UNIVERSITY OF CAPE COAST

COLLEGE OF HUMANITIES AND LEGAL STUDIES

SCHOOL OF BUSINESS
DEPARTMENT OF ACCOUNTING
SBU 202: QUANTITATIVE METHODS II
END OF SECOND SEMESTER MOCK EXAMINATION

INSTRUCTIONS: Circle the letter corresponding to the answer of your choice. Each
question carries ½ marks.

1. What is the primary purpose of linear A. They are the points where the
programming in a business setting? constraints are violated
A. To enhance marketing strategies B. They are the points where the
B. To optimize decision-making and feasible region intersects the axes
improve performance C. They are potential solutions that
C. To develop new products need to be evaluated for
D. To manage employee optimality
performance D. They represent the midpoints of
the feasible region
2. In linear programming, which of the
following best describes the 5. What does a feasible solution in
"objective function"? linear programming signifies?
A. A constraint that must be A. Any solution that maximizes the
satisfied objective function
B. A variable that can take any B. Any solution that satisfies all the
value constraints
C. A function that needs to be C. A solution that is outside the
maximized or minimized feasible region
D. A graphical representation of D. A solution that violates at least
feasible solutions one constraint
6. What does the term binding
3. Which component of a linear
constraint mean in the context of
programming model represents linear programming?
controllable input variables? A. It is a constraint that does not
A. Objective function affect the feasible region.
B. Decision variables B. It is a constraint that is satisfied
C. Constraints with equality at the optimal
D. Feasible solution solution.
C. It is a constraint that can be
4. In the graphical method of solving removed without changing the
linear programming problems, what solution.
is the significance of corner points? D. It is a constraint that increases
the value of the objective
function

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7. How does the simplex method differ C. They are the defined terms in the
from the graphical method in solving objective function.
linear programming problems? D. They are used to find the feasible
A. The simplex method can handle region.
more than two variables.
11. Given the linear programming
B. The simplex method is only used
problem with the objective function
for minimizing problems. Z=3 x+ 4 y and constraints:
C. The graphical method is more x +2 y ≤ 10, 3 x+ y ≤ 15 and x , y ≥ 0,
accurate than the simplex which point is most likely to be part
method. of the optimal solution?
D. The simplex method does not A. 0, 0
require constraints. B. 5, 2.5
C. 0, 5
8. What role do slack variables play in D. 3, 4
linear programming problems?
A. They help to identify the optimal 12. If a linear programming model's
solution. feasible region is unbounded and the
objective function is to be
B. They convert inequality
maximized, what can be inferred?
constraints into equality
A. The problem has multiple
constraints. optimal solutions.
C. They are used to plot the B. The problem does not have any
objective function. feasible solution.
D. They represent the decision C. The objective function can
variables. increase indefinitely.
D. The problem is infeasible.
9. When formulating a linear
programming problem, why is it 13. In analyzing the sensitivity of a
important to clearly state the linear programming solution, what
objective function? does a shadow price represent?
A. To ensure all constraints are met. A. The change in the objective
function value per unit increase
B. To determine the feasible region.
in the right-hand side of a
C. To know what quantity to constraint.
maximize or minimize. B. The values of the objective
D. To identify the slack variables. function at the optimal solution.
C. The cost of adding an additional
10. Which best describes the objective constraint.
function coefficients in a linear D. The rate at which a decision
programming model? variable changes.
A. They are the constraints that
must be satisfied. 14. Consider a linear programming
B. They determine the slope of the problem with the constraints:
constraints. 2 x+3 y ≤ 12, x + y ≥ 4 and x , y ≥ 0. If
the objective function is Z=5 x+2 y ,

