Ritz Camera, the probability that it was a Sony brand is ______. A) 0.105 B) 0.122 C) 0.178 D) 0.190

98) At a local bar in a small town, beer and wine are the only two alcoholic options. The manager noted that of all male customers, 150 ordered beer, 40 ordered wine, and 20 asked for soft drinks. Of female customers 38 ordered beer, 20 ordered wine, and 12 asked for soft drinks. What is the probability that a randomly selected customer orders wine? A) 0.143 B) 0.250 C) 0.071 D) 0.214

99) Suppose that 60% of the students do homework regularly. It is also known that 80% of students who had been doing homework regularly, end up doing well in the course. Only 20% of students who had not been doing homework regularly end up doing well in the course. Given that a student did well in the course, what is the probability that the student had been doing homework regularly?

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A) 0.286 B) 0.857 C) 0.143 D) 0.429

100) Suppose that 60% of the students do homework regularly. It is also known that 80% of students who had been doing homework regularly end up doing well in the course. Only 20% of students who had not been doing homework regularly end up doing well in the course. What is the probability that a student does well in the course? A) 0.080 B) 0.480 C) 0.560 D) 0.857

101) There are 23 chess players participating in a weekend tournament. Prices are awarded to the first-, second-, third-, and fourth-place finishers. The number of different ways these four places can be filled by those playing is ______. A) 3,450 B) 8,855 C) 70,256 D) 212,520

102) There are 30 Major League Baseball teams in the National League. Five of these teams will make the playoffs at the end of the season. The number of unique groups of teams that can make the playoffs is ______.

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A) 142,506 B) 252,640 C) 752,988 D) 17,100,720

103) The following table summarizes the ages of the 400 richest Americans. Suppose we select one of these individuals. Find the probability that the selected individual is at least 60 years old. Ages

Frequency

less than 40

40 up to 50

50 up to 60

60 up to 70

109

70 up to 80

80 up to 90

90 or more

104) The following table summarizes the ages of the 400 richest Americans. Suppose we select one of these individuals. Find the probability that the selected individual is less than 80 years old. Ages

Frequency

less than 40

40 up to 50

50 up to 60

60 up to 70

109

70 up to 80

80 up to 90

90 or more

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105)

An experiment consists of rolling a fair die. Find the probability that we roll a 4 or a 6.

106) An experiment consists of tossing a fair coin and rolling a fair die. Find the probability of tossing a head and rolling a 6.

107) The likelihood of rain has been reported at 80% for this week, 40% for next week, and 32% for both weeks. a.What is the probability that it rains in at least one of these two weeks? Which rule of probability applies? b.What is the probability that it does not rain in either of these two weeks? Which rule of probability applies?

108) The likelihood of rain has been reported at 80% for this week, 40% for next week, and 32% for both weeks. Does whether it rains this week influence whether it rains next week? Explain.

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109) Exams are approaching and Helen is allocating time to studying for exams. She thinks that with the appropriate amount of studying, she has an 80% chance of getting an A in Marketing. She also feels that she has a 60% chance of getting an A in Spanish with the appropriate amount of studying. Given the demands on her time, she feels that she has only a 45% chance of getting an A in both classes. What is the probability that Helen gets an A in at least one of her two classes?

110) Exams are approaching and Helen is allocating time to studying for exams. She feels that with the appropriate amount of studying, she has an 80% chance of getting an A in Marketing. She also feels that she has a 60% chance of getting an A in Spanish with the appropriate amount of studying. Given the demands on her time, she feels that she has only a 45% chance of getting an A in both classes. What is the probability that Helen does not get an A in either class?

111) Exams are approaching and Helen is allocating time to studying for exams. She thinks that with the appropriate amount of studying, she has a 70% chance of getting an A in Spanish, and a 20% chance of getting a B in Marketing. Assuming she has no obstacles limiting her available time to allocate to each subject, what is the probability that Helen gets an A in Spanish or a B in Marketing?

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112) Exams are approaching and Helen is allocating time to studying for exams. She plays for the very successful women’s lacrosse team and must schedule her studying around lacrosse practices and play-off games. The entire team assumes that the probability of making the playoffs is 50%. Helen thinks that with the appropriate preparation, she has a 70% chance of getting an A in Marketing, but this chance decreases to 60% if the lacrosse team makes the play-offs. Find the probability of getting an A in Marketing and making the lacrosse play-offs.

113) Exams are approaching and Helen is allocating time to studying for exams. She plays for the very successful women’s lacrosse team and must schedule her studying around lacrosse practices and play-off games. She thinks that with the appropriate preparation, she has a 70% chance of getting an A in Marketing. She also believes that this chance will decrease to 60% if the lacrosse team makes the play-offs. Are getting an A on the exam and being in the lacrosse play-offs independent events? Show evidence of your response.

114) Ryan is hoping to attend graduate school next year. Two of the schools he applied to are the University of Utah and Ohio State University. The probability he gets accepted to Utah given he got accepted to Ohio State is 0.75. The probability he gets accepted to Ohio State is 0.05. The probability he gets accepted to Utah is 0.10. What is the probability he gets accepted to Ohio State given he gets accepted to Utah?

115) Two stocks, A and B, have a historical correlation indistinguishable from zero. The probability that stock A increases next year is 0.2, and the probability that stock B increases next year is 0.4. Calculate the probability that A and B both increase next year.

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116) An investor is keeping a careful eye on the real estate markets in Las Vegas and the Inland Empire. The following are her predictions for the real estate market in 2016. ● With 0.32 probability, foreclosures will increase in Las Vegas. ● With 0.46 probability, foreclosures will increase in Las Vegas or the Inland Empire. ● With 0.27 probability, foreclosures will increase in Las Vegas and the Inland Empire. What is the probability that foreclosures will increase in the Inland Empire?

117) An investor is keeping a careful eye on the real estate markets in Las Vegas and the Inland Empire. The following are her predictions for the real estate market for the next year. ● With 0.32 probability, foreclosures will increase in Las Vegas. ● With 0.46 probability, foreclosures will increase in Las Vegas or the Inland Empire. ● With 0.27 probability, foreclosures will increase in Las Vegas and the Inland Empire. What is the probability that foreclosures will increase in the Inland Empire given that they increased in Vegas?

