Quantitative Business Analysis (QBA) Exam 2 Practice Test

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• A 95% confidence interval for a population mean with unknown sigma is constructed using the t distribution. Which is correct?
• The Central Limit Theorem describes the behavior of:
• Continuous random variables have what kind of outcomes?
• As the sample size increases while keeping other factors constant, the margin of error will
• What is the purpose of residual analysis in regression?
• What tells us the center of the distribution?
• If the population is normally distributed, the sampling distribution of the sample mean is normal regardless of the sample size.
• An observed value that can provide us with some idea as to what a parameter is equal to is called what?
• If the confidence level increases, what happens to the width of the CI?
• What does the confidence level represent in a confidence interval?
• How does Holt's linear method extend simple exponential smoothing?
• Compute EOQ given D=1000, S=50, H=2.
• What is the standard deviation of the sampling distribution of the sample mean called?
• Which statement correctly expresses the power of a statistical test?
• The Central Limit Theorem is applicable provided the sample size is sufficiently large.
• What is the formal purpose of the F-statistic in ANOVA?
• If residuals are not normally distributed, which assumption is violated?
• What does EVPI stand for in decision analysis?
• Describe the concept of confidence interval width and its dependence on sample size.
• An estimator is a function of random variables used for estimating a parameter. It can be thought of as the rule that creates an estimate. Which term matches?
• Which statement best describes the Central Limit Theorem's general claim?
• When the population standard deviation is unknown and the sample size is moderate to large, the t-distribution should be used.
• How is the Expected Monetary Value (EMV) calculated in a decision tree?
• An R-squared of 0.85 indicates what about the model's explanatory power?
• Which statement describes discrete random variables?
• Which of the following defines the power of a statistical test?
• Confidence level is 1 − α where α is the ______.
• Which statement is true about confidence intervals when the population standard deviation is unknown?
• Which statement best describes the difference between parametric and nonparametric tests?
• The standard deviation of a continuous random variable is
• What is the main difference between a parametric confidence interval and a bootstrapped confidence interval?
• What is P(X = c) if X is a continuous random variable?
• The normal distribution is often described as having which shape?
• What is the Z critical value used for a 95% confidence interval in large-sample approximation?
• A residual plot showing increasing spread with fitted values indicates what?
• Which statement best captures the purpose of stepwise regression and why is it controversial?
• A company measures the amount of time customers wait in line before being served. This variable is best classified as:
• Which statement about adjusted R-squared is true?
• Which statement defines a consistent estimator?
• Which of the following statements correctly describes AIC and BIC as model selection criteria?
• Under the Central Limit Theorem, as the sample size increases, the distribution of the sample mean becomes approximately normal with mean equal to the population mean and standard deviation equal to
• Which statement describes the normal distribution?
• Margin of error is computed by multiplying the standard error by a critical value from distributions such as the Z or t distributions. Which options best describe the source of the critical value?
• What does homoscedasticity refer to in regression analysis?
• For a 95% confidence interval for the population mean, if the population standard deviation is known, the standard normal distribution should be used.
• Which statement best describes the fundamental difference between Bayesian and frequentist probability interpretations?
• Under the central limit theorem, what happens to the t distribution as the degrees of freedom increase?
• What is the weighted average of all possible values that the random variable can take, with the weights being the probabilities of those values?
• An actual number; an estimator represents a potential number. Which pair is correct?
• True or False: The t-distribution becomes more similar to the standard normal distribution as the sample size increases.
• Which statement about confidence-interval width is true?
• True or False: The t-distribution becomes more similar to the standard normal distribution as the sample size increases.
• According to the Central Limit Theorem, as the sample size increases, the distribution of all possible sample means tends to be
• A VIF value greater than 5 signals concern for multicollinearity.
• The ________ of a random variable X, denoted σX, is simply the square root of the variance
• The term used for a computed value that estimates a population parameter is
• What is statistical power?
• Which term describes a range of values derived from sample data that is used to estimate a population parameter with a certain level of confidence?
• In the described sample of diamonds, which statement is accurate?
• What does an R-squared value close to 1 typically warn about in regression analysis, especially with a small sample or many predictors?