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 how would you determine if the profit per acre of wheat is GHS100,
current solution is optimal? and for corn, it is GHS150. How
A. Check if the solution lies within many acres of each crop should the
the feasible region. farmer plant to maximize profit?
B. Verify if the solution satisfies all A. 80 acres of wheat and 80 acres of
constraints. corn
C. Compare the solution with corner B. 60 acres of wheat and 100 acres
points of the feasible region. of corn
D. Calculate the objective function C. 100 acres of wheat and 60 acres
value for different values of x of corn
and y. D. 120 acres of wheat and 40 acres
of corn
15. What can be concluded if a linear
programming problem's feasible 18. A company manufactures two
region has no intersection of products, X and Y. Product X
constraints? requires 4 hours of machine time,
A. The problem has multiple and Product Y requires 3 hours. The
optimal solutions. total available machine time per
B. The problem is unbounded. week is 180 hours. The profit from
C. The problem is infeasible. Product X is GHS40 per unit, and
D. The problem has a unique from Product Y, it is GHS35 per
solution. unit. If the company must produce at
least 20 units of Product X and 10
16. A factory produces two products, A units of Product Y per week, what is
and B. The profit for each unit of the maximum profit?
Product A is GHS50, and for Product A. GHS2,600
B, it is GHS30. The factory can B. GHS2,300
produce a maximum of 200 units of C. GHS2,400
A and 150 units of B per month. The D. GHS2,500
production constraints are given by:
2 x+3 y ≤ 1000 (where x is the 19. A small business produces two types
number of units of A and y is the of cookies: chocolate chip and
number of units of B produced). oatmeal. Each batch of chocolate
What is the maximum profit the chip cookies requires 2 cups of flour
factory can achieve? and 1 cup of sugar. Each batch of
A. GHS15,000 oatmeal cookies requires 1 cup of
B. GHS25,000 flour and 2 cups of sugar. The bakery
C. GHS18,000 has 100 cups of flour and 80 cups of
D. GHS22,000 sugar available. The profit per batch
of chocolate chip cookies is GHS5,
17. A farmer has 240 acres of land to and for oatmeal cookies, it is GHS4.
plant wheat and corn. Each acre of How many batches of each type of
wheat requires 2 hours of labor, and cookie should the bakery make to
each acre of corn requires 3 hours of maximize profit?
labor. The farmer has a maximum of A. 20 batches of chocolate chip and
480 hours of labor available. The 20 batches of oatmeal

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 B. 30 batches of chocolate chip and B. Objective function: Minimize
10 batches of oatmeal 300 x+ 500 y; Constraints:
C. 10 batches of chocolate chip and 200 x+ 100 y ≥ 3000 , x+ y ≤ 20;
30 batches of oatmeal Optimal solution: 15 trucks and 5
D. 25 batches of chocolate chip and vans
15 batches of oatmeal
C. Objective function: Minimize
20. A retailer sells two types of 500 x+ 300 y; Constraints:
smartphones: Model A and Model B. 200 x+ 100 y ≥ 3000 , x+ y ≤ 20;
Each Model A sold generates a profit Optimal solution: 10 trucks and 5
of GHS150, and each Model B vans
generates a profit of GHS200. The D. Objective function: Minimize
retailer has a budget of GHS40000 300 x+ 500 y; Constraints:
for purchasing inventory, with each 200 x+ 100 y ≥ 3000 , x+ y ≤ 20;
Model A costing GHS400 and each
Optimal solution: 5 trucks and 15
Model B costing GHS500. The
vans
retailer wants to buy at least 50 units
of Model A and at least 30 units of
22. A hospital needs to allocate its
Model B. What is the maximum
budget to maximize patient care
profit the retailer can achieve?
while considering staffing and
A. GHS22,000
equipment costs. The hospital has a
B. GHS25,000
budget of $200,000. Each nurse costs
C. GHS27,000
$50,000 per year, and each piece of
D. GHS24,000
equipment costs $25,000 per year.
The hospital needs at least 2 nurses
21. A logistics company needs to
and 3 pieces of equipment. Create
determine the optimal number of
the objective function and
trucks (X) and vans (Y) to minimize
constraints, find the optimal
transportation costs. The cost to
allocation to maximize the number
operate a truck is $500 per day and
of resources within the budget.
for a van is $300 per day. The
A. Objective function: Maximize
company must transport at least 3000
50000 x+ 25000 y ; Constraints:
units of goods per day. Each truck
50000 x+ 25000 y ≥ 200000 , x ≥ 2 , y ≥ 3
can carry 200 units, and each van can
; Optimal solution: 2 nurses and
carry 100 units. Additionally, the
6 pieces of equipment
company can use a maximum of 20
B. Objective function: Maximize
vehicles in total per day. Formulate
50000 x+ 25000 y ; Constraints:
the objective function and 50000 x+ 25000 y ≥ 200000 , x ≥ 2 , y ≥ 3
constraints, then determine the
; Optimal solution: 4 nurses and
optimal number of trucks and vans to
4 pieces of equipment
minimize costs.
A. Objective function: Minimize
C. Objective function: Maximize
500 x+ 300 y; Constraints:
x + y; Constraints:
200 x+ 100 y ≥ 3000 , x+ y ≤ 20;
50000 x+ 25000 y ≥ 200000 , x ≥ 2 , y ≥ 3
Optimal solution: 10 trucks and
; Optimal solution: 3 nurses and
10 vans
4 pieces of equipment

