STAT 125 HK Business Statistics Midterm Exam

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STAT 125 HK Business Statistics Midterm Exam

Question 1
The probability that house sales will increase in the next 6 months is estimated to be 0.25. The
probability that the interest rates on housing loans will go up in the same period is estimated to
be 0.74. The probability that house sales or interest rates will go up during the next 6 months is
estimated to be 0.89. The probability that house sales will increase but interest rates will not
during the next 6 months is:
1. 0.065
2. 0.15
3. 0.51
4. 0.89

Question 2
The process of using sample statistics to draw conclusions about true population parameters is
called
1. statistical inference.
2. the scientific method.
3. sampling.
4. descriptive statistics.

Question 3
Which of the following is NOT a reason for obtaining data?
1. Data are needed to formulate a statistical model.
2. Data are needed to evaluate conformance to standards.
3. Data are needed to measure performance of an ongoing production process.
4. Data are needed to provide input to a study.

Question 4
A catalog company that receives the majority of its orders by telephone conducted a study to
determine how long customers were willing to wait on hold before ordering a product. The
length of time was found to be a random variable best approximated by an exponential
distribution with a mean equal to 3 minutes. What proportion of customers having to hold more
than 1.5 minutes will hang up before placing an order?
1. 0.86466
2. 0.60653
3. 0.39347
4. 0.13534

Question 5
Selection of raffle tickets from a large bowl is an example of
1. sampling with replacement.
2. sampling without replacement.

3. subjective probability.
4. None of the above.

Question 6
The width of each bar in a histogram corresponds to the
1. differences between the boundaries of the class.
2. number of observations in each class.
3. midpoint of each class.
4. percentage of observations in each class.

Question 7
If two events are mutually exclusive and collectively exhaustive, what is the probability that one
or the other occurs?
1. 0.
2. 0.50.
3. 1.00.
4. Cannot be determined from the information given.

Question 8
Which of the following is not an element of descriptive statistical problems?
1. An inference made about the population based on the sample.

2. The population or sample of interest.

3. Tables, graphs, or numerical summary tools.
4. Identification of patterns in the data.

Question 9
Which of the following statistics is not a measure of central tendency?
1. Mean.
2. Median.
3. Mode.
4. Q3.

Question 10
Major league baseball salaries averaged $1.5 million with a standard deviation of $0.8 million in
1994. Suppose a sample of 100 major league players was taken. Find the approximate probability
that the average salary of the 100 players exceeded $1 million.
1. Approximately 0
2. 0.2357
3. 0.7357
4. Approximately 1

Question 11

If two equally likely events A and B are mutually exclusive and collectively exhaustive, what is
the probability that event A occurs?
1. 0.
2. 0.50.
3. 1.00.
4. Cannot be determined from the information given.

Question 12
TABLE 2-6

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

Referring to Table 2-6, of those who did well on the midterm in the sample, _______ percent of
them went bar hopping the weekend before the midterm.

1. 15
2. 27.27
3. 30
4. 50

Question 13
TABLE 2-5

The following are the durations in minutes of a sample of long-distance phone calls made within
the continental United States reported by one long-distance carrier.
Time (in Minutes)

Relative Frequency

0 but less than 5

0.37

5 but less than 10

0.22

10 but less than 15

0.15

15 but less than 20

0.10

20 but less than 25

0.07

25 but less than 30

0.07

30 or more

0.02

Referring to Table 2-5, what is the width of each class?

1. 1 minute
2. 5 minutes
3. 2%
4. 100%

Question 14
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. The probability that annual household income is over $25,000
if the residents of a household do not own 2 cars is:
1. 0.12
2. 0.18
3. 0.40
4. 0.55

Question 15
A study is under way in Yosemite National Forest to determine the adult height of American pine
trees. Specifically, the study is attempting to determine what factors aid a tree in reaching heights
greater than 60 feet tall. It is estimated that the forest contains 25,000 adult American pines. The
study involves collecting heights from 250 randomly selected adult American pine trees and
analyzing the results. Identify the population from which the study was sampled.
1. The 250 randomly selected adult American pine trees.
2. The 25,000 adult American pine trees in the forest.
3. All the adult American pine trees taller than 60 feet.
4. All American pine trees, of any age, in the forest.

Question 16
When extreme values are present in a set of data, which of the following descriptive summary
measures are most appropriate?
1. CV and range.

2. mean and standard deviation.

3. interquartile range and median.
4. variance and interquartile range.

Question 17
A population frame for a survey contains a listing of 72,345 names. Using a table of random
numbers, how many digits will the code numbers for each member of your population contain?
1. 3
2. 4
3. 5
4. 6

Question 18
A recent survey of banks revealed the following distribution for the interest rate being charged on
a home loan (based on a 30-year mortgage with a 10% down payment).

Interest Rate:
Probability

7.0%
0.12

7.5%
0.23

8.0%
0.24

8.5%
0.35

>8.5%
0.06

If a bank is selected at random from this distribution, what is the chance that the interest rate
charged on a home loan will exceed 8.0%?

1. 0.06

2. 0.41
3. 0.59
4. 1.00

Question 19
Referring to the histogram from Table 2-3, how many graduating seniors attended the luncheon?
1. 4
2. 152
3. 275
4. 388

Question 20
TABLE 2-4

A survey was conducted to determine how people rated the quality of programming available on
television. Respondents were asked to rate the overall quality from 0 (no quality at all) to 100
(extremely good quality). The stem-and-leaf display of the data is shown below.
Stem

Leaves

24

03478999

0112345

12566

01

8
9

Referring to Table 2-4, what percentage of the respondents rated overall television quality with a
rating between 50 and 75?

1. 0.11
2. 0.40
3. 0.44
4. 0.56

Question 21
The Central Limit Theorem is important in statistics because
1. for a large n, it says the population is approximately normal.
2. for any population, it says the sampling distribution of the sample mean is approximately
normal, regardless of the sample size.
3. for a large n, it says the sampling distribution of the sample mean is approximately
normal, regardless of the shape of the population.
4. for any sized sample, it says the sampling distribution of the sample mean is
approximately normal.

Question 22

If you were constructing a 99% confidence interval of the population mean based on a sample of
n = 25 where the standard deviation of the sample s = 0.05, the critical value of t will be
2. 2.7969
3. 2.7874
4. 2.4922
5. 2.4851

Question 23
A statistics student found a reference in the campus library that contained the median family
incomes for all 50 states. She would report her data as being collected using
1. a designed experiment.
2. observational data.
3. a random sample.
4. a published source.