• Which statement describes the relationship between sample size and the standard error of the mean?
• If sample size increases, what happens to the width of the CI?
• What is the purpose of a decision tree in quantitative business analysis (QBA)?
• A normal distribution is determined by two parameters.
• In a normal distribution, X ∼ N(μX, σX) indicates that X is distributed with which two parameters?
• What is the general form of a simple linear regression model?
• The standard deviation of all possible values of the sample mean is called the standard error.
• Which statement about the normal distribution is incorrect?
• Which statement is true about the two-parameter normal distribution?
• If the demand rate doubles, how does EOQ change?
• A consistent estimator is one whose estimates converge to the true parameter as sample size grows.
• In a standard normal distribution, what are the mean and standard deviation?
• If the population is normally distributed, the sampling distribution of the sample mean is normal for any sample size.
• A 95% confidence interval for a population mean is constructed with known sigma. Which formula is correct?
• At alpha = 0.05, in a two-sample t-test for means, if p <= alpha, what is the conclusion?
• Which of the following characteristics describe the Normal distribution?
• What is the primary purpose of randomization in experiments?
• Which function is used to describe the distribution of probabilities for continuous random variables?
• If a population distribution is known to be normally distributed, the sample mean must be equal to the population mean.
• Which parameter is μX?
• The Empirical Rule applies to which type of distributions?
• What is the basic idea behind linear programming?
• Which principle describes the distribution of the sample mean regardless of the population distribution?
• R-squared expresses what aspect of a model?
• As the sample size increases, the standard error decreases.
• The standard deviation can be negative for a continuous random variable.
• In time series forecasting, which data pattern is simple exponential smoothing best suited for?
• In a normal distribution, increasing the expected value shifts the curve horizontally but does not change its shape.
• Which statement best describes multicollinearity's effect on regression coefficients?
• The Central Limit Theorem suggests that for any population distribution, the distribution of the sample mean becomes normal as the sample size increases.
• The standard deviation is a more intuitive measure of spread because it is expressed in the _____ units as the random variable X, whereas the variance is expressed in ______ units.
• This is the statistical shorthand notation for? X ∼ N (μX, σX)
• Which function describes the distribution of probabilities for discrete random variables?
• Which statement is true about the effect of increasing sample size on confidence interval width?
• Which statement correctly describes the Central Limit Theorem?
• What is the purpose of a confidence interval?
• What is the feasibility region in linear programming?
• What does the reduced cost of a non-basic variable indicate in linear programming?
• Which of the following pairs are sufficient to specify a normal distribution?
• The standard error is defined as the standard deviation of the sampling distribution of the sample mean.
• Which statement best describes the central limit theorem?
• Which statement correctly defines Type II error and the relationship to power?
• The distribution that is symmetric and bell-shaped but with thicker tails and that approaches the Z-distribution as degrees of freedom increase is the
• Which statement about the standard error of the mean is true?
• For a continuous random variable, the probability that X equals a specific value is?
• Consistency of an estimator concerns behavior of the variability of estimates as the sample size approaches infinity.
• With a PDF, probabilities are calculated by finding areas ___________ ____ ________.
• Which term describes an estimator that is unbiased?
• In time series forecasting, what is the principle of simple exponential smoothing?
• The distribution Z ∼ N(0, 1) is known as the
• Within 2 standard deviations of the mean in a normal distribution, approximately what percent of data lie?
• What is a residual plot useful for?
• Which are the three factors that affect the width of a confidence interval?
• Which term describes a numerical value computed from sample data to estimate a population parameter?
• Which pair correctly describes a population parameter and a statistic?
• Which of the following is true about the two-parameter normal distribution?
• The standard error of the mean decreases as sample size increases because it is proportional to 1/√n.
• What is the difference between Bayesian and frequentist interpretations of probability?
• For very large samples, the z-distribution can be used even if the population standard deviation is unknown.
• Which type of estimator has a standard deviation that does not converge to 0 as the sample size increases, meaning more data does not make estimates more precise?
• Which statement is true about AIC and BIC as sample size grows?
• What is the role of safety stock in achieving service level?
