LUBS267001

This question paper consists LUBS MCQ Answer Sheets required.

of 33 printed pages,
each of which is identified by the Answer Books required for rough
Code Number LUBS267001 calculations.

A formulae sheet is attached on page 28.

Statistical tables from: Statistical Tables
for Economic, Business & Social Studies
by Kmietowicz and Yannoulis are
attached on pages 29-33.
LUBS267001
© UNIVERSITY OF LEEDS Students are only allowed to
January 2014 use the following non-
programmable calculators in the
exam:
Examination for the degree of Casio fx-83, fx-85, fx -350
series
BA and BSc Sharp EL-531 series

STATISTICS FOR BUSINESS AND ECONOMICS 2

Time allowed 2 hours

Answer ALL questions

All questions carry equal marks

Please mark your answers on the MCQ Answer Sheet provided.

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 LUBS267001

USE THIS INFORMATION FOR QUESTIONS 1 TO 6

A manufacturing firm has been involved in statistical quality control for several years. As
part of the production process, parts are randomly selected and tested. From the records of
these tests, it has been established that the time, expressed in minutes, that elapses between
the occurrence of any two defective parts has the following probability density function:

f ( x ) = 0.069 e −0.069 x , x > 0.

1. Graph the probability density function of the time in minutes that elapses between any
two defects.

A.
f (x )

0.069

0 x

B.
f (x )

0.005

0 x

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 LUBS267001

C.
f (x )

0.263

0 x

D.
f (x )
14.493

0 x

E. None of the above

2. Find the mean number of minutes that elapse between any two defects.

A. 0.263
B. 0.069
C. 3.807
D. 14.493
E. 210.040

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3. Find the standard deviation of the number of minutes that elapse between any two
defects.

A. 210.040
B. 3.807
C. 14.493
D. 0.069
E. None of the above

4. What is the mean occurrence rate of defects per hour?

A. 0.069
B. 14.493
C. 15.761
D. 4.140
E. 0.286

5. What is the probability that less than 15 minutes will elapse between any two defects?

A. 0.069
B. 0.981
C. 1.000
D. 0.645
E. 0.355

6. What is the probability that more than 5 minutes, but less than 15 minutes will elapse
between any two defects?

A. 0.353
B. 0.045
C. 0.249
D. 0.647
E. None of the above

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 LUBS267001

USE THIS INFORMATION FOR QUESTIONS 7 TO 14

The Blackwell’s bookshop at a UK university sells textbooks both online and in their campus
store. Its daily in-store sales, measured by the random variable X , and its daily online sales,
measured by the random variable Y , have the following joint probability distribution:

⎛ 1 2 ⎞
f ( x, y ) = c ⎜1 −
1 2
x + y− x y ⎟, x = 0, 1, 2, 3, 4, y = 0, 1, 2, 3 .
⎝ 20 20 ⎠

7. Find the value of the constant c .

1
A.
22
2
B. −
7
1
C.
35
2
D.
45

E. None of the above

8. Which expression gives the marginal distribution of X ?

1 2 ⎞
4
⎛
f (x ) =
1 2
A. ∫
x =0
c ⎜1 −
⎝ 20
x + y−
20
x y ⎟ dx
⎠

4
⎛ 1 2 ⎞
f ( x ) = ∑ c ⎜1 −
1 2
B. x + y− x y⎟
x =0 ⎝ 20 20 ⎠

1 2 ⎞
3
⎛
f (x ) =
1 2
C. ∫
y =0
c ⎜1 −
⎝ 20
x + y−
20
x y ⎟ dy
⎠

4
⎛ 1 2 ⎞
f ( x ) = ∑ c ⎜1 −
1 2
D. x + y− x y⎟
y =0 ⎝ 20 20 ⎠

E. None of the above

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9. Find the marginal distribution of X .