Question 24
TABLE 2-5

The following are the durations in minutes of a sample of long-distance phone calls made within
the continental United States reported by one long-distance carrier.
Time (in Minutes)

Relative Frequency

0 but less than 5

0.37

5 but less than 10

0.22

10 but less than 15

0.15

15 but less than 20

0.10

20 but less than 25

0.07

25 but less than 30

0.07

30 or more

0.02

Referring to Table 2-5, if 10 calls lasted 30 minutes or more, how many calls lasted less than 5
minutes?

1. 10
2. 185
3. 295
4. 500

Question 25
The employees of a company were surveyed on questions regarding their educational
background and marital status. Of the 600 employees, 400 had college degrees, 100 were single,
and 60 were single college graduates. The probability that an employee of the company is single
or has a college degree is:
1. 0.10
2. 0.25
3. 0.667
4. 0.733

Question 26
The probability that house sales will increase in the next 6 months is estimated to be 0.25. The
probability that the interest rates on housing loans will go up in the same period is estimated to
be 0.74. The probability that house sales or interest rates will go up during the next 6 months is
estimated to be 0.89. The probability that neither house sales nor interest rates will increase
during the next 6 months is:
1. 0.11
2. 0.195
3. 0.89
4. 0.90

Question 27
A confidence interval was used to estimate the proportion of statistics students that are females.
A random sample of 72 statistics students generated the following 90% confidence interval:
(0.438, 0.642). Based on the interval above, is the population proportion of females equal to
0.60?
1. No, and we are 90% sure of it.
2. No. The proportion is 54.17%.
3. Maybe. 0.60 is a believable value of the population proportion based on the information
above.
4. Yes, and we are 90% sure of it.

Question 28
Since a _______ is not a randomly selected probability sample, there is no way to know how
well it represents the overall population.

1. simple random sample

2. quota sample
3. stratified sample
4. cluster sample

Question 29
TABLE 2-6

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

Referring to Table 2-6, _______ percent of the students in the sample went bar hopping the
weekend before the midterm and did well on the midterm.

1. 15
2. 27.27
3. 30
4. 50

Question 30
The collection of all possible events is called
1. a simple probability.
2. a sample space.
3. a joint probability.
4. the null set.

Question 31
A lab orders 100 rats a week for each of the 52 weeks in the year for experiments that the lab
conducts. Suppose the mean cost of rats used in lab experiments turned out to be $13.00 per
week. Interpret this value.
13. Most of the weeks resulted in rat costs of $13.00.
14. The median cost for the distribution of rat costs is $13.00.
15. The expected or average cost for all weekly rat purchases is $13.00.
16. The rat cost that occurs more often than any other is $13.00.

Question 32
Which of the following is not true about the Students t distribution?
1. It has more area in the tails and less in the center than does the normal distribution.
2. It is used to construct confidence intervals for the population mean when the population
standard deviation is known.
3. It is bell shaped and symmetrical.

4. As the number of degrees of freedom increases, the t distribution approaches the normal
distribution.

Question 33
If two events are mutually exclusive, what is the probability that one or the other occurs?
1. 0.
2. 0.50.
3. 1.00.
4. Cannot be determined from the information given.

Question 34
Tim was planning for a meeting with his boss to discuss a raise in his annual salary. In
preparation, he wanted to use the Consumer Price Index to determine the percentage increase in
his salary in terms of real income over the last three years. Which of the 4 methods of data
collection was involved when he used the Consumer Price Index?
1. Published sources
2. Experimentation
3. Surveying
4. Observation

Question 35

A professor of economics at a small Texas university wanted to determine what year in school
students were taking his tough economics course. Shown below is a pie chart of the results. What
percentage of the class took the course prior to reaching their senior year?
1. 14%
2. 44%
3. 54%
4. 86%

Question 36
TABLE 2-5

The following are the durations in minutes of a sample of long-distance phone calls made within
the continental United States reported by one long-distance carrier.
Time (in Minutes)

Relative Frequency

0 but less than 5

0.37

5 but less than 10

0.22

10 but less than 15

0.15

15 but less than 20

0.10

20 but less than 25

0.07

25 but less than 30

0.07

30 or more

0.02

Referring to Table 2-5, if 100 calls were randomly sampled, how many calls lasted 15 minutes or
longer?

1. 10
2. 14
3. 26
4. 74

Question 37
The chancellor of a major university was concerned about alcohol abuse on her campus and
wanted to find out the portion of students at her university who visited campus bars every
weekend. Her advisor took a random sample of 250 students. The portion of students in the
sample who visited campus bars every weekend is an example of __________.
1. a categorical random variable.
2. a discrete random variable.
3. a parameter.
4. a statistic.

Question 38
Which of the following statements about the median is not true?
1. It is more affected by extreme values than the mean.
2. It is a measure of central tendency.
3. It is equal to Q2.
4. It is equal to the mode in bell-shaped normal distributions.

Question 39
Most analysts focus on the cost of tuition as the way to measure the cost of a college education.
But incidentals, such as textbook costs, are rarely considered. A researcher at Drummand
University wishes to estimate the textbook costs of first-year students at Drummand. To do so,
she monitored the textbook cost of 250 first-year students and found that their average textbook
cost was $300 per semester. Identify the sample in the study.
1. All Drummand University students.
2. All college students.
3. All first-year Drummand University students.
4. The 250 students that were monitored.

Question 40
The head librarian at the Library of Congress has asked her assistant for an interval estimate of
the mean number of books checked out each day. The assistant provides the following interval
estimate: from 740 to 920 books per day. If the head librarian knows that the population standard
deviation is 150 books checked out per day, and she asked her assistant to use 25 days of data to
construct the interval estimate, what confidence level can she attach to the interval estimate?
99. 99.7%
100.

99.0%

101.

98.0%

102.

95.4%

Question 41
Which of the following is true regarding the sampling distribution of the mean for a large sample
size?

1. It has the same shape, mean, and standard deviation as the population.
2. It has a normal distribution with the same mean and standard deviation as the population.
3. It has the same shape and mean as the population, but has a smaller standard deviation.
4. It has a normal distribution with the same mean as the population but with a smaller
standard deviation.

