Practice Questions for Quiz 1

1. Two treatments for kidney stones are compared. The following table summarizes their
respective success rate for treatments involving both small and large kidney stones.

Which of the following statements is false?

a. Treatment A is more effective when used on small stones
b. Treatment A is more effective when used on large stones
c. The success rate of Treatment A must be higher than that of Treatment B when
considering both sizes at the same time
d. It is possible that the success rate of Treatment A is lower than that of Treatment B
when considering both sizes at the same time

2-3 Some graphical descriptions of final examination scores for students of a Statistics course are given
below.

2. Based on the figure above, which statement is false?

a. The score distribution is left skewed
b. The interval length for the histogram is 10
c. There is at least one student who got the perfect score of 100
d. Among all intervals in the histogram, the highest frequency occurs at 70’s

3. Based on the figure above, which statement is correct?

a. There is only one outlying score
b. Removing outlier(s) would increase the mean and SD
c. The mean score is higher than the median score
d. More than 50% of the students scored between 50 and 80
4. A student budgets $600 weekly for gas and a few quick meals off campus. Let X denote the
amount spent for gas and Y the amount spent for quick meals. Assume this student is very
disciplined and sticks to the budget, spending exactly $600 on these two things each week.
Which of the following statement is true?
a. X and Y are independent
b. X and Y are positively correlated
c. X and Y are dependent buy not correlated
d. X and Y are negatively correlated

5. If the covariance between the prices of two investments is 150,000$2, which of the following is
false?
a. The prices of the two investments are measured in $.
b. We know that the correlation is positive.
c. Because the covariance is quite large, the correlation must be very high.
d. If we measure the investment in $1,000s, then the covariance is 0.15 $1000! .

6. If you roll two fair dice, what is the probability that the sum on the two dice equal 6?
a. 3/36
b. 4/36
c. 5/36
d. 6/36

7. Based on the following mosaic plot, which of the following statements is false?

a. 𝑃(𝐵) = 0.5
b. 𝑃(𝐵|𝐴) = 0.25
c. 𝑃(𝐵|𝑁𝑜𝑡 𝐴) = 0.75
d. Events A and B are independent
 8. To promote sales a retailer offers special scratch-off coupons. When the shopper makes a
purchase, the clerk scratches off the covering to reveal the amount of the discount. The
discount is 10%, 30% and 50% of the initial amount. 7/8 of the coupons give the shopper 10%
off, 3/32 give 30% off, and 1/32 give 50% off. Suppose that half of the customers purchase a
sweater that retails for $100 and another half purchases a suit that retails for $150. What’s the
probability that a randomly selected customer saves more than $40 by using one of these
coupons?
a. 1/8
b. 1/16
c. 5/64
d. 3/32

9. A plumber loads his truck each morning with faucets that will be needed for the service calls and
other emergency calls that come in that day. Based on past experience, the number, N, of
faucets required each day has the following distribution: 𝑝(0) = 0.05; 𝑝(1) = 0.25; 𝑝(2) =
0.5; 𝑝(3) = 0.15; 𝑝(4) = 0.05. Each faucet requires 25 minutes to install. What is the
expected number of minutes the plumber will spend each day installing faucets?
a. 26.9
b. 50
c. 47.5
d. 9.5

10-11 A distribution center for a chain of electronics stores receives orders from the various branches.
When an order is received, an amount of time, 𝑋, is required to collect the items ordered by the store,
and then an amount of time, 𝑌, is required to load all the items onto a delivery truck. The characteristics
of the two random variables are as follows: 𝐸(𝑋) = 1.5 hours, 𝑆𝐷(𝑋) = 0.4 hours; 𝐸(𝑌)=2.2 hours,
𝑆𝐷(𝑌) = 0.5 hours. The correlation between X and Y is 𝜌 = 0.95.

10. About the time required to fill an order (that is, the time required to have the delivery truck
loaded and ready to go) once an order is received at the distribution center, which is correct?
a. Standard deviation is about 0.9 hours
b. Variance is 0.41 (hours2)
c. It will be on average greater than 4 hours
d. Variance is smaller than 0.41 (hours2)
11. The worker who collects the items on the order makes $70 per hour, and the worker who loads
the items into the truck makes $80 per hour. Which of the following is false about the total cost
of filling an order that is received at the distribution center?
a. The expected total cost is $281
b. The standard deviation is about $67
c. The variance is greater than 2384 ($2)
d. The standard deviation would be bigger if the correlation between X and Y were 0.5

12. Which one is false?

a. A random variable can always be thought of as the result of a random selection from a
population.
b. The probability distribution of a random variable can be viewed as a population
distribution.
c. The expected value of a random variable corresponds to the mean of a population.
d. Because the relation between the random variable and a random selection, the variance
of a random variable can be calculated in the same way as the sample variance.

