Chapter 3 Test Materials Flashcards
Statistics provides a _______________ using mathematical tools to conduct research.
a. system b. discipline c. structure d. all the above
All of the above
TRUE or FALSE: Time series analysis compares results over time to identify trends.
True
TRUE or FALSE: Organizations that experience seasonal variations in results (e.g. peak months in retail sales) can smooth the measurement of results by using twelve, 12-month intervals, beginning at one month and measured in consecutive months over a year.
True
TRUE or FALSE: If an organization uses a moving 12 month method of assessing results, as suggested in Question 3 above, it will need data from 24 months.
True
a. Assume Organization A uses a January 1 to December 31 fiscal calendar. A March 31, 2012 statistical analysis of the organization’s first Quarter 2012 results indicates that sales revenue is 10% less than budgeted. It chooses to offset this lower revenue with expense reduction. How many months of 2012 are left to reduce expenses?
a. nine months if they reduce expenses on April 1
b. six months if the wait until July 1 to reduce expenses
c. three months if it takes until October 1 to reduce expenses.
d. Any of the above depending on how fast the organization reacts to the slow sales
d. Any of the above depending on how fast the organization reacts to the slow sales
Suppose Organization A described in Question 5.a. above analyzes sales trends over the past 36 months and a regression trend line reveals that sales throughout 2012 will be 10% less than budgeted. If Organization A’s leaders achieve a 10% reduction in monthly expenses by July 1, what will be the effect of that reduction on annual expenses for 2012?
a. 5% Annual Expense Reduction b. 10% Annual Expense Reduction c. 15% Annual Expense Reduction d. 20% Annual Expense Reduction
a. 5% Annual Expense Reduction
Organization A’s marketing department has just implemented a new online sales strategy. This strategy has been successfully used for years by other organizations in the same industry. A regression analysis incorporating the positive effect of this new online sales strategy on sales revenue develops an R2 value of 0.8222. How confident should Organization A’s leadership be in accepting the revised forecast?
a. Very confident
b. Not very confident
c. Uncertain what to do
a. Very confident
Suppose Organization A’s marketing analysis forecasts that the new online marketing strategy will improve sales so that the 2012 sales revenue will be only 5% below budget instead of 10% below budget. In order for this to be true, how much of an increase in sales revenue will be needed in the last 6 months of the year to offset half of the forecasted 10% budget deficit?
a. 5% for the months of July through December b. 10% for the months of July through December c. 15% for the months of July through December d. 20% for the months of July through December
b. 10% for the months of July through December
Organization A’s leaders accept the possibility that sales revenue can be increased by 10% for the last two quarters of 2012, and they decide to decrease expenses by 10% for the time period of July through December as a precaution. If both of these strategies are effective for the last six months of 2012, will Organization A be able to achieve its original budget?
a. Yes b. No
Yes
If you are an owner of Organization A and you are interested in achieving budgeted revenue and expense goals, would you support leadership action that chooses to correct shortfall in revenue solely by changes in strategic marketing plans?
a. Yes b. No
No
. If you are an owner of Organization A, and your primary interest is in helping the company grow and earn profits, which of the following actions by the organization’s leaders are you most likely to prefer:
a. Choose only the action with the greatest likelihood (probability) of success
b. Choose both online sales strategy and expense reduction since forecasts are still only
estimates of possible results
c.Do both and explore additional sales opportunities
c .Do both and explore additional sales opportunities
The leaders of Organization A choose to adopt the new online sales strategy and they decide to reduce expenses by 10% before October 1, 2012. As a statistician, would you recommend detailed monthly measurement of both actual sales revenue and expenses?
a. Yes
b. No
Yes
Assume Organization A described above has a significant degree of seasonality in its revenue and expenses. Should the leaders also use a moving average of sales and expenses to better understand changes in their annual sales and expenses?
a. Yes
b. No
Yes
Should Organization A have an action plan prepared to further reduce expenses if sales results do not improve as the marketing department forecasts?
a. Yes b. No
Yes
Regression analysis is a tool used to estimate values of one variable based on the values of:
a. another variable b. the independent variable c. values of x d. all the above
All of the above
In simple linear regression analysis the variable that is estimated is known as:
a. the independent variable
b. the dependent variable
c. value of x
d. the slope
b. the dependent variable
TRUE or FALSE: If a study of three independent variables is used to estimate the effect on some other dependent variable, the three independent variables are named x1, x2, and x3.
