In March 2009, 100 registered voters were asked to rate the effectiveness of President Obama. In March 2010, these same people were again asked to make the same assessment. Seventy percent of the second ratings were lower than the first ratings and 30% were higher. a. Using the sign test, specify the competing hypotheses to determine whether the president’s rating had significantly declined. b. Calculate the value of the test statistic. c. Calculate the p-value. d. At the 5% significance level, do the data suggest that the president’s rating had significantly declined?
> The MIT Sloan School of Management is one of the leading business schools in the United States. The following table contains the tuition data for the masters program in the Sloan School of Management. a. Use 2004 as the base year to form a simple price
> According to dollar cost averaging, a fixed amount of money is invested periodically in a portfolio. Consequently, more units of a financial asset are purchased when prices are low and fewer units are purchased when prices are high. Robert Dudek follows
> The following table shows the monthly adjusted closing price per share of Microsoft Corporation for 2009. a. Construct a simple price index with January 2009 as the base. b. What is the percentage price change in July relative to January? c. What is
> Consider the following average monthly prices for regular gasoline in California in 2008. a. Construct a simple price index with January 2008 as the base. b. Determine the percentage change in the average gasoline price in California from January to J
> Use the price and quantity information in the previous exercise to compute the following aggregate price indices, given a base year of 2008: Previous exercise: Consider the following price and quantity data for three products from 2008 to 2010. a. T
> Consider the following price and quantity data for three products from 2008 to 2010. a. Compute the simple price index for each product, using 2008 as the base year. b. Compare the relative price movements of the three products. Year Product 1 Pro
> Consider the following price data from 1994 to 2002. a. Compute the simple price index using 1994 as the base year. b. Determine the percentage change in prices from 1994 to 1998. Year 1994 1995 1996 1997 1998 1999 2000 2001 2002 Price 62 60 64 67
> Consider the following simple price index created with a base year of 2004. a. Update the index numbers using a revised base year of 2008. b. Determine the percentage change in price from 2004 to 2012. c. Determine the percentage change in price from
> Consider the following competing hypotheses and accompanying sample data drawn from a matched-pairs sample. a. Determine the value of the test statistic using a normal approximation for T. b. Calculate the p-value. c. At the 5% significance level, wha
> Consider the following adjusted closing stock prices for Ford Motor Company (Ford) and General Motors Company (GM). Compute and compare the monthly returns for both companies from January 2017 to May 2017. Date Ford GM 1/1/2017 12.36 36.61 2/1/2017
> Consider the following adjusted closing stock prices for Intel Corporation. Find the monthly returns for January and February of 2017. Date ………………………………………………………………………………. Adjusted Closing Price January 1, 2017 ………………………………………………………………………………………. 36.82 F
> You would like to invest $20,000 for a year in a risk-free investment. A conventional certificate of deposit (CD) offers a 4.6% annual rate of return. You are also considering an “Inflation-Plus” CD which offers a real rate of return of 2.2% regardless o
> Bill Anderson purchased 1,000 shares of Microsoft Corporation stock for $17,100 at the beginning of 2009. At the end of the year, he sold all of his Microsoft shares at $30.48 a share. He also earned a dividend of $0.52 per share during the year. a. Wha
> A portfolio manager invested $1,500,000 in bonds. In one year, the market value of the bonds dropped to $1,485,000. The interest payments during the year totaled $105,000. a. What was the manager’s total rate of return for the year? b. What was the man
> The price of a stock has gone up from $24 to $35 in one year. It also paid a year-end dividend of $1.20. What is the stock’s (a) income yield, (b) capital gains yield, and (c) total return?
> The year-end price and dividend information on a stock is given in the following table. a. What is the nominal return of the stock in years 2 and 3? b. What is the corresponding real return if the inflation rates for years 2 and 3 were 2.8% and 1.6%,
> You bought a corporate bond last year for $980. You received a coupon payment (interest) of $60, and the bond is currently selling for $990. What is the (a) income yield, (b) capital gains yield, and (c) total return on the investment?
> You borrowed $2,000 to take a vacation in the Caribbean islands. At the end of the year, you had to pay back $2,200. What is the annual interest that you paid on your loan?
