1. What is the primary reason for applying a finite population correction coefficient?
A. When the sample is a very small portion of the population, the correction coefficient is required.
B. If you don’t apply the correction coefficient, your confidence intervals will be too broad, and thus less useful in decision making.
C. If you don’t apply the correction coefficient, your confidence intervals will be too narrow, and thus overconfident.
D. If you don’t apply the correction coefficient, you won’t have values to plug in for all the variables in the confidence interval formula.
2. A portfolio manager was analyzing the price-earnings ratio for this year’s performance. His boss said that the average price-earnings ratio was 20 for the many stocks that his firm had traded, but the portfolio manager felt that the figure was too high. He randomly selected a sample of 50 price-earnings ratios and
found a mean of 18.17 and a standard deviation of 4.60. Assume that the population is normally distributed, and test at the 0.01 level of significance. Which of the following is the correct decision rule 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 for the stocks is less than 20.
B. Because –2.81 falls in the rejection region, reject H0. At the 0.01 level, the sample data suggest that the average priceearnings ratio for the stocks is less than 20.
C. If z > 2.33, reject H0.
D. If t > 2.68 or if t 0.10
B. H0: p > 0.10 and H1: p ≤ 0.10
C. H0: p = 0.10 and H1: p ≠ 0.10
D. H0: p ≥ 0.10 and H1: p < 0.10
16. To schedule appointments better, the office manager for an ophthalmologist wants to estimate the average time that the doctor spends with each patient. A random sample of 49 is taken, and the sample mean is 20.3 minutes. Assume that the office manager knows from past experience that the standard deviation is 14 minutes. She finds that a 95% confidence interval is between 18.3 and 22.3 minutes. What is the point estimate of the population mean, and what is the confidence coefficient?
A. 18.3, 95%
B. 18.3, 0.95
C. 20.3, 95%
D. 20.3, 0.95
17. Nondirectional assertions lead only to _______ tests.
A. left-tail
B. two-tail
C. right-tail
D. one-tail
18. A mortgage broker is offering home mortgages at a rate of 9.5%, but the broker is fearful that this value is higher than many others are charging. A sample of 40 mortgages filed in the county courthouse shows an average of 9.25% with a standard deviation of 8.61%. Does this sample indicate a smaller average? Use α = 0.05 and assume a normally distributed population.
A. Yes, because the sample mean of 9.25 is below 9.5.
B. No, because the test statistic is –1.85 and falls in the rejection region.
C. No, because the test statistic falls in the acceptance region.
D. Yes, because the test statistic is greater than –1.645.
19. A human resources manager wants to determine a confidence interval estimate for the mean test score for the next office-skills test to be given to a group of job applicants. In the past, the test scores have been normally distributed with a mean of 74.2 and a standard deviation of 30.9. Determine a 95% confidence interval estimate if there are 30 applicants in the group.
A. 68.72 to 79.68
B. 64.92 to 83.48
C. 13.64 to 134.76
D. 63.14 to 85.26
20. What is the purpose of sampling?
A. To achieve a more accurate result than can be achieved by survey
B. To estimate a target parameter of the population
C. To create a point estimator of the population mean or proportion
D. To verify that the population is approximately normally distributed