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Chapter: 9 -Problem: 42 >> Consider the following hypotheses: H0: ? ? 100 HA: ? The population is normally distributed. A sample produces the following observations: Conduct the test at the 1% level of significance. Transcribed Image Text: 85 97 98 80 99 95
Answer Preview: The p-value =P(T 6 -2 38) is between 0 025 …

, Chapter: 13 -Problem: 29 >> Consider the estimated quadratic modely? = 20 + 1.9x ? 0.05x2.a. Predict y when x equals 10, 20, and 30.b. Find the value of x at which the predicted y is optimized. At this x value, is the predicted y maximized or minimized?
Answer Preview: a. At x=10, y = 20+1 910-0 05 10 2 = 34 At x=2…

, Chapter: 3 -Problem: 30 >> Consider the following population data: a. Calculate the range. b. Calculate MAD. c. Calculate the population variance. d. Calculate the population standard deviation. Transcribed Image Text: -4 -8 10
Answer Preview: a. Range = Max- Min …

, Chapter: 13 -Problem: 21 >> The accompanying data file contains 20 observations on the response variable y along with the explanatory variables x and d.a. Estimate and interpret a regression model with the explanatory variables x and d. Compare the results with an extended model that also includes the interaction variable xd.b. Use the preferred model to compute the predicted value given x = 25, and d equal to 0 and 1.
Answer Preview: a. Model 1: y = 0 + 1 x+ 2 d+ Model 3: y= 0 + 1 x+ 2 d+ 3 xd+ Relevant regres…

, Chapter: 2 -Problem: 44 >> Construct a scatterplot with the following data. Does a linear relationship exist between x and y? Transcribed Image Text: 3 10 4 6. ? 4
Answer Preview: There is no evid…

, Chapter: 13 -Problem: 66 >> The controller of a small construction company is attempting to forecast expenses for the next year. He collects quarterly data on expenses (in $1,000s) over the past five years, a portion of which is shown in the accompanying table. a. Estimate a linear trend model with seasonal dummy variables and forecast expenses for all four quarters of 2018. b. Estimate an exponential trend model with seas
Answer Preview: a. Summary Regression Output: Coefficients Standard Error t Stat P-value Intercept -5207 1992 1715 2…

, Chapter: 13 -Problem: 6 >> A sociologist is studying the relationship between consumption expenditures of families in the United States (Consumption in $), family income (Income in $), and whether or not the family lives in an urban or rural community (Urban = 1 if urban, 0 otherwise). She collects data on 50 families, a portion of which is shown in the accompanyingtable. a. Estimate Consumption = ?0 + ?1?Income + ?2 Urba
Answer Preview: a. Relevant regression results for : Coefficients Standard Error t Stat p-…

, Chapter: 3 -Problem: 6 >> Given the accompanying data, use Excel’s function options to find the mean and the median.
Answer Preview: For the mean: =…

, Chapter: 10 -Problem: 69 >> The Marketing Manager at Foodco, a large grocery store, wants to determine if store display location influences sales of a particular grocery item. He instructs employees to rotate the display location of that item every week and then tallies the weekly sales at each location over a 24-week period (8 weeks per location). The following sales (in $) were obtained. Assume that sales are normally dist
Answer Preview: ANOVA Source of Variation SS df MS F P-value Betw…

, Chapter: 8 -Problem: 7 >> Given the accompanying sample data, use Excel’s formula options to find the 90% confidence interval for the population mean. Assume that the population is normally distributed and that the population standard deviation equals 5.
Answer Preview: Lower limit: =AVERAGE(A1:A…

, Chapter: 13 -Problem: 68 >> Data on weekly earnings are collected as part of the Current Population Survey, a nationwide sample survey of households in which respondents are asked how much each wage and salary worker usually earns. The following table contains a portion of quarterly data on weekly earnings (Earnings, adjusted for inflation) in the U.S. from 2010?2017. a. Plot the series to determine if the linear or the qu
Answer Preview: a. Scatterplot First, there is a discernable seasonal pattern t…