> The Cheesecake Factory, Inc., is a popular restaurant chain in the United States. Although it started as a small restaurant in 1978, it currently has over 140 branches all over the country. The restaurants are characterized by extensive menus, custom d&A
> Mechanics A matched-pairs sample of 20 observations produced a test statistic of T = 165. a. Specify the competing hypotheses in order to determine whether the median difference is greater than zero. b. Determine the value of the test statistic using a
> The United States is often blamed for triggering the 2008 global financial crisis because many of the excesses and bad practices originated in the United States. The crisis has had consequences on all aspects of the global economy. According to a recent
> The dot-com period, roughly between 1995 and 2000, was characterized by extreme investor optimism for Internet-based businesses. This period was also marked by young, bold managers who made a good deal of money by reaching consumers over the Internet. Ar
> The consumption function, developed by John Maynard Keynes, captures one of the key relationships in economics. It expresses consumption as a function of disposable income, where disposable income is defined as income after taxes. For the years 2000&acir
> There has been a lot of discussion lately surrounding the levels and structure of executive compensation. It is well documented that in general, compensation received by senior executives has risen steeply in recent years. The accompanying table lists a
> In order to analyze differences in home prices between coastal and inland areas in California, an economist gathers 20 recent home sales (in $1,000s) in Southern California and 20 recent home sales (in $1,000s) in the Inland Empire. A portion of the resu
> The following table shows a portion of the percent change in the consumer price index (CPI) for the United States from 1980 through 2008. Use the method of runs above and below the median with a significance level of 5% to test the null hypothesis of ran
> A research analyst follows the monthly price data for the Dow Jones Industrial Average for the years 2008–2010. The accompanying table shows a portion of the price data. The analyst wants to test the random-walk hypothesis that suggests that prices move
> The following table shows a portion of the growth rate in the gross domestic product (GDP) for China from 1980 through 2008. Use the method of runs above and below the median with a significance level of 5% to test the null hypothesis of randomness again
> In order to ensure the public’s health and safety, state health inspectors are required to rate the cleanliness and quality of all restaurants in the state. Restaurants that consistently score below a certain level often lose their lice
> A research analyst believes that a positive relationship exists between a firm’s advertising expenditures and its sales. For 65 firms, she collects data on each firm’s yearly advertising expenditures and subsequent sales. She calculates a Spearman rank c
> An entrepreneur examines monthly sales (in $1,000s) for 40 convenience stores in Rhode Island. a. Specify the competing hypotheses to determine whether median sales differ from $130,000. b. At the 5% significance level, do median sales differ from $130
> The following table shows a portion of the annual returns (in percent) for two of Fidelity’s mutual funds: the Fidelity Advisor’s Electronic Fund and the Fidelity Advisor’s Utilities Fund. a. Specif
> An economist wants to determine whether the Price/Earnings (P/E) ratio is the same for firms in three industries. Five firms were randomly selected from each industry. Their P/E ratios are shown in the accompanying table. a. Specify the competing hypot
> A psychiatrist believes that the location of a test center may influence a test taker’s performance. To test his claim, he collects SAT scores from four different locations. a. Specify the competing hypotheses to test whether some med
> A consumer advocate researches the length of life between two brands of refrigerators, Brand A and Brand B. He collects data on the longevity of 40 refrigerators for Brand A and repeats the sampling for Brand B. A portion of the data is shown in the acco
> The table below shows a portion of the returns for Fidelity’s Equity Income mutual fund and Vanguard’s Equity Income mutual fund from 2000 through 2010. a. Specify the competing hypotheses to determine whether the me
> A farmer is concerned that a change in fertilizer to an organic variant might change his crop yield. He subdivides six lots and uses the old fertilizer on one half of each lot and the new fertilizer on the other half. The following table shows the result
> The following are the closing stock prices for a pharmaceutical firm over the past five days. a. Specify the competing hypotheses to determine whether the median stock price is greater than $61.25. b. Calculate the value of the Wilcoxon signed-rank te
