Download Quiz: Chapters 4-6 Student: 1. A research analyst wants to compare

Quiz: Chapters 4-6
Student: ___________________________________________________________________________
1. A research analyst wants to compare the dispersion in the price-to-earnings ratios for a group of common
stocks with their return on investment (ROI). For the price-to-earnings ratios, the mean is 10.9 and the standard
deviation is 1.8. The mean return on investment is 25 percent and the standard deviation 5.2 percent. What is
the relative dispersion for the price-to-earnings ratios and return on investment?
A. Price-to-earnings = 50.0 percent, ROI =10.0 percent
B. Price-to-earnings =132.0 percent, ROI =190.0 percent
C. Price-to-earnings =16.5 percent, ROI = 20.8 percent
D. Price-to-earnings = 32.0 percent, ROI =19.0 percent
2. A sample of experienced typists revealed that their mean typing speed is 87 words per minute and the median
is 73. The standard deviation is 16.9 words per minute. What is the Pearson's coefficient of skewness?
A. +2.5
B. -4.2
C. -2.5
D. +4.2
3. A large oil company is studying the number of gallons of gasoline purchased per customer at self-service
pumps. The mean number of gallons is 10.0 with a standard deviation of 3.0 gallons. The median is 10.75
gallons. What is the Pearson's coefficient of skewness?
A. +1.00
B. -0.75
C. -1.00
D. +0.75
4. In a contingency table, we describe the relationship between
A. two variables measured at the interval or ratio level
B. two variables measured at the ordinal or nominal level.
C. a variable measure on the interval or ratio level and time.
D. two variables, one measured as an ordinal variable and the other as a ratio variable
5. A tire manufacturer advertises, "the median life of our new all-season radial tire is 50,000 miles. An
immediate adjustment will be made on any tire that does not last 50,000 miles." You purchased four of these
tires. What is the probability that all four tires will wear out before traveling 50,000 miles?
A. 1/10, or 0.10
B. 1/64, or 0.0156
C. ¼, or 0.25
D. 1/16, or 0.0625
Use the following to answer questions 116-118:
A mortgage holding company has found that 2% of its mortgage holders default on their mortgage and lose the
property. Furthermore, 90% of those who default are late on at least two monthly payments over the life of their
mortgage as compared to 45% of those who do not default.
6. Based on Bayes' Theorem, what is the posterior probability that a mortgagee will not default given one or less
payments over the life of the mortgage?
A. Nearly 0
B. 0.538
C. Nearly 1
D. 0.98
E. Cannot be computed
7. A rug manufacturer has decided to use 7 compatible colors in her rugs. However, in weaving a rug, only 5
spindles can be used. In advertising, the rug manufacturer wants to indicate the number of different color
groupings for sale. How many color groupings using the seven colors taken five at a time are there? (This
assumes that 5 different colors will go into each rug, i.e., there are no repetitions of color.)
A. 2,520
B. 36
C. 6,740
D. 120
8. Which approach to probability assumes that the events equally likely?
A. Subjective
B. Mutually exclusive
C. Empirical
D. Classical
9. The marketing department of a nationally known cereal maker plans to conduct a national survey to find out
whether or not consumers of flake cereals can distinguish one of their favorite flake cereals. To test the
questionnaire and procedure to be used, eight persons were asked to cooperate in an experiment. Five very
small bowls of flake cereals were placed in front of a person. The bowls were labeled A, B, C, D and E. The
person was informed that only one bowl contained his or her favorite flake cereal. Suppose that the eight
persons in the experiment were unable to identify their favorite cereal and just guessed which bowl it was in.
What is the probability that none of the eight guessed correctly?
A. 0.125
B. 0.788
C. 0.168
D. 0.009
Use the following to answer questions 104-106:
A statistics professor receives an average of five e-mail messages per day from students. Assume the number of
messages approximates a Poisson distribution.
10. What is the probability that on a randomly selected day she will have five messages?
A. 0.175
B. 0.0067
C. 0.875
D. 1.0
11. Judging from recent experience, 5 percent of the computer keyboards produced by an automatic, high-speed
machine are defective. What is the probability that out of six keyboards selected at random, exactly zero
keyboards will be defective?
A. 0.500
B. 0.735
C. 0.001
D. 0.167
12. A farmer who grows genetically engineered corn is experiencing trouble with corn borers. A random check
of 5,000 ears revealed the following: many of the ears contained no borers. Some ears had one borer; a few had
two borers; and so on. The distribution of the number of borers per ear approximated the Poisson distribution.
The farmer counted 3,500 borers in the 5,000 ears. What is the probability that an ear of corn selected at random
will contain no borers?
A. 0.4966
B. 0.3476
C. 1.000
D. 0.0631