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 D. Objective function: Maximize If the bank decides to maximize
x + y; Constraints: returns while adhering to the
50000 x+ 25000 y ≥ 200000 , x ≥ 2 , y ≥ 3 guidelines, which of the following
; Optimal solution: 2 nurses and portfolios would be most
6 pieces of equipment appropriate?
23. A manufacturer is making two A. Invest 30% in consumer credit,
products, X and Y, with the 30% in commercial, 20% in
following input requirements: 4 kg student, and 20% in agricultural
of raw material, 2 hours of machine loans
time, and 1 hour of labor for product B. Invest 25% in consumer credit,
X; and 1 kg of raw material, 1 hour 25% in commercial, 25% in
of machine time, and 1 hour of labor student, and 25% in agricultural
for product Y. The inputs are loans
available in the following quantities C. Invest 20% in consumer credit,
per week: 90 kg of raw materials, 50 40% in commercial, 20% in
hours of machine time, and 40 hours student, and 20% in agricultural
of labor. The profit is GH¢40,000 on loans
product X and GH¢30,000 on D. Invest 40% in consumer credit,
product Y. The objective is to 20% in commercial, 20% in
maximize profit. student, and 20% in agricultural
loans
Given the constraints and objective,
which of the following solutions best 25. Angie and Nicole run a successful
maximizes the profit? lemonade stand, making both
A. Produce 10 units of product X lemonade and fruit punch. Their
and 20 units of product Y profit for a cup of lemonade is GH
B. Produce 15 units of product X ¢0.20, but only GH¢0.10 for fruit
and 10 units of product Y punch. They sold both drinks at the
C. Produce 5 units of product X and same price, but the ingredients for
30 units of product Y fruit punch cost more. If they want to
D. Produce 20 units of product X optimize their profits, what should
and 5 units of product Y Angie and Nicole consider changing
in their strategy?
24. AJT Bank offers four categories of A. Increase the price of lemonade to
loans: consumer credit, commercial, match the higher cost of
student, and agricultural loans. The ingredients for fruit punch
bank’s guidelines for selecting the B. Decrease the price of fruit punch
portfolio are: the average risk should to attract more customers
not exceed 0.25; the average term of C. Focus on selling more lemonade
investment should not exceed six due to its higher profit margin
years; and the Bank of Ghana D. Offer discounts on fruit punch to
regulation requires that at least 15% clear out excess inventory
of the funds should be retained in
cash. Use the following to answer questions 26 to
31. Correct your answers to 2d.p. The

