Question Paper
Quantitative Methods-II (MB152): January 2007

 

·       Answer all questions.

·       Marks are indicated against each question.

 

 

 

1.

A die is loaded so that the probability of getting face x is proportional to x. Then the probability of getting less than or equal to three is:

(a)

(b)

(c)

(d)

(e)

.

(2 marks)

< Answer >

2.

If the probability that A will be alive for 20 years is 0.7 and the probability that B will be alive for 20 years is 0.5, then what is the probability that both will be alive for 20 years?

(a)

0.35

(b)

0.45

(c)

0.50

(d)

0.70

(e)

0.75.

(1 mark)

< Answer >

3.

A ball is drawn at random from a box containing 6 red balls, 4 white balls and 5 blue balls. What is the probability that the ball drawn is ‘not red’?

(a)

1/3

(b)

2/3

(c)

2/15

(d)

3/5

(e)

1/5.

(2 marks)

< Answer >

4.

Two dice are thrown simultaneously. The probability that the sum of the numbers on them is less than or equal to 5 is

(a)

1/9

(b)

1/6

(c)

2/9

(d)

5/18

(e)

1/3.

(2 marks)

< Answer >

5.

In a simultaneous tossing of two unbiased coins, the probability of having atleast one tail is

(a)

1.00

(b)

0.75

(c)

0.50

(d)

0.25

(e)

0.375.

(1 mark)

< Answer >

6.

A and B are two independent events such that P(A) = 0.3, P(B) = k and P(A or B) = 0.8, then the value of k is equal to

(a)

1/3

(b)

2/3

(c)

2/7

(d)

5/7

(e)

2/5.

(1 mark)

< Answer >

7.

Which of the following is/are the conditions for applying the Bayes’ theorem for computing posterior probabilities of certain events?

(a)

The events must be non-mutually exclusive

(b)

The events must be mutually exclusive

(c)

The events must not be collectively exhaustive

(d)

The events must be collectively exhaustive

(e)

Both (b) and (d) above.

(1 mark)

< Answer >

8.

If events A and B are mutually exclusive then which of the following is true?

(a)

P(A and B) = 0

(b)

P(A) = 0

(c)

P(B) = 0

(d)

P(A or B) = 0

(e)

P(A or B) = 1.

(1 mark)

< Answer >

9.

Which of the following best describes the expected value of a discrete random variable?

(a)

It is the geometric average of all possible outcomes of the variable

(b)

It is the simple average of all possible outcomes of the variable

(c)

It is the weighted average of all possible outcomes of the variable

(d)

It is the outcome of the variable, which has the highest probability of occurrence

(e)

It is the highest probability of occurrence in probability distribution of the random variable.

(1 mark)

< Answer >

10.

The expected value of the number of successes of a binomial distribution is equal to

(a)

Zero

(b)

The number of trials

(c)

The probability of success in any trial

(d)

The probability of failure of any trial

(e)

The product of the number of trials and probability of success in any trial.

(1 mark)

< Answer >

11.

Which of the following statements is/are false with regard to a normal distribution?

I.       It is a continuous distribution.

II.      It is a multimodal.

III.    It is an asymmetrical distribution.

IV.    The mean, median and mode are equal.

(a)

Only (II) above

(b)

Both (I) and (II) above

(c)

Both (II) and (III) above

(d)

Both (I) and (IV) above

(e)

(I), (II) and (III) above.

(1 mark)

< Answer >

12.

The probability distributions of independent random variables X and Y, are given below:

X

12

17

22

27

Probability

0.20

0.40

0.30

0.10

 

Y

11

15

19

Probability

0.25

0.55

0.20

If a random variable Z, is defined as:  Z = 4X + 5Y

What is the expected value of the random variable Z?

(a)

  74

(b)

  66

(c)

125

(d)

185

(e)

148.

(2 marks)

< Answer >

13.

The persons A and B together tosses a coin, then the probability of A’s success is 2/3. The standard deviation of the number of success in a binomial distribution is given by.

Find the probability of obtaining exactly 9 successes?

(a)

0.1569

(b)

0.1654

(c)

0.1709

(d)

0.1785

(e)

0.1874.

(2 marks)

< Answer >

14.

Sanjunath is an incharge of the music section of a large departmental store. He has noticed that a customer who is just browsing will buy something is 0.3. Suppose that 15 customers browse in the music section in an hour.

What is the probability that not more than four browsing customers will buy something during the specified hour?

(a)

0.10105

(b)

0.21216

(c)

0.31327

(d)

0.41438

(e)

0.51549.

(2 marks)

< Answer >

15.

Which of the following is/are the example(s) of Poisson distribution?

I.       The number of deaths in a city due to suicides.

II.      The number of defective items in a box of 100 items.

III.    The number of plane accidents per week.

(a)

Only (I) above

(b)

Only (II) above

(c)

Both (II)and (III) above

(d)

Both (I) and  (III) above

(e)

All (I), (II) and (III) above.

(1 mark)

< Answer >

16.

Which of the following is not a characteristic of Bernoulli process?

(a)

Each trial has only two outcomes

(b)

The probability of outcome of any trial remains fixed over time

(c)

The trials are statistically independent

(d)

The probability of occurrence of one outcome is equal to the probability of occurrence of the other

(e)

The occurrence of one trial cannot influence the outcome of any other trial.

(1 mark)

< Answer >

17.

If = a + b1X1 + b2X2, where X1 and X2 are two independent variables, then the problem of multicollinearity will arise when the

(a)

Degree of correlation between Y, X1 and X2 is high

(b)

Degree of correlation between Y and X2 is high

(c)

Degree of correlation between X1 and X2 is high

(d)

Values of a and b1 are higher compared to b2

(e)

Values of a and b2 are higher compared to b1.

(1 mark)

< Answer >

18.

Which of the following is/are not true?

I.       F-distribution extends along abscissa from 0 to .

II.      F-distribution curve wholly lies in the first quadrant.

III.    Shape of the curve depends on the sample sizes n1 and n2.

(a)

Only (I) above

(b)

Only (II) above

(c)

Only (III) above

(d)

Both (I) and (II) above

(e)

Both (II) and (III) above.