, Chapter: 12 -Problem: 1 >> In a simple linear regression, the following sample regression coefficients were estimated: b0 = ?1.5 and b1 = 3.4.a. Formulate the sample regression equation.b. Predict y if x equals 5.
Answer Preview: a. y =-…

, Chapter: 3 -Problem: 76 >> In an attempt to determine whether a linear relationship exists between the price of a home (x in $1,000s) and the number of days it takes to sell the home (y), a real estate agent collected the following data from recent sales in his city. a. Calculate the covariance. What kind of linear relationship exists? b. Calculate and interpret the correlation coefficient.
Answer Preview: a. s xy = 4419 75/7 = 631 39. The covariance suggests that ther…

, Chapter: 4 -Problem: 63 >> High blood pressure is common in adults who are overweight and are black American. According to the American Heart Association, 47% of black men and 43% of black women have high blood pressure. Suppose 84% of black men with high blood pressure are overweight and 92% of black women with high blood pressure are overweight.a. Find the percentage of black men who have high blood pressure and are overw
Answer Preview: Let event M correspond to Black men with high blood …

, Chapter: 3 -Problem: 26 >> The following five-point summary and boxplot represent the salaries (in $) of 100 employees at a large firm. a. Interpret Q1 and Q3. b. Do outliers exist in the data? Explain. c. Is the distribution symmetric? If not, comment on its skewness. Distribution The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of asse
Answer Preview: a. Q1: Approximately 25 percent of the employees ear…

, Chapter: 8 -Problem: 23 >> Given the accompanying sample data, use Excel’s formula options to find the 90% confidence interval for the population mean. Assume that the population is normally distributed.
Answer Preview: Lower limit: =AVERAGE(A1:A20) - …

, Chapter: 3 -Problem: 72 >> Consider the following sample data: a. Calculate the covariance. b. Calculate and interpret the correlation coefficient. Transcribed Image Text: 4 ? -2 -2 -3 -8 -9 - 10 y
Answer Preview: a. b. There is a st…

, Chapter: 3 -Problem: 73 >> Consider the following sample data: a. Calculate the covariance. b. Calculate and interpret the correlation coefficient. Transcribed Image Text: 25 12 18 20 ? 15 25 22 27
Answer Preview: a. b. There is a str…

, Chapter: 2 -Problem: 37 >> Consider the following data set: Construct a stem-and-leaf diagram. Is the distribution symmetric? Explain. Distribution The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Answer Preview: Stem Leaf 2. 3 6 8 3. 0 2 2 3 4 5 6 4. 0 2 …

, Chapter: 11 -Problem: 14 >> According to a report by the Centers for Disease Control and Prevention (CDC), 36.5% of American adults are obese (Adult Obesity Facts, August 29, 2017). Among ethnic groups in general, African American women are more overweight than Caucasian women, but African American men are less obese than Caucasian men. Sarah Weber, a recent college graduate, is curious to determine if the same pattern also
Answer Preview: a. Let p 1 represent the population proportion of obese African-American men and p 2 the population …

, Chapter: 3 -Problem: 5 >> Given the accompanying data, use Excel’s function options to find the mean and the median.
Answer Preview: For the mean: =…

, Chapter: 13 -Problem: 62 >> The accompanying file contains ten years of quarterly data for the time series y along with the time variable, t, and dummy variables for each quarter, di. Estimate an exponential trend model with seasonal dummy variables to forecast y for all four quarters of the 11th year.
Answer Preview: Summary Regression Output: Coefficients Standard Error t …

, Chapter: 13 -Problem: 73 >> An analyst studies quarterly data on the relationship between retail sales (y, in $ millions), gross national product (x, in $ billions), and a quarterly dummy d that equals 1 if the sales are for the 4th quarter, 0 otherwise. He estimates the model y = ?0 + ?1x + ?2d + ?3xd + ?. Relevant regression results are shown in the accompanying table. a. Interpret the dummy variable, d. Is it significan
Answer Preview: a. The intercept dummy has an estimated coefficient of 112605 …

, Chapter: 8 -Problem: 6 >> Given the accompanying sample data, use Excel’s formula options to find the 95% confidence interval for the population mean. Assume that the population is normally distributed and that the population standard deviation equals 12.
Answer Preview: Lower limit: =AVERAGE(A1:A20…

