sma-testbank-chap-15-22-sma-final

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SMA Testbank CHAP 15 22 - sma final
Survey and Multivariate Analysis (Trường Đại học Kinh tế Thành phố Hồ Chí Minh)
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Marketing Research: An Applied Orientation, 7e (Malhotra)

Chapter 15 Frequency Distribution, Cross-Tabulation, and Hypothesis Testing
1) In a frequency distribution, two variables are considered at a time.

Answer: FALSE
Diff: 2 Page Ref: 439-442
LO: 15.2 Discuss data analysis associated with frequencies, including measures of location,
measures of variability, and measures of shape.
2) The valid percentage column in a frequency distribution represents percentages calculated by

excluding the cases with missing values.
Answer: TRUE
3) Frequency data may be used to construct a histogram, or a vertical bar chart.

Answer: TRUE
4) The most commonly used statistics associated with frequencies are measures of location,
measures of variability, and measures of occasion.
Answer: FALSE
5) Mean, median, and mode are measures of variability.

Answer: FALSE
6) If the entire sample is changed by adding a fixed constant to each observation, then the mean,
variance, and median change by the same fixed amount.
Answer: FALSE
AACSB: Analytical thinking
1
Copyright © 2019 Pearson Education, Inc.

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7) Measures of location or central tendency include the mean, median, and mode.
Answer: TRUE
8) The mode represents the highest peak of the distribution.

Answer: TRUE
9) If a variable is measured on a nominal scale, the median should be used.

Answer: FALSE
10) The measures of location are also known as measures of central tendency because they tend
to describe the center of the distribution.
Answer: TRUE
11) The mean is sensitive to extremely small or extremely large values (outliers).
Answer: TRUE
12) The Range = XLargest - XSmallest.

Answer: TRUE
13) If all the data points are multiplied by a constant, the interquartile range is multiplied by the
same constant.
Answer: TRUE
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14) The difference between the mean and an observed value is called the deviation from the
mean.
Answer: TRUE
15) The variance can never be negative.

Answer: TRUE
16) When the data points are scattered, variance is small.

Answer: FALSE
17) When calculating the standard deviation, we divide by n-1 because the sample is drawn from
a population and we are trying to determine how much the responses vary from the mean of the
entire population.
Answer: TRUE
18) In a symmetric distribution, the values on either side of the center of the distribution are the
same, and the mean, mode, and median are equal.
Answer: TRUE
19) The tendency of the deviations from the mean to be larger in one direction than in the other
is called skewness.
Answer: TRUE
20) If the kurtosis is positive, the distribution is more peaked than a normal distribution.
Answer: TRUE
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21) The first step in hypothesis testing is to select an appropriate statistical technique and the
corresponding test statistic.
Answer: FALSE
LO: 15.4 Describe data analysis associated with parametric hypothesis testing for one sample,
two independent samples, and paired samples.
22) The alternative hypothesis is a statement that some difference or effect is expected.
Answer: TRUE
23) The null hypothesis is always the hypothesis that is tested.

Answer: TRUE
24) The null hypothesis refers to a specified value of the population parameter, not a sample
statistic.
Answer: TRUE
25) In commercial marketing research, the one-tailed test is used more often than a two-tailed
test.
Answer: TRUE
26) The two-tailed test is more powerful than the one-tailed test.
Answer: FALSE
27) The test statistic measures how close the sample has come to the null hypothesis and often
follows a well-known distribution, such as the normal, t, or chi-square distribution.
Answer: TRUE
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28) Type I error occurs when the sample results lead to the rejection of the null hypothesis when
it is in fact true.
Answer: TRUE
29) The probability of Type II error (α) is also called the level of significance.
Answer: FALSE
30) For a given level of α, increasing the sample size will decrease β, thereby increasing the
power of the test.
Answer: TRUE
31) In determining the critical value of the test statistic, the area to the right of the critical value
is either α or α/2. It is α for a one-tail test and α/2 for a two-tail test.
Answer: TRUE
32) If the probability associated with the calculated or observed value of the test statistic (TS
CAL) is greater than the level of significance (α), the null hypothesis is rejected.
Answer: FALSE
33) If the calculated value of the test statistic is less than the critical value of the test statistic (TS
CR), the null hypothesis is rejected.
Answer: FALSE
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34) In tests of associations, the null hypothesis is that there is no association between the
variables (H0:......is NOT related to....).
Answer: TRUE
Diff: 3 Page Ref: 450
35) In tests of differences, the null hypothesis is that there is a difference (H0:.....is different
than....).
Answer: FALSE
36) A cross-tabulation is the merging of the frequency distribution of two or more variables in a
single table to help us to understand how one variable relates to another variable.
Answer: TRUE
LO: 15.3 Explain data analysis associated with cross-tabulations and the associated statistics:
chi-square, phi coefficient, contingency coefficient, Cramer's V, and lambda coefficient.
37) In cross-tabulation, the introduction of a third variable clarifies the initial association (or lack
of it) observed between two variables and can result in six possibilities.
Answer: FALSE
38) Cross-tabulation examines associations between variables, not causation.

Answer: TRUE
39) The null hypothesis, H0, when using the chi-square statistic, is that there is no association
between the variables.
Answer: TRUE
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40) When using the chi-square statistic in cross-tabulation, the null hypothesis (H0) will be
rejected only when the calculated value of the test statistic is greater than the critical value of the
chi-square distribution with the appropriate degrees of freedom.
Answer: TRUE
41) The chi-square statistic can be estimated on counts of data or on percentages.

Answer: FALSE
42) When variables are perfectly associated, the phi coefficient assumes the value of 1.
Answer: TRUE
43) When measuring the strength of association with the contingency coefficient, the maximum
value of 1 is achieved when the variables are perfectly associated.
Answer: FALSE
44) Lambda assumes that the variables are measured on an ordinal scale.
Answer: FALSE
45) An asymmetrical lambda value of 1 happens when each independent variable category is
associated with a single category of the dependent variable.
Answer: TRUE
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46) When conducting cross-tabulation analysis in practice, if H0 is rejected, the pattern of the
relationship should be interpreted by computing an appropriate statistic (phi coefficient,
contingency, Cramer's V, lambda coefficient, or other statistics).
Answer: FALSE
47) Hypothesis-testing procedures can be broadly classified as parameter or nonparameter based

on the measurement scale of the variables involved.
Answer: FALSE
48) Paired samples are two samples that are not experimentally related.
Answer: FALSE
49) The critical value of the F distribution depends upon two sets of degrees of freedom: those in
the numerator and those in the denominator.
Answer: TRUE
50) The F static is computed as the ratio of two sample variances.

Answer: TRUE
51) In hypothesis testing, the observations are paired so that the two sets of observations relate to
the same respondents.
Answer: TRUE
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52) Nonparametric tests are used when the independent variables are nonmetric.
Answer: TRUE
LO: 15.5 Understand data analysis associated with nonparametric hypothesis testing for one
sample, two independent samples, and paired samples.
53) The Kolmogorov-Smirnov one-sample test is a goodness of fit test that compares the
cumulative distribution function for a variable with a specified distribution.
Answer: TRUE
54) The binomial test is a test of randomness for a dichotomous variable.

Answer: FALSE
55) The runs test tests the goodness of fit of the observed number of observations in each
category to the number expected under specified binomial distribution.
Answer: FALSE
56) In the Mann-Whitney U test, two samples are combined and the cases are ranked in order of
increasing size. The test statistic, U, is computed as the number of times a score from sample 1
or group 1 follows a score from group 2.
Answer: FALSE
57) The Mann-Whitney U test is a statistical test for a variable measured on an ordinal scale,
comparing the difference in the location of two populations based on observations from two
independent samples.
Answer: TRUE
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58) The two-sample median test examines whether the two distributions are the same.
Answer: FALSE
59) The two-sample median test is not as powerful as the Mann-Whitney U test.
Answer: TRUE
60) The McNemar test is another paired sample nonparametric test that is used in the special case
of a binary variable where the researcher wishes to test differences in proportions.
Answer: TRUE
61) The sign test is more powerful than the Wilcoxon matched-pairs signed-ranks test.
Answer: FALSE
62) Nonparametric tests are conducted in SPSS via the NONPARAMETRIC TESTS program.
Answer: TRUE
AACSB: Information technology
LO: 15.6 Explain the role of software in conducting frequency, cross-tabulation, and hypothesis
testing using SPSS and SAS.
63) In SPSS, if the data are interval scaled and only the summary statistics are desired, the
DESCRIPTIVES procedure can be used.
Answer: TRUE
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64) A mathematical distribution whose objective is to obtain a count of the number of responses
associated with different values of one variable and to express these counts in percentage terms
is a(n) ________.
A) t distribution
B) frequency distribution
C) chi-square distribution
D) distribution
Answer: B
65) Which of the research questions/hypotheses below is best answered using frequency
distribution?
A) What percentage of the market consists of heavy users, medium users, light users, and
nonusers?
B) The heavy and light users of a brand differ in terms of psychographic characteristics.
C) What is the income distribution of brand users? Is this distribution skewed toward low
income brackets?
D) Both A and C are correct.
Answer: D
AACSB: Reflective thinking
66) A frequency distribution helps determine ________.

A) the extent of nonresponse
B) the extent of illegitimate responses
C) the presence of outliers or cases with extreme values
D) all of the above
Answer: D
67) A frequency distribution helps ________.

A) determine how close a sample comes to the null hypothesis
B) us to understand how one variable, X, relates to another variable, Y
C) determine if a systematic association exists between two variables
D) determine the shape of the empirical distribution of the variable
Answer: D
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68) A statistic that describes a location within a data set is a ________.

A) measure of variability
B) measure of shapes
C) measure of occasion
D) measure of location
Answer: D
69) The value obtained by summing all elements in a set and dividing by the number of elements
is the ________.
A) mean
B) median
C) mode
D) range
Answer: A
70) The ________ is the value that occurs most frequently.

A) mean
B) median
C) mode
D) range
Answer: C
71) A measure of central tendency given as the value above which half of the values fall and
below which half of the values fall is the ________.
A) mean
B) median
C) mode
D) range
Answer: B
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72) The median is an appropriate measure of central tendency for ________ data.
A) interval
B) ratio
C) ordinal
D) nominal
Answer: C
73) As a general rule to follow to determine which of the different measures of location to use, if
the variable is measured on a nominal scale, ________ is the appropriate measure of central
tendency that should be used.
A) mean
B) median
C) mode
D) range
Answer: C
74) A statistic that indicates the distribution's dispersion is a ________.

A) measure of variability
B) measure of shape
C) measure of occasion
D) measure of location
Answer: A
75) The ________ is the most appropriate measure of central tendency for interval or ratio data.
A) mean
B) median
C) mode
D) range
Answer: A
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76) ________ include the range, interquartile range, variance or standard deviation, and
coefficient of variation.
A) Measures of variability
B) Measures of shape
C) Measures of occasion
D) Measures of location
Answer: A
77) The difference between the smallest and the largest values in a distribution is the ________.
A) mean
B) median
C) mode
D) range
Answer: D
78) The ________ is the difference between the 75th and 25th percentile.
A) standard deviation
B) coefficient of variation
C) variance
D) interquartile range
Answer: D
79) The mean squared deviation of all the values from the mean is the ________.
C) variance
Answer: C
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80) The square root of the variance is the ________.

C) variance
Answer: A
81) The ________ is the ratio of the standard deviation to the mean, expressed as a percentage,
and it is a unitless measure of relative variability.
C) variance
Answer: B
82) The tendency of the deviations from the mean to be larger in one direction than in the other
is called ________.
A) kurtosis
B) type I error
C) skewness
D) type II error
Answer: C
83) ________ is a measure of the relative peakedness or flatness of the curve defined by the
frequency distribution.
A) Kurtosis
B) Type I error
C) Skewness
D) Type II error
Answer: A
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84) Which of the research questions/hypotheses below is best answered using hypothesis testing?
A) Is familiarity with a new product related to age and education levels after controlling for
income?
B) The department store is being patronized by more than 10 percent of households.
C) One hotel has a more upscale image than its close competitor.
D) Both B and C are correct.
Answer: D
85) Which statement is not correct about the null hypothesis?

A) It is always the hypothesis tested.
B) Accepting the null hypothesis will lead to some changes in opinions or action.
C) It can never be accepted based on a single statistical test.
D) In marketing research, the null hypothesis is formulated in such a way that rejection leads to
the acceptance of the desired conclusion.
Answer: B
86) Which of the following statements is not correct about the alternative hypothesis?
A) There is no way to determine whether the alternative hypothesis is true.
B) The alternative hypothesis represents the conclusion for which evidence is sought.
C) The alternative hypothesis is the opposite of the null hypothesis.
D) None of the statements are correct.
Answer: A
87) The alternative hypothesis: the percentage of Internet users who use the Internet for shopping
is greater than .40, is a ________.
A) Type I error
B) two-tailed test
C) Type II error
D) one-tailed test
Answer: D
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88) What is the correct expression of the null hypothesis for the alternative hypothesis: the
percentage of Internet users who use the Internet for shopping is greater than .40?
A) H0: π < .40
B) H1: π > .40
C) H0: π = .40
D) H1: π ≠ .40
Answer: A
89) ________ occurs when the sample results lead to the rejection of a null hypothesis that is in
fact true.
A) Type I error
B) Two-tailed error
C) Type II error
D) One-tailed error
Answer: A
90) Also known as beta error, ________ occurs when the sample results lead to the nonrejection
of a null hypothesis that is in fact false.
A) Type I error
B) Two-tailed error
C) Type II error
D) one-tailed error
Answer: C
91) The ________ is the probability of rejecting the null hypothesis when it is in fact false, and
should be rejected.
A) Type I error
B) level of significance
C) Type II error
D) power of a test
Answer: D
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92) To balance the two types of errors, alpha (α), also known as ________, is often set at .01 or
.05.
A) type I error
B) level of significance
C) type II error
D) A and B are correct
Answer: D
93) The last step involved in hypothesis testing is ________.

A) reject or do not reject the null hypothesis
B) draw a marketing research conclusion
C) compare the probability with level of significance alpha (α)
D) determine the probability associated with the test statistic under the null hypothesis
Answer: B
94) Hypothesis tests can be related to ________.

A) tests of strength
B) tests of association
C) tests of differences
D) B and C are correct
Answer: D
95) Which of the research questions/hypotheses below is best answered using cross-tabulations?
A) Is familiarity with a new product related to age and education levels?
B) The department store is being patronized by more than 10 percent of households.
C) One hotel has a more upscale image than its close competitor.
Answer: A
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96) A statistical technique that describes two or more variables simultaneously and results in
tables that reflect the joint distribution of two or more variables that have a limited number of
categories or distinct values is a ________.
A) t test
B) non-parametric test
C) parametric test
D) cross-tabulation
Answer: D
97) Which statement is not correct about cross-tabulations?

A) The margins of a cross-tabulation show the same information as the frequency tables for each
of the variables.
B) Cross-tabulation tables are also called contingency tables.
C) The data are considered to be qualitative or categorical data.
D) Cross-tabulations provide inferences for making statements about the means of parent
populations.
Answer: D
98) Which of the following statements is true concerning cross-tabulations with two variables?
A) Cross-tabulation with two variables is also known as bivariate cross-tabulation.
B) Because two variables have been cross-classified, percentages could be computed either
column-wise, based on column totals, or row-wise, based on row totals.
C) The general rule is to compute the percentages in the direction of the independent variable,
across the dependent variable.
D) All of the above statements are true.
Answer: D
99) The introduction of a third variable in cross-tabulation can result in which of the following
possibilities?
A) refined association between the two original variables
B) no association between the two original variables
C) no change in the initial pattern
D) All of the above are correct.
Answer: D
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100) In cross-tabs, the introduction of a third variable can ________.

A) refine the association observed between the two original variables
B) indicate no association between the two variables, although an association was initially
observed
C) indicate no change in the initial association
D) All of the above are correct.
Answer: D
101) Which of the following statements is not true concerning cross-tabulation?

A) No more than three variables can be cross-tabulated.
B) As a general rule, there should be at least five expected observations in each cell for the
statistics computed to be reliable.
C) Cross-tabulation examines association between variables, not causation.
D) None of the above statements are untrue.
Answer: A
102) Which statement is not related to statistics associated with cross-tabulation?

A) The statistical significance of the observed association is commonly measured by the chi-
square statistic.
B) The t test could be conducted on the mean of one sample or two samples of observations.
C) Generally, the strength of association is of interest only if the association is statistically
significant.
D) The strength of association can be measured by the phi correlation coefficient, the
contingency coefficient, Cramer's V, and the lambda coefficient.
Answer: B
103) The ________ is used to test the statistical significance of the observed association in cross-
tabulation.
A) contingency coefficient
B) Cramer's V
C) phi coefficient
D) chi-square statistic
Answer: D
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104) The ________ is a skewed distribution whose shape depends solely on the number of
degrees of freedom. As the number of degrees of freedom increases, the distribution becomes
more symmetrical.
A) t distribution
D) distribution
Answer: C
105) The ________ is used as a measure of the strength of association in the special case of a
table with two rows and two columns (a 2 × 2 table).
B) Cramer's V
C) phi coefficient
D) chi-square coefficient
Answer: C
106) The ________ can be used to assess the strength of association in a table of any size.
C) phi coefficient
D) chi-square coefficient
Answer: A
107) ________ is a measure of the strength of association used in tables larger than 2 × 2.
A) coefficient of variation
B) Cramer's V
C) Phi coefficient
D) Chi-square coefficient
Answer: B
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108) ________ is a modified version of the phi correlation coefficient, Φ.