Page 5 of 16
covariance matrix of the historic returns of A. Strong positive
three assets is indicated below: B. Strong negative
C. Weak positive
X Y Z D. Weak negative
X 10.2 - 5.3 11.5
Y -5.3 50.5 -6.9 31. If asset Y returns depend on asset
X’s returns, what will be the slope of
Z 11.5 -6.9 13.3
the regression equation?
A. 0.51
26. The risk for assets X, Y and Z are B. -0.51
………………. respectively? C. -0.10
D. 0.10
A. 3.19, 3.65 and 7.11
B. 3.19, 7.11 and 3.65 32. On a scatter diagram, the distances
C. 3.65, 7.11 and 3.19 between the observations and the
D. 7.11, 3.65 and 3.19 line of best fit show the
…………………?
27. What is the coefficient of correlation A. slope of the line
between X and Y? B. error values
A. -0.32 C. intercept
B. 0.23 D. correlation coefficient
C. 0.32
D. -0.23 33. In forecasting with linear
regressions, it is preferable for the
28. Based on the correlations, which observations to be farther away from
combination of assets will you the expected values of the dependent
recommend to an investor? variable.
A. X and Y A. True
B. Y and Z B. False
C. X and Z
D. None 34. Proper pairing, a key assumption of
the Karl Pearson’s Product Moment
29. What is the coefficient of correlation means that for each
determination between X and Z? observation the ……………….. .
A. 98% A. X value must be greater than the
B. 5.29% Y value
C. 7.29% B. X value must be less than the Y
D. 10.24% value
C. X value must have no
30. How will you describe the corresponding Y value
correlation between Y and Z?
Page 6 of 16
 D. X value must have a 39. A student calculated the correlation
corresponding Y value coefficient between American troops
in Iraq and number of graduating
The table below shows the Age and students at University of Cape Coast,
weight of 9 residents of Amamoma Ghana to be 0.99. Upon hearing the
news that America is cutting down
Age 69 3 27 45 5 24 5 35 21
(Years) 3 8 1 its troops by more 50% the following
Weight 64 7 60 102 7 67 7 55 67 year; he raised an alarm that more
(Kg) 0 5 6
Use it to answer question 35 to 38 students are not graduating next year
but you objected to his claim because
35. Rank the weight of 67 in the data set there is no logical relationship
A. 4.5 between the two. If your submission
B. 4 is true then correlation calculated is a
C. 5.5 A. Strong correlation
D. 5 B. Spurious correlation
C. No correlation
D. Weak correlation
36. What is the value of N ( N 2 −1)?
A. 519
The table below shows the quantity (Q) of
B. 720
item sold and profit (P) made
C. 600
D. 81 Q 12 8 12 10 11 13
P 7 6 8 5 6 9
37. Given that ∑ d 2=86.5 , where d is ∑ QP=461 , ∑ Q =742 , ∑ P =291
2 2

the difference between the rankings Use the information to answer

of Age and weight; what is the questions 40 – 45
nature of Spearman Rank correlation 40. What is the correlation coefficient
coefficient between Age and weight? between Q and P?
A. Weak positive A. 0.80
B. Weak negative B. 0.81
C. Strong positive C. 0.94
D. Strong negative D. 0.76

38. Which of the following values could 41. The least square regression
not represent a correlation coefficient between Q and P is
coefficient? ………….
A. r = 0.99 A. 4.65
B. r = 1.09 B. 0.92
C. r = -0.73 C. 0.88
D. r = -1.0 D. None

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 42. The percentage of variation in Q not estimates for correlation coefficient
explained by the variation in P is between A and B is relevant?
A. 0.24 A. 0.4881
B. 0.9 B. 0.6768
C. 0.81 C. 0.256
D. None D. 0.6786

