QNT561 FINAL EXAM ALL POSSIBLE QUESTIONS COVERED FOR QNT561- 400+ answers

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1. The expected value of the a probability distribution

A.   Is the same as the random variable

B.   Is another term for the mean

C.   Is also called the variance

D.   Cannot be greater than 1

 

2. Which of the following is a correct statement about a probability?

A.   It may range from 0 to 1

B.   It may assume negative values

C.   It may be greater than 1

D.   It cannot be reported to more than 1 decimal place

 

3. An experiment is a

A.   Collection of events

B.   Collection of outcomes

C.   Always greater than 1

D.   The act of taking a measurement or the observation of some activity

 

4. Which level of measurement is required for the median?

A.   Nominal

B.   Ordinal

C.   Interval

D.   Ratio

 

5. Which level of measurement is required for the mode?

A.   Nominal

B.   Ordinal

C.   Interval

D.   Ratio

 

6. In a set of observations, which measure of central tendency reports the value that occurs most often?

A.   Mean

B.   Median

C.   Mode

D.   Geometric mean

 

7. The weighted mean is a special case of the

A.   Mean

B.   Median

C.   Mode

D.   Geometric mean

 

8. The relationship between the geometric mean and the arithmetic mean is

A.   They will always be the same

B.   The geometric mean will always be larger

C.   The geometric mean will be equal to or less than the mean

D.   The mean will always be larger than the geometric mean

 

9. Suppose you compare the mean of raw data and the mean of the same raw data grouped into a frequency distribution. These two means will be

A.   Exactly equal

B.   The same as the median

C.   The same as the geometric mean

D.   Approximately equal

 

10. In a set of 10 observations the mean is 20 and the median is 15. There are 2 values that are 6, and all other values are different. What is the mode?

A.   15

B.   20

C.   6

D.   None of the above

 

11. Which of the measures of central tendency is the largest in a positively skewed distribution?

A.   Mean

B.   Median

C.   Mode

D.   Cannot tell from the information given

 

12. Which of the following is not a measure of dispersion?

A.   Range

B.   Variance

C.   Standard deviation

D.   All of the above are measures of dispersion

 

13. A disadvantage of the range is

A.   Only two values are used in its calculation

B.   It is in different units than the mean

C.   It does not exist for some data sets

D.   All of the above

 

14. The mean deviation is

A.   Based on squared deviations from the mean

B.   Also called the variance

C.   Based on absolute values

D.   Always reported in squared units

 

15. The standard deviation is

A.   Based on squared deviations from the mean

B.   In the same units as the mean

C.   Uses all the observations in its calculation

D.   All of the above

 

16. The variance is

A.   Found by dividing by N by the mean

B.   In the same units as the original data

C.   Found by squaring the standard deviation

D.   All of the above

 

17. In a positively skewed distribution

A.   The mean, median, and mode are all equal

B.   The mean is larger than the median

C.   The median is larger than the mean

D.   The standard deviation must be larger than the mean or the median

 

18. Which of the following statements is true regarding the standard deviation?

A.   It cannot assume a negative value

B.   If it is zero, then all the data values are the same

C.   t is in the same units as the mean

D.   All the above are all correct

 

19. A uniform distribution is defined by

A.   Its largest and smallest value

B.   Largest value

C.   Smallest value

D.   None of the above

20. The normal approximation to the binomial is used when

A.   The sample size is at least 30

B.   Both np and n (1 - p) are at least 5

C.   The mean and the variance are the same

D.   The z value is greater than 0

 

21. A sample

A.   Is a part of the population

B.   Has more than 30 observations

C.   Is usually identified as N

D.   All of the above

 

22. Which of the following is not a reason for sampling?

A.   The destructive nature of certain tests

B.   The physical impossibility of checking all the items in the population

C.   The adequacy of sample results

D.   All of the above are reasons for sampling

 

23. Which of the following is not a method of probability sampling?

A.   Random sampling

B.   Systematic sampling

C.   Stratified sampling

D.   All of the above are methods of probability sampling

 

24. In a simple random sample

A.   Every kth item is selected to be in the sample

B.   Every item has a chance to be in the sample

C.   Every item has the same chance to be in the sample

D.   All of the above

 

25. Suppose a population consisted of 20 items. How many different sample of n = 3 are possible?

A.   6840

B.   1140

C.   20

D.   120

 

26. The difference between the sample mean and the population mean is called the

A.   Population mean

B.   Population standard deviation

C.   Standard error of the mean

D.   Sampling error

 

27. The mean of the all the sample means and the population mean will

A.   Always be equal

B.   Always be normally distributed

C.   Characterized by the standard error of the mean

D.   None of the above

 

 

28. We wish to develop a confidence interval for the population mean. The shape of the population is not known, but we have a sample of 40 observations. We decide to use the 92 percent level of confidence. The appropriate value of z is:

A.   1.96

B.   1.65

C.   2.58

D.   1.75

 

29. Which of the following statements is not a characteristic of the t distribution.

A.   It is a continuous distribution

B.   It has a mean of 0

C.   It is symmetrical

D.   Like z there is only one t distribution

 

30. We wish to develop a confidence interval for the population mean. The population follows the normal distribution and we have a sample of 10 observations. We decide to use the 90 percent level of confidence. The appropriate value of to represent the level of confidence is

A.   z =1.65

B.   z = 1.96

C.   t = 1.833

D.   t = 1.812

 

37. The fraction or ratio of a sample possessing a certain trait is called

A.   Population

B.   Mean

C.   Confidence interval

D.   Proportion

 

32. To develop a confidence interval for a proportion

A.   We need to meet the binomial conditions

B.   The sample should be at least 100

C.   p should be less than .05

D.   None of the above

 

33. The finite population correction factor is used when

A.   n is more than 30

B.   N is more than 1000

C.   n is greater than 5

D.   n/N is more than .05

 

34. We wish to estimate the population proportion. We want to be 95 percent confident of our results and we want the estimate to be with .01 of the population parameter. No estimate of the population proportion is available. What value should we use for p?

A.   1.96

B.   .01

C.   .50

D.   We cannot complete the problem, we need more information.

 

35. The null hypothesis

A.   Is a statement about the value of the population parameter

B.   Will always contain the equal sign

C.   Cannot include values less than 0

D.   Both a and b are correct

 

36. The alternate hypothesis

A.   Is accepted if the null hypothesis is rejected

B.   Will always contain the equal sign

C.   Tells the value of the sample mean

D.   None of the above

 

37. The level of significance

A.   Is frequently .05 or .01

B.   Can be any value between 0 and 1.

C.   Is the likelihood of rejecting the null hypothesis when it is true.

D.   All of the above.

 

38. A Type I error is

A.   The correct decision

B.   A value determined from the test statistic

C.   Rejecting the null hypothesis when it is true

D.   Accepting the null hypothesis when it is false.

 

39. The critical value is

A.   Calculated from sample information

B.   Cannot be negative

C.   The point that divides the acceptance region from the rejection region

D.   A value determined from the test statistic

 

40. In a one-tailed test

A.   The rejection region is in one of the tails

B.   The rejection region is split between the tails

C.   The p-value is always less than the significance level

D.   The p-value is always more than the significance level

 

41Which of the following is not a requirement for the two-sample test of means for independent samples when both samples contain less than 30 observations?

A.   Normal populations

B.   Equal population standard deviations

C.   Equal sample sizes

D.   All of the above are required.

 

42To conduct a test of hypothesis for dependent samples we assume that

A.   The distribution of the difference between the paired observations follows the normal distribution

B.   Both samples are at least 30

C.   The samples are unrelated

D.   All of the above

 

43When conducting a test of hypothesis for the dependent samples

A.   We should have at least 30 pairs.

B.   The significance level is more than .05.

C.   The p-value is more than .10.

D.   None of the above

 

44Which of the following is not necessary to determine a p-value?

A.   Knowledge of whether the test is one-tailed or two-tailed

B.   The value of the test statistic

C.   The level of significance

D.   All of the above are needed

 

45In a two-way ANOVA the second source of variation is due to

A.   Random error

B.   Blocks

C.   Total variation

D.   None of the above

 

46uppose we conduct an ANOVA test of four treatment means and reject the null hypothesis. Construction of a confidence interval for the difference between the first and second sample mean revealed the interval to be 10 plus or minus 12. We conclude

A.   This pair of means differ

B.   This pair of means does not differ

C.   Because we do not know the units involved, we cannot draw any conclusion

D.   Because we do not know the degrees of freedom, we cannot draw any conclusion

 

47Which of the following is not an assumption required for ANOVA?

A.   The populations are normally distributed

B.   The populations have equal standard deviations

C.   The samples are independent.

D.   All of the above.

 

48Which of the following is not a characteristic of the F distribution?

