School of Business and Economics

RESIT EXAM
Course : Quantitative Business Code : EBC2025
Coordinator : C. Kerckhoffs

Date : X July 2022 Time : X.00-Y.00h

Location : XXX

Switch off all your electronic devices. Take off your watch. Put them in your bag (under your
table) or on the floor, not within arm’s reach! Otherwise we will report this as possible fraud
to the Board of Examiners.
Any changes to the examination after the official end of the examination will be reported as
possible fraud to the Board of Examiners.
If a report of irregularity has been made, the Board of Examiners will invite you for a hearing. Possible sanctions are:
 complete or partial voidance or annulment of the relevant examination;
 exclusion from participation or further participation of one or more examinations or exams at the SBE for a period
of time to be determined by the Board of Examiners, with a maximum period of one year;
 termination of the student’s registration for the concerning study programme.

This exam consists of:

22 numbered pages (front page, formulas and statistical tables included)
4 open questions, i.e. 2 for mathematics and 2 for statistics
Please check that you received all pages, before you start answering.

You are allowed to make use of:

Scrap paper and a calculator of the types Casio FX-82MS or FX-85MS. Books, manuals, lecture slides etc. are not
allowed.

Particulars
The answers to the questions have to be provided on the answer sheets provided by the invigilators. Be sure to write legibly,
and to answer the mathematics and statistics parts on separate answer sheets.

Norm:
This exam consists of two parts: mathematics and statistics. Both parts contain 2 open questions, each composed of distinct
items numbered as a), b) etc.
Both parts of the exam can be rewarded with 50 points at the most, for a maximum total of 100 points. Your unrounded
exam grade will be determined by dividing the total number of points scored by 10. Concerning your final grade for the
course, 30% of it will be determined by the unrounded grades for your three facilitation team performances (10% each),
and 70% by your unrounded grade for this exam. The resulting weighted average will be rounded into half points, subject
to two qualifications:
i) You need to score at least 25 points for both parts of this exam separately. If not, then your final grade can never be
higher than 5.0.
ii) To pass, you need a weighted average of at least 5.5. Scores like 5.4 will be rounded down.

Publication of the results / Procedure for objections:

- Any comments about the exam itself must be delivered during the five calendar days following the exam date, using
the link that will be provided on the Canvas course pages under Resources. If you disagree with a question or an answer,
you must give a clear argument as to why you disagree, explicitly referring to relevant pages in the basic textbooks, the
lecture slides or other official course materials. Incomplete comments will not be taken into consideration.
- Within fifteen working days after the exam, the course grades will be published on MyUM. At the same time, all the
relevant partial scores will be published on the Canvas course pages.
- Right after these publications an inspection session will be announced. The subscription procedure will be provided in
due time on the Canvas course pages. Inspection will only be possible after a proper subscription!

You have to hand in the entire examination set. It is not allowed to take home, copy or photograph the exam
or part of it!

SUCCESS !!!
1
2
 MATHEMATICS PART

Question 1 (Case M2): Project management, PERT/CPM and simulation (25pt)

A project consists of six activities as listed in the table below. The activity durations (in months) are modeled as
independent Beta distributed random variables based on the corresponding Optimistic, Most likely, and Pessimistic
estimates.
Hint: For some of the questions below, it is important to be aware that our activity durations are continuous random
variables. Consequently, the probabilities that e.g. activity 1 lasts for exactly 1, 2 or 4 months (or any other
specific value) are all equal to zero.

a) (9pt) i) Draw the corresponding activity-on-node network.

ii) Determine all the possible paths in the network.
iii) Motivate adequately, which of these paths can never become critical.
N.B.: Remember the Hint above.

b) (8pt) i) In the most optimistic scenario, what are the completion time and the critical path(s)?
ii) In the most likely scenario, what are the completion time and the critical path(s)?
iii) In the most pessimistic scenario, what are the completion time and the critical path(s)?
iv) What is the probability that the project is completed within 12 months? Motivate your answer.
N.B.: Remember the Hint above.

c) (5pt) i) The application of a statistical analysis is based on three crucial assumptions. Which of these
assumptions are not made when we apply simulation analysis?
ii) Why does a simulation analysis generally yield a higher value for the mean completion time than a
statistical analysis?

(Item d)
A simulation of 10,000 trials provides an estimate, for each activity, of the probability of being critical. The results
are as follows.

d) (3pt) Based on these results, estimate the probability of being critical for all the possible paths listed at item
a)ii) above.
3
Question 2 (Case M7): Oligopoly models (25pt)

The market demand for a duopoly with homogeneous products is given by

Q = 90 – 3P (1)

The market demand is shared between firms 1 and 2, so

Q = q1 + q2 (2)

The firms have linear total cost functions given by

TC1 = 15q1 and TC2 = 10q2 (3)

(Item a)
Suppose that the two firms compete on prices, as in the Bertrand model. During the actual Case M7, we discussed
the Bertrand model for heterogeneous products; but here, the products are homogeneous.

a) (5pt) i) Motivate verbally, using legitimate economic logic, that the Bertrand equilibrium price will be PB = 15
(or maybe something like 14.99).
ii) Determine the quantities q1B and q2B, and the profits π1B and π2B, at the Bertrand equilibrium.

(Item b)
Suppose that the two firms compete on quantities, as in the Cournot model.

b) (7pt) i) Show that the best response functions of both firms are given by:
q1 = 22.5 – 0.5q2 and q2 = 30 – 0.5q1 (4)
ii) Determine the quantities q1C and q2C, the price PC, and the profits π1C and π2C, at the Cournot
equilibrium.

(Item c)
Suppose that the two firms compete on quantities, as in the Stackelberg model, with firm 2 as leader and firm 1 as
follower.

c) (6pt) i) Show that the profit-maximizing quantity of the leader firm is q2S = 37.5.
ii) Determine the quantity q1S, the price PS, and the profits π1S and π2S, at the Stackelberg equilibrium.

(Item d)
Suppose that the two firms merge, and that the merged firm acts as a profit-maximizing monopoly.

d) (7pt) i) Motivate that the total cost function of the merged firm is given by
TC = 10Q (5)
ii) Determine the equilibrium quantity QM, the equilibrium price PM, and equilibrium profit πM, of the
merged firm.
iii) Motivate as carefully as you can, why the profit of the merged firm exceeds the sum of the profits of
both firms when engaged in Cournot competition (as found at item b)ii) above).
Hint: There are two distinct reasons.

4
 STATISTICS PART

PLEASE START ON A NEW SHEET OF PAPER!

Question 1 (Case S3): An empirical market research project (25pt)

Astec, one of the world’s largest suppliers of industrial power supply products, faces increasing competition by low-
cost Asian competitors. Its management believes there are three service areas for which clients might be willing to
pay a premium, thus enabling Astec to differentiate itself from price-oriented suppliers:
1) offering its clients more elaborate technical explanations of the power supply design and features;
2) assisting its clients in the design of their products, and
3) assisting its clients in their assembly operations.
Astec’s marketing manager hires a marketing research agency to examine the size of the market segments that are
interested in expanded services in these areas, and to identify the industrial and financial profiles of those segments.
The population of interest consists of all industrial firms that use power supply generators as an input to their
products. For a sample of such firms, a mail survey was sent to their purchasing managers. Below, you find (a small
part of) the questionnaire that was used for this survey. Complete answers have been obtained from 151 purchasing
managers. The variables in the resulting dataset have the same name as the survey questions (see the leftmost column
of the table). Note that we limit ourselves to service area 2): design assistance.

Please rate the importance of the following service on a 1 to 7

Q12 scale, where 1 means “not at all important to me” and 7 means 1 2 3 4 5 6 7
“critical to me”.
b. Design assistance.