A) Cramer's V
C) Asymmetric lambda
D) Chi-square statistic
Answer: A
109) ________ is a measure of the percentage improvement in predicting the value of the
dependent variable, given the value of the independent variable in contingency table analysis.
A) Tau b
B) Symmetric lambda
C) Asymmetric lambda
D) Tau c
Answer: C
110) ________ is an average of the two asymmetric lambda values. It does not make an
assumption about which variable is dependent.
A) Tau b
B) Symmetric lambda
C) Tau c
D) Gamma
Answer: B
111) ________ is a test statistic that measures the association between two ordinal-level
variables. It makes an adjustment for ties and is most appropriate when the table of variable is
square.
A) Tau b
B) Symmetric lambda
C) Tau c
D) Gamma
Answer: A
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112) Tau b, tau c, and gamma are available to measure association between two ________-level
variables.
A) nominal
B) ordinal
C) interval
D) ratio
Answer: B
variables. It makes an adjustment for ties and is most appropriate when the table of variables is
not square but a rectangle.
A) Tau b
B) Symmetric lambda
C) Tau c
D) Gamma
Answer: C
variables. It does not make an adjustment for ties.
A) Tau b
B) Symmetric lambda
C) Tau c
D) Gamma
Answer: D
115) ________ are hypothesis testing procedures that assume that the variables of interest are
measured on at least an interval scale.
A) Parameter tests
B) Parametric tests
C) Nonparametric tests
D) None of the above
Answer: B
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116) ________ are hypothesis testing procedures that assume that the variables are measured on
a nominal or ordinal scale.
A) Parameter tests
B) Parametric tests
C) Nonparametric tests
D) None of the above
Answer: C
117) The ________ is a statistic that assumes that the variable has a symmetric bell-shaped
distribution and the mean is known (or assumed to be known) and the population variance is
estimated from the sample.
A) statistic
B) t statistic
C) z statistic
D) none of the above
Answer: B
118) The ________ is a univariate hypothesis test using the t distribution, which is used when
the standard deviation is unknown and the sample size is small.
A) z test
B) t test
C) paired samples test
D) F test
Answer: B
119) Which of the following statements is not true about parametric tests?
A) Parametric tests are used when the independent variables are non-metric.
B) The t test is a commonly used parametric test.
C) The t statistic assumes that the variable is normally distributed and the mean is known (or
assumed to be known) and the population variance is estimated from the sample.
D) B and C are not correct.
Answer: A
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120) The ________ is a symmetric bell-shaped distribution that is useful for small sample (n <
30) testing.
A) t distribution
D) distribution
Answer: A
121) Which statement is not true concerning the t distribution?

A) Compared to the normal distribution, the t distribution has more area in the tails and less in
the center.
B) As the number of degrees of freedom increases, the t distribution approaches the normal
distribution.
C) The t distributions are skewed to the left.
D) The population variance is unknown and is estimated by the sample variance s2.
Answer: C
122) Suppose we wanted to test the hypothesis that the mean familiarity rating exceeds 4.0, the
neutral value on a seven-point scale. The hypotheses may be formulated as ________.
A) H0:μ1 = μ2
H1:μ1 ≠ μ2
B) H0:σ12 = σ22
H1:σ12 ≠ σ22
C) H0:μ ≤ 4.0
H1:μ > 4.0
D) H0: π1 = π2
H1: π1 ≠ π2
Answer: C
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123) The degrees of freedom for the t statistic to test hypotheses about one mean are ________.
A) n
B) n - 1
C) n1 + n2
D) n1 +n2 - 2
Answer: B
124) If the population standard deviation was assumed to be known, rather than estimated from
the sample, a ________ would be appropriate rather than a ________.
A) z test; t test
B) t test; F test
C) t test; z test
D) z test; F test
Answer: A
125) In the parametric case of means for two independent samples, the hypotheses take which
form?
A) H0:μ1 = μ2
H1:μ1 ≠ μ2
B) H0:σ12 = σ22
H1:σ12 ≠ σ22
C) H0:μ ≤ 4.0
H1:μ > 4.0
D) H0: π1 = π2
H1: π1 ≠ π2
Answer: A
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126) The degrees of freedom for the t statistic to test the hypothesis about two independent
samples is ________.
A) n
B) n - 1
C) n1 + n2
D) n1 +n2 - 2
Answer: D
127) The F test of sample variance may be performed if it is not known whether the two
populations have equal variance. In this case the hypotheses are ________.
A) H0:μ1 = μ2
H1:μ1 ≠ μ2
B) H0:σ12 = σ22
H1:σ12 ≠ σ22
C) H0:μ ≤ 4.0
H1:μ > 4.0
D) H0: π1 = π2
H1: π1 ≠ π2
Answer: B
128) The ________ is a statistical test of the equality of the variances of two populations.
A) z test
B) t test
C) paired samples test
D) F test
Answer: D
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129) The ________ is a frequency distribution that depends upon two sets of degrees of freedom,
the degrees of freedom in the numerator and the degrees of freedom in the denominator.
A) t distribution
B) Z statistic
Answer: D
130) If the probability of F is greater than the significance level α, ________ and ________
should be used.
A) H0 is rejected; t based on "equal variances not assumed"
B) H0 is not rejected; t based on "equal variances assumed"
C) H0 is rejected; t based on "equal variances assumed"
D) H0 is not rejected; t based on "equal variances not assumed"
Answer: B
131) For the parametric case, involving proportions for two independent samples, the null and
alternative hypotheses are ________.
A) H0:μ1 = μ2
H1:μ1 ≠ μ2
B) H0:σ12 = σ22
H1:σ12 ≠ σ22
C) H0:μ ≤ 4.0
H1:μ > 4.0
D) H0: π1 = π2
H1: π1 ≠ π2
Answer: D
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132) The degrees of freedom for the t statistic to test hypotheses about paired samples are
________.
A) n
B) n - 1
C) n1 + n2
D) n1 + n2 - 2
Answer: B
133) For the parametric case involving the means of paired samples, the null and alternative
hypotheses are ________.
A) H0:μ1 = μ2
H1:μ1 ≠ μ2
B) H0:σ12 = σ22
H1:σ12 ≠ σ22
C) H0:μD = 0
H1:μD ≠ 0
D) H0: π1 = π2
H1: π1 ≠ π2
Answer: C
134) In the context of the Internet usage example, suppose we wanted to test whether the
probability of observing a K value of .222, as determined by the normalized z statistic, is 0.103.
Because this is more than the significance level of 0.05, the null hypothesis cannot be rejected.
What do the results mean?
A) The distribution of the Internet usage does deviate significantly from the normal distribution.
B) The distribution of the Internet usage does not deviate significantly from the normal
distribution.
C) The proportion of users for males and for females is not significantly different for the two
samples.
D) The proportion of users for males and for females is significantly different for the two
samples.
Answer: B
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135) A one-sample nonparametric goodness-of-fit test to determine whether the observations for
a particular variable could reasonably have come from a particular distribution is the ________.
A) Kolmogorov-Smirnov one-sample test
B) runs test
C) binomial test
D) Mann-Whitney U test
Answer: A
136) A Kolmogorov-Smirnov one-sample test was conducted. The largest absolute difference
between the observed and normal distribution was K = 0.222. The sample size was only 30
therefore, the approximate formula was used and the critical value for K was 0.248. Because the
calculated value of K is ________ than the critical value, the null hypothesis ________ be
rejected.
A) smaller; cannot
B) larger; cannot
C) smaller; can
D) larger; can
Answer: A
137) The test statistic used in the Kolmogorov-Smirnov one-sample test is ________.
A) K = Max |Oi, Ai |
B) K = Min | Ai - Oi |
C) K = Max | Ai - Oi |
D) K = Min | Oi , Ai |
Answer: C
138) Which of the following tests is not a non-parametric one-sample test?

B) runs test
C) binomial test
Answer: D
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139) When the difference in the location of two populations is to be compared based on
observations from two independent samples, and the variable is measured on an ordinal scale, the
________ can be used.
B) runs test
C) binomial test
Answer: D
140) A ________ is a test conducted by determining whether the order or sequence in which
observations are obtained is random.
A) Mann-Whitney U test
B) sign test
C) binomial test
D) runs test
Answer: D
141) The ________ tests the goodness of fit of the observed number of observations in each
category to the number expected under a specified binomial distribution.
B) sign test
C) binomial test
D) runs test
Answer: C
142) If the samples used in the Mann-Whitney U test are from the same population, the
distribution of scores from the two groups in the rank list should be ________.
A) random
B) u-shaped
C) normal
D) uniform
Answer: A
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143) Which test is not an independent samples test?

A) Kolmogorov-Smirnov two-sample test
B) Wilcoxon matched-pairs signed-ranks test
C) Mann-Whitney U test
D) two-sample median test
Answer: B
144) The test statistic used in the Wilcoxon matched-pairs signed-ranks test is ________.
A) t
B) chi-square
C) alpha
D) z
Answer: D
145) A nonparametric test that analyzes the differences between the paired observations, taking
into account the magnitude of the differences is the ________.
A) Wilcoxon matched-pairs signed-ranks test
B) sign test
C) McNemar test
D) runs test
Answer: A
146) The ________ test is a nonparametric test for examining differences in the location of two
populations, based on paired observations, that compares only the signs of the differences
between pairs of variables without taking into account the magnitude of the differences.
B) sign test
C) binomial test
D) runs test
Answer: B
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147) Nonparametric tests are not available in ________.

A) SAS
B) Excel
C) SPSS
D) MINITAB
Answer: B
148) Which program or function listed below is not useful for conducting nonparametric tests?
A) NPAR TESTS
B) NPAR1WAY
C) Stat>Time Series
Answer: D
149) Mean, median, variance, standard deviation, minimum, maximum, and range are some of
the statistics that can be calculated via ________, ________, and ________ in SPSS.
A) FREQUENCIES; EXPLORE; and DESCRIPTIVES
B) DESCRIPTIVES; COUNTS; and EXPLORE
C) EXPLORE; DESCRIPTIVES; and COUNTS
D) COUNTS; FREQUENCIES; and DESCRIPTIVES
Answer: A
150) When conducting marketing research, what general rules should be followed to determine
when the different measures of location should be used?
Answer: If the variable is measured on a nominal scale, the mode is the appropriate measure of
central tendency that should be used. If the variable is measured on an ordinal scale, the median
is appropriate. If the variable is measured on an interval or ratio scale, the mean is the most
appropriate measure of central tendency.
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151) Define the null and alternative hypotheses. Discuss the relationship between the two
hypotheses.
Answer: A null hypothesis is a statement of the status quo, one of no difference or no effect. If
the null hypothesis is not rejected, no changes will be made. An alternative hypothesis is one in
which some difference or effect is expected. Accepting the alternative hypothesis will lead to
changes in opinions or actions. Thus, the alternative hypothesis is the opposite of the null
hypothesis. The null hypothesis is always the hypothesis that is tested. The alternative hypothesis
represents the conclusion for which evidence is sought. The null hypothesis refers to a specified
value of the population parameter, not a sample statistic. In marketing research, the null
hypothesis is formulated in such a way that its rejection leads to the acceptance of the desired
conclusion.
152) Discuss the relationship between Type I error and Type II error and the power of a test.
Answer: Type I error occurs when the sample results lead to the rejection of the null hypothesis
when it is in fact true. The probability of Type I error is denoted as α. Type II error occurs
when, based on the sample results, the null hypothesis is not rejected when it is in fact false. The
probability of Type II error is denoted by β. Unlike α, which is specified by the researcher, the
magnitude of β depends on the actual value of the population parameter (proportion). The
complement (1 - β) of the probability of a Type II error is called the power of a statistical test.
The power of a test is the probability of rejecting the null hypothesis when it is false and should
be rejected. Although β is unknown, it is related to α. An extremely low value of α (e.g., = 0.001)
will result in intolerably high β errors. So it is necessary to balance the two types of errors. As a
compromise, α is often set at 0.05; sometimes it is 0.01; other values of α are rare. The level of α,
along with the sample size, will determine the level of β for a particular research design. The risk
of both α and β can be controlled by increasing the sample size. For a given level of α, increasing
the sample size will decrease β, thereby increasing the power of the test.
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153) Discuss the relationship between cross-tabulation and frequency distribution.

Answer: Whereas a frequency distribution describes one variable at a time, a cross-tabulation
describes two or more variables simultaneously. A cross-tabulation is the merging of the
frequency distribution of two or more variables in a single table. It helps us to understand how
one variable such as brand loyalty relates to another variable such as sex. Cross-tabulation results
in tables that reflect the joint distribution of two or more variables with a limited number of
categories or distinct values. The categories of one variable are cross-classified with the
categories of one or more other variables. Thus, the frequency distribution of one variable is
subdivided according to the values or categories of the other variables.
154) Give three reasons why cross-tabulation is widely used in marketing research.
Answer: Cross-tabulation is widely used in commercial marketing research because (1) cross-
tabulation analysis and results can be easily interpreted and understood by managers who are not
statistically oriented; (2) the clarity of interpretation provides a stronger link between research
results and managerial action; (3) a series of cross-tabulations may provide greater insights into a
complex phenomenon than a single multivariate analysis; (4) cross-tabulation may alleviate the
problem of sparse cells, which could be serious in discrete multivariate analysis; and (5) cross-
tabulation analysis is simple to conduct and appealing to less sophisticated researchers.
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Chapter 16 Analysis of Variance and Covariance
1) Analysis of variance and analysis of covariance are tests of differences between two means or
median.
Answer: FALSE
LO: 16.1 Discuss the scope of the analysis of variance (ANOVA) technique and its relationship
to the t test and regression.
2) A marketing survey conducted by EgeBank in Istanbul, Turkey used analysis of variance

techniques to help identify affective and perceptual factors that differentiate alternative tourist
destinations.
Answer: TRUE
3) The null hypothesis for ANOVA is that all means are not equal.
Answer: FALSE
4) A particular combination of factor levels, or categories, is called a treatment.

Answer: TRUE
5) ANOVA and ANCOVA can include more than one independent variable and at least one of
the independent variables must be categorical.
Answer: TRUE
6) ANOVA and ANCOVA include one independent variable and t tests include more than one
independent variable.
Answer: FALSE
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7) The last step in the procedure for conducting one-way analysis of variance is to test the
significance.
Answer: FALSE
LO: 16.2 Describe one-way analysis of variance, including decomposition of the total variation,
measurement of effects, significance testing, and interpretation of results.
8) In examining the differences among means, one-way analysis of variance involves the
decomposition of the total variation observed in the independent variable.
Answer: FALSE
9) Analysis of variance is so named because it examines the variability or variation in the sample
(dependent variable) and, based on the variability, determines whether there is reason to believe
that the population means differ.
Answer: TRUE
10) SSbetween is the portion of the sum of squares in Y related to the independent variable or
factor X.
Answer: TRUE
11) SSbetween is also denoted as SSy.

Answer: FALSE
12) SSwithin is the variation in Y related to the variation within each category of X.
Answer: TRUE
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13) SSwithin is referred to as SSerror.

Answer: TRUE
14) In analysis of variance, it is assumed that all the groups have the same variation in the
population.
Answer: TRUE
15) The value of η2 varies between 0 and 1.

Answer: TRUE
16) η2 assumes a value of 0 when all the category means are equal, indicating that X has no
effect of X on Y.
Answer: TRUE
17) In one-way analysis of variance, under the null hypothesis, SSx and SSerror come from
different sources of variation.
Answer: FALSE
18) Modest departures from the assumptions in analysis of variance do not seriously affect the
validity of the analysis.
Answer: TRUE
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19) Interactions occur when the effects of one factor on the dependent variable depend on the
level (category) of the other factors.
Answer: TRUE
LO: 16.3 Describe n-way analysis of variance and the testing of the significance of the overall
effect, the interaction effect, and the main effect of each factor.
20) When using n-way ANOVA the significance of the overall effect may be tested by a t test.
Answer: FALSE
21) The n-way ANOVA considered assumes that the design was orthogonal, or balanced (the
number of cases in each cell was the same).
Answer: TRUE
22) The most common use of the covariate is to remove extraneous variation from the dependent
variable.
Answer: TRUE
LO: 16.4 Describe analysis of covariance and show how it accounts for the influence of
uncontrolled independent variables.
23) Analysis of covariance is most useful when the covariate is not linearly related to the
dependent variable and is not related to the factors.
Answer: FALSE
24) An interaction effect occurs when the effect of an independent variable on a dependent
variable is different for different categories or levels of another independent variable.
Answer: TRUE
LO: 16.5 Explain key factors pertaining to the interpretation of results with emphasis on
interactions, relative importance of factors, and multiple comparisons.
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25) Ordinal interaction involves a change in the rank order of the effects of one factor across the
levels of another.
Answer: FALSE
26) The most commonly used measure in ANOVA indicating the relative importance of factors
is omega squared, (ω2).
Answer: TRUE
27) Omega squared, ω2, indicates what proportion of the variation in the dependent variable is
related to a particular independent variable or factor.
Answer: TRUE
28) The estimated value of ω2 can be negative, in which case the estimated value of ω2 is set
equal to one.
Answer: FALSE
29) Contrasts are used in ANOVA to determine which of the means are statistically different.
Answer: TRUE
30) The Kruskal-Wallis one-way analysis of variance and the k-sample median test have the
same null hypothesis: "medians of the k populations are equal."
Answer: TRUE
LO: 16.6 Discuss specialized ANOVA techniques applicable to marketing such as repeated
measures ANOVA, nonmetric analysis of variance, and multivariate analysis of variance
(MANOVA).
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31) Nonmetric analysis of variance examines the difference in the central tendencies of more
than two groups when the dependent variable is measured on a nominal scale.
Answer: FALSE
(MANOVA).
32) The Kruskal-Wallis one-way analysis of variance also examines the difference in medians.
Answer: TRUE
(MANOVA).
33) Multivariate analysis of variance is appropriate when there are two or more dependent
variables that are correlated.
Answer: TRUE
(MANOVA).
34) A statistical technique for examining the differences among means for two or more
populations is called ________.
A) chi-square
B) analysis of variance (ANOVA)
C) cross-tabulation
D) independent samples t test
Answer: B
35) Categorical independent variables are ________. The independent variables must all be
categorical (nonmetric) to use ________.
A) factors; ANOVA
B) covariates; ANOVA
C) parameters; regression
D) items; ANOVA
Answer: A
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36) Which statement is correct concerning one-way ANOVA?