118) The following contingency table provides frequencies for the preferred type of exercise for people under the age of 35 and those 35 years of age or older. Here xx and yy represent missing values. Age Group

Preferred Form of Exercise

Total

Running

Biking

Swimming

Under 35 years

157

121

35 years or older

159

Total

148

166

516

Version 1

Compute the probability that an individual is under 35 and prefers running.

119) The following contingency table provides frequencies for the preferred type of exercise for people under the age of 35 and those 35 years of age or older. Here xx and yy represent missing values. Age Group

Preferred Form of Exercise

Total

Running

Biking

Swimming

Under 35 years

157

121

35 years or older

159

Total

166

516

Determine whether selecting an individual under 35 is independent of selecting an individual who prefers swimming.

120) The following contingency table provides frequencies for the preferred type of exercise for people under the age of 35 and those 35 years of age or older. Here xx and yy represent missing values. Age Group

Preferred Form of Exercise

Total

Running

Biking

Swimming

Under 35 years

157

121

35 years or older

159

Total

166

516

Determine whether selecting an individual under 35 is independent of selecting an individual who prefers swimming.

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121) In January 2012, the second stop for a Republican to get votes toward the presidential nomination was at the New Hampshire Primary. The following exhibit shows the votes several candidates received from registered Republicans and Independents. Party Affiliation Mitt Romney Ron Paul Jon Huntsman

Others

Total

Republicans

62,645

16,792

12,733

27,610

119,780

Not Republican

34,887

40,056

29,212

24,550

128,705

Source: ABC News What is the probability that a randomly selected voter voted for Ron Paul?

122) In January of 2012, the second stop for a Republican to get votes toward the presidential nomination was at the New Hampshire Primary. The following exhibit shows the votes several candidates received from registered Republicans and Independents. Party Affiliation Mitt Romney Ron Paul Jon Huntsman

Others

Total

Republicans

62,645

16,792

12,733

27,610

119,780

Not Republican

34,887

40,056

29,212

24,550

128,705

Source: ABC News Given that a randomly selected voter is not a Republican, what is the probability that he or she voted for Ron Paul?

123) In January of 2012, the second stop for a Republican to get votes toward the presidential nomination was at the New Hampshire Primary. The following exhibit shows the votes several candidates received from registered Republicans and Independents. Party Affiliation Mitt Romney Ron Paul Jon Huntsman

Others

Total

Republicans

62,645

16,792

12,733

27,610

119,780

Not Republican

34,887

40,056

29,212

24,550

128,705

Version 1

Source: ABC News If a randomly selected voter voted for Jon Huntsman, what is the probability he or she is a Republican?

124) As part of pharmaceutical testing for drowsiness as a side effect of a drug, 200 patients are randomly assigned to one of two groups of 100 each. One group is given the actual drug and the other a placebo. The number of people who felt drowsy in the next hour is recorded as Drug

Placebo

Drowsy

Not drowsy

a.What is the probability that a randomly picked patient in the study feels drowsy in the next hour? b.What is the probability that a randomly picked patient in the study takes the placebo or feels drowsy in the next hour? c.Given that the patient was given the drug, what is the probability that he or she feels drowsy in the next hour? d.Is whether a patient feels drowsy independent of taking the drug? Explain using probabilities.

125) Restaurants in London, Paris, and New York want diners to experience eating in pitch darkness to heighten their senses of taste and smell (Vanity Fair, December 2011). Suppose 400 people were asked, “If given the opportunity, would you eat at one of these restaurants?” The accompanying contingency table, cross-classified by age, would be produced. 18–29

30–44

45–64

65+

Yes

Convert the contingency table to a joint probability table. Version 1

126) Restaurants in London, Paris, and New York want diners to experience eating in pitch darkness to heighten their senses of taste and smell (Vanity Fair, December 2011). Suppose 400 people were asked, “If given the opportunity, would you eat at one of these restaurants?" The accompanying contingency table, cross-classified by age, would be produced. 18–29

30–44

45–64

65+

Yes

a.What is the probability that a respondent would eat at one of these restaurants? b.What is the probability that a respondent would eat at one of these restaurants or is in the 30–44 age bracket? c.Given that the respondent would eat at one of these restaurants, what is the probability that he or she is in the 30–44 age bracket? d.Is whether a respondent would eat at one of these restaurants independent of one’s age? Explain using probabilities.

127) Members of the saxophone section of a marching band are asked to attend saxophoneonly practices once a week. These practices are not mandatory, but they are the only opportunity for the entire section to play together in preparation for the marching season. The section leader has noted that 70% of the section regularly attends practices. Further, given that they attend regularly, there is a 40% chance of earning an A on their performance when later graded by the band director. If they do not attend regularly, there is only a 10% chance of earning an A on their performance. What is the probability that a randomly chosen musician receives an A on their performance?

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128) A certain weightlifter is prone to back injury. He finds that he has a 20% chance of hurting his back if he uses the proper form of bending at the hips and keeping his spine locked. The probability that he will hurt his back with bad form is 95%. The probability that he uses proper form is 75%. What is the probability he hurts his back?

129) Approximately 70% of the state of Pennsylvania sits on a shale formation from which natural gas may be extracted. If a geological test is positive, it has an 80% accuracy rate in correctly identifying a productive drilling site (shale is under the ground). If there is no shale under the ground, geological testing is falsely positive with a probability of 20%. Suppose the result of the geological test comes back positive (the test says there is shale under the ground). It is most important for us to know the probability that there is indeed shale under the ground given a positive geological test result. Find this probability.

130) An investor in Apple is worried the latest management earnings forecast is too aggressive and the company will fall short. His favorite analyst that covers Apple is going to release his report on Apple the week before the earnings announcement. Report stands for the analyst’s report, and Forecast stands for the earnings announcement. Prior Probabilities

Conditional Probabilities

P(Good Report) = 0.2

P(Below Forecast | Good Report) = 0.1

P(Medium Report) = 0.5

P(Below Forecast | Medium Report) = 0.4

P(Bad Report) = 0.3

P(Below Forecast | Bad Report) = 0.9

What is the probability the earnings announcement is below the forecast?

