BMSI

ET 7
 Business Mathematics & Statistical Inference
TEST - ET 7
 
Q1: In 2012, a price index based on 2010 = 100 stood at 140. In that year it was rebased at
2012 = 100. By 2016, the new index stood at 130. For a continuous estimate of price changes,
since 2012, the new index may be expressed in terms of old as .
a) 130.00
b) 140.00
c) 135.00
d) 182.00
Solution:
Prices in 2012 were 1.40 times those in 2010 and prices in 2012 were 1.30 times
those in 2010. Hence prices in 2012 were 1.40 × 1.30 = 1.82 times those in
2010. This corresponds to a price index of 182.00. (TYU 5)
Q2: Calculate the Laspeyers price index for the year 2015 taking 2014 as base year.
Items (2015)
X 120 130 5 7
Y 100 140 10 15
Z 120 110 10 5
a) 110.5
b) 112.5
c) 121.08
d) 116.71
 
Q3: which one of the followings is not an advantage of spreadsheets?
a) They enable the analysis, reporting and sharing of financial information.
b) Spreadsheets make the calculations and manipulation of data quicker
c) Spreadsheets cannot be corrupted
d) They enable what-if analysis
= 650 + 1400 + 1100 x 100
600 + 1000 + 1200

= 3150/2800 x 100

= 112.5
Q4: A series of numerical figures which show the relative position is called:
a) index number
b) absolute number
c) relative number
d) None of these
 
Q5: In which ways a price index of 230 may be interpreted?
a) There has been a 30 percent increase since the base year
b) There has been a 130 percent increase since the base year
c) There has been a 230 percent increase since the base year
d) None of these
Q6: In order to utilize the binomial distribution, all of the following assumptions must be satisfied
except:
a) The probability of a success (p) remains constant from one trial to the next
b) Each trial has two possible outcomes “success” or “failure”
c) The experiment consists of “n” repeated trials
d) The repeated trials are not independent of each other.
 
Q7: What is probability:
a) The likelihood that your results are true.
b) The integrity of the data
c) The likelihood that something occurs due to chance
d) Correlation
The four requirements are:

•each observation falls into one of two categories called a success or failure.
•there is a fixed number of observations.
•the observations are all independent.
•the probability of success (p) for each observation is the same - equally likely
Q8: The shape of the normal curve depends upon:
a)
b) Variance
c) Mean deviation
d) Quartile deviation
 
Q9: The use of significance testing is an example of:
a) confidence intervals
b) an alternative hypothesis
c) statistical inference
d) descriptive statistics
Q10: Whenever the sampling is with replacement, the population is considered as:
a) small
b) zero
c) infinite
d) finite
 
Q11: The component of time series used for short term forecast is .
a) cyclical
b) seasonal
c) trend
d) irregular
 
Q12: When either the supply of raw materials or the demand of finished products is highly variable,
forecasting and the accompanying managerial decisions:
a) are extremely difficult
b) are relatively straight forward
c) are extremely simple
d) should not be attempted
 
Q13: A lot consists of 12 good pencils 6 pencils with minor defects and 2 with major defects. One
pencil is selected from the lot at random. The probability that this pencil is good is:
a) 3/5
b) 2/5
c) 1/2
d) 3/10
A pencil is "defective" if it has either major or minor defects. Number of pencils with
"defects"=6+2=8.
Total pencils = 20.
Probability of getting defective pencil = 8/20.
Hence, Probability of not getting a defective pencil =1−8/20​=3/5
 
Q14: Suppose that a chi square test is to be performed on a contingency table with five rows and
four columns. How many degree of freedom should be used?
a) 9
b) 12
c) 14
d) 5
 
Q15: You have just calculated for the last two six-monthly periods, the running cost of the factory,
broken down into five categories. You are using a computer package which can produce ogive, pie-
charts, time series graphs and scatter diagrams among others. The graphics to illustrate best the
relative sizes of the cost categories in this situation will be:
a) Ogives
b) Time series graphs
c) Pie-charts
d) Scatter diagrams
Chi-square Test: (Pearson's chi-squared test):

chi-square (χ2) statistic is a measure of the difference between the observed and expected
frequencies of the outcomes of a set of events or variables.χ2 can be used to test whether two
variables are related or independent from one another.

Degree of freedom of chi-square test:

The degrees of freedom for the chi-square are calculated using the following formula: df = (r-1)
(c-1) where r is the number of rows and c is the number of columns. If the observed chi-square
test statistic is greater than the critical value, the null hypothesis can be rejected.

Hence, df = (5-1) x (4-1) = 4 x 3 = 12.

Q16: A time series for weeks 1 to 12 has been analyzed into a trend and seasonal variations,
using the additive model, the trend value is 94 + 0.6w, where “w” is the week number, the actual
value for week-9 is 98.5. What is number of associated week (w):
a) 0.6
b) 7.50
c) 5.40
d) -0.9
 
Q17: A series of numerical figures which show the relative positions is called:
a) None of these
b) relative number
c) index number
d) absolute number
 
Q18: It is observed that views on the articles published increases during the months of jan-march
whereas the views during Nov-Dec decreases. Does the above statement represent seasonality?
a) Can not say.
b) More information is needed
c) False
d) True
 
Q19: If mean of a distribution is 14 and standard deviation is 5. What is the value of co-efficient of
variation?
a) 48.3%
b) 27.8%
c) 25.7%
d) 35.7%
CV= (SD÷ MEAN) ×100
= (5÷14)×100
CV = 35.71
Q20: When the null hypothesis is = u = 53, the alternative hypothesis can be:
a) ; u 53
b) ; u < 53
c) ; u 42
d) ; u 53