1. What is the primary reason for applying a finite populationcorrection coefficient?
A. When the sample is a very small portion of the population, thecorrection coefficient is required.
B. If you don’t apply the correction coefficient, your confidenceintervals will be too broad, and thus less useful in decisionmaking.
C. If you don’t apply the correction coefficient, your confidenceintervals will be too narrow, and thus overconfident.
D. If you don’t apply the correction coefficient, you won’t havevalues to plug in for all the variables in the confidence intervalformula.
2. A portfolio manager was analyzing the price-earnings ratio forthis year’s performance. His boss said that the averageprice-earnings ratio was 20 for the many stocks that his firm hadtraded, but the portfolio manager felt that the figure was toohigh. He randomly selected a sample of 50 price-earnings ratiosand
found a mean of 18.17 and a standard deviation of 4.60. Assume thatthe population is normally distributed, and test at the 0.01 levelof significance. Which of the following is the correct decisionrule for the manager to use in this situation?
A. Because 2.81 is greater than 2.33, reject H0. At the 0.01 level,the sample data suggest that the average price-earnings ratio forthe stocks is less than 20.
B. Because â2.81 falls in the rejection region, reject H0. At the0.01 level, the sample data suggest that the average priceearningsratio for the stocks is less than 20.
C. If z > 2.33, reject H0. D. If t > 2.68 or if t 3. When theconfidence coefficient is large, which of the following istrue?
A. The confidence interval is narrow. B. Its value is 1.0 orlarger.
C. It’s more likely that the test will lead you to reject the nullhypothesis.
D. Its value is close to 1.0, but not larger than 1.0.
4. If a teacher wants to test her belief that more than fivestudents in college classes typically receive A as a grade, she’llperform
A. one-tail testing of a proportion. B. one-tail testing of amean.
C. two-tail testing of a proportion. D. two-tail testing of amean.
5. For 1996, the U.S. Department of Agriculture estimated thatAmerican consumers would have eaten, on average, 2.6 pounds ofcottage cheese throughout the course of that year. Based on alongitudinal study of 98 randomly selected people conducted during1996, the National Center for Cottage Cheese Studies found anaverage cottage cheese consumption of 2.75 pounds and a standarddeviation of s = 14 ounces. Given this information, which of thefollowing statements would be correct concerning a two-tail test atthe 0.05
level of significance?
A. We can conclude that we can’t reject the claim that the averagecottage cheese consumption in America is 2.6 pounds per person peryear.
B. We can conclude that the average cottage cheese consumption inAmerica is at least 0.705 pound more or less than 2.75 pounds perperson per year.
C. We can conclude that the average cottage cheese consumption inAmerica is actually 2.75 pounds per person per year.
D. We can conclude that the average cottage cheese consumption inAmerica isn’t 2.6 pounds per person per year.
6. Consider a null hypothesis stating that the population mean isequal to 52, with the research hypothesis that the population meanis not equal to 52. Assume we have collected 38 sample data fromwhich we computed a sample mean of 53.67 and a sample standarddeviation of 3.84. Further assume the sample
data appear approximately normal. What is the test statistic?
A. â2.68 B. â2.64 C. 2.64 D. 2.68
7. Consider a null hypothesis stating that the population mean isequal to 52, with the research hypothesis that the population meanis not equal to 52. Assume we have collected 38 sample data fromwhich we computed a sample mean of 53.67 and a sample standarddeviation of 3.84. Further assume the sample data appearapproximately normal. What is the p-value you would report for thistest?
A. 0.0037 B. 0.4963 C. 0.0041 D. 0.4959
8. Which of the following statements about hypothesis testing isfalse?
A. In both the one-tailed and two-tailed tests, the rejectionregion is one contiguous interval on the number line.
B. The rejection region is always given in units of standarddeviations from the mean.
C. A Type I error is the chance that the researcher rejects thenull hypothesis when in fact the null hypothesis is true.
D. The test will never confirm the null hypothesis, only fail toreject the null hypothesis.
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