Quantitative Business Analysis (QBA) Exam 2 Practice Test

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• In time series forecasting, what is the principle of simple exponential smoothing?
• Which statement best describes service level in inventory management?
• What is the purpose of a confidence interval?
• According to the Empirical Rule, what percentages lie within 1, 2, and 3 standard deviations?
• If sample size increases, what happens to the width of the CI?
• If the population is normally distributed, the sampling distribution of the sample mean is normal for any sample size.
• Which term describes an estimator that systematically overestimates or underestimates the parameter?
• Which statement correctly describes the Central Limit Theorem?
• The Central limit applies to samples that are:
• A 95% confidence interval for a population mean with unknown sigma is constructed using the t distribution. Which is correct?
• Which type of estimator has the standard deviation converge to 0 as the sample size grows?
• The Central Limit Theorem suggests that for any population distribution, the distribution of the sample mean becomes normal as the sample size increases.
• Continuous random variables have what kind of outcomes?
• What does the reduced cost of a non-basic variable indicate in linear programming?
• How is a forecast interval around a time series point forecast constructed?
• Which statement about the standard error of the mean is true?
• Which are the three factors that affect the width of a confidence interval?
• When the population standard deviation is known, the confidence interval for the mean uses the
• What is statistical power?
• In the described sample of diamonds, which statement is accurate?
• When the population standard deviation is unknown and the sample size is moderate to large, the t-distribution should be used.
• How do you compute EOQ?
• For a 95% confidence interval for the population mean, if the population standard deviation is known, the standard normal distribution should be used.
• What does the shadow price (dual value) in linear programming represent?
• What represents the amount by which the sample statistic may differ from the true population parameter?
• Which statement describes the conditions for a valid PDF?
• How is the Expected Monetary Value (EMV) calculated in a decision tree?
• An estimator is a function of random variables used for estimating a parameter. It can be thought of as the rule that creates an estimate. Which term matches?
• With a PDF, probabilities are calculated by finding areas ___________ ____ ________.
• Consistency of an estimator concerns behavior of the variability of estimates as the sample size approaches infinity.
• Which term is used interchangeably with the mean?
• True or False: The t-distribution becomes more similar to the standard normal distribution as the sample size increases.
• What is P(X = c) if X is a continuous random variable?
• As the sample size increases, the standard error decreases.
• Explain interaction terms in regression.
• Describe the concept of confidence interval width and its dependence on sample size.
• If p-value is greater than alpha, what is the correct conclusion?
• Which statement about confidence-interval width is true?
• Which statement is true about AIC and BIC as sample size grows?
• Which statement best describes the difference between parametric and nonparametric tests?
• What is the purpose of residual analysis in regression?
• A confusion matrix in binary classification is used to compute which metrics?
• What does homoscedasticity refer to in regression analysis?
• In a standard normal distribution, what are the mean and standard deviation?
• The observed value of a statistic is never exactly equal to the true parameter. Which word completes the sentence: the observed value is ______ equal to the true parameter?
• Which pair correctly describes a population parameter and a statistic?
• As degrees of freedom increase, the t-distribution becomes more like which distribution?
• In a regression model that includes a dummy variable for a categorical group, what does the dummy coefficient typically represent?
• An observed value that can provide us with some idea as to what a parameter is equal to is called what?
• In a normal distribution, X ∼ N(μX, σX) indicates that X is distributed with which two parameters?
• Under the central limit theorem, what happens to the t distribution as the degrees of freedom increase?
• A ____ describes how probability is distributed across values of X.
• As the sample size increases while keeping other factors constant, the margin of error will
• What is a residual plot useful for?
• In optimization, what is the purpose of sensitivity analysis?
• When is a t-test preferred over a z-test?
• Which of the following describes a continuous random variable?
• A company measures the amount of time customers wait in line before being served. This variable is best classified as:
• What is the purpose of a decision tree in quantitative business analysis (QBA)?
• The standard deviation of a continuous random variable is
• What is safety stock and when is it used?
• Which statement best describes the concept of leverage in regression analysis?
• What is the standard deviation of the sampling distribution of the sample mean called?
• Which of the following characteristics describe the Normal distribution?
