1. bizneznuz.com, an online business news agency, conducts a poll.

Visitors to the site are

invited to click on one of two buttons in order to register that they "agree" or "disagree"
with the following statement: "Funding for space exploration should be left entirely to the
private sector."
If bizneznuz.com wants to accurately measure its online readership's support for
government-funded space exploration, this poll will deliver a biased and unrepresentative
response because
answer choices:
The pool of respondents is self-selected
All responsdents have internet acces
Bizneznuz.com targets mainly the business community
All the above
2.The average height of American women is distributed normally, with a mean of
63.5 inches and a standard deviation of 2.5 inches.
Approximately what percentage of American women are taller than 58.5 inches, but
shorter than 68.5 inches?
50%
68%
84%
95%
Z (x >58.5) = (58.5 63.5)/2.5 = -2
P (z >-2) = 1- 0.0228= 0.9772
Z (x >68.5) = (68.5 63.5)/2.5 = 2
P (z >2) =0.0228
So, P (-2 <z <2) = 0.9772 -0.0228 = 0.95
= 95%
3. The histogram below displays the distribution of income among households in
the United States in 2001. Suppose a researcher takes a random sample of
60 households and calculates average household income in the sample.
Suppose 99 other researchers conduct identical studies, each independently
collecting a random sample of 60 households and computing the average
household income in that sample.

Which of the following best describes the distribution of the 100 different
average household incomes calculated by the researchers?
Symmetric with one peak.
Symmetric with two peaks.
Skewed left.

Skewed right.

4. In a survey of 48 citizens, 36 registered strong disapproval with their

government's economic leadership. In the previous month, the proportion of
participants registering strong disapproval was 65%.
At the 95% confidence level and using a two-sided test, which of the following
statements do these data support?

There is not sufficient evidence to indicate that the proportion of participants

registering strong disapproval has changed
The proportion of participants registering strong disapproval has increased.
The proportion of participants registering strong disapproval has stayed the
same.
None of the above

P= 36/48 = 0.75
S = sqrt (0.65*0.35/48) = 0.68
Z = (0.75 0.65)/0.068 = 1.45
For 95% confidence interval z = 1.96
As, the value of z is less than that of 95% interval
So,
The answer is as marked above

5. The regression analysis below relates US annual energy consumption in trillions

of BTUs to the independent variable "US Gross Domestic Product (GDP) in trillions of
dollars."
Which of the following is the lowest level at which the independent variable is
significant?
0.94
0.10
0.05
0.01

6. When comparing two regression analyses that have a different number of

independent variables, which of the following should be used to compare the
explanatory power of the two regressions?
Adjusted R-squared.
R-squared.
The correlation coefficient ("Multiple R").
None of the above.
7. Amalgamated Fruits, Vegetables, and Legumes, an agricultural company,
breeds the experimental fruit "kiwana." The company is studying the effects
of a new fertilizer on the number of kiwanas per bunch grown on kiwana
trees. The regression analysis below relates the number of kiwanas per bunch
to the independent dummy variable "fertilizer."

Based on the regression, which of the following statements may be

concluded?
On average, the use of the new fertilizer increases the number of kiwanas per
bunch by 5.25.
The independent dummy variable "fertilizer" is significant at the 0.01 level.

Variation in the independent dummy variable "fertilizer" explains around 53%

of the variation in the number of kiwanas per bunch.
None of the above.

8. In a regression analysis with multiple independent variables, multicollinearity

can be caused by:
A strong linear relationship between two or more independent variables.
A strong nonlinear relationship between the dependent variable and one or more

independent variables.
A strong heteroskedastic relationship between the dependent variable and
one or more independent variables.
None of the above

9. The table below displays data on defect rates at a compact disk (CD) pressing facility.
The table includes data on the distribution of CDs that have content errors (missing
and/or wrong content), and on the distribution of CDs that have labeling errors.
What is the probability that a randomly selected CD has a content error?