A) Only one categorical variable is involved.
B) A treatment is the same as a particular combination of factor levels.
C) The set of independent variables consists of both categorical and metric variables.
D) Both A and B are correct.
Answer: D
37) An advanced analysis of variance procedure in which the effects of one or more metric-
scaled extraneous variables are removed from the dependent variable before conducting the
ANOVA is called ________.
A) analysis of covariance (ANCOVA)
B) one-way analysis of variance
C) n-way analysis of variance
D) decomposition of the total variation
Answer: A
38) The null hypothesis for one-way ANOVA typically is that all ________.
A) proportions are equal
B) means are unequal
C) proportions are unequal
D) means are equal
Answer: D
39) A covariate is a ________ independent variable used in ________.

A) metric; ANOVA
B) categorical; ANCOVA
C) metric; ANCOVA
D) categorical; ANOVA
Answer: C
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40) Which of the statistical techniques below does not involve a metric independent variable
(Figure 16.1 in the text)?
A) t test
B) ANOVA
C) regression
Answer: D
41) How consumers' "intentions to buy the brand" varies with different price levels is best
analyzed via ________.
A) t tests
B) one-way ANOVA
C) ANCOVA
D) regression
Answer: B
42) The strength of the effects of X (independent variable or factor) on Y (dependent variable) is
measured by ________.
A) eta2 (η2)
B) SSx
C) SSy
D) SSwithin
Answer: A
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43) Also referred to as SSerror, ________ is the variation in Y due to the variation within each of
the categories of X. This variation is not accounted for by X.
A) SSx
B) SSwithin
C) SSbetween
D) SSy
Answer: B
44) The total variation in y is ________.

A) SSx
B) SSwithin
C) SSbetween
D) SSy
Answer: D
45) In one-way ANOVA, separation of the variation observed in the dependent variable into the
variation due to the independent variables plus the variation due to error is called ________.
A) decomposition of the total variation
B) one-way analysis of variance
C) n-way analysis of variance
D) analysis of covariance (ANCOVA)
Answer: A
46) The total variation in Y, denoted by SSy, can be decomposed into which two components?
A) SSy = SSx - SSerror
B) SSy = SSbetween + SSwithin
C) SSy = SSx + SSerror
D) B and C are correct.
Answer: D
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47) Which step are you on in the procedure for conducting one-way analysis of variance if you
are decomposing SSy into two components using the equation SSy = SSbetween + SSwithin?
A) decompose the total variation
B) measure the effects
C) test the significance
D) interpret the results
Answer: A
48) Which statement is correct concerning the decomposition of the total variation?
A) Because it is not known that all the groups have the same mean, we cannot calculate the
variance of all the observations together.
B) If the population mean is the same in all the groups, then the variation in the sample means
and the sizes of the sample groups can be used to estimate the variance of Y.
C) By comparing the Y variance estimates based on between-group and within group variation,
we can test the null hypothesis.
D) All statements are correct.
Answer: D
49) If you are estimating η2, you are at which step in the procedure for conducting one-way
analysis of variance?
A) decompose the total variation
B) measure the effects
C) test the significance
D) interpret the results
Answer: B
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50) The effects of X on Y is measured by ________.

A) SSerror
B) SSx
C) SSy
D) SSwithin
Answer: B
51) ________ is a measure of variation in Y that is explained by the independent variable X.

A) eta2 (η2)
B) SSx
C) SSy
D) SSwithin
Answer: A
52) In one-way ANOVA, the null hypothesis may be tested by ________.

A) the t statistic
B) statistic
C) chi-square
D) eta2
Answer: B
53) Which statement is correct if the null hypothesis for a one-way ANOVA is rejected?
A) The effect of the independent variable is significant.
B) The mean value of the dependent variable will be the same for different categories of the
independent variable.
C) The independent variable does not have a significant effect on the dependent variable.
Answer: A
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54) The ________ refers to the fact that ordinarily the assumption in analysis of variance that the
categories of the independent variable are fixed.
A) fixed-effects model
B) random-effects model
C) mixed-effects model
D) standard-effects model
Answer: A
55) In the ________, the categories or treatments are considered to be random samples from a
universe of treatments. Inferences are made to other categories not examined in the analysis.
A) fixed-effects model
B) random-effects model
C) mixed-effects model
D) standard-effects model
Answer: B
56) How consumers' intentions to buy a brand vary with different levels of price and different
levels of distribution is best analyzed via ________.
A) n-way ANOVA
B) one-way ANOVA
C) ANCOVA
D) regression
Answer: A
57) A major advantage of ________ is that it enables the researcher to examine interactions
between the factors.
A) one-way ANOVA
B) n-way ANOVA
C) t tests
D) tests
Answer: B
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58) The strength of the joint effect of two (or more) factors or the overall effect is known as
________.
A) significance of the overall effect
B) significance of the main effect
C) multiple η2
D) significance of the interaction effect
Answer: C
59) A test finding that some differences exist between some of the treatment groups is a test of
the ________.
C) multiple η2
Answer: A
60) Which F test is used in n-way ANOVA to test the significance of the overall effect?
A) F =
B) F =
C) F =
D) F =
Answer: B
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61) A test of the significance of the interaction between two or more independent variables is a
test of the ________.
C) multiple η2
Answer: D
62) A test of the significance of the main effect for each individual factor is a test of the
________.
C) multiple η2
Answer: B
63) In determining how different price levels will affect a household's cereal consumption, it
may be essential to take household size into account. This is best analyzed by ________.
A) n-way ANOVA
B) one-way ANOVA
C) ANCOVA
D) regression
Answer: C
64) Analysis of covariance includes at least one ________ independent variable and at least one
________ independent variable.
A) categorical; interval
B) ordinal; categorical
C) metric; interval
D) parametric; interval
Answer: A
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65) Important issues involved in the interpretation of ANOVA results include all of the following
except ________.
A) interactions
B) determining the appropriateness of the test
C) relative importance of factors
D) multiple comparisons
Answer: B
66) Which statement is not true concerning interactions resulting from ANOVA?
A) In disordinal interactions of a crossover type, the relative effect of the levels of one factor
changes with the levels of the other.
B) Because it involves a change in rank order, disordinal interaction is stronger than ordinal
interaction.
C) Disordinal interactions of a crossover type represent the weakest interactions.
D) In ordinal interaction, the rank order of the effects related to one factor does not change
across the levels of the second factor.
Answer: C
67) At what point does ω2 begin to represent a larger experimental effect?

A) .25
B) .15
C) .10
D) .06
Answer: B
68) ________ are used to examine differences among two or more means of the treatment
groups.
A) Nonmetric ANOVA
B) Contrasts
C) Repeated measures ANOVA
D) Multivariate analysis of variance (MANOVA)
Answer: B
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69) In ANOVA the relative contribution of a factor X is calculated as ________.
A) ω2 x =
B) ω2 x =
C) ω2 x =
D) ω2 x =
Answer: A
70) ________ are determined before conducting the analysis, based on the researcher's
theoretical framework.
A) Single comparison contrasts
B) Multiple comparison contrasts
C) A priori contrasts
D) A posteriori contrasts
Answer: C
71) ________ are contrasts made after the analysis.

Answer: D
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72) ________ are contrasts that enable the researcher to construct generalized confidence
intervals that can be used to make pairwise comparisons of all treatment means.
Answer: B
73) ________ is an ANOVA technique used when respondents are exposed to more than one
treatment condition and repeated measurements are obtained.
A) Nonmetric ANOVA
B) Contrasts
Answer: C
(MANOVA).
74) Repeated measures analysis of variance may be thought of as an extension of the ________
to the case of more than two related samples.
A) z test
B) F test
C) t test
D) paired samples t test
Answer: D
(MANOVA).
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75) ________ is an ANOVA technique for examining the difference in the central tendencies of
more than two groups when the dependent variable is measured on an ordinal scale.
A) Nonmetric ANOVA
B) Contrasts
Answer: A
(MANOVA).
76) ________ is an ANOVA technique using two or more metric dependent variables.
A) Nonmetric ANOVA
B) Contrasts
Answer: D
(MANOVA).
77) Suppose that four groups, each consisting of 100 randomly selected individuals, were
exposed to four different commercials about Tide detergent. After seeing the commercial, each
individual provided ratings on preference for Tide, preference for Proctor and Gamble (the
company making Tide), and preference for the commercial itself. Because these three preference
variables are correlated, ________ should be conducted to determine which commercial is the
most effective (produced the highest preferences across the three variables).
A) MANOVA
B) one-way ANOVA
C) n-way ANOVA
D) regression
Answer: A
(MANOVA).
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78) Which statement about MANOVA is not true?

A) MANOVA examines group differences across multiple dependent variables simultaneously.
B) In MANOVA, the null hypothesis is that the vectors of means on multiple dependent
variables are equal across groups.
C) MANOVA is most appropriate if there are multiple dependent variables that are uncorrelated
or orthogonal.
D) Multivariate analysis of variance is appropriate when there are two or more dependent
variables that are correlated.
Answer: C
(MANOVA).
79) When using SPSS Windows one-way ANOVA can be efficiently performed using the
________ program.
A) GENERAL LINEAR MODEL
B) NONPARAMETRIC TESTS
C) COMPARE MEANS
D) UNIVARIATE
Answer: C
80) When using SPSS Windows, for nonmetric analysis of variance, including the k-sample
median test and Kruskal-Wallis one way analysis of variance, the program ________ should be
used.
A) general linear model
B) nonparametric tests
C) compare means
D) univariate
Answer: B
(MANOVA).
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81) Explain SSbetween, SSwithin, and SSy and their relationship.

Answer:
∙ SSbetween. Also denoted as SSx, this is the variation in Y related to the variation in the means of
the categories of X. This represents variation between the categories of X, or the portion of the
sum of squares in Y related to X.
∙ SSwithin. Also referred to as SSerror, this is the variation in Y due to the variation within each
of the categories of X. This variation is not accounted for by X.
∙ SSy. The total variation in Y is SSy. SSy = SSbetween + SSwithin.
82) List the procedure for conducting one-way analysis of variance.

Answer: The procedure for conducting one-way analysis of variance is described in Figure 16.2
in the text. It involves identifying the dependent and independent variable, decomposing the
total variation, measuring effects, testing significance, and interpreting results.
83) What are the general steps involved in performing an ANCOVA?

Answer:
1. Remove variation in the dependent variable due to covariates by adjusting the dependent
variable's mean value within each treatment condition.
2. Perform analysis of variance on adjusted scores from step one.
3. Use appropriate F tests to test the significance of each covariate and the combined effects of
the covariates.
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84) Draw the ANOVA interactive cases listed below (Figure 16.4 in the text). Name your
dependent variable Y and assume that there are two factors, X1 with three levels (X11, X12, and
X13), and X2 with two levels (X21 and X22). Briefly discuss/describe the interaction shown in
each of your drawings.
1. no interaction
2. ordinal interaction
3. disordinal interaction (noncrossover)
4. disordinal interaction (crossover)
Answer: Refer to Figure 16.4 in the text for a picture of what the students should draw in
response to this question and to follow the illustrative discussion given.
Case 1 depicts no interaction. The effects of X1 on Y are parallel over the two levels of X2.
Although there is some departure from parallelism, this is not beyond what might be expected
from chance. Parallelism implies that the net effect of X22 over X21 is the same across the three
levels of X1. In the absence of interaction, the joint effect of X1 and X2 is simply the sum of their
individual main effects.
Case 2 depicts an ordinal interaction. The line segments depicting the effects of X1 and X2 are
not parallel. The difference between X22 and X21 increases as we move from X11 to X12 and
from X12 to X13, but the rank order of the effects of X1 is the same over the two levels of X2.
Case 3 depicts disordinal interaction of a noncrossover type. The lowest effect of X1 at level X21
occurs at X11, and the rank order of effects is X11, X12, and X13. However, at level X22, the
lowest effect of X1 occurs at X12, and the rank order is changed to X12, X11, X13. Because it
involves a change in rank order, disordinal interaction is stronger than ordinal interaction.
Case 4 depicts disordinal interactions of a crossover type - the line segments cross each other. In
this case, the relative effect of the levels of one factor changes with the levels of the other. Note
that X22 has a greater effect than X21 when the levels of X1 are X11 and X12. When the level of
X1 is X13, the situation is reversed, and X21 has a greater effect than X22. (Note that in cases 1,
2, and 3, X22 had a greater impact than X21 across all three levels of X1.) Hence, disordinal
interactions of a crossover type represent the strongest interactions.
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Chapter 17 Correlation and Regression
1) Regression analysis models helped Avon realize that employee benefits and the appointment
fee that representatives pay for materials were significant variables affecting the decline in their
sales staff.
Answer: TRUE
LO: 17.1 Discuss the concepts of product moment correlation, partial correlation, and part
correlation and show how they provide a foundation for regression analysis.
2) The product moment correlation, r, is the most widely used statistic summarizing the strength
of association between two metric (interval or ordinal scaled) variable, say X and Y.
Answer: FALSE
3) The product moment correlation, r2, is an index used to determine whether a linear, or
straight-line, relationship exists between X and Y. It indicates the degree to which the variation
in one variable, X, is related to the variation in another variable, Y.
Answer: FALSE
4) The covariance may be either positive or negative.

Answer: TRUE
5) The correlation coefficient between two variables varies depending on their underlying units
of measurement.
Answer: FALSE
6) Because r indicates the degrees to which variation in one variable is related to variation in
another, it can also be expressed in terms of the decomposition of the total variation.
Answer: TRUE
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7) Both r and r2 are symmetric measures of association. In other words, the correlation of X and
Y is the same as the correlation of Y and X.
Answer: TRUE
8) When determining the correlation coefficient, r, it does matter which variable is considered to
be the dependent variable and which is the independent.
Answer: FALSE
9) When determining the statistical significance of the relationship between two variables
measured by using r, the hypotheses to be tested are H0: ρ = 0 and H1:ρ ≠ 0
Answer: TRUE
10) A correlation matrix indicates the coefficient of correlation between each pair of variables.
Answer: TRUE
11) A partial correlation coefficient measures the association between two variables after
controlling for or adjusting for the effects of one or more additional variables.
Answer: TRUE
12) The order associated with a partial correlation indicates how many variables are being
adjusted or controlled.
Answer: TRUE
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13) The partial correlation coefficient is a measure of the correlation between Y and X when the
linear effects of the other independent variables have been removed from X but not from Y.
Answer: FALSE
14) The partial correlation coefficient is generally viewed as more important than the part
correlation coefficient.
Answer: TRUE
15) In the absence of ties, Kendall's τ yields a closer approximation to the Pearson product
moment correlation coefficient, ρ, than Spearman's ρs.
Answer: FALSE
LO: 17.5 Discuss nonmetric correlation and measures such as Spearman's rho and Kendall's tau.
16) If the nonmetric variables are nominal and numeric, Spearman's rho and Kendall's tau are
two measures of nonmetric correlation that can be used to examine the correlation between them.
Answer: FALSE
17) Regression analysis is concerned with the nature and degree of association between variables
and does not imply or assume any causality.
Answer: TRUE
LO: 17.2 Explain the nature and methods of bivariate regression analysis and describe the
general model, estimation of parameters, standardized regression coefficient, significance
testing, prediction accuracy, residual analysis, and model cross-validation.
18) The product moment correlation helps us determine the strength of the association between
two metric variables. Regression analysis helps us determine which variables cause a change in
other variables.
Answer: FALSE
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19) The estimated parameter b is usually referred to as the non-standardized regression

coefficient.
Answer: TRUE
20) In bivariate regression, the null hypothesis is that no linear relationship exists between X and
Y, or H0: β1 = 0.
Answer: TRUE
21) When fitting a straight line to a scattergram, the best-fitting line is called the regression line.
Answer: TRUE
22) The vertical distance from a point to the regression line is the squared error, e2.
Answer: FALSE
23) Standardized variables have a mean of 1 and a variance of zero.

Answer: FALSE
24) The term beta coefficient or beta weight is used to denote the standardized regression
coefficient.
Answer: TRUE
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25) The statistical significance of the linear relationship between X and Y may be tested by
examining the hypotheses: H0: β1 ≠ 0; H1: β1 = 0.
Answer: FALSE
26) The formula for the coefficient of determination is r2 = SSreg/ SSy.

