Answer Sheet
Analysis of Business
Multiple Choice
There are 50 multiple choice questions to answer in one hour and 30 minutes.
There are two marks per question and no penalty for an incorrect answer.
1 Which of the following is NOT a measure of central location:
a)Median
b)Mean
c)Variance
d)Mode
2 The value which occurs with the greatest frequency is called the
a)Mode
b)Median
c)Mean
d)Variance
3. The number of times a certain event has happened is called
a) Chance
b) Frequency
c) Tally
d) Probability
4. Data that can take aninfinite number of different values is called
a) Continuous data
b) Discrete data
c) Finite data
d) Limited data
5. Data that can take only a limited number of different values is called
a) Continuous data
b) Discrete data
c) Finite data
d) Limited data
6. If the class size of the data in a frequency table is unequal, then doubling the width of a rectangle in the histogram means we must
a) double the height of the rectangle
b) keep the height of the rectangle
c) halve the height of the rectangle
d) double the width of all the other rectangles in the histogram
7. A straight line diagram representing the same area as a histogram is
a) a frequency polygon
b) an equal width histogram
c) an unequal width histogram
d) a frequency curve
8. In the formula , Xiequals
a)The arithmetic mean of ungrouped data
b)The arithmetic mean of grouped data
c)The value of each item of data
d)The number of items of data
9. The standard deviation of ungrouped data can be calculated by:
a)
b)Taking the square root of the variance
c)Taking the square of the variance
d)Taking the square root of the mean deviation
10 A measure of relative dispersion is given by the:
a)Mean deviation
b)Variance
c)Co-efficient of variation
d)Standard deviation
Year / Quarter / Y Sales value (£000)2006 / 1 / 30
2 / 20
3 / 40
4 / 50
2007 / 1 / 40
2 / 30
Look at the data above to answer questions 11 and 12
11 The four-quarter centred moving average for 2006 quarter 3 is
a)£36,250
b)£35,000
c)£37,500
d)£40,000
12 In the above table the four-quarter centred moving average for 2006, quarter 4 is
a)£37,500
b)£50,000
c)£38,750
d)£36,250
13 Finding the centred four-quarter moving average in this way helps us identify the:
a)Cyclical component
b)Irregular component
c)Trend component
d)Seasonal component
14. If we first subtract the trend value (T) for each quarter from the original value (Y), then average the values for a given quarter over successive years, then for short-term data we get
a) Unseasonal data
b) Seasonal component
c) Cyclical component
d) Deseasonalised data
15. Deseasonalised data involves
a) Subtracting the Trend component (T) from the original data (Y)
b) Adding the Trend component (T) to the original data (Y)
c) Identifying the original data (Y)
d) Subtracting the Seasonal component (S) from the original data (Y)
16 Which of the following is most affected by an extreme value (often referred to as an outlier)?
a)Mode
b)Quartiles
c)Mean
d)Median
17. The value for which 75 per cent of the distribution is higher than that value is known as
a) Median
b) Upper Quartile
c) Mode
d) Lower Quartile
18. ‘Frequency density’ is calculated in the case of
a) Lorenz curve
b) Equal width histogram
c) Component bar chart
d) Unequal width histogram
19. The relative frequencies of particular components represented visually as sectors of a circle are illustrated using
a) Bar charts
b) Histograms
c) Frequency polygons
d) Pie charts
20 A positively skewed distribution is where:
a)The median value equals the modal value
b)The median value is greater than the arithmetic mean
c)The median value equals the arithmetic mean
d)The median value is less than the arithmetic mean
21 The range is calculated by taking
a)Double the quartile deviation
b)The absolute difference between the upper and lower quartiles
c)The absolute difference between the maximum value and the minimum value
d)Half the interquartile range
22. A negatively skewed distribution is where:
a) The median value equals the modal value
b) The median value is greater than the arithmetic mean
c) The median value equals the arithmetic mean
d) The median value is less than the arithmetic mean
23 The formula represents which measure of dispersion
a)Mean deviation of ungrouped data
b)Standard deviation of grouped data
c)Mean deviation of grouped data
d)Standard deviation of ungrouped data
24 The average of the squared deviations from the arithmetic mean is called the:
a)Variance
b)Co-efficient of variation
c)Mean absolute deviation
d)Standard deviation
25. In the equation of a straight line, Y = mX + c the term mis the
a) intercept
b) dependent variable
c) slope
d) independent variable
26. In the equation of a straight line, Y = mX + c if c is equal to zero then:
a) the line cuts the X axis to the left of the Y axis
b) the line does not cross the X axis
c) the line passes through the origin
d) the line cuts the X axis to the right of the Y axis
27 In the equation of a straight line, Y = mX + c if m is equal to -3 then:
a) There is a positive relationship between the two variables
b) There is no relationship between the two variables
c) The relationship between the two variables is perfect
d) There is a negative relationship between the two variables
28. If R2 is calculated to be 0.64 then:
a) 64 per cent of the variation can be accounted for (explained by) the regression line
b) ) 64 per cent of the variation cannot be accounted for (explained by) the regression line
c) There is no relationship between the two variables
d) There is a perfect relationship between the two variables
29 If R2 is calculated to be 0.99 how confident would you be in using the
line of best fit for prediction?
