QM Final

The probability that a normal random variable is less than its mean is ___. -1.0 -0.0 -Cannot be determined -0.5

0.5

The height of the probability density function f(x) of the uniform distribution defined on the interval [a, b] is ____________. -1/(b - a) between a and b, and zero otherwise -(b - a)/2 between a and b, and zero otherwise -1/(a + b) between a and b, and zero otherwise -(a + b)/2 between a and b, and zero otherwise

1/(b - a) between a and b, and zero otherwise

A consumer who is risk averse is best characterized as _______________. -A consumer who demands a positive expected gain as compensation for taking risk -A consumer who completely ignores risk and makes his/her decisions based solely on expected values -None of the above -A consumer who may accept a risky prospect even if the expected gain is negative

A consumer who demands a positive expected gain as compensation for taking risk

Which of the following is correct? -A discrete random variable has a probability mass function but not a cumulative distribution function. -A continuous random variable has a probability mass function, and a discrete random variable has a probability density function. -A continuous random variable has a probability density function, and a discrete random variable has a probability mass function. -A continuous random variable has a probability density function but not a cumulative distribution function.

A continuous random variable has a probability density function, and a discrete random variable has a probability mass function.

Which of the following represents an empirical probability? -The probability of tossing a head on a coin is 0.5. -The probability of rolling a 2 on a single die is 1 in 6. -Based on past observation, a manager believes there is a 3-in-5 chance of retaining an employee for at least one year. -A skier believes she has a 0.10 chance of winning a gold medal.

Based on past observation, a manager believes there is a 3-in-5 chance of retaining an employee for at least one year.

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

Custom cabinet making

A discrete random variable X may assume an (infinitely) uncountable number of distinct values. True False

False

For an experiment in which a single die is rolled, the sample space may be {1, 1, 2, 3, 4, 5}. True False

False

Subjective probability is assigned to an event by drawing on logical analysis. True False

False

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 ___________. -Ratio scale -Nominal scale -Interval scale -Ordinal scale

Nominal scale

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? -Interval scale; continuous -Ratio scale; continuous -Interval scale; discrete -Ratio scale; discrete

Ratio scale; discrete

Which of the following variables is quantitative? -Religious affiliation -Gender -Marital status -Temperature

Temperature

The Sharpe ratio measures -The extra variance per unit of reward -The extra risk per unit of reward -The extra reward per unit of risk -The increase in mean per unit of risk

The extra reward per unit of risk

According to the central limit theorem, the distribution of the sample means is normal if _______________. -Both A and B are correct -The underlying population is normal -The sample size n (greater than or equal to) 30 -If the standard deviation of the population is known

The sample size n (greater than or equal to) 30

What does it mean when we say that the tails of the normal curve are asymptotic to the x axis? -The tails get closer and closer to the x axis and eventually cross this axis. -The tails get closer and closer to the x axis but never touch it. -The tails get closer and -closer to the x axis and eventually become this axis. -The tails gets closer and closer to the x axis and eventually touch it.

The tails get closer and closer to the x axis but never touch it.

A binomial random variable is defined as the number of successes achieved in n trials of a Bernoulli process. True False

True

Permutations are used when the order in which different objects are arranged matters. True False

True

Sampling allows researchers to draw conclusions about the population. True False

True

Time series data contains values of a characteristic of a subject over time. True False

True

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

U.S. unemployment rate

If Y=e^x has a lognormal distribution, what can be said of the distribution of the random variable X? -X follows an exponential distribution. -X follows a standard normal distribution. -X follows a normal distribution. -X follows a continuous uniform distribution.

X follows a normal distribution.

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

is less sensitive to extreme deviations.