MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

Insurance company records indicate that 10% of its policyholders file claims involving theft or robbery of personalproperty from their homes. Suppose a random sample of 400 policyholders is selected.

1) The standard deviation of the sampling distribution of the sample proportion of policyholders filing claimsinvolving theft or robbery from their homes isA) 0.0455. B) 0.015. C) 0.25. D) 0.1667. E) 0.000225.

2) The probability that the sample proportion of policyholders filing claims involving theft or robbery fromtheir homes is less than 8% isA) 0.1333. B) 0.0918. C) 0.4082. D) 0.0517. E) 0.7892.

3) A truck company wants on-time delivery for 98% of the parts they order from a metal manufacturing plant.They have been ordering from Hudson Manufacturing but will switch to a new, cheaper manufacturer(Steel-R-Us) unless there is evidence that this new manufacturer cannot meet the 98% on-time goal. As atest the truck company purchases a random sample of metal parts from Steel-R-Us, and then determines ifthese parts were delivered on-time. Which hypotheses should they test?A) H0: p < 0.98Ha: p > 0.98

B) H0: p = 0.98Ha: p < 0.98

C) H0: p > 0.98Ha: p = 0.98

D) H0: p = 0.98Ha: p > 0.98

E) H0: p =0.98Ha: p 0.98

4) Suppose that a manufacturer is testing one of its machines to make sure that the machine is producing morethan 97% good parts (H0 : p = 0.97 and HA : p > 0.97). The test results in a P-value of 0.202. Inreality, the machine is producing 99% good parts. What probably happens as a result of our testing?A) We reject H0, making a Type I error.B) We fail to reject H0, making a Type I error.C) We fail to reject H0, making a Type II error.D) We correctly fail to reject H0.E) We correctly reject H0.

A rental car company has noticed that the distribution of the number of miles customers put on rental cars per day isnormal with mean 80 miles and a standard deviation of 20 miles.

5) What is the chance that a randomly chosen rental car is driven more than 110 miles a dayA) 0.0485 B) 0.0668 C) 0.0548 D) 0.6808 E) 0.4840

6) If the number of miles a customer put on a rental car in one day is at the 30th percentile, how many milesdid the customer drive on that day?A) 72B) 90C) 90.4D) 69.6E) none of the above

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7) Based on our data, a rental car will be most likely drivenA) more than 60 miles per dayB) less than 70 miles per dayC) more than 80 miles per dayD) more than 100 miles per dayE) less than 60 miles per day

8) Suppose that another rental car company has noticed that the distribution of the number of miles customersput on rentals cars is normal with a mean of 100 miles. If it is known that 20% of the rental cars were drivenat least 140 miles then the standard deviation of the distribution of miles customers put on rentals cars isA) 20B) 40C) 47.62D) 52.5E) It can't be determined from the information provided

College students are a major target for advertisements for credit cards. At a university 65% of students surveyed saidthey have opened an account a new credit card account within the past year. If the percentage is accurate

9) what is the chance that out of 10 randomly chosen students 9 students have opened an account within thepast year?A) 0.00725 B) 0.00051 C) 0.000051 D) 0.65 E) 0.0725

10) what is the chance that out of 100 randomly chosen students more than 70 students have opened an accountwithin the past year? (use the continuity correction)A) 0.25 B) 0.1251 C) 0.7 D) 0.67 E) 0.1469

11) In a random sample of 60 students, how many would you expect to have not opened an account within thepast yearA) 39B) 14C) 46D) 21E) none of the above

EU (European Union) countries report that 40% of their labor force is female. The United Nations wants to determineif the percentage of women in the U.S. labor force is similar. Representatives from the United States Department ofLabor plan to check a random sample of more than 10,000 employment records on file to estimate the percentage ofwomen in the U.S. labor force.