a) Not confident
b) Very confident
c) The relationship is random and thus cannot be predicted
d) The relationship is too weak to predict
30If the slope of the regression line is calculated to be 2 and the intercept 16 then the value of Y when X is r is:
a)4
b)24
c)16
d)64
31. When we use an approach which implies that the forecast for the next time period should take into account the observed error in the earlier forecast for the current time period, then we are using:
a) Decision Tree analysis
b) Regression analysis
c) Time series analysis
d) Exponential smoothing
32. Which of the following is a major problem for forecasting, especially when using regression analysis?
a) The future exactly follows the patterns of the past
b) The future is not entirely certain
c) The past cannot be known
d) The future may not follow the patterns of the past
33. Which of the following circumstances is likely to make a forecast using
(multiple) regression analysis less reliable?
a) All the points lie exactly along the regression line in the scatter
diagram
b) All the relevant variables are included in the regression equation
c) Some important variables are missing from the regression
equation
d) No important variables are missing from the regression equation
34. The weekly salaries of a group of employees are normally distributed with a mean of £400 and a standard deviation of £80. What is the probability that the salary of an employee taken at random will be £500 or more?
a) 0.3944
b) 0.1056
c) 0.3413
d) 0.2234
35. The weekly salaries of a group of employees are normally distributed with a mean of £200 and a standard deviation of £40. What proportion of salaries are at least £180 but no more than £230?
a) 0.3830
b) 0.2734
c) 0.1915
d) 0.4649
36. A company finds that the useful life of its computers is normally distributed with a mean of 3.5 years and a standard deviation of 0.4 years. Historically 40.9% of the computers have a useful life of less than the computer manufacturer’s advertised life. What is the manufacturer’s advertised life for the computers?
a) 3.192 years
b) 3.500 years
c) 2.58 years
d) 3.250 years
37. The heights of female students at DowntownUniversity are normally distributed with a mean height of 170cm and a standard deviation of 25cm. The percentage of the female population with a height less than 150cm is:
a) 78.81%
b) 21.19%
c) 8.00%
d) 92.00%
38. The ‘Central Limit Theorem’ suggests that:
a) For the distribution of sample means to be normal, the distribution of the population values must be normal
b) If we take random samples of a sufficiently large size, then the distribution of sample means will be normal whatever the distribution of the population values
c) There is no limit to the number of samples we can take
d) The distribution of sample variances will be normal
39. The average monthly rent for student accommodation is normally distributed with a mean of £280 and a standard deviation of £28. What is the probability that a sample of 49 students will have a (sample) mean monthly rent of £287 or more?
a) 0.0401
b) 0.4041
c) 0.0023
d) 0.0499
40. A random sample of 121 workers taken from the management level of a multinational corporation gives a mean annual salary of £50,000 with a standard deviation of £9000. What is the 95% confidence interval for the population mean?
a) £48,969 to £51,031
b) £48,396 to £51,604
c) £48, 686 to £51,314
d) £47,889 to £52,111
41. If the sample size of the previous question had been increased to 169 (with the same sample mean and standard deviation), what would be the new 95% confidence interval for the population mean?