(1 mark)

< Answer >

19.

The probability of success changes from trial to trial in

(a)

Binomial distribution

(b)

Poisson distribution

(c)

Hypergeometric distribution

(d)

Uniform distribution

(e)

Lognormal distribution.

(1 mark)

< Answer >

20.

If there are infinite number of possible number of outcomes, the probability of any one outcome is

(a)

1

(b)

0

(c)

(d)

(e)

Cannot be determined.

(1 mark)

< Answer >

21.

The sampling distribution of the mean is a distribution of

(a)

Means of individual populations

(b)

Observations within a population

(c)

Observations within a sample

(d)

Means of all possible samples of a specific size taken from a population

(e)

Means of samples of a specific size taken from different populations.

(1 mark)

< Answer >

22.

Which of the following is false with regard to standard error of mean?

(a)

It is less than the standard deviation of the population

(b)

It decreases as the sample size increases

(c)

It measures the variability of the mean from sample to sample

(d)

It is the standard deviation of the sampling distribution of mean

(e)

It is the standard deviation of the sample.

(1 mark)

< Answer >

23.

A sample of size 96 has been taken from a population and the estimated standard error of proportion is found to be 0.05. What is the sample proportion?

(a)

0.05 or 0.95

(b)

0.24 or 0.76

(c)

0.80 or 0.20

(d)

0.40 or 0.60

(e)

0.50.

(2 marks)

< Answer >

24.

For which of the following distributions the z-values and the observed values are same?

(a)

Perfectly normal

(b)

Standard normal

(c)

Binomial

(d)

Bernoulli’s probability

(e)

Poisson.

(1 mark)

< Answer >

25.

In random sampling, we can describe mathematically, the objectiveness of our estimates. This is because

I.       We always know the chance, that any population element will be included in the sample.

II.      Every sample always has an equal chance of being selected.

III.    All the samples are of same size and can be counted.

(a)

Only (I) above

(b)

Only (II) above

(c)

Both (I) and (II) above

(d)

Both (II) and (III) above

(e)

All (I), (II) and (III) above.

(1 mark)

< Answer >

26.

A statistic which comes very close to the value of the population parameter as the sample size increases is said to be

(a)

An unbiased estimator

(b)

A consistent estimator

(c)

An accurate estimator

(d)

A sufficient estimator

(e)

An efficient estimator.

(1 mark)

< Answer >

27.

Which of the following statements is true?

(a)

Systematic sampling requires less time and lower costs than simple random sampling

(b)

Cluster sampling is used when the population is divided into groups which are not representative of the population as a whole

(c)

Judgmental sampling is free from subjectivity

(d)

The chances of errors are less while dealing with census

(e)

In systematic sampling each element does not have an equal chance of being selected.

(1 mark)

< Answer >

28.

In making estimates of population parameters using sample statistics, efficiency refers to the

(a)

Size of the standard error of the sample statistics

(b)

Usage of the sample information by the statistic

(c)

Degree of representativeness of the sample information

(d)

Possibility that the sample statistic gets closer to the population parameter as the sample size increases

(e)

Tendency of the estimator to take values that are different from the population parameter.

(1 mark)

< Answer >

29.

The variance of the sampling distribution of mean is

(a)

Always equal to the variance of the underlying population

(b)

Less than the variance of the underlying population if the sample size is more  than one

(c)

More than the variance of the underlying population if the sample size is more than one

(d)

Equal to the standard deviation of the underlying population if the sample size is more than one

(e)

Not dependent on the sample size.

(1 mark)

< Answer >

30.

Which of the following is/are not required for calculating the test statistic for testing a hypothesis about a population variance?

(a)

Sample size

(b)

Population size

(c)

Sample variance

(d)

Hypothesized value of population variance

(e)

Both sample size and sample variance.

(1 mark)

< Answer >

31.

In order to find out the critical value for a hypothesis test on the variance of a population which of the following need not be known?

I.       Sample variance.

II.      Sample size.

III.    Significance level.

IV.    Type of test (one tailed or two tailed).

(a)

Only (I) above

(b)

Only (II) above

(c)

Only (III) above

(d)

Only (IV) above

(e)

Both (III) and (IV) above.

(1 mark)

< Answer >

32.

If a hypothesis is tested at a significance level of 10% then it means that

(a)

There is a 10% probability that the null hypothesis will be rejected though it is true

(b)

There is a 10% probability that the null hypothesis will be false

(c)

There is a 10% probability that the null hypothesis will be true

(d)

There is a 90% probability that the alternative hypothesis will be false

(e)

There is a 90% probability that the alternative hypothesis will be true.

(1 mark)

< Answer >

33.

Which of the following statements is false?

(a)

The purpose of hypothesis testing is to make a judgment about the difference between the sample statistic and the hypothesized population parameter

(b)

When the null hypothesis is rejected, the alternative hypothesis is accepted

(c)

The purpose of hypothesis testing is to test the correctness of the computed value of the sample statistic

(d)

The acceptance of the null hypothesis does not indicate that the null hypothesis is true

(e)

The testing of hypothesis is a process of testing the significance of a parameter of the population on the basis of a sample.

(1 mark)

< Answer >

34.

If we reject H0:= 10 in favor of H1:10 at a given level of significance with a positive value of the test statistic, then a test with H0: = 10 versus   H1:> 10 using the same sample and the same level of significance will

(a)

Always accept H0

(b)

Always reject H0

(c)

Sometimes accept and sometimes reject H0

(d)

Certainly lead to a Type I error

(e)

Certainly lead to a Type II error.

(1 mark)

< Answer >

35.

The ball bearings in a large consignment have a mean weight of 142.3 grams and a standard deviation of 8.5 grams. A random sample of 100 ball bearings is taken from the consignment. What is the probability that the sample mean lies between 140.61 and 141.75 grams?

(a)

0.0326

(b)

0.3231

(c)

0.6476

(d)

0.0514

(e)

0.0454.

(2 marks)

< Answer >

36.

