BA1040 Exam 2011
BA1040 Exam 2011
BA1040 Exam 2011
University of London
BSc Examination 2011
BBA0040
Business Administration
Business Statistics
DATE
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6. 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:
a) 0.11
b) 0.195
c) 0.89
d) 0.90
7. 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 events of increase in
house sales and increase in interest rates in the next 6 months are
a) statistically independent.
b) mutually exclusive.
c) collectively exhaustive.
d) None of the above.
8. 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 events of increase in
house sales and no increase in house sales in the next 6 months are
a) statistically independent.
b) mutually exclusive.
c) collectively exhaustive.
d) (b) and (c)
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TABLE 1
An alcohol awareness task force at a Big-Ten university sampled 200
students 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 result
was obtained.
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13. Referring to Table 1, the events "Did Well on Midterm" and "Studying
for Exam" are
a) not statistically dependent.
b) not mutually exclusive.
c) collective exhaustive.
d) None of the above.
14. Referring to Table 1, the events "Did Well on Midterm" and "Did
Poorly on Midterm" are
a) statistically dependent.
b) mutually exclusive.
c) collective exhaustive.
d) All of the above.
A certain type of new business succeeds 60% of the time. Suppose that
3 such businesses open (where they do not compete with each other,
so it is reasonable to believe that their relative successes would be
independent). P(X)=[n!/X!(n-X)!]pX(1-p)n-X (you can use the statistical
tables provided to answer the following questions, no need for
calculations)
15. Given the above information, the probability that all 3 businesses
succeed is ________.
16. Given the above information, the probability that all 3 businesses fail
is ________.
17. Given the above information, the probability that at least 1 business
succeeds is ________.
18. Suppose a 95% confidence interval for has been constructed. If it
is decided to take a larger sample and to decrease the confidence
level of the interval, then the resulting interval width would
________.(Assume that the sample statistics gathered would not
change very much for the new sample.)
(a) be narrower than the current interval width
(b) be larger than the current interval width
(c) be the same as the current interval width
(d) be unknown until actual sample sizes and reliability levels were
determined
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TABLE 2
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 portfolio's 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 prison stocks 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
Intercept
S&P
4.866004258
-0.502513506
Standard
Error
0.35743609
0.071597152
T Stat
13.61363441
-7.01862425
P-value
8.7932E-13
2.94942E-07
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TABLE 3
It is believed that GPA (grade point average, based on a four point
scale) should have a positive linear relationship with ACT scores. Given
below is the Excel output from regressing GPA on ACT scores using a
data set of 8 randomly chosen students from a Big-Ten university.
Regressing GPA on ACT
Regression Statistics
Multiple R
0.7598
R Square
0.5774
Adjusted R
Square
0.5069
Standard Error
0.2691
Observations
8
ANOVA
df
Regression
Residual
Total
Intercept
ACT
1
6
7
SS
MS
F
0.5940 0.5940 8.1986
0.4347 0.0724
1.0287
Significanc
eF
0.0286
Coefficie Standard
nts
Error
t Stat P-value Lower 95% Upper 95%
0.5681
0.9284 0.6119 0.5630
-1.7036
2.8398
0.1021
0.0356 2.8633 0.0286
0.0148
0.1895
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44. Referring to Table 3, the value of the measured test statistic to test
whether there is any linear relationship between GPA and ACT is
a) 0.0356
b) 0.1021
c) 0.7598
d) 2.8633
45. Referring to Table 3, what is the predicted average value of GPA
when ACT = 20?
a) 2.61
b) 2.66
c) 2.80
d) 3.12
46. Referring to Table 3, what are the decision and conclusion on
testing whether there is any linear relationship at 1% level of
significance between GPA and ACT scores?
a) Do not reject the null hypothesis; hence there is not sufficient
evidence to show that ACT scores and GPA are linearly
related.
b) Reject the null hypothesis; hence there is not sufficient
evidence to show that ACT scores and GPA are linearly
related.
c) Do not reject the null hypothesis; hence there is sufficient
evidence to show that ACT scores and GPA are linearly
related.
d) Reject the null hypothesis; hence there is sufficient evidence
to show that ACT scores and GPA are linearly related.
47. Referring to Table 3, the value of the measured (observed) test
statistic of the F-test for H 0 : 0 vs. H1 : 0
a)
b)
c)
d)
may be negative.
is always positive.
is always negative.
has the same sign as the corresponding t test statistic.
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END OF PAPER
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