FINAL EXAM

Business Statistics
Fuad, M.Si., Ph.D.
60 minutes

1. What is the proportion of the total area under the normal curve within plus and minus two
standard deviations of the mean?
A) 68%
B) 99.7%
C) 34%
D) 95%

2. The mean of a normally distributed group of weekly incomes of a large group of executives is
$20,000 and the standard deviation is $1000. What is the z-score for an income of $22,000?
A) 1.00
B) 2.00
C) 1.683
D) -0.90

3. The distribution of the annual incomes of a group of middle management employees

approximated a normal distribution with a mean of $37,200 and a standard deviation of $800.
About 95 percent of the incomes lie between what two incomes?
A) $30,000 and $40,000
B) $36,400 and $38,000
C) $34,800 and $39,600
D) $35,600 and $38,800

4. What is it called when all the items in a population have an unknown chance of being selected
in a sample?
A) Random sampling
B) z-score
C) Sampling error
D) Nonprobability sampling

5. What is the difference between a sample mean and the population mean called?
A) Standard error of the mean
B) Sampling error
C) Interval estimate
D) Point estimate

6. What sample statistic is used to estimate a population parameter?

A) Parameter
B) Sampling error
C) Point estimate
D) Interval estimate

7. The t distribution is similar to the z distribution in all BUT one of the following
characteristics. Which one is it?
A) Continuous
B) Symmetrical
C) Bell-shaped
D) positively skewed

8. Administering the same test to a group of 15 students and a second group of 15 students to
see which group scores higher is an example of
A) a one sample test of means.
B) a two sample test of means.
C) a paired t-test.
D) a test of proportions.

9. An F statistic is:
A) a ratio of two means.
B) a ratio of two variances.
C) the difference between three means.
D) a population parameter.

10. Analysis of variance is used to

A) compare nominal data.
B) compute t test.
C) compare population proportion.
D) simultaneously compare several population means.

11. A large department store examined a sample of the 18 credit card sales and recorded the
amounts charged for each of three types of credit cards: MasterCard, Visa and Discover. Six
MasterCard sales, seven Visa and five Discover sales were recorded. The store used ANOVA to
test if the mean sales for each credit card were equal. What are the degrees of freedom for the F
statistic?
A) 18 in the numerator, 3 in the denominator
B) 3 in the numerator, 18 in the denominator
C) 2 in the numerator, 15 in the denominator
D) 6 in the numerator, 15 in the denominator

12. What is the chart called when the paired data (the dependent and independent variables) are
plotted?
A) Scatter diagram
B) Bar chart
C) Pie chart
D) Histogram

13. What is the variable used to predict the value of another called?
A) Independent
B) Dependent
C) Correlation
D) Determination

14. If r = 0.65, what does the coefficient of determination equal?

A) 0.194
B) 0.423
C) 0.577
D) 0.806

15. What is the range of values for the coefficient of determination?

A) –1 to +1 inclusive
B) –100% to +100% inclusive
C) –100% to 0% inclusive
D) 0% to 100% inclusive

16. Suppose the least squares regression equation is Yˆ = 1000 + 30X. When X = 5, what does
Yˆ equal?

A) 1,150
B) 1,500
C) 1,510
D) 1,150
17. In the least squares equation, Ŷ = 10 + 20X the value of 20 indicates
A) the Y intercept.
B) for each unit increase in X, Y increases by 20.
C) for each unit increase in Y, X increases by 20.
D) none of the above.
18. Below are types of variables, except:
A) Independent variable
B) Dependent variable
C) Great variable

ESSAY
Refer to the data on employeedata.xls, which report information on 474 employees.
1.
a. The mean current salary is 34,419.57 with a standard deviation of 17,075. 66. Use the
normal distribution to estimate the current salary which is more that 35,000. Compare
with the actual number and comment the accuracy of your answer
b. The mean of previous experience is 96 with a standard deviation of 104.5. Use the
normal distribution to estimate the previous experience which is more less than 95.
Compare with the actual number and comment the accuracy of your answer
2. A. Develop a 99% confidence interval for the mean current salary
B. Develop a 95% confidence interval for the mean previous experience
3. Conduct a test of hypothesis to determine whether the mean current salary is different from
37,000 at the 0.05 significance level
4. At the 0.1 significance level, is there a difference in the variation in the current salary among
the minority (0) and non minority (1)?
5. Assume that you are interested to test the effects of previous experience, beginning salary and
educational level to current salary.
a. Identify the independent and dependent variables
b. Draw a scatter diagram
c. Develop a regression equation
d. What is the predicted current salary for the 100 months of previous experience
e. At the 0.05 significance level, can we conclude that the slope of regression line is positive?
f. What percent of variation in current salary is accounted for by previous experience (coefficient
of determination)?

Thank you and good luck