The central limit theorem

(a)

Relates the shape of the distribution of the mean to the mean of the sample

(b)

Requires the sample to contain fewer than 30 observations

(c)

Permits us to use sample statistics to make inferences about population parameters

(d)

Requires the knowledge of the frequency distribution

(e)

Both (b) and (d) above.

(1 mark)

< Answer >

37.

The 75 members of branch executives were sampled from all other executives in a specific industry and were classified into three age groups, labeled A, B, and C. It is believed that there is an equal likelihood that any branch executive selected at random will fall in any of the three age groups. There were 28 branch executives in group A, 22 in group B and 25 in group C. The belief is to be tested at a significance level of 0.05, using a suitable technique.

What is the value of the test statistic?

(a)

2.00

(b)

0.95

(c)

1.50

(d)

0.72

(e)

3.50.

(3 marks)

< Answer >

38.

For a sample randomly collected from a population, the following details are available:
= 1840
 = 160
Number of observations  = 16
What is the estimated standard error of mean?

(a)

1

(b)

2

(c)

4

(d)

10

(e)

16.

(2 marks)

< Answer >

39.

In the test involving ANOVA the F-statistic is calculated on the basis of

(a)

The variance of the largest sample

(b)

The mean of the largest sample

(c)

The standard deviation of the smallest sample

(d)

The estimated population mean based on the mean among the sample variances and the estimated population variance based on the variance within the samples

(e)

The estimated population variance based on the variance among the sample means and the estimated population variance based on the variance within the samples.

(1 mark)

< Answer >

40.

When the chi-square test is used as a test of independence, the number of degrees of freedom is determined by

(a)

The sample size

(b)

The ratio of sample size and the population

(c)

Number of rows in the contingency table only

(d)

Number of columns in the contingency table only

(e)

Both the number of rows and the number of columns in the contingency table.

(1 mark)

< Answer >

 

41.

A 95% confidence interval for the proportion of male drunken drivers in a given state is to be constructed and must be accurate to within 0.08 of the point estimate. A preliminary sample provides an initial estimate of the proportion as 0.09. The smallest sample size that will provide the desired accuracy is

(a)

77

(b)

26

(c)

150

(d)

50

(e)

40.

(2 marks)

< Answer >

 

42.

Which of the following is/are the method(s)  of finding the correlation between two variables?

I.       Method of least squares.

II.      Spearman’s rank correlation coefficient.

III.    Scatter diagram.

(a)

Only (I) above

(b)

Only (II) above

(c)

Only (III) above

(d)

Both (I) and (II) above

(e)

All (I), (II) and (III) above.

(1 mark)

< Answer >

 

43.

Capital Finance Company Ltd. is a non-banking finance company. In the recent years there have been variations in the demand for loans as well as in the rate of interest. The general manager of the company wants to know whether the variations in the amount of advances explain the variations in the net profit of the company.

The following data pertain to the operations of the company in the recent years:

Year

2006

2005

2004

2003

2002

2001

Amount of advances (Rs. in crores)

6.0

4.5

4.0

3.5

3.0

3.0

Profit after tax (Rs. in lakhs)

50

44

38

23

15

10

What is the coefficient of correlation between the net profit and the amount of advances?

(a)

0.9182

(b)

0.8215

(c)

0.6458

(d)

0.7584

(e)

0.2356.

(3 marks)

< Answer >

 

44.

A sample of paired observations of two random variables X and Y is given below:

X

3

6

2

4

5

4

7

1

Y

25

32

16

28

30

13

30

10

What is the covariance between X and Y?

(a)

10.12

(b)

11.25

(c)

13.86

(d)

14.35

(e)

16.48.

(2 marks)

< Answer >

 

45.

Two simple regression relationships have been developed between variables X and Y; and between variables W and Y. In both the relationships variable Y is the dependent variable. The coefficient of correlation between variables X and Y is 0.85 and the coefficient of correlation between variables W and Y is – 0.92.

Which of the following statements is/are correct?

(a)

The proportion of variation in variable Y that is not explained by variable X is 0.1536

(b)

The proportion of variation in variable Y that is not explained by variable W is 0.2775

(c)

The proportion of variation in variable Y that is explained by variable X is 0.7225

(d)

The proportion of variation in variable Y that is explained by variable W is more than the proportion of variation in variable Y that is explained by variable X

(e)

Both (c) and (d) above.

(2 marks)

< Answer >

 

46.

Which of the following is true when the slope of a regression line is negative?

(a)

The correlation coefficient between the dependent and independent variables is zero

(b)

There is a positive correlation between the dependent and independent variables

(c)

There is a negative correlation between the dependent and independent variables

(d)

The regression line is perpendicular to the horizontal axis

(e)

The regression line is parallel to the horizontal axis.

(1 mark)

< Answer >

 

47.

In the linear regression model, the residuals are assumed to

(a)

Have a binomial distribution with a probability of success of 0.50

(b)

Have a normal distribution with a mean of 0

(c)

Have a chi-square distribution with a mean of 0

(d)

Have a t-distribution with a mean of 1.00

(e)

Have a normal distribution with unknown mean.

(1 mark)

< Answer >

 

48.

The following details are available with regard to a simple regression relationship:

Total sum of squares = 16730

Error sum of squares = 1630

What percentage of the variations in the dependent variable is explained by the regression relationship?

(a)

       0%

(b)

  9.75%

(c)

  5.00%

(d)

90.25%

(e)

95.00%.

(2 marks)

< Answer >

 

49.

Prestige Industries Ltd. (PIL) has a sales force consisting of 150 salespersons having various number of years of sales experience. The sales manager of the company wants to establish a relationship between the number of years of experience and annual sales. The following data are collected by him from a random sample of 10 salespersons of the company:

No. of years of experience

2

11

4

11

5

9

5

7

14

12

Annual Sales (in Rs.’000s)

78

121

95

117

90

109

100

101

134

115

A simple regression relationship has to be developed for estimating the annual sales on the basis of the number of years of experience of the salesperson.

Which of the following is the estimated amount of annual sales if a salesperson has 10 years of experience?