Question 42
A lab orders 100 rats a week for each of the 52 weeks in the year for experiments that the lab
conducts. Prices for 100 rats follow the following distribution:

Price:

$10.00 $12.50 $15.00

Probability:

0.35

0.40

0.25

How much should the lab budget for next years rat orders be, assuming this distribution does not
change?

1. $520
2. $637
3. $650
4. $780

Question 43
The portfolio expected return of two investments

1. will be higher when the covariance is zero.

2. will be higher when the covariance is negative.
3. will be higher when the covariance is positive.
4. does not depend on the covariance.

Question 44
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. The probability that the residents of a household do not own 2
cars and have an income over $25,000 a year is:
1. 0.12
2. 0.18
3. 0.22
4. 0.48

Question 45
Which of the following is most likely a parameter as opposed to a statistic?
1. The average score of the first five students completing an assignment.
2. The proportion of females registered to vote in a county.
3. The average height of people randomly selected from a database.
4. The proportion of trucks stopped yesterday that were cited for bad brakes.

Question 46
Which of the mean, median, mode, and geometric mean are resistant measures of central
tendency?
1. The mean and median only.
2. The median and mode only.
3. The mode and geometric mean only.
4. The mean and mode only.

Question 47
The collection and summarization of the socioeconomic and physical characteristics of the
employees of a particular firm is an example of
1. inferential statistics.
2. descriptive statistics.
3. a parameter.
4. a statistic.

Question 48
A population frame for a survey contains a listing of 6,179 names. Using a table of random
numbers, which of the following code numbers will appear on your list?
1. 06
2. 0694
3. 6946
4. 61790

Question 49
In left-skewed distributions, which of the following is the correct statement?
3. The distance from Q1 to Q2 is smaller than the distance from Q2 to Q3.
4. The distance from the smallest observation to Q1 is larger than the distance from Q3 to
the largest observation.
5. The distance from the smallest observation to Q2 is smaller than the distance from Q2 to
the largest observation.
6. The distance from Q1 to Q3 is twice the distance from Q1 to Q2.

Question 50
Why is the Central Limit Theorem so important to the study of sampling distributions?
1. It allows us to disregard the size of the sample selected when the population is not
normal.
2. It allows us to disregard the shape of the sampling distribution when the size of the
population is large.
3. It allows us to disregard the size of the population we are sampling from.
4. It allows us to disregard the shape of the population when n is large.

STAT125-HK. BUSINESS STATISTICS (STAT125-HK) > TAKE ASSESSMENT: FINAL

EXAM

Question 1

In testing for differences between the means of 2 independent populations, the null hypothesis is:
2. H0: 1 2 = 2.
3. H0: 1 2 = 0.
4. H0: 1 2 > 0.
5. H0: 1 2 < 2.

Question 2
A survey claims that 9 out of 10 doctors recommend aspirin for their patients with headaches. To
test this claim against the alternative that the actual proportion of doctors who recommend
aspirin is less than 0.90, a random sample of 100 doctors results in 83 who indicate that they
recommend aspirin. The value of the test statistic in this problem is approximately equal to:
4. -4.12
5. -2.33
6. -1.86
7. -0.07

Question 3
If a group of independent variables are not significant individually but are significant as a group
at a specified level of significance, this is most likely due to
1. autocorrelation.
2. the presence of dummy variables.
3. the absence of dummy variables.
4. collinearity.

Question 4
TABLE 13-2

A candy bar manufacturer is interested in trying to estimate how sales are influenced by the price
of their product. To do this, the company randomly chooses 6 small cities and offers the candy
bar at different prices. Using candy bar sales as the dependent variable, the company will
conduct a simple linear regression on the data below:
City

Price ($)

Sales

River Falls

1.30

100

Hudson

1.60

90

Ellsworth

1.80

90

Prescott

2.00

40

Rock Elm
Stillwater

2.40
2.90

38
32

Referring to Table 13-2, what is the coefficient of correlation for these data?

1. -0.8854
2. -0.7839
3. 0.7839
4. 0.8854

Question 5
The Y-intercept (b0) represents the
1. predicted value of Y when X = 0.
2. change in estimated average Y per unit change in X.
3. predicted value of Y.
4. variation around the sample regression line.

Question 6
TABLE 14-5

A microeconomist wants to determine how corporate sales are influenced by capital and wage
spending by companies. She proceeds to randomly select 26 large corporations and record
information in millions of dollars. The Microsoft Excel output below shows results of this ltiple
regression.

SUMMARY OUTPUT
Regression Statistics
Multiple R

0.830

R Square

0.689

Adjusted R Square

0.662

Standard Error 17501.643

Observations

ANOVA

26

df

SS

MS

Signif F

Regression

Residual

23

Total

25

Coeff

StdError

15579777040

7789888520

7045072780

306307512

25.432 0.0001

22624849820

Intercept

t Stat

15800.0000

P-value
6038.2999

Capital 0.1245 0.2045 0.609

0.5485

Wages 7.0762 1.4729 4.804

0.0001

2.617

0.0154

Referring to Table 14-5, what are the predicted sales (in millions of dollars) for a company
spending $100 million on capital and $100 million on wages?

800.

15,800.00

801.

16,520.07

802.

17,277.49

803.

20,455.98

Question 7
If we are performing a two-tailed test of whether = 100, the probability of detecting a shift of
the mean to 105 will be ________ the probability of detecting a shift of the mean to 110.
1. less than
2. greater than
3. equal to

4. not comparable to

Question 8
TABLE 11-1

Psychologists have found that people are generally reluctant to transmit bad news to their peers.
This phenomenon has been termed the M effect. To investigate the cause of the M effect,
40 undergraduates at Duke University participated in an experiment. Each subject was asked to
administer an IQ test to another student and then provide the test taker with his or her percentile
score. Unknown to the subject, the test taker was a bogus student who was working with the
researchers. The experimenters manipulated two factors: subject visibility and success of test
taker, each at two levels. Subject visibility was either visible or not visible to the test taker.
Success of the test taker was either visible or not visible to the test taker. Success of the test taker
was either top 20% or bottom 20%. Ten subjects were randomly assigned to each of the 2 x 2 = 4
experimental conditions, then the time (in seconds) between the end of the test and the delivery
of the percentile score from the subject to the test taker was measured. (This variable is called the
latency to feedback.) The data were subjected to appropriate analyses with the following results.
Source df

SS

MS

Subject visibility

Test taker success

Interaction

1380.24
1325.16

3385.80

Error

36

11,664.00

Total

39

17,755.20

PR > F
1380.24

4.26

1325.16
3385.80

4.09
10.45

0.043
0.050

0.002

324.00

Referring to Table 11-1, in the context of this study, interpret the statement: Subject visibility
and test taker success interact.