, Chapter: 11 -Problem: 46 >> Although founded only in 2004, Facebook has nearly 2 billion active users, of which 50% log on to Facebook on any given day. In a survey by Facebook, young users were asked about theirpreference for delivering the news about breaking up a relationship (The Wall Street Journal, November 27?28, 2010). One of the shocking results was that only 47% of users preferred tobreak the news in person. A rese
Answer Preview: Let p 1 , p 2 , p 3 , p 4 , and p 5 denote the proportion for delivery Method In person, Phone, Email, Facebook or Instant message, respectively. H O : p 1 = 0 47, p 2 = 0 30, p 3 = 0 04, p 4 = 0 05, p 5 = 0 14 H A : At least one of the p i (i = 1,2,3,4,5) differs from its hypothesized value. Frequency Candidate Observed() Expected () In person …

, Chapter: 13 -Problem: 61 >> The accompanying file contains ten years of quarterly data for the time series y along with the time variable, t, and dummy variables for each quarter, di. Estimate a linear trend model with seasonal dummy variables to forecast y for all four quarters of the 11th year.
Answer Preview: Summary Regression Output: Coefficients Standard Error t Stat P-value Intercept 41 4916 11 6…

, Chapter: 3 -Problem: 33 >> Given the accompanying data, use Excel’s function options to find MAD, the sample variance, and the sample standard deviation.
Answer Preview: For MAD: =AVEDEV(A1:A20)=12 …

, Chapter: 3 -Problem: 31 >> Consider the following sample data: a. Calculate the range. b. Calculate MAD. c. Calculate the sample variance. d. Calculate the sample standard deviation. Transcribed Image Text: 52 40 48 32 38 42
Answer Preview: a. Range = Max-Min …

, Chapter: 13 -Problem: 7 >> One of the theories regarding initial public offering (IPO) pricing is that the initial return y (the percentage change from offer to open price) on an IPO depends on the price revision x (the percentage change from pre-offer to offer price). Another factor that may influence the initial return is a high-tech dummy variable that equals 1 for high-tech firms and 0 otherwise. The following table sho
Answer Preview: a. Relevant regression results forInitial Return= 0 + 1 x+ 2 d+: Coefficients Standard Error t Stat …

, Chapter: 3 -Problem: 7 >> At a small firm in Boston, seven employees were asked to report their one-way commute time (in minutes) into the city. Their responses were as follows. a. How long was the shortest commute? The longest commute? b. Calculate the mean, the median, and the mode. Transcribed Image Text: 45 35 20 35 90
Answer Preview: a. The shortest commute was 20 minutes. The longest …

, Chapter: 13 -Problem: 60 >> Consider an exponential trend model with seasonal dummy variables where t represents time and di represents the ith quarter. Using five years of quarterly data, the model is estimated as Make a forecast for all four quarters of the sixth year. Transcribed Image Text: In(y)= 0.28 + 0.15t +0.18d, + 0
Answer Preview: Year 6, Quarter 1: y = exp(0 28+0 1521+0 18+ 0 28 …

, Chapter: 13 -Problem: 19 >> Using 20 observations, the following regression output is obtained from estimating y = ?0 + ?1x + ?2d + ?3xd + ?. a. Compute y? for x = 10 and d = 1; compute y? for x = 10 and d = 0. b. Are the dummy variable d and the interaction variable xd individually significant at the 5% level? Explain. Transcribed Image Text:
Answer Preview: a. For d=1; y =13 56+4 62(10)-5 15(1)+2 09(10)(1)=75 51 For d=0; …

, Chapter: 3 -Problem: 74 >> Given the accompanying data, use Excel’s function options to find the sample covariance and the sample correlation coefficient.
Answer Preview: Sample covariance: =COV…

, Chapter: 3 -Problem: 16 >> The accompanying table shows a portion of the average price of gas (in $ per gallon) for the 50 states in the United States.State                               Price Alabama...........................4.36 Alaska...............................3.79 ?...............................................? Wyoming..........................3.63 Find the mean, the median, and the mode for the price per gallon
Answer Preview: Mean = 3 …