(a)

Rs.   40,000

(b)

Rs.   74,000

(c)

Rs.   78,000

(d)

Rs.1,14,000

(e)

Rs.   34,000.

(3 marks)

< Answer >

 

50.

A simple regression relationship was developed between the variables X and Y, with X as the independent variable. The estimated value of Y when X = 2, is 7.0; and the estimated value of Y when X = 8, is 11.8. What is the value of the coefficient of X?

(a)

0.80

(b)

1.50

(c)

2.30

(d)

1.95

(e)

2.50.

(2 marks)

< Answer >

 

51.

A simple regression relationship was developed between two variables X and Y, where X is the independent variable with slope 5 and intercept as 3. The following information is given below:

S Y2 = 780          SXY = 452                            SY = 72     n = 8

Find the coefficient of determination?

(a)

12.60

(b)

13.85

(c)

15.05

(d)

20.45

(e)

25.80.

(2 marks)

< Answer >

 

52.

Pyramid Networks Ltd. manufactures and sells network access software products. Its sales have been increasing in the recent years. The company is planning to expand its work force in response to the increasing trend shown by the sales of its products. The future manpower requirement is expected to be dependent on the level of future sales. The company requires an estimate for the sales in the year 2007. The following data are collected:

Year

Sales (Rs. in lakhs)

2006

160

2005

135

2004

105

2003

  85

2002

  60

2001

  35

The sales for the year 2007, estimated on the basis of a linear trend equation, is

(a)

Rs.150.16 lakhs

(b)

Rs.168.84 lakhs

(c)

Rs.175.34 lakhs

(d)

Rs.183.68 lakhs

(e)

Rs.195.25 lakhs.

(2 marks)

< Answer >

 

53.

If the regression equation is not a perfect estimator of the dependent variable then which of the following will be true?

I.       The standard error of estimate is not zero.

II.      The coefficient of determination is not one.

III.    The data points do not lie on the regression line.

IV.    Error sum of squares is equal to zero.

(a)

Only (I) above

(b)

Only (IV) above

(c)

Both (II) and (IV) above

(d)

(I), (II) and (III) above

(e)

All (I), (II), (III) and (IV) above.

(1 mark)

< Answer >

 

54.

Which one of the following is not true with regard to simple linear regression?

(a)

The relationship between the independent and dependent variables is necessarily linear

(b)

The relationship between the independent and dependent variables necessarily implies cause and effect

(c)

The relationship between the independent and dependent variables is a relationship of association

(d)

There is one independent variable and one dependent variable

(e)

There may be other factors which cause changes in both the dependent and independent variables.

(1 mark)

< Answer >

 

55.

Which criterion of decision-making is not applicable when the decision maker has insufficient information to assign any probabilities of occurrence to the various states of nature?

(a)

Maximax criterion

(b)

Maximin criterion            

(c)

Hurwicz criterion

(d)

Regret criterion

(e)

Expected value criterion.

(1 mark)

< Answer >

 

56.

The maximum criterion for decision making suggests that the alternative with the

(a)

Maximum of maximum profits must be selected

(b)

Maximum of minimum profits must be selected

(c)

Minimum of minimum profits must be selected

(d)

Minimum of maximum profits must be selected

(e)

Highest of expected profits must be selected.

(1 mark)

< Answer >

 

57.

Which of the following is a tool for making decisions involving many alternatives and different states of nature which can be specified in terms of probabilities?

(a)

Correlation analysis

(b)

Decision tree analysis

(c)

Variance analysis

(d)

Simple regression analysis

(e)

Multiple regression analysis.

(1 mark)

< Answer >

 

58.

The expected value of perfect information is equal to the difference between

I.       The highest gain possible under certain conditions.

II.      The least gain possible under certain conditions.

III.    The highest expected profit under uncertain conditions.

IV.    The least expected profit under uncertain conditions.

V.      The expected profit with perfect information.

VI.    The highest expected profit without perfect information.

VII.   The least expected profit without perfect information.

(a)

Both (I) and (II) above

(b)

Both (III) and (IV) above

(c)

Both (V) and (VI) above

(d)

Both (V) and (VII) above

(e)

Both (VI) and (VII) above.

(1 mark)

< Answer >

 

59.

In marginal analysis the minimum required probability of selling an additional unit, that justifies stocking of that additional unit,

(a)

Does not depend on the marginal loss that can be incurred by not selling that unit

(b)

Does not depend on the marginal profit that can be earned by selling that unit

(c)

Decreases if the marginal profit increases

(d)

Increases if the marginal profit increases

(e)

Does not change if the marginal profit increases or decreases.

(1 mark)

< Answer >

 

60.

Which of the following is not true for random variables?

(a)

A discrete random variable can assume only a limited number of values

(b)

A continuous random variable can assume any value within a given range

(c)

A random variable follows a predictable sequence of values

(d)

A random variable is a variable which assumes different numerical values as a result of random experiments

(e)

The value of the random variable changes from occurrence to occurrence in no predictable sequence.

(1 mark)

< Answer >

 

61.

Which of the following can be defined as a systematic and objective process of gathering, recording and analyzing data to guide business decision-making?

(a)

Research design

(b)

Business research

(c)

Basic research

(d)

Macro-economic research

(e)

Research hypothesis.

(1 mark)

< Answer >

 

62.

If the sampling frame is arranged in ascending or descending order, the sample selected by the systematic sampling method will be affected by

(a)

The location of first sample element

(b)

The number of data in the sample

(c)

The homogeneity of the data

(d)

The sampling ratio

(e)

Estimate of the sample ratio.

(1 mark)

< Answer >

 

63.

Which of the following is the measure of how close an estimate is expected to be, to the true value of the parameter?

(a)

Sample

(b)

Bias

(c)

Precision

(d)

Statistic

(e)

Standard error.

(1 mark)

< Answer >

 

64.

Which of the following is/are the preliminary decision(s) of a questionnaire design?

I.       Required information.

II.      Target respondents.

III.    Interviewing technique.

(a)

Only (I) above

(b)

Only (II) above

(c)

Only (III) above

(d)

Both (I) and (II) above

(e)

All (I), (II) and (III) above.