Please rate the quality of the following service (as currently

Q15 provided by power supply generator producers) on a 1 to 7 1 2 3 4 5 6 7
scale, where 1 means “very low” and 7 means “very high”.

b. Design assistance.

1 Low tech
Q22 Company level of technology: 2 Medium tech
3 High tech

1 Computer
Which of the following best describes your primary category of 2 Appliances
Q23
manufacturing? 3 Electronics
4 Other, ……..

(Items a-b)
An issue of interest is, whether the perceived quality of design assistance (Q15b) is related to a firm’s technology
level (Q22). A straightforward parametric procedure enabling us to examine this issue is “One-way ANOVA”: on
the next page, you find the associated SPSS-output. But you certainly remember that, during the actual discussion
of Case S3 in class, we focused on nonparametric procedures.

a) (5pt) i) State the null hypothesis addressed by the SPSS-output as explicitly as you can, in words.
ii) Describe as explicitly as you can, what can be concluded from the test results on the next page.
N.B. At item ii), please take the adequacy of the assumptions underlying the test for granted.
iii) Motivate that the output on the next page contains a clear indication that one of the assumptions
underlying our parametric procedure may be violated here.

5
b) (4pt) i) Mention two distinct nonparametric procedures which, in the application at hand, may serve as
alternatives to the parametric “One-way ANOVA” technique.
N.B.: Do not mention the “Chi-square test for Independence”: we have two other tests in mind here.
ii) Motivate that, if we were interested in the relation between Q15b and Q23 (rather than Q22), then one
of the two nonparametric procedures just identified would be illegitimate.

(Items c-e)
The ultimate purpose of the survey is to examine whether supplying extra services in particular areas (here: design
assistance) is commercially viable, or not.

(Item c)
Consider the SPSS-output below, reporting the frequency distribution of the variable Q15b, and a straightforward
application of the “Sign test” (“Binomial test” in SPSS-lingo) to this variable. You probably remember that the way
in which SPSS implements this “Sign test” contains an obvious error.

Binomial Test

Category N Test Prop.

q15b Group 1 <= 4 74 .49 .50 .871
Group 2 >4 77 .51
Total 151 1.00

c) (6pt) i) State the null hypothesis at hand as explicitly as you can, in words.
ii) Explain in intuitive terms, why the reported p-value of 0.871 is so high here.
iii) Imagine we would try to correct the “obvious error” in the output above, along the lines discussed in
Case S3. Motivate as carefully as you can what will happen to the reported p-value of 0.871 as a result
of this correction.
6
(Items d-e)
Now consider the SPSS-output below, representing an application of the “Wilcoxon Signed Ranks test” to the pair
of variables Q12b and Q15b.

a
Test Statistics
q15b - q12b
b
Z -5.430

Asymp. Sig. (2-tailed) .000

a.
b.

d) (6pt) i) State the null hypothesis at hand as explicitly as you can, in words.
ii) State the associated alternative hypothesis as explicitly as you can, in words.
N.B.: This is a tricky question. A well-developed answer will be rewarded generously.
iii) Describe as explicitly as you can what the reported test outcome above suggests concerning the
commercial viability of the service area at hand.

(Item e)
From the New Reading for Case S3 you may remember that, for most of the nonparametric tools discussed there,
the information provided in the “Mean Rank” column of the SPSS-output allows us to understand and interpret the
results. But for the “Wilcoxon Signed Ranks test”, this is not the case.

e) (4pt) Use the output above to explain as explicitly as you can, why the “Mean Rank” information is not so
useful in the case of the “Wilcoxon Signed Ranks test”.

(please turn to the next page)

7
Question 2 (Case S6): Explaining entrepreneurial intentions (25pt)

The background article for Case S6 describes a detailed study into the determinants of entrepreneurial intentions
among business students. In particular, the research issue is why some business students have intentions to start up
a business of their own, while others do not. The study is based on surveys, conducted in 2003, among students of
four different Dutch universities with an Economics & Business faculty. We confine ourselves to the data for
Maastricht, available for 335 respondents. For the purposes of our analysis, the survey questions (almost 100!) have
been condensed into the 14 variables that are listed in the table below. We’ll briefly discuss them in turn.

Variable type Variable name Variable coding or range

Dependent variable entrepreneur 1 organization 2 own business
Independent variables
1) Attitudes importance_autonomy 1–7
wealth_inter -7 – 7
challenge 1–7
financial_security 1–7
workload_avoidance 1–7
2) Perceived perseverance 1–7
behavioral control creativity 1–7
alertness 1–7
self_efficacy 1–7
3) Subjective norms subjective_norm -9 – 9
Control variables gender 1 man 2 woman
nationality 1 Dutch 2 German 3 other
age from 17 upward

The survey contains five potential dependent variables, i.e. measures of entrepreneurial intentions. We confine
ourselves to the variable entrepreneur, for which the original survey question reads as follows:

If the opportunity presented itself, and you were free to make any 1 Work for an 2 Operate your own
D3
employment choice you desired, would you prefer to … organization business

Of all 335 respondents, 179 (i.e. 53.4%) have answered this question with “own business”.

For the independent variables, i.e. the determinants of entrepreneurial intentions, the article takes the Theory of
Planned Behavior as its starting point. According to this theory, intentions can be explained by three classes of
determinants:
1) attitudes (“being willing to set up a business”);
2) perceived behavioural control (“being able to do so”); and
3) subjective norms (“the opinions of relevant referents e.g. parents, partners and friends”).
As the table above indicates, five “attitudes” constructs, four “perceived behavioral control” constructs and a single
“subjective norms” construct have been defined on the basis of the items in the survey. The precise interpretation
of these construct variables is largely irrelevant to this exam; for our purposes, their names are sufficiently
suggestive. Most of the constructs are straightforward averages of a number of survey items, each measured on a 7-
point Likert scale; consequently, these constructs also range from 1 to 7. There are two exceptions to this:
- wealth_inter This variable measures the influence of a respondent’s desire to accumulate wealth on
entrepreneurial intentions. We will address its broad logic at item c) of this question.
- subjective_norm For the purposes of this exam, its precise definition is irrelevant.

Finally, the control variables are a few straightforward demographic characteristics of the respondents.

8
(Item a)
Part C) of the original questionnaire contains 46 questions. Almost all of these appear as item in one of the constructs
importance_autonomy up to subjective_norm, with a few exceptions, including questions I6, I40, I45. The authors
found out that the answers to these questions showed some anomalous patterns: consequently, by omitting them,
the reliability of the associated constructs increased considerably. Below, we quote the exact phrasing of these three
omitted questions.

Part C): Independent variables

Indicate the extent to which the statements below refer to you. 1 = absolutely disagree; 2 = disagree; 3 = disagree a bit;
4 = do not disagree, do not agree; 5 = do agree a bit; 6 = agree; 7 = absolutely agree

I6 I find it important not to work under a boss. 1 2 3 4 5 6 7

I40 After a lot of setbacks I find it hard to continue. 1 2 3 4 5 6 7
I45 I prefer to have a break rather than to continue until a job or task is finished. 1 2 3 4 5 6 7

a) (4pt) i) If these three questions had not been omitted, then in which constructs would they most likely have
been included?
ii) Speculate as explicitly as you can on the issue, why the answers to these three questions may be
characterized by “anomalous patterns”.
N.B.: Your explanation may not be the same for all three questions.

(Items b-e)
The basic objective of the authors is to test three explicitly stated research hypotheses concerning the effects of their
ten independent variables (i.e. importance_autonomy up to subjective_norm) on the dependent variable
entrepreneur. The associated logistic regression model can be stated as follows:

e β 0 + β1importance_autonomy + β 2 wealth _ inter ...+ β10 subjective _ norm

p ("own business") = (1)
1 + e β 0 + β1importance_autonomy + β 2 wealth _ inter ...+ β10 subjective _ norm
The most important parts of the SPSS-output for model (1) are reported on the next page.

b) (2pt) Explain as explicitly as you can why the issue at hand requires a new technique, i.e. logistic regression,
rather than the standard linear regression.