A.   It is a discrete distribution

B.   In cannot be negative

C.   It is based on two sets of degrees of freedom

D.   All of the above

 

47In a multiple regression equation there

A.   Are two or more independent variables

B.   Is only one dependent variable

C.   Is one intercept value

D.   All of the above

 

50A dummy variable or indicator variable

A.   May assume only a value of 0 or 1

B.   Is another term for the dependent variable

C.   Is found by (Y - Y')

D.   Is equal to Y'

 

51 In the ANOVA table the value of k is

A.   The number of independent variables

B.   The total number of observations

C.   The number of degrees of freedom

D.   The sum of squares total

 

52. Multicollinearity occurs when

A.   The residuals are correlated

B.   Time is involved in the analysis

C.   The independent variables are correlated

D.   The residuals are not constant for all Y' values

 

53. A correlation matrix

A.   Shows all simple coefficients of correlation

B.   Shows all possible net regression coefficients

C.   Shows the correlations that are positive

D.   Reports the multiple regression equation

 

54. To conduct a nonparametric test the

A.   Population must follow the normal distribution

B.   The standard deviation must be known

C.   It is not necessary to make any assumption about the shape of the population

D.   The data must be at least interval scale

 

55. In a goodness-of-fit test where the sample size is 200, there are 5 categories, and the significance level is .05. The critical value of X2 is

A.   9.488

B.   11.070

C.   43.773

D.   None of the above

 

56. In a goodness-of-fit test

A.   All the cell frequencies must be the same

B.   There must be at least 30 observations

C.   Forty percent of the cells must contain at least 10 observations

D.   None of the above

 

57. In a contingency table

A.   The number of rows must be the same as the number of columns

B.   A variable is classified according to two criteria

C.   There must be at least 10 observations in each cell

D.   All of the above

 

58. In a contingency table a sample of 400 people is classified by gender and hair color (4 groups: blond, brown, black, and red). How many degrees of freedom are there?

A.   3

B.   8

C.   399

D.   None of the above

 

59. To find the expected frequency in a contingency table

A.   Take the square root of the degrees of freedom

B.   Multiple the row total by the column total and divide the result by the grand total

C.   Use the total number of observations minus one

D.   None of these

 

60. Suppose we select a sample of 100 observations and organize them into 6 categories. We wish to investigate whether the number of observations could be the same in each of the categories in the population. How many degrees of freedom are there?

A.   5

B.   97

C.   3

D.   None of these

 

61. To conduct the sign test, we assume

A.   The population is normally distributed

B.   The scale of measurement is interval

C.   The samples are dependent

D.   There are at least 20 observations in the sample

 

 

62. An index

A.   Shows a percent change from one period to another

B.   Must be larger than 100

C.   Can employ qualitative data

D.   Cannot assume negative values

 

63  The role of statistics is business research is to capture a population’s characteristics by using inferential statistics from a sample’s characteristics – True

 

 

64. To conduct a one sample test of means and use the z distribution as the test statistic

A.   We need to know the population mean

B.   We can use the sample standard deviation provided np is at least 30

C.   We need np to be at least 5

D.   Both a and b are correct

 

65. A p-value is

A.   The same as the population proportion

B.   The same as the significance level

C.   The fraction of the population that has a particular characteristic

D.   The probability of finding a value of the test statistic this extreme when the null hypothesis is true

 

66. A Type II error occurs when

A.   We accept a false null hypothesis

B.   We reject a true alternate hypothesis

C.   We reject a false null hypothesis

D.   None of the above

 

67. Which of the following statements are correct when deciding whether to use the z or the t distribution?

A.   Use z when the sample size is 30 or more

B.   Use z when we have a normal population and we know the standard deviation

C.   Use t when the population is normal, the population standard deviation is not known, and n is less than 30

D.   All of the above statements are correct

 

68. In a two-sample test of means for independent samples, the equal sign always appears in

A.   The null hypothesis

B.   The alternate hypothesis

C.   The upper tail of the test statistic

D.   None of the above

 

69. In a two-sample test of means for independent samples, we use the z distribution when

A.   The population standard deviations are equal

B.   Both populations are positively skewed

C.   Both samples are at least 30

D.   n and n(1-) are both greater than 5

 

70. Which of the following is a requirement for a two-sample test of proportions

A.   The population standard deviations are equal.

B.   Both populations are positively skewed

C.   Both samples are at least 30.

D.   n and n(1-) are both greater than 5

 

71 Which of the following measures of central location is affected most by extreme values?

A. Mean

B. Median

C. Geometric mean        

D. Mode      

 

72 Which level of measurement is required for the mode?

A.Ordinal

B.Nominal

C.Ratio        

D.Interval 

 

73 A difference between calculating the sample mean and the population mean is:

A.We divide the sum of the observations by n - 1 instead of n        

B.Only in the symbols, we use instead of µ and n instead of N.      

C.There are no differences.      

D.The observations are ranked and select the middle value for the        population mean.         

 

74 In which of the following distributions is the probability of a success usually small?

A. Poisson    

B. Binomial           

C. All distribution           

D. Hypergeometric      

75 The difference between a random variable and a probability distribution is:

A.A random variable does not include the probability of an event.         

B.A random variable can only assume whole numbers.        

C.A probability distribution can only assume whole numbers.       

D.None of the above.   

76 The mean and the variance are equal in

A.The hypergeometric distribution.           

 B.The binomial distribution.            

 C.All probability distributions.        

 D. The Poisson distribution.

           

77 In a simple random sample

 A. Every Kth item is selected to be in the sample.        

 B. Every item has a chance to be in the sample.           

 C. Every item has the same chance to be in the sample.        

 D. All of these    

 

78 A sample

 A. Is part of the population.   

 B. Has more than 30 observations.            

 C. Is usually identified as N.   

 D. All of these    

 

79 The difference between the sample mean and the population mean is called the

 

 A. Sampling error.        

 B. Population standard deviation.   

 C. Population mean.      

 D. Standard error of the mean.    

80 We wish to develop a confidence interval for the population mean. The shape of the population is not known, but we have a sample of 40 observations. We decide to use the 92% level of confidence. The appropriate value of z is:

 

 A. 1.75        

 B. 1.65         

 C. 1.96        

 D. 2.58     

 

81 We wish to develop a confidence interval for the population mean. The population follows the normal distribution, the standard deviation of the population is 3, and we have a sample of 10 observations. We decide to use the 90% level of confidence. The appropriate value of to represent the level of confidence is

 A. t=1.812   

 B. z=1.96     

 C. z =1.65    

 D. t=1.833

 

82 A point estimate is

 A. Always an estimate of the population mean.           

 B. Always equal to the population value.           

 C. An estimate of the population parameter.     

 D. None of these

 

83 We use the General Rule of Multiplication to combine

 A. Events based on subjective probabilities        

 B. Mutually exclusive events.           

 C. Events that are not independent.          

 D. Events that total more than 1.00.      

84. If the two samples are not independent, their population means can still be compared using the ____________ statistic.

A.   . paired t

B.   . Z

C.   . F

D.   . chi-square

 

85 Which of the following is/are an appropriate null hypothesis for a two-sided test of the difference between two population means? 1. H0: ?1 = ?2 2. H0: ?1 ? ?2 3. H0: ?1 – ?2 = 0

A.   . 1

B.   . 2

C.   . 3

D.   . both 1 and 3

 

 

 

 

86 An experiment is a:

 A.The act of taking a measurement or the observation of                     some activity.         

B.Collection of outcomes.        

C.Collection of events     

D. Always greater than 1.     

 

87 Which of the following is a correct statement about a probability?

A. It cannot be reported to more than 1 decimal place.         

 B. It may assume negative values.    

 C. It may range from 0 to 1.   

D. It may be greater than 1. 

 

88 Which of the following statements is true regarding a population?

A. It must be a large number of values.     

B. It must refer to people.        

C. It is a collection of individuals, objects, or measurements.          

 D None of these 

 

89 Which of the following statements is true regarding a sample?

A. It is a part of population.    

B. It must contain at least five observations.       

C. It refers to descriptive statistics     

D. All of these are correct      

 

90 A discrete variable is

A. Cannot be negative.   

B. Can assume only whole number values.         

C. An example of a qualitative variable.    

D. Can assume only certain clearly separated values 

 

91 In a two-sample test of means for independent samples, the equal sign always appears in

A. The null hypothesis.   

B. The alternate hypothesis.    

C. The upper tail of the test statistic.          

D. None of these 

 

92 In a two-sample test of means for independent samples, we use the z distribution when

A. nB and n(1-B) are both greater than 5.          

B. Both populations have at least 4,000 observations.           

C The population standard deviations are equal.         

D. Both population standard deviations are known. 

 

93) A Type I error is

 

 A. Accepting the null hypothesis when it is false.         

 B. A value determined from the test statistic       

 C. The correct decision            

 D. Rejecting the null hypothesis when it is true         

 

94 To conduct a nonparametric test the.

 A. The data must be at least interval scale.         

 B. The standard deviation must be known.        

 C. Population must follow the normal distribution.    

 D. It is not necessary to make any assumption about the shape of the population.

 

95 In a contingency table a sample of 400 people is classified by gender and hair color (4 groups: blond, brown, black, and red). How many degrees of freedom are there?

 A. 3    

 B. 8    

 C. 399         

 D. None of these

 

96 In a contingency table

 A. The number of rows must be the same as the number of columns.    

 B. A variable is classified according to two criteria.     

 C. There must be at least 10 observations in each cell.          

 D. All of these    

 

97 The multiple standard error of estimate is

 A. Is based on the (Y - Y)2.  

 B. Is negative when one of the net regression coefficients is 0.        

C.Is found by taking the square root of SSR/SS total.          

D.All of these      

 

98 In the ANOVA table the value of k is

 A.The sum of squares total.    

 B.The total number of observations          

 C.The number of independent variables.           

 D.The number of degrees of freedom.    

 

99 A dummy variable or indicator variable

 A. Is equal to Y    

B. Is another term for the dependent variable.    

C. May assume only a value of 0 or 1.       

D. Is found by (Y - Y).

 

100 Suppose we have a population that follows the normal distribution. Which of the following statements is correct regarding the distribution of sample means?