• The Central Limit Theorem describes the behavior of:
• Which statement best captures the purpose of stepwise regression and why is it controversial?
• Which of the following statements correctly describes AIC and BIC as model selection criteria?
• Confidence level is 1 − α where α is the ______.
• What is the basic idea behind linear programming?
• A continuous random variable may assign positive probability to a single exact value.
• What is the relationship between standard deviation and variance?
• An actual number calculated from actual data points is called what?
• A firm's daily revenue (in thousands of dollars) has an expected value of 40. This means:
• Which term describes a range of values derived from sample data that is used to estimate a population parameter with a certain level of confidence?
• In binary classification, which metric measures the true positive rate?
• For very large samples, the z-distribution can be used even if the population standard deviation is unknown.
• This is the statistical shorthand notation for? X ∼ N (μX, σX)
• For a continuous random variable, the probability that X equals a specific value is?
• The probability that a continuous random variable equals a specific value c is always 0.
• A VIF value greater than 5 signals concern for multicollinearity.
• A consistent estimator is one whose estimates converge to the true parameter as sample size grows.
• What is the formal purpose of the F-statistic in ANOVA?
• In ANOVA, besides Levene's test, which other test can be used to assess equal variances across groups?
• A probability density function over its entire domain must integrate to what value?
• Which statement describes the normal distribution?
• Which of the following pairs are sufficient to specify a normal distribution?
• What does the confidence level represent in a confidence interval?
• Which term describes the rule that produces an estimate?
• What is the objective of an EOQ model in inventory management?
• If variability increases, the width of a confidence interval will generally:
• Margin of error is computed by multiplying the standard error by a critical value from distributions such as the Z or t distributions. Which options best describe the source of the critical value?
• Which statement about adjusted R-squared is true?
• What gives us an idea of how spread out the possible values of the random variable are?
• What is a common rule for selecting a forecasting model using error measures?
• What is the difference between Bayesian and frequentist interpretations of probability?
• A normal distribution is determined by two parameters.
• What is the simplex method in linear programming?
• Which statement describes the relationship between sample size and the standard error of the mean?
• In a normal distribution, increasing the expected value shifts the curve horizontally but does not change its shape.
• The ________ of a random variable X, denoted σX, is simply the square root of the variance
• If the population is normally distributed, the sampling distribution of the sample mean is normal regardless of the sample size.
• According to the Central Limit Theorem, as the sample size increases, the distribution of all possible sample means tends to be
• The distribution Z ∼ N(0, 1) is known as the
• A continuous distribution is completely defined by the:
• What does EVPI stand for in decision analysis?
• As the level of confidence increases, with everything else held constant, the width of a confidence interval will
• The Central Limit Theorem is applicable provided the sample size is sufficiently large.
• Which statement about the normal distribution is incorrect?
• Which of the following is an assumption of linear regression?
• The Central Limit Theorem only applies to populations that are normally distributed.
• Which test is used to test for equal variances across groups in ANOVA?
• Which term describes a numerical value computed from sample data to estimate a population parameter?
• Which statement best distinguishes correlation from causation?
• Which statement is true about confidence intervals when the population standard deviation is unknown?
• Which of the following defines the power of a statistical test?
• What does an R-squared value close to 1 typically warn about in regression analysis, especially with a small sample or many predictors?
• The standard deviation of all possible values of the sample mean is called the standard error.
• What is the difference between Type I and Type II errors?
• Which statement best describes the Central Limit Theorem's general claim?
• In regression analysis, which statement best describes an outlier and its handling?
• MAPE stands for which measure?
• Under the Central Limit Theorem, as the sample size increases, the distribution of the sample mean becomes approximately normal with mean equal to the population mean and standard deviation equal to
• Which statement about holding cost and EOQ is correct?
• Which type of estimator has a standard deviation that does not converge to 0 as the sample size increases, meaning more data does not make estimates more precise?
• Compute EOQ given D=1000, S=50, H=2.
• Which statement best describes multicollinearity's effect on regression coefficients?
• A 95% confidence interval for a population mean is constructed with known sigma. Which formula is correct?
• Which statement about the standard normal distribution is true?
• What is the role of safety stock in achieving service level?
• Which parameter is σX?