(Item c)
Rather than the basic construct importance_wealth (which is simply the average of 6 underlying survey items), the
authors systematically use the interaction variable wealth_inter as explanatory variable in their analyses. Its rather
involved definition is given on p. 548 of their article:

wealth_inter = importance_wealth * ( I68a – I68b ) / 6

Survey questions I68a and I68b are defined as follows:

To which extent do you associate the following characteristics with self-employment,

and with organisational employment (firm, government, non-profit) respectively? 1 = not; …; 7 = fully

I68a Earning much money: one’s own firm 1 2 3 4 5 6 7

I68b Earning much money: organization 1 2 3 4 5 6 7

The authors provide an extremely elaborate motivation for this interaction variable, including a statistical analysis
of the differences between I68a and I68b among students who want to have their own firm or not (as defined by
variable D3). By making things so complex, they may actually hide their basic point; even more so because their
statistical analysis contains an obvious mistake.

9
c) (4pt) i) Motivate as explicitly as you can, why the authors feel compelled to use the interaction variable
wealth_inter as explanatory variable in their analyses, rather than the basic construct
importance_wealth.
ii) Show that, as stated in the table at the beginning of this question, wealth_inter indeed ranges from –7
to +7.

Logistic Regression

Block 1: Method = Enter

Omnibus Tests of Model Coefficients
Chi-square df Sig.
Step 1 Step 87.575 10 .000
Block 87.575 10 .000

Model 87.575 10 .000

a
Classification Table
Predicted
entrepreneur

Observed organisation
Step 1 entrepreneur organisation 101 55 64.7
own business 52 127 70.9
Overall Percentage 68.1
a.

(Items d-e)
Concerning the effect of the construct subjective_norm on entrepreneurial intentions, the authors state the following
research hypothesis:

H3: Students whose subjective norms towards self-employment are more positive are more likely to have
intentions of setting up a business.

10
d) (3pt) i) Motivate that, in statistical terms, H3 is really an alternative hypothesis.
ii) Use the SPSS-output on the previous page to verify as explicitly as you can to what extent research
hypothesis H3 is supported.

(Item e)
As eq. (1) indicates, a logistic regression model is nonlinear in the independent variables. This complicates the
interpretation of the model’s coefficients (here: β0 up to β10) and their estimates (here: b0 up to b10).

e) (6pt) i) Explain the meaning of the following concept in words: “the odds of an event” .
ii) Explain the meaning of the following concept in words: “the odds ratio for a particular independent
variable”.
iii) In the SPSS-output on the previous page, identify the odds ratio for the independent variable
subjective_norm, and describe its meaning in words, as clearly as you can.

(Item f)
Let’s generalize model (1) by adding the control variables gender, nationality (which requires 2 dummies!) and age,
to obtain the following model (2):

e β0 + β1importance_autonomy+...+ β14 age

p(" own business" ) = (2)
1 + e β0 + β1importance_autonomy+...+ β14 age

Concerning the role of these control variables, the authors state the following:

“… control variables such as gender […] do in fact enhance our understanding of entrepreneurial intentions.
However, we assume that the effect of these variables is mediated by the influence of the components of the
theory of planned behavior on entrepreneurial intentions.”

When model (2) is estimated, SPSS reports a “–2 Log likelihood” of –2LL = 366.151 . Now consider the following
verbally phrased null hypothesis:

“In model (2), the control variables are jointly irrelevant”.

f) (6pt) i) Copy the graph below into your answer sheet, and visualize the authors’ statement (i.e. the first
italicized quote above) by drawing an additional causal arrow into it.
ii) Show, using the appropriate test, that the verbally phrased null hypothesis above can be rejected at the
10% significance level.
iii) Motivate as explicitly as you can, how your test result fits into the graph below.
Hint: If necessary, draw an additional causal arrow, or remove an existing one.

The control variables The components of the Theory of Planned Behavior

- gender 1) attitudes Entrepreneurial
- nationality 2) perceived behavioral control intentions
- age 3) subjective norms

In case you finish the exam before the official ending time,
please leave the examination hall as quietly as possible,
so you will not disturb the students who are still
trying to concentrate on their work!

11
12
Quantitative Business (EBC2025), 2021-2022: Mathematical Formulas

Part I: Decision Theory, Project Management and Modeling Risk (Cases 1&2&3)

N
EV (ai ) =  oij P(s j )
j =1
Expected value of where there are N possible states of nature sj with probabilities P(s j ) ≥ 0 and
action ai
N
 P( s j ) = 1 , while oij is the payoff of action ai under state of nature sj
j =1
N
Variance Var(ai ) =  (oij − EV (ai )) 2 P( s j )
j =1

Standard deviation SD(ai ) = Var (ai )

Expected value of
EVPI = EVwPI − EV
perfect infomation
Expected value of
EVSI = EVwSI − EV
sample information
Coefficient of SD(ai )
CV (ai ) =
variation EV (ai )
1 EV (ai )
Return to risk ratio RRR(ai ) = =
CV (ai ) SD(ai )
P ( Ai and B) P ( B Ai ) P ( A i )
P ( Ai B ) = =
Reversing the P( B)  P( B A j ) P( A j )
conditioning: j
Bayes’ rule for n events Ai that are mutually exclusive (each pair is disjoint) and exhaustive (their union
is the whole space)
EFTi = ESTi + Di for all activities i
ESTi = 0 for all activities i without immediate predecessors
for all activities i that have immediate predecessors,
ESTi = maximum { EFTj }
j ranging over all immediate predecessors of i
Project management,
LSTi = LFTi – Di for all activities i
basic formulas
LFTi = minimum compl. time for all activities i without successor
for all activities i that have immediate successors,
LFTi = minimum { LSTj }
j ranging over all immediate successors of i
Si = LSTi – ESTi = LFTi – EFTi for all activities i
o + 4m + p
Mean =
6 o, m and p the optimistic, most likely and
Beta Distribution 2
p−o  p −o pessimistic duration estimates
Stdev = or Variance =  
6  6 
Mean ( project completion time ) =  Mean ( duration of critical activities )
PERT / CPM Variance ( project completion time ) =  Variance ( duration of critical activities )
X − Mean
P (completion time ≤ X ) = P ( z ≤ )
Stdev

A gamble G is a vector G = ( p 1 , x1 ,..., p n , x n ) where each x i is an amount of cash,

Gamble n
and each p i ≥ 0 (with  p i = 1 ) is the probability that the individual receives that amount
i =1

13
 n
Expected payoff μ(G) =  pi xi = p1 ⋅x1 + ... + p n ⋅ x n
i =1
n
Variance V (G ) = σ 2 (G ) =  p i ( x i − μ (G )) 2
i =1

Standard deviation σ (G) = V (G)

The von Neumann-Morgenstern utility U(G) of a gamble G is the expected value of the
Utility over gambles: utility which is obtained from the various cash amounts that can be won:
n
Von Neumann- U (G ) =  p i ⋅ u ( x i ) = p 1 ⋅u ( x1 ) + ... + p n ⋅ u ( x n )
Morgenstern i =1
where u (x ) is the individual’s utility function for cash

The certainty equivalent CE(G) of a gamble G is the sure cash amount c such that
Certainty equivalent u ( c ) = U (G )

Risk premium RP (G ) = μ (G ) − CE (G )

u (x ) is concave
Risk aversion
for every gamble G, the risk premium RP(G) is non-negative
u (x ) is linear
Risk neutrality for every gamble G, the risk premium RP(G) is zero
utility maximization = expected payoff maximization

u (x ) is convex
Risk love
for every gamble G, the risk premium RP(G) is non-positive