A.   The population standard deviation is always unknown

B.   The distribution of samples means will follow the uniform distribution

C.   The distribution of the sample means will also follow the normal distribution

D.   None of the above is correct

 

101 Suppose we have a population that does not follow the normal distribution. If we select sample of what size will the distribution approximate the normal distribution?

A.   2

B.   5

C.   20

D.   30

 

102 The standard error of the mean is

A.   The standard deviation of the sampling distribution of sample means

B.   Always normally distributed

C.   Sometimes less than 0

D.   None of the above

 

103 A point estimate is

A.   Always an estimate of the population mean

B.   Always equal to the population value

C.   An estimate of the population parameter

D.   None of the above

 

104 A confidence interval

A.   Always includes the population parameter

B.   Decreases in width as the sample size is increased

C.   Cannot include a value of 0

D.   None of the above

 

105 If we wished to decrease the width of a confidence interval, we would not do which of the following

A.   Increase the size of the sample

B.   Reduce the size of the population

C.   Decrease the level of confidence

D.   None of the above

 

106 Under which of the following conditions would the standard deviation assume of negative value

A.   When all the data values were negative

B.   When more than half of the data values were negative

C.   If all the data values were the same

D.   The standard deviation cannot be negative

 

107 The difference between a histogram and a bar chart is:

A.   The midpoints are connected with a histogram but not with a bar chart

B.   The bars must be next to each other on a histogram and separated in a bar chart

C.   Cumulative frequencies are required in a bar chart

D.   None of the above

 

108 The appropriate alternative hypothesis for a lower tail test to determine if mean body weight of all the men who have joined a health club is less than 185 pounds would be

A.   HA: μ ≥ 185 lb

B.   HA: μ < 185 lb

C.   HA: μ = 185 lb

D.   HA: μ ≠ 185 lb

 

109 The normal distribution is a

A.   Discrete distribution

B.   Continuous distribution

C.   Positively skewed distribution

D.   None of the above

 

110Which of the following are characteristics of the normal distribution?

A.   It is a symmetric distribution

B.   It is bell-shaped

C.   It is asymptotic

D.   All of the above

 

111Which of the following are correct statements about a normal distribution?

A.   It cannot assume negative numbers

B.   It is defined by its mean and standard deviation

C.   All normal distributions have a variance of at least 1

D.   All of the above are correct

 

112 Which of the following statements is correct regarding the standard normal distribution

A.   It is also called the z distribution

B.   Any normal distribution can be converted to the standard normal distribution

C.   The mean is 0 and the standard deviation is 1

D.   All of the above are correct

 

113 The area under a normal curve between 0 and -1.75 is

A.   .0401

B.   .9599

C.   .4599

D.   None of the above.

 

114 The continuity correction factor is used when

A.   The sample size is at least 5

B.   Both np and n (1 - p) are at least 30

C.   A continuous distribution is used to approximate a discrete distribution

D.   The standard normal distribution is applied

 

115 The difference between the sample mean and the population mean is called the:

A.   Sampling error.

B.   Population standard deviation.

C.   Population mean.

D.   Sandard error of the mean.

 

116 A confidence interval:

A.   Always includes the population parameter.

B.   Decreases in width as the sample size is increased

C.   Cannot include a value of 0

D.   None of these

 

117 The alternate hypothesis

A.   None of these

B.   Will always contain the equal sign.

C.   Is accepted if the null hypothesis is rejected

D.   Tells the value of the sample mean.

 

 

118 To conduct a nonparametric test the.

A.   The data must be at least interval scale.

B.   The standard deviation must be known.

C.   Population must follow the normal distribution.

D.   It is not necessary to make any assumption about the shape of the population

 

119  In the ANOVA table the value of k is

A.   The sum of squares total.

B.   The total number of observations

C.   The number of independent variables.

D.   The number of degrees of freedom.

120 The difference between a random variable and a probability distribution is

A.   A random variable does not include the probability of an event

B.   A random variable can only assume whole numbers

C.   A probability distribution can only assume whole numbers

D.   None of the above

 

121. Which of the following is not a requirement of a binomial distribution?

A.   A constant probability of success

B.   Only two possible outcomes

C.   A fixed number of trails

D.   Equally likely outcomes

 

122 The mean and the variance are equal in

A.   All probability distributions

B.   The binomial distribution

C.   The Poisson distribution

D.   The hypergeometric distribution

 

123. Bayes' Theorem

A.   Is an example of subjective probability

B.   Can assume of value less than 0

C.   Is used to revise a probability based on new or additional information

D.   Is found by applying the complement rule

 

124. The difference between a permutation and a combination is

A.   In a permutation order is important and in a combination it is not

B.   In a permutation order is not important and in a combination it is important

C.   A combination is based on the classical definition of probability

D.   A permutation is based on the classical definition of probability

 

125. A difference between calculating the sample mean and the population mean is

A.   Only in the symbols, we use instead of µ and n instead of N

B.   We divide the sum of the observations by n - 1 instead of n

C.   The observations are ranked and select the middle value for the population mean

D.   There are no differences

 

126. Which of the following measures of central location is affected most by extreme values?

A.   Median

B.   Mean

C.   Mode

D.   Geometric mean

 

127. In which of the following distributions is the probability of a success usually small?

A.   Binomial

B.   Poisson

C.   Hypergeometric

D.   All distribution

 

128. Which of the following is not a requirement of a probability distribution?

A.   Equally likely probability of a success

B.   Sum of the possible outcomes is 1.00

C.   The outcomes are mutually exclusive

D.   The probability of each outcome is between 0 and 1

 

129 For a binomial distribution

A.   n must assume a number between 1 and 20 or 25

B.   p must be a multiple of .10

C.   There must be at least 3 possible outcomes

D.   None of the above

 

 130. Events are independent if

A.   By virtue of one event happening another cannot.

B.   The probability of their occurrence is greater than 1.

C.   We can count the possible outcomes.

D.   The probability of one event happening does not affect the probability of another event happening.

E.   None of the above.

 

131 . The Special Rule of Addition is used to combine

A.   Independent events.

B.   Mutually exclusive events

C.   Events that total more than one.

D.   Events based on subjective probabilities

E.   Found by using joint probabilities.

 

132. We use the General Rule of Multiplication to combine

A.   Events that is not independent.

B.   Mutually exclusive events.

C.   Events that total more than 1.00.

D.   Events based on subjective probabilities

E.   Found by using joint probabilities.

 

133 A nominal scale variable is

A.   Cannot have more than two categories.

B.   Has a meaningful zero point.

C.   Usually the result of counting something

D.   May assume negative values.

 

134. We wish to develop a confidence interval for the population mean. The shape of the population is not known, but we have a sample of 40 observations. We decide to use 92% level of confidence. The appropriate values of Z is:

A.   1.65

B.   1.96

C.   2.58

D.   1.75

 

135. Which of the following is a correct statement about a probability?

A.   It may range from 0 to 1.

B.   It may assume negative values.

C.   It may be greater than 1.

D.   It cannot be reported to more than 1 decimal place.

E.   All the above are correct.

 

136. An experiment is a

A.   Collection of events.

B.   Collection of outcomes.

C.   Always greater than 1.

D.   The act of taking a measurement or the observation of some activity.

E.   None of the above is correct.

 

137. Which of the following is not a type of probability?

A.   Subjective

B.   Independent

C.   Relative frequency

D.   Classical

 

138. We use the General Rule of Multiplication to combine

A.   Mutually exclusive events

B.   Events that is not independent

C.   Events that total more than 1.00

D.   Events based on subjective probabilities

 

139. Which of the following is not a type of probability?

A.   Independent

B.   Subjective

C.   Relative frequency

D.   Classical

 

140. Which of the following is a correct statement about probability?

A.   It may assume negative values

B.   It may range from 0 to 1

C.   It may be greater than 1

D.   It cannot be reported to more than 1 decimal place

 

141. The ratio scale of measurement

A.   Is usually based on counting

B.   Usually involves ranking

C.   Has a meaningful zero point

D.   Cannot assume negative values

 

1421. Which of the following statements is true regarding a population?

A.   It must be a large number of values

B.   It must refer to people

C.   It is a collection of individuals, objects, or measurements

D.   Non of these

 

143. Which of the following statements is true regarding samples?

A.   It is a part of population

B.   It must contain at least five observations

C.   It refers to descriptive statistics

D.   All of these are correct.

 

144. A type I error is

A.   Accepting the null hypothesis when it is false

B.   The correct decision

C.   Rejecting the null hypothesis when it is true

D.   A value determined from the test statistics

 

145. Which of the following is a requirement for a two-sample test of proportions?

A.   nB and n(1-B) are both greater than 5

B.   The population standard deviations are equal

C.   Both samples are at least 30

D.   Both populations are positively skewed

 

146. Which of the following is not a characteristic of the X2?

A.   It approaches a normal distribution as the degree of freedom increases 

B.   Its shape is based on the sample size

C.   It is positively skewed

D.   It is not negative

 

147. In a contingency table a sample of 400 people is classified by gender and hair color(4 groups: blond, brown, black and red). How many degrees of freedom are there?

A.   3

B.   8

C.   399

D.   None of these

 

148. In a goodness-of-fit test where the sample size is 200, there are 5 categories, and the significant level in .05. The critical value of X2 is.