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131) An investor in Apple is worried the latest management earnings forecast is too aggressive and the company will fall short. His favorite analyst that covers Apple is going to release his report on Apple the week before the earnings announcement. Report stands for the analyst’s report, and Forecast stands for the earnings announcement. Prior Probabilities

Conditional Probabilities

P(Good Report) = 0.2

P(Below Forecast | Good Report) = 0.1

P(Medium Report) = 0.5

P(Below Forecast | Medium Report) = 0.4

P(Bad Report) = 0.3

P(Below Forecast | Bad Report) = 0.9

What is the probability the analyst issued a good report given Apple’s earnings announcement was below the forecast?

132) A certain state wants to use three letters followed by three digits on their license plates. If each letter and each digit can be used only once, how many possible license plates can be created?

133) A pension plan gives you 12 possible funds in which to invest, but you are allowed to hold four at any given point in time. How many possible combinations of the 12 funds could you have in your portfolio?

134) There are three unfilled seats on a small plane, but 10 people showed up to try to get one of those three unfilled seats. If the airline picks three people at random to get on the plane, what is the probability you and your two kids will get on the plane? Version 1

135) A group of students has 12 girls and 10 boys. A project team, including three girls and two boys, must be created. Find the number of possible project teams.

136) 5}.

For an experiment in which a single die is rolled, the sample space may be {1, 1, 2, 3, 4, ⊚ ⊚

true false

137)

The probability of a union of events can be greater than 1. ⊚ true ⊚ false

138)

Events are exhaustive if they do not share common outcomes of a sample space. ⊚ true ⊚ false

139)

Mutually exclusive events may share common outcomes of a sample space. ⊚ true ⊚ false

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140) Mutually exclusive and collectively exhaustive events contain all outcomes of a sample space, and they do not share any common outcomes. ⊚ true ⊚ false

141) The union of two events A and B, denoted by A ∪ B, does not have outcomes from both A and B. ⊚ true ⊚ false

142) The complement of an event A, denoted by AC, within the sample space S, is the event consisting of all outcomes of A that are not in S. ⊚ true ⊚ false

143) The intersection of two events A and B, denoted by A ∩ B, is the event consisting of all outcomes that are in A and B. ⊚ true ⊚ false

144)

Two events A and B can be both mutually exclusive and independent at the same time. ⊚ true ⊚ false

145)

Subjective probability is assigned to an event by drawing on logical analysis. ⊚ true ⊚ false

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146)

For two independent events A and B, the probability of their intersection is zero. ⊚ true ⊚ false

147)

Two events can be both mutually exclusive and independent at the same time. ⊚ true ⊚ false

148) Two events A and B are independent if the probability of one does not influence the probability of the other. ⊚ true ⊚ false

149) The total probability rule is useful only when the unconditional probability is expressed in terms of probabilities conditional on two mutually exclusive and exhaustive events. ⊚ true ⊚ false

150) Bayes’ theorem uses the total probability rule to update the prior probability of an event that has not been affected by any new evidence. ⊚ true ⊚ false

151) Bayes’ theorem is used to update prior probabilities based on the arrival of new relevant information. ⊚ true ⊚ false

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152)

Combinations are used when the order in which different objects are arranged matters. ⊚ true ⊚ false

153)

Permutations are used when the order in which different objects are arranged matters. ⊚ true ⊚ false

154) Consider these events. A = The survey respondent is less than 40 years old. B = The survey respondent is 40 years or older. Events A and B are mutually exclusive and exhaustive. ⊚ true ⊚ false

155) The addition rule is used to determine the probability of the union of two events occurring and is defined as a sum of the probabilities of both events. ⊚ true ⊚ false

156) Joint probability of two independent events A and B equals the sum of the individual probabilities of A and B. ⊚ true ⊚ false

157)

The total probability rule is defined as P(A) = P(A ⊚ ⊚

Version 1

B) + P(A

)

true false

158) Bayes’ theorem is a rule that uses the total probability rule and the addition rule to update the probability of the event. ⊚ true ⊚ false

159)

0! = 0. ⊚ true ⊚ false

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Answer Key Test name: Chap 04_4e 1) sample space 2) 3) empirical 4) [law of large numbers, 50] 5) mutually exclusive 6) dependent 7) probability tree 8) C 9) B 10) C 11) C 12) C 13) C 14) C 15) D 16) C 17) C 18) C 19) B 20) A 21) B 22) A 23) C 24) C 25) C 26) A Version 1

27) B 28) A 29) D 30) C 31) D 32) A 33) C 34) D 35) A 36) C 37) A If P(A∪B)C = 0.10 the P(A∪B) = 0.90 P(A∪B) = P(A) + P(B) − P(A∩B) So, 0.90 = 0.60 + 0.30 − P(A∩B) and P(A∩B) = 0 38) B 39) D 40) C 41) D 42) A 43) B 44) D 45) C 46) C 47) C 48) D 49) B 50) C 51) C 52) B 53) C Version 1

54) B 55) A 56) A 57) D 58) A 59) C 60) B 61) B 62) C 63) A 64) B 65) D 66) D 67) B 68) C 69) C 70) B 71) D 72) B 73) D 74) A 75) C 76) D 77) D 78) C 79) A 80) D 81) D 82) B 83) D Version 1

84) C 85) C 86) B 87) C 88) D 89) A 90) D 91) A 92) D 93) C 94) A 95) C 96) A 97) B 98) D 99) B 100) C 101) D 102) A 103) 104) 105) 106)

0.64 0.865 0.3333 1/12 or 0.0833

107) a.88%; the addition rule. b.12%; the compliment rule. 108) Whether it rains next week is not dependent on whether it rains this week because P(rain this week ∩ rain next week) = P(rain this week) × P(rain next week). 109) 0.95 110) 0.05

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111) 0.90 112) 0.30

113) The events "Getting an A in Marketing" and "Making the playoffs" are not independent. 114) 0.375 120) Selecting a 35-or-older individual is not independent of selecting an individual who prefers swimming. 124) a.0.35 b.0.70 c.0.40 d.Not independent