1. The difference between the mean feedback time for visible and nonvisible subjects
depends on the success of the test taker.

2. The difference between the mean feedback time for test takers scoring in the top 20% and
bottom 20% depends on the visibility of the subject.
3. The relationship between feedback time and subject visibility depends on the success of
the test taker.
4. All of the above are correct interpretations.

Question 9
TABLE 13-1

A large national bank charges local companies for using their services. A bank official reported
the results of a regression analysis designed to predict the banks charges (Y) measured in
dollars per month for services rendered to local companies. One independent variable used to
predict service charge to a company is the companys sales revenue (X) measured in millions
of dollars. Data for 21 companies who use the banks services were used to fit the model:

E(Y) = 0 + 1X

The results of the simple linear regression are provided below.

Y = -2,700+20X, syx = 65, two-tailed p value = 0.034 (for testing 1)

Referring to Table 13-1, interpret the p value for testing whether 1 exceeds 0.

1. There is sufficient evidence (at the = 0.05) to conclude that sales revenue (X) is a useful
linear predictor of service charge (Y).

2. There is insufficient evidence (at the = 0.10) to conclude that sales revenue (X) is a
useful linear predictor of service charge (Y).
3. Sales revenue (X) is a poor predictor of service charge (Y).
4. For every $1 million increase in sales revenue, we expect a service charge to increase
$0.034.

Question 10
TABLE 14-1

A manager of a product sales group believes the number of sales made by an employee (Y)
depends on how many years that employee has been with the company (X1) and how he/she
scored on a business aptitude test (X2). A random sample of 8 employees provides the following:
Employee

X1

100

10

90

10

80

70

60

50

40

30

X2

Referring to Table 14-1, for these data, what is the estimated coefficient for the variable
representing years an employee has been with the company, b1?

1. 0.998
2. 3.103
3. 4.698
4. 21.293

Question 11
The Journal of Business Venturing reported on the activities of entrepreneurs during the
organization creation process. As part of a designed study, a total of 71 entrepreneurs were
interviewed and divided into 3 groups: those that were successful in founding a new firm (n1 =
34), those still actively trying to establish a firm (n2 = 21), and those who tried to start a new
firm but eventually gave up (n3 = 16). The total number of activities undertaken (e.g., developed
a business plan, sought funding, looked for facilities) by each group over a specified time period
during organization creation was measured. The objective is to compare the mean number of
activities of the 3 groups of entrepreneurs. Because of concerns over necessary assumption of the
parametric analysis, it was decided to use a nonparametric analysis. Identify the nonparametric
method that would be used to analyze the data.
1. Wilcoxon Rank Sums Test
2. Wilcoxon Signed Rank Test
3. Kruskal-Wallis Rank Test for Differences in Medians
4. One-way ANOVA F test

Question 12
TABLE 15-4

In Hawaii, condemnation proceedings are under way to enable private citizens to own the
property that their homes are built on. Until recently, only estates were permitted to own land,
and homeowners leased the land from the estate. In order to comply with the new law, a large

Hawaiian estate wants to use regression analysis to estimate the fair market value of the land.
Each of the following 3 models were fit to data collected for n = 20 properties, 10 of which are
located near a cove.

Model 1: Y = 0 + 1X1 + 2X2 + 3X1X2 + 4X12 + 5X12X2 +

where
Y = Sale price of property in thousands of dollars
X1 = Size of property in thousands of square feet
X2 = 1 if property located near cove, 0 if not

Using the data collected for the 20 properties, the following partial output obtained from
Microsoft Excel is shown:
Regression Statistics
Multiple R

0.985

R Square

0.970

Standard Error 9.5

Observations

20

ANOVA
Regression

df
5

Residual

14

Total

19

Coeff

StdError

SS

MS

28324

5664

1279

91

29063

t Stat

P-value

F
62.2

Signif F
0.0001

Intercept

-32.1

35.7

-0.90

Size

12.2

5.9

2.05

Cove

-104.3

53.5

-1.95

0.0715

Size*Cove

17.0

8.5

1.99

SizeSq -0.3

0.2

-1.28

0.2204

SizeSq*Cove

-0.3

0.3

0.3834

0.0594

-1.13

0.0661

0.2749

Referring to Table 15-4, given a quadratic relationship between sale price (Y) and property size
(X1), what test should be used to test whether the curves differ from cove and non-cove
properties?

1. F test for the entire regression model.

2. t test on each of the coefficients in the entire regression model.
3. Partial F test on the subset of the appropriate coefficients.
4. t test on each of the subsets of the appropriate coefficients.

Question 13
TABLE 10-2

A researcher randomly sampled 30 graduates of an MBA program and recorded data concerning
their starting salaries. Of primary interest to the researcher was the effect of gender on starting
salaries. Analysis of the mean salaries of the females and males in the sample is given below.
Size
Females

Mean

Std Dev
18

48,266.7

13,577.63

Males

12

55,000 11,741.29

Std Error = 4,764.82

Means Diff = -6,733.3
Z = -1.4528 2-tailed p value = 0.1463
T = -1.4221 2-tailed p value = 0.1574

Referring to Table 10-2, the researcher was attempting to show statistically that the female MBA
graduates have a significantly lower mean starting salary than the male MBA graduates.
According to the test run, which of the following is an appropriate alternative hypothesis?

1. H1: females > males

2. H1: females < males
3. H1: females males
4. H1: females = males

Question 14
TABLE 10-3
The use of preservatives by food processors has become a controversial issue. Suppose 2
preservatives are extensively tested and determined safe for use in meats. A processor wants to
compare the preservatives for their effects on retarding spoilage. Suppose 15 cuts of fresh meat
are treated with preservative A and 15 are treated with preservative B, and the number of hours
until spoilage begins is recorded for each of the 30 cuts of meat. The results are summarized in
the table below.
Referring to Table 10-3, what assumptions are necessary for a comparison of the population
variances to be valid?
1. Both sampled populations are normally distributed.