13. An investor buys the stocks of two companies, investing $10,000 in each. The stock of each
company either goes up by 10% after a month with probability 1/2 or drop by 8% with
probability 1/2. The changes in the two stock prices are positively correlated with correlation
0.7. Which of the following statements is true?
a. The expected value of the investment after one month is larger than $20,200
b. The expected value of the investment after one month is equal to $20,200
c. The expected value of the investment after one month is smaller than $20,200
d. Cannot determine based on the given information

14. Consider two investment plans, A and B. Their annual returns have means 65% and 36%, and
standard deviations 132% and 66% respectively. Suppose one wants to choose one plan and
invest for 20 years. Which of the following statements is correct?
a. Plan A is better because it has a bigger expected return.
b. Plan B is better because it has a smaller standard deviation.
c. Plan A is better because it has a higher Sharpe ratio.
d. Plan B is better because it has a higher volatility-adjusted return.

15. The probability that a new advertising campaign will increase sales is assessed as being 0.80. The
probability that the cost of developing the new ad campaign can be kept within the original
budget allocation is 0.40. Assume that the two events are independent. The probability that the
cost is not kept within budget or the campaign will not increase sales is:
a. 0.12
b. 0.32
c. 0.68
d. 0.88
 16. Two events are impossible to have the following relationship:
a. Independent and mutually exclusive.
b. Dependent and mutually exclusive.
c. Independent and Not mutually exclusive.
d. Dependent and Not mutually exclusive

17-18 Boxplots of earnings per share (EPS) data for a sample of retail company stocks and a sample of
energy company stocks are shown below.

17. Which of the following statements is correct?

a. The median EPS is higher for energy stocks compared to retail stocks.
b. The median EPS is higher for retail stocks compared to energy stocks.
c. The IQR for the EPS data is larger for retail stocks than for energy stocks.
d. The EPS data are more variable for retail stocks than for energy stocks.
e. The mean is higher for energy stocks compared to retail stocks.

18. Which of the following statements is true about the distributions of EPS for retail and energy
stocks?
a. The distribution of EPS for retail stocks is skewed to the right.
b. The distribution of EPS for energy stocks is symmetric.
c. Both distributions of EPS are symmetric.
d. The distribution of EPS for retail stocks is skewed to the left.
e. The distribution of EPS for energy stocks is skewed to the left.
19. A histogram for a sample of 200 home prices in a rural community shows that the distribution is
nearly bell-shaped except for 4 high outliers that are at least $80,000 greater than the next
lowest price. If it is decided to drop the 4 outliers from the data, which of the following
measures would be impacted the most?
a. Median
b. IQR
c. Mean
d. First quartile
e. Third quartile

20. The median annual income of 20 women is $22,000 and the median annual income of 10 men is
$19,000. What is the median annual income of the combined group of 30 people?
a. $19,000
b. $20,000
c. $21,000
d. $22,000
e. Cannot be determined

21. A company has developed a new computer microprocessor whose average lifetime is unknown.
In order to estimate this average, 300 microprocessors are randomly selected from a large
production line and tested; their average lifetime is found to be 7 years. The estimated average
lifetime of 7 years here is a:
a. Parameter
b. Statistics
c. Sample
d. Population
e. None of above

22. Suppose an automobile company has two assembly factories, A and B. The defective rate of cars
produced by factory A is 1.2%, while factory B has 2.4% defective rate. Factory B produces twice
as many cars as factory A. What is the overall defective rate of the company?
a. 1.8%
b. 1.4%
c. 3.6%
d. 2.0%
e. 1.2%
23-24 An appliance manufacturer maintains a repair center for its customers. Based on past experience,
70% of all appliances sent in for repair have a mechanical problem (M), and 30% have an electrical
problem (E). If the problem is mechanical, 90% of the appliances can be repaired and returned to the
customer (RR); in the remaining 10% of the cases the appliance must be replaced (REP) with a new unit.
If the problem is electrical, 60% can be repaired and returned to the customer, with the remaining 40%
being replaced with a new unit.

