This document appears to be a practice exam for a statistics course. It contains questions about hypothesis testing, correlation, regression, ANOVA, and other statistical analyses. The questions assess understanding of key statistical concepts and procedures for choosing and conducting appropriate tests based on given datasets and research questions.

1. RES 342 Final Exam
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1. A statistician was setting up a hypothesis test with a level of significance
dictated by upper management. However, she was concerned that the test she
wished to perform might have unacceptable large possibilities of Type II error, ß.
Which of the following would solve this problem
2. The area of rejection, on a bell shaped curve, defines the location of all those
values that are
3. A hypothesis test that involves a small sample requires that we make the
following assumption that
4. What are the critical z-values for a two-tailed hypothesis test if the significant ?
5. K & S Construction, located in Phoenix, Arizona, is working on its business
plan for the upcoming year. They did a study to determine if they should focus on
building condominiums or individual houses. A building study, which had been
conducted by the state, indicated that 60 percent of those families looking to buy
a home in Arizona desired to buy a condominium. K & S Construction wanted to
know if this figure applied to Phoenix. They collected a sample of 500 individuals
that had expressed plans to buy a new home. The z-distribution was selected for
this proportion test. The null hypothesis is and the alternate is p ≠ 0.60. The
significant level selected was .05. From the sample of 500, it was determined that
290 wanted to buy a condominium. What decision should be made regarding the
null hypothesis?
6. Doi Winery has two wine shops in the neighboring towns of Seamen and
Batavia. The favorite wine, as advertised, is Raspberry wine. A survey of 300
customers at the Seamen store revealed that 225 individuals preferred the
Raspberry wine while 290 out of 400 in Batavia preferred the same flavor. To test
the hypothesis that there was no difference in preferences in the two towns, what
is the alternate hypothesis?

2. 7. The Ohio Electric Company is investigating electric consumption by single
family homes based on the number of rooms. The investigators wanted to
determine the relationship between number of rooms and electric consumption in
kilowatt-hours (thousands). A sample of 12 homes was selected and the data is
as follows:
Number of Rooms Kilowatt-Hours Number of Rooms Kilowatt-Hours
10 10 8 9
9 8 10 11
7 6 10 9
12 13 8 9
87 67
11 12 5 6
What percent of the variation is explained by the variable, number of rooms?
8. What randomness exists in the linear regression model?
9. Smith’s Appliances is evaluating its advertising budget. The owner is trying to
decide if the budget needs to be altered or not. The question: Is there a positive
return on the investment that is being made in advertising? What is the
relationship between sales and the amount spent on advertising? The owner
collected data for the past year by month. The data is in millions of dollars.
Month Advertising Expense Sales Revenue
January 2 4
February 3 5
March 3 6
April 5 8
May 6 8
June 4 7

3. July 5 7
August 6 8
September 7 9
October 8 10
November 10 13
December 9 11
Is there a relationship between the two variables? What is the coefficient of
correlation for this data?
10. If the coefficient of correlation is 0.69, the coefficient of determination is
11. In the least squares equation, Y' = 12 + 25X the value of 25 indicates
12. When an insurance company is going to write a new home owner policy, one
concern is the distance between the house and the nearest fire department
station. This is one factor that goes in to determining the cost of the insurance for
the home owner. ETB Insurance Company wants to determine if there is a
relationship between the distance to a fire station and the amount of fire damage
to a house. A random sample of 50 claims was selected for analysis. The
correlation coefficient was 0.78. Which is the correct interpretation and
recommendation?
13. Conducting a multiple regression analysis, the residual analysis is used to test
the requirement that
14. In a multiple regression ANOVA table, explained variation is represented by
15. If the net regression coefficients in the population are significantly different
from zero, what can be included?

4. 16. The time series component that reflects variability over short, repetitive time
periods that last less than one year is called
17. A time series is
18. Given the trend equation Y' = 24 + 0.6t (base ), what would be the forecast
value for 2010?
19. A research company has been hired by a reality company to do an analysis
of heating cost of homes in the region. The reality company wanted to be able to
predict the heating cost of a typical single family home. The realtor company was
constantly being asked questions regarding heating costs by potential home
buyers. It was believed that these variables would impact heating costs (Y'):
mean daily outdoor temperature (X1), the number of inches of insulation (X2), the
age in years of the furnace (X3). The multiple regression analysis produced the
following regression equation: Y' = 427.2 – 4.58X1 – 14.83X2 + 6.10X3. Which
statement is correct based on this analysis?
20. With the increased cost in fuel, there has been a shift in the buying habits of
new car purchasers. A local car dealer was interested in determining if there was
a significant difference in fuel efficiencies between three sizes of car: compact,
midsize and large. The manager did a random sample of 27 cars. An ANOVA
was used as the analysis tool using a significant level of .01. The results of the
ANOVA were as follows:
Source of Variation SS df MS F p-value
Between Groups 130.44 2 65.22 7.97 0.00017
Within Groups 196.24 24 8.18
Total 326.68 36
The manger’s decision would be
21. Midwest State University Office of Registrar is reviewing the university’s
enrollment for the past 10 years. It is know that there are seasonal variable that
affects the university’s enrollment. To be better able to address business

