Business Statistics

Mathematical Sciences Department STA-214 – Test 2

BAF, BCTM, BCME, BAC, BAM, BAU & Date: September 8, 2023
BBA (Year 2: Generic & Weekend) Time Allowed: 1.5 hours
Instruction: Attempt all 35 items

1) A point estimate is
a) a parameter from a sample c) a statistic from a sample
b) the margin of error d) calculated from a census (1 mark)

2) Which of the following is not a condition for normality for a sampling distribution of a
proportion.
a) Samples must be random
b) Sample size must be less than 10% of the population
c) The product of the proportion of the attribute and sample size must be equal to or greater
than 10
d) The product of the proportion of the attribute and sample size must be equal to or less
than 10 (2 marks)

3) What term describes the probability of making a Type I error?

a) Confidence coefficient c) Confidence interval
b) Level of significance d) p-value (2 marks)

4) Below are profits (K’million) reported by a sample of SMEs from Limbe in 2022:
74 33 71 73 82 79 35 82
60 75 72 66 51 68 21 64
Calculate the unbiased point estimate (K’million) of the variance of the profits reported by
all the SMEs from Limbe.
a) 17.9 c) 320.23
b) 341.58 d) 18.48 (3 mark)

5) The difference between a statistic and its corresponding parameter is called a

a) sample error c) standard error
b) type I error d) margin of error (2 mark)

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6) The Central Limit Theorem states that as sample size becomes large
a) the frequency distribution of the variable becomes normal
b) the sampling distribution of sample means becomes large.
c) the sampling distribution of sample means approaches normality.
d) the population distribution becomes normal

7) Which of the following will yield the point estimate of  ?

a) Margin of error times 2
b) Upper confidence limit minus the margin error [EBM]
c) Upper confidence limit minus lower confidence limit
d) Lower confidence limit minus the margin of error (2 mark)

8) Which of the following will affect the width of a confidence interval?

I. Sample mean III. Standard deviation
II. Sample proportion IV. Central Limit Theorem
a) I. only c) III. only
b) I. & II. d) I., III., & IV. (2 mark)

9) In order to summarise the decisions made in hypothesis testing and their associated errors,
a student produced the table below. Complete cell B

False H 0 True H 0

Fail to reject H 0

Reject H 0 B

a) Incorrect decision & Type I error c) Incorrect decision & Type II error
b) Correct decision & Type I error d) Correct decision & Type II error (2 marks)

10) If a researcher changes from 99% confidence level to the 95% level, the confidence interval
will
a) widen c) decrease in width
b) widen if n is greater than 100 d) not be affected (2 mark)

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11) A null hypothesis is a statement about
a) a population parameter c) a sample statistic
b) the outcome of a t test d) rejection or failure to reject (2 mark)

12) The p-value in hypothesis tests represents which of the following (select the best response)
a) The probability of failing to reject the null hypothesis, given the observed results
b) The probability that the null hypothesis is true, given the observed results
c) The probability that the observed results are statistically significant, given that the null
hypothesis is true
d) The probability of observing results as extreme or more extreme than currently
observed, given that the null hypothesis is true (2 marks)

13) A 99% t-based confidence interval for the mean price for a Lenovo IdeaPad is calculated as
K332,000 < 𝜇 < K398,000. What is the sample mean price for a Lenovo IdeaPad?
a) K33,000
b) K365,000
c) Not enough information: I also need to know s and n.
d) Not enough information: I also need to know  and n. (2 marks)

14) Let the random variable X follow a normal distribution with a mean  and a standard

deviation  . Let X be the mean of a sample of n randomly selected elements from this
population. Which of the following statements is true?
    
a) P  X      P  X    
 2n   n

    
b) P  X      P X    
 2n   n

     
c) P  X      P X    
 n  n

     
d) P  X      P X     (2 mark)
 n  n

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For questions/items 15, 16, 17, 18 & 19
The data in the table relates to the possible gender-depression link among a sample of students.
A researcher believes that the proportion of individuals with depression was higher in males.

Gender Depression
Present (Yes) Absent (No)
Male 37 51
Female 24 78

15) State the null and alternative hypotheses.

a) H 0 : pM  pF c) H 0 : pM  pF
H 1 : pM  p F H1 : p M  p F

b) H 0 : pM  pF d) H 0 : pM  pF (2 marks)
H1 : p M  p F H1 : p M  p F

16) What proportion of the male students had depression? (3 decimal places)
a) 0.420 c) 0.421
b) 0.195 d) 0.607 (2 marks)

17) Testing this claim, what would the resulting test statistic be? (3 decimal places)
a) -0.011 c) 1.96
b) 2.726 d) 4.094 (3 marks)

18) Testing this claim, what would the resulting p-value be? (3 decimal places)
a) 0.006 c) 0.069
b) 0.003 d) 0.035 (3 marks)

19) What are the most sensible decision and conclusion you can make based on the sample data?
a) Reject H 0 and conclude that the proportion of depression was higher in female students.

b) Reject H 0 and conclude that the proportion of depression was the same.

c) Fail to reject H 0 and conclude that the proportion of depression was the same.

d) Reject H 0 and conclude that the proportion of depression was higher in male students.
(2 marks)

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20) A population has a normal distribution with a mean of 50 and a standard deviation of 10. If
you select a random sample of size 9 from the population, what is the probability that its
mean will be between 48 and 54?
a) 0.2257 c) 0.6106
b) 0.3849 d) 0.1592 (3 marks)

21) Five students took Calculus in Year 1 and Fundamentals of Statistics in Year 2. Their overall
grades (%) are listed below for both modules.