1 ⎛ 1 2⎞
A. f (x ) = ⎜ 2 − x ⎟, x = 0, 1, 2, 3, 4
28 ⎝ 10 ⎠

1⎛ 1 ⎞
B. f (x ) = ⎜ 2 − x 2 ⎟ , x = 0, 1, 2, 3, 4
7 ⎝ 10 ⎠

1⎛ 1 ⎞
C. f (x ) = ⎜ 2 − x 2 ⎟ , x = 0, 1, 2, 3, 4
5 ⎝ 10 ⎠

f (x ) =
1 2
D. x − 2, x = 0, 1, 2, 3, 4
10

1 ⎛ 3 2⎞
E. f (x ) = ⎜15 − x ⎟ , x = 0, 1, 2, 3, 4
44 ⎝ 4 ⎠

10. Which expression gives the marginal distribution of Y ?

4
⎛ 1 2 ⎞
f ( y ) = ∑ c ⎜1 −
1 2
A. x + y− x y⎟
x =0 ⎝ 20 20 ⎠

1 2 ⎞
3
⎛
f (y) =
1 2
B. ∫
y =0
c ⎜1 −
⎝ 20
x + y−
20
x y ⎟ dy
⎠

3
⎛ 1 2 ⎞
f ( y ) = ∑ c ⎜1 −
1 2
C. x + y− x y⎟
x =0 ⎝ 20 20 ⎠

1 2 ⎞
4
⎛
f (y) =
1 2
D. ∫
x =0
c ⎜1 −
⎝ 20
x + y−
20
x y ⎟ dx
⎠

3
⎛ 1 2 ⎞
f ( y ) = ∑ c ⎜1 −
1 2
E. x + y− x y⎟
y =0 ⎝ 20 20 ⎠

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11. Find the marginal distribution of Y .

f (y) = (1 + y ),
2
A. y = 0, 1, 2, 3
15

f (y) = (1 + y ),
1
B. y = 0, 1, 2, 3
7

f (y) = (1 + y ),
1
C. y = 0, 1, 2, 3
10

f (y) = (1 + y ),
1
D. y = 0, 1, 2, 3
9

E. None of the above

12. Find the conditional distribution of daily in-store sales when the bookshop sells 3
textbooks online.

20 ⎛ 1 2⎞
A. f (x Y = 3) = ⎜ 2 − x ⎟, x = 0, 1, 2, 3, 4
11 ⎝ 10 ⎠

9 ⎛ 1 2⎞
B. f (x Y = 3) = ⎜ 2 − x ⎟, x = 0, 1, 2, 3, 4
45 ⎝ 10 ⎠

f (x Y = 3) =
1 2
C. x − 2, x = 0, 1, 2, 3, 4
10

15 ⎛ 1 2⎞
D. f (x Y = 3) = ⎜1 − x ⎟, x = 0, 1, 2, 3, 4
44 ⎝ 20 ⎠

1⎛ 1 ⎞
E. f (x Y = 3) = ⎜ 2 − x 2 ⎟ , x = 0, 1, 2, 3, 4
7⎝ 10 ⎠

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13. Daily in-store and online sales are independent if

A. f (x ) f ( y ) = f ( y )

B. f (x y ) = f ( y )

C. f ( x ) f ( y ) = f (x, y )

D. f (x ) f ( y ) = f (x )

E. f ( x, y ) = f ( x )

14. We can conclude that

A. when daily in-store sales decrease, daily online sales also decrease

B. when daily in-store sales decrease, daily online sales increase

C. when daily in-store sales increase, daily online sales also increase

D. when daily in-store sales increase, daily online sales decrease

E. none of the above

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 LUBS267001

USE THIS INFORMATION FOR QUESTIONS 15 TO 30

An insurance agency services customers who have purchased both home insurance and car
insurance from the agency. For each type of policy, an excess amount – the part of an
insurance claim that a person has to pay while the insurance company pays the rest – must be
specified. For the car policy, the choice of excess can be any amount between £100 and £200,
whereas for the home policy, the choice of excess can be any amount between 0 and £200.
Let X represent the excess amount on the car policy and Y the excess amount on the home
policy, both expressed in £ ’00. The joint probability distribution of X and Y is given by:

