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A sport preference poll yielded the following data for men and women. Use the 5%
significance level and test to determine if sport preference and gender are independent.
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A customer has approached a local credit union for a $20,000 1-year loan at a 10%
interest rate. If the credit union does not approve the loan application, the $20,000 will
be invested in bonds that earn a 6% annual return. Without additional information, the
credit union believes that there is a 5% chance that this customer will default on the
loan, assuming that the loan is approved. If the customer defaults on the loan, the credit
union will lose the $20,000.
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The bank can thoroughly investigate the customer's credit record and obtain a favorable
or unfavorable recommendation. If the credit report is perfectly reliable, what is the
most the credit union should be willing to pay for the report?
The Durbin-Watson statistic can be used to measure of autocorrelation.
In making decisions, we choose the decision with the largest expected monetary value.
In order to estimate with 90% confidence a particular value of Y for a given value of X
in a simple linear regression problem, a random sample of 20 observations is taken. The
appropriate t-value that would be used is 1.734.
In a regression model with seasonal dummy variables, the coefficients on the dummy
variables represent the additive factor relative to the reference quarter value, not the
multiplicative factor.
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Mrs. Rich has just bought a new $30,000 car. As a reasonably safe driver, she believes
that there is only a 5% chance of being in an accident in the forthcoming year. If she is
involved in an accident, the damage to her new car depends on the severity of the
accident. The probability distribution for the range of possible accidents and the
corresponding damage amounts (in dollars) are shown in the table below. Mrs. Rich is
trying to decide whether she is willing to pay $170 each year for collision insurance
with a $300 deductible. Note that with this type of insurance, she pays the first $300 in
damages if she causes an accident, and the insurance company pays the remainder.
Distribution of Accident Types and Corresponding Damage Amounts
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What impact, if any, does the insurance premium cost have on her decision? Briefly
explain your answer
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Below you will find summary measures on salaries for classroom teachers across the
United States. You will also find a list of selected states and their average teacher salary.
All values are in thousands of dollars.
Salaries for classroom teachers across the United States
Selected states and their average teacher salary
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What salary amount represents the second quartile?
One of the potential characteristics of an outlier is that the value of the dependent
variable is much larger or smaller than predicted by the regression line.
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Consider a binomial random variable X withn = 5 and p = 0.40.
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Find P(X < 3).
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The time it takes a technician to fix a computer problem is exponentially distributed
with a mean of 15 minutes.
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What is the variance of the time it takes a technician to fix a computer problem?
Two or more events are said to be exhaustive if at most one of them can occur.
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An oil company is planning to drill three exploratory wells in different areas of West
Texas. The company estimates that each of these wells, independent of the others, has
about a 30% chance of being successful.
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Suppose the first well to be completed is successful. What is the probability that one of
the two remaining wells is successful?
The rejection region is the set of sample data that leads to the rejection of the alternative
hypothesis.
In multiple regression, if there is multicollinearity between independent variables, the
t-tests of the individual coefficients may indicate that some variables are not linearly
related to the dependent variable, when in fact they are.