A.   9.488

B.   11.070

C.   43.733

D.   None of these

 

149. A sample

A.   Is part of the population

B.   Have more than 30 observations

C.   Is usually identified as N

D.   All of these

 

150. The difference between the sample mean and the population mean is called the:

A.   Population standard deviation

B.   Population mean

C.   Standard error of the mean

D.   Sampling error

 

151. Suppose a population consisted of 20 items, how many different sample of n=3 are possible?

A.   1140

B.   6840

C.   20

D.   120

 

152. A confidence internal

A.   Always include the population parameter

B.   Decreases in width as the sample increases

C.   Cannot include a value of 0

D.   None of these

 

 

153. When we find the probability of an event happening by subtracting the probability of the event not happening from 1, we are using

A.   Subjective probability

B.   The complement rule.

C.   The general rule of addition.

D.   The special rule of multiplication

E.   Joint probability

 

154. When we determine the number of combinations

A.   We are really computing a probability.

B.   The order of the outcomes is not important.

C.   The order of the outcomes is important.

D.   We multiple the likelihood of two independent trials.

E.   None of the above.

 

155. Bayes' Theorem

A.   Is an example of subjective probability

B.   Can assume of value less than 0.

C.   Is used to revise a probability based on new or additional information. 

D.   Is found by applying the complement rule.

E.   None of the above.

 

156. The difference between a permutation and a combination is:

A.   In a permutation order is important and in a combination it is not.

B.   In a permutation order is not important and in a combination it is important.

C.   A combination is based on the classical definition of probability.

D.   A permutation is based on the classical definition of probability.

E.   None of the above.

 

157. Which of the following is not a measure of dispersion?

A.   Range

B.   Variance

C.   Standard deviation

D.   All of the above are measures of dispersion

 

158. A disadvantage of the range is

A.   Only two values are used in its calculation.

B.   It is in different units than the mean.

C.   It does not exist for some data sets.

D.   All of the above.

 

 

159. The mean deviation is

A.   Based on squared deviations from the mean.

B.   Also called the variance.

C.   Based on absolute values.

D.   Always reported in squared units.

 

160. The standard deviation is

A.   Based on squared deviations from the mean.

B.   In the same units as the mean.

C.   Uses all the observations in its calculation.

D.   All of the above.

 

161. The variance is

A.   Found by dividing by N by the mean.

B.   In the same units as the original data.

C.   Found by squaring the standard deviation.

D.   All of the above.

 

162. In a positively skewed distribution

A.   The mean, median, and mode are all equal.

B.   The mean is larger than the median.

C.   The median is larger than the mean.

D.   The standard deviation must be larger than the mean or the median.

 

163. The quartile deviation is

A.   The square root of the variance.

B.   Based on the middle 50 percent of the observations.

C.   In squared units of the original data.

D.   Appropriate only for symmetric distributions.

 

165. In a symmetric distribution

A.   The mean, median, and mode are equal.

B.   The mean is the largest measure of location.

C.   The median is the largest measure of location.

D.   The standard deviation is the largest value.

 

166. A coefficient of skewness of -2.73 was computed for a set of data. We conclude that

A.   The mean is larger than the median.

B.   The median is larger than the mean.

C.   The standard deviation is a negative number.

D.   Something is wrong because the coefficient of skewness cannot be less than -1.00.

 

167. Which of the following statements is true regarding the standard deviation?

A.   It cannot assume a negative value.

B.   If it is zero, then all the data values are the same.

C.   It is in the same units as the mean.

D.   All the above are all correct.

 

168. A difference between calculating the sample mean and the population mean is

A.   Only in the symbols, we use instead of ? and n instead of N.

B.   We divide the sum of the observations by n - 1 instead of n.

C.   The observations are ranked and select the middle value for the population mean.

D.   There are no differences.

 

169. Which of the following measures of central tendency is affected most by extreme values?

A.   Median

B.   Mean

C.   Mode

D.   Geometric mean

 

170. Which level of measurement is required for the median?

A.   Nominal

B.   Ordinal

C.   Interval

D.   Ratio

 

171. Which level of measurement is required for the mode?

A.   Nominal

B.   Ordinal

C.   Interval

D.   Ratio

 

172. In a set of observations, which measure of central tendency reports the value that occurs most often?

A.   Mean

B.   Median

C.   Mode

D.   Geometric mean

 

173. The weighted mean is a special case of the

A.   Mean

B.   Median

C.   Mode

D.   Geometric mean

 

174. The relationship between the geometric mean and the arithmetic mean is

A.   They will always be the same.

B.   The geometric mean will always be larger.

C.   The geometric mean will be equal to or less than the mean.

D.   The mean will always be larger than the geometric mean.

 

175. Suppose you compare the mean of raw data and the mean of the same raw data grouped into a frequency distribution. These two means will be

A.   Exactly equal.

B.   The same as the median.

C.   The same as the geometric mean.

D.   Approximately equal.

 

176. In a set of 10 observations the mean is 20 and the median is 15. There are 2 values that are 6, and all other values are different. What is the mode?

A.   15

B.   20

C.   6

D.   None of the above.

 

177. Which of the measures of central tendency is the largest in a positively skewed distribution?

A.   Mean

B.   Median

C.   Mode

D.   Cannot tell from the information given.

 

178. In a goodness-of-fit test where the sample size is 200, there are 5 categories, and the significance level is .05. The critical value of X2 is

A.   9.488

B.   11.070

C.   43.773

D.   None of these

 

 

179. The mean and the variance are equal in

A.   All probability distributions.

B.   B. The binomial distribution.

C.   C. The Poisson distribution.

D.   D. The hypergeometric distribution.

 

180. Which of the following is not a requirement of a binomial distribution?

A.   A constant probability of success.

B.   B. Only two possible outcomes.

C.   C. A fixed number of trails.

D.   D. Equally likely outcomes.

 

181. In which of the following distributions is the probability of a success usually small?

A.   Binomial

B.   Poisson

C.   Hyper geometric

D.   All distribution

 

182. In a goodness-of-fit test where the sample size is 200, there are 5 categories, and the significance level is .05. The critical value of X2 is

A.   9.488

B.   11.070

C.   43.773

D.   None of these

 

183. In a contingency table

A.   The number of rows must be the same as the number of columns.

B.   A variable is classified according to two criteria.

C.   There must be at least 10 observations in each cell.

D.   All of these

 

184. In a two-sample test of means for independent samples, we use the z distribution when

A. Both population standard deviations are known

B.   nB and n(1-B) are both greater than 5

C.   The population standard deviations are equal

D.   Both populations have at least 4,000 observations.

 

185. A discrete variable is

A.   Can assume only certain clearly separated values

B.   Cannot be negative

C.   An example of a qualitative variable

D.   Can assume only whole number values.

 

186. Which of the following statements is true regarding a sample?

A.   It is a part of population

B.   It must contain at least five observations

C.   It refers to descriptive statistics

D.   All of these are correct

 

187. A point estimate is

A.   Always an estimate of the population mean

B.    Always equal to the population value

C.   An estimate of the population parameter

D.   None of these

 

188. Which of the following statements is not a characteristic of the t distribution?

A.   It is symmetrical

B.   Like z there is only one t distribution

C.   It is a continuous distribution

D.   It has a mean of 0.

 

189. A nominal scale variable is

A.   Cannot have more than two categories.

B.   B. Has a meaningful zero point.

C.   C. Usually the result of counting something

E.   May assume negative values.

190: What area under the standard normal curve falls outside the Z values -1.96 and 1.96?

A. 0.05

B. 0.01

C. 0.90

D. 0.10

 

191 Which level of measurement is required for the median?

A. Nominal

B. Ordinal

C. Interval

D. Ratio

 

192 The weighted mean is a special case of the:

A. Mean

B. Median

C. Mode

D. Geometric mean

 

193 In a set of observations, which measure of central tendency reports the value that occurs most often?

A. Mean

B. Median

C. Mode

D. Geometric mean

 

194 The mean and the variance are equal in

A. All probability distributions.

B. The binomial distribution.

C. The Poisson distribution.

D. The hypergeometric distribution.

 

195 Which of the following is not a requirement of a binomial distribution?

A. A constant probability of success.

B. Only two possible outcomes.

C. A fixed number of trails.

D. Equally likely outcomes.

 

196 In which of the following distributions is the probability of a success usually small?

A. Binomial

B. Poisson

C. Hypergeometric

D. All distribution

 

197 A sample

A. Is part of the population.

B. Has more than 30 observations.

C. Is usually identified as N.

D. All of these

 

198 If each of a set of raw scores is transformed into a Z-score, the new distribution will have a standard deviation equal to

A. zero.

B. one.

C. the mean of the original distribution.

D. the standard deviation of the original distribution.

 

 

199 Which of the following random variables are continuous and which are discrete?

1. Score in a IQ Test

2. number of kittens in a litter

3C. number of cars crossing a Traffic Light in one hour

4. the number of rainy days in a month

 

A. 1, 2 continuous; 3, 4 discrete

B. 1, 3, 4 continuous; 2 discrete

C. 4 continuous; 1, 2, 3 discrete

D. 1 continuous; 2, 3, 4 discrete

200 A factor that is varied by an experimenter in order to assess its effect is known as a(n):

A. dependent variable

B. independent variable

C. control variable

D. none of the above

 

201  For students' distribution, 90 percent of the area lies between t = -1.895 and t = 1.895 if the degrees of freedom are:

A. 6

B. 3

C. 7

D. 8

 

202 When (for what level of confidence) do we use Z = 1.645, for a two-sided test or confidence interval?

A. 90%

B. 95%

C. 80%

D. 100%

 

203 Which nonparametric test is analogous to a parametric two-sample t-test for means?

A. Wald-Wolfowitz test

B. Wilcoxon signed rank test

C. Mann-Whitney test

D. Kruskal-Wallis test

 

204 Which nonparametric test is analogous to a parametric t-test for differences in paired data?

A. Wald-Wolfowitz test

B. Wilcoxon signed rank test

C. Mann-Whitney test

D. Kruskal-Wallis test

 

205: Which nonparametric test is analogous to a one-factor ANOVA?