43. What is the least square regression 47. The numerical measurement
coefficient of P on Q? showing the degree and direction of
A. 0.81 correlation between two variables is
B. 0.88 referred to as …………
C. 0.92 A. Correlation
D. None B. Spurious correlation
C. Statistics
44. If Q=a+bP where a is constant and D. Correlation coefficient
b is the regression coefficient of Q
on P, then a is 48. A correlation coefficient of 1
A. 4.675 indicate
B. 4.245 A. the absence of any correlation
C. 4.713 B. a perfect correlation
D. None C. a relatively small degree of
correlation
45. What is the coefficient of D. a relatively high degree of
determination between Q and P? correlation
A. 78%
B. 68% 49. If the values of two variables moves
C. 58% in the same direction, the correlation
D. 42% is said to be
A. non-linear
The table below shows the scores awarded B. linear
to the contestants by the judges: C. negative
D. positive
Contestan 1 2 3 4 5
t
50. If two or more quantities vary in
Judge A 40 38 45 40 47
Judge B 45 33 43 45 43 sympathy, so that movements in one
Use the information given above and tend to be accompanied by
answer question 46 corresponding movements in the
46. Using the method of Spearman rank other, then they are said to be
correlation, which of the following A. correlated
B. simple
C. partial
Page 8 of 16
 D. multiple A. 0.57
B. 0.75
Suppose that the National Petroleum Authority C. 0.66
(NPA) is deciding on whether to drill or not on a D. 0.87
particular site. There are three possibilities to
this; no oil (S1), some oil (S2), and much oil 55. What term describes the probabilities
(S3). Based on experience and the geological calculated for 52 – 54?
footprints of the site, NPA assigns prior A. Subjective probabilities
probabilities as P(S1) = 0.7, P(S2) = 0.2, and B. Total probabilities
P(S3) = 0.1. Further, there is historical C. Posterior probabilities
experimental drilling by NPA with readings as D. None of the above
low, medium, and high. Of the past 100 drills
that produced no oil, 4 sites gave high reading, 56. A box contains 12 white balls and 8
of the past 400 drills producing some oil, 8 sites black balls. If one ball is drawn and then
gave a high reading and of the past 300 drills replaced, and then another ball is drawn,
which produced much oil, 288 sites gave high what is the probability of drawing a
reading. white ball on the second draw, given
that the first ball drawn is black?
51. What is the probability that, the new site A. 3/10
will give a high reading? B. 4/10
A. 0.128 C. 2/5
B. 0.213 D. 3/5
C. 0.138
D. 0.199 57. A company uses two machines
(Machine A and Machine B) to
52. Given a high reading, what is the manufacture a product: Machine A
probability that the new site will produces 70% of the products, while
produce no oil? Machine B produces 30%. The
A. 0.2314 products’ defect rates from Machine A
B. 0.2373 and Machine B are 55% and 10%
C. 0.2188 respectively. If a randomly selected
D. 0.2288 defective product is chosen, what is the
probability that it was manufactured by
53. Given a high reading, what is the Machine A?
probability that the new site will A. 0.30
produce some oil? B. 0.93
A. 0.0313 C. 0.40
B. 0.0133 D. 0.45
C. 0.3013
D. 0.3110 58. A probability distribution is said to be
symmetric if:
54. Given a high reading, what is the A. It has a mean of zero
probability that the new site will B. It has a peak at either end
produce much oil?

Page 9 of 16
 C. It looks the same on both sides of 63. In assigning probabilities, which method
the mean is best when the sample space outcomes
D. It is normally distributed are equally likely?
A. Subjective
59. Which type of probability distribution is B. Experimental
used to model the average number of C. Classical
events occurring in a fixed period of D. Relative frequency
time?
A. Normal distribution 64. Given that A and B are two probabilistic
B. Binomial distribution events; which of the following express
C. Poisson distribution the general addition rule?
D. Exponential distribution A. P ( A ∪ B )=P ( A ) + P ( B ) −P ( A|B )
B. P ( A ∪ B )=P ( A ) + P ( B ) −P ( B| A )
60. What is the cumulative distribution C. P ( A ∪ B )=P ( A ) + P(B)× P ( A|B )
function?
D.
A. A way to calculate probabilities
P ( A ∪ B )=P ( A ) + P ( B ) −P( A ∩ B)
B. A way to add up probabilities
C. A way to represent possible
outcomes and their likelihoods 65. Given that A and B are two probabilistic
D. A way to graph data events, the restrictive addition rule is
given by P ( A ) + P(B). What condition
61. Experiment randomly surveys 1000 produces this restrictive addition rule?
selected consumer to ask their A. Dependence
preference between Kiagi Tamarind B. Independence
drink and all other drinks. If 140 of C. Unity
those surveyed indicated that they do D. Mutually exclusivity
not prefer Kiagi Tamarind drink. What
is the probability that a randomly Answer questions 66-70 based on the
selected consumer prefers Kiagi information below:
Tamarind drink? Suppose there are three classes of portfolios of
A. 0.89 stocks (Ci) that are of relevance for the ensuing
B. 0.78 financial year. C1 has 3 Technology and 4 Auto
C. 0.86 stocks, C2 has 2 Technology and 3 Auto stocks,
D. 0.99 and C3 has 5 Technology and 4 Auto stocks.
(Note: Keep all answers to 2 d.p.)
62. What method of assigning probability is 66. What is the probability of selecting an
described in question 41 above? Auto stock?
A. Subjective A. 0.14
B. Experimental B. 0.41
C. Classical C. 0.52
D. Relative frequency D. 0.51