f ( x, y ) = xy (x + y ),
3
1< x < 2 , 0< y < 2.
26

15. Which expression gives the marginal distribution of X ?

(x y + xy 2 )dy
2
f (x ) =
3 2
A. ∫
y =0
26

(x y + xy 2 )
2
f (x ) = ∑
3 2
B.
x =1 26

( )
2
f (x ) =
3 2
C. ∫
x =1
26
x y + xy 2 dx

(x y + xy 2 )
2
f (x ) = ∑
3 2
D.
y =0 26

E. None of the above

16. Find the marginal distribution of X .

3 ⎛4 2⎞
A. f (x ) = ⎜ x + x ⎟, 1< x < 2
26 ⎝ 3 ⎠

B. f (x ) =
3
26
(5 x + 3 x 2 ), 1< x < 2

3 ⎛7 3 2⎞
C. f (x ) = ⎜ x + x ⎟, 1< x < 2
26 ⎝ 3 2 ⎠

3 ⎛7 3 2⎞
D. f (x ) = ⎜ x + x ⎟, 1< x < 2
13 ⎝ 3 2 ⎠

3 ⎛4 2⎞
E. f (x ) = ⎜ x + x ⎟, 1< x < 2
13 ⎝ 3 ⎠

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17. Find the expected excess amount on the car policy.

A. £ 79.17
B. £ 158.33
C. £ 174.36
D. £ 141.03
E. None of the above

18. Find E (X 2 ).

A. 1.3538
B. 2.1846
C. 2.5846
D. 2.7077
E. 1.2923

19. Find the standard deviation of the excess amount on the car policy.

A. £ 27.87
B. £ 44.25
C. £ 57.66
D. £ 81.58
E. £ 77.06

20. Which expression gives the marginal distribution of Y ?

(x y + xy 2 )
2
f (y) = ∑
3 2
A.
y =0 26

(x y + xy 2 )dx
2
f (y) =
3 2
B. ∫
x =0
26

(x y + xy 2 )
2
f (y) = ∑
3 2
C.
x =1 26

(x y + xy 2 )dx
2
3 2
D. f (y) = ∫
x =1
26

E. None of the above

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21. Find the marginal distribution of Y .

3 ⎛4 2⎞
A. f (y) = ⎜ y + y ⎟, 0< y<2
26 ⎝ 3 ⎠

B. f (y) =
3
26
( )
5y + 3y2 , 0< y<2

3 ⎛7 3 2⎞
C. f (y) = ⎜ y + y ⎟, 0< y<2
26 ⎝ 3 2 ⎠

3 ⎛7 3 2⎞
D. f (y) = ⎜ y + y ⎟, 0< y<2
13 ⎝ 3 2 ⎠

3 ⎛4 2⎞
E. f (y) = ⎜ y + y ⎟, 0< y<2
13 ⎝ 3 ⎠

22. Find the expected excess amount on the home policy.

A. £ 158.33
B. £ 174.36
C. £ 141.03
D. £ 87.18
E. None of the above

23. Find E (Y 2 ) .

A. 1.3538
B. 2.7077
C. 1.2923
D. 2.5846
E. 2.1846

24. Find the standard deviation of the excess amount on the home policy.

A. £ 77.06
B. £ 44.25
C. £ 81.58
D. £ 57.66
E. None of the above

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25. Which expression gives the expected value of the product of X and Y ?

