ISOM 2500 Business Statistics

Sample Quiz 1

Time Allowed: 60 Minutes

Student Name: _________________________________

Student ID #: __________________________________

Section: L4 & L5

Read the following instructions very carefully before you start the quiz.

a. There are 20 multiple-choice questions. Choose the best answer for each question.
The total point of this quiz is 20 points.
b. It is your responsibility to check that your question booklet consists of 9 printed
pages, including this cover page.
c. Submit both the multiple-choice answer sheet and this question booklet when you
are done with the quiz.
d. Please read the academic integrity declaration below and sign.

Academic Integrity Declaration

I declare that the answers submitted for this quiz are my own work. I understand that
sanctions will be imposed if I am found to have violated the University’s regulations
governing academic integrity.

Student's Signature: ______________________________________

Do NOT open this question booklet unless you are told to do so.

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1.
Which of the following numerical measures is/are sensitive to unusual observations?
I. The first quartile, Q1.
II. The interquartile range, Q3 – Q1.
III. The maximum.
(a) Only I is correct
(b) Only II is correct
(c) Only III is correct
(d) Only I and III are correct
(e) Only II and III are correct

2.
What is not a measure of the central tendency?
(a) Variance
(b) Mean
(c) Median
(d) Mode
(e) All of the other choices are measures of the central tendency

3.
The following distribution

(a) Is right-skewed
(b) Is left-skewed
(c) Has a normal distribution
(d) Is unimodal
(e) Is symmetric
4.
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An online distributor of healthcare products maintains data on all transactions. The
information that is recorded is shown in the sample transaction record below:

A new row is added to the data table for each transaction. Which of the variables in the data
table are numerical?
(a) Product #
(b) Customer #
(c) Both Product # and Customer #
(d) Amount of Purchase
(e) Zip Code

5.
Consider the validity of the following statements.
I. The 3rd quartile of a dataset is a value such that 75% of the data is greater than that
value and 25% of the data is less than that value.
II. The median of a dataset has to be a value in the dataset.
III. When every measurement in a dataset is different from one another, the mode
does not exist.
(a) Only I is correct
(b) Only II is correct
(c) Only III is correct
(d) Only I and III are correct
(e) Only II and III are correct

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6.
The correlation of the following scatterplot is

(a) A strong positive correlation, r = 0.99

(b) A moderate positive correlation, r = 0.87
(c) Little or no correlation, r = 0.15
(d) A moderate negative correlation, r = -0.85
(e) A strong negative correlation, r = -0.99

7.
The production manager says the following to you: “Based on a positive correlation close to
1, it appears that an increase in the weekly production quota (Q) causes an increase in the
percentage of defective bulbs (D) produced. Do you agree with that?” Which of the following
would be appropriate answers to her question using a proper interpretation of the data and the
concept of association between variables?
(a) Yes, I agree because the correlation between Q and D is close to 1.
(b) Yes, I agree because the correlation between Q and D is positive.
(c) No, I do not agree because association between Q and D does not imply causation.
(d) No, I do not agree because there could be other factors that affect the percentage of
defective bulbs that are produced.
(e) Both (c) and (d) are appropriate responses.

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8.
A manufacturer of toaster ovens keeps track of all ovens that are returned for warranty repair.
Each oven is classified by the cause of the problem resulting in the return. Within each
category, the total number of ovens returned is recorded, and the total number that the
manufacturer was able to repair is recorded (ovens that cannot be repaired are replaced with a
new unit). The results for a given month are provided:

What percentage of all ovens are returned due to faulty components? (Round your
percentage to one decimal place.)
(a) 16.7%
(b) 35.8%
(c) 19.2%
(d) 43.0%
(e) 47.8%

9. [out of scope of midterm exam]

The operations manager of a bank has been monitoring the time required to assist customers
who use the bank’s drive-up facility. Over a one-month period, 525 customers using the
facility were selected at random and the time to assist the customer was recorded. The
histogram for the service times was nearly bell-shaped and symmetric. A summary of the
data is given below:

Based on this data, the Empirical Rule indicates that 95% of all customer assistance times
will be in which of the following intervals?
(a) [4.2, 9.4]
(b) [4.3, 9.5]
(c) [5.1, 8.5]
(d) [5.2, 8.6]
(e) [5.95, 7.65]

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10. [out of scope of midterm exam]
Using the data in a contingency table classifying the cause of the defect and the plant in
which a product was produced, it is determined that chi-squared χ2=10.52 and Cramer’s
V=0.12. Which of the following statements is an appropriate interpretation of these results?
(a) There is no association between the cause of the defect and the plant in which the
camera was produced.
(b) There is a strong association between the cause of the defect and the plant in which
the camera was produced.
(c) There is some association between the cause of the defect and the plant in which the
camera was produced, but it is not very strong.
(d) The chi-squared χ2 value indicates that the expected number of defective cameras in
each cell and the observed number of defective cameras in each cell are equal for
every cell.
(e) None of the other interpretations of the results is appropriate.