• Which test is commonly used to detect heteroscedasticity in regression models?
• An actual number; an estimator represents a potential number. Which pair is correct?
• The Empirical Rule applies to which type of distributions?
• Which of the following is NOT a characteristic of the normal distribution?
• Which term describes an estimator that is unbiased?
• For discrete random variables, what is the name of the probability formula?
• If the variance of a normal distribution increases, what happens to the shape of the distribution?
• In the context of probability distributions, which term specifically refers to the 'location' of the distribution?
• What is the primary purpose of randomization in experiments?
• Which statement is true about the effect of increasing sample size on confidence interval width?
• The area under the probability density function between two values represents the probability that a continuous random variable falls within that interval.
• Which characteristic applies to the normal distribution?
• The term used for a computed value that estimates a population parameter is
• Which value does the total integral of a density function over its domain equal?
• If a population distribution is known to be normally distributed, the sample mean must be equal to the population mean.
• In time series forecasting, which data pattern is simple exponential smoothing best suited for?
• A residual plot showing increasing spread with fitted values indicates what?
• Which statement correctly defines Type II error and the relationship to power?
• The shape of the t-distribution as degrees of freedom increase
• What is the general form of a simple linear regression model?
• Which principle describes the distribution of the sample mean regardless of the population distribution?
• The distribution that is symmetric and bell-shaped but with thicker tails and that approaches the Z-distribution as degrees of freedom increase is the
• As the sample size grows large, the t-distribution becomes more like the standard normal distribution.
• A retail store tracks the number of customers entering each hour and the amount each customer spends. Which of the following correctly classifies the variables?
• Within 2 standard deviations of the mean in a normal distribution, approximately what percent of data lie?
• Which statement best describes the fundamental difference between Bayesian and frequentist probability interpretations?
• Which statement defines a consistent estimator?
• Which expression defines the Expected Value of Perfect Information (EVPI)?
• What does N(0,1) denote in the context of standard normal distribution?
• Which statement best describes the central limit theorem?
• Which statement describes discrete random variables?
• Which parameter is μX?
• If the confidence level increases, what happens to the width of the CI?
• The standard deviation is a more intuitive measure of spread because it is expressed in the _____ units as the random variable X, whereas the variance is expressed in ______ units.
• What is the role of dummy variables in regression?
• The standard error of the mean decreases as sample size increases because it is proportional to 1/√n.
• The expected value (or mean) provides which of the following?
• Which of the following is true about the two-parameter normal distribution?
• Which function is used to describe the distribution of probabilities for continuous random variables?
• True or False: The t-distribution becomes more similar to the standard normal distribution as the sample size increases.
• What is the main difference between a parametric confidence interval and a bootstrapped confidence interval?
• When should the t-distribution be used instead of the normal distribution for confidence intervals?
• If residuals are not normally distributed, which assumption is violated?
• Which statement is true about the two-parameter normal distribution?
• R-squared expresses what aspect of a model?
• Which function describes the distribution of probabilities for discrete random variables?
• For continuous random variables, we use which function?
• Which method uses resampling to estimate the sampling distribution for confidence intervals?
• At alpha = 0.05, in a two-sample t-test for means, if p <= alpha, what is the conclusion?
• For a 95% confidence interval of a population mean with known sigma, which critical value is used?
• For a continuous variable, the probability that X lies in an interval [a, b] is given by which of the following?
• What is the weighted average of all possible values that the random variable can take, with the weights being the probabilities of those values?
• What tells us the center of the distribution?
• How does Holt's linear method extend simple exponential smoothing?
• Which statement correctly expresses the power of a statistical test?
• What is the Z critical value used for a 95% confidence interval in large-sample approximation?
• The normal distribution is often described as having which shape?
• What is the feasibility region in linear programming?
• The standard deviation can be negative for a continuous random variable.
• The standard error is defined as the standard deviation of the sampling distribution of the sample mean.
• Between the z-distribution and the t-distribution, which statement is true as the degrees of freedom increase?
• An R-squared of 0.85 indicates what about the model's explanatory power?
• The Normal distribution, also known as the '______ ______', is the most commonly used statistical distribution.
• RMSE stands for what metric?
• If the demand rate doubles, how does EOQ change?