Student Ansley Dun Esther Sophie Vitumbiko

Calculus 80 69 99 91 72
Fundamentals of Statistics 85 71 93 93 89

Which of the following statistical test would be most appropriate to test the claim that the
students’ overall grades are the same in both modules?
a) 2-tailed two-sample dependent t-test of means
b) 2-tailed two-sample independent t-test of means
c) 2-tailed two-sample independent z-test of means
d) 2-tailed two-sample z-test of means (2 marks)

22) The statement “If there is sufficient evidence to reject H 0 at   10% , then there is

sufficient evidence to reject it at   5% ” is

a) always true
b) always false
c) sometimes true; the p-value needs to be provided for a conclusion
d) Not enough information; depends on the type of statistical test used (2 marks)

23) If the expected value of a sample statistic is equal to the parameter it is estimating, then we
call that sample statistic
a) biased c) random
b) error margin d) unbiased (1 mark)

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24) A sampling distribution of the means of all possible samples of size n  100 is formed. The
parent population has   5 and   1.4 . What is the value of E  X  ?

a) 5 c) 0.014
b) 0.05 d) 1.4 (1 mark)

25) For sample size 1, the sampling distribution of the mean will be normally distributed
a) only if the population values are positive
b) only if the shape of the population is symmetrical
c) only if the population is normally distributed
d) regardless of the shape of the population (2 marks)

26) A 90% confidence interval for the proportion of students who reserve their places each year
is (0.011, 0.032). What is the point estimate of the proportion of all students who reserve
their places yearly?
a) 0.0105 c) 0.016
b) 0.021 d) 0.0215 (2 marks)

27) A random sample of 10 football fans spent an average of K14,000 with a standard deviation
of K2,500 during a single Super League game. Use this information to construct a 90%
confidence interval of the average expenditure of all football fans during a single game.
2,500 2,500
a) 14, 000  1.383  c) 14, 000  1.833 
10 10
2,500 2,500
b) 14, 000  1.645  d) 14, 000  1.812  (2 marks)
10 10

28) The Ministry of Labor released the unemployment rate of 5.3% for 2022 in Malawi.
However, a study by a group of final year business students has revealed that there is a
change in Malawi’s unemployment rate. What are the null and alternative hypotheses?
a) H 0 : p  0.053 c) H 0 : p  0.053
H1 : p  0.053 H1 : p  0.053

b) H 0 : p  0.053 d) H 0 : p  0.053 (2 marks)

H1 : p  0.053 H1 : p  0.053

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29) Old Mutual sets up a statistical test with a null hypothesis that the average time for
processing a claim is 7 days, and an alternative hypothesis that the average time for
processing a claim is greater than 7 days. After completing the statistical test, it is concluded
that the average time exceeds 7 days. However, it is eventually learned that the mean process
time is really 7 days. What type of error occurred in the statistical test?
a) Type II error c) Standard error
b) Type I error d) Sampling error (2 marks)

30) Consider a test of H0 :   6 . For the following case H1 :   6 and   0.1, give the
rejection region for the test in terms of the z-statistic.
a) 1.28  z  1.28 c) z  1.28
b) z  1.645 d) 1.645  z  1.645 (2 marks)

31) A report by the Consumer Association of Malawi stated that smart phone prices fell in 2020,
but the prices are beginning to increase because of added features. According to the report,
the average price of smart phones was K215,000. Recent prices of a sample of phones was
entered into a spreadsheet and the following printout was obtained:
One-Sample T Test

Null Hypothesis: μ = 215

Alternative Hyp: μ > 215

95% Conf Interval

Variable Mean SE Lower Upper t df p
Phone Price 245.23 15.620 212.740 277.720 1.94 21 0.0333

Which of the following conclusions is correct?

a) At   0.10, there is insufficient evidence to indicate that the mean price of all smart
phones exceeds K215,000
b) At   0.01, there is sufficient evidence to indicate that the mean price of all smart
phones exceeds K215,000
c) At   0.05, there is insufficient evidence to indicate that the mean price of all smart
phones exceeds K215,000
d) At   0.03, there is insufficient evidence to indicate that the mean price of all smart
phones exceeds K215,000 (2 marks)

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32) Research has determined that university students spend an average of K40,000 on groceries
per semester. Suppose a random sample of 10,000 students yielded the following data:
x  31,000 & s  18,000 . Set up the calculation for the test statistic, but do not simplify.
31, 000  40, 000 31, 000  40, 000
a) z  c) z 
18, 0002 18, 000
10, 000
31, 000  40, 000 31, 000  40, 000
b) z  d) z  (2 marks)
18, 000 18, 000
10, 000 10, 0002

33) The School of Business and Economic Sciences wants to determine the proportion of
business students who have laptop computers. Suppose a hypothesis test is conducted and
the test statistic is 2.4. Find the p-value for a two-tailed test.
a) 0.0164 c) 0.4918
b) 0.4836 d) 0.0082 (2 marks)

34) TNM claims that 9 out of 10 students (i.e., 90%) use its Agulu Youth Bundles. To test this
claim against the alternative hypothesis that the actual proportion is less than 90%, a random
sample of 100 students was selected which resulted in 94 who indicate that they use the
bundles. The test statistic in this problem is approximately:
a) 1.67 c) 1.33
b) 1.83 d) –1.33

35) MUBAS is interested to determine if less than 20% of the current students live off campus
and walk to class. Data for a random sample of 108 was processed through a spreadsheet
and the results are shown below:
Hypothesis Test - One Proportion
Sample Size : 108 H0: p = 0.2 Difference : -0.05185
Successes : 16 H1: p < 0.2 Std Error : 0.03418
Proportion : 0.14815 z : -1.35
p-value : 0.0885
What conclusion would be correct when testing at   0.05?
a) Fail to reject H 0 c) Reject H 0

b) Accept H 0 d) Accept H1

End of Paper

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