• As the sample size grows large, the t-distribution becomes more like the standard normal distribution.
• As degrees of freedom increase, the t-distribution becomes more like which distribution?
• What is the simplex method in linear programming?
• The shape of the t-distribution as degrees of freedom increase
• Which test is used to test for equal variances across groups in ANOVA?
• What does N(0,1) denote in the context of standard normal distribution?
• In optimization, what is the purpose of sensitivity analysis?
• Which of the following describes a continuous random variable?
• What is the role of dummy variables in regression?
• For continuous random variables, we use which function?
• Which statement about holding cost and EOQ is correct?
• What is the relationship between standard deviation and variance?
• RMSE stands for what metric?
• A continuous distribution is completely defined by the:
• The probability that a continuous random variable equals a specific value c is always 0.
• Which characteristic applies to the normal distribution?
• A probability density function over its entire domain must integrate to what value?
• The expected value (or mean) provides which of the following?
• If p-value is greater than alpha, what is the correct conclusion?
• According to the Empirical Rule, what percentages lie within 1, 2, and 3 standard deviations?
• For a continuous variable, the probability that X lies in an interval [a, b] is given by which of the following?
• MAPE stands for which measure?
• In the context of probability distributions, which term specifically refers to the 'location' of the distribution?
• What does the shadow price (dual value) in linear programming represent?
• The observed value of a statistic is never exactly equal to the true parameter. Which word completes the sentence: the observed value is ______ equal to the true parameter?
• What represents the amount by which the sample statistic may differ from the true population parameter?
• The Normal distribution, also known as the '______ ______', is the most commonly used statistical distribution.
• What is safety stock and when is it used?
• Which term is used interchangeably with the mean?
• Which statement best distinguishes correlation from causation?
• Which statement describes the conditions for a valid PDF?
• Which of the following is an assumption of linear regression?
• When should the t-distribution be used instead of the normal distribution for confidence intervals?
• Which parameter is σX?
• In a regression model that includes a dummy variable for a categorical group, what does the dummy coefficient typically represent?
• Which statement about the standard normal distribution is true?
• Which test is commonly used to detect heteroscedasticity in regression models?
• As the level of confidence increases, with everything else held constant, the width of a confidence interval will
• A retail store tracks the number of customers entering each hour and the amount each customer spends. Which of the following correctly classifies the variables?
• Which expression defines the Expected Value of Perfect Information (EVPI)?
• The Central Limit Theorem only applies to populations that are normally distributed.
• What is a common rule for selecting a forecasting model using error measures?
• In binary classification, which metric measures the true positive rate?
• A firm's daily revenue (in thousands of dollars) has an expected value of 40. This means:
• What is the objective of an EOQ model in inventory management?
• What gives us an idea of how spread out the possible values of the random variable are?
• If the variance of a normal distribution increases, what happens to the shape of the distribution?
• An actual number calculated from actual data points is called what?
• If variability increases, the width of a confidence interval will generally:
• How is a forecast interval around a time series point forecast constructed?
• In ANOVA, besides Levene's test, which other test can be used to assess equal variances across groups?
• A confusion matrix in binary classification is used to compute which metrics?
• Between the z-distribution and the t-distribution, which statement is true as the degrees of freedom increase?
• How do you compute EOQ?
• A ____ describes how probability is distributed across values of X.
• Which type of estimator has the standard deviation converge to 0 as the sample size grows?
• The area under the probability density function between two values represents the probability that a continuous random variable falls within that interval.
• Which statement best describes service level in inventory management?
• For a 95% confidence interval of a population mean with known sigma, which critical value is used?
• Which method uses resampling to estimate the sampling distribution for confidence intervals?
• A continuous random variable may assign positive probability to a single exact value.
• Which value does the total integral of a density function over its domain equal?
• The Central limit applies to samples that are:
• In regression analysis, which statement best describes an outlier and its handling?
• When is a t-test preferred over a z-test?
• Explain interaction terms in regression.
• When the population standard deviation is known, the confidence interval for the mean uses the
• For discrete random variables, what is the name of the probability formula?
• Which statement best describes the concept of leverage in regression analysis?