2. Both samples are random and independent.

3. Neither (a) nor (b) is necessary.
4. Both (a) and (b) are necessary.

Question 15
In testing for the differences between the means of 2 independent populations where the
variances in each population are unknown but assumed equal, the degrees of freedom are
1. n 1.
2. n1 + n2 1.
3. n1 + n2 2.
4. n 2.

Question 16
TABLE 12-1

A study published in the American Journal of Public Health was conducted to determine whether
the use of seat belts in motor vehicles depends on ethnic status in San Diego County. A sample of
792 children treated for injuries sustained from motor vehicle accidents was obtained, and each
child was classified according to (1) ethnic status (Hispanic or non-Hispanic) and (2) seat belt
usage (worn or not worn) during the accident. The number of children in each category is given
in the table below.
Hispanic

Non-Hispanic

Seat belts worn

Seat belts not worn

31
283

148
330

Referring to Table 12-1, which test would be used to properly analyze the data in this
experiment?

1. test for independence in a two-way contingency table.

2. test for equal proportions in a one-way table.
3. ANOVA F test for interaction in a 2 x 2 factorial design.
4. test for a 2 x 2 factorial design.

Question 17
If the p value is less than in a two-tailed test,
1. the null hypothesis should not be rejected.
2. the null hypothesis should be rejected.
3. a one-tailed test should be used.
4. no conclusion should be reached.

Question 18
TABLE 14-1

A manager of a product sales group believes the number of sales made by an employee (Y)
depends on how many years that employee has been with the company (X1) and how he/she
scored on a business aptitude test (X2). A random sample of 8 employees provides the following:
Employee

X1

X2

100

10

90

10

80

70

60

50

40

30

Referring to Table 14-1, for these data, what is the estimated coefficient for the variable
representing scores on the aptitude test, b2?

1. 0.998
2. 3.103
3. 4.698
4. 21.293

Question 19
TABLE 10-9

A buyer for a manufacturing plant suspects that his primary supplier of raw materials is
overcharging. In order to determine if his suspicion is correct, he contacts a second supplier and
asks for the prices on various materials. He wants to compare these prices with those of his
primary supplier. The data collected is presented in the table below, with some summary
statistics presented (all of these might not be necessary to answer the questions which follow).

The buyer believes that the differences are normally distributed and will use this sample to
perform an appropriate test at a level of significance of 0.01.
Material

Primary

Supplier

Secondary

Supplier

Difference

$55

$45

$10

$48

$47

$1

$31

$32

-$1

$83

$77

$6

$37

$37

$0

$55

$54

$1

$309

$292

$17

Sum:

Sum of Squares:

$17,573

$15,472

Referring to Table 10-9, the test to perform is a

1. pooled-variance t test for differences in 2 means.

2. separate-variance t test for differences in 2 means.
3. Wilcoxon Rank Sum Test for differences in 2 medians.
4. t-test for mean difference.

Question 20
TABLE 10-4

$139

A real estate company is interested in testing whether, on average, families in Gotham have been
living in their current homes for less time than families in Metropolis have. A random sample of
100 families from Gotham and a random sample of 150 families in Metropolis yield the
following data on length of residence in current homes.
Referring to Table 10-4, what is the standardized value of the estimate of the mean of the
sampling distribution of the difference between sample means?
8. -8.75
9. -3.75
10. -2.33
11. -1.96

Question 21
In a multiple regression model, the adjusted r2
1. cannot be negative.
2. can sometimes be negative.
3. can sometimes be greater than +1.
4. has to fall between 0 and +1.

Question 22
The owner of a local nightclub has recently surveyed a random sample of n = 250 customers of
the club. She would now like to determine whether or not the mean age of her customers is over
30. If so, she plans to alter the entertainment to appeal to an older crowd. If not, no entertainment
changes will be made. If she wants to be 99% confident in her decision, what rejection region
should she use?
2. Reject H0 if t Z < -2.33.

3. Reject H0 if t Z < -2.55.

4. Reject H0 if t Z > 2.33.
5. Reject H0 if t Z > 2.58.

Question 23
A campus researcher wanted to investigate the factors that affect visitor travel time in a complex,
multilevel building on campus. Specifically, he wanted to determine whether different building
signs (building maps versus wall signage) affect the total amount of time visitors require to reach
their destination and whether that time depends on whether the starting location is inside or
outside the building. Three subjects were assigned to each of the combinations of signs and
starting locations, and travel time in seconds from beginning to destination was recorded. How
should the data be analyzed?

Starting Room
Interior

Exterior

Wall Signs

141

119

339

238

139

Map

85

94

129

126

130

224

226

1. Completely randomized design

2. Randomized block design
3. 2 x 2 factorial design

4. Kruskal-Wallis rank test

Question 24
TABLE 12-4
A few years ago, Pepsi invited consumers to take the Pepsi Challenge. Consumers were asked
to decide which of two sodas, Coke or Pepsi, they preferred in a blind taste test. Pepsi was
interested in determining what factors played a role in peoples taste preferences. One of the
factors studied was the gender of the consumer. Below are the results of analyses comparing the
taste preferences of men and women with the proportions depicting preference for Pepsi.
Referring to Table 12-4, suppose that the two-tailed p value was 0.0734. State the proper
conclusion.
1. At = 0.05, there is sufficient evidence to indicate the proportion of males preferring
Pepsi differs from the proportion of females preferring Pepsi.
2. At = 0.10, there is sufficient evidence to indicate the proportion of males preferring
Pepsi differs from the proportion of females preferring Pepsi.
3. At = 0.05, there is sufficient evidence to indicate the proportion of males preferring
Pepsi equals the proportion of females preferring Pepsi.
4. At = 0.08, there is insufficient evidence to indicate the proportion of males preferring
Pepsi differs from the proportion of females preferring Pepsi.

Question 25
If a test of hypothesis has a Type I error probability () of 0.01, we mean
1. if the null hypothesis is true, we dont reject it 1% of the time.
2. if the null hypothesis is true, we reject it 1% of the time.
3. if the null hypothesis is false, we dont reject it 1% of the time.
4. if the null hypothesis is false, we reject it 1% of the time.

