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A car dealer collected the following information about a sample of 448 Grand Rapids
residents:
Exact salaries of these Grand Rapids residents
Education level (completed high school only or completed college)
Income level (low or high)
Car finance (whether or not the last purchased car was financed)
Using the education level, income level, and car finance data, he created the three pivot
tables shown below. Based on these tables; determine how education and income
influence the likelihood that a family finances a car.
Given that events A and B are independent and that P(A) = 0.8 and P(B/A) = 0.4, then
P(A and B) = 0.32.
If a simple random sample of size n is chosen from a population of size N, then each
member of the population has probability N / n of being chosen in the sample.
The R2 can only increase when extra explanatory variables are added to a multiple
regression model
In a random walk model, there are significantly more runs than expected, and the
autocorrelations are not significant.
An unbiased estimate is a point estimate such that the mean of its sampling distribution
is equal to the true value of the population parameter being estimated.
Diagnose what may be causing the problem seen in the residuals plot in Question 130.
What issue(s) do you identify?
In systematic sampling, one of the first k members is selected randomly, and then every
kth member after this one is selected. The value k is called the sampling interval and
equals the ratio N / n, where N is the population size and n is the desired sample size.
NARRBEGIN: SA_123_125
Suppose that a decision maker's utility as a function of her wealth, x, is given by U(x) =
ln x (the natural logarithm of x).
NARREND
Is this decision maker risk averse? Explain why or why not.
Perform an F-test for the existence of a linear relationship between Y and X. Use a 5%
level of significance.
A population includes all elements or objects of interest in a study, whereas a sample is
a subset of the population used to gain insights into the characteristics of the population.
Chemical Bank is attempting to determine where its assets should be invested during
the current year. At present, $800,000 is available for investment in bonds, home loans,
auto loans, and personal loans. The annual rate of return on each type of investment is
known to be the following: bonds, 12%, home loans, 18%, auto loans, 15%, personal
loans, 22%. To ensure that the banks portfolio is not too risky, the bank's investment
manager has placed the following restrictions on the bank portfolio:
No more than 30% of the total amount invested may be in personal loans
The amount invested in home loans cannot exceed the amount invested in auto loans
The amount invested in personal loans cannot exceed the amount invested in bonds.
Determine how the bank can maximize the annual return on its investment portfolio.
The test statistic employed to test is , which is Fdistributed
with degrees of freedom.
