Let the random variable Z follow a standard normal distribution, and let z1 be a possible value of Z that is unknown but

identifiable by position and area. Find z1 if the area to the right of z1 is 0.0869: a) -1.36. b) 1.71. c) 1.36. d) 1.80 Let the random variable X follow a normal distribution with a mean and a standard deviation . Let m1 and m2 be the means of samples of sizes 35 and 35, respectively, randomly and independently selected from this population. Consider the following expressions: (1) Pr(-0.2<m1<+), and (2) Pr(-<m2<+0.2). Which of the following statements is true? a) Value of expression 1 is equal to value of expression 2. b) Value of expression 1 is greater than value of expression 2. c) Value of expression 1 is smaller than value of expression 2. d) Unable to determine the relationship between expression 1 and expression 2. In a recent survey of college professors, it was found that the average amount of money spent on entertainment each week was normally distributed with a mean of $95.25 and a standard deviation of $27.32. What is the probability that the average spending of a sample of 30 randomly-selected professors will exceed $102.50? a) 0.0730 b) 0.1064 c) 0.3936 d) 0.4082 In examining the invoices issued by a company, an auditor finds that the dollar amounts of invoices have a mean of $1,732 and a standard deviation of $298. What is the probability that for a sample of 45 invoices, the average invoice is greater than $1,800? a) 0.563 b) 0.063 c) 0.437 d) 0.937

The time it takes to complete the assembly of an electronic component is normally distributed with a standard deviation of 4.38 minutes. If we select 20 components at random, what is the probability that the standard deviation for the time of assembly of these units is less than 3.0 minutes? a) 0.05 b) 0.005 c) 0.025 d) 0.01 You have recently joined a Weight Watchers club. Suppose that the number of times you expect to visit the club in a month is represented by a normally distributed random variable with a mean of 12 and a standard deviation of 2.50. Over the course of the next year, what is the probability that you average more than 13 visits to the club? a) 0.1554 b) 0.4177 c) 0.3446 d) 0.0823 The number of students using the ATM on campus daily is normally distributed with a mean of 237.6 and a standard deviation of 26.3. For a random sample of 55 days, what is the probability that ATM usage averaged more than 230 students per day? a) 0.9756 b) 0.9483 c) 0.9838 d) 0.9524 The amount of time that you have to wait before seeing the doctor in the doctors office is exponentially distributed with a mean of 15.2 minutes and a standard deviation of 15.2 minutes. If you take a random sample of 35 patients, what is the probability that the average wait time is greater than 20 minutes? a) 0.28 b) 0.26 c) 0.24 d) 0.03

If a random sample of size n is drawn from a normal population, then the sampling distribution of sample means will be: a) normal for all values of n b) normal only for n > 30 c) approximately normal for all values of n d) approximately normal only for n > 30 If the standard error of the sampling distribution of the sample proportion is 0.02049 for samples of size 500, then the population proportion must be either a) 0.2 or 0.8. b) 0.5 or 0.5. c) 0.3 or 0.7. d) 0.6 or 0.4. Random samples of size 36 each are taken from a large population whose mean is 120 and standard deviation is 39. The mean and standard error of the sampling distribution of sample mean, respectively, are: a) 120 and 39. b) 120 and 6.5. c) 39 and 120. d) 6.5 and 120. In a survey of 472 personnel directors, 63% thought that they would be hiring new personnel over the next three months. Which of the following represents a 98% confidence interval for the proportion of all personnel directors planning to hire personnel over the next three months? a) 0.63 0.057 b) 0.63 0.047 c) 0.63 0.042 d) 0.63 0.052 In developing an interval estimate for a population mean, a sample of 40 observations was used. The interval estimate was 28.76 1.48. Had the sample size been 160 instead of 40, the interval estimate would have been a) 28.76 0.37 b) 28.76 0.74