125) 18–29

30–44

45–64

65+

Total

Yes

0.125

0.975

0.19

0.1625

0.575

0.125

0.1525

0.06

0.0875

0.425

Total

0.250

1.000

126) a.0.575 b.0.7275 c.0.1696 d.Not independent 127) 0.31 128) 0.3875 129) 0.9032

130) 0.49 131) 0.04

136) FALSE 137) FALSE 138) FALSE 139) FALSE 140) TRUE 141) FALSE 142) FALSE Version 1

143) TRUE 144) FALSE 145) FALSE 146) FALSE 147) FALSE 148) TRUE 149) FALSE 150) FALSE 151) TRUE 152) FALSE 153) TRUE 154) TRUE 155) FALSE 156) FALSE 157) TRUE 158) FALSE 159) FALSE

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CHAPTER 05 – 4e 1) risk.

A risk-averse consumer demands a(n) _______ expected gain as compensation for taking

2) The risk of the portfolio depends not only on the individual risks of the assets but also on the ________ between the asset returns.

3) To illustrate the possible outcomes and their associated probabilities we can construct a probability ______.

An Excel’s function _________ is used for calculating Poisson probabilities.

5) The hypergeometric probability distribution is appropriate in applications where we cannot assume the trials are _________.

The following formula defines the ________ of a hypergeometric random variable

Which of the following can be represented by a discrete random variable? A) The number of obtained spots when rolling a six-sided die B) The height of college students C) The average outside temperature taken every day for two weeks D) The finishing time of participants in a cross-country meet

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Which of the following can be represented by a discrete random variable? A) The circumference of a randomly generated circle B) The time of a flight between Chicago and New York C) The number of defective light bulbs in a sample of five D) The average distance achieved in a series of long jumps

Which of the following can be represented by a continuous random variable? A) The time of a flight between Chicago and New York B) The number of defective light bulbs in a sample of five C) The number of arrivals to a drive-through bank window in a four-hour period D) The score of a randomly selected student on a five-question multiple-choice quiz

10)

Which of the following can be represented by a continuous random variable?

A) The average temperature in Tampa, Florida, during the month of July B) The number of typos found on a randomly selected page of this test bank C) The number of students who will get financial assistance in a group of 50 randomly selected students D) The number of customers who visit a department store between 10:00 a.m. and 11:00 a.m. on Mondays

11) Which of the following is NOT a characteristic of the probability mass function of a discrete random variable X? A) The sum of probabilities P(X = x) over all possible values x is 1. B) For every possible value x, the probability P(X = x) is between 0 and 1. C) Describes all possible values x with the associated probabilities P(X = x). D) The probability P(X ≤ x) for every possible value x is equal to 1.

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12)

What are the two key properties of a discrete probability distribution? A) 0≤P (X = x) ≤1 and ∑P (X = xi ) = 0 B) 0≤P (X = x) ≤1 and ∑P (X = xi ) = 1 C) −1≤P (X = x) ≤1 and ∑P (X = xi ) = 1 D) −1≤P (X = x) ≤1 and ∑P (X = xi ) = 0

13)

Consider the following discrete probability distribution. x

−10

P(X = x)

0.35

0.10

0.15

0.40

What is the probability that X is 0? A) 0.10 B) 0.35 C) 0.55 D) 0.65

14)

Consider the following discrete probability distribution. x

–10

P(X = x)

0.30

0.18

0.11

0.41

What is the probability that X is greater than 0? A) 0.18 B) 0.30 C) 0.52 D) 0.62

15)

Consider the following discrete probability distribution. x

−10

P(X = x)

0.35

0.10

0.15

0.40

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What is the probability that X is greater than 0? A) 0.10 B) 0.35 C) 0.55 D) 0.65

16)

Consider the following discrete probability distribution. x

−10

P(X = x)

0.35

0.10

0.15

0.40

What is the probability that X is negative? A) 0.00 B) 0.10 C) 0.15 D) 0.35

17)

Consider the following discrete probability distribution. x

−10

P(X = x)

0.35

0.10

0.15

0.40

What is the probability that X is less than 5? A) 0.10 B) 0.15 C) 0.35 D) 0.45

18) X.

Consider the following cumulative distribution function for the discrete random variable x

P(X ≤ x)

0.30

0.44

0.72

1.00

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What is the probability that X is less than or equal to 2? A) 0.14 B) 0.30 C) 0.44 D) 0.56

19) X.

Consider the following cumulative distribution function for the discrete random variable x

P(X ≤ x)

0.26

0.49

0.58

1.00

What is the probability that X equals 2? A) 0.23 B) 0.65 C) 0.49 D) 0.26

20) X.

Consider the following cumulative distribution function for the discrete random variable x

P(X ≤ x)

0.30

0.44

0.72

1.00

What is the probability that X equals 2? A) 0.14 B) 0.30 C) 0.44 D) 0.56

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21) X.

Consider the following cumulative distribution function for the discrete random variable x

P(X ≤ x)

0.10

0.35

0.75

0.85

1.00

What is the probability that X is greater than 3? A) 0.75 B) 0.45 C) 0.35 D) 0.25

22)

We can think of the expected value of a random variable X as ________.

A) the long-run average of the random variable values generated over 100 independent repetitions B) the long-run average of the random variable values generated over 1,000 independent repetitions C) the long-run average of the random variable values generated over infinitely many independent repetitions D) the long-run average of the random variable values generated over a finite number of independent repetitions

23) The expected value of a random variable X cannot be referred to or denoted as ___________. A) µ B) E(X) C) the population mean D) the mode

24)

Consider the following probability distribution. xi

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P(X = xi)

0.1

0.7

The expected value is _____. A) 1.4 B) 2.0 C) 2.4 D) 3.0

25)

Consider the following probability distribution. xi

P(X = xi)

0.1

0.2

0.3

0.4

The expected value is _____.

A) 0.9 B) 1.5 C) 2.0 D) 2.5

26)

Consider the following probability distribution. xi

P(X = xi)

0.1

0.2

0.4

0.3

The expected value is _____.