Question 26
TABLE 10-2

A researcher randomly sampled 30 graduates of an MBA program and recorded data concerning
their starting salaries. Of primary interest to the researcher was the effect of gender on starting
salaries. Analysis of the mean salaries of the females and males in the sample is given below.
Size

Mean

Females
Males

Std Dev
18

12

48,266.7

13,577.63

55,000 11,741.29

Std Error = 4,764.82

Means Diff = -6,733.3
Z = -1.4528 2-tailed p value = 0.1463
T = -1.4221 2-tailed p value = 0.1574

Referring to Table 10-2, the researcher was attempting to show statistically that the female MBA
graduates have a significantly lower mean starting salary than the male MBA graduates. From
the analysis in Table 10-2, the correct test statistic is:

634.

4,634.72

635.

-1.4221

636.

-1.4528

637.

-6,733.33

Question 27
If we wish to determine whether there is evidence that the proportion of successes is higher in
group 1 than in group 2, the appropriate test to use is
1. the Z test.
2. the chi-squared test.
3. Both of the above.
4. None of the above.

Question 28
TABLE 11-4

A campus researcher wanted to investigate the factors that affect visitor travel time in a complex,
multilevel building on campus. Specifically, he wanted to determine whether different building
signs (building maps versus wall signage) affect the total amount of time visitors require to reach
their destination and whether that time depends on whether the starting location is inside or
outside the building. Three subjects were assigned to each of the combinations of signs and
starting locations, and travel time in seconds from beginning to destination was recorded. An
Excel output of the appropriate analysis is given below:
ANOVA
Source of Variation
Signs

SS

14008.33

Starting Location
5.317645
Interaction

48

Within 35305.33

df

MS

P-value

14008.33
12288

0.11267

2.784395
48
4413.167

F crit
5.317645

0.13374
0.919506

5.317645

Total

61649.67

11

Referring to Table 11-4, the within (error) degrees of freedom is

1. 1
2. 4
3. 8
4. 11

Question 29
A local real estate appraiser analyzed the sales prices of homes in 2 neighborhoods to the
corresponding appraised values of the homes. The goal of the analysis was to compare the
distribution of sale-to-appraised ratios from homes in the 2 neighborhoods. Random and
independent samples were selected from the 2 neighborhoods from last years homes sales, 8
from each of the 2 neighborhoods. Identify the nonparametric method that would be used to
analyze the data.
1. the Wilcoxon Signed-Ranks Test, using the test statistic Z
2. the Wilcoxon Signed-Ranks Test, using the test statistic W
3. the Wilcoxon Rank Sum Test, using the test statistic T1
4. the Wilcoxon Rank Sum Test, using the test statistic Z

Question 30
TABLE 12-13

Parents complain that children read too few storybooks and watch too ch television nowadays.
A survey of 1,000 children reveals the following information on average time spent watching TV
and average time spent reading storybooks
Average time spent reading storybooks
Average time
spent watching TV

Less than

1 hour Between
1 and 2 hours

More than

2 hours
Less than 2 hours

90

More than 2 hours

655

85
32

130
8

Referring to Table 12-13, to test whether there is any relationship between average time spent
watching TV and average time spent reading storybooks, the value of the measured test statistic
is

12. -12.59
13. 1.61
14. 481.49
15. 1,368.06

Question 31
TABLE 10-2

A researcher randomly sampled 30 graduates of an MBA program and recorded data concerning
their starting salaries. Of primary interest to the researcher was the effect of gender on starting
salaries. Analysis of the mean salaries of the females and males in the sample is given below.
Size

Mean

Females
Males

Std Dev
18

12

48,266.7

13,577.63

55,000 11,741.29

Std Error = 4,764.82

Means Diff = -6,733.3
Z = -1.4528 2-tailed p value = 0.1463
T = -1.4221 2-tailed p value = 0.1574

Referring to Table 10-2, the researcher was attempting to show statistically that the female MBA
graduates have a significantly lower mean starting salary than the male MBA graduates. What
assumptions were necessary to conduct this hypothesis test?

1. Both populations of salaries (male and female) must have approximate normal
distributions.
2. The population variances are approximately equal.
3. The samples were randomly and independently selected.
4. All of the above assumptions were necessary.

Question 32
Testing for the existence of correlation is equivalent to
1. testing for the existence of the slope (1).
2. testing for the existence of the Y-intercept (0).

3. the confidence interval estimate for predicting Y.

4. None of the above.

Question 33
TABLE 14-3

An economist is interested to see how consumption for an economy (in $ billions) is influenced
by gross domestic product ($ billions) and aggregate price (consumer price index). The
Microsoft Excel output of this regression is partially reproduced below.

SUMMARY OUTPUT
Regression Statistics
Multiple R

0.991

R Square

0.982

Adjusted R Square

0.976

Standard Error 0.299

Observations

ANOVA
Regression
Residual
Total

10

df
2

MS

33.4163

7
9

SS

34.0440

0.6277 0.0897

F
16.7082

Signif F
186.325

0.0001

Coeff

StdError

Intercept

-0.0861

t Stat

P-value
0.5674 -0.152

GDP

0.7654 0.0574 13.340 0.0001

Price

-0.0006

0.0028 -0.219

0.8837

0.8330

Referring to Table 14-3, one economy in the sample had an aggregate consumption level of $4
billion, a GDP of $6 billion, and an aggregate price level of 200. What is the residual for this data
point?

4. $4.39 billion
5. $0.39 billion
6. -$0.39 billion
7. -$1.33 billion

Question 34
A ____________ is a numerical quantity computed from the data of a sample and is used in
reaching a decision on whether or not to reject the null hypothesis.
1. significance level
2. critical value
3. test statistic
4. parameter

Question 35

TABLE 13-7

An investment specialist claims that if one holds a portfolio that moves in opposite direction to
the market index like the S&P 500, then it is possible to reduce the variability of the portfolios
return. In other words, one can create a portfolio with positive returns but less exposure to risk.

A sample of 26 years of S&P 500 index and a portfolio consisting of stocks of private prisons,
which are believed to be negatively related to the S&P 500 index, is collected. A regression
analysis was performed by regressing the returns of the prison stocks portfolio (Y) on the returns
of S&P 500 index (X) to prove that the private prisons stock portfolio is negatively related to the
S&P 500 index at a 5% level of significance. The results are given in the following EXCEL
output.
Coefficients

Standard Error T Stat

Intercept

4.866004258

S&P

-0.502513506

P-value

0.35743609

0.071597152

13.61363441

-7.01862425

8.7932E-13

2.94942E-07

Referring to Table 13-7, which of the following will be a correct conclusion?