> A research analyst follows the biotechnology industry and examines the daily stock price of Amgen, Inc. over the past year. The table below shows a portion of the daily stock price of Amgen (in $) for the 252 trading days in 2010. The research analyst wa
> The superintendent of a large suburban high school must decide whether to close the school for at least two days due to the spread of flu. If she can confirm a trend in absenteeism, then she will close the high school. The following are the number of stu
> The following table shows a portion of the growth rate in the gross domestic product (GDP) for India from 1980 through 2008. Use the method of runs above and below the median with a significance level of 5% to test the null hypothesis of randomness again
> A realtor in Mission Viejo, California, believes that the median price of a house is more than $500,000. The accompanying data is in $1,000s. a. Specify the competing hypotheses for the test. b. At the 5% significance level, is the realtor’s claim supp
> A gambler suspects that a coin may be weighted more heavily toward the outcome of tails (T) over heads (H). He flips the coin 25 times and notes the following sequence: T T H T T T H H T H T T H T T T H H T H T H TT H a. Specify the competing hypothese
> Given the digits zero through nine, a computer program is supposed to generate even and odd numbers randomly. The computer produced the following sequence of numbers: 5 3 4 6 8 0 2 9 7 7 1 6 8 3 1 5 2 4 3 3 9 2 a. Specify the competing hypotheses to te
> Let D denote a desirable outcome and U denote an undesirable outcome. The sequence of the outcomes is as follows: DDDUUDUUUUUDDDUUDUUUDDDUUUUDDD At the 1% significance level, conduct a hypothesis test to determine if the outcomes are nonrandom.
> Let A and B be two possible outcomes of a single experiment. The sequence of the outcomes is as follows: BBAABAABBABABBBABBAAABABBABBABA At the 5% significance level, conduct a hypothesis test to determine if the outcomes are nonrandom.
> Consider the following information: n1 = 10, n2 = 13, and R = 8, where R is the number of runs, n1 and n2 are the number of elements in a sequence possessing and not possessing a certain attribute, and n1 + n2 = n. a. Specify the competing hypotheses to
> Consider the following information: n1 = 24, n2 = 28, and R = 18, where R is the number of runs, n1 and n2 are the number of elements in a sequence possessing and not possessing a certain attribute, and n1 + n2 = n. a. Specify the competing hypotheses t
> For scholarship purposes, two graduate faculty members rate 12 applicants to the PhD program on a scale of 1 to 10 (with 10 indicating an excellent candidate). These ratings are shown in the following table. a. Using the sign test, specify the competin
> In March 2009, 100 registered voters were asked to rate the effectiveness of President Obama. In March 2010, these same people were again asked to make the same assessment. Seventy percent of the second ratings were lower than the first ratings and 30% w
> Concerned with the increase of plastic water bottles in landfills, a leading environmentalist wants to determine whether there is any difference in taste between the local tap water and the leading bottled water. She randomly selects 14 consumers and con
> An economist wants to test whether the median hourly wage is less than $22. a. Specify the competing hypotheses for the test. b. At the 5% significance level, can you conclude that the median hourly wage is less than $22? Explain.
> Consider the following sign data, produced from a matched-pairs sample of ordinal data. a. Specify the competing hypotheses to determine whether the proportion of negative signs is significantly greater than the proportion of positive signs. b. Calcul
> Consider the following sign data, produced from a matched-pairs sample of ordinal data. a. Specify the competing hypotheses to determine whether the proportion of negative signs differs from the proportion of positive signs. b. Calculate the value of
> Consider the following competing hypotheses and sample data. a. Calculate the value of the test statistic for the sign test. b. Calculate the p-value. c. At the 1% significance level, what is the conclusion? Explain. Hoip <0.50 n= 25 p= 0.64 HẠ:
> Consider the following competing hypotheses and sample data. a. Calculate the value of the test statistic for the sign test. b. Calculate the p-value. c. At the 5% significance level, what is the conclusion? Explain. Hoip= 0.50 Hai P # 0.50 n= 40
> The accompanying table shows a portion of the number of cases of crime related to gambling and offenses against the family and children for the 50 states in the United States during 2010. Using the Spearman rank correlation coefficient, determine wheth
> . Many attempts have been made to relate happiness with various factors. One such study relates happiness with age and finds that, holding everything else constant, people are least happy when they are in their mid-40s (The Economist, December 16, 2010).