A. Wald-Wolfowitz test

B. Wilcoxon signed rank test

C. Mann-Whitney test

D. Kruskal-Wallis test

 

 

 

206 A linear regression between Y and X produced the following equation for the least squares line:

= -4.3 + 2.1x

Which of the following statements concerning this relationship is true?

A. For every one-unit increase in X, Y increases 4.3 units.

B. For every one-unit increase in X, Y decreases 2.1 units.

C. For every one-unit increase in X, Y decreases 4.3 units.

D. For every one-unit increase in X, Y increases 2.1 units.

 

207 The difference between an observed value of the dependent variable and its predicted value obtained from the regression equation is called a(n)

A. extrapolation.

B. interpolation.

C. residual.

D. mean deviation.

 

208 A regression line has been found and the statistician wants to know if the line has a slope. What is the appropriate null hypothesis to test?

A. H0: β1 = 0.

B. H0: β1 > 0.

C. H0: β1 < 0.

D. H0: β1 ≠ 0.

 

209 The continuity correction factor is used when

A. The sample size is at least 5

B. Both nπ and n(1 - π) are at least 30.

C. A continuous distribution is used to approximate a discrete distribution

D. The standard normal distribution is applied

 

210 A uniform distribution is defined by

A. Its largest and smallest value

B. Largest value

C. Smallest value

D. None of the above

 

211 The normal approximation to the binomial is used when

A. The sample size is at least 30

B. Both nπ and n(1 - π) are at least 5

C. The mean and the variance are the same

D. The z value is greater than 0

 

212 In the standard normal distribution, what is the probability of finding a z value between -1.25 and -1.00?

A. 0.3944

B. 0.3413

C. 0.7357

D. 0.0531

 

213 The standard error of the mean is

A. The standard deviation of the sampling distribution of sample means

B. Always normally distributed

C. Sometimes less than 0

D. None of the above

 

214 Suppose we have a population that does not follow the normal distribution. If we select sample of what size will the distribution approximate the normal distribution?

A. 2

B. 5

C. 20

D. 30

 

215 The mean of the all the sample means and the population mean will

A. Always be equal

B. Always be normally distributed

C. Characterized by the standard error of the mean

D. None of the above

 

216 In a simple random sample

A. Every Kth item is selected to be in the sample.

B. Every item has a chance to be in the sample.

C. Every item has the same chance to be in the sample.

D. All of these

 

217 The difference between the sample mean and the population mean is called the

A. Standard error of the mean.

B. Sampling error.

C. Population mean.

D. Population standard deviation.

 

218 A point estimate is

A. Always an estimate of the population mean.

B. Always equal to the population value.

C. An estimate of the population parameter.

D. None of these

 

219 Which of the following statements is not a characteristic of the t distribution?

A. It is symmetrical.

B. Like z there is only one t distribution.

C. It is a continuous distribution.

D. It has a mean of 0.

 

220 If we wished to decrease the width of a confidence interval, we would not do which of the following

A. Increase the size of the sample

B. Reduce the size of the population

C. Decrease the level of confidence

D. None of the above

 

221 Which of the following statements is true regarding a sample?

A. It is a part of population.

B. It must contain at least five observations.

C. It refers to descriptive statistics

D. All of these are correct

 

13) A discrete variable is

A. Can assume only certain clearly separated values

B. Cannot be negative.

C. An example of a qualitative variable.

D. Can assume only whole number values.

 

222 In a two-sample test of means for independent samples, we use the z distribution when

A. Both population standard deviations are known.

B. nB and n(1-B) are both greater than 5.

C. The population standard deviations are equal.

D. Both populations have at least 4,000 observations.

 

223 In a contingency table a sample of 400 people is classified by gender and hair color (4 groups: blond, brown, black, and red). How many degrees of freedom are there?

A. 3

B. 8

C. 399

D. None of these

 

224 In a contingency table

A. The number of rows must be the same as the number of columns.

B. A variable is classified according to two criteria.

C. There must be at least 10 observations in each cell.

D. All of these

 

225 In a goodness-of-fit test where the sample size is 200, there are 5 categories, and the significance level is .05. The critical value of X2 is

A. 9.488

B. 11.070

C. 43.773

D. None of these

 

226 A confidence interval

A. Always includes the population parameter.

B. Decreases in width as the sample size is increased.

C. Cannot include a value of 0

D. None of these

 

227 Which of the following is not a type of probability?

A. Relative frequency

B. Classical

C. Subjective

D. Independent

 

228 We use the General Rule of Multiplication to combine

A. Events that total more than 1.00.

B. Events based on subjective probabilities

C. Events that are not independent.

D. Mutually exclusive events.

 

229 Which of the following is a correct statement about a probability?

A. It may be greater than 1.

B. It cannot be reported to more than 1 decimal place.

C. It may range from 0 to 1.

D. It may assume negative values.

 

230 We wish to develop a confidence interval for the population mean. The shape of the population is not known, but we have a sample of 40 observations. We decide to use the 92% level of confidence. The appropriate value of z is:

A. 1.96

B. 2.58

C. 1.75

D. 1.65

 

231 Suppose a population consisted of 20 items. How many different samples of n = 3 are possible?

A. 6840

B. 20

C. 120

D. 1140

 

232 Which of the following statements is not a characteristic of the t distribution?

A. It is a continuous distribution.

B. It is symmetrical.

C. Like z there is only one t distribution.

D. It has a mean of 0

 

233 The alternate hypothesis 
A. None of these
 
B. Will always contain the equal sign.
 
C. Is accepted if the null hypothesis is rejected.
 
D. Tells the value of the sample mean.

 

234 The expected value of the a probability distribution

A. Is the same as the random variable

B. Is another term for the mean

C. Is also called the variance

D. Cannot be greater than 1

 

235 For a binomial distribution with n = 15 as π changes from .50 toward .05 the distribution will

 

A. Become more positively skewed

B. Become more negatively skewed

C. Become symmetrical

D. All of the above

 

236 In a continuous probability distribution

A. Only certain outcomes are possible.

B. All the values within a certain range are possible

C. The sum of the outcomes is greater than 1.00

D. None of the above

 

237 For a binomial distribution

A. n must assume a number between 1 and 20 or 25

B. π must be a multiple of .10

C. There must be at least 3 possible outcomes

D. None of the above

 

238 Which of the following is not a requirement of a probability distribution

A. Equally likely probability of a success

B. Sum of the possible outcomes is 1.00

C. The outcomes are mutually exclusive

D. The probability of each outcome is between 0 and 1

 

239 In which of the following distributions is the probability of a success usually small?

A. Binomial

B. Poisson

C. Hypergeometric

D. All distribution

 

240 In finding confidence intervals for the mean of a normal population by using a t-statistic, student A uses a confidence coefficient of 0.95 while student B uses 0.99. Which one of the following statements is true about the length of the confidence intervals found by A and B?

a. B's interval will always be smaller than A's interval

b. B's interval will usually be smaller than A's interval

c. B's interval will always be larger than A's interval

d. B's interval will usually be larger than A's interval

 

241 We know the mean MU of a population. Suppose 1,000 samples of size n are drawn from this population. For each sample we compute a 90% confidence interval for MU. We would expect the mean of the population would NOT be contained within approximately how many of these intervals?

A. 0

B. 10

C. 100

D. 900

 

242 If the P-value for your test statistic satisfies p > .25, then:

A. you would not reject H(O) for ALPHA = .05

B. you would reject H(O) for ALPHA = .05

C. you would reject H(O) for ALPHA = .10

D. you would reject H(O) for ALPHA = .01

 

243 The appropriate alternative hypothesis for a lower tail test to determine if mean body weight of all the men who have joined a health club is less than 185 pounds would be

A. HA: μ ≥ 185 lb.

B. HA: μ < 185 lb.

C. HA: μ = 185 lb.

D. HA: μ ≠ 185 lb.

 

244 The e-mail usage for two different plants of a large company was compared at level of significance 0.05. A sample of 100 employees was selected at each plant. The mean number of e-mail messages sent per employee for one plant was 16 per week and the standard deviation was 4. For the other plant, the mean was 15 and the standard deviation was 3. For the test of equal population means versus unequal population means, the absolute value for the computed test statistic, the critical values, and the p-value respectively are:

A. 2, ± 1.96, 0.0455

B. 3, ± 2.33, 0.0027

C. 3, ± 1.96, 0.0455

D. 2, ± 1.65, 0.0455

 

245 Three samples of 10 were used to compare 3 population means. If the Sum of Squares Treatment (SST) is 350, what is the value for the Mean Square Treatment (MST)?