Answer: TRUE
27) The hypotheses for the test for significance of the coefficient of determination are: H0:
R2pop = 0 ; H1: R2pop > 0.
Answer: TRUE
28) The standard error of estimate, SEE, is the standard deviation of the actual Y values from the
predicted Ŷ values.
Answer: TRUE
29) The standard error of estimate, SEE, may be interpreted as a kind of average residual or
average error in predicting Y from the regression equation.
Answer: TRUE
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30) The general form of the multiple regression model is: Y = β0 + β1 X1 + β2 X2 + β3X3 + ....
+ βkXk + e
Answer: TRUE
LO: 17.3 Explain the nature and methods of multiple regression analysis and the meaning of
partial regression coefficients.
31) The coefficient of multiple determination is adjusted for the number of dependent variables
and the sample size to account for diminishing returns.
Answer: FALSE
32) The multiple correlation coefficient, R, can also be viewed as the simple correlation
coefficient, r, between Y and Ŷ.
Answer: TRUE
33) R2 cannot decrease as more independent variables are added to the regression equation.
Answer: TRUE
34) In multiple regression, if the overall null hypothesis is rejected, we know which specific
coefficients (βis) are nonzero.
Answer: FALSE
35) A residual is the difference between the observed value of Yi and the value predicted by the
regression equation, Ŷi.
Answer: TRUE
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36) If a variable explains a significant proportion of the residual variation, it should be

considered for inclusion in the regression equation.
Answer: TRUE
37) If an examination of the residuals indicates that the assumptions underlying linear regression
are not met, the researcher can transform the variables in an attempt to satisfy the assumptions.
Answer: TRUE
38) When there are a large number of independent variables and the researcher suspects that not
all of them are significant, stepwise regression should be used.
Answer: TRUE
LO: 17.4 Describe specialized techniques used in multiple regression analysis, particularly
stepwise regression, regression with dummy variables, and analysis of variance and covariance
with regression.
39) The purpose of stepwise regression is to select, from a large number of predictor variables, a
small subset of variables that account for most of the variation in the dependent or criterion
variable.
Answer: TRUE
with regression.
40) Stepwise procedures result in regression equations that are optimal, in the sense of producing
the largest R2, for a given number of predictors.
Answer: FALSE
with regression.
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41) Multicollinearity arises when intercorrelations among the predictors are very low.
Answer: FALSE
with regression.
42) In regression with dummy variables, the predicted Ŷ for each category is the mean of Y for
each category.
Answer: TRUE
with regression.
43) Regression in which a single independent variable has been recoded into dummy variables is
equivalent to one-way analysis of variance.
Answer: TRUE
with regression.
44) The product moment correlation is also known as the Pearson correlation coefficient and as
________.
A) simple correlation
B) bivariate correlation
C) correlation coefficient
D) all of the above
Answer: D
45) ________ is best to use to determine how strongly sales are related to advertising
expenditures.
A) Multiple regression analysis
B) Partial correlation coefficient
C) ANOVA
D) Product moment correlation (r)
Answer: D
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46) The ________ is a statistic summarizing the strength of association between two metric
variables.
A) multiple regression analysis
B) partial correlation coefficient
C) ANOVA
D) product moment correlation
Answer: D
47) The equation for r involves dividing the ________ by ________.

A) COVxy; the product of the variance of X and Y (Sx2Sy2)
B) product of the standard deviation of X and Y (SxSy); COVxy
C) COVxy; the product of the standard deviation of X and Y (SxSy)
D) product of the variances of X and Y (Sx2Sy2); COVxy
Answer: C
48) The equation for r is represented as ________.

A) COVxy/ Sx2Sy2
B) SxSy/COV
C) COVxy/ SxSy
D) Sx2Sy2/COV
Answer: C
49) In the equation COVxy/ SxSy, Sx and Sy represent ________.

A) the standard deviation of X and Y
B) the variances of X and Y
C) the means of X and Y
D) the strength of the effects of X and Y
Answer: A
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50) r2 measures ________.

A) the proportion of variation in one variable that is explained by the other
B) the proportion of error variation
C) the proportion of variation in Y related to the variation of the categories of X
D) the proportion of variation in Y due to the variation within each of the categories of X
Answer: A
51) r = 0 indicates ________.

A) X and Y have a relationship
B) X and Y don't have a linear relationship
C) X and Y are unrelated
D) X and Y have a linear relationship
Answer: B
52) Which statement about the correlation coefficient, r, is true?

A) The calculation of r assumes that X and Y are metric variables whose distributions have the
same shape.
B) The correlation coefficient computed for a population is denoted by ρ(rho).
C) Data obtained by using rating scales with a small number of categories tends to deflate r.
D) All of the statements are true.
Answer: D
53) Which statement is not true about correlation matrices?

A) Usually only the lower portion of the matrix is considered.
B) The diagonal elements all equal 0.
C) A correlation matrix indicates the coefficient of correlation between each pair of variables.
D) The upper triangular portion of the matrix is a mirror image of the lower triangular portion.
Answer: B
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54) The ________ is a measure of the association between two variables after controlling or
adjusting for the effects of one or more additional variables.
A) regression analysis
C) ANOVA
Answer: B
55) The question of "How strongly are sales related to advertising expenditures when the effect
of price is controlled?" is best answered via ________.
A) bivariate regression analysis
C) ANOVA
Answer: B
56) Which statement is not correct about the partial correlation coefficient?
A) Partial correlations can be helpful for detecting spurious relationships.
B) The partial correlation coefficient is generally viewed as more important than the part
correlation coefficient.
C) The partial correlation coefficient represents the correlation between Y and X when the linear
effects of the other independent variables have been removed from X but not from Y.
D) The partial correlation coefficient can be calculated by a knowledge of the simple correlations
alone.
Answer: C
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57) Partial correlations have an order associated with them. The order indicates how many
variables are being adjusted or controlled. The simple correlation coefficient, r, has a ________,
as it does not control for any additional variables when measuring the association between two
variables. The coefficient rsy.z is a ________ partial correlation coefficient, as it controls for the
effect of one additional variable, Z.
A) zero-order; first-order
B) zero-order; second-order
C) first-order; second-order
D) first-order; third-order
Answer: A
58) The relationship between X and Y is spurious if ________.

A) Y increases exponentially with increases in X
B) the correlation between X and Y disappears when the effect of Z is controlled
C) Y decreases exponentially with decreases in X
D) both A and C are correct
Answer: B
59) ry(x.z) represents the ________.

A) partial correlation
B) Pearson correlation
C) part correlation
D) partition correlation
Answer: C
60) Which of the following is a measure of nonmetric correlation?

A) Pearson product moment correlation
B) Spearman's rho
C) Kendall's tau
D) both B and C
Answer: D
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61) When considering nonmetric correlation, as a rule of thumb, ________ is to be preferred

when a large number of cases fall into a relatively small number of categories (thereby leading to
a large number of ties).
A) Spearman's rho
B) Kendall's tau
C) chi-square
D) Pearson product moment correlation
Answer: B
62) ________ is a statistical procedure for analyzing associative relationships between a metric
dependent variable and one or more independent variables.
A) Regression analysis
B) Partial correlation coefficient
C) ANOVA
D) Product moment correlation
Answer: A
63) ________ is a procedure for deriving a mathematical relationship, in the form of an equation,
between a single metric dependent variable and a single metric independent variable.
A) Chi-square
B) Part correlation
C) Multiple regression
D) Bivariate regression
Answer: D
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64) Which of the following situations is best addressed by regression?

A) Is there an association between market share and the size of the sales force?
B) Is there an association between market share and size of the sales force after adjusting for the
effect of sales promotion?
C) Determine how much of the variation in the dependent variable (store sales) can be explained
by the independent variables (price and level of advertisement).
D) Are consumers' perceptions of quality related to their perceptions of prices when the effect of
brand image is controlled?
Answer: B
65) Which statement is not true about regression analysis?

A) The terms dependent or criterion variables, and independent or predictor variables in
regression analysis do not imply that the criterion variable is dependent on the independent
variables in a causal sense.
B) Regression analysis can be used to determine if color preference is related to product size and
price.
C) Regression can be used to predict the values of the dependent variable.
D) Regression analysis is a powerful and flexible procedure for analyzing associative
relationships between a metric dependent variable and one or more independent variables.
Answer: B
66) A technique for fitting a straight line to a scattergram by minimizing the square of the
vertical distances of all the points from the line is known as the ________.
A) least-square procedure
B) scatter diagram plot
C) sum of square errors procedure
D) maximum residual procedure
Answer: A
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67) The bivariate regression model that accounts for the probabilistic or stochastic nature of the
relationship between X and Y is ________.
A) Ŷ = a + b1X1 + b2X2
B) Y = β0 + β1 Xi
C) Yi =β0 + β1 Xi + ei
D) Ŷ i = a + bXi
Answer: C
68) What is the bivariate regression equation if sample observations are used to predict Y?
A) Ŷ = a + b1X1 + b2X2
B) Ŷ = β0 + β1 Xi
C) Ŷ i =β0 + β1 Xi + ei
D) Ŷ i = a + bxi
Answer: D
69) Which statement is not true about the constant b in the bivariate regression equation Ŷ i = a
+ bXi?
A) It is usually referred to as the non-standardized regression coefficient.
B) It is the slope of the regression line and it indicates the expected change in Y when X is
changed by one unit.
C) It is the intercept of the regression line and it indicates the value of Y when X is zero.
D) It may be computed as b=COVxy/Sx2.
Answer: C
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70) Which equation depicts the relationship between the standardized and non-standardized
regression coefficients?
A) Byx = byx(S2x/S2y)
B) B2yx = byx(Sx/Sy)
C) Byx = byx(Sx/Sy)
D) B2yx = byx(S2x/S2y)
Answer: C
71) The standard deviation of b, or the standard error, is denoted as ________.

A) SEb
B) SDb
C) SSYb
Answer: A
72) In bivariate regression, which statement is true concerning the coefficient of determination,
r2?
A) r2 is the square of the simple correlation coefficient obtained by correlating the two variables.
B) r2 varies between 0 and 1.
C) r2 signifies the proportion of the total variation in Y accounted for by the variation in X.
D) All are correct.
Answer: D
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73) ________ is the appropriate test statistic to use to determine the significance of the
coefficient of determination in bivariate regression.
A) statistic
B) T statistic
C) Z statistic
D) ω2
Answer: A
74) To estimate the accuracy of predicted values, Ŷ, found in bivariate regression, it is useful to
calculate the ________, the standard deviation of the actual Y values from the predicted Ŷ values.
A) coefficient of determination
B) standard error of the estimate
C) covariance
D) standard error
Answer: B
75) ________ is a statistical technique that simultaneously develops a mathematical relationship

between two or more independent variables and an interval-scaled dependent variable.
A) Chi-square
B) The least-squares procedure
C) Multiple regression
D) Bivariate regression
Answer: C
76) The general form of the multiple regression model is estimated by which equation?
A) Ŷ i = a + bXi
B) Ŷ i =β0 + β1 Xi + ei
C) Ŷ =a + b1 X1 + b2 X2 + b3X3 + ... + bkXk
D) Ŷ = a + b1X1 + b2X2
Answer: C
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77) Which statistic is associated only with multiple regression and not with bivariate regression?
A) adjusted R2
B) partial F test
C) estimated or predicted value (Ŷ)
D) both A and B
Answer: D
78) The ________ denotes the change in the predicted value, Ŷ, per unit change in X1 when the
other independent variables, X2 to Xk, are held constant.
A) partial regression coefficient
C) part correlation coefficient
D) part regression coefficient
Answer: A
79) Which statement is not true about partial regression coefficients?

A) The combined effects of X1 and X2 on Y are additive. In other words, if X1 and X2 are each
changed by one unit, the expected change in Y would be (b1 + b2).
B) The beta coefficients are the partial regression coefficients obtained when all the variables (Y,
X1, X2...Xk) have been standardized to a mean of 0 and a variance of 1 before estimating the
regression equation.
C) Partial regression coefficients have an order associated with them.
D) Both A and B are not true.
Answer: C
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80) In multiple regression, if the overall null hypothesis is rejected, ________.

A) the mean value of the dependent variable will be different for different categories of the
independent variable
B) the means of the independent variables are not equal
C) there is an association between the independent variables
D) one or more population partial regression coefficients have a value different from 0
Answer: D
81) In multiple regression, if the overall null hypothesis is rejected, which statement is true?
A) We know which specific βs are nonzero.
B) We can use t = b/SEb to determine which βs are nonzero.
C) We do not know which βs are nonzero.
Answer: D
82) ________ is a regression procedure in which the predictor variables enter or leave the
regression equation one at a time.
A) Multiple regression
B) Bivariate regression
C) Dummy variable regression
D) Stepwise regression
Answer: D
with regression.
83) ________ is a state of very high intercorrelations among independent variables.

A) Hypercollinearity
B) Partial collinearity
C) Multicollinearity
D) Variable collinearity
Answer: C
with regression.
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84) Which of the following is not a problem associated with multicollinearity?

A) The partial regression coefficients may not be estimated precisely. The standard errors are
likely to be high.
B) It becomes difficult to assess the relative importance of the independent variables in
explaining the variation in the dependent variables.
C) Predictor variables may be incorrectly included or removed in stepwise regression.
D) It becomes difficult to compute the correct test statistic.
Answer: D
with regression.
85) Which statement is true about cross-validation.

A) It can be used for evaluating the model for chance variations in the data and other problems
associated with regression.
B) It examines whether the regression model continues to hold on comparable data not used in
the estimation.
C) A special form of validation is called double cross-validation where the sample is split into
halves.
Answer: D
with regression.
86) ________ variables may be used as predictors or independent variables by coding them as
dummy variables.
A) Interval
B) Categorical
C) Ratio
D) All of the above
Answer: B
with regression.
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87) The regression equation for a categorical variable with four categories would be modeled as
________.
A) Ŷ i = a + b1 D1 + b2 D2 + b3D3
B) Ŷ i = a + b1 D1 + b2 D2 + b3D3 + b4D4
C) Ŷ = b1 D1 + b2 D2 + b3D3
D) Ŷ = b1 D1 + b2 D2 + b3D3 + b4D4
Answer: A
with regression.
88) Suppose a researcher wants to explain attitudes towards a respondent's city of residence in
terms of duration of residence in the city. The attitude is measured on an 11-point scale and the
duration of residence is measured in terms of the number of years the respondent has lived in the
city. In a pretest of 12 respondents, the calculated t value for the correlation coefficient based on
the data given is 8.414. The critical value of t for a two-tailed test and α = 0.05 is 2.228. r =
.9361. What is the null hypothesis for this scenario? What do the results mean in terms of the
null hypothesis and the correlation coefficient, r?
Answer: The null hypothesis of no relationship between X and Y is rejected. This along with
the positive sign of r, indicates that attitude toward the city is positively related to the duration of
residence in the city. Moreover, the high value of r indicates that this relationship is strong. If
this were a large and representative sample, the implication would be that managers, city
officials, and politicians wishing to reach people with a favorable attitude toward the city should
target long-time residents of that city.
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89) In what ways can regression analysis be used?

Answer:
1. Determine whether the independent variables explain a significant variation in the dependent
variable: whether a relationship exists.
2. Determine how much of the variation in the dependent variable can be explained by the
independent variables: strength of the relationship.
3. Determine the structure or form of the relationship: the mathematical equation relating the
independent and dependent variables.
4. Predict the values of the dependent variable.
5. Control for other independent variables when evaluating the contributions of a specific
variable or set of variables.
90) Briefly explain how a scatter diagram benefits the researcher?

Answer: A scatter diagram is useful for determining the form of the relationship between the
variables. A plot can alert the researcher to patterns in the data, or to possible problems. Any
unusual combinations of the two variables can be easily identified.
91) What are the assumptions made by the regression model in estimating the parameters and in
significance testing?
Answer:
1. The error term is normally distributed. For each fixed value of X, the distribution of Y is
normal.
2. The means of all these normal distributions of Y, given X, lie on a straight line with slope b.
3. The mean of the error term is 0.
4. The variance of the error term is constant. This variance does not depend on the values
assumed by X.
5. The error terms are uncorrelated. In other words, the observations have been drawn
independently.
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92) Given the multiple regression equation, Ŷ = a + b1X1 + b2X2, and the bivariate equation Ŷ
= a + bX, why is the partial regression coefficient, b1, different from the regression coefficient,
b, obtained by regressing Y on only X1?
Answer: This happens because X1 and X2 are usually correlated. In bivariate regression, X2 was
not considered and any variation in Y that was shared by X1 and X2 was attributed to X1.
However, in the case of multiple independent variables, this is no longer true.
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Chapter 18 Discriminant and Logit Analysis
1) When the dependent variable is binary, the logit model can also be used instead of two-group
discriminant analysis.
Answer: TRUE
LO: 18.1 Describe the concept of discriminant analysis, its objectives, and its applications in
marketing research.
2) Discriminant functions are linear combinations of the predictor or independent variables,

which will best discriminate between the categories of the criterion or dependent variable
(groups).
Answer: TRUE
marketing research.
3) When the criterion variable has two categories, the technique is referred to as multiple
discriminant analysis.
Answer: FALSE
marketing research.
4) In two-group discriminant analysis it is possible to derive only one discriminant function.