12) The Department of Labor wants to estimate the percentage of women in the U.S. labor force to within 5%with 90% confidence. The number of employment records that should be sampled is closest toA) 451 B) 382 C) 271 D) 1000 E) 260

13) Suppose the Department of Labor wants to be 90% confident of estimating the percentage of women in thelabor force to within 2% of the true percentage. To do this they would have toA) decrease the precision.B) decrease the sample size.C) increase the sample size.D) increase the sampling error.E) select the same number of employment records.

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14) They actually select a random sample of 500 employment records, and find that 220 of the people arefemales. The 90% confidence interval isA) 0.4235 to 0.4579B) 0.1776 to 0.6944C) 0.2747 to 0.5973D) 0.4035 to 0.4765E) 0.1243 to 0.7100

15) If the Department of Labor wishes to tighten the interval, they shouldI. decrease the confidence level.II. increase the confidence level.III. decrease the sample size.A) II only B) I and III C) I and II D) I only E) III only

16) All else being equal, increasing the level of confidence desired willA) tighten the confidence interval and increase the margin of error.B) tighten the confidence interval.C) decrease the margin of error.D) increase the margin of error.E) increase precision.

17) Which of the following is not an assumption / condition required for constructinga confidence interval for the proportion?A) 10% conditionB) Linearity conditionC) Randomization conditionD) Success/Failure conditionE) None of the above

18) A survey of 300 randomly chosen students at a university indicated that 222 students have loans. After thesurveyor computes the sample proportion of students with loans and the standard error for the sampleproportion of students with loans, he/she writes down the following confidence interval (69%, 79%). Whichstatement is correct?A) The range from 69% to 79% is a 95% confidence interval for the proportion of students in the samplewho have loans

B) The sample proportion of students with loans is 74% with a standard error of approximately 2.5%C) If another surveyor takes another simple random sample of 300 students, the 95% confidence intervalbased on his/her sample will likely be the same.

D) There is a 95% chance that the proportion of students with loans at the university is between 69% and79%.

E) All of the above

A marketing agency has developed two vacation packages to promote a timeshare plan at a new resort. They estimatethat 40% of potential customers will choose the Overnight Plan which includes one night at the resort, and 60% willchoose the Weekend Plan which includes two nights.

19) The expected value of the number of nights potential customers will need isA) 1 B) 1.5 C) 2.5 D) 1.6 E) 2

20) The variance of the number of nights potential customers will need isA) 0.24 B) 0.30 C) 0.20 D) 0.1 E) 0.5

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21) For 5 randomly chosen potential customers the variance of the number nights they need isA) 12.5 B) 1.2 C) 2.5 D) 1 E) 6

A company manufacturing computer chips finds that 8% of all chips manufactured are defective. In an effort todecrease the percentage of defective chips, management decides to provide additional training to those employeeshired within the last year. After training was implemented, a sample of 450 chips revealed only 27 defects. Ahypothesis test is performed to determine if the additional training was effective.

22) Which of the following statement is true about this hypothesis test?A) Ho:p=8% vs Ha:p8%B) Ho:p=8% vs Ha:p8%C) It is a two tailed test about a proportion.D) It is a one tailed upper tail test about a proportion.E) It is a one tailed test about a proportion.

23) The value of the test statistics isA) -1.96 B) 1.56 C) -1.56 D) 2.57 E) -2.57

24) At the level of significance = 0.01,A) we can conclude that the additional training significantly increased the defect rate.B) we can conclude that the additional training significantly lowered the defect rate.C) we can conclude that the additional training did not significantly lower the defect rate.D) we can conclude that the additional training did affect the defect rate.E) None of these.

25) The pvalue for the appropriate hypotheses isA) 0.0594 B) 0.9406 C) 0.1188 D) 0.8812 E) 0.0051

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Answer KeyTestname: PASTTEST1

1) B2) B3) B4) C5) B6) D7) A8) C9) E10) B11) D12) C13) C14) D15) D16) D17) B18) B19) D20) A21) B22) E23) C24) C25) A

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