True
In regression analysis, which of the following symbols represents the independent variable?
a. x b. σ c. μ d. y
x
. In regression analysis, which of the following symbols represents the dependent variable?
a. x b. σ c. μ d. y
y
TRUE or FALSE: The formula used in simple linear regression to estimate values of the dependent variable for two variables (x-bar and y-hat) is: y-hat = b0 + b1 x Y = β0 + β1 X
True
TRUE or FALSE: The formula used in simple linear regression to estimate values of the dependent variable for three x variables ( x1 , x2 , x3) is: y-hat = b0 + b1 x1 + b2 x2 + b3 x3
True
In simple linear regression the symbol b0 for a sample (or β0 for a population) stands for which of the following:
a. the y intercept b. the slope of the regression line c. the sum of the squares d. the correlation coefficient
b. the slope of the regression line
TRUE or FALSE: In order for Excel to create the regression line it needs to calculate the slope and the y intercept.
True
TRUE or FALSE: When illustrating two variables on a scatter diagram, the vertical line represents values of the independent variable, x.
False
Which letter stands for the values of the variable on the horizontal line?
a. x b. y c. b d. β
x
In simple linear regression the symbol b1 for a sample (or β1 for a population) stands for which of the following:
a. the y intercept b. the slope of the regression line c. the sum of the squares d. the correlation coefficient
b. the slope of the regression line
TRUE or FALSE: The value for b0 appears on the vertical line of a scatter diagram.
True
TRUE or FALSE: The y intercept of the regression line is always a point on the vertical axis even if values given from the data set do not touch the y axis.
True
The first step in using Excel to develop a regression line is to:
a. enter data in at least two columns for x and y b. select regression c. enter the degrees of freedom
a. enter data in at least two columns for x and y
The second step in using Excel to develop a regression line is to:
a. select (highlight) the range of data for the variables
b. select the “home” tab
c. select the “insert” tab
d. select the “formula” tab
a. select (highlight) the range of data for the variables
The third step in using Excel’s chart icons to develop a regression line is:
a. select the “home” tab
b. select the “insert” tab
c. select the “formula” tab
b. select the “insert” tab
The fourth step in using Excel to develop a regression line is:
a. select the formula icon
b. select the scatter icon
c. select the hyperlink icon
d. select the bar icon
b. select the scatter icon
TRUE or FALSE: The fifth step in using Excel to develop a regression line is to choose an appropriate type of scatter diagram.
True
TRUE or FALSE: To add a trend line to the scatter diagram requires left clicking on any of the blue dots (representing intersections of x and y values), that appear on the diagram.
True
Which of the following choices is the default trend line option in Excel’s trend line window:
a. exponential b. linear c. logarithmic d. polynomial
Linear
After choosing the appropriate trend line in the Excel window which of the following must be checked to get Excel to show the regression formula used to calculate values of y:
a. Display R2 b. Display Equation c. Display x bar d. Display correlation coefficient
Display Equation
After choosing “Display Equation” you can get Excel to calculate the ‘goodness of fit” between the trend line and the intersecting points. This is known as the ‘coefficient of determination” / “R2”. Do this by:
a. Check the box for “R2” R Squared
b. Check the box for Labels
c. Check the box for lunch
a. Check the box for “R2” R Squared
TRUE or FALSE: Statistics provides a system of thinking which uses mathematical tools to structure research.
True
TRUE or FALSE: Research is a process of testing pairs of hypotheses to see which one most closely reflects true conditions.
True
TRUE or FALSE: Tests of pairs of hypotheses usually need to be performed repeatedly in order to gain confidence in the likely outcome of the question posed by the hypotheses.
True
If a test of a pair of hypotheses results in rejecting the H0, what must be done with the HA?
a. Reject it b. Accept it
Accept it
If a test of a pair of hypotheses results in rejecting the HA, what must be done with the H0?
a. Reject it b. Accept it
Accept it
If we are performing a test of difference between samples of two variables, which of the following correctly states the H0
a. H0: µ1 = µ2
b. H0: µ1 ≠ µ2
c. H0: x-bar1 = x-bar2
d. H0: x-bar1 ≠ x-bar2
c. H0: x-bar1 = x-bar2
If an initial test results in rejecting the H0 and then subsequent tests of the same hypotheses reveal that the first test incorrectly rejected the H0, this would be an example of:
a. Weak testing controls b. Type I Error c. Type II Error d. Dissimilar samples
Type I Error
Which of the hypotheses reflects the tester’s bias, expectation, hope, fear or concern?
a. H0 b. HA
HA
TRUE or FALSE: Chi square (X2) tests can be used to measure the goodness of fit between expected values and the observed values of two or more sets of variables.