1. We cannot reject the null hypothesis and, therefore, conclude that there is sufficient
evidence to show that the prison stock portfolio and S&P 500 index are negatively
related.
2. We can reject the null hypothesis and, therefore, conclude that there is sufficient evidence
to show that the prison stock portfolio and S&P 500 index are negatively related.
3. We cannot reject the null hypothesis and, therefore, conclude that there is not sufficient
evidence to show that the prison stock portfolio and S&P 500 index are negatively
related.
4. We can reject the null hypothesis and conclude that there is not sufficient evidence to
show that the prison stock portfolio and S&P 500 index are negatively related.

Question 36
Why would you use the Tukey-Kramer procedure?
1. To test for normality.
2. To test for homogeneity of variance.
3. To test independence of errors.
4. To test for differences in pairwise means.

Question 37
TABLE 12-6

One criterion used to evaluate employees in the assembly section of a large factory is the number
of defective pieces per 1,000 parts produced. The quality control department wants to find out
whether there is a relationship between years of experience and defect rate. Since the job is
repetitious, after the initial training period any improvement due to a learning effect might be
offset by a loss of motivation. A defect rate is calculated for each worker in a yearly evaluation.
The results for 100 workers are given in the table below.
Years Since Training Period
< 1 Year

1 4 Years

Defect Rate
Average
Low

High
9

5 9 Years

9
19

23

10

Referring to Table 12-6, find the rejection region necessary for testing at the 0.05 level of
significance whether there is a relationship between defect rate and years of experience.

16. Reject H0 if > 16.919

17. Reject H0 if > 15.507
18. Reject H0 if > 11.143
19. Reject H0 if > 9.488

Question 38
TABLE 12-5

The following EXCEL output contains the results of a test to determine if the proportions of
satisfied guests at two resorts are the same or different.

Hypothesized Difference

Level of Significance

0.05

Group 1
Number of Successes
Sample Size

163
227

Group 2
Number of Successes
Sample Size

154
262

Group 1 Proportion

0.718061674

Group 2 Proportion

0.58778626

Difference in Two Proportions 0.130275414

Average Proportion

0.648261759

Test Statistic

3.00875353

Two-Tailed Test
Lower Critical Value

-1.959961082

Upper Critical Value

1.959961082

p-Value

0.002623357

Referring to Table 12-5, if you want to test the claim that Resort 1 (Group 1) has a higher
proportion of satisfied guests compared to Resort 2 (Group 2), the p-value of the test will be

1. 0.00262
2. 0.00262/2
3. 2*(0.00262)
4. 1 (0.00262/2)

Question 39
TABLE 15-5

As a business statistics project, a student examined the factors that determine parking meter rates
throughout the campus and downtown area. The campus is a group of buildings located in the
center of downtown, with an open central quadrangle.

Data were collected for the price of parking per hour and the number of blocks to the quadrangle.
In addition, two dummy variables were coded to indicate the location of the parking meter (See
below). The population regression model hypothesized is

Yi = 0 + 1x1i + 2x2i + 3x3i + i

where
Y is the price per hour
x1 is a numerical variable = the number of blocks to the quadrangle
(Note that
if x1 is less than 2, then the meter is on campus;
if x1 is less than 3, then the meter is downtown)
x2 is a dummy variable = 1 if inside downtown and off campus, 0 otherwise
x3 is a dummy variable = 1 if outside downtown and off campus, 0 otherwise

The following Excel results are obtained.

Regression Statistics
Multiple R

9.9659

R Square

0.9331

Adjusted R Square

0.9294

Standard Error 0.0327

Observations

ANOVA
Regression
Residual
Total

58

df
3
54

57

0.8675

SS

MS

0.8094 0.2698 251.1995

0.0580 0.0010

Signif F
1.0964E-31

Coeff

StdError

Intercept

t Stat

P-value

0.5118 0.0136 37.4675

2.4904

X1

-0.0045

0.0034 -1.3275

0.1898

X2

-0.2392

0.0123 -19.3942

5.3581E-26

X3

-0.0002

0.0123 -0.0214

0.9829

Referring to Table 15-5, if one is already outside of downtown and off campus but decides to
park an additional 3 blocks from the quadrangle, the estimated average parking meter rate will

1. decrease by 0.0045.
2. decrease by 0.0135.
3. decrease by 0.0139.
4. decrease by 0.4979.

Question 40
TABLE 14-4

A real estate builder wishes to determine how house size (House) is influenced by family income
(Income), family size (Size), and education of the head of household (School). House size is
measured in hundreds of square feet, income is measured in thousands of dollars, and education
is in years. The builder randomly selected 50 families and ran the ltiple regression. Microsoft
Excel output is provided below:

SUMMARY OUTPUT

Regression Statistics
Multiple R

0.865

R Square

0.748

Adjusted R Square

0.726

Standard Error 5.195

Observations

50

ANOVA

df

Regression

MS

3605.7736

Residual

1214.2264

Total

49

Coeff

StdError

Intercept

Signif F

901.4434

0.0001

26.9828

4820.0000

t Stat

-1.6335

Income
Size

SS

P-value
5.8078 -0.281

0.7798

0.4485 0.1137 3.9545 0.0003

4.2615 0.8062 5.286

School -0.6517

0.0001

0.4319 -1.509

0.1383

Referring to Table 14-4, one individual in the sample had an annual income of $10,000, a family
size of 1, and an education of 8 years. This individual owned a home with an area of 1,000
square feet (House = 10.00). What is the residual (in hundreds of square feet) for this data point?

8. 8.10
9. 5.40

10. -5.40
11. -8.10

Question 41
The sample correlation coefficient between X and Y is 0.375. It has been found out that the pvalue is 0.256 when testing H0: = 0 against the two-sided alternative H1: 0. To test H0: =
0 against the one-sided alternative H1: > 0 at a significance level of 0.193, the p-value is
1. 0.256/2
2. 0.256
3. 1 0.256
4. 1 0.256/2

Question 42
TABLE 15-5

As a business statistics project, a student examined the factors that determine parking meter rates
throughout the campus and downtown area. The campus is a group of buildings located in the
center of downtown, with an open central quadrangle.