Part II: Portfolio Theory (Cases 4&5)

Utility over gambles: U ( G ) = μ (G ) − r ⋅ V (G )

Finance where the parameter r > 0 is a measure of risk aversion

For a gamble λG, equal to the original gamble G, but with all payoffs equal to λ times their
original values, with λ > 0, the following properties hold:
μ ( λ G ) = λ ⋅ μ (G )
Multiples of a gamble
V ( λG) = λ2 ⋅ V (G)
σ ( λ G ) = λ ⋅ σ (G )

If we participate in two gambles G and H simultaneously, the following properties hold:

μ (G + H ) = μ (G ) + μ ( H ) (12)
σ 2 (G + H ) = σ 2 (G) + σ 2 (H ) + 2 ⋅ σ (G) ⋅ σ (H ) ⋅ ρ(G, H ) (13)
Composite gambles I
Cov(G, H )
where ρ(G, H ) = represents the correlation between the payoffs for gambles
σ (G) ⋅ σ ( H )
G and H, with Cov (G , H ) their covariance

Stochastic 2 2 2
independence ρ (G , H ) = 0 , implying σ (G + H ) = σ (G) + σ ( H )

If we participate in gamble G for a fraction α, and in gamble H for a fraction β, the following
properties hold:
Composite gambles II μ ( αG + βH ) = α ⋅ μ (G ) + β ⋅ μ ( H ) (15)
σ 2 (αG + βH ) = α 2 ⋅ σ 2 (G) + β 2 ⋅ σ 2 (H ) + 2αβ ⋅ σ (G) ⋅ σ (H ) ⋅ ρ(G, H ) (16)

14
 One Fund portfolio
with the risk-free bond B into a portfolio, the slope of the line defined above is maximized

Each Pareto optimal portfolio is a linear combination of the One Fund portfolio and the risk-
Pareto optimal
free bond. Conversely, every combination of the One Fund portfolio and the risk-free bond
portfolios
is Pareto optimal.

For any available risky asset Ai, it holds that

CAPM pricing formula μ = μ + β( μ − μ ) with β = Cov( Ai , M )
Ai 0 M 0
V (M )

Part III: Game Theory and Industrial Organization (Cases 6&7)

There are no formulas for this part of the course.

15
Quantitative Business (EBC2025), 2021-2022: Statistical Formulas
Description Formula CI and/or test statistic Formula components Degrees of freedom
Part I: Basic Tools of Inferential Statistics (Cases 1&2&3)
We only provide the formulas for the tools discussed in QM2 here. The names of the corresponding nonparametric methods are mentioned in brackets.
All these methods are based on ranking the data, rather than on their original numerical values. We do not report their formulas.

One-sample t-test [ y ± t α / 2 ⋅ SE ( y )]
s
(Sign test = Binomial test) y − µ0 SE ( y ) = n–1 df
t= n
A CI for a Population Mean µ, and a Test of H0: µ =µ0 SE ( y )
General version (“equal var. not assumed”) ( s12 / n1 + s 22 / n 2 ) 2
df
s12 s 22 ( s12 / n1 ) 2 ( s 22 / n 2 ) 2
SE ( y1 − y 2 ) = + +
Independent-samples t-test n1 n 2 n1 − 1 n2 − 1
[( y1 − y 2 ) ± tα / 2 ⋅ SE ( y1 − y 2 )]
(Wilcoxon rank sum test = Mann-Whitney U test)
( y − y2 ) − Δ 0 Pooled version (“equal var. assumed”)
Comparing Two Population Means, Independent Samples: t= 1
SE ( y1 − y 2 ) 1 1
A CI for µ1 – µ2, and a Test of H0: µ1 – µ2 = Δ0 SE( y1 − y 2 ) = s pooled +
n1 n2 n1+n2–2 df
(n1 − 1)s12 + (n2 − 1) s 22
s 2pooled =
n1 + n2 − 2
Paired-sample t-test [d ± tα / 2 ⋅ SE (d )]
(Wilcoxon signed ranks test) s
d − Δ0 SE ( d ) = n–1 df
The Mean of a Population of Paired Differences: t= n
A CI for µd = µ1 – µ2, and a Test of H0: µd = Δ0 SE (d )

k
Oneway ANOVA SSTr =  ni ( yi − y )2
(Kruskal-Wallis H test) MSTr SSTr / ( k − 1) i =1 k–1 numerator-df
F= =
An F Test for Differences Between Treatment Means MSE SSE / ( N − k ) k N–k denominator-df
SSE =  (ni − 1) si2
H0: µ1 = … = µk i =1

Pairwise comparisons  1 1 
An Individual CI for µi – µh (LSD) ( y i − y h ) ± tα / 2 MSE( ni + )
nh 
N–k df
 
 qα 1 1 
A Simultaneous CI for µi – µh (Tukey HSD) ( y i − y h ) ± MSE( +
ni
)
nh  qα: studentized range
 2 

16
 t
SSTr = b ( y• j − y ) 2
j =1

b
Oneway repeated-measures ANOVA MSTr SSTr / (t − 1) SSB = t  ( y i• − y ) 2 t–1 numerator-df
F= = i =1
(Friedman test) MSE SSE / [(t − 1)(b − 1)] b t
(t–1)(b–1) denominator-df
SST =  ( yij − y ) 2
i =1 j =1

SSE = SST − SSTr − SSB

Pearson’s correlation coefficient  ( y1i − y1 )( y 2i − y 2 )
r=
2 2
(Spearman’s rank correlation coefficient)  ( y1i − y1 ) ⋅  ( y 2i − y 2 )

Chi-square test for Goodness of Fit 2 (Obsi − Expi ) 2

k
χ = Expi = npi k–1 df
(itself nonparametric) i =1 Expi

Chi-square test for Homogeneity or Independence (Obsij − Expij ) 2 ri c j

χ2 =  Exp ij = (r–1)(c–1) df
(itself nonparametric) all cells Expij n

Part II: Multiple Regression (Cases 4&5)

The Multiple Regression Model y = μ y x1 , x2 ,..., xk + ε = β0 + β1 x1 + β 2 x 2 + ... + β k x k + ε

Point Estimation and Prediction in Multiple Regression yˆ = b0 + b1 x01 + b2 x02 + ... + bk x0 k
SSE
The Standard Deviation of the Residuals se = SSE = Unexplained variation =  ( y i − yˆ i ) 2 =  ei2
n − k −1
SSR = Explained variation =  ( yˆ i − y ) 2
2 SSR SSE
The Coefficient of Determination, R2 R = =1− SST = Total variation =  ( yi − y ) 2
SST SST
SST = SSR + SSE
2 SSE /( n − k − 1)
Adjusted R2 Radj =1−
SST /( n − 1)
The Overall F Test for the Linear Regression Model MSR SSR / k k numerator-df
F= =
H0: β1 = ... = β k = 0 MSE SSE /( n − k − 1) n–k–1 denominator-df
Testing the Significance of Explanatory Variable xj bj
t= n–k–1 df
H0: β j = 0 SE (b j )

A Confidence Interval for the Regression Parameter βj [b j ± tα / 2 ⋅ SE (b j )] n–k–1 df

17
The Partial F Test for a Portion of a Regression Model ( SSE R − SSE C ) /( k − g ) k–g numerator-df
F=
H0: β g +1 = ... = β k = 0 SSE C /( n − k − 1) n–k–1 denominator-df
1
Variance Inflation Factor VIF j =
1 − R 2j
the random shock at has zero mean, constant variance and
First-order Autocorrelation ε t = φεt −1 + at with − 1 < φ < 1
no autocorrelation of any order

n HA: φ > 0 if D < d L,α reject H0

2
 (et − et −1 )
if D > dU ,α do not reject H0
The Durbin-Watson Test D = t =2 n
≈ 2(1 − f )
 et
2 if d L,α ≤ D ≤ dU ,α the test is inconclusive
H0: φ = 0
t =1
HA: φ < 0 use 4–D rather than D
with 0 < D < 4
HA: φ ≠ 0 use both 4–D and D; use α/2 rather than α