1.00%
0.98%
0.02%
None of the above

Total = 100%
Cotent Error = 0.98 +0.02 =1%

10.-------------------The table below displays data on defect rates at a compact disk

(CD) pressing facility. The table includes data on the distribution of CDs that
have content errors (missing and/or wrong content), and on the distribution of
CDs that have labeling errors.

What is the conditional probability that a CD has no content errors, given that
has a labeling error?
97.02%
1.98%
98.00%
None of the above

Probability ( no content error I labelling error) = 1.98/ (1.98+0.02) =99%

11.The table below displays data on defect rates at a compact disk (CD) pressing
facility. The table includes data on the distribution of CDs that have content
errors (missing and/or wrong content), and on the distribution of CDs that
have labeling errors.
Which of the following statements is true?
The fact that a CD has a content error tells us nothing about whether it
has a labeling error.
The events of a CD having a content error and a CD having a labeling
error are statistically dependent.

The fact that a CD has a labeling error tells us something about whether it has a
content error.

None of the above

12.The WH meat-packing company must decide whether or not to recall one

week's production of kielbasa due to possible contamination. An outbreak of
non-fatal food poisoning may be linked to WH. If so, WH may face a lawsuit.
The tree below summarizes the decision.
What is the expected monetary value of the cost of not issuing a recall?

$80,000
$120,000
$800,000
$0

Expected monetary value of not issuing a recall = (4,000,000 *0.2)*0.1 = 80,000

13. The WH meat-packing company must decide whether or not to recall one week's production
of kielbasa due to possible contamination. An outbreak of non-fatal food poisoning may be
linked to WH. If so, WH may face a lawsuit. The tree below summarizes the decision.
The EMV of the cost of not issuing a recall is $80,000. Based on EMV, WH should not issue a
recall. If WH chooses to recall, which of the following best describes the WH's attitude towards
this decision? (use table below)

Risk averse
Risk neutral
Risk seeking
Chicken

14. The WH meat-packing company must decide whether or not to recall one week's production
of kielbasa due to possible contamination. An outbreak of non-fatal food poisoning may be
linked to WH. If so, WH may face a lawsuit. The tree below summarizes the decision.
The EMV of the cost of not issuing a recall is $80,000. Based on EMV, WH should not issue a
recall. An estimated value of a reputation loss is included in the outcome estimate of the lawsuit.

If WH is implicated, the firm may face a reputation loss even if no lawsuit is filed. For what
values of that reputation loss would issuing the recall be preferable, in terms of EMV? (use table
below)

Higher than $500,000

Lower than $500,000
Lower than $44,444
None of the above

EMV should be greater than 120,000 for not recalling = (4,000,000 *0.2+x*0.8)*0.1
(4,000,000 *0.2+x*0.8)*0.1 > 120,000
x> 500,000
15. The WH meat-packing company must decide whether or not to recall one week's
production of kielbasa due to possible contamination. An outbreak of non-fatal food
poisoning may be linked to WH. If so, WH may face a lawsuit. The tree below
summarizes the decision.
The EMV of the cost of not issuing a recall is $80,000. Based on EMV, the manager
should not issue the recall. For what values of p = Prob[WH is implicated] is not
recalling the kielbasa preferable to recalling the kielbasa, in terms of EMV? (use
table below)
P<15%
p>15%
p<85%
none of the above
EMV should be less than 120,000 for recalling = (4,000,000 *0.2)*x
(4,000,000 *0.2)*x < 120,000
X< 15%

16. The WH meat-packing company must decide whether or not to recall one week's
production of kielbasa due to possible contamination. An outbreak of non-fatal food
poisoning may be linked to WH. If so, WH may face a lawsuit. The tree below
summarizes the decision.
The EMV of the cost of not issuing a recall is $80,000. Suppose there were a way to
know for certain whether WH would be implicated or not. What would be the value
of this perfect information? (use table below)
$68,000
$12,000
$80,000
None of the above

EM at perfect information = 0

So,value of perfect information = 80000 -0 = 80,000