Final Exam – Solutions

QBA 201 – Summer 2013

Instructor: Michael Malcolm

Instructions: You can use a calculator and any written materials you would like in
completing this exam.

Statement of academic honesty:

This exam entirely reflects my own work. I have not received assistance from
anyone or given assistance to anyone in completing this exam

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Name: _____________________________________

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Multiple Choice

1. The power for a statistical test is

a. The probability of rejecting the null hypothesis when it is true

b. The probability of rejecting the null hypothesis when it is false
c. The probability of observing the given data when the null hypothesis is true
d. The probability of observing the given data when the null hypothesis is false

2. The size of a statistical test is

a. The probability of rejecting the null hypothesis when it is true

b. The probability of rejecting the null hypothesis when it is false
c. The probability of observing the given data when the null hypothesis is true
d. The probability of observing the given data when the null hypothesis is false

3. The p-value for a statistical test is

a. The probability of rejecting the null hypothesis when it is true

b. The probability of rejecting the null hypothesis when it is false
c. The probability of observing the given data when the null hypothesis is true
d. The probability of observing the given data when the null hypothesis is false

4. If the median deposit in a bank is AED 1000 but the mean deposit is AED 3000, then this means that

a. The coefficient of variation is greater than 0.33

b. The coefficient of variation is greater than 3
c. Most deposits are small, but there are a few very large deposits
d. Most deposits are large, but there are a few very small deposits

5. The arrival time for an ambulance is uniformly distributed from 5 minutes to 15 minutes. If you call for an
ambulance and you have already waited for 10 minutes, what is the probability that you will wait more than
12 minutes?

a. 0.08
b. 0.3
c. 0.5
d. 0.6

6. The 𝑅2 of a regression would equal 1 if there were no

a. Explained variation
b. Unexplained variation
c. Intercept
d. Severe outlier

7. If we take an iid random sample of 𝑛 observations from some population, then the sample mean is

a. An unbiased estimator of the population mean

b. A consistent estimator of the population mean
c. The efficient estimator of the population mean
d. All of the above
8. If two events A and B are independent, then

a. They never occur together

b. 𝑃(𝐴 ∩ 𝐵) = 𝑃(𝐴)𝑃(𝐵)
c. Both (a) and (b)
d. None of the above

9. If X and Y are random variables such that the variance of X is 7.5, the variance of Y is 6 and the covariance
between X and Y is 4, then the variance of 2X + 3Y is

a. 33
b. 37
c. 84
d. 132

10. If the confidence level is reduced, then a confidence interval

a. Widens
b. Narrows
c. Stays the same as long as the sample size does not change
d. Impossible to determine

11. A regression is run using three observations of data points (𝑥, 𝑦): {(4,8), (2,5), (1,2)}. The estimated
regression line is 𝑦̂ = 3 + 2𝑥. What is the sum of squared residuals for this regression line?

a. 22
b. 15
c. 8
d. 7

12. If a dataset is approximately bell-shaped and has a mean of 167, with a standard deviation of 10, then
approximately 95% of the data will lie in the interval

a. [167,187]
b. [157, 177]
c. [157, 187]
d. [147, 187]

13. According to the Central Limit Theorem, the normal distribution provides a good approximation for the
distribution of the sample mean

a. For any population no matter what the sample size is

b. For any population only when the sample size is large
c. For normally distributed populations only, no matter the sample size
d. For normally distributed populations only, and only for large sample sizes

14. For a random variable that follows a Poisson distribution

a. The mean and the standard deviation are equal

b. The mean and the variance are equal
c. The mean and the median are equal
d. The median and the standard deviation are equal
15. For a standard normal random variable 𝑍, what is 𝑃(−1.30 < 𝑍 < 1.50)?

a. 0.0968
b. 0.4032
c. 0.8364
d. 0.9032

16. If we are testing at significance level 𝛼 = 0.05, which of the following p-values will lead to a rejection of
the null hypothesis?

a. 0.02
b. 0.06
c. 0.10
d. Both (b) and (c) are correct

17. A random sample of 25 observations is selected from a normally distributed population. The sample
variance is 10. In a 95% confidence interval for the population variance, the upper limit is

a. 6.09
b. 17.12
c. 17.33
d. 19.35

18. The probability that a doctor will make mistake A is 0.05. The probability that a doctor will make mistake
B is 0.03. The two mistakes are independent of each other. What is the probability that the doctor makes at
least one mistake?

a. 0.0015
b. 0.0785
c. 0.08
d. 0.15

19. How can you tell from looking at Excel output whether a regression coefficient is significantly different
from zero?

a. Look at the 𝑅2
b. Look at the adjusted-𝑅2
c. Look at the p-value
d. None of the above

20. Suppose we measure a dataset in kilograms, and we find that the standard deviation is 5 and the coefficient
of variation is 40. But your supervisor wants the statistics in grams. Which is correct?