Part III: Additional Multivariate Tools (Cases 6&7)

There are no formulas for Exploratory Factor Analysis (Case 7).
y = 1: the event of interest occurs
Logistic Regression
y = 0: the event of interest does not occur
e β0 + β1 x1 +...+ βk x k
p ( y = 1 x1 ,..., x k ) =
The Logistic Regression Model 1 + e β0 + β1 x1 +...+ βk xk
p( y = 0 x1 ,..., x k ) = 1 − p( y = 1 x1 ,..., x k )
2
Wald Test for the Significance of Explanatory Variable xj  bj 
Wald j =   approxim. χ2 with 1 df
H0: β j = 0  SE (b j ) 
 
Likelihood Ratio Test for a Portion of a Logistic Regression
LR = ( −2 LL R ) − (−2 LLC ) approxim. χ2 with k–g df
H0: β g +1 = ... = β k = 0
p( y = 1 x1 ,..., x k )
The Odds odds( x1 ,..., x k ) = = e β0 + β1x1 +...+ βk xk
p ( y = 0 x1 ,..., x k )
odds( x1 ,..., x j + 1,..., x k ) βj
The Odds Ratio for Explanatory Variable xj odds ratio( x j ) = =e
odds( x1 ,..., x j ,..., x k )

18
Quantitative Business (EBC2025), 2021-2022: Statistical Tables
TABLE X TABLE Z
Second decimal place in z
Right-tail probability 0.10 0.05 0.025 0.01 0.005 z 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09
df 1 2.706 3.841 5.024 6.635 7.879 0.0 0.5000 0.5040 0.5080 0.5120 0.5160 0.5199 0.5239 0.5279 0.5319 0.5359
Values of χα2 2 4.605 5.991 7.378 9.210 10.597 Areas under the standard 0.1 0.5398 0.5438 0.5478 0.5517 0.5557 0.5596 0.5636 0.5675 0.5714 0.5753
3 6.251 7.815 9.348 11.345 12.838 Normal curve 0.2 0.5793 0.5832 0.5871 0.5910 0.5948 0.5987 0.6026 0.6064 0.6103 0.6141
4 7.779 9.488 11.143 13.277 14.860 0.3 0.6179 0.6217 0.6255 0.6293 0.6331 0.6368 0.6406 0.6443 0.6480 0.6517
5 9.236 11.070 12.833 15.086 16.750 0.4 0.6554 0.6591 0.6628 0.6664 0.6700 0.6736 0.6772 0.6808 0.6844 0.6879
6 10.645 12.592 14.449 16.812 18.548 0.5 0.6915 0.6950 0.6985 0.7019 0.7054 0.7088 0.7123 0.7157 0.7190 0.7224
7 12.017 14.067 16.013 18.475 20.278 0.6 0.7257 0.7291 0.7324 0.7357 0.7389 0.7422 0.7454 0.7486 0.7517 0.7549
8 13.362 15.507 17.535 20.090 21.955 0.7 0.7580 0.7611 0.7642 0.7673 0.7704 0.7734 0.7764 0.7794 0.7823 0.7852
9 14.684 16.919 19.023 21.666 23.589 0.8 0.7881 0.7910 0.7939 0.7967 0.7995 0.8023 0.8051 0.8078 0.8106 0.8133
10 15.987 18.307 20.483 23.209 25.188 0.9 0.8159 0.8186 0.8212 0.8238 0.8264 0.8289 0.8315 0.8340 0.8365 0.8389
11 17.275 19.675 21.920 24.725 26.757 1.0 0.8413 0.8438 0.8461 0.8485 0.8508 0.8531 0.8554 0.8577 0.8599 0.8621
12 18.549 21.026 23.337 26.217 28.300 1.1 0.8643 0.8665 0.8686 0.8708 0.8729 0.8749 0.8770 0.8790 0.8810 0.8830
13 19.812 22.362 24.736 27.688 29.819 1.2 0.8849 0.8869 0.8888 0.8907 0.8925 0.8944 0.8962 0.8980 0.8997 0.9015
14 21.064 23.685 26.119 29.141 31.319 1.3 0.9032 0.9049 0.9066 0.9082 0.9099 0.9115 0.9131 0.9147 0.9162 0.9177
15 22.307 24.996 27.488 30.578 32.801 1.4 0.9192 0.9207 0.9222 0.9236 0.9251 0.9265 0.9279 0.9292 0.9306 0.9319
16 23.542 26.296 28.845 32.000 34.267 1.5 0.9332 0.9345 0.9357 0.9370 0.9382 0.9394 0.9406 0.9418 0.9429 0.9441
17 24.769 27.587 30.191 33.409 35.718 1.6 0.9452 0.9463 0.9474 0.9484 0.9495 0.9505 0.9515 0.9525 0.9535 0.9545
18 25.989 28.869 31.526 34.805 37.156 1.7 0.9554 0.9564 0.9573 0.9582 0.9591 0.9599 0.9608 0.9616 0.9625 0.9633
19 27.204 30.143 32.852 36.191 38.582 1.8 0.9641 0.9649 0.9656 0.9664 0.9671 0.9678 0.9686 0.9693 0.9699 0.9706
20 28.412 31.410 34.170 37.566 39.997 1.9 0.9713 0.9719 0.9726 0.9732 0.9738 0.9744 0.9750 0.9756 0.9761 0.9767
21 29.615 32.671 35.479 38.932 41.401 2.0 0.9772 0.9778 0.9783 0.9788 0.9793 0.9798 0.9803 0.9808 0.9812 0.9817
22 30.813 33.924 36.781 40.290 42.796 2.1 0.9821 0.9826 0.9830 0.9834 0.9838 0.9842 0.9846 0.9850 0.9854 0.9857
23 32.007 35.172 38.076 41.638 44.181 2.2 0.9861 0.9864 0.9868 0.9871 0.9875 0.9878 0.9881 0.9884 0.9887 0.9890
24 33.196 36.415 39.364 42.980 45.559 2.3 0.9893 0.9896 0.9898 0.9901 0.9904 0.9906 0.9909 0.9911 0.9913 0.9916
25 34.382 37.653 40.647 44.314 46.928 2.4 0.9918 0.9920 0.9922 0.9925 0.9927 0.9929 0.9931 0.9932 0.9934 0.9936
26 35.563 38.885 41.923 45.642 48.290 2.5 0.9938 0.9940 0.9941 0.9943 0.9945 0.9946 0.9948 0.9949 0.9951 0.9952
27 36.741 40.113 43.195 46.963 49.645 2.6 0.9953 0.9955 0.9956 0.9957 0.9959 0.9960 0.9961 0.9962 0.9963 0.9964
28 37.916 41.337 44.461 48.278 50.994 2.7 0.9965 0.9966 0.9967 0.9968 0.9969 0.9970 0.9971 0.9972 0.9973 0.9974
29 39.087 42.557 45.722 49.588 52.336 2.8 0.9974 0.9975 0.9976 0.9977 0.9977 0.9978 0.9979 0.9979 0.9980 0.9981
30 40.256 43.773 46.979 50.892 53.672 2.9 0.9981 0.9982 0.9982 0.9983 0.9984 0.9984 0.9985 0.9985 0.9986 0.9986
40 51.805 55.759 59.342 63.691 66.767 3.0 0.9987 0.9987 0.9987 0.9988 0.9988 0.9989 0.9989 0.9989 0.9990 0.9990
50 63.167 67.505 71.420 76.154 79.490 3.1 0.9990 0.9991 0.9991 0.9991 0.9992 0.9992 0.9992 0.9992 0.9993 0.9993
60 74.397 79.082 83.298 88.381 91.955 3.2 0.9993 0.9993 0.9994 0.9994 0.9994 0.9994 0.9994 0.9995 0.9995 0.9995
70 85.527 90.531 95.023 100.424 104.213 3.3 0.9995 0.9995 0.9995 0.9996 0.9996 0.9996 0.9996 0.9996 0.9996 0.9997
80 96.578 101.879 106.628 112.328 116.320 3.4 0.9997 0.9997 0.9997 0.9997 0.9997 0.9997 0.9997 0.9997 0.9997 0.9998
90 107.565 113.145 118.135 124.115 128.296 3.5 0.9998 0.9998 0.9998 0.9998 0.9998 0.9998 0.9998 0.9998 0.9998 0.9998
100 118.499 124.343 129.563 135.811 140.177 3.6 0.9998 0.9998 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999
3.7 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999
3.8 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999
3.9 1.0000 For z ≥ 3.90, the areas are 1.0000 to four decimal places.