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A) 0.89 B) 0.94 C) 1.65 D) 1.90

27)

Consider the following probability distribution. xi

P(X = xi)

0.1

0.2

0.4

0.3

The standard deviation is _________. A) 0.89 B) 0.94 C) 1.65 D) 1.90

28)

Consider the following probability distribution. xi

P(X = xi)

–2

0.2

–1

0.1

0.3

0.4

The expected value is _____. A) −1.0 B) −0.1 C) 0.1 D) 1.0

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29)

Consider the following probability distribution. xi

P(X = xi)

−2

0.2

−1

0.1

0.3

0.4

The variance is _____. A) 1.14 B) 1.29 C) 1.65 D) 1.94

30)

Consider the following probability distribution. xi

P(X = xi)

–2

0.2

–1

0.1

0.3

0.4

The standard deviation is _____.

A) 1.14 B) 1.29 C) 1.65 D) 1.94

31) An analyst has constructed the following probability distribution for firm X’s predicted return for the upcoming year. Return

Probability

−5

0.20

0.30

0.40

0.10

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The expected value and the variance of this distribution are _____ and _____. Expected Value

Variance

4.58

21.00

2.5

4.58

2.5

21.00

A) Option A B) Option B C) Option C D) Option D

32) An analyst believes that a stock’s return depends on the state of the economy, for which she has estimated the following probabilities: State of the Economy

Probability

Return

Good

0.60

15%

Normal

0.30

10%

Poor

0.10

−2%

According to the analyst’s estimates, the expected return of the stock is ____. A) 7.8% B) 11.4% C) 11.8% D) 15.0%

33)

An analyst estimates that the year-end price of a stock has the following probabilities: Stock Price

Probability

$80

0.10

$85

0.30

$90

0.40

$95

0.20

The stock’s expected price at the end of the year is _______.

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A) $87.50 B) $88.50 C) $89.00 D) $90.00

34) The number of homes sold by a realtor during a month has the following probability distribution: Number Sold

Probability

0.20

0.40

What is the probability that the realtor will sell at least one house during a month? A) 0.20 B) 0.40 C) 0.60 D) 0.80

35) The number of homes sold by a realtor during a month has the following probability distribution: Number Sold

Probability

0.20

0.40

What is the probability that the realtor sells no more than one house during a month? A) 0.20 B) 0.40 C) 0.60 D) 0.80

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36) The number of homes sold by a realtor during a month has the following probability distribution: Number Sold

Probability

0.20

0.40

What is the expected number of homes sold by the realtor during a month? A) 1 B) 1.2 C) 1.5 D) 2

37) The number of homes sold by a realtor during a month has the following probability distribution: Number Sold

Probability

0.20

0.10

0.70

What is the standard deviation of the number of homes sold by the realtor during a month? A) 0.81 B) 0.65 C) 1.50 D) 1.50

38) The number of homes sold by a realtor during a month has the following probability distribution: Number Sold

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Probability

0.20

0.40

What is the standard deviation of the number of homes sold by the realtor during a month? A) 0.56 B) 0.75 C) 1 D) 1.2

39) The number of cars sold by a car salesperson during each of the last 25 weeks is the following: Number Sold

Frequency

What is the probability that the salesperson will sell one car during a week? A) 0.20 B) 0.40 C) 0.60 D) 0.80

40) The number of cars sold by a car salesperson during each of the last 25 weeks is the following: Number Sold

Frequency

What is the probability that the salesperson sells no more than one car during a week? A) 0.20 B) 0.40 C) 0.60 D) 0.80

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41) The number of cars sold by a car salesperson during each of the last 25 weeks is the following: Number Sold

Frequency

What is the expected number of cars sold by the salesperson during a week? A) 0 B) 0.8 C) 1 D) 1.5

42) The number of cars sold by a car salesperson during each of the last 25 weeks is the following: Number Sold

Frequency

What is the standard deviation of the number of cars sold by the salesperson during a week? A) 0.56 B) 0.75 C) 0.80 D) 1

43)

A consumer who is risk averse is best characterized as __________.

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A) a consumer who may accept a risky prospect even if the expected gain is negative B) a consumer who demands a positive expected gain as compensation for taking risk C) a consumer who completely ignores risk and makes his or her decisions based solely on expected values D) a consumer who is indifferent to risk

44) A consumer who is risk neutral is best characterized as ______________________________________________________. A) a consumer who may accept a risky prospect even if the expected gain is negative B) a consumer who demands a positive expected gain as compensation for taking risk C) a consumer who completely ignores risk and makes his or her decisions based solely on expected values D) a consumer who underplays risk

45)

How would you characterize a consumer who is risk loving?

A) A consumer who may accept a risky prospect even if the expected gain is negative. B) A consumer who demands a positive expected gain as compensation for taking risk. C) A consumer who completely ignores risk and makes his or her decisions solely on the basis of expected values. D) A consumer who is indifferent to risk.

46) An investor has a $200,000 portfolio of which $120,000 has been invested in Stock A and the remainder in Stock B. Other characteristics of the portfolio are shown in the accompanying table. Stock A

Stock B

E(RA ) = µA = 8.4%

E(RB ) = µB = 6.5%

σA = 11.82%

σB = 7.19%

Cov(RA,RB ) = σAB = 17.10%

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The correlation coefficient between the returns on Stocks A and B is _____. A) −0.17 B) 0.20 C) 0.80 D) 4.97

47) An investor has a $200,000 portfolio of which $120,000 has been invested in Stock A and the remainder in Stock B. Other characteristics of the portfolio are shown in the accompanying table. Stock A

Stock B

E(RA ) = µA = 8.4%

E(RB ) = µB = 6.5%

σA = 11.82%

σB = 7.19%

Cov(RA,RB ) = σAB = 17.10%

The expected return of the portfolio is ____. A) 2.60% B) 5.04% C) 7.64% D) 14.90%

48) An investor has a $200,000 portfolio of which $120,000 has been invested in Stock A and the remainder in Stock B. Other characteristics of the portfolio are shown in the accompanying table. Stock A

Stock B

E(RA ) = µA = 8.4%

E(RB ) = µB = 6.5%

σA = 11.82%

σB = 7.19%

Cov(RA,RB ) = σAB = 17.10%

The portfolio variance is ______.