(x y + xy 2 )
2 2
E ( XY ) = ∑
3 2
A.
x =1
∑
y =0 26

(x y + xy 2 ) dy dx
2 2
E ( XY ) =
3 2
B. ∫ ∫
x =1 y = 0
26

(x y + x 2 y 3 )
2 2
E ( XY ) = ∑
3 3 2
C.
x =1
∑
y =0 26

(x y + x 2 y 3 ) dy dx
2 2
E ( XY ) = ∫ ∫
3 3 2
D.
x =1 y = 0
26

E. None of the above

26. Find E ( XY ) .

A. 2.2329
B. 3.0401
C. 1.0000
D. 2.4615
E. 2.2308

27. Find the covariance of the excess amounts on car and home policies.

A. 0.0000
B. − 1.2329
C. − 0.5786
D. 1.5406
E. − 0.0021

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28. Find the correlation coefficient between the excess amounts on car and home policies.

A. 0.2451
B. − 0.1741
C. 0.0000
D. − 0.0173
E. None of the above

29. The annual premium for a combined car and home policy, expressed in £ ’00, is
related to the excess amounts by the expression:

P = 4.15 − 0.40 X − 0.30Y .

Find the expected annual premium.

A. £ 311.09
B. £ 292.95
C. £ 357.18
D. £ 356.38
E. None of the above

30. Find the standard deviation of the annual premium.

A. £ 17.33
B. £ 23.61
C. £ 17.19
D. £ 72.78
E. £ 28.83

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USE THIS INFORMATION FOR QUESTIONS 31 TO 37

A sample of 187 professional working women, taken without replacement from a population
of 935 , showed that the average amount paid annually into a private pension fund per person
was £ 3,352 . The population standard deviation is £ 1,100 . An independent sample of 276
professional working men, taken without replacement from a large population, showed that
the average amount paid annually into a private pension fund per person was £ 3,727 , with a
population standard deviation is £ 1,700 . An association of professional women wants to
verify whether professional women do not pay as much per year as professional men into
private pension funds.

31. Let the subscripts w and m refer to professional women and professional men
respectively. What are the null and alternative hypotheses for the test that professional
women do not pay as much per year as professional men into private pension funds?

A. H 0 : µw − µm = 0 H1 : µw − µm ≠ 0

B. H 0 : µw − µm = 0 H1 : µw − µm < 0

C. H 0 : µw − µm < 0 H1 : µw − µm = 0

D. H 0 : µw − µm = 0 H1 : µw − µm > 0

E. None of the above

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32. Which expression gives the test statistic?

( X w − X m ) − ( µ w − µ m )0
A.
σ w2 ⎛ N w − n w ⎞ σ m2
⎜ ⎟+
n w ⎜⎝ N w − 1 ⎟⎠ nm

( X w − X m ) − ( µ w − µ m )0
B.
⎛ N m − nm ⎞
σ w2 + σ m2 ⎜⎜ ⎟
− ⎟
⎝ mN 1 ⎠

( X w − X m ) − ( µ w − µ m )0
C.
σ w2 σ m2 ⎛ N m − nm ⎞
+ ⎜ ⎟
nw nm ⎜⎝ N m − 1 ⎟⎠

( X w − X m ) − ( µ w − µ m )0
D.
σ w2 σ m2
+
nw nm

( X w − X m ) − ( µ w − µ m )0
E.
⎛ N w − nw ⎞
σ w2 ⎜⎜ ⎟ + σ m2
⎟
⎝ Nw −1 ⎠

33. Calculate the test statistic.

A. − 0.1909
B. − 2.8811
C. − 3.0766
D. − 0.1997
E. − 2.9973

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34. The sampling distribution of the test statistic is

A. Z ~ N (0, 1)

B. t ~ t distribution with 186 degrees of freedom

⎛
⎜
σ w2 ⎛ N w − nw ⎞ σ m2 ⎞⎟
C. Z ~ N µw − µm , ⎜ ⎟+
⎜
⎝ n w ⎜⎝ N w − 1 ⎟⎠ nm ⎟⎠