(1 mark)

< Answer >

 

65.

The statistical difference in results between a survey that includes only those who responded and a perfect survey that also include those who failed to respond is

(a)

Response error

(b)

Non-response error

(c)

Data processing error

(d)

Sample frame error

(e)

Systematic error.

(1 mark)

< Answer >

 

66.

Which of the following does not come under the category of asymmetrical relationship?

(a)

Stimulus response relationship

(b)

Property-disposition relationship

(c)

Client-response relationship

(d)

Property-behavior relationship

(e)

Disposition-behavior relationship.

(1 mark)

< Answer >

 

67.

The scale which helps segregate data into categories that are mutually exclusive and collectively exhaustive is

(a)

Internal scale

(b)

Nominal scale

(c)

Ordinal scale

(d)

Ratio scale

(e)

Moral scale.

(1 mark)

< Answer >

 

68.

For instance, if the researcher is conducting intercept interviews in public places then the researcher may not respond as properly as they would if they were interviewed in their homes, this type of research error comes under

(a)

Respondent associated errors

(b)

Measurer as error source

(c)

Situational errors

(d)

Instrument associated errors

(e)

Flexibility errors.

(1 mark)

< Answer >

 

69.

Which graphical representation is best suitable for the changes/trends in the demand for a product?

(a)

Bar charts

(b)

Histogram

(c)

Pie charts

(d)

Area charts

(e)

Scatter diagram.

(1 mark)

< Answer >

 

70.

Which of the following is undertaken to verify the data and check for any potential errors or for any inconsistencies?

(a)

Survey

(b)

Pre-testing

(c)

Editing

(d)

Verification

(e)

Coding.

(1 mark)

< Answer >

 

71.

How would you print a bar chart that you have produced in SPSS?

(a)

In Output Viewer, select the bar chart and click file → Print, click ok

(b)

In Output Viewer edit SPSS chart object → open bar chart, → Print → ok

(c)

In Chart Editor click Descriptive Statistics → Print → ok

(d)

In Data Editor open Graphs dialog box, click save → ok

(e)

In Chart Editor click chart → Transport chart → Print → ok.

(1 mark)

< Answer >

 

72.

To generate the Spearman's rho test, which set of instructions should we follow in SPSS?

(a)

Analyze → Crosstabs → Descriptive Statistics → Spearman → ok

(b)

Graphs → Frequencies → [select variables] → Spearman → ok

(c)

Analyze → Compare Means → Anova table → First layer → Spearman → ok

(d)

Analyze → Correlate → Bivariate → [select variables] → Spearman → ok

(e)

Analyze → Compare Means → explore → Spearman → ok.

(1 mark)

< Answer >

 

73.

In which sub-dialog box can the Chi-Square test be found?

(a)

Explore: Statistics

(b)

Crosstabs: Statistics

(c)

Bivariate: Pearson

(d)

Crosstabs: Cell display

(e)

Crosstabs: Table Format.

(2 marks)

< Answer >

 

74.

When cross-tabulating two variables it is conventional to:

(a)

Represent the independent variable in rows and the dependent variable in columns

(b)

Assign both the dependent and independent variables to columns

(c)

Represent the dependent variable in rows and the independent variable in columns

(d)

Assign both the dependent and the independent variables to rows

(e)

Assign both the variables to rows and columns.

(1 mark)

< Answer >

 

75.

What should the business researcher do if their multi-strategy approach produces inconsistent results?

(a)

Start the whole research project again

(b)

Treat one set of results as definitive

(c)

Extend the number of research methods used

(d)

Re-analyze the data in an attempt to locate more consistent results

(e)

Start verifying the research project values.

(2 marks)

< Answer >

 

76.

What is/are the advantage(s) of using SPSS over calculating statistics by hand?

I.       This is how most quantitative data analysis is done in 'real research' now-a-days.

II.      It reduces the chance of making errors in your calculations.

III.    It equips you with a useful transferable skill.

(a)

Only (I) above

(b)

Only (II) above

(c)

Only (III) above

(d)

Both (I) and (II) above

(e)

All (I), (II) and (III) above.

(1 mark)

< Answer >

Suggested Answers
Quantitative Methods-II (MB152): January 2007

1.

Answer :   (b)

Reason :    There are six faces in a die and they are named as 1, 2, 3, 4, 5 and 6. So, the corresponding probability would be 1k, 2k, 3k, 4k, 5k and 6k respectively. Since one of the face must appear the sum of all these probabilities should be one i.e. k + 2k + 3k + 4k + 5k + 6k = 21k = 1 or k =.

                   The probability of getting less than or equal to three is 1k +2k + 3k = 6k =  =.

< TOP >

2.

Answer :   (a)

Reason :    Since the events A and B are independent then, the probability of A and B is =
P(A and B) = P(A) . P(B) = (0.7)(0.5) = 0.35.

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3.

Answer :   (d)

Reason :    The total number of balls other than red are 9.

                   So a ball can be drawn from 9 non red balls in ways.

                   And the ball is drawn from total of 15 balls in ways.

                   P(not Red) =

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4.

Answer :   (d)

Reason :    Total number of possible event = 36.

                   The set of favorable event is E = {x, y}, such that (x + y) £ 5,

                   E = {(1, 1), (1, 2), (1, 3), (1, 4), (2, 1), (2, 2), (2, 3), (3, 1), (3, 2), (4, 1)}

                   Thus total number of favorable event = 10.

Therefore required probability = P(E) =

< TOP >

5.

Answer :   (b)

Reason :    Here, the sample space may be drawn as (HH, HT, TH and TT). The number of cases that are favorable is given by 3 while the total number of possible outcomes is 4. Hence, the required probability is = 0.75.

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6.

Answer :   (d)

Reason :    Here, P(A) = 0.3 and P(B) = k while, P(A or B)

                   = P(A) + P(B) – P(A).P(B) (as the events are independent) = 0.8

                   Therefore, 0.3 + k – 0.3´k = 0.8 or, 0.7´k = 0.5 or, k = 5/7.

< TOP >

7.