, Chapter: 3 -Problem: 8 >> In order to get an idea on current buying trends, a real estate agent collects data on 10 recent house sales in the area. Specifically, she notes the number of bedrooms in each house as follows: a. Calculate the mean, the median, and the mode. b. Which measure of central location best reflects the typical value with respect to the number of bedrooms in recent house sales?
Answer Preview: a. Sample mean: x =(3+4+3+3+5+4+4+2+5+3)/10=3 6. The medi…

, Chapter: 9 -Problem: 23 >> Given the accompanying sample data, use Excel’s formula options to determine if the population mean differs from 3 at the 5% significance level. Assume that the population is normally distributed and that the population standard deviation equals 5.
Answer Preview: H 0 : = 3; H A : 3 The value of the test statistic, z: …

, Chapter: 13 -Problem: 30 >> Consider the estimated quadratic modely? = 20 ? 0.72x + 0.02x2.a. Predict y when x equals 10, 20, and 30.b. Find the value of x at which the predicted y is optimized. At this x value, is the predicted y maximized or minimized?
Answer Preview: a. At x = 10, y = 20-0 7210+0 0210 2 = 14 80 At x …

, Chapter: 13 -Problem: 64 >> The accompanying file contains five years of monthly data for the time series y. Create the time variable and the monthly dummy variables to estimate an exponential trend model with seasonal dummy variables to forecast y for January, February and December of the 6th year.
Answer Preview: Summary Regression Output: Coefficients Standard Error t Stat P-value Intercep…

, Chapter: 9 -Problem: 44 >> Given the accompanying sample data, use Excel’s formula options to determine if the population mean differs from 1 at the 5% significance level. Assume that the population is normally distributed.
Answer Preview: H 0 : = 1; H A : 1 The value of the test statistic,t_19: =(AVERAGE(A1:A2…

, Chapter: 3 -Problem: 44 >> The accompanying table shows a portion of the annual returns (in %) for the Fidelity Latin America Fund and the Fidelity Canada Fund from 2000 through 2017. a. Which fund had the higher average return? b. Which fund was riskier over this time period? c. Given a risk-free rate of 3%, which fund has the higher Sharpe ratio? What does this ratio imply?
Answer Preview: a. x LA =13 01, x Canada = 10 83. The Fidelity Latin America Fund has a higher averag…

, Chapter: 10 -Problem: 76 >> The marketing department for an upscale retail catalog company wants to determine if there are differences in the mean customer purchase amounts across the available purchase sources (Internet, phone, or mail-in). Accordingly, samples were taken for 20 random orders for each purchase source. The following ANOVA table was produced. Assume purchase amounts are normally distributed. At the 5% signi
Answer Preview: H 0 : Internet = Phone = Mail-in ; H A : Not all popu…

, Chapter: 9 -Problem: 22 >> Given the accompanying sample data, use Excel’s formula options to determine if the population mean is less than 125 at the 5% significance level. Assume that the population is normally distributed and that the population standard deviation equals 12.
Answer Preview: H 0 : 125; H A : < 125 The value of the test statistic, z: …

, Chapter: 2 -Problem: 38 >> Consider the following data set: Construct a stem-and-leaf diagram. Is the distribution symmetric? Explain. Distribution The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Answer Preview: Stem Leaf -8 7 5 5 3 2 0 0 0 -7 9 7 5 3 3 2 1 …

, Chapter: 13 -Problem: 50 >> The accompanying data file contains 20 observations for t and yt.a. Plot the series along with the superimposed linear and exponential trends. Which trend model do you think describes the data well?b. Estimate the appropriate model to make a forecast for y21.
Answer Preview: a. Series y t with linear and exponential trends: Com…

, Chapter: 10 -Problem: 68 >> A government agency wants to determine whether the average salaries of four kinds of transportation operators differ. The accompanying table shows the salaries (in $1,000s) for a random sample of five employees in each of the four categories. Assume that salaries are normally distributed. a. Specify the competing hypotheses in order to determine whether the average salaries of the transportation
Answer Preview: ANOVA Source of Variation SS df MS F P-value Between Groups 2011 33 3 670 4433 429 978 …