Answer: TRUE
marketing research.
5) In the discriminant analysis model, the coefficients, or weights (b), are estimated so that the
groups differ as much as possible on the values of the discriminant function. This occurs when
the ratio of between-group sum of squares to within-group sum of squares for the discriminant
scores is at a maximum.
Answer: TRUE
LO: 18.2 Outline the procedures for conducting discriminant analysis, including the formulation
of the problem, estimation of the discriminant function coefficients, determination of
significance, interpretation, and validation.
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6) Also referred to as discriminant loadings, the structure correlations represent the simple
correlations between the predictors and the discriminant function in discriminant analysis.
Answer: TRUE
7) The last step in conducting discriminant analysis is to interpret the results (Figure 18.2 in the
text).
Answer: FALSE
8) The first step in discriminant analysis is to formulate the problem by identifying the
objectives, the criterion variable, and the independent variables.
Answer: FALSE
9) If attitude towards the brand is measured on a seven-point scale from unfavorable to

favorable, it could be categorized as unfavorable (1, 2, 3), neutral (4), or favorable (5, 6, 7).
Answer: TRUE
10) When conducting discriminant analysis, the analysis sample is that part of the total sample
used to check the results of the estimation sample.
Answer: FALSE
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11) The direct method is an approach to discriminant analysis that involves estimating the
discriminant function so that all the predictors are included simultaneously.
Answer: TRUE
12) The stepwise discriminant analysis method is appropriate when, based on previous research
or a theoretical model, the researcher wants the discrimination to be based on all the predictors.
Answer: FALSE
LO: 18.4 Demonstrate stepwise discriminant analysis and the Mahalanobis procedure.
13) The null hypothesis in discriminant analysis, that in the population, the means of all
discriminant functions in all groups are not equal, can be statistically tested.
Answer: FALSE
Diff: 2 Page Ref: 555, 558
14) In discriminant analysis, rejecting the null hypothesis means there is significant
discrimination between groups.
Answer: TRUE
15) In discriminant analysis, the value of the coefficient for a particular predictor depends on the
other predictors included in the discriminant function.
Answer: TRUE
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16) In discriminant analysis, there is no multicollinearity in the predictor variables. Therefore,

there is no ambiguous measure of the relative importance of the predictors in discriminating
between groups.
Answer: FALSE
17) A characteristic profile is an aid to interpreting discriminant analysis results by describing

each group in terms of the group means for the predictor variables..
Answer: TRUE
18) With the leave-one-out cross-validation option in SPSS, the discriminant model is re-
estimated as many times as there are respondents in the sample.
Answer: TRUE
19) The hit ratio is the number of variables found to be significant by the discriminant analysis.
Answer: FALSE
20) The hit ratio is the percentage of cases correctly classified by the discriminant analysis.
Answer: TRUE
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21) The results obtained from a classification matrix based on the analysis sample are invariably
better than leave-one-out classification or the classification obtained on the holdout sample.
Answer: TRUE
22) The Mahalanobis procedure is based on minimalizing a generalized measure of the distance
between the two closest groups.
Answer: FALSE
23) When the dependent variable is binary and there is one independent variable that is
nonmetric, in addition to two-group discriminant analysis one can also use OLS regression, logit,
and probit models for estimation.
Answer: FALSE
LO: 18.5 Describe the binary logit model and its advantages over discriminant and regression
analysis.
24) The binary logit model commonly deals with the issue of how likely an observation is to
belong to each group. It estimates the probability of an observation belonging to a particular
group
Answer: TRUE
analysis.
25) The logit model falls somewhere between regression and discriminant analysis in
application.
Answer: TRUE
analysis.
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26) When the probability of success, p, is modeled using OLS regression, p is constrained to lie
between 0 and 1.
Answer: FALSE
analysis.
27) The procedure that is used to estimate the parameters of the binary logit model is called the
maximum likelihood method.
Answer: TRUE
analysis.
28) Discriminant analysis is available in EXCEL.

Answer: FALSE
LO: 18.6 Explain the role of software in conducting discriminant and logit analysis using SPSS
and SAS.
29) An examination of differences across groups lies at the heart of the basic concept of
________.
B) discriminant analysis
C) conjoint analysis
D) factor analysis
Answer: B
marketing research.
30) In discriminant analysis, the criterion or dependent variable is ________ and the predictor or
independent variables are ________ in nature.
A) interval; categorical
B) ordinal; interval
C) categorical; interval
D) ordinal; categorical
Answer: C
marketing research.
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31) The linear combinations of independent variables developed by discriminant analysis that
will best discriminate between the categories of the dependent variable are ________.
A) discriminant functions
B) discriminant scores
C) characteristic profiles
D) classification matrix
Answer: A
marketing research.
32) Which of the following statements is not an objective of discriminant analysis?

A) examination of whether significant differences exist among the groups, in terms of the
criterion variables
B) determination of which predictor variables contribute to most of the intergroup differences
C) classification of cases to one of the groups based on the values of the predictor variables
D) evaluation of the accuracy of classification
Answer: A
marketing research.
33) Discriminant analysis can be used to answer questions such as ________.

A) How much of the variation in sales can be explained by advertising expenditures, prices, and
level of distribution?
B) In terms of demographic characteristics, how do customers who exhibit store loyalty differ
from those who do not?
C) What are the distinguishing characteristics of consumers who respond to direct mail
solicitations?
Answer: D
marketing research.
34) Discriminant/logit analysis is similar to regression and ANOVA in which of the areas stated
below (Table 18.1 in the text)?
A) nature of the dependent variables
B) nature of the independent variables
C) both A and B
Answer: D
marketing research.
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35) The nature of dependent and independent variables in the binary logit model is similar to that
in ________.
A) multivariate analysis of variance
B) analysis of variance
C) regression analysis
D) discriminant analysis
Answer: D
marketing research.
36) Discriminant/logit analysis is similar to regression and ANOVA in which of the areas stated
below (Table 18.1 in the text)?
A) number of dependent variables
B) number of independent variables
C) both A and B
Answer: C
marketing research.
37) D is the ________ in the model D = b0 + b1 X1 + b2 X2 + b3X3 + ... + bkXk.

A) discriminant score
B) disordinal interaction
C) difference variable
D) discriminant coefficients or weights
Answer: A
38) Sometimes also called confusion or prediction matrix, the ________ contains the number of
correctly classified and misclassified cases.
A) classification matrix
B) total correlation matrix
C) pooled within-group correlation matrix
D) identity matrix
Answer: A
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39) As one of the statistics associated with discriminant analysis, ________ are obtained when
the unstandardized coefficients are multiplied by the values of the variables and the products are
summed and added to the constant term.
A) Wilks' λ
C) discriminant function coefficients
D) eigenvalue
Answer: B
40) As one of the statistics associated with discriminant analysis, the ________ (unstandardized)
are the multipliers of variables when the variables are in the original units of measurement.
A) Wilks' λ
D) eigenvalue
Answer: C
41) As one of the statistics associated with discriminant analysis, the ________ for each
predictor is the ratio of the within-group sum of squares to the total sum of squares. Its value
varies between 0 and 1.
A) Wilks' λ
D) eigenvalue
Answer: A
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42) The assumptions in discriminant analysis are that each of the groups is a sample from a
________ population and all of the populations have the same ________.
A) multivariate normal; standard deviation
B) multivariate normal; covariance matrix
C) multivariate normal; standard error
D) multivariate normal; variance
Answer: B
43) Which of the following is not one of the steps involved in the "formulating the problem" step
in discriminant analysis?
A) convert the dependent variable into categories
B) divide the sample into analysis and validation samples
C) estimate the discriminant function coefficients
D) repeatedly conduct the validation of the discriminant function
Answer: C
44) If you are using the direct method or stepwise discriminant analysis, you are at the ________
step of conducting discriminant analysis.
A) formulate the problem
B) estimate the discriminant function coefficients
C) assess the validity of the discriminant analysis
D) determine the size of the discriminant function
Answer: B
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45) What does it mean if the discriminant function is estimated and the square of the canonical
correlation is .64?
A) 64% of the variance in the dependent variable is explained by the model.
B) The null hypothesis is not rejected. Therefore, there is no significant discrimination between
groups.
C) 64% of the explained variance is accounted for.
D) B and C are correct.
Answer: A
46) In discriminant analysis, we can obtain some idea of the relative importance of the variables
by ________.
A) examining the absolute magnitude of the standardized discriminant function coefficients
B) examining the structure correlations, or canonical loadings or discriminant loadings
C) examining the unstandardized discriminant function coefficients
D) A and B are correct
Answer: D
47) If you are using the leave-out option of SPSS, you are at the ________ step of discriminant
analysis.
A) estimate the discriminant coefficients
B) determine the significance of the discriminant function
C) interpret the results
D) assess validity of discriminant analysis
Answer: D
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48) The ________ is used for estimating the ________; the ________ is used for developing the
________.
A) analysis sample; discriminant function; validation sample; classification matrix
B) validation sample; discriminant function; analysis sample; classification matrix
C) classification matrix; discriminant function; validation sample; analysis sample
Answer: A
49) If there are 10 groups and 8 predictors, how many discriminant functions can be estimated?
A) ten
B) nine
C) eight
D) seven
Answer: C
LO: 18.3 Discuss multiple discriminant analysis and the distinction between two-group and
multiple discriminant analysis.
50) In multiple discriminant analysis, the interpretation of results is aided by an examination of

all of the following except ________.
A) the standardized discriminant function coefficients
B) the correlation coefficients
C) the structure correlations
D) certain plots
Answer: B
51) A ________ is a tool for assessing discriminant analysis results that plots the group
membership of each case on a graph.
A) characteristic profile
B) scattergram
C) territorial map
D) pie chart
Answer: C
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52) Which of the following statements is true about stepwise discriminant analysis?
A) The predictors are entered sequentially based on their ability to discriminate between groups.
B) The predictor with the highest F ratio is the first to be selected for inclusion in the
discriminant function, if it meets certain significance and tolerance criteria.
C) Each predictor selected is tested for retention based on its association with the other
predictors selected.
Answer: D
53) When the dependent variable is binary and there are several independent variables that are
metric, in addition to two-group discriminant analysis all of the following models can be used
except ________.
A) OLS regression
B) the logit model
C) multiple discriminant analysis
D) the probit model
Answer: C
analysis.
54) The binary logit model is also called ________.

A) stepwise regression
B) logistic regression
C) OLS regression
Answer: B
analysis.
55) When the probability of success, p is modeled using a binary logit model, it is constrained to
lie between ________.
A) 0 to -1
B) -1 to 1
C) 1 to 100
D) 0 and 1
Answer: D
analysis.
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56) Cox and Snell R square and Nagelkerke R2 are measures of model fit used in ________.
A) logistic regression
B) OLS regression
C) the binary logit model
D) Both A and C are correct.
Answer: D
analysis.
57) The ________ is a test of significance of the logistic regression coefficient based on the
asymptotic normality property of maximum likelihood estimates.
A) Nagelkerke R2
B) Wald statistic
C) Wilks' λ
D) Cox and Snell R square
Answer: B
analysis.
58) Discriminant analysis can be conducted via all of the following except ________.
A) SPSS
B) EXCEL
C) MINITAB
D) SAS
Answer: B
LO: 18.6 Explain the role of software in conducting discriminant and logit analysis using SPSS
and SAS.
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59) Discuss the similarities and differences among ANOVA, regression, and discriminant
analysis (Table 18.1 in the text).
Answer: All three procedures involve a single criterion or dependent variable and multiple
predictor or independent variables. However, the nature of these variables differ. In analysis of
variance and regression analysis, the dependent variable is metric or interval scaled (amount of
life insurance purchased in dollars), whereas in discriminant analysis it is categorical (amount of
life insurance purchased classified as high, medium, or low). The independent variables are
categorical in the case of analysis of variance (age and income are each classified as high,
medium, or low) but metric in the case of regression and discriminant analysis (age in years and
income in dollars, i.e., both measured on a ratio scale).
Two-group discriminant analysis, in which the dependent variable has only two categories, is
closely related to multiple regression analysis. In this case, multiple regression, in which the
dependent variable is coded as a 0 or 1 dummy variable, results in partial regression coefficients
that are proportional to discriminant function coefficients.
marketing research.
60) What are the steps involved in conducting discriminant analysis (Figure 18.2 in the text)?
Answer: The steps involved in conducting discriminant analysis are shown in Figure 18.2 in the
text as:
1. Formulate the problem.
2. Estimate the discriminant function coefficients.
3. Determine the significance of the discriminant function.
4. Interpret the results.
5. Assess the validity of the discriminant analysis.
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Chapter 20 Cluster Analysis
1) Cluster analysis does not classify variables as dependent or independent.

Answer: TRUE
LO: 20.1 Describe the basic concept and scope of cluster analysis and its importance in
marketing research.
2) The primary objective of cluster analysis is to classify objects into relatively homogeneous
groups.
Answer: TRUE
marketing research.
3) Cluster analysis is the obverse of factor analysis in that it reduces the number of objects, not
the number of variables, by grouping them into a much smaller number of clusters.
Answer: TRUE
marketing research.
4) Cluster analysis requires prior knowledge of the cluster or group membership for each object
or case included to develop the classification rule.
Answer: FALSE
marketing research.
5) If cluster analysis is used as a general data reduction tool, subsequent multivariate analysis can
be conducted on the clusters rather than on the individual observations.
Answer: TRUE
marketing research.
6) Most clustering methods are relatively complex procedures that are supported by an extensive
body of statistical reasoning.
Answer: FALSE
marketing research.
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7) The dendrogram is read from right to left.

Answer: FALSE
LO: 20.2 Discuss the statistics associated with cluster analysis.
8) In cluster analysis, the set of variables selected should describe the similarity between objects
in terms that are relevant to the marketing research problem.
Answer: TRUE
LO: 20.3 Explain the procedure for conducting cluster analysis, including formulating the
problem, selecting a distance measure, selecting a clustering procedure, deciding on the number
of clusters, and interpreting and profiling clusters.
9) Clustering should be done on samples of at least 300 or more.

Answer: FALSE
10) Measuring similarity in terms of distance between pairs of objects is the most common
approach used in cluster analysis for grouping similar objects together.
Answer: TRUE
11) In cluster analysis, objects with larger distances between them are more similar to each other
than are those at smaller distances.
Answer: FALSE
12) Use of different distance measures may lead to different clustering results. Hence, it is
advisable to use different measures and compare the results.
Answer: TRUE
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13) The complete linkage method of hierarchical clustering is based on the minimum distance or
the nearest neighbor approach.
Answer: FALSE
14) The average linkage method of hierarchical clustering is preferred to the single and complete
linkage methods.
Answer: TRUE
15) The centroid method is a variance method of hierarchical clustering in which the distance
between two clusters is the distance between their centroids (means for all the variables).
Answer: TRUE
16) The parallel threshold method differs from the other two non-hierarchical clustering
procedures in that the objects can later be reassigned to clusters to optimize an overall criterion.
Answer: FALSE
17) Nonhierarchical clustering is faster than hierarchical methods.

Answer: TRUE
18) The TwoStep cluster analysis procedure can automatically determine the optimal number of
clusters by comparing the values of a model-choice criteria across different clustering solutions.
Answer: TRUE
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19) In the TwoStep procedure, the euclidean measure can be used only when all of the variables
are ordinal.
Answer: FALSE
20) Choice of a clustering method and choice of a distance measure are interrelated.
Answer: TRUE
21) It is possible to obtain information on cluster membership of cases via the icicle plot if the
number of clusters is specified.
Answer: TRUE
22) The centroids represent the mean values of the objects contained in the cluster on each of the
variables.
Answer: TRUE
23) It is helpful to profile the clusters in terms of variables that were not used for clustering.
Answer: TRUE
24) Formal procedures for assessing the reliability and validity of clustering are simple and
should be undertaken.
Answer: FALSE
LO: 20.4 Describe the purpose and methods for evaluating the quality of clustering results and
assessing reliability and validity.
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25) One method of assessing reliability and validity of clustering is to use different methods of
clustering and compare the results.
Answer: TRUE
26) In hierarchical clustering, the solution may depend on the order of cases in the data set.
Answer: FALSE
LO: 20.5 Discuss the applications of nonhierarchical clustering and clustering of variables.
27) In non-hierarchical clustering, the F test is only descriptive. Because the cases or objects are
systematically assigned to clusters to maximize differences on the clustering variables, the
resulting probabilities should not be interpreted as testing the null hypothesis of no differences
among clusters.
Answer: TRUE
28) To reduce the number of variables, a large set of variables can often be replaced by the set of
cluster components.
Answer: TRUE
29) Principal components are usually easier to interpret than the cluster components.
Answer: FALSE
30) When cluster analysis is also used for clustering variables to identify homogeneous groups,
the units used for analysis are the variables and the distance measures are computed for all pairs
of variables.
Answer: TRUE
31) Which method of analysis does not classify variables as dependent or independent?
C) analysis of variance
D) cluster analysis
Answer: D
marketing research.
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32) ________ is a class of techniques used to classify objects or cases into relatively
homogeneous groups.
A) Principal components analysis
B) Cluster analysis
C) Common factor analysis
D) Conjoint analysis
Answer: B
marketing research.
33) Which method allows the researcher to obtain information on cluster membership of cases if
the number of clusters is specified?
A) dendrogram
B) scree plot
C) icicle plot
D) both A and C
Answer: D
34) Which method allows the researcher to obtain information on cluster membership of cases if
the number of clusters is specified?
A) factor loading plot
B) scattergram
C) icicle plot
D) scree plot
Answer: C
35) Which statement is not true about cluster analysis?

A) Cluster analysis is a technique for analyzing data when the criterion or dependent variable is
categorical and the independent variables are interval in nature.
B) Cluster analysis is also called classification analysis or numerical taxonomy.
C) Groups or clusters are suggested by the data, not defined a priori.
D) Objects in each cluster tend to be similar to each other and dissimilar to objects in the other
clusters.
Answer: A
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36) Cluster analysis has been used in marketing for all of the purposes below except ________.
A) segmenting the market based on benefits sought from the purchase of a product
B) identifying new product opportunities by clustering brands and products so that competitive
sets within the market can be determined
C) selecting test markets
D) determining how strongly sales are related to advertising expenditures
Answer: D
37) Most ________ methods are heuristics based on algorithms.

A) factor analysis
C) clustering
D) analysis of variance
Answer: C
38) The ________ are the initial starting points in nonhierarchical clustering.
A) factor scores
B) cluster centers
C) cluster centroids
D) factor loadings
Answer: B
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39) A(n) ________ or tree graph is a graphical device for displaying clustering results. Vertical
lines represent clusters that are joined together. The position of the line on the scale indicates the
distances at which clusters were joined.
A) dendrogram
B) scattergram
C) scree plot
D) icicle diagram
Answer: A
40) A ________ is a lower-triangle matrix containing pairwise distances between objects or

cases.
A) classification matrix
B) correlation matrix
C) similarity/distance coefficient matrix
D) factor matrix
Answer: C
41) The most important part of ________ is selecting the variables on which clustering is based.
A) interpreting and profiling clusters
B) selecting a clustering procedure
C) assessing the validity of clustering
D) formulating the clustering problem
Answer: D
42) Clustering should be done on samples of ________ or more.