c) 7.19 1.48 d) 7.19 1.82 The 95% confidence interval for the population proportion given a sample size n = 2200 and sample proportion p = 0.214 is computed as a) 0.214 1.96 (0.00875) b) 0.214 1.645 (0.00875) c) 0.214 1.96 (0.000075) d) 0.214 1.645 (0.000075) The upper limit of 90% confidence interval for the population proportion given a sample size n = 300 and sample proportion p = 0.1833 is equal to a) 0.1466 b) 0.1395 c) 0.2271 d) 0.2200 Which of the following statements is false? a) If a sample has 16 observations and a 90% confidence estimate for is needed, the appropriate t-score is 2.602 b) If a sample has 16 observations and a 99% confidence estimate for is needed, the appropriate t-score is 2.947 c) If a sample has 20 observations and a 95% confidence estimate for is needed, the appropriate t-score is 2.093 d) The t distribution, like the z distribution, is symmetric about the mean =0 In order to estimate the average daily down time, a manufacturer randomly samples 40 days of production records and found a mean of 51.576 minutes and standard deviation of 75.9 minutes. An 80% confidence interval is given by: a) 51.675 1.28(12.0) b) 51.675 1.28(75.9) c) 51.675 1.304(12.0) d) 51.675 1.304(8.7) A random sample of size 15 taken from a normally distributed population

revealed a sample mean of 75 and a sample variance of 25. The upper limit of a 95% confidence interval for the population mean would equal: a) 77.769 b) 72.231 c) 72.727 d) 77.273 The supervisor of a production line believes that the average time to assemble an electronic component is 14 minutes. Assume that assembly time is normally distributed with a standard deviation of 3.4 minutes. The supervisor times the assembly of 14 components, and finds that the average time for completion was 11.6 minutes. What are the appropriate null and alternative hypotheses? a) H0: 14 and H1: <14 b) H0: 14 and H1: >14 c) H0: =14 and H1: 14 d) H0: 14 and H1: =14 Which of the following statements is most accurate? a) Unable to reject the null hypothesis at 0.10. b) Reject the null hypothesis at = 0.025, but not at = 0.05. c) Reject the null hypothesis at = 0.05, but not at = 0.01. d) Reject the null hypothesis at = 0.008. The manufacturer of a new product claims that his product will increase output per machine by at least 29 units per hour. A line manager adopts the product on 15 of his machines, and finds that the average increase was only 26 with a standard deviation of 6.2. What are the appropriate null and alternative hypotheses? a) H0: =29 and H1: 29 b) H0: 29 and H1: < 29 c) H0: 29 and H1: = 29 d) H0: > 29 and H1: 29 Using a 5% significance level, which of the following statements is true?

a) Reject H0 if t statistic < 1.761. b) Reject H0 if t statistic > 2.16. c) Reject H0 if t statistic < -1.761. d) Reject H0 if t statistic < -2.16. The value of the test statistics is a) 1.240. b) 1.874. c) -1.240. d) -1.874. Which of the following statements is most accurate? a) Reject the null hypothesis at = 0.10. b) Unable to reject the null hypothesis at 0.10. c) Reject the null hypothesis at = 0.05, but not 0.10. d) Reject the null hypothesis at = 0.01, but not 0.05. As shift manager at a local fast food place, you are responsible for ensuring quality control. You do not want to weigh all the frozen hamburger patties that get delivered by your supplier to make sure they weigh four ounces on average, so you have one of your minimum wage earners do it. Assume that the standard deviation of the weight of hamburger patties is known to be 0.1 ounces. You tell your employee that as a shipment comes in, select 20 patties at random. Find the average weight for the 20 patties. If the average weight is less than 3.95 ounces, reject the shipment. What is the significance level associated with your decision rule? a) 0.015 b) 0.008 c) 0.023 d) 0.013 Suppose that you want to test H0: = 0.54 against H1: < 0.54 based on a sample of n = 25 and s= 13.2. Let m be the sample mean. What would the test statistic be? a) (m - 0.54) / 34.848 b) (m - 0.54) / 2.64 c) (m -0.54) / 0.528

d) (m -0.54) / 0.2789 An assembly line will be shut down for maintenance if the defect rate exceeds 2.3%. Suppose you adopt a 5% significance level and take a random sample 200 items off the assembly line and compute the proportion that are defective. For what values of the sample proportion will the assembly line be shut down? a) 0.034 b) 0.038 c) 0.036 d) 0.040 A professor claims that the average score on a recent exam was 83. Assume that the test scores are normally distributed. You ask some people in class how they did, and you record the following scores: 82, 77, 85, 76, 81, 91, 70, and 82. Suppose you want to test whether the professors statement was correct. What are the null and alternative hypotheses? a) H0: = 83 and H1: > 83 b) H0: = 83 and H1: < 83 c) H0: = 83 and H1: 83 d) H0: > 83 and H1: 83 What is the appropriate decision rule? a) Reject H0 if t statistic > t,n-1. b) Reject H0 if t statistic < - t/2,n-1 or > t/2,n-1. c) Reject H0 if t statistic = t,n-1. d) Reject H0 if t statistic < - t,n-1. Which of the following is the most accurate statement about the p-value? a) p-value > 0.10 b) p-value < 0.05 c) p-value < 0.10 d) p-value < 0.01 A local transportation planning group is concerned about the lack of car-