D. t ~ t distribution with 275 degrees of freedom

⎛ σ2 σ2 ⎞
E. Z ~ N ⎜⎜ µ w − µ m , w + m ⎟⎟
⎝ n w nm ⎠

35. The critical value corresponding to the 1% significance level is

A. z 0.99 = −2.3263

B. t 0.99, 186 = −2.3451

C. z 0.01 = 2.5758

D. t 0.01, 275 = 2.3388

E. none of the above

36. The decision rule for the test at the 1% significance level is:

A. • if Z ≤ −2.5758 , reject H 0
• if Z > −2.5758 , do not reject H 0

B. • if t ≥ 2.3388 , reject H 0
• if t < 2.3388 , do not reject H 0

C. • if Z ≤ −2.3263 , reject H 0
• if Z > −2.3263 , do not reject H 0

D. • if Z ≥ 2.5758 , reject H 0
• if Z < 2.5758 , do not reject H 0

E. none of the above

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37. The test conclusion is:

A. Reject H 0 . There is significant evidence (at the 1% level) that professional

women do not pay as much per year as professional men into private pension
funds

B. Do not reject H 0 . There is no significant evidence (at the 1% level) that

professional women do not pay as much per year as professional men into
private pension funds

C. Reject H 0 . There is significant evidence (at the 1% level) that professional

women pay the same per year as professional men into private pension funds

D. Do not reject H 0 . There is significant evidence (at the 1% level) that

professional women pay the same per year as professional men into private
pension funds

E. Reject H 0 . There is no significant evidence (at the 1% level) that professional

women do not pay as much per year as professional men into private pension
funds

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USE THIS INFORMATION FOR QUESTIONS 38 TO 45

In an attempt to target its clientele, managers of a supermarket chain want to investigate the
difference between the proportion of morning shoppers who are men and the proportion of
afternoon shoppers who are men. Over a period of two weeks, the chain’s researchers
conduct a random sample survey of 400 morning shoppers, selected without replacement
from the population of 1740 morning shoppers during the two weeks’ period. The sample
reveals that 352 are women and 48 are men. During the same period, an independent
random sample of 480 afternoon shoppers, selected without replacement from a population
of 2860 , reveals that 288 are women and 192 are men. The managers want to assess the
claim that the proportion of men is different in the two populations of morning and afternoon
shoppers.

38. What are the unbiased point estimators of the population proportions of morning
shoppers who are men and afternoon shoppers who are men?

A. 48 and 192
B. 0.88 and 0.60
C. 352 and 288
D. 0.12 and 0.40
E. 0.77 and 0.83

39. Let the subscripts 1 and 2 refer to morning shoppers and afternoon shoppers
respectively. The sampling distribution of the difference between the sample
proportion of morning shoppers who are men and the sample proportion of afternoon
shoppers who are men is

⎛ π (1 − π 1 ) π 2 (1 − π 2 ) ⎞
A. ( P1 − P2 ) ~ N ⎜⎜ π 1 − π 2 , 1 + ⎟
⎟
⎝ n1
n 2 ⎠

⎛ ⎛ N −n ⎞ ⎛ N − n2 ⎞ ⎞
B. ( P1 − P2 ) ~ N ⎜ π 1 − π 2 , π 1 (1 − π 1 )⎜⎜ 1 1 ⎟⎟ + π 2 (1 − π 2 )⎜⎜ 2 ⎟⎟
⎜ − − ⎟⎟
⎝ ⎝ 1
N 1 ⎠ ⎝ 2
N 1 ⎠⎠

⎛ π (1 − π 1 ) ⎛ N 1 − n1 ⎞ π 2 (1 − π 2 ) ⎛ N 2 − n2 ⎞ ⎞⎟
C. ( P1 − P2 ) ~ N ⎜ π 1 − π 2 , 1 ⎜
⎜ N −1 ⎟ +
⎟ ⎜
⎜ N − 1 ⎟⎟
⎟
⎜
⎝ n1 ⎝ 1 ⎠ n 2 ⎝ 2 ⎠⎠