A. 350

B. 175

C. 35. 13

 

 

246 Which of the following are factors that are important in determining the size of the sample needed in a study? 1. The amount of variation in the population 2. The size of the population 3. The amount of error that can be tolerated

A.   . 1

B.   . 2

C.   . 3

D.   . 1, 2, and 3

 

247 Populations are studied using samples because of all of the following reasons except

A.   it usually takes too much time to study the entire population.

B.   management need not be concerned about sampling error.

C.   studying the entire population is not cost effective. 

D.   it may not be possible to identify all the members of the population

 

 

248 Which of the following is a major difference between the binomial and the hypergeometric distributions?

A.   The sum of the outcomes can be greater than 1 for the hypergeometric

B.   The probability of a success changes in the hypergeometric distribution

C.   The number of trials changes in the hypergeometric distribution

D.   The outcomes cannot be whole numbers in the hypergeometric distribution

249 Which of the following is not a type of probability?

A.   Subjective

B.   Independent

C.   Relative frequency

D.   Classical

 

250 Events are independent if

A.   By virtue of one event occurring another cannot

B.   The probability of their occurrence is greater than 1

C.   We can count the possible outcomes

D.   The probability of one event happening does not affect the probability of another event happening

 

251 The Special Rule of Addition is used to combine

A.   Independent events

B.   Mutually exclusive events

C.   Events that total more than one

D.   Events based on subjective probabilities

 

252 We use the General Rule of Multiplication to combine

A.   Events that are not independent

B.   Mutually exclusive events

C.   Events that total more than 1.00

D.   Events based on subjective probabilities

 

253 When we find the probability of an event happening by subtracting the probability of the event not happening from 1, we are using

A.   Subjective probability

B.   The complement rule

C.   The general rule of addition

D.   The special rule of multiplication

 

254 When we determine the number of combinations

A.   We are really computing a probability

B.   The order of the outcomes is not important

C.   The order of the outcomes is important

D.   We multiple the likelihood of two independent trials

 

255 In a continuous probability distribution

A.   Only certain outcomes are possible

B.   All the values within a certain range are possible

C.   The sum of the outcomes is greater than 1.00

D.   None of the above

 

256 For a binomial distribution with n = 15 as p changes from .50 toward .05 the distribution will

A.   Become more positively skewed

B.   Become more negatively skewed

C.   Become symmetrical

D.   All of the above

 

257 The difference between a random variable and a probability distribution is

A. A random variable does not include the probability of an event

B. A random variable can only assume whole numbers

C. A probability distribution can only assume whole numbers

D. None of the above

 

258 The normal distribution is a

A. Discrete distribution

B. Continuous distribution

C. Positively skewed distribution

D. None of the above

 

259 Which of the following are characteristics of the normal distribution?

A. It is a symmetric distribution

B. It is bell-shaped

C. It is asymptotic

D. All of the above

 

260 Which of the following are correct statements about a normal distribution?

A. It cannot assume negative numbers.

B. It is defined by its mean and standard deviation

C. All normal distributions have a variance of at least 1

D. All of the above are correct

 

261 Which of the following statements is correct regarding the standard normal distribution?

A. It is also called the z distribution

B. Any normal distribution can be converted to the standard normal distribution

C. The mean is 0 and the standard deviation is 1

D. All of the above are correct

 

262 The area under a normal curve between 0 and -1.75 is

A. 0401

B. 9599

C. 4599

D. None of the above

 

 

263  Which of the following is not a reason for sampling

A. The destructive nature of certain tests

B. The physical impossibility of checking all the items in the population

C. The adequacy of sample results

D. All of the above are reasons for sampling

 

264 Which of the following statements is not a characteristic of the t distribution

A. It is a continuous distribution

B. It has a mean of 0

C. It is symmetrical

D. Like z there is only one t distribution

 

265 The fraction or ratio of a sample possessing a certain trait is called a

A. Population.

B. Mean

C. Confidence interval

D. Proportion

 

266 To develop a confidence interval for a proportion

A. We need to meet the binomial conditions

B. The sample should be at least 100

C. B should be less than .05

D. None of the above

 

267 The finite population correction factor is used when

A. n is more than 30

B. N is more than 1000

C. nB is greater than 5

D. n/N is more than .05

 

268In a contingency table a sample of 400 people is classified by gender and hair color (4 groups: blond, brown, black, and red). How many degrees of freedom are there?

A.   3

B.   8

C.   399

D.   None of the above

 

269 Suppose we select a sample of 100 observations and organize them into 6 categories. We wish to investigate whether the number of observations could be the same in each of the categories in the population. How many degrees of freedom are there?

A.   5

B.   97

C.   3

D.   None of these

 

270We wish to estimate the population proportion. We want to be 95 percent confident of our results and we want the estimate to be with .01 of the population parameter. No estimate of the population proportion is available. What value should we use for p?

A. 1.96

B. .01

C. .50

D. We cannot complete the problem, we need more information

 

271In a multiple regression equation there

A.   Are two or more independent variables

B.   Is only one dependent variable

C.   Is one intercept value

D.   All of the above

 

272  dummy variable or indicator variable

A.   May assume only a value of 0 or 1

B.   Is another term for the dependent variable

C.   Is found by (Y - Ŷ)

D.   Is equal to Ŷ

 

273 The multiple standard error of estimate is

A.   Is based on the (Y - Ŷ)2  

B.   Is negative when one of the net regression coefficients is 0

C.   Is found by taking the square root of SSR/SS total

D.   All of the above

 

274 In the ANOVA table the value of k is

A.   The number of independent variables

B.   The total number of observations

C.   The number of degrees of freedom

D.   The sum of squares total

 

275. A correlation matrix

A.   Shows all simple coefficients of correlation

B.   Shows all possible net regression coefficients

C.   Shows the correlations that are positive

D.   Reports the multiple regression equation

 

276. In a multiple regression equation

A.   There is only one dependent variable

B.   The R2 term must be at least .50

C.   All the regression coefficient must be between -1.00 and 1.00

D.   None of the above

 

277. Multicollinearity occurs when

A.   The residuals are correlated

B.   Time is involved in the analysis

C.   The independent variables are correlated

D.   The residuals are not constant for all Y' values

 

278. In a global test of hypothesis we determine

A.   Which independent variables do not equal 0

B.   Whether any of the set of independent variables differ from 0

C.   Whether any of the correlation coefficients differ from 0

D.   None of the above

279. In testing the significance of individual regression coefficients

A.   The test statistic is the t distribution

B.   We test the independent variables individually

C.   We usually delete the variables where the null hypothesis is not rejected

D.   All of the above

 

280 The residual

A.   Is the difference between the actual and the predicted value of the dependent variable

B.   Cannot assume a negative value

C.   Is also called the correlation matrix

D.   Has the same degrees of freedom as the MSE term

 

281 An index

A.   Shows a percent change from one period to another

B.   Must be larger than 100

C.   Can employ qualitative data

D.   Cannot assume negative values

 

282 For an index number the base period

A.   Appears in the numerator

B.   Cannot be less than 100

C.   Appears in the denominator

D.   Must be after the year 1980

 

283 The Consumer Price Index (CPI) is

A.   Reported monthly

B.   Reported by the Bureau of Labor Statistics

C.   A Laspeyres type index

D.   All of the above

 

284 In a Laspeyres price index the

A.   Base period quantities do not change

B.   Base period prices do not change

C.   The base period must be the same as the CPI

D.   None of the above

 

285 Which of the following is a reason for computing an index?

A.   It is a convenient way of expressing a change in unlike items, such as dollars and bushels.

B.   It is always at least 100

C.   The base periods may be different

D.   All of the above

 

286 In 1995 Eastern Publishing, Inc. employed 35 sales representatives. In 2005 they employed 50 sales representatives. Using 1995 as the base period the index for the number of sales representative in 2005 is

A.   50.0

B.   143.0

C.   70.0

D.   None of the above

 

287 The Director of Purchasing reported that the industrial production index was 135. This means production

A.   Increased 35 percent from the base period

B.   Increased by 35 units from the base period

C.   Decreased by 35 percent from the base period

D.   None of the above

 

288 An index increased from 120 to 150 from 2000 to 2005. We conclude that this is

A.   An increase of 30 percent

B.   A decrease of 30 percent

C.   An increase of 25 percent

D.   None of the above

 

289 An index of 75 was reported. We conclude that

A.   There has been a decline of 25 percentage points from the base period

B.   An error was made because an index cannot be less than 100

C.   There had been an increase of 25 percent since the base period

D.   None of the above

 

290 Jon earned $50,000 in 2005, when the Consumer Price Index was 200. If the base period is 1995, what are his earnings in terms of 1995 dollars?

A.   $50,000

B.   $25,000

C.   $100,000

D.   None of the above

 

291 What is the “up-and-down” variation, the periods of prosperity followed by recession that occurs over extended periods of time?

A.   secular trend

B.   seasonal variation

C.   cyclical variation

D.   irregular variation

 

292What is the variation within a year called? This is variation, such as high sales at Christmas and Easter and low sales in January is called the

A.   secular trend

B.   seasonal variation

C.   cyclical variation

D.   irregular variation

 

293 A linear trend for time series data beginning in 2001 and extending up through 2006 (data for 6 years) is Ŷ = 5.2 + 3.1t. The forecast for 2007 is

A.   23.8

B.   26.9

C.   30.0

D.   21.7

294 The least squares equation for sales data going from 2001 to 2006 is Ŷ = 10 + 1.3t What is the plot for the year 2004?

A.   t = 6, y = 17.8

B.   t = 0, y = 10.0

C.   t = 4, y = 15.2

D.   t = 10, y = 0.0

 

295 The linear trend equation developed for the annual sales (in $thousands) of the Jordan Manufacturing Company is Ŷ = 500 + 60t. By how much are sales increasing per year?