pooling on the part of commuters. They are afraid that the proportion of local drivers car-pooling is below the national average of 20%. What are the appropriate null and alternative hypotheses? a) H0: > 0.20 and H1: 0.20 b) H0: = 0.20 and H1: 0.20 c) H0: = 0.20 and H1: > 0.20 d) H0: = 0.20 and H1: < 0.20 As shift manager at a local fast food place, you are responsible for ensuring quality control. You do not want to weigh all the frozen hamburger patties that get delivered by your supplier to make sure they weigh four ounces on average, so you have one of your minimum wage earners do it. Assume that the standard deviation of the weight of hamburger patties is known to be 0.1 ounces. You tell your employee to choose 25 patties at random and find the average weight. For what values would you tell the employee to reject the shipment, if you wanted the probability of a Type I error to be 0.10 or less? a) Reject the shipment if weight < 3.955 b) Reject the shipment if weight < 3.975 c) Reject the shipment if weight < 3.965 d) Reject the shipment if weight < 3.985 Which of the following statements is not true? a) A test statistic is a function of the sample data on which the decision to reject or not reject the null hypothesis is to be based. b) A rejection region consists of the set of all test statistic values for which the null hypothesis will be rejected. c) A rejection region consists of the set of all test statistic values for which the alternative hypothesis will be rejected. d) A good hypothesis-testing procedure is one for which the probability of making either type I or type II error is small. A student has been offered part-time work in a laboratory. The professor says that the work will vary from week to week. The number of hours will be between 10 and 20 with a uniform probability density function. What is the probability of getting less than 15 hours in a week? a) 0.

b) 0.8. c) 0.5. d) 0.6. Given that the student gets at least 15 hours in a week, what is the probability that more than 17 hours will be available? a) 0.25. b) 0.4. c) 0.5. d) 0.6. (10 points) Mr W, a stock analyst, claims that he can pick stocks that will outperform the market. You, as the boss of an investment company, decided to give him a chance. During his three-month probation in your company, in 40 out of 66 trading days, the stock he picked has a higher return than the market average (say, better than the Hang Seng Index). Should you keep him or ask him to leave when the probation period expires? Show steps for your conclusion. We will keep the analyst if we found that he can actually outperform the market. On any day, there are approximately half of the stocks doing better than the market average and half worse than the market average. (Remember: average is a measure of central tendency.) So, if a chimpanzee picks a stock on a particularly day (i.e., randomly), it is likely to perform like the market average. Thus, the reference is a chimpanzee whose probability of picking a stock outperforming the market average is 0.5, i.e., =0.5. H0: 0.5 (the stock analyst is doing no better than a chimpanzee) or H0: =0.5 (the stock analyst is doing no better than a chimpanzee) H1: >0.5 (the stock analyst is better than a chimpanzee) The sample proportion is p=44/66 = 0.606. Variance of p under null is (1-)/(n-1) = 0.003846 (an unbiased formula) or (1-)/n = 0.003788 (slightly biased but convenience formula) The sample proportion is distributed as binomial with a mean 0.5 and the variance above. Since n*>=66*0.5 = 33> 9, we can use the normal approximation. Most people would consider probability of 0.05 as small. From normal

table, we find that Pr(Z>1.65) = 0.05. Thus, we reject H0 if z = (p-)/std(p) > 1.65. In our sample, we have (p-)/std(p) = 1.710 (or 1.723 depending on what formula of std(p) we use). Thus, H0 is rejected at 5% significance level. The analyst is better than a chimpanzee. We can also compute the probability of observing the sample proportion at least as extreme as 0.606 under H0 (i.e., the z statistic at least as extreme as 1.71). That is, p-value = Pr(Z>1.71) = 0.0436 (or Pr(Z>1.723) = 0.0424). This computation of p-value confirms our result of testing the hypothesis at 5% level.