⎛ ⎛ N −n ⎞ ⎞
D. ( P1 − P2 ) ~ N ⎜ π 1 − π 2 , π 1 (1 − π 1 )⎜⎜ 1 1 ⎟⎟ + π 2 (1 − π 2 ) ⎟
⎜ ⎟
⎝ ⎝ N1 − 1 ⎠ ⎠

⎛ π (1 − π 1 ) ⎛ N 1 − n1 ⎞ π 2 (1 − π 2 ) ⎞⎟
E. ( P1 − P2 ) ~ N ⎜ π 1 − π 2 , 1 ⎜
⎜ N −1 ⎟ +
⎟
⎜ ⎟
⎝ n1 ⎝ 1 ⎠ n2 ⎠

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40. Find the standard error of the difference between the sample proportion of morning
shoppers who are men and the sample proportion of afternoon shoppers who are men.

A. 0.0006
B. 0.0249
C. 0.5669
D. 0.5302
E. 0.0276

41. Which expression gives the 95% confidence interval for the difference between the
population proportion of morning shoppers who are men and the population
proportion of afternoon shoppers who are men?

A. (π 1 − π 2 ) = (P1 − P2 ) ± z 0.05 ⋅ SE (P1 − P2 )

B. (π 1 − π 2 ) = (P1 − P2 ) ± t 0.05, 878 ⋅ SE (P1 − P2 )

C. (π 1 − π 2 ) = (P1 − P2 ) ± z 0.95 ⋅ SE (P1 − P2 )

D. (π 1 − π 2 ) = (P1 − P2 ) ± t 0.95, 878 ⋅ SE (P1 − P2 )

E. None of the above

42. Find the 95% confidence interval for the difference between the population
proportion of morning shoppers who are men and the population proportion of
afternoon shoppers who are men.

A. (− 0.3342, − 0.2258)
B. (− 1.3193, 0.7593)
C. (− 1.2125, 0.6525)
D. (− 0.2810, − 0.2790 )
E. (− 0.3288, − 0.2312 )

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43. Which expression gives the 99% confidence interval for the difference between the
population proportion of morning shoppers who are men and the population
proportion of afternoon shoppers who are men?

A. (π 1 − π 2 ) = (P1 − P2 ) ± t 0.99, 878 ⋅ SE (P1 − P2 )

B. (π 1 − π 2 ) = (P1 − P2 ) ± z 0.99 ⋅ SE (P1 − P2 )

C. (π 1 − π 2 ) = (P1 − P2 ) ± t 0.01, 878 ⋅ SE (P1 − P2 )

D. (π 1 − π 2 ) = (P1 − P2 ) ± z 0.005 ⋅ SE (P1 − P2 )

E. None of the above

44. Find the 99% confidence interval for the difference between the population
proportion of morning shoppers who are men and the population proportion of
afternoon shoppers who are men.

A. (− 0.3441, − 0.2159 )
B. (− 0.2814, − 0.2786 )
C. (− 1.5988, 1.0388)
D. (− 1.6458, 1.0858)
E. None of the above

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45. We can conclude that

A. the 99% confidence interval obtained includes the possibility that the
proportion of men is the same in the two populations of morning and
afternoon shoppers, but the 95% confidence interval does not. Evidence in
favour of the claim that the proportion of men is different in the two
populations is not very strong: it would be advisable to observe larger
samples.

B. both the 95% and 99% confidence intervals obtained do not include the
possibility that the proportion of men is the same in the two populations of
morning and afternoon shoppers. Evidence is clearly in favour of the claim
that the proportion of men is different in the two populations.

C. both the 95% and 99% confidence intervals obtained include the possibility
that the proportion of men is the same in the two populations of morning and
afternoon shoppers. Evidence is clearly against the claim that the proportion of
men is different in the two populations.