19
TABLE T Two-tail probability 0.20 0.10 0.05 0.02 0.01 TABLE F
One-tail probability 0.10 0.05 0.025 0.01 0.005 Numerator df
df α = 0.01 1 2 3 4 5 6 7 8
1 3.078 6.314 12.706 31.821 63.657 1 4052.2 4999.3 5403.5 5624.3 5764.0 5859.0 5928.3 5981.0
Values of tα 2 1.886 2.920 4.303 6.965 9.925 2 98.50 99.00 99.16 99.25 99.30 99.33 99.36 99.38
3 1.638 2.353 3.182 4.541 5.841 3 34.12 30.82 29.46 28.71 28.24 27.91 27.67 27.49
4 1.533 2.132 2.776 3.747 4.604 4 21.20 18.00 16.69 15.98 15.52 15.21 14.98 14.80
5 1.476 2.015 2.571 3.365 4.032 5 16.26 13.27 12.06 11.39 10.97 10.67 10.46 10.29
6 1.440 1.943 2.447 3.143 3.707 6 13.75 10.92 9.78 9.15 8.75 8.47 8.26 8.10
7 1.415 1.895 2.365 2.998 3.499 7 12.25 9.55 8.45 7.85 7.46 7.19 6.99 6.84
8 1.397 1.860 2.306 2.896 3.355 8 11.26 8.65 7.59 7.01 6.63 6.37 6.18 6.03
9 1.383 1.833 2.262 2.821 3.250 9 10.56 8.02 6.99 6.42 6.06 5.80 5.61 5.47
10 1.372 1.812 2.228 2.764 3.169 10 10.04 7.56 6.55 5.99 5.64 5.39 5.20 5.06
11 1.363 1.796 2.201 2.718 3.106 11 9.65 7.21 6.22 5.67 5.32 5.07 4.89 4.74
12 1.356 1.782 2.179 2.681 3.055 12 9.33 6.93 5.95 5.41 5.06 4.82 4.64 4.50
13 1.350 1.771 2.160 2.650 3.012 13 9.07 6.70 5.74 5.21 4.86 4.62 4.44 4.30
14 1.345 1.761 2.145 2.624 2.977 14 8.86 6.51 5.56 5.04 4.69 4.46 4.28 4.14
15 1.341 1.753 2.131 2.602 2.947 15 8.68 6.36 5.42 4.89 4.56 4.32 4.14 4.00
16 1.337 1.746 2.120 2.583 2.921 16 8.53 6.23 5.29 4.77 4.44 4.20 4.03 3.89
17 1.333 1.740 2.110 2.567 2.898 17 8.40 6.11 5.19 4.67 4.34 4.10 3.93 3.79
18 1.330 1.734 2.101 2.552 2.878 18 8.29 6.01 5.09 4.58 4.25 4.01 3.84 3.71
19 1.328 1.729 2.093 2.539 2.861 19 8.18 5.93 5.01 4.50 4.17 3.94 3.77 3.63
20 1.325 1.725 2.086 2.528 2.845 20 8.10 5.85 4.94 4.43 4.10 3.87 3.70 3.56

Denominator df
21 1.323 1.721 2.080 2.518 2.831 21 8.02 5.78 4.87 4.37 4.04 3.81 3.64 3.51
22 1.321 1.717 2.074 2.508 2.819 22 7.95 5.72 4.82 4.31 3.99 3.76 3.59 3.45
23 1.319 1.714 2.069 2.500 2.807 23 7.88 5.66 4.76 4.26 3.94 3.71 3.54 3.41
24 1.318 1.711 2.064 2.492 2.797 24 7.82 5.61 4.72 4.22 3.90 3.67 3.50 3.36
25 1.316 1.708 2.060 2.485 2.787 25 7.77 5.57 4.68 4.18 3.85 3.63 3.46 3.32
26 1.315 1.706 2.056 2.479 2.779 26 7.72 5.53 4.64 4.14 3.82 3.59 3.42 3.29
27 1.314 1.703 2.052 2.473 2.771 27 7.68 5.49 4.60 4.11 3.78 3.56 3.39 3.26
28 1.313 1.701 2.048 2.467 2.763 28 7.64 5.45 4.57 4.07 3.75 3.53 3.36 3.23
29 1.311 1.699 2.045 2.462 2.756 29 7.60 5.42 4.54 4.04 3.73 3.50 3.33 3.20
30 1.310 1.697 2.042 2.457 2.750 30 7.56 5.39 4.51 4.02 3.70 3.47 3.30 3.17
32 1.309 1.694 2.037 2.449 2.738 32 7.50 5.34 4.46 3.97 3.65 3.43 3.26 3.13
35 1.306 1.690 2.030 2.438 2.725 35 7.42 5.27 4.40 3.91 3.59 3.37 3.20 3.07
40 1.303 1.684 2.021 2.423 2.704 40 7.31 5.18 4.31 3.83 3.51 3.29 3.12 2.99
45 1.301 1.679 2.014 2.412 2.690 45 7.23 5.11 4.25 3.77 3.45 3.23 3.07 2.94
50 1.299 1.676 2.009 2.403 2.678 50 7.17 5.06 4.20 3.72 3.41 3.19 3.02 2.89
60 1.296 1.671 2.000 2.390 2.660 60 7.08 4.98 4.13 3.65 3.34 3.12 2.95 2.82
75 1.293 1.665 1.992 2.377 2.643 75 6.99 4.90 4.05 3.58 3.27 3.05 2.89 2.76
100 1.290 1.660 1.984 2.364 2.626 100 6.90 4.82 3.98 3.51 3.21 2.99 2.82 2.69
120 1.289 1.658 1.980 2.358 2.617 120 6.85 4.79 3.95 3.48 3.17 2.96 2.79 2.66
140 1.288 1.656 1.977 2.353 2.611 140 6.82 4.76 3.92 3.46 3.15 2.93 2.77 2.64
180 1.286 1.653 1.973 2.347 2.603 180 6.78 4.73 3.89 3.43 3.12 2.90 2.74 2.61
250 1.285 1.651 1.969 2.341 2.596 250 6.74 4.69 3.86 3.40 3.09 2.87 2.71 2.58
400 1.284 1.649 1.966 2.336 2.588 400 6.70 4.66 3.83 3.37 3.06 2.85 2.68 2.56
1000 1.282 1.646 1.962 2.330 2.581 1000 6.66 4.63 3.80 3.34 3.04 2.82 2.66 2.53
∞ 1.282 1.645 1.960 2.326 2.576

