Midterm Practice Flashcards
Numerical variables can be subdivided into which two types?
Discrete and Continuous
Cross-Sectional data are observations:
coming from different individuals or groups at a single point in time
“Number of children” is a:
Discrete variable
SPX daily closing prices during 6/1/2019 - 12/15/2019 are:
Time Series Data
What is an example of a population?
The number of cars sold in Michigan
The statement “categorical variables can be classified as either discrete or continuous” is:
False
Suppose we are interested in political affiliation, a categorical variable that might assume three values - Republican, Democrat, or Independent. How many dummy variables should be constructed to represent political affiliation?
2
A variable is classified as ordinal if:
There is a natural ordering of categories
What is an example of a sample?
Participants in an experiment
Panel Data are:
Derived from a number of observations over time on a number of cross-sectional units
What is an example of a nominal variable?
Color
Time Series Data are observations:
Collecting at usually discrete and equally spaced time intervals
Player Salary Data for 10 MLB baseball teams during 2012-2019 is an example of what type of data?
Panel Data
To represent a categorical variable with K different categories, the number of dummy variables needed is:
K-1
The location of a normal distribution is determined by:
The mean
Population Definition
All of the entries of interest in a study
Population Example
All drivers in Michigan
Sample Definition
A subject (part) of the population
Variable Definition
A characteristic of members of a population
Observation Definition
A list of all variable values for a single member of a population
Data Set Definition
A rectangular array of data with variables in columns and observations in rows
What are the two types of data?
Numerical and Categorical
Numerical Data is:
Meaningful arithmetic can be performed (Age)
Numerical Data’s Two Subcategories are:
Discrete and Continuous
Categorical Data is:
Non-numerical (Gender)
Categorical Data’s Two Subcategories are:
Ordinal and Nominal
Ordinal Data is used when:
Order is important (Ranking)
Discrete Data is used when:
The number of values is countable (Number of Children)
Nominal Data is used when:
There is no natural order (Gender)
Continuous Data is used when:
The number of values is uncountable (Time)
How many types of data are there?
3
What are the 3 types of data?
Cross-sectional, Time-series, and Panel
Panel Data is:
Data derived from a number of observations over time on a number of cross-sectional units
Panel data is a combination of what two types of data?
Cross-sectional and Time-series
Normal Distribution is:
A continuous probability distribution that has a bell-shaped probability density function (pdf)
Normal Distribution Formula
F(X) = 1/[sqrt(2pis.d.)^(e-(x-µ)^2/(2s.d.^2)]
In normal distribution the pdf moves which way when µ gets larger?
Rightward
In normal distribution the standard deviation determines:
The shape
In normal distribution when the standard deviation gets larger, the pdf does what?
Gets flatter
T-Distribution is:
A continuous probability distribution that has a bell-shaped pdf, like the normal distribution, but has fatter tails
What defines the shape of the t-distribution?
The degrees of freedom (df)
The Degrees of Freedom (df) are:
n-1
When df gets larger, the t-distribution:
Approaches to the Z-distribution
F-Distribution is:
A continuous, positively skewed probability distribution determined by two parameters, d1 (d1 = n1-1), d2 (d2 = n2-1)
What defines the shape of the F-Distribution?
The degrees of freedom (d1, d2)
The F-Distribution is non-negative, meaning it must have a minimum value of:
0
Permutation is:
Any arrangement of r objects selected from a single group of n possible objects (when order is important)
Combination is:
Any arrangement of r objects selected from a single group of n possible objects (when order isn’t important)
Sample Random Sampling is:
Each possible sample of size n has the same chance of being chosen
What are the 4 types of sampling?
Sample Random, Systemic, Stratified, and Cluster
Hypothesis Testing is:
A procedure based on sample evidence and probability theory to determine whether the hypothesis is a reasonable statement
Null Hypothesis is:
A statement that is tested (Ho)
Alternative Hypothesis is:
A statement that is accepted if the sample data provide sufficient evidence that the null is false (H1)
A test is one-tailed if:
H1 states a direction
A test is two-tailed if:
H1 does not state a direction
Type 1 Error is:
Rejecting a null when it is true
Type 2 Error is:
Failing to reject a null when it is fake
The significance level is:
The probability of making a Type 1 error, α (alpha)
The critical value is:
The dividing point between the region where the null is rejected and the region where it is not rejected
The P-Value is:
A probability that measures the strength of evidence in support of the null. The null is often rejected when the P-Value is less than the significance level
The colleges, such as college of business admin, college of arts and media, and college of education at CMU are:
Nominal
The sample is 5,8,7,10,13,6,9,11,12. To test whether the population mean is 10, we apple what type of test?
T test
For a one sample z-test, when the calculated z value is smaller than the critical z value in absolute value, we:
do not reject the null