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67. Given that an Auto stock is selected, 72. Suppose that A1, A2, A3, and A4 are
what is the probability that it came from mutually inclusive events and
class C1? P(A1)=0.80, P(A2)=0.20, P(A3)=0.1
A. 0.37 and P(A4)=0.30. Further, suppose that
B. 0.34 events are A1 and A4 are independent,
C. 0.36 what is the probability given that A4 has
D. 0.51 already occurred?
A. 0.79
68. Given that an Auto stock is selected, B. 0.80
what is the probability that it came from C. 0.33
class C3? D. 0.44
A. 0.37
B. 0.36 73. Mutually exclusive events are also
C. 0.49 mutually exhaustive.
D. 0.51 A. True
B. False
69. What is the probability of selecting a
Technology stock? 74. The sum of a probability and its
A. 0.48 compliment is equal to ………………
B. 0.41 A. 0
C. 0.37 B. 0.5
D. 0.51 C. 1
D. 1.5
70. Given that a Technology stock is
selected, what is the probability that it 75. Using the binomial model, find the
came from class C2? probability of getting exactly 3 Heads in
A. 0.32 5 tosses of a fair coin.
B. 0.41 A. 4/20
C. 0.25 B. 3/12
D. 0.20 C. 5/18
D. 5/16
71. Suppose that four events, A, B, C, and
D, are mutually exhaustive. The 76. Which of the following is true about a
probabilities of selecting A and B are simple moving average method for time
0.23 and 0.40, respectively. If the series forecasting?
probabilities of C and D are equally A. It weights all values equally
likely, what is the probability of event B. It gives more weight to recent
D? values
A. 0.50 C. It gives more weight to older values
B. 0.23 D. It only considers the most recent
C. 0.185 value
D. 0.22
77. Which of the following is a drawback of
using time series forecasting?

Page 11 of 16
 A. It cannot be used for short-term B. Only price changes are reflected and
forecasting not quantity changes
B. It assumes that historical patterns C. It is difficult to obtain data for the
will continue into the future base period
C. It is not suitable for modeling D. It cannot be used to compare
complex systems different time periods
D. It cannot be used for financial
forecasting 82. Which of the following is NOT a
limitation of index numbers?
78. Which of this best describes the A. Limited number of time periods
seasonality component of an additive B. Lack of accuracy
time series? C. Difficulty in interpretation
A. The variation in the time series that D. Dependence on the base year
occurs over long periods of time
B. The variation in the time series that 83. ……………….. cannot be used to
occurs at fixed intervals of time calculate index numbers.
C. The random variation in the series A. Simple aggregate method
D. The variation in the series that B. Weighted average method
occurs due to external factors such C. Exponential smoothing method
as holidays or events D. Moving average method

79. When do we use a seasonal adjustment 84. The base year for an index number is
in time series forecasting? ……….?
A. When the data shows a clear upward A. The year in which the index is being
or downward trend calculated
B. When the data shows a seasonal B. The year used as a standard for
pattern comparison
C. When the data shows a random C. The year with the highest value
pattern D. The year with the lowest value
D. When the data is already stationary 85. The advantage of the chain base method
80. Which of the following is NOT an of index number construction is
assumption of linear programming? ………….
A. Additivity A. It is simpler to construct than other
B. Linearity methods
C. Non-negativity B. It is easier to understand than other
D. Convexity methods
C. It takes into account changes in the
81. Which of the following is a limitation of relative importance of different
the base period method of index number items
construction? D. It is less affected by changes in the
A. Changes in the relative importance base period than other methods.
of different items are not taken into
account 86. Which of the following index numbers
measures the average change in the