20
TABLE F (CONT.) TABLE F (CONT.)
Numerator df Numerator df
α = 0.05 1 2 3 4 5 6 7 8 α = 0.10 1 2 3 4 5 6 7 8
1 161.4 199.5 215.7 224.6 230.2 234.0 236.8 238.9 1 39.9 49.5 53.6 55.8 57.2 58.2 58.9 59.4
2 18.51 19.00 19.16 19.25 19.30 19.33 19.35 19.37 2 8.53 9.00 9.16 9.24 9.29 9.33 9.35 9.37
3 10.13 9.55 9.28 9.12 9.01 8.94 8.89 8.85 3 5.54 5.46 5.39 5.34 5.31 5.28 5.27 5.25
4 7.71 6.94 6.59 6.39 6.26 6.16 6.09 6.04 4 4.54 4.32 4.19 4.11 4.05 4.01 3.98 3.95
5 6.61 5.79 5.41 5.19 5.05 4.95 4.88 4.82 5 4.06 3.78 3.62 3.52 3.45 3.40 3.37 3.34
6 5.99 5.14 4.76 4.53 4.39 4.28 4.21 4.15 6 3.78 3.46 3.29 3.18 3.11 3.05 3.01 2.98
7 5.59 4.74 4.35 4.12 3.97 3.87 3.79 3.73 7 3.59 3.26 3.07 2.96 2.88 2.83 2.78 2.75
8 5.32 4.46 4.07 3.84 3.69 3.58 3.50 3.44 8 3.46 3.11 2.92 2.81 2.73 2.67 2.62 2.59
9 5.12 4.26 3.86 3.63 3.48 3.37 3.29 3.23 9 3.36 3.01 2.81 2.69 2.61 2.55 2.51 2.47
10 4.96 4.10 3.71 3.48 3.33 3.22 3.14 3.07 10 3.29 2.92 2.73 2.61 2.52 2.46 2.41 2.38
11 4.84 3.98 3.59 3.36 3.20 3.09 3.01 2.95 11 3.23 2.86 2.66 2.54 2.45 2.39 2.34 2.30
12 4.75 3.89 3.49 3.26 3.11 3.00 2.91 2.85 12 3.18 2.81 2.61 2.48 2.39 2.33 2.28 2.24
13 4.67 3.81 3.41 3.18 3.03 2.92 2.83 2.77 13 3.14 2.76 2.56 2.43 2.35 2.28 2.23 2.20
14 4.60 3.74 3.34 3.11 2.96 2.85 2.76 2.70 14 3.10 2.73 2.52 2.39 2.31 2.24 2.19 2.15
15 4.54 3.68 3.29 3.06 2.90 2.79 2.71 2.64 15 3.07 2.70 2.49 2.36 2.27 2.21 2.16 2.12
16 4.49 3.63 3.24 3.01 2.85 2.74 2.66 2.59 16 3.05 2.67 2.46 2.33 2.24 2.18 2.13 2.09
17 4.45 3.59 3.20 2.96 2.81 2.70 2.61 2.55 17 3.03 2.64 2.44 2.31 2.22 2.15 2.10 2.06
18 4.41 3.55 3.16 2.93 2.77 2.66 2.58 2.51 18 3.01 2.62 2.42 2.29 2.20 2.13 2.08 2.04
19 4.38 3.52 3.13 2.90 2.74 2.63 2.54 2.48 19 2.99 2.61 2.40 2.27 2.18 2.11 2.06 2.02
20 4.35 3.49 3.10 2.87 2.71 2.60 2.51 2.45 20 2.97 2.59 2.38 2.25 2.16 2.09 2.04 2.00
Denominator df

Denominator df
21 4.32 3.47 3.07 2.84 2.68 2.57 2.49 2.42 21 2.96 2.57 2.36 2.23 2.14 2.08 2.02 1.98
22 4.30 3.44 3.05 2.82 2.66 2.55 2.46 2.40 22 2.95 2.56 2.35 2.22 2.13 2.06 2.01 1.97
23 4.28 3.42 3.03 2.80 2.64 2.53 2.44 2.37 23 2.94 2.55 2.34 2.21 2.11 2.05 1.99 1.95
24 4.26 3.40 3.01 2.78 2.62 2.51 2.42 2.36 24 2.93 2.54 2.33 2.19 2.10 2.04 1.98 1.94
25 4.24 3.39 2.99 2.76 2.60 2.49 2.40 2.34 25 2.92 2.53 2.32 2.18 2.09 2.02 1.97 1.93
26 4.23 3.37 2.98 2.74 2.59 2.47 2.39 2.32 26 2.91 2.52 2.31 2.17 2.08 2.01 1.96 1.92
27 4.21 3.35 2.96 2.73 2.57 2.46 2.37 2.31 27 2.90 2.51 2.30 2.17 2.07 2.00 1.95 1.91
28 4.20 3.34 2.95 2.71 2.56 2.45 2.36 2.29 28 2.89 2.50 2.29 2.16 2.06 2.00 1.94 1.90
29 4.18 3.33 2.93 2.70 2.55 2.43 2.35 2.28 29 2.89 2.50 2.28 2.15 2.06 1.99 1.93 1.89
30 4.17 3.32 2.92 2.69 2.53 2.42 2.33 2.27 30 2.88 2.49 2.28 2.14 2.05 1.98 1.93 1.88
32 4.15 3.29 2.90 2.67 2.51 2.40 2.31 2.24 32 2.87 2.48 2.26 2.13 2.04 1.97 1.91 1.87
35 4.12 3.27 2.87 2.64 2.49 2.37 2.29 2.22 35 2.85 2.46 2.25 2.11 2.02 1.95 1.90 1.85
40 4.08 3.23 2.84 2.61 2.45 2.34 2.25 2.18 40 2.84 2.44 2.23 2.09 2.00 1.93 1.87 1.83
45 4.06 3.20 2.81 2.58 2.42 2.31 2.22 2.15 45 2.82 2.42 2.21 2.07 1.98 1.91 1.85 1.81
50 4.03 3.18 2.79 2.56 2.40 2.29 2.20 2.13 50 2.81 2.41 2.20 2.06 1.97 1.90 1.84 1.80
60 4.00 3.15 2.76 2.53 2.37 2.25 2.17 2.10 60 2.79 2.39 2.18 2.04 1.95 1.87 1.82 1.77
75 3.97 3.12 2.73 2.49 2.34 2.22 2.13 2.06 75 2.77 2.37 2.16 2.02 1.93 1.85 1.80 1.75
100 3.94 3.09 2.70 2.46 2.31 2.19 2.10 2.03 100 2.76 2.36 2.14 2.00 1.91 1.83 1.78 1.73
120 3.92 3.07 2.68 2.45 2.29 2.18 2.09 2.02 120 2.75 2.35 2.13 1.99 1.90 1.82 1.77 1.72
140 3.91 3.06 2.67 2.44 2.28 2.16 2.08 2.01 140 2.74 2.34 2.12 1.99 1.89 1.82 1.76 1.71
180 3.89 3.05 2.65 2.42 2.26 2.15 2.06 1.99 180 2.73 2.33 2.11 1.98 1.88 1.81 1.75 1.70
250 3.88 3.03 2.64 2.41 2.25 2.13 2.05 1.98 250 2.73 2.32 2.11 1.97 1.87 1.80 1.74 1.69
400 3.86 3.02 2.63 2.39 2.24 2.12 2.03 1.96 400 2.72 2.32 2.10 1.96 1.86 1.79 1.73 1.69
1000 3.85 3.00 2.61 2.38 2.22 2.11 2.02 1.95 1000 2.71 2.31 2.09 1.95 1.85 1.78 1.72 1.68

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 TABLE D Critical Values dL and dU of the Durbin-Watson Statistic D (Critical Values are One-Sided)