A) 50
B) 100
C) 200
D) 300
Answer: B
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43) The most commonly used measure of similarity is the ________ or its square.
A) euclidean distance
B) city-block distance
C) Chebychev's distance
D) Manhattan distance
Answer: A
44) Which statement is not true concerning the clustering solution if the variables are measured
in vastly different units?
A) The clustering solution will not be influenced by the units of measurement.
B) Standardization can reduce the differences between groups on variables that may best
discriminate groups or clusters.
C) It is desirable to eliminate outliers.
D) We must standardize the data by rescaling each variable to have a mean of zero and standard
deviation of unity.
Answer: A
45) ________ is a clustering procedure characterized by the development of a tree-like structure.

A) Non-hierarchical clustering
B) Hierarchical clustering
C) TwoStep clustering
D) Optimizing partitioning clustering
Answer: B
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46) ________ is a clustering procedure where each object starts out in a separate cluster.
C) Divisive clustering
D) Agglomerative clustering
Answer: D
47) ________ is a clustering procedure where all objects start out in one giant cluster. Clusters
are formed by dividing this cluster into smaller and smaller clusters.
Answer: C
48) ________ methods are commonly used in marketing research.

A) TwoStep clustering
B) Optimizing partitioning
Answer: D
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49) The ________ method is based on minimum distance or the nearest neighbor rule.
A) single linkage
B) medium linkage
C) complete linkage
D) average linkage
Answer: A
50) The ________ method is based on the maximum distance or the furthest neighbor approach.
A) single linkage
B) medium linkage
C) complete linkage
D) average linkage
Answer: C
51) Which of the methods below is not a hierarchical method?

A) optimizing partitioning
B) parallel threshold
C) both A and B
D) variance
Answer: C
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52) The ________ method uses information on all pairs of distances, not merely the minimum or
maximum distances.
A) single linkage
B) medium linkage
C) complete linkage
D) average linkage
Answer: D
53) ________ are agglomerative methods of hierarchical clustering in which clusters are
generated to minimize the within-cluster variance.
A) Variance methods
B) Linkage methods
C) Centroid methods
D) Parallel methods
Answer: A
54) Which of the following is a variance method of clustering?

A) sequential threshold
B) Ward's method
C) complete linkage
D) optimizing partitioning
Answer: B
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55) ________ is frequently referred to as k-means clustering.

B) Ward's method
Answer: A
56) ________ is a procedure that first assigns or determines a cluster center and then groups all
objects within a pre-specified threshold value from the center.
B) Ward's method
Answer: A
57) ________ is a variance method in which the squared euclidean distance to the cluster means
is minimized.
A) Optimizing partitioning method
B) Sequential threshold method
C) Parallel threshold method
D) Ward's procedure
Answer: D
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58) The ________ is a nonhierarchical method in which a cluster center is selected and all
objects within a pre-specified threshold value from the center are grouped together.
A) optimizing partitioning method
B) sequential threshold method
C) parallel threshold method
D) Ward's procedure
Answer: B
59) The ________ is a nonhierarchical method that specifies several cluster centers at once. All
objects within a pre-specified threshold value from the center are grouped together.
D) Ward's procedure
Answer: C
60) The ________ is a nonhierarchical method that allows for later reassignment of objects to
clusters to optimize an overall criterion.
D) Ward's procedure
Answer: A
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61) Which of the following is not a disadvantage of nonhierarchical clustering procedures?

A) The number of clusters must be pre-specified.
B) The selection of cluster centers is arbitrary.
C) The procedures do not work well when the clusters are poorly defined.
D) All of the above are disadvantages.
Answer: C
62) Which cluster analysis procedure can automatically determine the optimal number of clusters
by comparing the values of a model-choice across different clustering solutions?
A) divisive
B) sequential threshold
C) Ward's method
D) TwoStep
Answer: D
63) In non-hierarchical clustering, plotting the ratio of total within-group variance to between-
group variance against the number of clusters is useful if you are ________.
A) interpreting and profiling the clusters
B) assessing the validity of clustering
C) deciding on the number of clusters
D) both B and C
Answer: C
64) ________ involves examining the cluster centroids.

A) Interpreting and profiling the clusters
B) Assessing reliability and validity
C) Deciding on the number of clusters
D) Selecting a clustering procedure
Answer: A
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65) If you are performing cluster analysis on the same data using different distance measures and
then comparing the results across measures to determine stability of the solutions, you are at
which stage of the cluster analysis process?
A) interpreting and profiling the clusters
B) assessing reliability and validity
C) deciding on the number of clusters
D) selecting a clustering procedure
Answer: B
66) Which of the following is not a procedure to check the quality of clustering results?
A) Perform cluster analysis on the same data using different distance measures. Compare the
results across measures to determine the stability of the solutions.
B) Delete variables randomly. Perform clustering based on the reduced set of variables. Compare
the results with those obtained by clustering based on the entire set of variables.
C) Use the same method of clustering and compare the results.
D) Split the data randomly into halves. Perform clustering separately on each half. Compare
cluster centroids across the two subsamples.
Answer: C
67) To use cluster analysis for clustering variables to identify homogeneous groups, the
researcher could do all of the following except ________.
A) using the variables as the units of analysis
B) using the correlation coefficient as a measure of similarity between variables
C) inserting communalities in the diagonal of the correlation matrix
D) both A and B
Answer: C
68) In SPSS, the main program for hierarchical clustering of objects or cases is ________.
A) VARCLUS
B) CLUSTER ANALYSIS
C) FASTCLUS
D) HIERARCHICAL CLUSTER
Answer: D
LO: 20.6 Explain the role of software in conducting cluster analysis using SPSS and SAS.
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69) In SAS, the ________ program can be used for the hierarchical clustering of objects or cases.
A) VARCLUS
B) CLUSTER ANALYSIS
C) FASTCLUS
D) HIERARCHICAL CLUSTER
Answer: B
LO: 20.6 Explain the role of software in conducting cluster analysis using SPSS and SAS.
70) What are the steps in conducting cluster analysis (Figure 20.3 in the text)?
Answer: The steps involved in conducting cluster analysis are listed in Figure 20.3 in the text.
The first step is to formulate the clustering problem by defining the variables on which the
clustering will be based. An appropriate distance measure must then be selected. The distance
measure determines how similar or dissimilar the objects being clustered are. Several clustering
procedures have been developed and the researcher should select one that is appropriate for the
problem at hand. Deciding on the number of clusters requires judgment on the part of the
researcher. The derived clusters should be interpreted in terms of the variables used to cluster
them and profiled in terms of additional salient variables. Finally, the researcher must assess the
validity of the clustering process.
71) Which is best to use when selecting a clustering procedure: hierarchical or nonhierarchical
clustering?
Answer: Although nonhierarchical clustering is faster than hierarchical methods and has merit
when the number of objects or observations is large, it has been suggested that the hierarchical
and nonhierarchical methods be used in tandem. First, an initial clustering solution is obtained
using a hierarchical procedure, such as average linkage or Ward's. The number of clusters and
cluster centroids so obtained are used as inputs to the optimizing partitioning method.
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72) What suggested guidelines researchers can use when deciding on the number of clusters?
Answer: Although there are no hard and fast rules, some guidelines are available:
∙ Theoretical, conceptual, or practical considerations may suggest a certain number of clusters.
For example, if the purpose of clustering is to identify market segments, management may want
a particular number of clusters.
∙ In hierarchical clustering, the distances at which clusters are combined can be used as criteria.
∙ In nonhierarchical clustering, the ratio of total within-group variance to between group
variance can be plotted against the number of clusters.
∙ The relative sizes of the clusters should be meaningful.
73) Why should the clustering of variables be used?

Answer: Cluster analysis is also used for clustering variables to identify homogeneous groups.
Hierarchical clustering of variables can aid in the identification of unique variables, or variables
that make a unique contribution to the data. Clustering can also be used to reduce the number of
variables. Associated with each cluster is a linear combination of the variables in the cluster,
called the cluster components. A large set of variables can often be replaced by the set of cluster
components with little loss of information. However, a given number of cluster components
does not generally explain as much variance as the same number of principal components. Why,
then, should the clustering of variables be used? Cluster components are usually easier to
interpret than the principal components even if the latter are rotated.
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Chapter 21 Multidimensional Scaling and Conjoint Analysis
1) The conjoint analysis procedure is based on trade-offs respondents make when evaluating
alternatives.
Answer: TRUE
LO: 21.6 Discuss the basic concepts of conjoint analysis, contrast it with MDS, and discuss its
various applications.
2) The number of brands or stimuli selected for use in MDS analysis and the specific brands
included determines the nature of the resulting dimensions and configurations.
Answer: TRUE
LO: 21.1 Discuss the basic concept and scope of multidimensional scaling (MDS) in marketing
research and describe its various applications.
3) Suppose a researcher is interested in obtaining consumer perceptions of automobiles, the

choice of the number and specific brands or stimuli to be included in the MDS analysis should be
based on the statement of the marketing research problem and theory only. The researcher
should not bias the research by also using his judgment to determine what should be included in
the analysis.
Answer: FALSE
4) Perception data may be direct or derived.

Answer: TRUE
LO: 21.2 Describe the steps involved in multidimensional scaling of perception data, including
formulating the problem, obtaining input data, selecting an MDS procedure, deciding on the
number of dimensions, labeling the dimensions and interpreting the configuration, and assessing
reliability and validity.
5) In direct approaches to gathering perception data, respondents are asked to make similarity
judgments on pairs of various brands or stimuli.
Answer: TRUE
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6) Direct approaches to collecting perception data are attribute-based approaches.

Answer: FALSE
7) Derived approaches to collecting perception data require respondents to rate the brands or
stimuli on the identified attributes using semantic differential scales or Likert scales.
Answer: TRUE
8) The direct approaches to collecting perception data are used more frequently than the
attribute-based approaches.
Answer: TRUE
9) The fit of an MDS solution is commonly assessed by the stress measure. Stress is a goodness-
of-fit measure; higher values of stress indicate better fits.
Answer: FALSE
10) Preference data order the brands or stimuli in terms of respondents' preference for some
property.
Answer: TRUE
LO: 21.3 Explain the multidimensional scaling of preference data and distinguish between
internal and external analysis of preferences.
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11) The configuration derived from preference data is very similar to that obtained from
similarity data.
Answer: FALSE
12) Non-metric MDS procedures assume that the input data are ordinal, and they result in ordinal
output.
Answer: FALSE
13) The metric MDS procedures assume that input data are metric and the output is also metric.
Answer: TRUE
14) The metric and non-metric MDS methods often produce vastly different results.
Answer: FALSE
15) Spatial maps are computed in such a way that the fit increases as the number of dimensions
decreases.
Answer: TRUE
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16) The objective in MDS is to obtain a spatial map that best fits the input data in the smallest
number of dimensions.
Answer: TRUE
17) Gaps in the spatial map may indicate potential opportunities for introducing new products.
Answer: TRUE
18) Each dimension determined in MDS represents only one attribute.

Answer: FALSE
19) MDS solutions are subject to substantial random variability.

Answer: TRUE
20) Stress values indicate the proportion of variance of the optimally scaled data that is not
accounted for by the MDS model.
Answer: TRUE
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21) For Kruskal's stress formula 1, a stress value of zero would indicate a poor fit of the MDS
model to the data.
Answer: FALSE
22) An assumption of MDS is that the similarity of stimulus A to B is the same as the similarity
of stimulus B to A.
Answer: TRUE
23) Internal analysis of preferences allows both brands and respondents to be represented in the
same spatial map.
Answer: TRUE
24) In order to perform internal analysis of preferences, both preference and perception data
must be obtained.
Answer: FALSE
25) External analysis of preferences is preferred in most situations.

Answer: TRUE
26) The interpretation of results in correspondence analysis is similar to that in principal

components analysis.
Answer: TRUE
LO: 21.4 Explain correspondence analysis and discuss its advantages and disadvantages.
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27) Quantitative data can be mapped using correspondence analysis.

Answer: FALSE
28) Results in correspondence analysis are interpreted in terms of proximities among rows and
columns.
Answer: TRUE
29) Correspondence analysis is an explanatory data analysis technique that is not suitable for
hypothesis testing.
Answer: TRUE
30) Correspondence analysis requires more effort on the part of the respondent than other MDS
techniques.
Answer: FALSE
31) Correspondence analysis data is binary or categorical.

Answer: TRUE
32) If the attribute-based approaches are used to obtain input data, spatial maps can also be
obtained by using factor or discriminant analysis.
Answer: TRUE
LO: 21.5 Understand the relationship among MDS, discriminant analysis, and factor analysis.
33) To develop spatial maps by means of discriminant analysis, the independent variable is the
brand rated and the dependent variables are the attribute ratings.
Answer: FALSE
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34) When conducting conjoint analysis, the attributes selected should be salient in influencing
consumer preference and choice.
Answer: TRUE
35) When constructing conjoint analysis stimuli, it is necessary to evaluate all possible
combinations of levels of the attributes.
Answer: FALSE
LO: 21.7 Describe the procedure for conducting conjoint analysis, including formulating the
problem, constructing the stimuli, deciding the form of input data, selecting a conjoint analysis
procedure, interpreting the results, and assessing reliability and validity.
36) The pair-wise approach to conducting conjoint analysis stimuli is more commonly used than
the full-profile approach.
Answer: FALSE
37) For nonmetric conjoint analysis input data, the respondents are typically required to provide
rank order evaluations.
Answer: TRUE
38) With the full-profile approach to constructing conjoint analysis stimuli, respondents rank all
the stimulus profiles.
Answer: TRUE
39) For metric conjoint analysis input data, the respondents provide ratings.
Answer: TRUE
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40) In conjoint analysis, the dependent variable is usually preference or intention to buy.
Answer: TRUE
41) In conjoint analysis, the importance of an attribute, Ii, is defined in terms of the range of the
part-worths, αij, across the levels of that attribute Ii = {max(αij) - min(αij)}, for each i.
Answer: TRUE
42) In conjoint analysis, the attribute's importance is normalized to ascertain its importance
relative to other attributes, Wi.
Answer: TRUE
43) For interpreting conjoint analysis, it is helpful to plot the part-worth functions.
Answer: TRUE
44) If individual-respondent level analysis has been conducted, the estimation sample can be
split in several ways to assess the stability of conjoint analysis solutions.
Answer: FALSE
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45) Conjoint analysis assumes that the important attributes of a product can be identified.
Answer: TRUE
46) Conjoint analysis assumes that consumers evaluate the choice alternatives in terms of the
important attributes and make trade-offs.
Answer: TRUE
47) The text reports on a research project which used MDS to plot the perceived ethics of
marketing research firms using a broad-based moral equity dimension (factor 1) and a relativistic
dimension (factor 2). Based on the research, internal marketing research departments are
perceived to be the most ethical on both dimensions.
Answer: TRUE
48) ________ is a class of procedures for representing perceptions and preferences of

respondents spatially by means of a visual display.
A) Conjoint analysis
B) Regression analysis
C) Hybrid conjoint analysis
D) Multidimensional scaling (MDS)
Answer: D
49) The derivation and use of ________ lie at the heart of multidimensional scaling.
A) perceptual maps
B) pair-wise tables
C) part-worth functions
D) contrasts
Answer: A
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50) MDS could be used for all of the marketing applications below except ________
A) Market segmentation: position brands and consumers in the same space and thus identify
groups of consumers with relatively homogeneous perceptions.
B) Assessing advertising effectiveness-spatial maps can be used to determine whether
advertising has been successful in achieving the desired brand positioning.
C) Consumer intention: how do consumer's intentions to buy the brand vary with different price
levels?
D) Channel decisions: judgments on compatibility of brands with different retail outlets could
lead to spatial maps useful for making channel decisions.
Answer: C
51) ________ is a lack of fit measure; higher values indicate poorer fits.
A) Attribute levels
B) Stress
C) R-square
D) Relative importance weights
Answer: B
52) ________ is a squared correlation index that indicates the proportion of variance of the
optimally scaled data that can be accounted for by the MDS procedure. This is a goodness-of-fit
measure.
A) Attribute levels
B) Stress
C) R-square
D) Relative importance weights
Answer: C
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53) ________ requires that the researcher specify the purpose for which the MDS results would
be used and select the brands or other stimuli to be included in the analysis.
A) Formulating the problem
B) Obtaining input data
C) Selecting an MDS procedure
D) Deciding on the number of dimensions
Answer: A
54) In MDS, at minimum, ________ brands or stimuli should be included so as to obtain a well-
defined spatial map. Including more than ________ brands is likely to be cumbersome and may
result in respondent fatigue.
A) 6; 20
B) 6; 25
C) 8; 20
D) 8; 25
Answer: D
55) In ________ approaches to collecting perception data, the respondents are asked to use their
own criteria to judge how similar or dissimilar the various brands or stimuli are.
A) direct
B) preference
C) derived
D) Likert
Answer: A
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56) In which approach to collecting perception data are respondents often required to rate all
possible pairs of brands or stimuli in terms of similarity on a Likert scale?
A) direct
B) preference
C) derived
D) indirect
Answer: A
57) Which is a disadvantage of the direct approach to collecting perception data?

A) The criteria are influenced by the brands or stimuli being evaluated.
B) The researcher must identify all the salient attributes.
C) The spatial map obtained depends upon the attributes identified.
D) Both B and C are disadvantages.
Answer: A
58) Which is a disadvantage of the derived approach to collecting perception data?

A) The criteria are influenced by the brands or stimuli being evaluated.
B) The researcher must identify all the salient attributes.
C) It may be difficult to determine before analysis if and how the individual respondents'
judgments should be combined.
D) It may be difficult to label the dimensions of the spatial map.
Answer: B
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59) Which is an advantage of the direct approach to collecting perception data?