23. What percentage of all appliances sent to the repair center are repaired and returned to the
customer (RR)?
a. 50%
b. 81%
c. 90%
d. 18%
e. 63%

24. If an appliance at the repair center is selected at random and it can be repaired and returned to
the customer, what is the probability that the appliance has a mechanical problem?
a. 8.64%
b. 42.86%
c. 33.33%
d. 28.57%
e. 77.78%

25. A study found that as ice cream sales (X) increase, the rate of drowning deaths (Y) increases
sharply. Based on this finding, which statement is correct?
a. Eating ice cream causes drowning.
b. Drowning causes ice cream consumption.
c. Higher ice cream consumption is typically accompanied with lower rate of drowning
deaths.
d. Eating ice cream is not associated with drowning death.
e. None of above is correct.

26. If two variables, X and Y, have a correlation of 0.05, which of the following statement is correct?
a. X and Y are almost independent.
b. X and Y are almost dependent.
c. The correlation between X and Y are very strong.
d. X and Y are weakly dependent.
e. None of above is correct.
27. If a scatter plot of Y against X shows a strong positive linear pattern. What will happen to the
correlation if we interchange the axes of the scatter plot, i.e. plot X against Y?
a. Both sign and magnitude of the correlation will change.
b. The sign changes while the magnitude remains the same.
c. The magnitude changes while the sign remains the same.
d. Both sign and magnitude of the correlation will not change.
e. Cannot not be determined.

28. A certain type of tomato seed germinates 90% of the time. A backyard farmer planted 25 seeds.
What is the probability that 24 or fewer germinate?
a. 0.8282
b. 0.8782
c. 0.9282
d. 0.9782
e. 0

29.

𝑋 0 1 2 3

𝑝(𝑋) 0.4 0.3 0.2 0.1

What is the mean and variance of 𝑌, where 𝑌 = 2𝑋 + 1?

a. mean = 1; variance = 1
b. mean = 1; variance = 4
c. mean = 3; variance = 1
d. mean = 3; variance = 4

30. Event 𝐴 and 𝐵 are independent. Then,

a. 𝐴 and 𝐵 are mutually exclusive
b. 𝐴" and 𝐵 are mutually exclusive
c. 𝐴" and 𝐵" are independent
d. 𝑃(𝐴 ∩ 𝐵) = 0
e. None of the above

31. Consider flipping two fair coins. What is the probability that you can get at least 1 heads, given
that there is a least 1 tails?
a. 1/2
b. 2/3
c. 0
d. 1
e. 1/4
32. The collected data of the marital status of the employee of the company is
a. The ordinal scale
b. The nominal scale
c. The numerical scale
d. None of the above

33. At a primary school, 64 children are raising money for the charity. The average amount raised is
$5. What is the largest possible number of children who could have raised $25 or more?
a. 11
b. 12
c. 13
d. 14
e. 15

34. The Golden State Warriors is in the NBA final, against the Cleveland Cavaliers. You have assigned
a probability of 60% that it will win the championship. Past records indicate that when teams
win the championship, they win all the first three games 30% of the time. When teams lose the
series, they win the first three games 1% of the time The first three game is over; given that the
Warriors has won all the first three game, what is the probability that it will win the series?
a. 0.6
b. 0.8622
c. 0.9783
d. 0.7783
e. 0

35. The Rapid Test is used to determine whether someone has HIV (the virus that causes AIDS). The
false-positive and the false negative rates are 0.027 and 0.080 respectively. A physician has just
received the Rapid Test report that his patient tested positive. Before receiving the result, the
physician assigned his patient to the low-risk group (defined on the basis of several variables)
with only a 0.5% probability of having HIV. What is the probability that the patient actually has
HIV?
a. 0.1462
b. 0.2462
c. 0.3462
d. 0.2121
e. 0.3121

36. Which of the following is not an approach to assigning probabilities?

a. Classical approach
b. Relative frequency approach
c. Modern approach
d. All of the above
37. In the United States, voters who are neither Democrat nor Republican are called Independents.
It is believed that 10% of all voters are Independents. A survey asked 25 people to identify
themselves as Democrat, Republican, or Independent. What is the probability that more than
one people are Independent?
a. 0.5288
b. 0.6288
c. 0.7288
d. 0.8288
e. 0.9288

38. The number of pizzas delivered to university students each month is a random variable with the
following probability distribution.

