Stats

The z value associated with a probability of .5040 is '

.01

For the binomial distribution, px(1 − p)n − x, represents the probability of any particular sequence with x successes and n − x failures. Use this formula to answer the following: In the Southern area of the United States, approximately 20% of adults have a college degree. We randomly ask four adults whether they have a college degree. What is the probability that none of the adults have a college degree?

.4096

For z =.11, what is the corresponding probability? Multiple choice question.

.5438

Order the steps in developing a hypothesis in order from the first to second to third step.

1. identify the relevant population parameter of interest 2. Determine whether it is a one-or two-tailed test. 3. Include some form of the equality sign in the null hypothesis...

The nonzero slope coefficient test is used for a renowned financial application referred to as the capital asset pricing model (CAPM).The model y = α + βx + ɛ, is essentially a simple linear regression model that uses α and β, in place of the usual β0 and β1, to represent the intercept and the slope coefficients, respectively. Which of the following is true about the slope coefficient α, called the stock's alpha? Select that apply! Abnormal returns are positive when α > 0 Abnormal returns are negative when α < 0. Measures how sensitive the stock's return is to changes in the level of the overall market The CAPM theory predicts α to be zero

Abnormal returns are positive when α > 0 Abnormal returns are negative when α < 0. The CAPM theory predicts α to be zero

What are some commonly used terms for the normal distribution?

Bell-shaped distribution Gaussian distribution

Which of the following is an example of a Type II Error?

Can occur when the null hypothesis is false

The assumption of constant variability of observations often breaks down in studies with cross-sectional data. Consider the model y = β0 + β1x + ɛ, where y is a household's consumption expenditure and x is its disposable income. It may be unreasonable to assume that the variability of consumption is the same across a cross-section of household incomes. This violation is called: Correlated Observations Nonlinear Patterns Multicollinearity Changing variability

Changing variability

A simple probability distribution for a continuous random variable is called the:

Continuous uniform distribution

We are conducting a hypothesis test using α = 0.05. H0:Do not build brick-and-mortar store. HA:Build brick-and-mortar store. We determine that the p-value is .20. What is our decision?

Do not reject the null hypothesis

Consider the following linear regression model, which links the response variable y with k predictor variables x1, x2,..., xk:y=β0+β1x1+β2x2+... +βkxk+ε. If, for example, the slope coefficient β1 equals zero, then the predictor variable x1 does what and implies what? Choose all that answer the 'does what?' and 'Implies what?' questions! Drops out of the equation Implying that x1 does not influence y Does not drop out of the equation Then x1 influences y

Drops out of the equation Implying that x1 does not influence y

For the linear regression model, y = β0 + β1x1 + β2x2 + . . . + βkxk + ɛ, which of the following are the competing hypotheses used for a test of joint significance? Choose both the correct test for the null and alternative hypotheses. H0:β1=β2=... =βk=0 HA: βj ≠βj0 H0: βj =βj0 HA:At least one βi≠0

H0:β1=β2=... =βk=0 HA:At least one βi≠0

Which of the following is true of the population proportion p?

Is a descriptive measure for a qualitative variable It is estimated on the basis of its sample counterpart, the sample proportion ̄P

Which of the following is true regarding the graph depicting the normal probability density function f(x)?

Is often referred to as the bell curve Is often referred to as the normal curve Is symmetric around the mean

Which of the following is true regarding the graph depicting the normal probability density function f(x)?

Is symmetric around the mean Is often referred to as the normal curve Is often referred to as the bell curve

What is the most widely used continuous probability distribution? the '_____ ' distribution.

Normal

Scores on a management aptitude exam are normally distributed with a mean of 72 and a standard deviation of 8. If we are trying to find the probability that a randomly selected manager will score above 75, what is the corresponding Z value?

P(Z >.375)

Which of the following summarizes the two correct decisions related to Type I and Type II errors?

Rejecting the null hypothesis when the null hypothesis is false Not rejecting the null hypothesis when the null hypothesis is true

'' " plots are used to detect some of the common violations to the regression model assumptions. These graphical plots are easy to use and provide informal analysis of the estimated regression models.

Residual

If residual plots exhibit strong nonlinear patterns, the inferences made by a linear regression model can be quite misleading. In such instances, we should employ nonlinear regression methods based on simple transformations of the ' ' and the predictor variables.