5. decisions that are affected by enrollment, an analysis of data was necessary. The
school operates on a quarter system of enrollment starting typically with fall
quarter and ending with summer quarter. The analysis of the data produced these
four quarterly indexes.
Fall Winter Spring Summer
1.2617 1.1896 1.040 0.4447
Which statement is correct based on this analysis?
22. A machine is set to fill the small size packages of Good and Better candies
are packaged with 60 pieces of candies in each bag. Sampling results revealed: 3
bags of 61, 2 bags of 59, 1 bag of 58, and 2 bags of 62. How many degrees of
freedom are there?
23. Thomas Delivery has a fleet of 24 trucks that are utilized for the companies;
business. Electro-Lite, a manufacturer of spark plugs, claims that its spark plugs
have an average life in excess of 25,000 miles. The purchasing agent at Thomas
Delivery purchased 24 sets and found that the sample average life was 26,300
miles, the sample standard deviation was 1,500 miles, and the computed test
statistic was Based on these findings, at the 0.05 level, is there enough evidence
to accept the manufacturer's claim?
24. You are conducting a two-tailed test of means but your software package
only calculates a one-tailed p-value equal to 0.13. The actual p-value for your test
is
25. Golf balls that are properly manufactured will have a rebound height of 42
inches when dropped by a testing machine from a height of 5 feet. The quality
control inspector is concerned that a new manufacturing machine is not properly
calibrated and that the resulting golf balls are falling short of the desired height. At
random, 100 golf balls were selected for a test. The test results indicated that the
rebound height was 41.6 inches with a standard deviation of 0.5. At the .05
significant level, what is the result of the test?
26. Flash Jolt, a manufacturer of camera equipment, annually introduces new
models in the fall of the year. At the conclusion of the Christmas season, retail
dealers are contacted regarding their stock on hand of each piece of equipment.
It has been discovered that unless 47% of the new equipment ordered by the

6. retailers in the fall had been sold by Christmas, immediate production cutbacks
are needed. At the end of the 2009 Christmas shopping season a survey of 100
dealers indicated that 45% of Flash Jolt equipment had been sold. It was decided
to continue production levels at the current levels. The statistical test was
conducted at the 0.05 level. Computed z = –0.40.
27. In a test for the equality of two variances (two-tailed), when the populations
are normal, a 5% level of significance was used. Sample sizes were and The
upper critical value for the test is
28. The owner of a bottling company is considering buying a new bottling
machine. He has been testing two different machines that are being considered.
After collecting 300 samples from each machine over several weeks, he was able
to conduct a two sample z test.<p>He decided to utilize a 0.05 significant level for
the test. The test was to address the claim that the mean weight of the bottles
filled by the Orno machine was greater than the mean weight of the bottles filled
by the Edne machine. The test statistics was 2.21. What is the decision regarding
the hypothesis?
29. Accounting procedures allow a business to evaluate their inventory at LIFO
(Last In First Out) or FIFO (First In First Out). A manufacturer evaluated its
finished goods inventory (in $ thousands) for five products both ways. Based on
the following results, is LIFO more effective in keeping the value of his inventory
lower?
Product FIFO (F) LIFO (L)
1 225 221
2 119 100
3 100 113
4 212 200
5 248 245
The 5% level of significance was selected for the t value. This example is what
type of test?
30. Indy H2O is a water bottling company. They are looking at two different
bottling manufacturers’ equipment for the purpose of replacing some old
equipment. The net weights of a sample of bottles filled by a machine