Data were collected for the price of parking per hour and the number of blocks to the quadrangle.
In addition, two dummy variables were coded to indicate the location of the parking meter (See
below). The population regression model hypothesized is

Yi = 0 + 1x1i + 2x2i + 3x3i + i

where
Y is the price per hour
x1 is a numerical variable = the number of blocks to the quadrangle
(Note that
if x1 is less than 2, then the meter is on campus;
if x1 is less than 3, then the meter is downtown)
x2 is a dummy variable = 1 if inside downtown and off campus, 0 otherwise
x3 is a dummy variable = 1 if outside downtown and off campus, 0 otherwise

The following Excel results are obtained.

Regression Statistics
Multiple R

9.9659

R Square

0.9331

Adjusted R Square

0.9294

Standard Error 0.0327

Observations

ANOVA
Regression
Residual
Total

58

df
3
54

57

0.8675

SS

MS

0.8094 0.2698 251.1995

0.0580 0.0010

Signif F
1.0964E-31

Coeff

StdError

Intercept

t Stat

P-value

0.5118 0.0136 37.4675

2.4904

X1

-0.0045

0.0034 -1.3275

0.1898

X2

-0.2392

0.0123 -19.3942

5.3581E-26

X3

-0.0002

0.0123 -0.0214

0.9829

Referring to Table 15-5, predict the meter rate per hour if one parks outside of downtown and off
campus, 3 blocks from the quad.

1. $-0.0139
2. $0.2589
3. $0.2604
4. $0.4981

Question 43
If the Type I error () for a given test is to be decreased, then for a fixed sample size n
1. the Type II error () will also decrease.
2. the Type II error () will increase.
3. the power of the test will increase.
4. a one-tailed test must be utilized.

Question 44

TABLE 11-3

A realtor wants to compare the average sales-to-appraisal ratios of residential properties sold in
four neighborhoods (A, B, C, and D). Four properties are randomly selected from each
neighborhood and the ratios recorded for each, as shown below.

A: 1.2, 1.1, 0.9, 0.4

B: 2.5, 2.1, 1.9, 1.6
C: 1.0, 1.5, 1.1, 1.3
D: 0.8, 1.3, 1.1, 0.7

Interpret the results of the analysis summarized in the following table:

Source df

SS

Neighborhoods
Error

MS

F
2.97

PR > F
0.990

8.31

12

Total

4.40

Referring to Table 11-3, the within group mean squares is

1. 0.119
2. 0.990
3. 1.109
4. 8.31

0.0260

Question 45
TABLE 12-5

The following EXCEL output contains the results of a test to determine if the proportions of
satisfied guests at two resorts are the same or different.

Hypothesized Difference

Level of Significance

0.05

Group 1
Number of Successes
Sample Size

163
227

Group 2
Number of Successes

154

Sample Size

262

Group 1 Proportion

0.718061674

Group 2 Proportion

0.58778626

Difference in Two Proportions 0.130275414

Average Proportion

0.648261759

Test Statistic

3.00875353

Two-Tailed Test
Lower Critical Value

-1.959961082

Upper Critical Value

1.959961082

p-Value

0.002623357

Referring to Table 12-5, if you want to test the claim that Resort 1 (Group 1) has a lower
proportion of satisfied guests compared to Resort 2 (Group 2), you will use

1. a t-test for the difference in two proportions.

2. a z-test for the difference in two proportions.
3. a test for the difference in two proportions.
4. a test for independence.

Question 46
If we use the chi-squared method of analysis to test for the differences among 4 proportions, the
degrees of freedom are equal to:
1. 3
2. 4
3. 5
4. 1

Question 47
TABLE 10-5

To test the effects of a business school preparation course, 8 students took a general business test
before and after the course. The results are given below.
Student

Exam Score Before Course

Exam Score After Course

530

670

690

770

910

1,000

700

710

450

550

820

870

820

770

630

610

Referring to Table 10-5, at the 0.05 level of significance, the conclusion for this hypothesis test
would be:

1. the business school preparation course does improve exam score.

2. the business school preparation course does not improve exam score.
3. the business school preparation course has no impact on exam score.
4. It cannot be drawn from the information given.

Question 48
How many Kleenex should the Kimberly Clark Corporation package of tissues contain?
Researchers determined that 60 tissues is the average number of tissues used during a cold.
Suppose a random sample of 100 Kleenex users yielded the following data on the number of
tissues used during a cold: = 52, s = 22. Suppose the alternative we wanted to test was H1: <
60. State the correct rejection region for = 0.05.
1. Reject H0 if t > 1.6604.
2. Reject H0 if t < -1.6604.

3. Reject H0 if t > 1.9842 or Z < -1.9842.

4. Reject H0 if t < -1.9842.

Question 49
TABLE 14-5

A microeconomist wants to determine how corporate sales are influenced by capital and wage
spending by companies. She proceeds to randomly select 26 large corporations and record
information in millions of dollars. The Microsoft Excel output below shows results of this ltiple
regression.

SUMMARY OUTPUT
Regression Statistics
Multiple R

0.830

R Square

0.689

Adjusted R Square

0.662

Standard Error 17501.643

Observations

ANOVA
Regression
Residual
Total

26

df
2
23

25

SS

MS

Signif F

15579777040

7789888520

7045072780

306307512

22624849820

25.432 0.0001

Coeff

StdError

Intercept

t Stat

P-value

15800.0000

6038.2999

Capital 0.1245 0.2045 0.609

0.5485

Wages 7.0762 1.4729 4.804

0.0001

2.617

0.0154

Referring to Table 14-5, which of the following values for is the smallest for which the
regression model as a whole is significant?

1. 0.00005
2. 0.001
3. 0.01
4. 0.05

Question 50
TABLE 12-3

A computer used by a 24-hour banking service is supposed to randomly assign each transaction
to one of 5 memory locations. A check at the end of a days transactions gave the counts shown
in the table to each of the 5 memory locations, along with the number of reported errors.
Memory Location:

Number of Transactions:
Number of Reported Errors

2
82
11

3
100
12

4
74
6

5
92

102

10

The bank manager wanted to test whether the proportion of errors in transactions assigned to
each of the 5 memory locations differ.

Referring to Table 12-3, which test would be used to properly analyze the data in this
experiment?

1. test for independence in a two-way contingency table

2. test for equal proportions in a one-way table
3. ANOVA F test for main treatment effect
4. Z test for the difference in two proportions