A.   $60,000 per year

B.   $6,000 per month

C.   $500,000 per year

D.   $6,000 per year

 

296 To conduct a nonparametric test the

A.   Population must follow the normal distribution

B.   The standard deviation must be known

C.   It is not necessary to make any assumption about the shape of the population

D.   The data must be at least interval scale

 

297 Which of the following is not a characteristic of the X2

A.   Its shape is based on the sample size

B.   It is not negative

C.   It is positively skewed

D.   It approaches a normal distribution as the degrees of freedom increase

 

298 In a goodness-of-fit test where the sample size is 200, there are 5 categories, and the significance level is .05. The critical value of X2 is

A.   9.488

B.   11.070

C.   43.773

D.   None of the above

 

299 In a goodness-of-fit test

A.   All the cell frequencies must be the same

B.   There must be at least 30 observations

C.   Forty percent of the cells must contain at least 10 observations

D.   None of the above

 

300 In a contingency table

A.   The number of rows must be the same as the number of columns

B.   A variable is classified according to two criteria

C.   There must be at least 10 observations in each cell

D.   All of the above

 

301 Under what conditions could the X2 distribution assume negative values?

A.   When the sample size is small

B.   When the cell frequencies are all equal

C.   When the degrees of freedom is 1

D.   Never

 

302 The difference between a permutation and a combination is:

A.   In a permutation order is important and in a combination it is not

B.   In a permutation order is not important and in a combination it is important

C.   A combination is based on the classical definition of probability

D.   A permutation is based on the classical definition of probability

 

303 Bayes' Theorem

A.   Is an example of subjective probability

B.   Can assume of value less than 0

C.   Is used to revise a probability based on new or additional information

D.   Is found by applying the complement rule

 

304 When we determine the number of combinations

A.   We are really computing a probability

B.   The order of the outcomes is not important

C.   The order of the outcomes is important

D.   We multiple the likelihood of two independent trials

 

305 The alternate hypothesis

A.   Is accepted if the null hypothesis is rejected

B.   Will always contain the equal sign

C.   Tells the value of the sample mean

D.   None of the above

 

306 The level of significance

A.   Is frequently .05 or .01

B.   Can be any value between 0 and 1

C.   Is the likelihood of rejecting the null hypothesis when it is true

D.   All of the above

 

307 A Type I error is

A.   The correct decision

B.   A value determined from the test statistic

C.   Rejecting the null hypothesis when it is true

D.   Accepting the null hypothesis when it is false

 

308 Which of the following is not a characteristic of the X2

A.   It approaches a normal distribution as the degrees of freedom increase

B.   It is positively skewed

C.   Its shape is based on the sample size

D.   It is not negative

 

 

309 When we find the probability of an event happening by subtracting the probability of the event not happening from 1, we are using

A.   Subjective probability

B.   The complement rule

C.   The general rule of addition

D.   Joint probability

 

310 We use the General Rule of Multiplication to combine

A.   Events that are not independent

B.   Mutually exclusive events

C.   Events that total more than 1.00

D.   Events based on subjective probabilities

311 Events are independent if

A.   By virtue of one event happening another cannot

B.   The probability of their occurrence is greater than 1

C.   We can count the possible outcomes

D.   The probability of one event happening does not affect the probability of another event happening

 

 

312 In a one-tailed test

A.   The rejection region is in only one of the tails

B.   The rejection region is split between the tails

C.   The p-value is always less than the significance level

D.   The p-value is always more than the significance level

 

313 To conduct a one sample test of means and use the z distribution as the test statistic

A.   We need to know the population mean.

B.   We need to know the population standard deviation

C.   We need nπ to be less than 5.

D.   Both a and b are correct

 

314 In a two-sample test of means for independent samples, we use the z distribution when

A.   The population standard deviations are equal

B.   Both populations have at least 4000 observations

C.   Both population standard deviations are known

D.   nB and n(1-B) are both greater than 5

 

315 Which of the following is a requirement for a two-sample test of proportions

A.   The population standard deviations are equal

B.   Both populations are positively skewed

C.   Both samples are at least 30

D.   nB and n(1-B) are both greater than 5

 

316 A random sample of 10 observations is selected from the first normal population and 8 from the second normal population. For a one-tailed test of hypothesis (.01 significance level) to determine if there is a difference in the population means, the degrees of freedom are

A.   18

B.   17

C.   16

D.   None of the above

 

317 A random sample of 10 observations is selected from the first normal population and 8 from the second normal population. For a one-tailed test of hypothesis (.01 significance level) to determine if there is a difference in the population means, the critical value(s) are

A.   2.552

B.   -2.921, 2.921

C.   -2.583, 2.583

D.   None of the above

 

 

318 A p-value is

A.   The same as the population proportion

B.   The same as the significance level

C.   The fraction of the population that has a particular characteristic

D.   The probability of finding a value of the test statistic this extreme when the null hypothesis is true

 

319 A Type II error occurs when

A.   We accept a false null hypothesis

B.   We reject a true alternate hypothesis

C.   We reject a false null hypothesis

D.   None of the above

 

320 Which of the following is not a characteristic of the X2

A.   It approaches a normal distribution as the degrees of freedom increase.

B.   It is positively skewed.

C.   Its shape is based on the sample size.

D.   It is not negative.

 

321 A correlation matrix

A.   Shows the correlations that are positive.

B.   Shows all possible net regression coefficients.

C.   Reports the multiple regression equation.

D.   Shows all simple coefficients of correlation.

 

322 In a multiple regression equation

A.   There is only one dependent variable.

B.   The R2 term must be at least .50

C.   All the regression coefficient must be between -1.00 and 1.00

D.   None of these

 

323 A.  dummy variable or indicator variable

A.   Is found by (Y - Y).

B.   Is another term for the dependent variable

C.   Is equal to Y

D.   May assume only a value of 0 or 1

 

334 A correlation matrix

A.   Shows the correlations that are positive

B.   Shows all possible net regression coefficients

C.   Reports the multiple regression equation

D.   Shows all simple coefficients of correlation

 

335 In a multiple regression equation

A.   There is only one dependent variable

B.   The R2 term must be at least .50

C.   All the regression coefficient must be between -1.00 and 1.00

D.   None of these

 

336 The Special Rule of Addition is used to combine

A. Independent events

B.   Events that total more than one

C.   Events based on subjective probabilities

D.   Mutually exclusive events

 

337 Events are independent if

A. By virtue of one event happening another cannot

B, We can count the possible outcomes

C. The probability of one event happening does not affect the probability of another event happening

D.   The probability of their occurrence is greater than 1

 

338 Suppose a population consisted of 20 items. How many different samples of n = 3 are possible?

A.   6840

B.   20

C.   120

D.   1140

339 The weighted mean is a special case of the:

A.   A. Mean

B.   B. Median

C.   C. Mode

D.   D. Geometric mean

 

340 In a set of observations, which measure of central tendency reports the value that occurs most often?

A.   Mean

B.   Median

C.   Mode

D.   Geometric mean

341 Which of the following statements are correct when deciding whether to use the z or the t distribution

A.   Use zin a test of proportions when nπ and n(1 - π) are greater than or equal to 5

B.   Use z when we have a normal population and we know the standard deviation

C.   Use t when the population is normal and the population standard deviation is not known

D.   All of the above statements are correct

 

342 In a two-sample test of means for independent samples, the equal sign always appears in

A.   The null hypothesis

B.   The alternate hypothesis

C.   The upper tail of the test statistic

D.   None of the above

 

343 Which of the following is not a requirement for the two-sample test of means for independent samples observations?

A.   Normal populations

B.   Equal population standard deviations

C.   Equal sample sizes

D.   All of the above are required

 

344 To conduct a test of means for two independent samples which of the following are always required?

A.   At least one of the samples must have 30 observations

B.   Both samples must have 30 observations

C.   np and n (1 - p) must be 5

D.   None of the above

 

345 Which of the following is not a type of probability?

A.   Classical

B.   Independent

C.   Subjective

D.   Relative frequency

 

346 We use the General Rule of Multiplication to combine

A.   Events based on subjective probabilities

B.   Mutually exclusive events

C.   Events that are not independent

D.   Events that total more than 1.00

 

347 The difference between a random variable and a probability distribution is

A.   A random variable does not include the probability of an event

B.   A random variable can only assume whole numbers

C.   A probability distribution can only assume whole numbers

D.   None of the above

 

348 Suppose a population consisted of 20 items. How many different samples of n = 3 are possible

A.   120

B.   20

C.   1140

D.   6840

349 The standard error of estimate is

A.   Based on squared deviations from the regression line

B.   May assume negative values

C.   Is in squared units of the independent variable

D.   All of the above

 

350 Which of the following is not a necessary condition for regression analysis

A.   The standard deviation of each of the conditional distributions must be the same

B.   The Y values are independent

C.   For each X value, there is a group of Y values and these Y values are normally distributed

D.   The slope of the regression line is positive (increasing)

 

351 A dummy variable or indicator variable

A.   Is found by (Y - Y)

B.   Is another term for the dependent variable

C.   Is equal to Y

D.   May assume only a value of 0 or 1

 

352 A correlation matrix

A.   Shows the correlations that are positive

B.   Shows all possible net regression coefficients

C.   Reports the multiple regression equation

D.   Shows all simple coefficients of correlation

 

353 In a multiple regression equation

A.   There is only one dependent variable

B.   The R2 term must be at least

C.   All the regression coefficient must be between -1.00 and 1.00

D.   None of these

 

354 An experiment is a

A.   The act of taking a measurement or the observation of some activity

B.   Collection of outcomes

C.   Collection of events

D.   Always greater than 1

 

355. Which of the following is not based on squared deviations from the regression line?

A.   The coefficient of correlation

B.   The coefficient of determination

C.   The standard deviation

D.   The standard error of estimate

 

356. In an ANOVA table for regression, the degrees of freedom for regression is

A.   Equal to 1

B.   n – 1

C.   n – 2

D.   None of the above

 

357 The multiple standard error of estimate is

A.   Is based on the (Y - Y)2

B.   Is negative when one of the net regression coefficients is 0

C.   Is found by taking the square root of SSR/SS total

D.   All of these

 

358 In a two-sample test of means for independent samples, the equal sign always appears in

A.   The null hypothesis

B.   The alternate hypothesis

C.   The upper tail of the test statistic

D.   None of these

 

359 To conduct a nonparametric test the

A.   The data must be at least interval scale

B.   The standard deviation must be known

C.   Population must follow the normal distribution

D.   It is not necessary to make any assumption about the shape of the population

 

360 Which of the following is not necessary to determine a p-value

A.   Knowledge of whether the test is one-tailed or two-tailed

B.   The value of the test statistic

C.   The level of significance

D.   All of the above

 

361 When conducting a test of hypothesis for the dependent samples

A.   We should have at least 30 pairs

B.   The significance level is more than .05

C.   The p-value is more than .10

D.   None of the above

 

362 Given a two-tail test for the population mean, the null hypothesis contains a(n) __________ sign, and the alternative hypothesis contains a(n) ___________ sign.