𝑋 0 1 2 3

𝑃(𝑋) 0.1 0.3 0.4 0.2

Find the probability that a student has received delivery of two or more pizzas this month.

a. 0.4
b. 0.2
c. 0.6
d. 0.3
e. 0.1

39. Compute the interquartile range from the data: 5 − 𝑎, 8 − 𝑎, 14 − 𝑎, 6 − 𝑎, 21 − 𝑎, 11 − 𝑎, 9 −

𝑎, 10 − 𝑎, 18 − 𝑎, 2 − 𝑎, where 𝑎 is a constant.
a. 6
b. 7
c. 8
d. 10.5
e. Cannot be determined

40. In monitoring the manufacturing of M&M candies, the mean and standard deviation of the
weight are obtained, both in grams. Now if the measuring unit is changed to ounces (1 gram =
0.035 ounces), which of the following summary statistic will remain unchanged?
a. Mean
b. SD
c. Coefficient of variation
d. IQR
41. Consider rolling two fair dice. What is the probability that the sum of two dice is greater than or
equal to 7?
a. 1/2
b. 21/36
c. 1/3
d. 22/36
e. 1/4

42. A quality control manager at a plant has been monitoring the amount of money X spent each
week on quality control efforts, and the percentage of defective products P that are returned
from each week’s production. The correlation coefficient between the two variables is found to
be -0.95. Which of the following statements is appropriate for the manager to conclude?
a. An increase in the amount of money spent on quality control efforts will cause a
decrease in the percentage of defective products returned.
b. An increase in the amount of money spent on quality control efforts is always
accompanied with a decrease in the percentage of defective products returned from
that week’s production.
c. There is strong positive correlation between the amount of money spent on quality
control efforts and the percentage of defective products returned from each week’s
production.
d. None of the above.
43. Compare the two histogram below. Which statement is true?

a. The spread of histogram A is smaller than the spread of histogram B.

b. The spread of histogram A is larger than the spread of histogram B.
c. The spread of histogram A is the same as the spread of histogram B.
d. You cannot compare the spreads of these two histogram without the original data.
e. None of the above
44. Data for calories and salt content (milligrams of sodium) in 17 brands of meat hot dog are shown
in the scatter diagram below. According to this diagram, what can you say about the relationship
between calories and sodium?

a. There is a strong positive linear relationship between calories and sodium.

b. There is a strong negative linear relationship between calories and sodium.
c. There is a weak positive linear relationship between calories and sodium.
d. There is a weak negative linear relationship between calories and sodium.
e. There is no association between calories and sodium.

45. The relationship between two numerical variables is graphically displayed by a

a. Scatter plot
b. Histogram
c. Bar chart
d. Pie chart
e. Boxplot

46. Which of the following is NOT a reason for the need for sampling?
a. It is usually too costly to study the whole population.
b. It is usually too time consuming to look at the whole population.
c. It is sometimes destructive to observe the entire population.
d. It is always more informative to investigate a sample than the entire population.
 47. A retail wanted to estimate the monthly fixed and variable selling expenses. As a first step, she
collected data form the past 8 months. The total selling expenses ($1,000) and the total sales
($1,000) were recorded and listed below.

Total 20 40 60 50 50 55 60 70
Sales

Selling 14 16 18 17 18 18 18 20
Expenses

Compute the covariance of total sales and selling expenses.

a. 25.2807
b. 25.3807
c. 25.4807
d. 26.1607
e. 26.2807

48. The classification of student class designation (freshman, sophomore, junior, senior) is an
example of
a. A categorical random variable.
b. A discrete random variable.
c. A continuous random variable.
d. A parameter.

51-52 A sample of 200 students at a Big Ten university was taken after the midterm to ask them
whether they went bar hopping the weekend before the midterm or spent the weekend studying, and
whether they did well or poorly on the midterm. The following table contains the result:

Did Well on Midterm Did Poorly on Midterm

Studying for Exam 80 20

Went Bar Hopping 30 70

49. Of those who went bar hopping the weekend before the midterm in the sample, ______ percent
of them did well on the midterm.
a. 15
b. 27.27
c. 30
d. 55

50. If the sample is a good representation of the population, we can expect ______ percent of the
students in the population to spend the weekend studying and do poorly on the midterm.
a. 10
b. 20
c. 45
d. 50

51. In a right-skewed distribution,

a. the median equals the mean.
b. the median is less than the mean.
c. the median is larger than the mean.
d. none of the above

52. Which of the following statements about the median is not true?
a. It is more affected by extreme values than the mean.
b. It is a measure of central tendency.
c. It is equal to Q2.
d. Not all statements above are true.