Answer :   (e)

Reason :    The events for which the Bayes’ theorem may be applied for computing posterior probabilities must be mutually exclusive and collectively exhaustive.

< TOP >

8.

Answer :   (a)

Reason :    Two mutually exclusive events, A and B, cannot occur together.

                   \ P(A and B) = 0. None of the other alternatives are implied by the definitions of mutually exclusive events.

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9.

Answer :   (c)

Reason :    a.      The expected value of a discrete random variable is not a geometric average of the outcomes of the variable.

b.      The expected value of a discrete random variable is not a simple average of the outcomes of the variable.

c.      The expected value of a discrete random variable is a weighted average of the outcomes of the variable.

d.      The expected value of a discrete random variable is not the outcome, which has the highest frequency.

                   e.      The expected value of a discrete random variable is not the highest probability of occurrence in the distribution of the random variable

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10.

Answer :   (e)

Reason :    The mean (expected value) of the number of successes in a binomial distribution is equal to the product of the number of trials and probability of success in any trial.

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11.

Answer :   (c)

Reason :    Normal distribution is a continuous distribution. It is unimodal and symmetrical. The mean, median and mode are equal.

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12.

Answer :   (e)

Reason :    E(Z)  =       E(4X + 5Y)

                            =       4E(X) + 5E(Y)

                            =      
        

                            =       74 + 74

                            =       148   

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13.

Answer :   (d)   

Reason :    Probability of success p = 2/3.

                   Then q = 1– p = 1/3.

                   To find the value of n, put the values of p and q in variance.

                   i.e. variance = npq

                   3.33 =  

                    n = 15

                   .

< TOP >

14.

Answer :   (e)

Reason :    The total number of customers browsing the music section is 15. The probability that a customer will buy something is 0.3. This follows a Binomial Distribution with n = 15, p = 0.3 and q =      0.7.   For exactly r successes out of n trials is  

The probability that no more than four browsing customers will buy something during a specified hour

= P(0) + P(1) + P(2)+ P(3) + P(4)

=   

= 0.51549.

< TOP >

15.

Answer :   (e)

Reason :    The constant probability p of success for each trial is very small and the number of trials is indefinitely large.

So, all the given examples follows Poisson distribution.

< TOP >

16.

Answer :   (d)

Reason :    Alternative (a), (b),(c) and (e) are the characteristics of a Bernoulli process. The probability of two outcomes not necessarily should be same.

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17.

Answer :   (c)

Reason :    As the degree of correlation between the two independent variables increases, the problem of multicollinearity arises. Other options are wrong.

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18.

Answer :   (c)

Reason :    Shape of the curve of F-distribution depends on the degrees of freedom n1 and n

                   But not on the sample sizes.

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19.

Answer :   (c)

Reason :    The probability of success changes from trial to trial in Hypergeometric distribution.

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20.

Answer :   (b)

Reason :    If there are infinite number of possible number of outcomes, the probability of any one outcome is zero.

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21.

Answer :   (d)

Reason :    a.      The sampling distribution of mean is not a distribution of means of individual populations.

b.      The sampling distribution of mean is not a distribution of observations within a population

c.      The sampling distribution of mean is not a distribution of observations within a sample.

d.      The sampling distribution of mean is a distribution of means of all possible samples of a specific size taken from a population.

                   e.      The sampling distribution of mean is not a distribution of means of samples of a specific size taken from different population

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22.

Answer :   (e)

Reason :    a.      The standard error of mean is less than the population standard deviation(σ) because it is equal to σ/√n.

                   b.      From above we can see that it will decrease as the sample size increases.

                   c.      The standard error  is a measure of the variability of the mean across various samples of the same size taken from the population.

                   d.      It is the standard deviation of the distribution of means of all possible samples of a specific size that can be taken from the population.

                   e.      From above we can see that the standard error of mean is not the standard deviation of     the sample.

< TOP >

23.

Answer :   (d)

Reason :        =                =       0.05

Or             =       0.05

\         =       96 (0.05)2

or             =       0.24

or     

                   \         =          =       0.40 or 0.60.

< TOP >

24.

Answer :   (b)

Reason :    The z-values and the observed values are same for standard normal distributions.

< TOP >

25.

Answer :   (d)

Reason :    In  random sampling, every sample has an equal chance of being selected. We always know the chance, that any problem element will be included in the sample.

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26.

Answer :   (b)

Reason :    A statistic which comes very close to the value of the population parameter as the sample size increases is said to be a consistent estimator.

< TOP >

27.

Answer :   (d)

Reason :    While dealing with census the chances of errors are very less due to a large size. So the option (d) is true and  (a), (b), (c) and (e) are false

< TOP >

28.

Answer :   (a)

Reason :    In making estimates of population parameters using sample statistics, efficiency refers to the size of the standard error of the sample statistics

< TOP >

29.

Answer :   (b)

Reason :    The variance of the sampling distribution of mean is less than the variance of the underlying population if the sample size is more than one.

< TOP >

30.

Answer :   (b)

Reason :    For calculating the test statistic for a test of population variance the population size is not required.

< TOP >

31.

Answer :   (a)

Reason :    Sample variance need not be known. All others are required.

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32.

Answer :   (a)

Reason :    a.  If a hypothesis is tested at a 10% significance level then, it means that there is a 10% probability that the null hypothesis will be rejected though it is true.

                   b, c, d & e are incorrect interpretations of the significance level

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33.

Answer :   (c)

Reason :    The purpose of hypothesis testing is to make a judgment about the difference between the sample statistic and the hypothesized population parameter. The purpose of hypothesis testing is not to test the correctness of the sample statistics. Alternative (c) is false. Alternatives (a), (b) (d) and (e) are true.

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34.

Answer :   (b)

Reason :    If we reject H0:m = 10 in favor of H1:m  10 at a given level of significance with a positive value of the test statistic, then a test with H0:m = 10 versus H1:m > 10 using the same sample and the same level of significance will always reject H0 because in a one tailed test the critical region on the relevant tail is larger than a two tailed test for the same level of significance.

< TOP >

35.