D. both the 95% and 99% confidence intervals obtained include the possibility
that the proportion of men is the same in the two populations of morning and
afternoon shoppers. Evidence is clearly in favour of the claim that the
proportion of men is different in the two populations.

E. none of the above

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USE THIS INFORMATION FOR QUESTIONS 46 TO 60

A real estate broker is interested in comparing the asking prices of flats in the British cities of
Exeter and Cardiff. The broker conducts a small telephone survey in the two cities, asking the
prices of flats. A random sample of 21 flats in Exeter resulted in a sample average price of
£ 116,900 , with a sample standard deviation of £ 2,300 . An independent random sample of
16 flats in Cardiff resulted in a sample average price of £ 114,000 , with a sample standard
deviation of £ 1,750 . The broker assumes that the prices of flats are normally distributed. He
wants to determine whether there is any difference in the population mean prices of flats of
the two cities. A necessary condition for proceeding with this test is that the variance in
prices is the same in the two cities.

46. Let the subscripts E and C refer to Exeter and Cardiff respectively. What are the null
and alternative hypotheses for the test that the variance in prices of flats is the same in
the two cities?

A. H 0 : σ E2 ≠ σ C2 H 1 : σ E2 = σ C2

B. H 0 : s E2 = sC2 H 1 : s E2 > sC2

C. H 0 : σ E2 > σ C2 H 1 : σ E2 = σ C2

D. H 0 : s E2 = sC2 H 1 : s E2 ≠ sC2

E. H 0 : σ E2 = σ C2 H 1 : σ E2 ≠ σ C2

47. Which expression gives the test statistic for this test?

(nE − 1)sE2 + (nC − 1)sC2

A.
n E + nC − 2

B.
(nE − 1)s E2
(nC − 1)sC2
sC / σ C
C.
sE / σ E

s E2 / σ E2
D.
sC2 / σ C2

E. None of the above

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48. Calculate the test statistic for this test.

A. 1.314
B. 2.303
C. 0.761
D. 2082.152
E. 1.727

49. The sampling distribution of the test statistic for this test is

A. t ~ t distribution with 35 degrees of freedom

B. F ~ F distribution with 20, 15 degrees of freedom

C. χ 2 ~ χ 2 distribution with 35 degrees of freedom

D. F ~ F distribution with 15, 20 degrees of freedom

E. t ~ t distribution with 37 degrees of freedom

50. The critical value corresponding to the 1% significance level for this test is

A. F0.01, 15, 20 = 3.088

B. t 0.005, 35 = 2.724

C. F0.005, 20, 15 = 3.883

D. χ 02.01, 35 = 57.342
E. none of the above

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51. The decision rule for this test at the 1% significance level is:

A. • if F ≥ 3.883 , reject H 0
• if F < 3.883 , do not reject H 0

B. • if t ≥ 2.724 , reject H 0
• if t < 2.724 , do not reject H 0

C. • if χ 2 ≥ 57.342 , reject H 0
• if χ 2 < 57.342 , do not reject H 0

D. • if F ≥ 3.088 , reject H 0
• if F < 3.088 , do not reject H 0

E. • if t ≥ 2.705 , reject H 0
• if t < 2.705 , do not reject H 0

52. The test conclusion for this test is:

A. Do not reject H 0 . There is significant evidence (at the 1% level) that the
variance in prices of flats is different in the two cities.

B. Reject H 0 . There is no significant evidence (at the 1% level) that the variance
in prices of flats is different in the two cities.

C. Do not reject H 0 . There is no significant evidence (at the 1% level) that the
variance in prices of flats is the same in the two cities.

D. Reject H 0 . There is significant evidence (at the 1% level) that the variance in
prices of flats is the same in the two cities.

E. Do not reject H 0 . There is no significant evidence (at the 1% level) that the
variance in prices of flats is different in the two cities.

