Statistics General Questions

Extracted Content from Question Files:

True/False – Please type True or False in the box to the right of the statement.

1
Based on a classical approach, the probability of an event is defined as
the number of favorable outcomes divided by the total number of
possible outcomes.
2
One characteristic of the F distribution is that F cannot be negative.
3
If the null hypothesis states that there is no difference between the
mean net income of retail stores in Chicago and New York City, then the
test is two-tailed.
4
Hypothesis testing is a procedure that uses sample evidence and
probability theory to decide whether to reject or fail to reject a
hypothesis.
5
The probability of rolling a 3 or 2 on a single die is an example of
mutually exclusive events.
6
If the computed value of F is 0.99 and the critical value is 3.89, we
would not reject the null hypothesis.
7
If we are testing for the difference between two population means, it is
assumed that the sample observations from one population are
independent of the sample observations from the other population.
8
As sample sizes decrease, we are more confident in sample estimates of
population parameters.
9
A probability of 0.0 is assigned to an event that is certain not to occur.
10
To apply the special rule of addition, the events must be independent.
11
As sample sizes decrease, rejecting the null hypotheses is less likely.
12
An alternate hypothesis is a statement about a population parameter
that is accepted when the null hypothesis is rejected.
13
Type II error is the probability or risk of rejecting a null hypothesis when
it is actually true.
14
If the null hypothesis is true and the researchers do not reject it, then a
correct decision has been made.
15
The fifth and final step in testing a hypothesis is taking a sample and,
based on the decision rule, deciding if the null hypothesis should be
rejected.
16
You can forecast benefit costs with 100% accuracy using time series
regression analysis.
17
A standard distribution has more than one peak.
18
You can only forecast benefit costs within a certain amount of confidence
interval using time series regression analysis.
19
Aren’t you glad this class is over.
20
A standard distribution looks like a bell.

Multiple Choice – Type in the letter in the left side box that corresponds to the correct
answer.

1 Which of the following is NOT one of the five steps in the hypothesis
testing procedure?

A. Formulate a decision rule
B. State the null and alternate hypotheses
C. Select a level for β
D. Identify the test statistic

2 What is a Type II error?

A. Accepting a false null hypothesis
B. Rejecting a false null hypothesis
C. Accepting a false alternate hypothesis
D. Rejecting a false alternate hypothesis

3 What is the level of significance?

A. Probability of a Type II error
B. Probability of a Type I error
C. z-value of 1.96
D. Beta error
4 Administering the same test to a group of 15 students and a second
group of 15 students to see which group scores higher is an example of

A. a one sample test of means.
B. a two sample test of means.
paired t-test.
C. a
D. a test of proportions.

5 Given the following regression model, which factor do you think is most
important in predicting benefit costs?

Benefit costs = 0.9(employee population) +
0.8(claims experience) + 0.4(gender)

A. employee population
B. claims experience
C. gender
D. cannot be determined

6 Your assistant has determined that the regression model that best
describes the relationship between performance (x) and salary (y) is:
y = 7.107 + 0.813x

How may this regression model be useful to you?

A. It shows that performance and salary move in opposite
directions.
B. It can be used to determine the appropriate salary, given
performance.
C. It can be used to determine performance given salary.
D. There is no relationship

What is the logarithm in the equation 109 = 1,000,000,000?
7

A. 10
B. 9
C. 1,000,000,000
D. 1

8 In executive compensation, it is important to consider distributions
because:

A. Most wage earners receive salaries on the lower end of the
scale.
B. Low salaries throw the mean salary level off.
C. No company wants to pay above the market level.
D. None of the above.
9 The information in the data that is not explained by the regression model
is called:

A. Hats
B. Estimates
C. Residuals
D. Curves

10 Collinearity occurs when:

A. independent variables are highly correlated with each other
B. all coefficients are large
C. independent variables are highly correlated with the
dependent variable
D. None of the Above

11 Given the information below, what is the cost-of-living index of Oregon?

City Income ($)*
National 35,973
Michigan 35,862
Florida 36,985
Oregon 33,044

*The numbers are used for illustration purposes only.

A. 82
B. 92
C. 109
D. 33,044

Which statement is correct about the F distribution?
12

A. Cannot be negative
B. Cannot be positive
Is the same as the t distribution
C.
Is the same as the z distribution
D.

13 The result of a particular experiment is called a(n)

A. observation.
B. conditional probability.
C. event.
D. outcome.

14 What do we call the statement that determines if the null hypothesis is
rejected?

A. Decision rule
B. Test statistic
C. Alternate hypothesis
D. Critical value
15 What is another name for the alternate hypothesis?

A. Null hypothesis
B. Hypothesis of no difference
C. Rejected hypothesis
D. Research hypothesis

16 Which approach to probability assumes that the events are equally
likely?

A. Classical
B. Empirical
C. Subjective
D. Mutually exclusive

17 Using the median test only, is there a difference in compensation
between the following 2 groups?

Protected Non-protected
1 $20,746 $20,972
2 $21,356 $21,864
3 $22,018 $22,808
4 $22,900 $22,900
5 $24,986 $25,087
6 $25,983 $26,076
7 $26,385 $27,476

A. There is a substantial difference in the medians of the 2
groups.
B. There is a small difference in the medians of the 2 groups.
C. There is no difference in the median value between the 2
groups.
D. Not enough information to make a determination.

18 To set executive pay using regression analysis, what is the first step you
must take?

A. Identify the factors used in establishing compensation levels.
B. Find the regression equation.
C. Do a benchmark study.
D. Set you salary ranges.

19 The best way to determine employee benefit preferences is to use:

A. Benchmarking
B. Surveys
C. Chi-square test
D. Regression analysis
20 To conduct a test of hypothesis with a small sample, we need to be able
to make an assumption that:

A. a larger computed value of t will be needed to reject the null
hypothesis.
B. the region of acceptance will be wider than for large samples.
C. the confidence interval will be wider than for large samples.
D. the population is normally distributed.