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A) 8.17% B) 13.80% C) 66.78 (%)2 D) 190.70 (%)2

49) An investor has a $100,000 portfolio of which $75,000 has been invested in Stock A and the remainder in Stock B. Other characteristics of the portfolio are shown in the accompanying table. Stock A

Stock B

E(RA ) = µA = 8.0%

E(RB ) = µB = 5.5%

σA = 11.82%

σB = 7.19%

Cov(RA,RB ) = σAB = 17.10%

The expected return of the portfolio is _____. A) 6.30% B) 6.75% C) 7.38% D) 13.50%

50) An investor has a $100,000 portfolio of which $75,000 has been invested in Stock A and the remainder in Stock B. Other characteristics of the portfolio are shown in the accompanying table. Stock A

Stock B

E(RA ) = µA = 8.4%

E(RB ) = µB = 6.5%

σA = 10.80%

σB = 7.29%

Cov(RA,RB ) = σAB = 16.70%

The standard deviation of the portfolio is _____.

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A) 9.39 (%) B) 14.19 (%). C) 88.23 (%)2. D) 201.41 (%)2.

51) Given the information in the accompanying table, calculate the correlation coefficient between the returns on Stocks A and B. Stock A

Stock B

E(RA ) = µA = 8.4%

E(RB ) = µB = 6.5%

σA = 10.80%

σB = 7.29%

Cov(RA,RB ) = σAB = 16.70%

A) −0.212 B) −0.167 C) 0.167 D) 0.212

52) Which of the following statements is the most accurate about a binomial random variable? A) It has a bell-shaped distribution. B) It is a continuous random variable. C) It counts the number of successes in a given number of trials. D) It counts the number of successes in a specified time interval or region.

53) It is known that 15% of the calculators shipped from a particular factory are defective. What is the probability that exactly four of ten chosen calculators are defective?

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A) 0.99 B) 0.01 C) 0.4 D) 0.04

54) It is known that 10% of the calculators shipped from a particular factory are defective. What is the probability that none in a random sample of four calculators is defective? A) 0.0010 B) 0.2916 C) 0.3439 D) 0.6561

55) It is known that 10% of the calculators shipped from a particular factory are defective. What is the probability that at least one in a random sample of four calculators is defective? A) 0.0010 B) 0.2916 C) 0.3439 D) 0.6561

56) It is known that 10% of the calculators shipped from a particular factory are defective. What is the probability that no more than one in a random sample of four calculators is defective? A) 0.2916 B) 0.3439 C) 0.6561 D) 0.9477

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57) Thirty percent of the CFA candidates have a degree in economics. A random sample of three CFA candidates is selected. What is the probability that none of them has a degree in economics? A) 0.027 B) 0.300 C) 0.343 D) 0.900

58) Thirty percent of the CFA candidates have a degree in economics. A random sample of three CFA candidates is selected. What is the probability that at least one of them has a degree in economics? A) 0.300 B) 0.343 C) 0.657 D) 0.900

59) On a particular production line, the likelihood that a light bulb is defective is 5%. Ten light bulbs are randomly selected. What is the probability that two light bulbs will be defective? A) 0.0105 B) 0.0746 C) 0.3151 D) 0.5987

60) On a particular production line, the likelihood that a light bulb is defective is 5%. Ten light bulbs are randomly selected. What is the probability that none of the light bulbs will be defective?

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A) 0.0105 B) 0.0746 C) 0.3151 D) 0.5987

61) On a particular production line, the likelihood that a light bulb is defective is 12%. Four light bulbs are randomly selected. What is the probability that at most 2 of the light bulbs will be defective? A) 0.0062 B) 0.0052 C) 0.9937 D) 0.9832

62) On a particular production line, the likelihood that a light bulb is defective is 5%. Ten light bulbs are randomly selected. What is the probability that at most 3 of the light bulbs will be defective? A) 0.0105 B) 0.0115 C) 0.9885 D) 0.9990

63) On a particular production line, the likelihood that a light bulb is defective is 5%. Ten light bulbs are randomly selected. What are the mean and variance of the number of defective bulbs? A) 0.475 and 0.475 B) 0.475 and 0.6892 C) 0.50 and 0.475 D) 0.50 and 0.6892

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64) According to a study by the Centers for Disease Control and Prevention, about 33% of U.S. births are Caesarean deliveries. Suppose seven expectant mothers are randomly selected. What is the probability that two of the expectant mothers will have a Caesarean delivery? A) 0.0147 B) 0.0606 C) 0.2090 D) 0.3088

65) According to a study by the Centers for Disease Control and Prevention, about 33% of U.S. births are Caesarean deliveries. Suppose seven expectant mothers are randomly selected. What is the probability that at least one of the expectant mothers will have a Caesarean delivery? A) 0.0606 B) 0.2090 C) 0.9394 D) 0.9742

66) According to a study by the Centers for Disease Control and Prevention, about 33% of U.S. births are Caesarean deliveries. Suppose seven expectant mothers are randomly selected. What is the probability that at most two of the expectant mothers will have a Caesarean delivery? A) 0.2696 B) 0.3088 C) 0.4217 D) 0.5783

67) According to a study by the Centers for Disease Control and Prevention, about 33% of U.S. births are Caesarean deliveries. Suppose seven expectant mothers are randomly selected. The expected number of mothers who will not have a Caesarean delivery is ______.

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A) 1.24 B) 2.31 C) 3.50 D) 4.69

68) According to a study by the Centers for Disease Control and Prevention, about 33% of U.S. births are Caesarean deliveries. Suppose seven expectant mothers are randomly selected. What is the standard deviation of the number of mothers who will have a Caesarean delivery? A) 1.24 B) 1.54 C) 2.31 D) 4.69

69) For a particular clothing store, a marketing firm finds that 16% of $10-off coupons delivered by mail are redeemed. Suppose six customers are randomly selected and are mailed $10-off coupons. What is the probability that three of the customers redeem the coupon? A) 0.0486 B) 0.1912 C) 0.3513 D) 0.4015

70) For a particular clothing store, a marketing firm finds that 5% of $10-off coupons delivered by mail are redeemed. Suppose three customers are randomly selected and are mailed $10-off coupons. What is the probability that no more than one of the customers redeems the coupon?