7. manufactured by WTR, and the net weights of a sample filled by a similar
machine manufactured by Target are (in grams):
WTR: 8, 9, 7, 8, 9, and 10
Target: 8, 10, 7, 11, 9, 12, 8, and 9
Testing the claim at the 0.05 level that the mean weight of the bottles filled by the
Target machine is greater than the mean weight of the bottles filled by the WTR
machine, what is the critical value?
31. A consumer researcher is testing the difference between two proportions at
the 0.05 level of significance. The researcher was utilizing the z distribution for
the test. If the computed test statistic z value was 1.12, what was the decision?
A. Do not reject the null hypothesis.
32. Two different accounting procedures that are utilized by businesses as a way
to evaluate their inventory are LIFO (Last In First Out) and FIFO (First In First
Out). ABC manufacturer evaluated its finished goods inventory (in $ thousands)
for five products using both procedures. Based on the following results, is LIFO
more effective in keeping the value of his inventory lower?
Product FIFO (F) LIFO (L)
1 225 221
2 119 100
3 100 113
4 212 200
5 248 245
The 5% level of significance was selected for the t value. The calculated test
statistic was 1.93. What is the decision?
33. If the paired differences are normal in a test of mean differences, the
distribution used for testing is the
34. Watson’s TV claims that their televisions have the best performance record
on the market. They advertise that after 3 years only 10% of their sold televisions
have had any type of repairs. The president of the company wanted to confirm
that this statement was correct. To do this, a sample of 60 sets was taken of sets
that had been sold and were at least 3 years old. Twelve percent of these

8. television sets had been in for repair. The null hypothesis is that there is no
difference between the stated percent and the sample data. At the .05 significant
level, what can we conclude about the null hypothesis?
35. The accountant for Thomas’s Furniture Store is concerned regarding the
outstanding receivable owed the company. There has been a cash flow problem
and it is believed that the slow collection of accounts receivable is partially the
blame. The accountant believes that 40% of the present accounts are more than
4 months behind in making payments. To be able to make a decision regarding
this belief, a random sample of 100 accounts was taken. It was found that 37
accounts were more than 4 months late. Did the sample data confirm the
accountant’s belief? Use the .05 significant level for the statistical test.
36. New college business graduates are finding it difficult to get a job. A business
journal has reported that only one in five graduates is able to find a job within 6
months of their graduation. A report by the University of Phoenix indicated that
out of a survey of 300 recent business graduates, 75 had jobs. You are a
business major at the University of Phoenix and have a concern about getting a
job. Based on this data, will a graduate of the University of Phoenix have a better
chance of getting a job in the first 6 months after graduation? Use the .05
significant level for the test.
37. Analysis of variance is used to
38. The F distribution is utilized with the ANOVA test. There are some basic
assumptions associated with the distribution. Which of these assumptions is NOT
valid?
39. Blake’s Mortgage Company utilizes four different appraisers for the purpose
of determining the value of a house. There is a concern by the company’s owner
that the appraisers are not providing the same estimates. She wants to determine
if there is a difference between the four appraisers. Six houses were selected and
each appraiser provided an appraisal for each of the six houses. What would be
the best statistical test to use for the analysis of this data?
40. If an ANOVA test is conducted and the null hypothesis is rejected, what does
this indicate?
41. Ace Car Rental has three main models that are used in it midsize range of
cars. The cars are very similar and perform at about the same level. Since the
customer has to pay for the gas use during the rental period, the manager is often
asked about which car gets the best gas mileage. To be able to address this
question, an analysis was done of the three makes of cars. Each car can use any
one of four different grades of gasoline. The data collected was for each car for
each type of fuel. Performance was measured in miles per gallon. Perform an
ANOVA test and state the results.

9. Gasoline Model A Model B Model C
Regular 21.4 22.3 20.8
Super Regular 20.6 17.1 19.5
Unleaded 21.3 19.2 20.2
Premium 20.5 20.3 18.5
42. In ANOVA analysis, when the null hypothesis is rejected, we can find which
means are different by
43. The chi-square has
44. What nonparametric test is used when the assumptions for the parametric
analysis of variance (ANOVA) cannot be met? Its purpose is to test whether three
or more populations are equal. The data must be at least ordinal scaled.
45. Which of the following values of Spearman's (rho) indicates the strongest
relationship between two variables?
46. The nonparametric counterpart of the randomized block model of the ANOVA
is the
47. The city of Denver has several golf courses around the city. The Recreational
Park manager is trying to set the schedule for the employees at these courses.
His concern is that he wants to have enough staff to handle the daily demands
but to not be overstaffed. He has concerns about the next year’s budget and is
trying to curb expenses where possible. To be able to make a decision regarding
staffing, he collected data regarding the number of rounds of golf played during
the week. The weekend was excluded because the weekends are always very
busy. He wanted to see if there was a significant difference between the days of
the week in terms of rounds being played. If there was a difference, then he could
use this information to help make staffing decisions. The result of the data
collection is as follows:
Day of Week Rounds
Monday 150
Tuesday 90
Wednesday 120
Thursday 100
Friday 140