> An engineer examines the relationship between the weight of a car and its average miles per gallon (MPG). For a sample of 100 cars, he calculates a Spearman rank correlation coefficient of −0.60. a. Specify the competing hypotheses to determine whether
> A social scientist analyzes the relationship between educational attainment and salary. For 65 individuals, he collects data on each individual’s educational attainment (in years) and his/her salary (in $1,000s). He then calculates a Spearman rank correl
> The director of graduate admissions at a local university is analyzing the relationship between scores on the Graduate Record Examination (GRE) and subsequent performance in graduate school, as measured by a student’s grade point average (GPA). She uses
> In an attempt to determine whether a relationship exists between the price of a home (in $1,000s) and the number of days it takes to sell the home, a real estate agent collected the relevant data from recent sales in his city. A portion of the data is sh
> During the fourth quarter of 2009, rents declined in almost all major cities in the United States. The largest fall was in New York, where average rents fell nearly 20% to $44.69 per square foot annually (The Wall Street Journal, January 8, 2010). The fo
> You are interested in whether the returns on Asset A (in %) are negatively correlated with the returns on Asset B (in %). Consider the following annual return data on the two assets: a. Specify the competing hypotheses to determine whether the Spearman
> The following table shows a portion of the World Bank’s 2008 ranking of the richest countries, as measured by per capita GNP. In addition, it gives each country’s respective rank with respect to infant mortality accord
> Applications The following table shows the ranks given by two judges to the performance of six finalists in a men’s figure skating competition: a. Specify the competing hypotheses to determine whether the Spearman rank correlation coe
> Consider the following competing hypotheses and accompanying sample data. a. What is the value of the test statistic and its associated p-value? Assume the normal approximation for rs. b. At the 1% significance level, what is the conclusion? Hoi P
> Consider the following competing hypotheses and accompanying sample data. a. What is the value of the test statistic and its associated p-value? Assume the normal approximation for rs. b. At the 10% significance level, what is the conclusion? Ho:P
> Consider the following sample data: a. Specify the competing hypotheses to determine whether the Spearman rank correlation coefficient is less than zero. b. Calculate and interpret rs. c. The p-value associated with the test statistic in part b is 0.
> For exercises marked with an asterisk, it is advised that you use a statistical software package that accommodates the Spearman rank correlation test. Consider the following sample data: a. Specify the competing hypotheses to determine whether the Spe
> A human resource specialist wants to determine whether the median job satisfaction score (on a scale of 0 to 100) differs depending on a person’s field of employment. She collects scores from 30 employees in three different fields. A po
> A statistics instructor wonders whether significant differences exist in her students’ median exam scores in her three different sections. She randomly selects scores from 10 different students in each section. A portion of the data is
> A well-known conglomerate claims that its detergent “whitens and brightens better than all the rest.” In order to compare the cleansing action of the top three detergents, 15 swatches of white cloth were soiled with re
> The following table lists a portion of the data representing the annual returns (in percent) over a 10-year period for the Balanced mutual fund, a top-performing mutual fund from the Janus Capital Group. Year …………………………………………………………………………………………… Return 2
> A research analyst examines annual returns (in percent) for Industry A, Industry B, and Industry C, as shown in the accompanying table. a. Specify the competing hypotheses to test whether some differences exist in the median returns by industry. b. Ca
> A quality-control manager wants to test whether there is any difference in the median length of life of light bulbs between three different brands. Random samples were drawn from each brand, where the duration of each light bulb (in hours) was measured.