[Q11-Q12]
11.
A large bank determines that 70% of the loans that it approves are to individuals (for cars,
homes, etc.) and 30% are to small businesses. Among the loans to individuals, 10% end up in
default, 85% are repaid on time, and 5% are repaid late. Among the loans to small businesses,
15% end up in default, 70% are repaid on time, and 15% are repaid late.
What percentage of all loans is repaid? (Round the percentage to 2 decimal places.)
(a) 14.75%
(b) 16.07%
(c) 80.50%
(d) 88.50%
(e) 76.50%

12.
Refer to Q11, the events, A = default on loan, and B = repay the loan, are which type of
events?
(a) Independent
(b) Dependent
(c) Mutually exclusive
(d) Both independent and mutually exclusive
(e) Both dependent and mutually exclusive

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13.
Bottles of water are supplied from a distributor in 12-packs. Each month, any retailer may
order 50, 100, or 200 12-packs at a time. Past data from hundreds of retailers show that:
p(50)=0.4; p(100)=0.5; p(200)=0.1. What is the expected value of N, where N is a random
variable defined as the number of 12-packs ordered by a retailer each month? (Round your
answer to 2 decimal places.)
(a) 90.00
(b) 116.67
(c) 350.00
(d) 29.17
(e) 86.00

14.
A local church is having a raffle, and there were 1,600 free tickets distributed. The raffle has
prizes of $200, $100, and $50. Prior to drawing the raffle, the probability distribution of prize
of a player looks like:

What is the missing probability in the probability distribution?

(a) Not enough information to determine it
(b) 1/1600
(c) 3/1600
(d) 25/32
(e) 1597/1600

15.
A shipment of 20 DVDs has arrived at a video rental store. Based on past experience, the
manager knows that 10% of all new DVDs sent to the store have a visible defect. Among all
the DVDs with a visible defect, 80% play with no loss in quality. If one new DVD is selected
at random from among those sent to the store, what is the probability of selecting a DVD that
has a visible defect and plays with no loss in quality? (Round your answer to 2 decimal
places.)
(a) .08
(b) .90
(c) .80
(d) .02
(e) .72

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16.
At a university, 10% of the students are scholarship athletes. Half of the athletes are male and
half are female. Of the students that are not athletes, 57% are female and 43% are male. Find
the percentage of all females at this university that are athletes.
(a) 57.0%
(b) 56.3%
(c) 10%
(d) 8.9%
(e) 7.3%

17. [out of scope of midterm exam]

Consider a normal random variable, X ~ N(m, D), with given positive numbers m and D > 0.
I. Any probability of X can be found in terms of a standard normal probability using
the Z table.
II. Subtracting m from X, followed by dividing by D, gives a N(0,1) random
variable.
III. The median of X is equal to m.
Which of the above statements is/are correct?
(a) I only
(b) II and III only
(c) I and II only
(d) I and III only
(e) All of the statements

18. [out of scope of midterm exam]

Consider the following statements.
I. The probability of a standard normal random variable taking a value between -2
and -1 is more than 10%.
II. The probability P(Z = 1 or -1) = 0 for a standard normal random variable Z.
III. A normal random variable with mean 2 must be greater than another normal
random variable with mean 1 when they share the same standard deviation.
Which of the above statements is/are correct?
(a) I only
(b) II only
(c) I and II only
(d) I and III only
(e) All of the statements

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[Q19-Q20]
19.
A store has a display of 1,000 envelopes with discount coupons in them. Any customer will
randomly select one envelope and is entitled to the discount of the coupon inside it. The
coupons are 20% off, 30% off, or 50% off. Below is the histogram of the distribution of the
discounts in the envelopes.

If a customer is to purchase $20.65 worth of clothes (before the discount), how much should
that customer expect to pay on average after the discount?
(Hint: Amount to pay = Price – Price*Discount).
(a) $464.63
(b) $461.78
(c) $15.30
(d) $15.55
(e) $15.80

20.
Refer to Q19, what is the expected discount if the store decides to take 1.5 times the coupon
values (i.e., a discount of 40% would now equal 60%)?
(a) 21.32%
(b) 23.51%
(c) 38.70%
(d) 36.51%
(e) 35.25%

----- The End ---

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Solution

E
B
C
C

D
E
A
E
A

D
D

C
E
E

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