Page 12 of 16
 prices of household goods and services D. None of the above
consumed?
A. Consumer price index 91. The quantities indices for 2020, 2021,
B. Producer price index 2022 are 100, 106, and 113 respectively.
C. Weighted price index Suppose 2020 is the base year, what is
D. Retail price index the percentage change of the quantity
index in 2022?
87. The Paasche index is a type of index A. 6%
number that uses ………..as weight. B. 7%
A. Current quantities and current prices C. 13%
B. Base year quantities and base year D. None of the above
prices
C. Current quantities and base year 92. The Paasche quantity index for a
prices product in the base year is 100. In the
D. Base year quantities and current current year, the quantity of the same
prices product has increased by 25%. What is
the Paasche quantity index for the
88. The Fisher’s Ideal Index is a measure current year?
that ……….. A. 80
A. Calculate the harmonic mean of the B. 100
Laspeyres index and Paasche index C. 105
B. Ignores the Laspeyres and Paasche D. 125
indices
C. Calculates the geometric mean of 93. If a person’s nominal income increased
the Laspeyres and Paasche indices by 5% and the inflation rate is 3%, what
D. Calculates the arithmetic mean of is the change in their real income?
the Laspeyres and Paasche indices A. Increase of 5%
B. Decrease of 5%
89. The concept of a “price relative” in C. Decrease by 2%
index numbers refers to……… D. Increase of 2%
A. The ratio of current year price to
base year price 94. When the general price level in an
B. The ratio of base year price to economy rises, what happens to
current year price purchasing power?
C. The ratio of current year price to A. It increases
average price B. It decreases
D. The ratio of average price to current C. It remains unchanged
year price D. It fluctuates randomly

90. The Paasche price index is biased 95. When sales are deflated, it means that
towards: ……………
A. Overestimating price changes A. Sales have decreased significantly
B. Underestimating price changes B. Sales have been adjusted for
C. Ignoring price changes inflation

Page 13 of 16
 C. Sales have been deliberately D. Conditional theorem
reduced
D. None of the above Answer questions 101-102 based on the
information below:
96. If the Laspeyres price index is 110 and In the mass production of belts it is found that
the Paasche price index is 108, what is 5% are defective. Belts are selected at random
the Fishers ideal price index? and put into packets of 10. A packet is selected
A. 110 at random.
B. 108
C. 100 101. What is the probability that
D. 109 the packet contains exactly 3
defective belts?
97. Which one of the following is the use of A. 0.0105
an index number?
B. 0.0150
C. 0.0050
A. To measure changes in quantity
D. 0.0200
B. To measure changes in demand
C. To measure changes in price
102. What is the probability that
D. To measure change in variable as the packet contains less than 3
compared to a benchmark. defective belts?
A. 0.9850
98. An index number is called a simple B. 0.9885
index when it is computed from C. 0.9920
………….? D. 0.9785
A. Single variable
B. Bi-variable
C. Multivariable
D. None of the above 103. Three holiday caravans,
99. An outcome of an experiment can be labeled X, Y, and Z, are occupied as
described as follows: Caravan X has 2 adults and
A. The set of all possible successes of a 4 children, Caravan Y has 4 adults
trial and 2 children, and Caravan Z has 3
B. One of the possible results of adults and 1 child. A special holiday
carrying out a trial prize is awarded by first randomly
C. A process that generates a set of
selecting one of the caravans and
then randomly selecting one of the
results when repeated
occupants from the chosen caravan.
D. A specifically defined outcome of a
Determine the probability that the
particular interest
chosen occupant is a child.
A. 1/4
100. A technique that updates prior B. 1/3
probabilities to posterior probabilities is C. 5/12
known as …………… D. 1/2
A. Updating theorem
B. Central limit theorem Use the information below to answer
C. Bayes’ theorem questions 104 – 106