a) £48,643 to £51,357
b) £48,228 to £51,772
c) £46,234 to £52,234
d) £49,702 to £52,189
42. The method of investment appraisal which calculates that rate of discount which makes net present value = 0 for any project, is called
a) The payback period
b) The reducing balance method
c) The internal rate of return
d) The average rate of return
43. What can we find by using the following formula?
Total Fixed Costs
Contribution per Unit
a)Budgeted Output
b)Budgeted Profit
c)Break-even Output
d)Margin of Safety
44. If each unit of output can be sold at a price of £5 and incurs variable costs which are constant at £3 per unit, and if the fixed costs already incurred are £15,000, then the break-even output is
a) 5,000 units
b) 7,500 units
c) 3,000 units
d) 15,000 units
45 Budgeted output minus break-even output gives us the
a) Contribution per unit
b) Maximum profit solution
c) Budgeted Profit
d) Margin of Safety
46 Chris claims that the average time students spend watching TV per week is 20 hours. Emma says that it is more than this. A sample of 100 students is taken. The sample mean is 21.5 hours and the sample standard deviation is 8 hours. A hypothesis test at the 5%level of significance is used. Which of the following is true?
a) The null hypothesis is that μ > 20 hours and this hypothesis should be rejected
b) The null hypothesis is that μ = 20 hours and this hypothesis should be rejected
c) The null hypothesis is that μ = 20 hours and this hypothesis should be accepted
d) The null hypothesis is that μ > 20 hours and this hypothesis should be accepted
47. The designers of a new model of sports car claim that fuel consumption is 40 km per gallon. The marketing department wants to test this claim to see whether the advertised figure should be higher or lower than 40 km per gallon. A sample of 50 cars yields a mean of 38.5 km per gallon and a standard deviation of 4 km per gallon. If we test the designers’ claim at the 0.05 level of significance, which of the following is true?
a) The alternative hypothesis is that μ ≠ 40 km.p.g. and the null hypothesis should be rejected
b) The alternative hypothesis is that μ = 40 km.p.g. and the null hypothesis should be accepted
c) The alternative hypothesis is that μ = 38.5 km.p.g. and the null hypothesis should be rejected
d) The alternative hypothesis is that μ ≠ 40 km.p.g. and the null hypothesis should be accepted
48 A machine is supposed to fill 25 Kilo bags of coal. A sample of 20 bags gives a mean of 25.51 kilos with a standard deviation of 2.19 kilos. Test the hypothesis that the machine is out of control at the 0.05 level of significance. Which of the following is correct?
a) The alternative hypothesis is that μ ≠ 25 kilos and the null hypothesis should be rejected
b) The alternative hypothesis is that μ = 25 kilos. and the null hypothesis should be accepted
c) The alternative hypothesis is that μ ≠ 25 kilos and the null hypothesis should be accepted
d) The alternative hypothesis is that μ = 25.51 kilos and the null hypothesis should be rejected
49 The manager of a call centre is worried that the average time spent on telephone calls has increased above the recommended 2 minutes. A sample of 16 calls gives an average length of 2.35 minutes, with a standard deviation of 0.4 minutes. Is the manager right to be concerned? Use the 0.01 level of significance and select the best answer.
a) The alternative hypothesis is that μ = 2 minutes and the null hypothesis should be accepted
b) The alternative hypothesis is that μ = 2 minutes and the null hypothesis should be rejected
c) The alternative hypothesis is that μ > 2 minutes and the null hypothesis should be accepted
d) The alternative hypothesis is that μ > 2 minutes and the null hypothesis should be rejected
50 A study of 100 industrial accidents finds the following pattern
Day / Monday / Tuesday / Wednesday / Thursday / FridayAccident / 30 / 20 / 10 / 20 / 20
If the null hypothesis is that accidents are spread evenly throughout the week, which of the following is correct?
a) Reject at both the 5% and 1% significance levels
b) Accept at the 5% significance level but reject at 1% significance level
c) Accept at the 1% significance level but reject at 5% significance level
d) Accept at both the 5% and 1% significance levels
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