Test Business Maths 1. A. B. C. D. Which of the following is correct with regard to expected values?

Expected values provide a weighted average of anticipated outcomes The expected value will always equal one of the possible outcomes Expected values will show whether the decision maker is risk averse, risk seeking or risk neutral The expected value will never equal one of the possible outcomes

2. Which of the following are correct with regard to regression analysis? (i) In regression analysis the n stands for the number of pairs of data. (ii) x2 is not the same calculation as ( x)2 (iii) xy is calculated by multiplying the total value of x and the total value of y A. (i) and (ii) only B. (i) and (iii) only C. (ii) and (iii) only D. (i), (ii) and (iii) 3. A company uses regression analysis to establish a total cost equation for budgeting purposes. Data for the past four months is as follows: Month Total cost Quantity Produced 000 000 1 575 125 2 375 100 3 450 150 4 600 200 575 20000 The gradient of the regression line is 1714. What is the value of a? A. 2536 B. 4856 C. 7464 D. 10145 4. A. B. C. D. Which of the following is a feasible value for the correlation coefficient? 20 12 0 + 12

5. A company has recorded its total cost for different levels of activity over the last five months as follows: Month Activity level (units) Total cost () 7 300 17,500 8 360 19,500 9 400 20,500 10 320 18,500 11 280 17,000 The equation for total cost is being calculated using regression analysis on the above data. The equation for total cost is of the general form y = a + bx and the value of b has been calculated correctly as 2953. What is the value of a (to the nearest ) in the total cost equation?

A. B. C. D.

7,338 8,796 10,430 10,995

The following information relates to questions 6 and 7: In the following price, cost and revenue functions, which have been established by a company for one of its products, Q represents the number of units produced and sold per week: Price ( per unit) = 40 003Q Marginal revenue ( per unit) = 40 006Q Total cost per week () = 3,500 + 10Q 6. What price should be set in order to maximise weekly profits? A. 10 B. 15 C. 25 D. 30 7. A. B. C. D. What would be the profit per week if the selling price of the product was set at 31 per unit? 2,800 3,150 5,490 5,800

8. Regression analysis is being used to find the line of best fit (y = a + bx) from eleven pairs of data. The calculations have produced the following information: x = 440, y = 330, x2 = 17,986, y2 = 10,366 and xy = 13,467 What is the value of a in the equation for the line of best fit (to 2 decimal places)? A. 063 B. 069 C. 233 D. 533 9. The following statements relate to the calculation of the regression line y = a + bx using the information on the formulae sheet at the end of this examination paper: (i) n represents the number of pairs of data items used (ii) ( x)2 is calculated by multiplying x by x (iii) xy is calculated by multiplying x by y Which statements are correct? A. (i) and (ii) only B. (i) and (iii) only C. (ii) and (iii) only D. (i), (ii) and (iii) 10. The correlation coefficient (r) for measuring the connection between two variables (x and y) has been calculated as 06. How much of the variation in the dependent variable (y) is explained by the variation in the independent variable (x)? A. 36% B. 40% C. 60% D. 64%

The following information relates to questions 11 and 12: A company has established the following selling price, costs and revenue equations for one of its products: Selling price ( per unit) = 50 0025Q Marginal revenue ( per unit) = 50 005Q Total costs per month () = 2,000 + 15Q Q represents the number of units produced and sold per month. 11. At what selling price will monthly profits be maximised? A. 1500 B. 1750 C. 2500 D. 3250 12. A. B. C. D. What would be the monthly profit if the selling price per unit was set at 20? 1,000 4,000 6,000 12,000

13. An organisation is using linear regression analysis to establish an equation that shows a relationship between advertising expenditure and sales. It will then use the equation to predict sales for given levels of advertising expenditure. Data for the last five periods are as follows: Period Advertising Sales number expenditure 000 000 1 17 108 2 19 116 3 24 141 4 22 123 5 18 112 What are the values of x, y and n that need to be inserted into the appropriate formula? x y n A. 600,000 100,000 5 B. 100,000 600,000 5 C. 600,000 100,000 10 D. 100,000 600,000 10 14. A. B. C. D. 15. A. B. C. D. Which of the following correlation coefficients indicates the weakest relationship between two variables? + 10 + 04 06 10 Which of the following is NOT a feasible value for the correlation coefficient? + 12 + 06 +0 06

16. The following statements relate to the calculation of the regression line y = a + bx using the information on the formulae sheet at the end of this examination paper: (i) xy is calculated by multiplying x by y. (ii) y2 is not the same as ( y)2 . (iii) n represents the number of pairs of data items used. Which statements are correct? A. (i) and (ii) only B. (i) and (iii) only C. (ii) and (iii) only D. (i), (ii) and (iii) 17. Which of the following are feasible values for the correlation coefficient? 1 +140 2 +104 30 4 094 A. 1 and 2 only B. 3 and 4 only C. 1, 2 and 4 only D. 1, 2, 3 and 4 18. The following statements relate to the advantages that linear regression analysis has over the high low method in the analysis of cost behaviour: 1. the reliability of the analysis can be statistically tested 2. it takes into account all of the data 3. it assumes linear cost behaviour Which statements are true? A. 1 only B. 1 and 2 only C. 2 and 3 only D. 1, 2 and 3