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A) 0.5913 B) 0.6415 C) 0.9928 D) 0.4872

71) For a particular clothing store, a marketing firm finds that 16% of $10-off coupons delivered by mail are redeemed. Suppose six customers are randomly selected and are mailed $10-off coupons. What is the probability that no more than one of the customers redeems the coupon? A) 0.2472 B) 0.3513 C) 0.4015 D) 0.7528

72) For a particular clothing store, a marketing firm finds that 16% of $10-off coupons delivered by mail are redeemed. Suppose six customers are randomly selected and are mailed $10-off coupons. What is the probability that at least two of the customers redeem the coupon? A) 0.2472 B) 0.3513 C) 0.4015 D) 0.7528

73) For a particular clothing store, a marketing firm finds that 16% of $10-off coupons delivered by mail are redeemed. Suppose six customers are randomly selected and are mailed $10-off coupons. What is the expected number of coupons that will be redeemed?

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A) 0.81 B) 0.96 C) 3.42 D) 5.04

74) According to a Department of Labor report, the city of Detroit had a 20% unemployment rate in May. Eight working-age residents were chosen at random. What is the probability that exactly one of the residents was unemployed? A) 0.0419 B) 0.1678 C) 0.2936 D) 0.3355

75) According to a Department of Labor report, the city of Detroit had a 20% unemployment rate in May. Eight working-age residents were chosen at random. What is the probability that at least two of the residents were unemployed? A) 0.1678 B) 0.3355 C) 0.4967 D) 0.5033

76) According to a Department of Labor report, the city of Detroit had a 20% unemployment rate in May. Eight working-age residents were chosen at random. What is the probability that exactly four residents were unemployed? A) 0.0013 B) 0.0091 C) 0.0459 D) 0.1468

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77) According to a Department of Labor report, the city of Detroit had a 20% unemployment rate in May. Eight working-age residents were chosen at random. What was the expected number of unemployed residents, when eight working-age residents were randomly selected? A) 1.0 B) 1.6 C) 2.0 D) 6.4

78) Chauncey Billups, a current shooting guard for the Los Angeles Clippers, has a career free-throw percentage of 89.4%. Suppose he shoots six free throws in tonight’s game. What is the probability that Billups makes all six free throws? A) 0.1070 B) 0.3632 C) 0.5105 D) 0.6530

79) Chauncey Billups, a current shooting guard for the Los Angeles Clippers, has a career free-throw percentage of 92.80%. Suppose he shoots six free throws in tonight’s game. What is the probability that Billups makes five or more of his free throws? A) 0.5728 B) 0.4255 C) 0.9360 D) 0.9563

80) Chauncey Billups, a current shooting guard for the Los Angeles Clippers, has a career free-throw percentage of 89.4%. Suppose he shoots six free throws in tonight’s game. What is the probability that Billups makes five or more of his free throws?

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A) 0.3632 B) 0.5105 C) 0.8737 D) 0.8940

81) Chauncey Billups, a current shooting guard for the Los Angeles Clippers, has a career free-throw percentage of 89.4%. Suppose he shoots six free throws in tonight’s game. What is the expected number of free throws that Billups will make? A) 0.636 B) 5.364 C) 5.686 D) 6.000

82) Chauncey Billups, a current shooting guard for the Los Angeles Clippers, has a career free-throw percentage of 89.4%. Suppose he shoots six free throws in tonight’s game. What is the standard deviation of the number of free throws that Billups will make? A) 0.5364 B) 0.5686 C) 0.7540 D) 5.6860

83)

Which of the following statements is the most accurate about a Poisson random variable? A) It counts the number of successes in a given number of trials. B) It counts the number of successes in a specified time or space interval. C) It is a continuous random variable. D) It has a bell-shaped distribution.

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84) The foreclosure crisis has been particularly devastating in housing markets in much of the south and west United States, but even when analysis is restricted to relatively strong housing markets the numbers are staggering. For example, in 2017 an average of three residential properties were auctioned off each weekday in the city of Boston, up from an average of one per week in 2011. What is the probability that exactly four foreclosure auctions occurred on a randomly selected weekday of 2017 in Boston? A) 0.1680 B) 0.1954 C) 0.2240 D) 0.8153

85) The foreclosure crisis has been particularly devastating in housing markets in much of the south and west United States, but even when analysis is restricted to relatively strong housing markets the numbers are staggering. For example, in 2017 an average of three residential properties were auctioned off each weekday in the city of Boston, up from an average of one per week in 2011. What is the probability that at least one foreclosure auction occurred in Boston on a randomly selected weekday of 2017? A) 0.0498 B) 0.1494 C) 0.8009 D) 0.9502

86) The foreclosure crisis has been particularly devastating in housing markets in much of the south and west United States, but even when analysis is restricted to relatively strong housing markets the numbers are staggering. For example, in 2017 an average of three residential properties were auctioned off each weekday in the city of Boston, up from an average of one per week in 2011. What is the probability that no more than two foreclosure auctions occurred on a randomly selected weekday of 2017 in Boston?

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A) 0.1991 B) 0.2240 C) 0.4232 D) 0.5768

87) The foreclosure crisis has been particularly devastating in housing markets in much of the south and west United States, but even when analysis is restricted to relatively strong housing markets the numbers are staggering. For example, in 2017 an average of three residential properties were auctioned off each weekday in the city of Boston, up from an average of one per week in 2011. What is the probability that exactly 10 foreclosure auctions occurred during a randomly selected five-day week in 2017 in Boston? A) 0.0008 B) 0.0486 C) 0.1185 D) 0.9514

88) A bank manager estimates that an average of four customers enter the tellers’ queue every nine minutes. Assume that the number of customers that enter the tellers’ queue is Poisson distributed. What is the probability that exactly five customers enter the queue in a randomly selected nine-minute period? A) 0.1999 B) 0.2466 C) 0.0661 D) 0.1563

89) A bank manager estimates that an average of two customers enter the tellers’ queue every five minutes. Assume that the number of customers that enter the tellers’ queue is Poisson distributed. What is the probability that exactly three customers enter the queue in a randomly selected five-minute period?