53. In general, which of the following descriptive summary measures cannot be easily approximated
from a boxplot?
a. the variance
b. the range
c. the interquartile range
d. the median

54. In perfectly symmetrical distributions, which of the following is NOT a correct statement?
a. The distance from Q1 to Q2 equals to the distance from Q2 to Q3.
b. The distance from the smallest observation to Q1 is the same as the distance from Q3 to
the largest observation.
c. The distance from the smallest observation to Q2 is the same as the distance from Q2 to
the largest observation.
d. The distance from Q1 to Q3 is half of the distance from the smallest to the largest
observation.
 55. If two events are mutually exclusive and collectively exhaustive, what is the probability that
both occur?
a. 0
b. 0.50
c. 1.00
d. Cannot be determined from the information given.

56. If two equally likely events A and B are mutually exclusive, what is the probability that event A
occurs?
a. 0
b. 0.50
c. 1.00
d. Cannot be determined from the information given.

57. If the outcome of event A is not affected by event B, then events A and B are said to be
a. mutually exclusive.
b. independent.
c. collectively exhaustive.
d. none of the above

58-59 According to a survey of American households, the probability that the residents own 2 cars if
annual household income is over $25,000 is 80%. Of the households surveyed, 60% had incomes over
$25,000 and 70% had 2 cars.

58. The probability that the residents of a household own 2 cars and have an income less than or
equal to $25,000 a year is:
a. 0.12.
b. 0.18.
c. 0.22.
d. 0.48.

59. The probability that the residents do not own 2 cars if annual household income is not over
$25,000 is:
a. 0.12.
b. 0.18.
c. 0.45.
d. 0.70.

60. The portfolio expected return of two investments

a. will be higher when the covariance is zero.
b. will be higher when the covariance is negative.
c. will be higher when the covariance is positive.
d. does not depend on the covariance.
61. A company has 2 machines that produce widgets. An older machine produces 23% defective
widgets, while the new machine produces only 8% defective widgets. In addition, the new
machine produces 3 times as many widgets as the older machine does. What is the probability
that a randomly chosen widget produced by the company is defective?
a. 0.0780
b. 0.1175
c. 0.1560
d. 0.3100

62. You toss a fair coin four times. What is the probability of getting at least one tail?
a. 0.9375
b. 0.0625
c. 0.8750
d. 0.1250

63. The random variable 𝑋 has the following distribution.

𝑋 -2 5 7 8

𝑝(𝑥) 0.59 0.15 0.25 0.01

What is the mean and variance for the probability distribution below?

a. Mean = 1.4, Variance = 17.04

b. Mean = 3.76, Variance = 17.04
c. Mean = 1.4, Variance = 4.86
d. Mean = 3.76, Variance = 4.86
64. In order to analyze the strength of a certain product, a sample of size 1000 were selected and
tested. The histogram of the strengths is nearly bell-shaped, with the following summary.

Summary Strength (pounds)

Mean 1180

Median 1175

IQR 108

SD 80

The empirical rule predicts that approximately 68% of the strengths will be in the interval

a. [1100, 1260]
b. [1020, 1340]
c. [1067, 1284]
d. [1095, 1255]

65. A time series recording the daily closing prices of HSBC stock is shuffled. Which of the following
summaries will change?
a. Histogram
b. Time series plot
c. Median
d. Mean

66. The following table summarizes the status of 1,000 loans made by a bank. Each loan either
ended in default or was repaid. Loans were divided into large loans (more than $100,000) or
small loans.

Repaid Default

Large 40 10

Small 930 20

Suppose it was found that among the large loans five of them originally categorized as ‘default’
were repaid later. Thus it is necessary to correct the table. Compare the association between
the loan size and payment outcome before and after the correction.

a. The association is stronger before the correction.

b. The association is stronger after the correction.
c. About the same.
d. Cannot be determined.
67. Which scatterplot shows a strong negative association?

a.

b.

c.

d.