α = 0.05 α = 0.01
k=1 k=2 k=3 k=4 k=5 k=1 k=2 k=3 k=4 k=5
n dL dU dL dU dL dU dL dU dL dU dL dU dL dU dL dU dL dU dL dU
15 1.08 1.36 0.95 1.54 0.82 1.75 0.69 1.97 0.56 2.21 0.81 1.07 0.70 1.25 0.59 1.46 0.49 1.70 0.39 1.96
16 1.10 1.37 0.98 1.54 0.86 1.73 0.74 1.93 0.62 2.15 0.84 1.09 0.74 1.25 0.63 1.44 0.53 1.66 0.44 1.90
17 1.13 1.38 1.02 1.54 0.90 1.71 0.78 1.90 0.67 2.10 0.87 1.10 0.77 1.25 0.67 1.43 0.57 1.63 0.48 1.85
18 1.16 1.39 1.05 1.53 0.93 1.69 0.82 1.87 0.71 2.06 0.90 1.12 0.80 1.26 0.71 1.42 0.61 1.60 0.52 1.80
19 1.18 1.40 1.08 1.53 0.97 1.68 0.86 1.85 0.75 2.02 0.93 1.13 0.83 1.26 0.74 1.41 0.65 1.58 0.56 1.77
20 1.20 1.41 1.10 1.54 1.00 1.68 0.90 1.83 0.79 1.99 0.95 1.15 0.86 1.27 0.77 1.41 0.68 1.57 0.60 1.74
21 1.22 1.42 1.13 1.54 1.03 1.67 0.93 1.81 0.83 1.96 0.97 1.16 0.89 1.27 0.80 1.41 0.72 1.55 0.63 1.71
22 1.24 1.43 1.15 1.54 1.05 1.66 0.96 1.80 0.86 1.94 1.00 1.17 0.91 1.28 0.83 1.40 0.75 1.54 0.66 1.69
23 1.26 1.44 1.17 1.54 1.08 1.66 0.99 1.79 0.90 1.92 1.02 1.19 0.94 1.29 0.86 1.40 0.77 1.53 0.70 1.67
24 1.27 1.45 1.19 1.55 1.10 1.66 1.01 1.78 0.93 1.90 1.04 1.20 0.96 1.30 0.88 1.41 0.80 1.53 0.72 1.66
25 1.29 1.45 1.21 1.55 1.12 1.66 1.04 1.77 0.95 1.89 1.05 1.21 0.98 1.30 0.90 1.41 0.83 1.52 0.75 1.65
26 1.30 1.46 1.22 1.55 1.14 1.65 1.06 1.76 0.98 1.88 1.07 1.22 1.00 1.31 0.93 1.41 0.85 1.52 0.78 1.64
27 1.32 1.47 1.24 1.56 1.16 1.65 1.08 1.76 1.01 1.86 1.09 1.23 1.02 1.32 0.95 1.41 0.88 1.51 0.81 1.63
28 1.33 1.48 1.26 1.56 1.18 1.65 1.10 1.75 1.03 1.85 1.10 1.24 1.04 1.32 0.97 1.41 0.90 1.51 0.83 1.62
29 1.34 1.48 1.27 1.56 1.20 1.65 1.12 1.74 1.05 1.84 1.12 1.25 1.05 1.33 0.99 1.42 0.92 1.51 0.85 1.61
30 1.35 1.49 1.28 1.57 1.21 1.65 1.14 1.74 1.07 1.83 1.13 1.26 1.07 1.34 1.01 1.42 0.94 1.51 0.88 1.61
31 1.36 1.50 1.30 1.57 1.23 1.65 1.16 1.74 1.09 1.83 1.15 1.27 1.08 1.34 1.02 1.42 0.96 1.51 0.90 1.60
32 1.37 1.50 1.31 1.57 1.24 1.65 1.18 1.73 1.11 1.82 1.16 1.28 1.10 1.35 1.04 1.43 0.98 1.51 0.92 1.60
33 1.38 1.51 1.32 1.58 1.26 1.65 1.19 1.73 1.13 1.81 1.17 1.29 1.11 1.36 1.05 1.43 1.00 1.51 0.94 1.59
34 1.39 1.51 1.33 1.58 1.27 1.65 1.21 1.73 1.15 1.81 1.18 1.30 1.13 1.36 1.07 1.43 1.01 1.51 0.95 1.59
35 1.40 1.52 1.34 1.58 1.28 1.65 1.22 1.73 1.16 1.80 1.19 1.31 1.14 1.37 1.08 1.44 1.03 1.51 0.97 1.59
36 1.41 1.52 1.35 1.59 1.29 1.65 1.24 1.73 1.18 1.80 1.21 1.32 1.15 1.38 1.10 1.44 1.04 1.51 0.99 1.59
37 1.42 1.53 1.36 1.59 1.31 1.66 1.25 1.72 1.19 1.80 1.22 1.32 1.16 1.38 1.11 1.45 1.06 1.51 1.00 1.59
38 1.43 1.54 1.37 1.59 1.32 1.66 1.26 1.72 1.21 1.79 1.23 1.33 1.18 1.39 1.12 1.45 1.07 1.52 1.02 1.58
39 1.43 1.54 1.38 1.60 1.33 1.66 1.27 1.72 1.22 1.79 1.24 1.34 1.19 1.39 1.14 1.45 1.09 1.52 1.03 1.58
40 1.44 1.54 1.39 1.60 1.34 1.66 1.29 1.72 1.23 1.79 1.25 1.34 1.20 1.40 1.15 1.46 1.10 1.52 1.05 1.58
45 1.48 1.57 1.43 1.62 1.38 1.67 1.34 1.72 1.29 1.78 1.29 1.38 1.24 1.42 1.20 1.48 1.16 1.53 1.11 1.58
50 1.50 1.59 1.46 1.63 1.42 1.67 1.38 1.72 1.34 1.77 1.32 1.40 1.28 1.45 1.24 1.49 1.20 1.54 1.16 1.59
55 1.53 1.60 1.49 1.64 1.45 1.68 1.41 1.72 1.38 1.77 1.36 1.43 1.32 1.47 1.28 1.51 1.25 1.55 1.21 1.59
60 1.55 1.62 1.51 1.65 1.48 1.69 1.44 1.73 1.41 1.77 1.38 1.45 1.35 1.48 1.32 1.52 1.28 1.56 1.25 1.60
65 1.57 1.63 1.54 1.66 1.50 1.70 1.47 1.73 1.44 1.77 1.41 1.47 1.38 1.50 1.35 1.53 1.31 1.57 1.28 1.61
70 1.58 1.64 1.55 1.67 1.52 1.70 1.49 1.74 1.46 1.77 1.43 1.49 1.40 1.52 1.37 1.55 1.34 1.58 1.31 1.61
75 1.60 1.65 1.57 1.68 1.54 1.71 1.51 1.74 1.49 1.77 1.45 1.50 1.42 1.53 1.39 1.56 1.37 1.59 1.34 1.62
80 1.61 1.66 1.59 1.69 1.56 1.72 1.53 1.74 1.51 1.77 1.47 1.52 1.44 1.54 1.42 1.57 1.39 1.60 1.36 1.62
85 1.62 1.67 1.60 1.70 1.57 1.72 1.55 1.75 1.52 1.77 1.48 1.53 1.46 1.55 1.43 1.58 1.41 1.60 1.39 1.63
90 1.63 1.68 1.61 1.70 1.59 1.73 1.57 1.75 1.54 1.78 1.50 1.54 1.47 1.56 1.45 1.59 1.43 1.61 1.41 1.64
95 1.64 1.69 1.62 1.71 1.60 1.73 1.58 1.75 1.56 1.78 1.51 1.55 1.49 1.57 1.47 1.60 1.45 1.62 1.42 1.64
100 1.65 1.69 1.63 1.72 1.61 1.74 1.59 1.76 1.57 1.78 1.52 1.56 1.50 1.58 1.48 1.60 1.46 1.63 1.44 1.65

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