A) It is easier to label the dimensions.
B) It is easy to identify respondents with homogeneous perceptions.
C) The researcher does not have to identify a set of salient attributes.
D) The respondents can be clustered based on the attribute ratings.
Answer: C
60) Which is an advantage of the derived approach to collecting perception data?

A) Respondents make similarity judgments using their own criteria, as they would under normal
circumstances.
B) It is easy to identify respondents with homogeneous perceptions.
C) The researcher does not have to identify a set of salient attributes.
D) Both A and C are advantages.
Answer: B
61) ________ data order the brands or stimuli in terms of respondents' preferences for some
property.
A) Direct
B) Preference
C) Derived
D) Likert
Answer: B
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62) Which of the ways below is not a way in which preference data might be obtained?
A) asking respondents to rank brands from the most preferred to the least preferred
B) asking respondents to rate all possible pairs of brands in terms of similarity on a Likert scale
C) asking respondents to make paired comparisons and indicate which brand in a pair they prefer
D) asking respondents for preference ratings for the various brands
Answer: B
63) Which of the following is not a factor influencing the MDS selection procedure?
A) whether some of the original values will be used in subsequent analysis
B) whether perception or preference data are being scaled, or whether the analysis requires both
kinds of data
C) the nature of the input data
D) whether the MDS analysis will be conducted at the individual respondent level or at an
aggregate level
Answer: A
64) Which guideline for deciding on the number of MDS dimensions relies on theory or past
research to suggest the number of dimensions?
A) a priori knowledge
B) interpretability of the spatial map
C) ease of use
D) elbow criterion
Answer: A
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65) Which guideline for deciding on the number of MDS dimensions warns that it is difficult to
interpret configurations or maps derived in more than three dimensions?
C) ease of use
D) elbow criterion
Answer: B
66) Which guideline for deciding on the number of MDS dimensions suggests plotting stress
versus dimensionality?
C) ease of use
D) elbow criterion
Answer: D
67) Which guideline for deciding on the number of MDS dimensions suggests it is easier to work
with two-dimensional maps or configurations than with those involving more dimensions?
C) ease of use
D) elbow criterion
Answer: C
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68) Various ways to label dimensions obtained in MDS were mentioned in the text. Which of
the ways below was not mentioned in your text?
A) Axes may be labeled for the attributes with which they are most closely aligned.
B) label based on the criteria respondents used in making their evaluations
C) Respondents can be shown their maps and asked to label the dimensions by inspecting the
configurations.
Answer: D
69) Which of the following is a way to interpret the configuration or spatial map?
A) examine dimension centroids
B) profile dimensions in terms of variables that were not used in the MDS procedure
C) examine variables that load high on a factor
D) examine the coordinates and relative positions of the brands
Answer: D
70) Values of .60 or better are considered acceptable values of ________, the index of fit.
A) attribute levels
B) stress
C) R-square
D) relative importance weights
Answer: C
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71) Which of the Kruskal's stress formula 1 values below represent a perfect fit of the MDS
model?
A) 1.00
B) 0.90
C) 0.10
D) 0
Answer: D
72) Which of the following is not a way to assess reliability and validity of the MDS solution?
A) Collect input data at two different points in time and then determine test-retest reliability.
B) Selectively eliminate stimuli from the input data and then determine the solution from the
remaining stimuli.
C) Add a random error term to the input data, subject the resulting data to MDS analysis, and
compare the solutions.
D) All of the above are ways to assess reliability and validity.
Answer: D
73) In MDS, when a spatial map is obtained, it is assumed that interpoint distances are ________
scaled and that the axes of the map are multidimensional ________ scaled.
A) interval; interval
B) ratio; interval
C) ordinal; interval
D) interval; ratio
Answer: B
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74) ________ is a method of configuring a spatial map such that the spatial map represents both
brands or stimuli and respondent points or vectors and is derived solely from the preference data.
A) Metric analysis of preferences
B) Correspondence analysis
C) Internal analysis of preferences
D) External analysis of preferences
Answer: C
75) ________ is a method of configuring a spatial map, such that the ideal points or vectors
based on preference data are fitted in a spatial map derived from perception data.
Answer: D
76) ________ is an MDS technique for scaling qualitative data that scales the rows and columns
of the input contingency table in corresponding units so that each can be displayed in the same
low-dimensional space.
Answer: B
77) Which statement is true about correspondence analysis?

A) The interpretation of results is similar to that in chi-square analysis.
B) An advantage over other MDS techniques is that it reduces the data collection demands put on
the respondents because only interval or ratio data are obtained.
C) A disadvantage is that between-set distances cannot be meaningfully interpreted.
D) All of the statements are true.
Answer: C
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78) Which statement is true about using factor analysis to create spatial maps?
A) By factor analyzing the data obtained using attribute-based approaches, one could derive, for
each respondent, n factor scores for each factor, one for each brand.
B) The dimensions would be labeled by examining the eigenvalues.
C) Discriminant weights can be used to label the dimensions.
Answer: A
79) Which statement is true about using discriminant analysis to create spatial maps?
A) Spatial maps are obtained by plotting brand scores on the factors.
B) Input data should be obtained via attribute-based approaches to obtaining perception data.
C) Factor weights can be used to label the dimensions.
D) Both A and C are true.
Answer: B
80) ________ is a technique that attempts to determine the relative importance consumers attach
to salient attributes and the utilities they attach to the levels of attributes.
A) Internal analysis of preferences
B) External analysis of preferences
C) Conjoint analysis
D) Correspondence analysis
Answer: C
81) Which of the following statements is not true concerning conjoint analysis?
A) The underlying assumption is that any set of stimuli, such as products, brands, or stores, is
evaluated as a bundle of attributes.
B) Unlike multidimensional scaling, conjoint analysis relies on respondent's objective
evaluations.
C) Conjoint analysis seeks to develop the part-worth or utility functions describing the utility
consumers attach to the levels of each attribute.
D) Conjoint analysis attempts to determine the relative importance consumers attach to salient
attributes and the utilities they attach to the levels of attributes.
Answer: B
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82) Conjoint analysis could be used for all of the marketing applications below except ________.
A) determining the relative importance of attributes in the consumer choice process
B) estimating market share of brands that differ in attribute levels
C) used as a general data reduction tool
D) determining the composition of the most preferred brand
Answer: C
83) In conjoint analysis, ________ are utility functions that describe the utility consumers attach
to the levels of each attribute.
A) relative importance weights
B) orthogonal arrays
D) attribute levels
Answer: C
84) In conjoint analysis, ________ indicate which attributes are important in influencing
consumer choice.
D) attribute levels
Answer: A
85) In conjoint analysis, ________ are the values assumed by the attributes.
D) attribute levels
Answer: D
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86) In conjoint analysis, ________ are a special class of fractional designs that enable the
efficient estimation of all main effects.
D) attribute levels
Answer: B
87) When conducting conjoint analysis in ________, the researcher must identify the attributes
and attribute levels to be used in constructing stimuli.
A) formulating the problem
B) constructing the stimuli
C) deciding on the form of input data
D) selecting a conjoint analysis procedure
Answer: A
88) Which statement is not true about formulating the conjoint analysis problem?
A) Attributes selected should be salient in influencing consumer preference and choice.
B) Once the salient attributes have been identified, their appropriate level should be selected.
C) The set of variables selected should describe the similarity between objects in terms that are
relevant to the marketing research problem.
D) The researcher should take into account the attribute levels prevalent in the marketplace and
the objectives of the study.
Answer: C
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89) In (the) ________ for constructing conjoint analysis stimuli, respondents evaluate two
attributes at a time until all the possible pairs of attributes have been evaluated.
A) full-profile approach
B) pair-wise approach
C) two-factor evaluations
D) both B and C
Answer: D
90) When constructing conjoint analysis, full or complete profiles of brands are constructed for
all the attributes in (the) ________.
A) full-profile approach
B) pair-wise approach
C) two-factor evaluations
D) both B and C
Answer: A
91) Which statement is true about the full-profile approach to constructing conjoint analysis
stimuli?
A) It is possible to reduce the number of paired comparisons by using cyclical designs.
B) The number of stimulus profiles can be greatly reduced by means of fractional factorial
designs.
C) The advantage of pair-wise is that it is easier for the respondents to provide judgments on the
paired comparisons.
D) The disadvantage of pair-wise is that it requires more evaluations than the full-profile
approach.
Answer: B
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92) If you are determining if you should have respondents rank or rate nonmetric or metric data,
you are at which step of conducting conjoint analysis?
A) Construct the stimuli.
B) Decide on the form of input data.
C) Select a conjoint analysis procedure.
D) Assess reliability and validity.
Answer: B
93) The basic conjoint analysis model expressing the fundamental relationship between attributes
and utility in conjoint analysis is shown below:
U(X) =
What does αij represent?

A) 1 if the jth level of the ith attribute is present, or 0 otherwise.
B) the part-worth contribution or utility associated with jth level (j, j=1, 2, ...ki) of the ith
attribute (i, i=1, 2,...m)
C) number of attributes
D) number of levels of attribute i
Answer: B
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U(X) =
What does Xij represent?

A) 1 if the jth level of the ith attribute is present, or 0 otherwise
attribute (i, i=1, 2, ...m)
Answer: A
U(X) =
What does ki represent?

Answer: D
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U(X) =
What does m represent?

Answer: C
97) Decisions related to selecting the conjoint analysis procedure include all of the following
except ________.
A) whether perception or preference data are being scaled
B) whether to average the data at the individual-respondent level or the aggregate level
C) which grouping procedure to use
D) which model for estimating parameters should be specified
Answer: A
98) Which of the following is not one of the procedures for assessing the reliability and validity
of conjoint analysis results?
A) The goodness of fit of the estimated model (R2) should be evaluated.
B) Stress values or badness of fit measures should be evaluated. Stress values vary with the type
of conjoint analysis procedure and the data being analyzed.
C) Test-retest reliability can be assessed by obtaining a few replicated judgments and correlating
them.
D) Internal validity can be determined by correlating predicted evaluations with those obtained
from the respondents.
Answer: B
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99) ________ is a form of conjoint analysis that can simplify the data collection task and
estimate selected interactions as well as all main effects.
A) Conjoint analysis
C) Hybrid conjoint analysis
D) Multidimensional scaling (MDS)
Answer: C
LO: 21.8 Define the concept of hybrid conjoint analysis and explain how it simplifies the data
collection task.
100) ________ is a computer program developed for conducting MDS.

A) MONANOVA
B) PREFMAP
C) LINMAP
D) SIMGRAF
Answer: B
LO: 21.9 Explain the role of software in conducting multidimensional scaling and conjoint
analysis using SPSS and SAS.
101) ________ is a computer program developed for conducting conjoint analysis.

A) MONANOVA
B) PREFMAP
C) APM
D) Both B and C
Answer: A
LO: 21.9 Explain the role of software in conducting multidimensional scaling and conjoint
analysis using SPSS and SAS.
102) What are the steps involved in conducting multidimensional scaling?

Answer:
∙ formulate the problem
∙ obtain input data
∙ select an MDS procedure
∙ decide on the number of dimensions
∙ label the dimensions and interpret the configuration
∙ assess reliability and validity
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103) What are the advantages and disadvantages of the direct and derived approaches to
obtaining perception data for multidimensional scaling?
Answer: Direct approaches have the advantage that the researcher does not have to identify a set
of salient attributes. Respondents make similarity judgments using their own criteria, as they
would under normal circumstances. The disadvantages are that the criteria are influenced by the
brands or stimuli being evaluated. If the various brands of automobiles being evaluated are in the
same price range, then price will not emerge as an important factor. It may be difficult to
determine before analysis if and how the individual respondents' judgments should be combined.
Furthermore, it may be difficult to label the dimensions of the spatial map. The advantage of the
attribute-based approach is that it is easy to identify respondents with homogeneous perceptions.
The respondents can be clustered based on the attribute ratings. It is also easier to label the
dimensions. A disadvantage is that the researcher must identify all the salient attributes, a
difficult task. The spatial map obtained depends upon the attributes identified.
104) Which approach is best to use to obtain perception data, the direct approach or the derived
approach?
Answer: The direct approaches are more frequently used than the attribute-based approaches.
However, it may be best to use both these approaches in a complementary way. Direct similarity
judgments may be used for obtaining the spatial map, and attribute ratings may be used as an aid
to interpreting the dimensions of the perceptual map.
105) What are the disadvantages of internal analysis of preferences?

Answer: In internal analysis, the differences in perceptions are confounded with differences in
preferences. It is possible that the nature and relative importance of dimensions may vary
between the perceptual space and the preference space. Two brands may be perceived to be
similar (located close to each other in the perceptual space) yet, one brand may be distinctly
preferred over the other (i.e., the brands may be located apart in the preference space). These
situations cannot be accounted for in internal analysis. In addition, internal analysis procedures
are beset with computational difficulties.
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106) Contrast conjoint analysis with MDS.

Answer: Like multidimensional scaling, conjoint analysis relies on respondents' subjective
evaluations. However, in MDS, the stimuli are products or brands. In conjoint analysis, the
stimuli are combinations of attribute levels determined by the researcher. The goal in MDS is to
develop a spatial map depicting the stimuli in a multidimensional perceptual or preference space.
Conjoint analysis, on the other hand, seeks to develop the part-worth or utility functions
describing the utility consumers attach to the levels of each attribute. The two techniques are
complementary.
107) List the steps in conjoint analysis.

Answer: Formulate the problem.
Construct the stimuli.
Decide on the form of input data.
Select a conjoint analysis procedure.
Interpret the results.
Assess reliability and validity.
108) What are the limitations of conjoint analysis?

Answer: In situations where image or brand name is important, consumers may not evaluate the
brands or alternatives in terms of attributes. Even if consumers consider product attributes, the
trade-off model may not be a good representation of the choice process. Another limitation is
that data collection may be complex, particularly if a large number of attributes are involved and
the model must be estimated at the individual level.
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109) Define and describe hybrid conjoint analysis.

Answer: Hybrid conjoint analysis is an attempt to simplify the burdensome data-collection task
required in traditional conjoint analysis. Each respondent evaluates a large number of profiles,
yet usually only simple part-worths, without any interaction effects, are estimated. In the simple
part-worths or main effects model, the value of a combination is simply the sum of the separate
main effects (simple part-worths). In actual practice, two attributes may interact, in the sense
that the respondent may value the combination more than the average contribution of the
separate parts.
In the hybrid approach, the respondents evaluate a limited number generally no more than nine,
of conjoint stimuli, such as full profiles. These profiles are drawn from a large master design,
and different respondents evaluate different sets of profiles, so that over a group of respondents,
all the profiles of interest are evaluated. In addition, respondents directly evaluate the relative
importance of each attribute and desirability of the levels of each attribute. By combining the
direct evaluations with those derived from the evaluations of the conjoint stimuli, it is possible to
estimate a model at the aggregate level and still retain some individual differences.
collection task.
110) What are the two main purposes for which hybrid conjoint analysis models were
developed?
Answer: Hybrid models have been developed to serve two main purposes: (1) simplify the data-
collection task by imposing less of a burden on each respondent, and (2) permit the estimation of
selected interactions (at the subgroup level) as well as all main (or simple) effects at the
individual level.
collection task.
111) How does hybrid conjoint analysis simplify the data collection task?
Answer: In the hybrid approach, the respondents evaluate a limited number, generally no more
than nine, conjoint stimuli, such as full profiles. These profiles are drawn from a large master
design, and different respondents evaluate different sets of profiles, so that over a group of
respondents, all the profiles of interest are evaluated. In addition, respondents directly evaluate
the relative importance of each attribute and desirability of the levels of each attribute.
Combining the direct evaluations with those derived from the evaluations of the conjoint stimuli,
it is possible to estimate a model at the aggregate level and still retain some individual
differences.
collection task.
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Chapter 22 Structural Equation Modeling and Path Analysis
1) SEM is a procedure for estimating a series of dependence relationships among a set of

concepts or constructs represented by multiple measured variables and incorporated in to an
integrated model.
Answer: TRUE
LO: 22.1 Define the nature and unique characteristics of structural equation modeling (SEM).
2) A construct is an unobservable or latent variable that can be defined in conceptual terms that
can be measured directly.
Answer: FALSE
3) SEM is distinguished by the explaining of the covariance among the measured items or
observed variables.
Answer: TRUE
4) Generally, we use SEM to find a suitable model.

Answer: FALSE
5) Measured variables or indicators are the actual items that are measured using a survey
questionnaire.
Answer: TRUE
LO: 22.2 Explain the basic concepts in SEM such as theory, model, path diagram, exogenous
versus endogenous constructs, dependence and correlational relationships, model fit, and model
identification.
6) Constructs are the actual items that are measured using a survey questionnaire.
Answer: FALSE
identification.
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7) SEM analysis is based on raw data, rather than a correlation or covariance.

Answer: FALSE
identification.
8) Dependence relationships are represented with one-headed straight arrows in a path model.
Answer: TRUE
identification.
9) Dependence relationships are represented with two-headed curved arrows in a path model.
Answer: FALSE
identification.
10) An exogenous construct is represented in an structural path model as a box with one-headed
arrows going into it.
Answer: FALSE
identification.
11) An exogenous construct is represented in an structural path model as a an oval with no one-
headed arrows going into it.
Answer: TRUE
identification.
12) It is recommended that each construct be measured by using at least three observed variables.
Answer: TRUE
identification.
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13) The confirmatory factor analysis is used to verify the factor structure of a set of observed
variables.
Answer: TRUE
LO: 22.3 Discuss the basic statistics associated with SEM.
14) Having at least three observed variables for each latent construct is a way to help make sure
that the model is identified.
Answer: TRUE
15) When two constructs are theoretically unrelated to each other, the path between those two
constructs should be "free."
Answer: FALSE
LO: 22.5 Know how to specify a measurement model and assess its validity.
constructs should be "fixed."
Answer: TRUE
constructs should be assigned a value of 1.
Answer: FALSE
18) SEM models are estimated so as to maximize the likelihood function.

