Quantitative Methods For Business
Quantitative Methods For Business
Exam Question 1
If test results are normally distributed with mean 150 and standard deviation 30,
what is the probability that a student receives a test result between 120 and 165?
Round your answer to two decimal places. Use at least 4 decimals in all your
computations.
Answer: 0.53
The z score for 120 is: (120-150)/30 = -1. Now, Pr(z < -1) = Pr(z > 1) =0.1587
using the table.
The z score for 165 is: (165-150)/30 = 0.5. Pr(z > 0.5) = 0.3085 using the table.
The probability we seek is Pr(-1 < z < 0.5) = 1 - Pr(z < -1) - Pr(z > 0.5) = 1-
0.1587-0.3085 = 0.5328
Exam Question 2
If the probability that a student answers a question correctly is 0.7 (independently),
what is the probability that the student answers 3 or less questions correctly in an
exam with eight questions? Round your answer to two decimal places. Use at least 4
decimals in all your computations.
Answer: 0.06.
To answer this using the table, we focus on the number of incorrect answers: 3
or less correct implies 5 or more incorrect answers. The probability of an
incorrect answer is 0.3. We can then find the relevant probability using the table
of the binomial distribution. The probability is 0.0580.
Alternatively, one can use the formula for the binomial distribution and calculate
Pr(k = 0)+ Pr(k = 1)+ Pr(k = 2)+ Pr(k = 3).
Exam Question 3:
What is the probability that the sum of two dices will be more than 10? Round your
answer to two decimal places. Use at least 4 decimals in all your computations.
Answer: 0.08
One possibility is that the total equals 12. This only occurs if both equal 6, which
occurs with probability 1/36. Another possibility is that the total equals 11. This
can occur in two ways:
a) the first dice = 5 and the second = 6. Occurs with probability 1/36.
b) the second dice = 5 and the first = 6. Occurs with probability 1/36.
To check the weight of a new product a sample of 64 products was taken and
weighed. The mean weight was 35 and the standard deviation was 8. Create an
approximate 95% confidence interval around the sample mean. What is the upper
limit of the confidence interval? Round your answer to one decimal place. Use at
least 4 decimals in all your computations.
Answer: 37.0
The upper limit of the confidence interval is mean + 2*STEM, where STEM =
StandardDeviation/sqrt(n).
Exam Question 5
Answer: 240
So, we know that 0.2 = ME = 2.58*(1.2 / sqrt(n)). Solving for sqrt(n) we get
Exam Question 6
In a survey of 180 consumers, 30% said they prefer product design A. Create an
approximate 95% confidence interval for the proportion of consumers who prefer
design A. What is the lower limit of the confidence interval? Round your answer to
two decimal places. Use at least 5 decimals in all your computations.
Answer: 0.23
Exam Question 7
A study of a new blood pressure medicine, with 81 patients, found that the average
reduction in blood pressure was 10 with a standard deviation of 30. Test the null
hypothesis that the medicine did not reduce blood pressure using a significance level
of 5%. What is the value of the test statistic (the “t-value”)? Round your answer to
one decimal place. Use at least 4 decimals in all your computations.
Answer: 3.0
Exam Question 8
Robin suspects that a coin is biased. She throws it 25 times and gets head 15 times.
Using this data, test the null hypothesis that the coin is unbiased, i.e., test the null
hypothesis that the probability of getting of head is 0.5, using a significance level of
5%. What is the value of the test statistic (the “t-value” or “t-statistic”)? Round your
answer to one decimal place. Use at least 4 decimals in all your computations.
Answer: 1.0
The following data shows the yearly growth rate for three firms. Based on this
data, test the null hypothesis that the average growth rate is equal for all firms,
using an Anova and a significance level of 0.05.
Exam Question 9
What is the critical value that the F-ratio should be compared with (round to 2
decimal places)?
Answer: 5.14
Exam Question 10
What is the F-ratio (use at least 4 decimals in each calculation and round the
answer to 1 decimal places)?
Answer: 0.8
The following data shows the yearly markets shares for four firms. Based on this data,
test the null hypothesis that the average market share is equal for all firms, using an
Anova and a significance level of 0.05. What is the F-ratio? Use at least 4 decimals in
each calculation and round the answer to 1 decimal place.
Answer: 1.3
The following data shows the growth rates for firms from two countries (France
and UK) and two different sizes (small and large).
Country
France UK
Small 8 3
Size 7 6
5 1
Large 8 3
10 7
11 4
Exam Question 12
Using a two factor Anova, what is the F-ratio for the main effect of the Country? Use
at least 4 decimals in all computations. Round your answer to 1 decimal place.
Answer: 13.6
Exam Question 13
Using a two factor Anova, what is the F-ratio for the main effect of Size? Use at least
4 decimals in all computations. Round your answer to 1 decimal place.
Answer: 3.7
Exam Question 14
Using a two factor Anova, what is the F-ratio for the interaction effect? Use at least 4
decimals in all computations. Round your answer to 1 decimal place.
Answer: 0.5
SS_With = 30.67
The following table shows exam result (y) and study time (x) for four students.
Student x y
1 2 5
2 6 8
3 4 3
4 8 8
Exam Question 15
What is the correlation coefficient (r) based on this data? Round your answer to 1
decimal place. Use at least 4 decimals in all your computations.
Answer: 0.7
Exam Question 16
Assuming the regression line is Y = a + bX, what is the value of b? Round your answer
to 1 decimal place. Use at least 4 decimals in all your computations.
Answer: 0.7
Exam Question 17
Assuming the regression line is Y = a + bX, what is the value of ‘a’? Round your
answer to 1 decimal place. Use at least 4 decimals in all your computations.
Answer: 2.5
Exam Question 18
Test the null hypothesis that the slope in the regression line is equal to zero, using a
significance level of 0.05 (two-tailed test). What is the value of the test-statistic (the
‘w-value’ or sometimes called ‘t-statistic’)? Round your answer to one decimal place.
Use at least 5 decimals in all your computations.
Answer: 1.5
The regression line can be computed as follows
Number of obs. is 4 Signif level: 0.05
Σ (Y-Ŷ)2 8.2
Thus, Rsq = 1 - ( Σ (Y-Ŷ)2)/SS_y ) = 1 - 8.2 / 18.00 = 0.544444
To test the null-hypothesis of a slope equal to zero we compute the test statistic: w = (b-0)/s_b
where s_b*s_b = (Σ (Y-Ŷ)2 / (N-2)) / SS_x
The following table shows sales (y) and marketing costs (x) for five products.
Product x y
1 5 6
2 3 4
3 6 3
4 4 5
5 8 9
Test the null hypothesis that the slope in the regression line is equal to zero using a
significance level of 0.05 (two-tailed test). What is the value of the test-statistic (the
‘w-value’ or sometimes called ‘t-statistic’)? Round your answer to one decimal place.
Use at least 5 decimals in all your computations.
Answer: 1.5
To test the null-hypothesis of zero slope, we compute the test statistic: w = (b-0)/s_b
where s_b*s_b = (Σ (Y-Ŷ)2 / (N-2)) / SS_x
Student
Test the null-hypothesis that there is no association between student type and
distinction using a Chi-square test. What is the test statistic (the chi-square sum, the
uncorrected one, not the Yates corrected chi-square)? Use at least 4 decimals in all
your computations. Round your answer to 1 decimal place.
Answer: 15.8
2) Totals: a1 a2 a3 3) Calculate E: a1 a2 a3
b1 11 45 29 85 b1 24.286 34.249 26.465
b2 67 65 56 188 b2 53.714 75.751 58.535
78 110 85 273