True
TRUE or FALSE: When testing for goodness of fit with a X2 method, generally a relatively high X2 value results in rejecting the H0.
True
Which of the following statistical process is often used to assess whether changes in one variable cause changes in another variable?
a. F test
b. Simple Linear Regression
c. Multiple Regression
d. Z test
Simple Linear Regression
If we have data over ten years showing the number of undergraduate students in Statesboro, and the corresponding sales revenue for a fast food restaurant within 5 miles of campus over the same time period, could we test to see whether the number of students was a positive or negative factor on sales revenue for the specific restaurant?
a. Yes
b. No
Yes
If we performed such a study for the specific restaurant in Question 12.a. above, could we estimate the relative change in revenue for a specific change in student population?
a. Yes b. No
Yes
If You used Excel to perform an analysis of the student population as it relates to restaurant sales, which data set would represent the Independent Variable?
a. Sales Revenue b. Student Population
Student Population
If Excel calculated an R2 value of 0.8765 for the relationship between student population and restaurant sales, which of the following would be true?
a. The trendline would be only a weak indicator of the trend
b. The relationship between the two variable is negative
c. The trendline would be a fairly strong (reliable) indicator of the trend
d. There is no relationship between the two variables
c. The trendline would be a fairly strong (reliable) indicator of the trend
If Excel calculated a Multiple R for the study identified in Question 12.a. above, which of the following would be true?
a. The Multiple R would = the √ R2
b. The Multiple R would be a negative number greater than the R2
a. The Multiple R would = the √ R2
When Excel illustrates a regression trendline for two variables, which of the following is a possible form for the line:
a. A straight line parallel to the y axis
b. A straight line parallel to the x axis
c. A curved line relative to the x axis
b. A straight line parallel to the x axis
If Excel illustrates a regression trendline that slopes upward from left to right, what do we know about the relationship between the independent variable and the dependent variable?
a. There is no relationship between them
b. That there is a positive relationship between these two variables
c. That there is a negative relationship between these two variables
d. That the relationship between these two variables is weak
b. That there is a positive relationship between these two variables
TRUE or FALSE: A negative relationship between two variables can be as strong as a positive relationship between two other variables
True
TRUE or FALSE: Without the value of the β0, the slope could still define the angle of the trendline relative to a horizontal axis.
True
TRUE or FALSE: The β0 defines the point on the y axis where the trendline would cross if the trendline were extended to the y axis.
True
Which of the following is the correct formula for the regression trendline of a sample:
a. Y = β0 + β1 x x b. y-hat = β0 + β1 x x c. y-hat = b0 + b1 x x
c. y-hat = b0 + b1 x x
TRUE or FALSE: If a study of three independent variables is used to estimate the effect on some other dependent variable, the three independent variables are named x1, x2, and x3.
True
In regression analysis of a sample, which of the following symbols represents the independent variable:
a. x b. σ c. μ d. y
x
In regression analysis of a sample, which of the following symbols represents the dependent variable:
a. x b. σ c. μ d. y
y
TRUE or FALSE: The formula used in simple linear regression to estimate values of the dependent variable for three independent variables is: y-hat = b0 + b1 x1 + b2 x2 + b3 x3
True
A statistical process called ________________can be used to develop an equation showing how variables are related.
simple linear regression
The variable being predicted by this analysis is called the _________variable.
Dependent
The variable being used to predict the variable in number 2. above is called the _____________variable.
Independent
If a sales manager is interested in predicting sales dollars she might have a series of three possible advertising budgets to compare with three possible sales outcomes. A chart comparing these two variables might look like the following:
Ad Expense Sales Revenue
Option 1 $ 50,000 $100,000
Option 2 $ 75,000 $150,000
Option 3 $100,000 $200,000
Of the two components of this analysis, ad expense and sales revenue, which would be the independent variable? Which would be the dependent variable. Does the chart above suggest a positive or negative relationship between these two variables?
Ad Expense, Sales Revenue, Positive
The study of how two variables are likely to interact in the future based on past data is called regression analysis. When the study involves only one independent variable and one dependent variable it is called_________ linear regression.
Simple
- For a particular restaurant near a growing school, data shows that as student population has increased over the past five years from 8,000, to 9,000, to 10,000, to 11,000 and to 12,000 last year, sales revenue has increased about 10% each year. Suppose last year’s sales revenue at this restaurant was $200,000. If enrollment increases to 13,000 next year at this school, what would be the Expected value of sales revenue next year?
220,000