a. The standard deviation is 5000 and the coefficient of variation is 40,000

b. The standard deviation is 5000 but the coefficient of variation is still 40
c. The coefficient of variation is 40,000 but the standard deviation is still 5
d. The standard deviation is still 5 and the coefficient of variation is still 40
21. If IQ scores are normally distributed with a mean of 100 and a standard deviation of 15, where is the cutoff
for the lowest 10% of the IQ distribution?

a. 80.8
b. 85
c. 98.5
d. 98.72

22. If IQ scores are normally distributed with a mean of 100 and a standard deviation of 15, what is the
probability in a randomly chosen group of 100 students that the average IQ will be greater than 110?

a. Almost zero
b. 0.2514
c. 0.7486
d. Almost one

23. Which of the following is a continuous random variable?

a. The size of the soda ordered by customers at Burger King

b. The color of a student’s hair
c. The amount of milk produced by a cow in 24 hours
d. The number of employees at an automobile factory

24. A sample size of 68 is needed to form a confidence interval with a margin of error equal to 10. The
standard deviation is 50. This implies that the confidence level for the confidence interval is

a. 99%
b. 97.5%
c. 95%
d. 90%

25. If the probability of making a Type I error is decreased then, for a fixed sample size 𝑛, the probability of
making a Type II error

a. Increases
b. Decreases
c. Stays the same
d. Impossible to say
Problem 1

a. If 𝑋 counts the number of classes with satisfactory evaluations for an excellent professor,
then 𝑋 has a binomial distribution with 𝑛 = 6 and 𝑝 = 0.9.

6
𝑃(𝑋 = 5) = ( ) (0.9)5 (1 − 0.9)6−5 = 0.3543
5

b. If 𝑋 counts the number of classes with satisfactory evaluations for a good professor, then
𝑋 has a binomial distribution with 𝑛 = 6 and 𝑝 = 0.75.

6
𝑃(𝑋 = 5) = ( ) (0.75)5 (1 − 0.75)6−5 = 0.3560
5

c. If 𝑋 counts the number of classes with satisfactory evaluations for a bad professor, then 𝑋
has a binomial distribution with 𝑛 = 6 and 𝑝 = 0.4.

6
𝑃(𝑋 = 5) = ( ) (0.4)5 (1 − 0.4)6−5 = 0.0369
5

d. Let 𝐹 be the event described in the problem, that the professor gets five satisfactory
evaluations out of 6 classes. Using Bayes’ Rule:

𝑃(𝐹|𝐸)𝑃(𝐸) 0.3543⋅0.5
𝑃(𝐸|𝐹) = 𝑃(𝐹|𝐸)𝑃(𝐸)+𝑃(𝐹|𝐺)𝑃(𝐺)+𝑃(𝐹|𝐵)𝑃(𝐵) = 0.3543⋅0.5+0.3560⋅0.25+0.0369⋅0.25 = 0.6433
Problem 2

a. 𝑦̂𝑖 = 7.2017 + 0.0061 ⋅ 𝐼𝑁𝐶𝑂𝑀𝐸 + 0.1946 ⋅ 𝑀𝐴𝐿𝐸 − 0.0288 ⋅ 𝐶𝐼𝐺𝑆

b. All of them, since all p-values are 𝑝 < 0.05

c. Other factors held constant, the expected birthweight of a male baby is 0.1946 pounds
greater than the expected birthweight of a female baby.

d. As given in the regression output, a 95% confidence interval for the effect on birthweight
of one additional cigarette per day is:

[−0.0400, −0.0176]

The confidence interval for the effect on birthweight of 20 additional cigarettes per day
multiplies each endpoint by 20:

[−0.8000, −0.3520]

e. No, correlation does not prove causation. Maybe mothers who smoke during pregnancy
also have other bad health habits or have different demographic characteristics, and this is
the reason for low birthweights, rather than smoking per se.
Problem 3
Letting 𝑋 indicate the weight of your goose’s egg, we can use the results from uniform
distributions to derive:
8+13
𝐸(𝑋) = = 10.5
2

(13−8)2
𝑉𝑎𝑟(𝑋) = = 2.0833
12

𝑠𝑑(𝑋) = √2.0833 = 1.4434

After 40 days, your sister has 400 grams of gold, so the probability that your total beats hers is:

∑𝑥 400
𝑃(∑ 𝑥𝑖 > 400) = 𝑃 ( 40𝑖 > ) = 𝑃(𝑥̅ > 10)
40

But we can use the central limit theorem to approximate this:

10−10.5
𝑃(𝑥̅ > 10) = 𝑃 (𝑧 > 1.4434⁄ ) = 𝑃(𝑧 > −2.19) = 0.9857
√40
Problem 4

a. Hypothesis test for the value of a mean

1. 𝐻0 : 𝜇 = 50 versus 𝐻𝑎 : 𝜇 ≠ 50

2. RR: 𝑧 > 1.96 or 𝑧 < −1.96

48.6−50
3. 𝑧 = = −1.05
8⁄√36

4. Do not reject the null hypothesis – not enough evidence to conclude 𝜇 ≠ 50.

b. For a 2-sided test: 𝑝 = 2𝑃(𝑧 < −1.05) = 2 ⋅ 0.1469 = 0.2938