Answer :   (d)

Reason :    From the given values we have z = (x –)/

                   Z = (140.61–142.3)/ 8.5 = – 0.198
(The corresponding value for a z score of 0.198= 0.0753.)
Thus P(140.61<z < 142.3) = 0.0753

                   z = (141.75 – 142.3)/ 8.5= – 0.064.

                   (The corresponding value of z-score of 0.064 = 0.0239)

                   Thus, P(141.75< z < 142.3) = 0.0239.

                   Hence P(140.61< z < 141.75) = 0.0753 – 0.0239 = 0.0514

< TOP >

36.

Answer :   (c)

Reason :    The central limit theorem permits us to use sample statistics to make inferences about population parameters.

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37.

Answer :   (d)   

Reason :    The appropriate test is a chi-square test of goodness of fit. Since there is an equal likelihood for any account executive to be in any of the three age groups, the probability of observing any of the age groups is .

                   Hence the expected frequencies for the three age groups will be as follows:        

A

B

C

                   The observed frequencies are :      

A

B

C

28

22

25

The test statistic is the chi-square statistic, which is calculated below :

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38.

Answer :   (a)    

Reason :    Estimated standard error of mean =

Sample standard deviation, 

\ s =

\ Estimated standard error of mean =

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39.

Answer :   (e)

Reason :    The F statistic is calculated on the basis of two estimates of the population variance viz.,

                   The estimated population variance based on the variance among the sample means and the estimated population variance based on the variance within the samples.

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40.

Answer :   (e)

Reason :    a.      This is a wrong answer. The number of degrees of freedom does not depend on the sample size.

b.      This is the wrong answer. The number of degrees of freedom does not depend on the ratio of sample size and the population.

c.      This is the wrong answer. The number of degrees of freedom does not depend on the number of rows in the contingency table only.

d.      This is the wrong answer. The number of degrees of freedom does not depend on the number of columns in the contingency table only.

                   e.      This is the right answer. When the chi-square distribution is used as a test of   independence, the number of degrees of freedom is related to both the number of rows and the number of columns in the contingency table.

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41.

Answer :   (d)

Reason :

                  

                   \The sample size should be at least 50 (we cannot round off 49.16 to the lower value because that will reduce the accuracy).

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42.

Answer :   (e)

Reason :    The important methods to find the correlation between the variables are scatter diagram, Karl Pearson’s coefficient of correlation, Spearman’s rank correlation coefficient and method of least squares.

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43.

Answer :   (a)

Reason :    Let the following notations be used:

                            X      :         Amount of advances (Rs. in crores)

                            Y       :         Net profit (Rs. in lakhs)

                   Coefficient of correlation is given by:

                            r        =               =              

A.     X

6.0

4.5

4.0

3.5

3.0

3.0

B.      Y

50

44

38

23

15

10

C.      (X – ­)

2

0.5

0

–0.5

–1

–1

 

D.     (Y – ­)

20

14

8

–7

–15

–20

 

E.      (X – ­)2

4

0.25

0

0.25

1

1

 = 6.5

F.      (Y – ­)2

400

196

64

49

225

400

  = 1334

G.      (X – ­)(Y – ­)

40

7

0

3.5

15

20

(X – ­)(Y – ­) = 85.5

                                =                 =            =     4

                                =                =           =   30

                   \      r        =            =      0.9182

         The coefficient of correlation between the net profit and the amount of advances is r = 0.9182.

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44.

Answer :   (c)    

Reason :    Cov (X,Y) =

  A             A

X

3

6

2

4

5

4

7

1

åX = 32

 B

Y

25

32

16

28

30

13

30

10

åY = 184

C

X –

–1

2

–2

0

1

0

3

–3

 

D

Y –

2

9

–7

5

7

–10

7

–13

 

E

C ´ D

–2

18

14

0

7

0

21

39

å(X-) (Y-)=97

 

                                =                =       = 4    

                                =                =       = 23

                            \ Cov (X,Y) =  = 13.86 (approx).

< TOP >

45.

Answer :   (e)    

Reason :    Coefficient of correlation between X and Y        =       0.85

                   \ Explained variation in Y = 0.852                         =       0.7225

                   Unexplained variation in Y = 1–0.852                    =       0.2775

                   Coefficient of correlation between Y and W       =       ­–0.92

                   \ Explained variation in Y = (–0.92)2                    =       0.8464

                   Unexplained variation in Y = 1–(–0.92)2               =       0.1536

                   Hence both (c) and (d) are correct.

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46.

Answer :   (c)

Reason :    When the slope of a regression line is negative the dependent variable decreases as the independent variable increases. Hence increases in the independent variable can be associated with decreases in the dependent variable and vice versa. Hence, the correlation between the dependent and the independent variables is negative.

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47.

Answer :   (b)

Reason :    In the linear model, the residuals are assumed to have a normal distribution with a mean of zero.

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48.

Answer :   (d)

Reason :    Proportion of variations in the dependent variable explained by the regression relationship

                   =  i.e. 90.25 percent

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49.

Answer :   (d)   

Reason :    Let the following notations be used:

                   X      :        Number of years of experience

                   Y       :        Annual sales

                       =       a + bX

                   SX    =       80               SY = 1060 n = 10

                   SXY =       9048           SX2 = 782

                   \ b =           =     

                                                                            =             =       4.00

                   a =  – b                                  =      = 74.00

                   \ The regression relationship is :       = 74 + 4X

                   For number of years of experience     (X) = 10,

                   Annual sales estimated                        = 74 + 4(10) = 114 (Rs in’000s)

                   \ For 10 years of experience the estimated annual sales will be Rs.1,14,000.

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50.

Answer :   (a)    

Reason :    = a + bX

                   Given:       7 = a + b (2)                 (For X=2)

                   Or              7 = a + 2 b………………….(A)

                                      11.8 = a + b (8)            (For X=8)

                   Or              11.8 = a + 8b……………….(B)

                   \b   =       = 0.80.

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51.

Answer :   (b)   

Reason :    Coefficient of determination, R2 =

                      

            

                   \ Coefficient of determination, R2 =

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52.