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A) 0.0902 B) 0.1804 C) 0.2240 D) 0.2707

90) A bank manager estimates that an average of two customers enters the tellers’ queue every five minutes. Assume that the number of customers that enters the tellers’ queue is Poisson distributed. What is the probability that fewer than two customers enter the queue in a randomly selected five-minute period? A) 0.1353 B) 0.2707 C) 0.4060 D) 0.6767

91) A bank manager estimates that an average of two customers enters the tellers’ queue every five minutes. Assume that the number of customers that enters the tellers’ queue is Poisson distributed. What is the probability that at least two customers enter the queue in a randomly selected five-minute period? A) 0.1353 B) 0.2707 C) 0.4060 D) 0.5940

92) A bank manager estimates that an average of two customers enters the tellers’ queue every five minutes. Assume that the number of customers that enters the tellers’ queue is Poisson distributed. What is the probability that exactly seven customers enter the queue in a randomly selected 15-minute period?

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A) 0.0034 B) 0.1033 C) 0.1377 D) 0.1606

93) Cars arrive randomly at a tollbooth at a rate of 30 cars per 8 minutes during rush hour. What is the probability that exactly five cars will arrive over a five-minute interval during rush hour? A) 0.4623 B) 0.0874 C) 0.0123 D) 0.0001

94) Cars arrive randomly at a tollbooth at a rate of 20 cars per 10 minutes during rush hour. What is the probability that exactly five cars will arrive over a five-minute interval during rush hour? A) 0.0378 B) 0.0500 C) 0.1251 D) 0.5000

95) A roll of steel is manufactured on a processing line. The anticipated number of defects in a 10-foot segment of this roll is two. What is the probability of no defects in 10 feet of steel? A) 0.0002 B) 0.1353 C) 0.1804 D) 0.8647

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96) According to geologists, the San Francisco Bay Area experiences five earthquakes with a magnitude of 6.5 or greater every 100 years. What is the probability that no earthquakes with a magnitude of 6.5 or greater will strike the San Francisco Bay Area in the next 40 years? A) 0.0067 B) 0.0337 C) 0.1353 D) 0.2707

97) According to geologists, the San Francisco Bay Area experiences five earthquakes with a magnitude of 6.5 or greater every 100 years. What is the probability that more than two earthquakes with a magnitude of 6.5 or greater will strike the San Francisco Bay Area in the next 40 years? A) 0.1353 B) 0.2706 C) 0.3233 D) 0.8754

98) According to geologists, the San Francisco Bay Area experiences six earthquakes with a magnitude of 4.6 or greater every 100 years. What is the probability that one or more earthquakes with a magnitude of 4.6 or greater will strike the San Francisco Bay Area in the next year? A) 0.4972 B) 0.1447 C) 0.9418 D) 0.0582

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99) According to geologists, the San Francisco Bay Area experiences five earthquakes with a magnitude of 6.5 or greater every 100 years. What is the probability that one or more earthquakes with a magnitude of 6.5 or greater will strike the San Francisco Bay Area in the next year? A) 0.0488 B) 0.1353 C) 0.4878 D) 0.9512

100) According to geologists, the San Francisco Bay Area experiences five earthquakes with a magnitude of 6.5 or greater every 100 years. What is the expected value of the number of earthquakes with a magnitude of 6.5 or greater striking the San Francisco Bay Area in the next 40 years? A) 1.414 B) 2.000 C) 2.236 D) 5.000

101) According to geologists, the San Francisco Bay Area experiences four earthquakes with a magnitude of 5.1 or greater every 100 years. What is the standard deviation of the number of earthquakes with a magnitude of 5.1 or greater striking the San Francisco Bay Area in the next 40 years? A) 1.836 B) 4.000 C) 1.600 D) 1.265

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102) According to geologists, the San Francisco Bay Area experiences five earthquakes with a magnitude of 6.5 or greater every 100 years. What is the standard deviation of the number of earthquakes with a magnitude of 6.5 or greater striking the San Francisco Bay Area in the next 40 years? A) 1.414 B) 2.000 C) 2.236 D) 5.000

103)

Which of the following is true about the hypergeometric distribution? A) The trials are independent and the probability of success may change from trial to

trial. B) The trials are independent and the probability of success does not change from trial to trial. C) The trials are not independent and the probability of success may change from trial to trial. D) The trials are not independent and the probability of success does not change from trial to trial.

104) An urn contains 15 balls, seven of which are red. The selection of a red ball is desired and is therefore considered to be a success. If a person draws three balls from the urn, what is the probability of two successes? A) 0.3692 B) 0.2101 C) 0.7320 D) 0.8919

105) An urn contains 12 balls, five of which are red. The selection of a red ball is desired and is therefore considered to be a success. If a person draws three balls from the urn, what is the probability of two successes? Version 1

A) 0.1591 B) 0.3182 C) 0.6810 D) 0.8409

106) An urn contains 12 balls, five of which are red. Selection of a red ball is desired and is therefore considered to be a success. If three balls are selected, what is the expected value of the distribution of the number of selected red balls? A) 0.4167 B) 0.8333 C) 0.5833 D) 1.2500

107) Suppose a baseball team has 14 players on the roster who are not members of the pitching staff. Of those 14 players, assume that three have recently taken a performance-enhancing drug. Suppose the league decides to randomly test five members of the team. What is the probability that exactly two of the tested players are found to have taken a performance-enhancing drug? A) 0.2308 B) 0.2473 C) 0.4945 D) 0.7692

108) Suppose a baseball team has 14 players on the roster who are not members of the pitching staff. Of those 14 players, assume that two have recently taken a performance-enhancing drug. Suppose the league decides to randomly test seven members of the team. What is the probability that at least one of the tested players is found to have taken a performance-enhancing drug?

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