Response

In the presence of changing variability, the estimated standard errors of the OLS estimators are inappropriate. What does this imply about using standard testing? We should use standard t tests only We should use F tests only Standard t or F tests are not valid as they are based on these estimated standard errors. Use standard t or F tests

Standard t or F tests are not valid as they are based on these estimated standard errors.

When we assess a linear regression model, there are several tests we can use. What is the test called that determines whether the predictor variables x1, x2,..., xk have a joint statistical influence on y? Test of individual significance Test for nonzero slope coefficient Test for goodness of fit Test of joint significance

Test of joint significance

An experiment satisfies a Poisson process if (choose all that apply)

The number of successes within a specified time or space interval equals any integer between zero and infinity The probability of success in any interval is the same for all intervals of equal size The probability of success in any interval is proportional to the size of the interval

Which of the following are the assumptions that underlie the classical linear regression model? Please select all that apply! The regression model given by y = β0 + β1x1 + β2x2 +... + βkxk + ɛ is linear in the parameters β0, β1,..., βk. There is an exact linear relationship among the predictor variables; or, in statistical terminology, there is no perfect multicollinearity. The error term ɛ is correlated with any of the predictor variables x1, x2,..., xk Conditional on x1, x2,.., xk, the error term ɛ is uncorrelated across observations; or, in statistical terminology, there is no serial correlation.

The regression model given by y = β0 + β1x1 + β2x2 +... + βkxk + ɛ is linear in the parameters β0, β1,..., βk. Conditional on x1, x2,.., xk, the error term ɛ is uncorrelated across observations; or, in statistical terminology, there is no serial correlation.

Recall that the population proportion p is the essential descriptive measure for a qualitative variable, and that it is estimated on the basis of its sample counterpart. What is its sample counterpart?

The sample proportion ̄P

The basic principle of hypothesis testing is to first assume that the null hypothesis is ' ' and then determine if sample evidence contradicts this

True

True or false: In most applications, we require some form of the equality sign in the null hypothesis

True

The nonzero slope coefficient test is used for a renowned financial application referred to as the capital asset pricing model (CAPM).The model y = α + βx + ɛ, is essentially a simple linear regression model that uses α and β, in place of the usual β0 and β1, to represent the intercept and the slope coefficients, respectively. Which of the following is true about the slope coefficient β, called the stock's beta? Select that apply!

When β equals 1, any change in the market return leads to an identical change in the given stock return. Measures how sensitive the stock's return is to changes in the level of the overall market A stock for which β > 1 is considered more "aggressive" or riskier than the market

Scores on a management aptitude examination are normally distributed with a mean of 72 and a standard deviation of 8.We want to find the lowest score that will place a manager in the top 10% (90th percentile) of the distribution. Which of the following is true to solve this problem?

a score of 82.24 or higher will place a manager in the top 10% of the distribution z = 1.28 The 90th percentile is a numerical value x such that P(X < x) = 0.90

We use hypothesis testing to resolve conflicts between two competing hypotheses on a particular population parameter of interest. Which of the following corresponds to the null hypothesis?

corresponding to a presumed default state of nature or status quo denoted H0

For the binomial distribution, px(1 − p)n − x, represents the probability of any particular sequence with x successes and n − x failures. Use this formula to answer the following: In the Southern area of the United States, approximately 20% of adults have a college degree. We randomly ask four adults whether they have a college degree. Which of the following statements is true?

n=4 Probability that one adult will have a college degree = 10.24%

A standard normal table, also referred to as the z-table, provides what information that is under the z curve?

probabilities

If sample evidence is inconsistent with the null hypothesis, we ' ' the null hypothesis.

reject

For a Poisson process, we define the number of '________' achieved in a specified time or space interval as a Poisson random variable.

successes

True or false: Linearity is justified if the residuals are randomly dispersed across the values of a predictor variable. True false question.

true

In the presence of changing variability, the OLS estimators are ' ', but their estimated standard errors are inappropriate

unbiased

Suppose the competing hypotheses in testing for individual significance are H0: βj = 0 versus HA: βj ≠ 0. What would rejecting the null hypothesis imply? xj is significant in explaining y xj is not significant in explaining y xjexplains all the variation in y We would accept the null hypothesis

xj is significant in explaining y

The standard normal distribution is a special case of the normal distribution with a mean equal to '

zero

The simple linear regression model y = β0 + β1x + ɛ implies that if x goes up by one unit, we expect y to change by how much? (irrespective of the value of x), β0 β1 x ɛ

β1