Answer: FALSE
19) SEM models are estimated so as to minimize the difference between the observed and
estimated covariance matrices.
Answer: TRUE
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20) SEM models are estimated so as to minimize the sum of squares between constructs.
Answer: FALSE
21) The impact of the average error variance of indicators can be understood in terms of
communality.
Answer: TRUE
22) GFI of .95 or higher is a way to help make sure that the model is identified.
Answer: FALSE
LO: 22.6 Explain the concept of model fit and the differences among absolute, incremental, and
parsimony fit indices.
23) CFI is an absolute fit index.

Answer: FALSE
24) RMSR is an absolute fit index.

Answer: TRUE
25) TLI is an absolute fit index.

Answer: FALSE
26) NFI is an incremental fit index.

Answer: TRUE
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27) CFI is an incremental fit index.

Answer: TRUE
28) RMSEA is an incremental fit index.

Answer: FALSE
29) RNI is a parsimony fit index.

Answer: FALSE
30) TFI is a fit measure used in SEM

Answer: FALSE
31) A 0.04 value for RMSEA is considered conservative.

Answer: TRUE

Answer: TRUE

Answer: FALSE
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34) The baseline model that is commonly used is the null model that is based on the assumption
that the observed variables are uncorrelated.
Answer: TRUE
35) Construct validity is established when the measured items are conceptually consistent with a
construct definition.
Answer: FALSE
36) Convergent validity is established when the measured items are conceptually consistent with
a construct definition.
Answer: FALSE
37) In moving from the measurement model to the structural model the error terms are correlated
with each other.
Answer: FALSE
LO: 22.4 Describe the process of conducting SEM and explain the various steps involved.
38) In moving from the measurement model to the structural model the emphasis shifts from the
relationships between latent constructs and measured variables to the nature and magnitude of
the relationships between constructs.
Answer: TRUE
39) In moving from the measurement model to the structural model the exogenous constructs
each become endogenous.
Answer: FALSE
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40) In moving from the measurement model to the structural model the endogenous constructs
become exogenous.
Answer: FALSE
41) Once the validity of the measurement model has been established, you can proceed with the
specification of structural model.
Answer: TRUE
LO: 22.7 Describe how to specify a structural model and assess its validity.
42) A proposed structural model involves four constructs, two of which are exogenous. X1 and
X2 together cause Y1, which in turn causes Y2. This model is recursive.
Answer: TRUE
43) A proposed structural model involves three constructs, one of which are exogenous. X1
causes Y1, which in turn causes Y2. This model is nonrecursive.
Answer: FALSE
44) A sample size of 1000 is used to test a structural model of advertising effectiveness for the
Coca-Cola company. The results show that a significant relationship exists between advertising
effectiveness and sales. The estimated value of the standardized path estimate is .035. The
Coca-Cola management dismisses the finding because the relationship is trivial.
Answer: TRUE
45) Δχ2 statistic is most useful for comparing nested models.

Answer: TRUE
46) RMSR statistic is most useful for comparing nested models.

Answer: FALSE
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47) PNFI statistic is most useful for comparing nested models.

Answer: FALSE
48) The specification of which variables load on which factors is a difference contrasting EFA
with CFA.
Answer: TRUE
LO: 22.8 Discuss the relationship of SEM to other multivariate techniques.
49) The size of the loading estimates considered significant is a difference contrasting EFA with
CFA.
Answer: FALSE
50) SEM can be thought of as a combination of MANOVA and ANOVA.

Answer: FALSE
51) SEM can be thought of as a combination of MANOVA and Exploratory factor analysis.
Answer: FALSE
52) SEM can be thought of as a combination of Factor analysis and multiple regression analysis.
Answer: TRUE
53) SEM can be thought of as a combination of MANOVA and multiple regression analysis.
Answer: FALSE
54) SEM can be thought of as a combination of Discriminant analysis and cluster analysis.
Answer: FALSE
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55) In SEM, the posited relationships between constructs are tested similarly to the way they are
tested using cluster analysis.
Answer: FALSE
56) Path analysis can be viewed as a special case of SEM.

Answer: TRUE
LO: 22.9 Explain path analysis and discuss its relationship to SEM.
57) Which of the following is a distinguishing characteristic of SEM?

A) The estimation of multiple and interrelated dependence relationships simultaneously in a
single analysis.
B) The explaining of the covariance among the measured items or observed variables.
C) The ability to discriminate multiple groups in a single analysis.
D) A and B
E) A, B, and C
Answer: D
58) Which of the following is true about Structural Equation Modeling?

A) In SEM, the constructs are unobservable or latent factors that are representative by multiple
variables.
B) SEM explicitly takes into account the measurement error.
C) SEM is mainly used as an exploratory technique.
D) A and B are true.
E) A, B, and C are true.
Answer: D
59) SEM has the following characteristics:

A) representation of constructs as unobservable or latent factors in dependence relationships.
B) estimation of multiple and interrelated dependence relationships incorporated in an integrated
model.
C) incorporation of measurement error in an explicit manner.
D) explanation of covariance among the observed variables.
E) All of the above
Answer: E
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60) ________ are the actual items that are measured using a survey questionnaire.
A) Constructs
B) Measured variables or indicators
C) Latent factors
D) Observed factors
E) Estimated Parameter
Answer: B
identification.
61) Which of the following are true regarding exogenous constructs?

A) An exogenous construct is the latent, multi-item equivalent of an independent variable in
traditional multivariate analysis.
B) An exogenous construct is determined by factors outside of the model.
C) Graphically, an exogenous construct does not have any paths coming to it.
D) A and C are correct.
E) A, B, and C are correct.
Answer: E
identification.
62) Which of the following are true regarding SEM models?

A) A SEM model consists of two models: the measurement model and the structural model.
B) The measurement model depicts how the observed variable represent constructs.
C) The observed variables are measured by researcher.
D) A structural model shows how the constructs are interrelated to each other, often with
multiple dependence relationships.
E) All of the above
Answer: E
identification.
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63) Dependence relationships are represented with ________ in a path model.

A) two-headed straight arrows
B) two-headed curved arrows
C) ovals
D) boxes
E) none of the above
Answer: E
identification.
64) How is an exogenous construct represented in an structural path model?

A) It is represented by a box with one-headed arrows going into it.
B) It is represented by a box with one-headed arrows going into it and two headed arrows.
C) It is represented by an oval with no arrows.
D) The construct is represented by an oval with no one-headed arrows going into it.
E) None of the above
Answer: D
identification.
65) Which is a way to help make sure that the model is identified?
A) have at least three observed variables for each latent construct
B) have all formative indicators
C) a GFI of .95 or higher
D) a large sample size
Answer: A
identification.
66) Which of the following steps are involved in conducting SEM?

A) Define the individual constructs.
B) Specify the measurement model.
C) Assess measurement model reliability and validity.
D) Specify the structural model if the measurement model is valid.
E) All of the above
Answer: E
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constructs should be ________.
A) free
B) fixed
C) assigned a value of 1
D) estimated
Answer: B
68) SEM models are estimated so as to ________.

A) maximize the likelihood function.
B) minimize the difference between the observed and estimated covariance matrices.
C) minimize the sum of squares between constructs.
D) minimize the least squared difference.
E) both A and C
Answer: B
69) ________ is established when the measured items are conceptually consistent with a
construct definition.
A) Nomological validity
B) Composite reliability
C) Convergent validity
D) Discriminant validity
Answer: E
70) The validity of the measurement model depends on ________.

A) goodness-of-fit results
B) composite reliability
C) convergent validity
D) discriminant validity
E) all of the above
Answer: E
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71) The diagnostic cues that can be used to make appropriate modifications include ________.
A) the path estimates or loadings
B) standardized residual
C) modification indices
D) specification search
E) all of the above
Answer: E
72) In moving from the measurement model to the structural model ________.
A) the error terms are correlated with each other
B) the emphasis shifts from the relationships between latent constructs and measured variables to
the nature and magnitude of the relationships between constructs
C) the exogenous constructs each become endogenous
D) the endogenous constructs become exogenous
Answer: B
73) Which is not an absolute fit index?

A) CFI
B) SRMR
C) NFI
D) Chi-square
E) A and C
Answer: E
74) Which is not an incremental fit index?

A) GFI
B) NFI
C) CFI
D) RMSR
E) A and D
Answer: E
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75) Which of the following is not a fit measure?

A) RMSR
B) SRMR
C) GFI
D) TFI
E) CFI
Answer: D
76) Which statistic is most useful for comparing nested models?

A) Δχ2
B) AGFI
C) RMSR
D) NNFI
E) PNFI
Answer: A
77) Which of the following value(s) for RMSEA are considered conservative?
A) 0.04
B) 0.06
C) 0.90
D) 0.99
E) A and B
Answer: E
78) Model fit includes the following steps:________.

A) Produce correlations or covariances among the items
B) Estimate the covariance matrix between the observed variables based on the proposed
measurement and structural models
C) Model fit is determined by comparing how closely the estimated covariance matrix matches
the observed covariance matrix
D) Examine the residuals
E) All of the above
Answer: E
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79) In a tests of a structural model, the path between store preference and store patronage has a
coefficient of 0.85. What does this provide evidence of?
A) time order of occurrence
B) nonspurious association
C) absence of other casual factors
D) the hypothesis that preference causes store patronage is supported
Answer: E
80) A proposed structural model involves four constructs, two of which are exogenous. X1 and
X2 together cause Y1, which in turn causes Y2. What term describes this model?
A) descriptive
B) empirical
C) nonrecursive
D) recursive
Answer: D
81) A sample size of 1000 is used to test a structural model of advertising effectiveness for the
Coca-Cola company. The results show that a significant relationship exists between advertising
effectiveness and sales. The estimated value of the standardized path estimate is .035. The Coca-
Cola management dismisses the finding. Why?
A) The sample size is probably too small.
B) The sample size is probably too large.
C) The relationship is trivial.
D) The model fit is poor.
Answer: C
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82) SEM can be thought of as a combination of which two techniques?

A) MANOVA and ANOVA
B) MANOVA and Exploratory factor analysis
C) Factor analysis and multiple regression analysis
D) MANOVA and multiple regression analysis
E) Discriminant analysis and cluster analysis
Answer: C
83) In SEM, the posited relationships between constructs are tested similarly to the way they are
tested using ________.
A) multiple regression
B) analysis of Covariance
C) discriminant analysis
D) cluster analysis
E) MDS
Answer: A
84) Which of the following is a difference contrasting EFA with CFA?

A) the specification of which variables load on which factors
B) one technique is exploratory and the other is confirmatory
C) the size of the loading estimates considered significant
D) A and B
E) A, B, and C
Answer: D
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85) Which of the following is true about the relationship of SEM to multiple regression
techniques?
A) SEM is similar to multiple regression when exogenous constructs are used to predict
endogenous constructs.
B) It is different from multiple regression because the dependent construct in one relationship
may become the independent construct.
C) It is different from multiple regression because the all of the equation are estimated
simultaneously.
E) A, B and C are correct.
Answer: E
86) Which of the following is true about the relationship of SEM to factor analysis?
A) The measurement model in SEM is similar to factor analysis in that both techniques have
variables with loadings on factors.
B) Concepts such as correlations and covariances are common to both the techniques.
C) SEM, we have to specify which variables are associated with each construct based on theory.
E) A, B and C are correct.
Answer: E
87) Explain exogenous and endogenous constructs.

Answer: An exogenous construct is the latent, multi-item equivalent of an independent variable
in traditional multivariate analysis. Multiple observed variables or items are used to represent an
exogenous construct that acts as an independent variable in the model. An exogenous construct is
determined by factors outside of the model, and it cannot be explained by any other construct or
variable in the model. Graphically, an exogenous construct does not have any paths (single-
headed arrows) coming into it from any other construct or variable in the model; it will only have
paths (single-headed arrows) going out of it.
In contrast, an endogenous construct is the latent, multi-item equivalent of a dependent variable.
It is determined by constructs or variables within the model and thus it is dependent on other
constructs. Graphically, an endogenous construct has one or more paths (single-headed arrows)
coming into it from one or more exogenous construct or from other endogenous constructs.
identification.
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88) Describe the process of conducting SEM and explain the various steps involved.
Answer: The process of conducting SEM is described in Figure 22.2 in the text. The steps
involved in conducting SEM are (1) define the individual constructs, (2) specify the
measurement model, (3) assess measurement model reliability and validity, (4) specify the
structural model if the measurement model is valid, (5) assess structural model validity, and (6)
draw conclusions and make recommendations if the structural model is valid.
89) Describe the assessment of reliability in a measurement model.

Answer: Recall from Chapter 9 that an unreliable construct cannot be valid. So first we should
assess the reliability of the constructs in the measurement model. As in Chapter 9, the
coefficient alpha can be used to assess reliability. In addition, we compute composite reliability
(CR), which is defined as the total amount of true score variance in relation to the total score
variance. Composite reliability corresponds to the conventional notion of reliability in classical
test theory (see Chapter 9). As general guidelines, composite reliabilities of 0.7 or higher are
considered good. Estimates between 0.6 and 0.7 may be considered acceptable if the estimates of
the model validity are good.
90) Describe the assessment of discriminant validity in a measurement model.

Answer: In order to establish discriminant validity, we must show that the construct is distinct
from other constructs and thus makes a unique contribution. First, individual observed variables
should load on only one latent construct. Cross-loadings indicate lack of distinctiveness and
present potential problems in establishing discriminant validity.
One formal way to show distinctiveness is to set the correlation between any two constructs as
equal to one, i.e., we are specifying that observed variables measuring the two constructs might
as well be represented by only one construct. Evidence of discriminant validity is obtained if the
fit of the two-construct model is significantly better than the fit of the one-construct model.
However, this actually turns out to be a weak test as significant fit differences may be obtained
even when the correlations between the two constructs are very high.
An alternative test of discriminant validity is based on the logic that a construct should explain
its observed variables better than it explains any other construct. This test is conducted by
showing that the average variance extracted is greater than the square of the correlations.
Equivalently, discriminant validity is achieved if the square root of the average variance
extracted is larger than correlation coefficients.
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91) Describe the specification of a structural model.

Answer: In moving from the measurement model to the structural model, the emphasis shifts
from the relationships between latent constructs and the observed variables to the nature and
magnitude of the relationships between constructs. Thus, the measurement model is altered
based on the relationships among the latent constructs. Because the measurement model is
changed, the estimated covariance matrix based on the set of relationships examined will also
change. However, the observed covariance matrix, based on the sample data, does not change as
the same data are used to estimate the structural model. Thus, in general, the fits statistics will
also change, indicating that the fit of the structural model is different than the fit of the
measurement model.
If the measurement model is identified, then the structural model is too, provided that it is
recursive in that there are no feedback loops or dual dependencies and, in addition, there are no
interaction terms. In such cases, generally the structural model is nested within the measurement
model and contains fewer estimated parameters. A model is nested within another model if has
the same number of constructs and variables and can be derived from the other model by altering
relationships, as by adding or deleting relationships. Dual dependencies exist when C1 and C2
are mutually dependent on each other, and models containing such relationships are referred to
as nonrecursive.
92) Describe path analysis and its relationship to SEM.

Answer: Path analysis (PA) can be viewed as a special case of structural equation modeling
(SEM). We could think of PA as SEM with only single indicators for each of the variables in the
causal model. In other words, path analysis is SEM with a structural model, but no measurement
model. Path analysis may also be viewed as an extension of the regression model. The PA model
is depicted in a rectangle-and-arrow figure in which single-headed arrows indicate causation. A
regression is done for each variable in the model as a dependent on others, which the model
indicates are causes. The regression weights estimated by the model are compared with the
observed correlation matrix for the variables, and a goodness-of-fit statistic is calculated. Path
analysis calculates the strength of each relationship using only a correlation or covariance matrix
as input.
LO: 22.9 Explain path analysis and discuss its relationship to SEM.
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SMA Testbank CHAP 15 22 - sma final

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Marketing Research: An Applied Orientation, 7e (Malhotra)

1) In a frequency distribution, two variables are considered at a time.

2) The valid percentage column in a frequency distribution represents percentages calculated by

3) Frequency data may be used to construct a histogram, or a vertical bar chart.

5) Mean, median, and mode are measures of variability.

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8) The mode represents the highest peak of the distribution.

9) If a variable is measured on a nominal scale, the median should be used.

12) The Range = XLargest - XSmallest.

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15) The variance can never be negative.

16) When the data points are scattered, variance is small.

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23) The null hypothesis is always the hypothesis that is tested.

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38) Cross-tabulation examines associations between variables, not causation.

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41) The chi-square statistic can be estimated on counts of data or on percentages.

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47) Hypothesis-testing procedures can be broadly classified as parameter or nonparameter based

50) The F static is computed as the ratio of two sample variances.

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54) The binomial test is a test of randomness for a dichotomous variable.

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66) A frequency distribution helps determine ________.

67) A frequency distribution helps ________.

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68) A statistic that describes a location within a data set is a ________.

70) The ________ is the value that occurs most frequently.

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74) A statistic that indicates the distribution's dispersion is a ________.

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80) The square root of the variance is the ________.

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85) Which statement is not correct about the null hypothesis?

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93) The last step involved in hypothesis testing is ________.

94) Hypothesis tests can be related to ________.

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97) Which statement is not correct about cross-tabulations?

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100) In cross-tabs, the introduction of a third variable can ________.

101) Which of the following statements is not true concerning cross-tabulation?

102) Which statement is not related to statistics associated with cross-tabulation?

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108) ________ is a modified version of the phi correlation coefficient, Φ.

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121) Which statement is not true concerning the t distribution?

39) A covariate is a independent variable used in .

47) The equation for r involves dividing the by .