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The annual salaries of employees in a large C. 1.50
company are approximately normally distributed D. 1.97
with a mean of GHS5,000 and a standard 109. Given the sales data of a
deviation of GHS2,000. supermarket in 2003, use the least
104. What percent of people earn less squares method to find the linear
than GHS4,000? trend line. If the sales data is as
A. 19.15% follows: Jan (47), Feb (56), Mar
B. 30.85% (50), Apr (55), May (72), Jun (71),
C. 40.15% Jul (72), Aug (75), Oct (79), Nov
D. 50.85% (83), Dec (79), predict the sales for
September.
105. What percent of people earn A. 76
between GHS4,500 and GHS6,500? B. 77
A. 27.21% C. 78
B. 37.21% D. 79
C. 47.21% 110. Calculate the four-quarterly
D. 57.21% moving average trend for the
revenue data of a company where the
106. What percent of people earn revenue in four consecutive years is
more than GHS7000? as follows: 2000: Q1 (49), Q2 (37),
A. 10.87% Q3 (58), Q4 (67), 2001: Q1 (50), Q2
B. 15.87% (38), Q3 (59), Q4 (68), 2002: Q1
C. 20.87% (51), Q2 (40), Q3 (60), Q4 (70),
D. 25.87% 2003: Q1 (50), Q2 (42), Q3 (61).
A. Q1: 50.5, Q2: 39.0, Q3: 59.5, Q4:
68.0
B. Q1: 50.0, Q2: 39.3, Q3: 59.0, Q4:
107. For an additive time series 68.3
model, if the values for Y, C, S, and C. Q1: 50.5, Q2: 39.5, Q3: 59.5, Q4:
I for the third quarter of 2003 sales 68.5
for a company are GH¢7 million, D. Q1: 50.0, Q2: 39.0, Q3: 59.0, Q4:
GH¢1 million, GH¢2 million, and - 68.0
GH¢5 million respectively, what is 111. Using the given data for the
the trend value T for this quarter’s sales of garden equipment over three
sales? years, establish the trend equation
A. GH¢9 million using the least squares method. The
B. GH¢10 million sales data (in millions of cedis) is as
C. GH¢11 million follows: 2001: Q1 (2.34), Q2 (9.26),
D. GH¢12 million Q3 (6.53), Q4 (4.31), 2002: Q1
108. Using the multiplicative time (2.75), Q2 (9.78), Q3 (7.04), Q4
series model, if the values for Y, T, (4.72), 2003: Q1 (2.96), Q2 (10.03),
S, and I are GH¢200 million, GH Q3 (7.28), Q4 (4.98). Calculate the
¢170 million, 1.25, and 1.20 average seasonal variation for Q1.
respectively, calculate the A. -3.15
approximate value of C. B. -3.04
A. 0.97 C. -3.08
B. 1.25

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 D. -3.32 and out of an industry or the overall
economy.
112. The basis used in the fixed- A. True
based technique is not fixed; rather, B. False
it varies annually.
A. True 117. The Paasche Price Index is
B. False the weighted aggregative index if the
quantities of the present time period
113. A figure that indicates how are used as weights.
much a numerous commodity has A. True
changed is called an index relative. B. False
A. True
B. False 118. In cases when n is enormous
and p is near to 0.50, the binomial
114. A composite index number is approximation to the normal
a numerical value that is produced by distribution is the most effective
combining several pieces of data method.
from a collection of similar A. True
economic items. B. False
A. True
B. False 119. One of the features of normal
probability distribution is
115. The fundamentals of time asymptotic to the y-axis
series analysis are necessary to A. True
compare various timeframes, plan B. False
future operations, assess present
successes, and comprehend historical 120. When the mean or
behavior. expectation is less than 5 and the
A. True likelihood of success is more than
B. False 5%, the Poisson distribution is used.
A. True
116. Cyclical variation is the term B. False
used to describe the movements in

END OF PAPER
ALL THE BEST!!!

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