53. Calculate the pooled estimate of the common population variance.

A. 2064.2857
B. 4326756.7568
C. 4335357.1429
D. 2082.1520
E. None of the above

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54. What are the null and alternative hypotheses for the test that the mean price of flats in
the two cities is different?

A. H 0 : µ E − µC > 0 H 1 : µ E − µC = 0

B. H 0 : µ E − µC = 0 H 1 : µ E − µC ≠ 0

C. H 0 : µ E − µC < 0 H 1 : µ E − µC = 0

D. H 0 : µ E − µC = 0 H 1 : µ E − µC > 0

E. H 0 : µ E − µC = 0 H 1 : µ E − µC < 0

55. Which expression gives the test statistic for this second test?

(X E
− X C ) − (µ E − µ C )0
A.
1 1
sp +
n E nC

B.
(nE − 1)s E2
(nC − 1)sC2
(X E
− X C ) − (µ E − µ C )0
C.
1 1
s 2p +
n E nC

s E2 / σ E2
D.
sC2 / σ C2

E. None of the above

56. Calculate the test statistic for this second test.

A. 2.3031
B. 1.7273
C. 4.1971
D. 0.0020
E. None of the above

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57. The sampling distribution of the test statistic for this second test is

A. F ~ F distribution with 20, 15 degrees of freedom

B. t ~ t distribution with 35 degrees of freedom

C. Z ~ N ( 0, 1)

D. F ~ F distribution with 15, 20 degrees of freedom

E. t ~ t distribution with 37 degrees of freedom

58. The critical value corresponding to the 1% significance level for this second test is

A. t 0.005, 37 = 2.7045

B. F0.01, 15, 20 = 3.088

C. z 0.01 = 2.3263
D. F0.005, 20, 15 = 3.883

E. none of the above

59. The decision rule for this second test at the 1% significance level is:

A. • if F ≥ 3.883 , reject H 0
• if F < 3.883 , do not reject H 0

B. • if t ≥ 2.7238 , reject H 0
• if t < 2.7238 , do not reject H 0

C. • if Z ≥ 2.3263 , reject H 0
• if Z < 2.3263 , do not reject H 0

D. • if F ≥ 3.088 , reject H 0
• if F < 3.088 , do not reject H 0

E. none of the above

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60. The test conclusion for this second test is:

A. Reject H 0 . There is significant evidence (at the 1% level) that the population
mean prices of flats are different in the two cities.

B. Do not reject H 0 . There is significant evidence (at the 1% level) that the
population mean prices of flats are the same in the two cities.

C. Reject H 0 . There is no significant evidence (at the 1% level) that the

population mean prices of flats are different in the two cities.

D. Do not reject H 0 . There is no significant evidence (at the 1% level) that the
population mean prices of flats are the same in the two cities.

E. none of the above

END OF QUESTIONS

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FORMULAE

var ( X ) = E (X 2 ) − [E ( X )]
2

SD( X ) = var( X )

E (a + bX ) = a + b E ( X )

E [(a + bX ) + (c + dY )] = a + b E ( X ) + c + d E (Y )

var (a + bX ) = b 2 var ( X )

var[(a + bX ) + (c + dY )] = b 2 var( X ) + d 2 var(Y ) + 2 b d cov( X , Y )

cov( X , Y ) = E ( XY ) − E ( X )E (Y )

cov ( X , Y )
ρ X ,Y =
SD ( X ) SD (Y )

f ( x, y ) f (x, y )
f (x y ) = f (y x ) =
f (y) f (x )

f ( x ) = θ e −θ x , E(X ) = var( X ) =
1 1
For x > 0, θ > 0 : ;
θ θ2

∑ (X − Xi )
ni
2

s 2p =
(n1 − 1) s2
1+ (n2 − 1) s 2
2
where si2 = j =1
ij

n1 + n2 − 2 ni − 1

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END OF PAPER
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