Answer :   (d)   

Reason :    Let the following notations be used:

                            X : Year

                            x : Coded value for year

                            Y : Sales                     

Year

x = (X–)´ 2

Y

xY

x2

2001

–2.5 ´ 2 = ­–5

35

–175

25

2002

–1.5 ´ 2 = –3

60

–180

9

2003

–0.5 ´ 2 = –1

85

–85

1

2004

    0.5 ´ 2 = 1

105

105

1

2005

   1.5 ´ 2 = 3

135

405

9

2006

  2.5 ´ 2 = 5

160

800

25

 

 

580

870

Sx2 = 70

                                         =                =       2003.5

                                         =       a + bx

                            b                =              =                          =       12.43

                            a =        =                =                          =       96.67

                            \ The linear trend equation is

                                =       96.67 + 12.43x

                            The estimated sales for the year 2007:

                            X      = 2007                 \ x = (2007–2003.5) ´ 2 = 7

                            Estimated sales for the year 2007 = 96.67 + 12.43 ´ 7 = Rs.183.68 lakhs.

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53.

Answer :   (d)

Reason :    If the regression equation is not a perfect estimator of the dependent variable then
i.   Standard error of estimate is not zero
ii.  The coefficient of determination is not one
iii. The data points do not lie on the regression line
iv. Error sum of squares is not zero

                   Therefore options (I), (II) and (III) are true. So the option (d) is correct.

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54.

Answer :   (b)

Reason :    The relationship between the independent and dependent variables does not imply cause and effect. So the option (b) is true.

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55.

Answer :   (e)

Reason :    When the decision maker has insufficient information to assign any probabilities of occurrence to the various states of nature expected value criterion will not be applicable.

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56.

Answer :   (b)

Reason :    Under maximin criterion, the decision maker first identifies the lowest profit associated with each decision alternative and then chooses that alternative which is the maximum of the above minimum profits.

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57.

Answer :   (b)

Reason :    Decision tree analysis is a tool for making decisions involving many alternatives and different states of nature which can be specified in terms of probabilities.

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58.

Answer :   (c)

Reason :    The expected value of perfect information is equal to the difference between the expected profit with perfect information and highest expected profit without perfect information.

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59.

Answer :   (c)

Reason :    In marginal analysis minimum required probability of selling an additional unit decreases if Marginal Profit increases.

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60.

Answer :   (c)

Reason :    Statements (a), (b), (d) and (e) are true; Statement (c) is false.

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61.

Answer :   (b)

Reason :    Business research can be defined as a systematic and objective process of gathering, recording and analyzing data to guide business decision-making.

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62.

Answer :   (a)

Reason :    If the sampling frame is arranged in an order ascending or descending, of some attribute of the first sample element affects the result of the study.

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63.

Answer :   (c)

Reason :    Precision is a measure of how close an estimate is expected to be, to the true value of a parameter. It is a measure of similarity and is expressed in terms of imprecision and related to the standard error of the estimate.

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64.

Answer :   (e)

Reason :    All these are the preliminary decisions that are to be covered under a questionnaire design. So the option (e) is correct.

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65.

Answer :   (b)

Reason :    The statistical difference in results between a survey that includes only those who responded and a perfect survey that also include those who failed to respond is known as non-response error.

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66.

Answer :   (c)

Reason :    All other options other than (c) come under the category of asymmetrical relationships.

                   So, option (c) is correct.

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67.

Answer :   (b)

Reason :    The scale which helps segregate data into categories that are mutually exclusive and collectively exhaustive is nominal scale.

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68.

Answer :   (c)

Reason :    The factors such as location of the interview also plays a crucial part. For instance, if the researcher is conducting intercept interviews in public places then the researcher may not respond as properly as they would if they were interviewed in their homes, this type of research error comes under situational errors.

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69.

Answer :   (a)

Reason :    Bar charts can be used to represent changes or trends in the demand for a product.

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70.

Answer :   (c)

Reason :    Editing is undertaken to verify the data and check for  any potential errors or for any inconsistencies. It is done to remove errors that may have cropped up during the interview such as recording the answers under the wrong columns of a questionnaire.

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71.

Answer :   (a)

Reason :    a.      In Output Viewer, click file → Print, select the bar chart and click ok.

This is a straightforward way of printing your bar chart as a piece of output from SPSS. If you do not specify which things you want to print from the output summary box on the left of the screen, SPSS will print all of the graphs and tables in the Output Viewer

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72.

Answer :   (d)

Reason :    Analyze → Correlate → Bivariate → [select variables] → Spearman → ok.

This set of instructions opens up the 'Bivariate Correlations' dialog box and allows you to generate a coefficient to show the strength of a relationship between two variables.

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73.

Answer :   (b)

Reason :    Crosstabs: Statistics.

To generate a Chi Square test, Phi and Cramers V, we need to do: click Analyze → Descriptive Statistics → Crosstabs → [assign Indpt.Var and Dep.Var to columns and rows] → Cells → [select counts: Observed and Percentages: Columns] → Continue → Statistics → Chi Square → Phi and Cramers V → Continue → ok.

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74.

Answer :   (c)

Reason :    Represent the dependent variable in rows and the independent variable in columns. It is conventional to represent an inferred relationship between two variables in this way because it makes tables easier to read. Similarly, when producing a bar chart or scatter plot, you should assign the Indpt.Var to the x axis (to produce columns) and the Dep.Var to the y axis (to produce horizontal readings).

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75.

Answer :   (b)

Reason :    Treat one set of results as definitive. Unfortunately, if the selection of one set of data over another is entirely arbitrary, this is not an ideal approach to overcoming the difficulty of contradiction within a research project that has adopted a multi-strategy approach. Instead, researchers may wish to either explore reasons for the contrasting findings, or establish a clearly reasoned argument for the selection of one type of data as definitive.

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76.

Answer :   (e)

Reason :    Option (e) is correct. In recent, most quantitative data analysts use SPSS or an equivalent statistical software package. Such tools are widely regarded as a useful transferable skill being much faster and more efficient than mental arithmetic, as they can generate huge volumes of complex statistical data with out any errors within seconds.

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