10. What is the result of the statistical test? Can the manager’s staff schedule vary for
different days of the week? Use the chi square distribution at the .05 significant
level.
48. Seamen’s Manufacturing has five hundred employees at its plant. These
employees are divided into three main groups: administration, clerical, and labor.
The company is looking at making some changes to it retirement plan that is
available for employees. There are three plans beginning considered. The 500
employees were surveyed regarding their preferences for the various retirement
plans. The president is concerned if there is a relationship between the person
position in the company and which retirement plan was preferred. Utilize the chi
square distribution at the .05 significant level, and determine if there is a
relationship between position in company and the retirement plan selected.
Position Plan A Plan B Plan C
Labor 170 50 30
Clerical 30 110 30
Administration 20 20 40
49. Clermont Savings and Loan has four branches located throughout the
county. The activity level at these four branches appears to be different but the
manger needs verification. Turnover rate, how quickly money is withdrawn from
an account after being deposited, was selected as the variable to be measured. A
total sample of 22 accounts was collected from the four Branches. The Kruskal-
Wallis test, at the .01 significant level, was selected for the statistical analysis.
The null hypothesis being tested was that the population distribution between the
four branches is identical. The test statistics was What is the correct interpretation
of this result?
50. Corny’s Feed Company markets four different mixtures of feed for chickens.
These feeds have different combinations of ingredients. One question that the
manager is often asked by customers is if there is a difference between the four
feeds in terms of weight gain. To be able to address this question an analysis was
done of the four feeds. They contacted a local farmer to conduct a test regarding
the four feeds. There were 28 chickens selected for the test. These chickens
were divided into four groups, with each group receiving one of the feeds. The
statistical test selected for the analysis was the Kruskal-Wallis test and the .05
significant level was used for the test. The test result was H 4.65. This indicates
that
51. What is your decision regarding the differences between the observed and
expected frequencies if the critical value of chi-square is 7.815 and the computed
value is 6.789?

11. 52. Correlation coefficients of positive 0.88 and negative 0.88 represent
relationships between two variables that have
53. If the coefficient of multiple determination is 0.72, what percent of variation is
not explained?
54. What is the measure that indicates how precise a prediction of Y is based on
X or, conversely, how inaccurate the prediction might be?
55. A manufacturer wants to increase the absorption capacity of a sponge. Based
on past data, the average sponge could absorb 3.5 ounces. An organic candle
manufacturer wants to increase the burning life of their candles. Changes were
made in the production process, which resulted in an improved candle. To
determine if the changes had made a difference in the life of the candle, a test
was conducted. The length of burning time was collected for a sample of 10
candles (time in hours): 4.1, 3.7, 3.3, 3.5, 3.8, 3.9, 3.6, 3.8, 4.0, and 3.9. What is
the decision rule at the 0.01 level of significance to test if the new design
increased the absorption amount of the sponge?
56. The statement that determines if the null hypothesis is rejected or not is called
the
57. Newton’s, a tire manufacturer, wanted to set a mileage guarantee on its new
Road Warrior 60 tire. A sample test of 500 tires revealed that the tire’s mileage is
normally distributed with a mean of 50,000 miles and a standard deviation of
1,750 miles. The warranty on the tires is presently set at 47,500 miles. The z-test
statistic result was 1.43. The manufacturer wanted to determine if the tires were
exceeding the guarantee. At the .05 significant level, it was concluded that the
tires are exceeding the manufacturer’s guarantee.
58. When is it appropriate to use the paired difference t-test?
59. What is the critical value for a one-tailed hypothesis test in which a null
hypothesis is tested at the 5% level of significance based on two samples, both
sample sizes are 13?
60. When testing for differences between two means, the Behrens-Fisher
problem arises when the sample populations are
61. If the decision is to reject the null hypothesis of no difference between two
population parameters, z distribution at the .01 significant level, what is the
correct statement of the alternate hypothesis and rejection region?
62. An independent consumer testing lab preformed a statistical test on 25 type-C
alkaline batteries and calculated the mean life for a particular use before they
failed was 22.5 hours. The distribution of the lives approximated a normal

12. distribution. The standard deviation of the distribution was 1.1 hours. Information
on the package states that the batteries should last 24 hours.
The test question was if this difference between the test statistics and the stated
life of the battery was significant? The .05 significant level was selected for the
test. Which is the correct statement?
63. Cake manufacturer Little Diva’s wants to increase the shelf life of its easy-to-
fix cupcake mixes. Company’s records indicate that the average shelf life of the
mix is 230 days. A new, improved cupcake mix was developed and a sample of
10 boxes of the cupcake mix had these shelf lives (in days): 231, 233, 232, 233,
228, 231, 234, 229, 235, and 232. If the standard deviation was .67 and at the
0.025 significant level, has the shelf life of the cupcake mix increased?
64. Which of the following is NOT a reason one should have knowledge of
statistics?
65. The collection and summarization of the socioeconomic and physical
characteristics of the employees of a particular firm is an example of
RES 342 Final Exam
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