QNT 2020

If GMAT scores for applicants at Oxnard Graduate School of Business are N(500, 50), then the top 5 percent of the applicants would have a score of at least (choose the nearest integer)

582: The top 5 percent would require z = 1.645, so x = 500 + 1.645(50) = 582.25.

If the attendance at a baseball game is to be predicted by the equation Attendance = 16,500 − 75 Temperature, what would be the predicted attendance if Temperature is 90 degrees?

9.750: The predicted Attendance is 16,500 − 75(90) = 9,750.

Outliers are data values that fall beyond ±2 standard deviations from the mean.

False: Outliers are 3 standard deviations from the mean

The coefficient of variation is

A unit-free statistic.

Histograms are best used to

Assess the shape of the distribution.

Chebyshev's Theorem says that at least 95 percent of the data lie within 2 standard deviations of the mean.

False: At least 75 percent by Chebyshev.

The level of significance refers to the probability of making a Type II error.

False: The level of significance is the desired probability of Type I error.

Which probability model is most appropriate to describe the waiting time (working days) until an office photocopier breaks down (i.e., requires unscheduled maintenance)?

Exponential: Poisson breakdowns suggest exponential waiting time.

A higher confidence level leads to a narrower confidence interval, ceteris paribus.

False: Higher confidence requires more uncertainty (a wider interval). For example, z0.025 = 1.960 (for 95 percent confidence) gives a wider interval than z0.05 = 1.645 (for 90 percent confidence). The proffered statement would also hold true for the Student's t distribution.

In a bimodal histogram, the two highest bars will have the same height.

False: Not necessarily, though they might be the same.

A false positive in a drug test for steroids is a Type II error.

False: A false positive is a Type I error.

In the model Sales = 268 + 7.37 Ads (both variables in dollars) an additional $1 spent on ads will increase sales by 7.37 percent.

False: The slope coefficient is in the same units as Y (dollars, not percent, in this case).

The variable used to predict another variable is called the

Independent variable.: We might also call the independent variable a predictor of Y.

So far this year, stock A has had a mean price of $6.58 per share with a standard deviation of $1.88, while stock B has had a mean price of $10.57 per share with a standard deviation of $3.02. Which stock is more volatile?

They are the same: They are the same: CVA = 100(1.88/6.58) = 28.57%. CVB = 100(3.02/10.57) = 28.57%.

In a simple regression, the correlation coefficient r is the square root of R2.

True: In fact, we could use the notation r2 instead of R2 when talking about simple regression.

In constructing a confidence interval for the mean, the z distribution provides a result nearly identical to the t distribution when n is large. Group starts

True: Student's t approaches z as the sample size increases.

For a sample size of 20, a 95 percent confidence interval using the t distribution would be wider than one constructed using the z distribution.

True: Student's t is always larger than z for the same level of confidence.

In a simple regression, if the coefficient for X is positive and significantly different from zero, then an increase in X is associated with an increase in the mean (i.e., the expected value) of Y.

True: The conditional mean of Y depends on X (unless the slope is effectively zero).

The level of significance refers to the probability of making a Type I error.

True: The level of significance is the desired probability of Type I error

As n increases, the standard error decreases.

True: The standard error is the standard deviation divided by the square root of the sample size.

A sample of size 5 shows a mean of 45.2 and a sample standard deviation of 6.4. The standard error of the sample mean is approximately 2.86.

True: The standard error is the standard deviation divided by the square root of the sample size. We would use Student's t instead of z to construct a confidence interval for the population mean, but this problem did not ask for a confidence interval.

A frequency distribution is a tabulation of n data values into classes called bins.

True: This is the definition of a frequency distribution.

When the sample standard deviation is used to construct a confidence interval for the mean, we would use the Student's t distribution instead of the normal distribution.

True: We should use the t distribution when the population variance is unknown.

In a left-skewed distribution, we expect that the median will be greater than the mean.

True: When there is left skewness, the mean is likely to be pulled down by low extremes.

Simple regression analysis means that

We have only one explanatory variable.: Multiple regression has more than one independent variable (predictor).

Consider the following linear trend equation of an industry's sales: yt = 120 + 12 xt, where t is the time index (t = 1, 2, . . . , n) and yt is annual sales (in millions of dollars). Which is the most reasonable conclusion?

We would forecast that sales will increase $12 million in the next year.: The slope is 12. Sales are in millions, so 12 represents $12 million.