, Chapter: 13 -Problem: 63 >> The accompanying file contains five years of monthly data for the time series y. Create the time variable and the monthly dummy variables to estimate a linear trend model with seasonal dummy variables to forecast y for January, February and December of the 6th year.
Answer Preview: Summary Regression Output: Coefficients Standard Error t Stat P-value Inte…

, Chapter: 6 -Problem: 72 >> On St. Patrick’s Day, men spend an average of $43.87 while women spend an average of $29.54 (USA TODAY, March 17, 2009). Assume the standard deviations of spending for men and women are $2.50 and $9.00, respectively, and that both distributions are normally distributed.a. What is the probability that men spend over $50 on St. Patrick’s Day?b. What is the probability that women spend over $50 on St
Answer Preview: Let X represent the amount spent on St. Patricks Day. a. P(X>50) …

, Chapter: 13 -Problem: 28 >> Important risk factors for high blood pressure reported by the National Institute of Health include weight and ethnicity. High blood pressure is common in adults who are overweight and are African-American. According to the American Heart Association, the systolic pressure (top number) should be below 120. In a recent study, a public policy researcher in Atlanta surveyed 150 adult men in the 55-60
Answer Preview: Model 1: Systolic = 0 + 1 Weight + 2 Black+ Model 2: Systolic = 0 + 1 Weight + 2 Black+ 3 WeightBlac…

, Chapter: 9 -Problem: 82 >> The Great Recession cost America trillions of dollars in lost wealth and also levied a heavy toll on the national psyche (The Wall Street Journal, December 21, 2009). According to a poll, just 33% of those surveyed said America was headed in the right direction. Suppose this poll was based on a sample of 1,000 people. Does the sample evidence suggest that the proportion of Americans who feel that
Answer Preview: The p-value = P(Z -1 33) = 0 0918 Since the p-value > 0 0…

, Chapter: 3 -Problem: 75 >> Given the accompanying data, use Excel’s function options to find the sample covariance and the sample correlation coefficient.
Answer Preview: Sample covariance: =C…

, Chapter: 3 -Problem: 34 >> Given the accompanying data, use Excel’s function options to find MAD, the sample variance, and the sample standard deviation.
Answer Preview: For MAD: =AVEDEV(A1:A20)=5 …

, Chapter: 11 -Problem: 48 >> A study in the Journal of the American Medical Association (February 20, 2008) found that patients who go into cardiac arrest while in the hospital are more likely to die if it happens after 11 pm. The study investigated 58,593 cardiac arrests during the day or evening. Of those, 11,604 survived to leave the hospital. There were 28,155 cardiac arrests during the shift that began at 11 pm, commonly
Answer Preview: a. H O : Surviving a cardiac arrest is independent of the time of the cardiac arrest H A : Sur…

, Chapter: 1 -Problem: 2 >> Many people regard video games as an obsession for youngsters, but, in fact, the average age of a video game player is 35 years (Telegraph.co.uk, July 4, 2013). Is the value 35 likely the actual or the estimated average age of the population? Explain.
Answer Preview: The value 35 is the estimated average a…

, Chapter: 13 -Problem: 70 >> Housing starts are the number of new residential construction projects that have begun during any given month. It is considered to be a leading indicator of economic strength. The following table contains a portion of monthly data on housing starts (in 1,000s) in the U.S. from 2011–2017.Period                      Housing Starts Jan-11...........................................40.2 Feb-11.........
Answer Preview: Summary Regression Output: Coefficients Standard Error t Stat P-value …

, Chapter: 13 -Problem: 24 >> A sociologist is looking at the relationship between consumption expenditures of families in the United States (Consumption in $), family income (Income in $), and whether or not the family lives in an urban or rural community (Urban = 1 if urban, 0 otherwise). She collects data on 50 families across the United States, a portion of which is shown in the accompanying table. a. Estimate: Consumpti
Answer Preview: Model 1: Consumption = 0 + 1 Income+ Model 2: Consumption = 0 + 1 Income + 2 Urban+ Model 3: Consump…

