GMP (QTMD)

(Closed Book & Closed Notes) Mark: 45

Duration: 90
minutes

Level: Easy

Choose the most appropriate answer. For a correct answer (1 mark) will be awarded. For a wrong
answer (-0.25) will be awarded.

1. The central limit theorem assures us that the sampling distribution of the
mean
a) Is always normal.
b) Is always normal for large sample size.
c) Approaches normality as sample size increases.
d) Appears normal only when sample size is greater than 1,000.

2. Suppose that a population with a size of 144 has a mean as 24. What is the
mean of the sampling distribution of the mean for the samples of size 25?

a) 24.
b) 2.
c) 4.8.
d) Can not be determined from the information given .

3. Which of the following is a method of selecting samples from a population?

a) Random sampling.
b) Cluster sampling.
c) Systematic sampling.
d) All of these.

4. Which of the following is the necessary condition for using a t-distribution

table?

a) The sample size is small.

b) Sample standard deviation is known but population standard
deviation is not.
c) The population is infinite.
d) (a) and (b) but not (c).

1
5. A certain normally distributed population has a known standard deviation of
1.0 .What is the total width of a 95% confidence interval for the population
mean?
a) 1.96.
b) 0.98
c) 3.92.
d) It cannot be determined from the information given.

6. The average height of 25 students in a MBA class is known to be 66” with a

standard deviation of 4”. In constructing a 95% confidence interval for the
average height of all the students in the class , we would use :

a) The normal distribution with 24 degrees of freedom.

b) The t-distribution with 24 degrees of freedom.
c) The normal distribution with 25 degrees of freedom.
d) The t-distribution with 25 degrees of freedom.

7. In a normally distributed population the sampling distribution of the mean

a) Is normally distributed.
b) Has a mean equal to the population mean.
c) Has a standard deviation equal to the population standard deviation
divided by the square root of the sample size .
d) All the above.

8. The F ratio contains

a) Two estimates of the population variance.

b) Two estimates of the population means.
c) One estimate of the population mean and one estimate of the
population variance.
d) Both (a) and (b).
e) None of the above.

9. Which of these distributions has a pair of degrees of freedom?

a) Poisson.
b) Normal.
c) Chi –square.
d) Binomial.
e) All of these,
f) None of these.

2
 10. From which of the following can retailers immediately determine how many
cases they should stock each day to maximize profits?

a) Expected profit from each stocking action.

b) Expected loss from each stocking action.
c) Conditional-profit table.
d) (a), (b) and (c).
e) (a), (b) but not (c).

State whether the following statements are true or false?

11. The probability distribution of all the possible means of samples is known as
the sampling distribution of means. T F

12. A sampling plan that divides the population into well-defined groups from
which random samples are drawn is known as cluster sampling. T
F

13. If the mean for a certain population were 20 it is likely that most of the
samples we could take from that population would have means of 20.
T F

14. With increasing sample size, the sampling distribution of the mean
approaches normality, regardless of the distribution of the population.
T F

15. A statistic is the characteristic of the population. T F

16. A sampling plan that selects members from a population at uniform intervals
in time, order, or space is called stratified sampling. T F

17. The standard error of the mean is the standard deviation of the distribution of
the sample means. T F.

18. When the items included in the sample are based on the judgment of the
individual conducting the sample, the sample is said to be non-random.

T F
19. There is a different t-distribution for each possible sample size. T F

20. As the width of the confidence interval increases, the confidence level
associated with the interval also increases. T F

3
 21. The t-distribution is less able to be approximated by a normal distribution as
the sample size increases. T F

22. Large samples are always good idea because they decrease the standard
error.
T F
23. A decision theory that maximizes expected profits will also minimize
expected losses. T F

24. Payoffs in a decision table are the only positive benefits of various
alternatives.
T F
25. If perfect information were available, a retailer would consistently make the
maximum profit possible. T F

Key:

1. C
2. A
3. D
4. D
5. D
6. B
7. D
8. A
9. F
10. E
11. T
12. T
13. F
14. T
15. F
16. F
17. T
18. T
19. T
20. T
21. F
22. F
23. T
24. F
25. T

4
 Level: Moderate

Choose the most appropriate answer. For a correct answer (1 mark) will be awarded. For a wrong
answer (-0.25) will be awarded.

1. When a null hypothesis is accepted, it is possible that:

a. A correct decision has been made,
b. A Type I error has been made,
c. Both (a) and (b) have occurred,
d. Neither (a) nor (b) has occurred.

2. With a lower significance level, the probability of rejecting a null hypothesis that is
actually true:
a. Decreases,
b. Remains the same,
c. Increases,
d. None of these.

3. We can use the normal distribution to represent the sampling distribution of the
population when;
a. The sample size is more than 10.
b. The sample size is less than 50.
c. The sample size is more than 5.
d. None of these.

4. If we say that α = 0.10 for a particular hypothesis test, we are saying that:
a. Ten percent is our minimum standard for acceptable probability.
b. Ten percent is the risk we take of rejecting a hypothesis that is true.
c. Ten percent is the risk we take of accepting a hypothesis that is false.
d. (a) and (b) only.

5. A chi-square value can never be negative because:

a. Differences between expected and observed frequencies are squared.
b. A negative value would mean that the observed frequencies were negative.
c. The absolute value of the differences is computed.
d. None of these.

State whether the following statements are true or false?

6. If 1.96 is the critical value of Z, then the significance level of the test is 0.05.
T F

5
7. When sample sizes are small, only one tailed tests of the difference between two
population means can be done. T F

8. When comparing the variances of two populations, it is convenient to look at the

differences in the sample variances, just as we looked at the differences about
population means. T F

9. If the sample sizes are too small to use the normal distribution for a test of the
difference two population proportions, you should use t-distribution. T F

10. For both chi-square and F tests, we reject H0 if the probability value is less than α,
the significance level of the test. T F

11. When testing hypotheses about a population’s variance, we may form confidence
intervals by using the chi-square distribution. T F

12. The smaller the value of the F statistic, the more we tend to believe there is a
difference among the various samples. T F

13. As a general rule, it is not necessary to include a finite population multiplier in a

computation of a standard error of the mean when the size of the sample is greater
than 30. T F

14. The precision with which the sample mean can be used to estimate the population
mean decreases as the standard error increases. T F

15. Assuming that a given hypothesis about a population mean is correct, the
percentage of sample means that could fall outside certain limits from this
hypothesized mean is called the significance level. T F

16. In hypothesis testing, the appropriate probability distribution to use is always the
normal distribution. T F

17. An interval estimate is a range of values used to estimate the shape of the
population’s distribution. T F

18. There is a different chi- square distribution for each possible sample size. T F

19. Analysis of variance is based on the estimation of the variance of the population
that contains all samples. T F

20. A statistic is said to be an efficient estimator of a population parameter if, with

increasing sample size, it becomes almost certain that the value of the statistic
comes very close to that of the population parameter. T F

6
 Key:

1. a
2. a
3. d
4. d
5. a
6. F
7. F
8. F
9. F
10. T
11. T
12. F
13. F
14. T
15. T
16. F
17. F
18. T
19. T
20. F