Name: __________________________ Date: _____________

1. A manager wants to predict the cost (y) of travel for salespeople based on the
number of days (x) spent on each sales trip. The following model has been
developed: y = $400 + 120x. If a trip took 3 days, the predicted cost of the trip is
_____________.
A) 760
B) 360
C) 523
D) 1560
E) 1080

2. A manager wishes to predict the annual cost (y) of an automobile based on the
number of miles (x) driven. The following model was developed: y = 1,550 + .
36x. If a car is driven 20,000 miles, the predicted cost is ____________.
A) 7,200
B) 5,650
C) 8,750
D) 2,270
E) 6,750

3. The following residuals plot indicates _______________.

A) a nonlinear relation
B) a nonconstant error variance
C) the simple regression assumptions are met
D) the sample is biased
E) a random sample

4. The numerical value of the coefficient of determination must be _______.

A) between –1 and +1
B) between –1 and 0
C) between 0 and 1
D) equal to SSE/(n-2)
E) between –100 and +100

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 5. In the regression equation, y = 75.65 + 0.50x, the intercept is _______.
A) 0.50
B) 75.65
C) 1.00
D) 0.00
E) -0.50

6. From the following scatter plot, we can say that between y and x there is
_______.

A) perfect positive correlation

B) virtually no correlation
C) positive correlation
D) negative correlation
E) perfect negative correlation

7. From the following scatter plot, we can say that between y and x there is
_______.

A) perfect positive correlation

B) virtually no correlation
C) positive correlation
D) negative correlation
E) perfect negative correlation

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 8. A researcher is testing a hypothesis of a single mean. The critical z value for
 = .05 and a twotailed test is +1.96. The observed z value from sample data is
1.85. The decision made by the researcher based on this information is to _____
the null hypothesis.
A) reject
B) not reject
C) redefine
D) change the alternate hypothesis into
E) restate the null hypothesis

9. A researcher is testing a hypothesis of a single mean. The critical z value for  = .

05 and a twotailed test is +1.96. The observed z value from sample data is 2.85.
The decision made by the researcher based on this information is to _____ the
null hypothesis.
A) reject
B) not reject
C) redefine
D) change the alternate hypothesis into
E) restate the null hypothesis

10. Jennifer Cantu, VP of Customer Services at Tri-State Auto Insurance, Inc.,

monitors the claims processing time of the claims division. Her standard
includes "a mean processing time of 5 days or less." Each week, her staff checks
for compliance by analyzing a random sample of 60 claims. Jennifer's null
hypothesis is ________.
A)  > 5
B)  > 5
C) n = 60
D)  < 5
E)  = 5

11. In a two-tailed hypothesis about a population mean with a sample size of 100 and
 = 0.05, the rejection region would be _______.
A) z > 1.64
B) z > 1.96
C) z < -1.96 and z > 1.96
D) z < -1.64 and z > 1.64
E) z < -2.33 and z > 2.33

12. The expected (mean) life of a particular type of light bulb is 1,000 hours with a
standard deviation of 50 hours. The life of this bulb is normally distributed.
What is the probability that a randomly selected bulb would last longer than 1150

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 hours?
A) 0.4987
B) 0.9987
C) 0.0013
D) 0.5013
E) 0.5513

13. The net profit from a certain investment is normally distributed with a mean of
$10,000 and a standard deviation of $5,000. The probability that the investor will
not have a net loss is _____________.
A) 0.4772
B) 0.0228
C) 0.9544
D) 0.9772
E) 1.0000

14. Completion time (from start to finish) of a building remodeling project is

normally distributed with a mean of 200 work-days and a standard deviation of
10 work-days. To be 99% sure that we will not be late in completing the project,
we should request a completion time of _______ work-days.
A) 211
B) 207
C) 223
D) 200
E) 250

15. You are offered an investment opportunity. Its outcomes and probabilities are
presented in the following table.

x P(x)
-$1,000 .40
$0 .20
+$1,000 .40
The mean of this distribution is _____________.
A) -$400
B) $0
C) $200
D) $400
E) $500

16. A fair coin is tossed 5 times. What is the probability that exactly 2 heads are
observed?

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A) 0.313
B) 0.073
C) 0.400
D) 0.156
E) 0.250

17. Abel Alonzo, Director of Human Resources, is exploring employee absenteeism

at the Plano Power Plant. Ten percent of all plant employees work in the
finishing department; 20% of all plant employees are absent excessively; and 7%
of all plant employees work in the finishing department and are absent
excessively. A plant employee is selected randomly; F is the event "works in the
finishing department;" and A is the event "is absent excessively." P(A|F) =
_____________.
A) 0.37
B) 0.70
C) 0.13
D) 0.35
E) 0.80

18. Let A be the event that a student is enrolled in an accounting course, and let S be
the event that a student is enrolled in a statistics course. It is known that 30% of
all students are enrolled in an accounting course and 40% of all students are
enrolled in statistics. Included in these numbers are 15% who are enrolled in
both statistics and accounting. Find P(S).
A) 0.15
B) 0.30
C) 0.40
D) 0.55
E) 0.60

19. Abel Alonzo, Director of Human Resources, is exploring employee absenteeism

at the Plano Power Plant. Ten percent of all plant employees work in the
finishing department; 20% of all plant employees are absent excessively; and 7%
of all plant employees work in the finishing department and are absent
excessively. A plant employee is selected randomly; F is the event "works in the
finishing department;" and A is the event "is absent excessively." P(F|A) =
_____________.
A) 0.35
B) 0.70
C) 0.13
D) 0.37
E) 0.10

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 20. The table below provides summary information about students in a class. The
sex of each individual and the major is given.

Male Female Total

Accounting 12 18 30
Finance 10 8 18
Other 26 26 52
Total 48 52 100

If a student is randomly selected from this group, what is the probability that the
student is male?
A) 0.12
B) 0.48
C) 0.50
D) 0.52
E) 0.68

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Answer Key

1. A
2. C
3. A
4. C
5. B
6. D
7. B
8. B
9. A
10. E
11. C
12. C
13. D
14. C
15. B
16. A
17. B
18. C
19. A
20. B

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