A.   . ?, =

B.   . =, ?

C.   . ?, =

D.   . =, ?

 

363 If each of a set of raw scores is transformed into a Z-score, the new distribution will have a standard deviation equal to

A.   . zero.

B.   . one.

C.   . the mean of the original distribution.

D.   . the standard deviation of the original distribution

 

367 Consider the following two columns that describe different types of data:

368 Nominal 1. Qualitative B. Discrete 2. Quantitative C. Ordinal D. Continuous The correctly paired groupings of the two columns is

A.   . 1–AB 2–CD

B.   . 1–AD 2–BC

C.   . 1–AC 2–BD

D.   . 1–BC 2–AD

 

369 Arrange the following steps in correct sequence: 1. Begin sampling. 2. Determine the sample size. 3. Establish the sampling frame.

A.   . 1, 2, 3

B.   . 2, 1, 3

C.   . 3, 1, 2

D.   . 3, 2, 1 Q14

 

370 To conduct a test of hypothesis for dependent samples we assume that

A.   The distribution of the difference between the paired observations follows the normal distribution

B.   Both samples are at least 30

C.   The samples are unrelated

D.   All of the above

 

371 To conduct a test of means for two independent samples which of the following are always required?

A.   At least one of the samples must have 30 observations.

B.   Both samples must have 30 observations

C.   np and n (1 - p) must be 5

D.   None of the above

 

372 The term ANOVA

A.   Has no special meaning

B.   Stands for Analysis of Variance

C.   Stands for Another Numerical Observation of the Variance

D.   None of the above

 

373 The general idea of analysis of variance is to compare estimates of variance

A.   From both between the treatment means and within the treatment means

B.   Based on the several treatments

C.   From within the treatments

D.   None of the above

 

374 Which of the following is not a characteristic of the F distribution?

A.   It is a discrete distribution

B.   In cannot be negative

C.   It is based on two sets of degrees of freedom

D.   All of the above

 

375 The term “Treatment” refers to

A.   A source of variation

B.   The numerator degrees of freedom

C.   The variation within the cells

D.   None of the above

 

376 Suppose we select 6 observations from each of three treatments. The appropriate degrees of freedom are

A.   3 and 6

B.   2 and 6

C.   2 and 15

D.   None of the above

 

377 The term MSE

A.   Is called the mean square error

B.   Is found by SSE/(n - k)

C.   Is an estimate of the common population variance

D.   All of the above

 

378 Which of the following is not an assumption required for ANOVA?

A.   The populations are normally distributed

B.   The populations have equal standard deviations

C.   The samples are independent

D.   All of the above

 

379 Under which of the following conditions will the computed value of F be negative?

A.   When there is no difference in the treatment means

B.   When there is no difference in the block means

C.   When the SS total is larger than SST

D.   F cannot be negative

380 Suppose we conduct an ANOVA test of four treatment means and reject the null hypothesis. Construction of a confidence interval for the difference between the first and second sample mean revealed the interval to be 10 plus or minus 12. We conclude

A.   This pair of means differ

B.   This pair of means does not differ

C.   Because we do not know the units involved, we cannot draw any conclusion

D.   Because we do not know the degrees of freedom, we cannot draw any conclusion

 

381 In a two-way ANOVA the second source of variation is due to

A.   Random error

B.   Blocks

C.   Total variation

D.   None of the above

 

382 A scatter diagram is a chart

A.   In which the dependent variable is scaled along the vertical axis

B.   In which the independent variable is scaled along the horizontal axis

C.   That portrays the relationship between two variables

D.   All of the above

 

383 In correlation analysis

A.   We consider several independent variables

B.   We study the strength of the association between two variables

C.   We consider the intercept with the Y-axis

D.   None of the above

 

384 The sample coefficient of correlation

A.   Has the same sign as the slope, i.e. b

B.   Can range from -1.00 up to 1.00

C.   Is also called Pearson=s r

D.   All of the above

 

385 The coefficient of determination

A.   Is the square of the coefficient of correlation

B.   Cannot be negative

C.   Reports the percent of the variation in the dependent variable explained by the independent variable

D.   All of the above

 

386 Suppose we developed the following least squares regression equation: Y= = 3.5 + 2.1X. Which of the following statements are correct?

A.   The dependent variable increases 2.1 for an increase of 1 in X

B.   The equation crosses the Y-axis at 3.5

C.   If X = 5, then Y= = 14

D.   All of the above

 

 

387 The term SSR/SS total is also called the

A.   Sum of squares due to regression

B.   Coefficient of determination

C.   Standard error of estimate

D.   Coefficient of correlation

388. Which of the following statements is not a characteristic of the t distribution?

E.   It is symmetrical

F.    Like z there is only one t distribution

G.  It is a continuous distribution

H.  It has a mean of 0.

 

389. A nominal scale variable is

E.   Cannot have more than two categories.

F.    B. Has a meaningful zero point.

G.  C. Usually the result of counting something

F.    May assume negative values.

390: What area under the standard normal curve falls outside the Z values -1.96 and 1.96?

A. 0.05

B. 0.01

C. 0.90

D. 0.10

 

391 Which level of measurement is required for the median?

A. Nominal

B. Ordinal

C. Interval

D. Ratio

392 The weighted mean is a special case of the:

A. Mean

B. Median

C. Mode

D. Geometric mean

 

393 In a set of observations, which measure of central tendency reports the value that occurs most often?

A. Mean

B. Median

C. Mode

D. Geometric mean

 

394 The mean and the variance are equal in

A. All probability distributions.

B. The binomial distribution.

C. The Poisson distribution.

D. The hypergeometric distribution.

 

395 Which of the following is not a requirement of a binomial distribution?

A. A constant probability of success.

B. Only two possible outcomes.

C. A fixed number of trails.

D. Equally likely outcomes.

 

396 In which of the following distributions is the probability of a success usually small?

A. Binomial

B. Poisson

C. Hypergeometric

D. All distribution

 

397 A sample

A. Is part of the population.

B. Has more than 30 observations.

C. Is usually identified as N.

D. All of these

 

398 If each of a set of raw scores is transformed into a Z-score, the new distribution will have a standard deviation equal to

A. zero.

B. one.

C. the mean of the original distribution.

D. the standard deviation of the original distribution.

 

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TRUE OR FALSE

1.     The role of statistics is business research is to capture a population’s characteristics by using inferential statistics from a sample’s characteristics – 

 

2.     The difference between business research and scientific research is that business research does not involve a hypothesis – 

 

 

3.     Business research usually requires use of the both qualitative and quantitative data – 

 

4.     A sample does not need to be representative of the larger population as long as the sample is large enough – 

 

 

5.     A research design is always based on a research question –

 

6.     A theory is a statement about a population parameter developed for testing – 

 

 

7.     The z-test statistic is used when performing a small sample (<30) test of means – 

 

8.     The test of whether two variables are related results in an ANOVA table – 

 

9.     Correlation analysis is the study of the relationship between variables 

 

10.   A correlation of -.25 is weaker than a correlation of +.15 – 

 

 

11.   The number of individuals in a family is a continuous variable. 

 

12.   Distributions are spread out more than a normal distribution with MU = 0, SIGMA = 1. 

 

 

13.   A random sample of 64 cars passing a check point on a certain highway showed a mean speed of 60 mph. The standard deviation of speeds is known to be 15 mph. In this case 60 mph is a point estimate of the population mean speed on this highway. 

 

14.   According to the Central Limit Theorem, the shape of the sampling distribution of sample mean (given that n ≥ 30) will be normal, whether or not the shape of the population is normal. 

 

 

15.   If the sample size is large (n ≥ 30), the standard deviation of the sample mean will equal the population standard deviation for that random variable. 

 

16.   Level of confidence is another name for level of significance. 

If we would reject a null hypothesis at the 5% level, we would also reject it at the 1% level.

 

 

17. A Type I error is committed when one accepts the null hypothesis when it is false. 

 

18. In a one-way ANOVA, when the null hypothesis is false, the calculated F-ratio would exceed the critical value of F for the chosen significance level. 

 

19. Rejection of a hypothesis using a nonparametric test is more convincing than using an equivalent parametric test when the data are badly skewed. 

 

20. Most nonparametric tests assume ordinal data. 

 

21.One of the assumptions of regression analysis is that the error terms are normally distributed. 

 

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