, Chapter: 3 -Problem: 29 >> Consider the following population data: a. Calculate the range. b. Calculate MAD. c. Calculate the population variance. d. Calculate the population standard deviation. Transcribed Image Text: 10 42 34 12 22
Answer Preview: a. Range = Max-Min = …

, Chapter: 12 -Problem: 72 >> A simple linear regression, y = ?0 + ?1x + ?, is estimated with cross-sectional data. The resulting residuals e along with the values of the explanatory variable x are shown in the accompanying table. a. Graph the residuals e against the values of the explanatory variable x and look for any discernible pattern. b. Which assumption is being violated? Discuss its consequences and suggest a possibl
Answer Preview: a. b. Since the residual plot exhibits nonlinear patterns, the …

, Chapter: 4 -Problem: 14 >> Let P(A) = 0.65, P(B) = 0.30, and P(A | B) = 0.45.a. Calculate P(A ? B).b. Calculate P(A ? B).c. Calculate P(B | A).
Answer Preview: P(A)=0 65;P(B)=0 30;P(AB)=0 45 a…

, Chapter: 4 -Problem: 2 >> A sample space S yields three mutually exclusive and exhaustive events, A, B, and C, such that P(A) = 0.25 and P(A ? B) = 0.70.a. Find P(C).b. Find P(BC).c. Find P(A ? C).
Answer Preview: a. The odds fortails are 1 to 1 (1:1). b. The odds …

, Chapter: 13 -Problem: 20 >> The accompanying data file contains 20 observations on the response variable y along with the explanatory variables x and d.a. Estimate and interpret a regression model with the explanatory variables x and d. Compare the results with an extended model that also includes the interaction variable xd.b. Use the preferred model to compute the predicted value given x = 15, and d equal to 0 and 1.
Answer Preview: a. Model 1: y = 0 + 1 x+ 2 d+ Model 3: y = 0 + 1 x+ 2 d+ 3 xd+ Relevant regression re…

, Chapter: 4 -Problem: 15 >> Let P(A) = 0.55, P(B) = 0.30, and P(A ? B) = 0.10.a. Calculate P(A | B).b. Calculate P(A ? B).c. Calculate P((A ? B)c).
Answer Preview: P(A) = 0 55;P(B) = 0 30;P(AB) = 0 …

, Chapter: 9 -Problem: 43 >> Given the accompanying sample data, use Excel’s formula options to determine if the population mean is greater than 116 at the 5% significance level. Assume that the population is normally distributed.
Answer Preview: H 0 : 116; H A : > 116 The value of the test statistic,t_19…

, Chapter: 9 -Problem: 74 >> With increasing out-of-pocket healthcare costs, it is claimed that more than 60% of senior citizens are likely to make serious adjustments to their lifestyle. Test this claim at the 1% level of significance if in a survey of 140 senior citizens, 90 reported that they have made serious adjustments to their lifestyle.
Answer Preview: The p-value = P(Z 1 04) = 0 1492. Since the p-value > 0 01 = ,wed…

, Chapter: 3 -Problem: 43 >> Consider the following summary measures for the annual returns for Vanguard’s Energy Fund and Vanguard’s Health Care Fund from 2005 through 2017.Energy: x? = 9.62% and s = 23.58% Health Care: x? = 12.38% and s = 15.45% a. Which fund had the higher average return?b. Which fund was riskier over this time period? Given your answer in part (a), is this result surprising? Explain.c. Given a risk-free r
Answer Preview: a. The Vanguard Health Care Fund has a higher average return. b. The Vanguard Energy Fund has a high…

, Chapter: 8 -Problem: 24 >> Given the accompanying sample data, use Excel’s formula options to find the 99% confidence interval for the population mean. Assume that the population is normally distributed.
Answer Preview: Lower limit: =AVERAGE(A1:A20)-T …

, Chapter: 13 -Problem: 88 >> The following data represent a portion of quarterly net sales (in $ millions) of Lowe?s Companies, Inc., over five years. Estimate an exponential trend model with quarterly dummy variables to forecast net sales for fiscal year 2009. Transcribed Image Text: Net Sales 8861 Year Quarter 2004 2004 101
Answer Preview: Let y e represent the series over time, t = 1,2,,20. Variable Exponential trend …

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