> Consider the following competing hypotheses and sample data. a. Assuming that the sampling distribution of T is normally distributed, calculate the value of the test statistic. b. Calculate the p-value. c. At the 5% significance level, what is the co
> Consider the following sample data. a. Specify the competing hypotheses to determine whether the median is less than 10. b. Calculate the value of the test statistic T. c. The p-value corresponding to the test statistic in part b is approximately equ
> Consider the following sample data: a. Specify the competing hypotheses to determine whether the median is greater than 140. b. Calculate the value of the test statistic T. c. The p-value corresponding to the test statistic in part b is equal to 0.04
> Consider the following sample data: a. Specify the competing hypotheses to determine whether the median differs from 20. b. Calculate the value of the test statistic T. c. The p-value corresponding to the test statistic in part b is equal to 0.188. A
> Consider the sample regressions for the linear, the logarithmic, the exponential, and the log-log models. For each of the estimated models, predict y when x equals 50. Response Variable: y Response Variable: In(y) Model 1 Model 2 Model 3 Model 4 Int
> Consider the sample regressions for the linear, the logarithmic, the exponential, and the log-log models. For each of the estimated models, predict y when x equals 100. Response Variable: y Response Variable: In(y) Model 1 Model 2 Model 3 Model 4 In
> According to a report by the government, new home construction fell to an 18-month low in October 2010 (CNNMoney.com, November 17, 2010). Housing starts, or the number of new homes being built, experienced an 11.7% drop in the seasonally adjusted annual
> A research analyst wants to test whether the median unemployment rate differs from one region of the country to another. She collects the unemployment rate (in percent) of similar-sized cities in three regions of the United States. The results are shown
> Learning curves are used in production operations to estimate the time required to complete a repetitive task as an operator gains experience. Suppose a production manager has compiled 30 time values (in minutes) for a particular operator as she progress
> The inventory manager at a warehouse distributor wants to predict inventory cost (Cost in $) based on order quantity (Quantity in units). She thinks it may be a nonlinear relationship since its two primary components move in opposite directions: (1) ord
> The accompanying table shows a portion of the monthly data on the personal savings rate (Savings in %) and personal disposable income (Income in $ billions) in the U.S. from January 2007 to November 2010. a. Estimate the linear model, Savings = Î
> A nutritionist wants to understand the influence of income and healthy food on the incidence of smoking. He collects 2009 data on the percentage of smokers in each state in the U.S., the percentage of the state’s population that regular
> The operator’s manager at an electronics company believes that the time required for workers to build a circuit board is not necessarily proportional to the number of parts on the board. He wants to develop a regression model to predict time (in minutes)
> A realtor examines the factors that influence the price of a house. He collects data on the prices (in $) for 36 single-family homes in Arlington, Massachusetts, sold in the first quarter of 2009. For explanatory variables, he uses the houseâ€
> A horticulturist is studying the relationship between tomato plant height and fertilizer amount. Thirty tomato plants grown in similar conditions were subjected to various amounts of fertilizer (in ounces) over a four-month period, and then their heights
> A sports enthusiast wants to examine the factors that influence a quarterback’s salary (Salary in $ millions). In particular, he wants to assess the influence of the pass completion rate (PC), the total touchdowns scored (TD), and a qua
> Economists often examine the relationship between the inputs of a production function and the resulting output. A common way of modeling this relationship is referred to as the Cobb–Douglas production function. This function can be expr
> Use the data in Exercise 24 to answer the same four questions regarding life expectancy of males. Who is more likely to benefit from adding more physicians to the population? Explain. Exercise 24: Life expectancy at birth is the average number of years
> Random samples were drawn from four independent populations. The results are shown in the accompanying table. a. Specify the competing hypotheses to test whether some differences exist between the medians. b. At the 5% significance level, do some medi
> Life expectancy at birth is the average number of years that a person is expected to live. There is a huge variation in life expectancies between countries, with the highest being in Japan, and the lowest in some African countries. An important factor fo
> Chad Dobson has heard about the positive outlook for real estate investment in college towns. He is interested in investing in Davis, California, which houses one of the University of California campuses. He uses zillow.com to access data on 2011 monthly
> The facility manager at a pharmaceutical company wants to build a regression model to forecast monthly electricity cost (Cost in $). Three main variables are thought to influence electricity cost: (1) average outdoor temperature (Temp in °F),
> Professor Orley Ashenfelter of Princeton University is a pioneer in the field of wine economics. He claims that, contrary to old orthodoxy, the quality of wine can be explained mostly in terms of weather conditions. Wine romantics accuse him of undermini
> A manufacturing manager uses a dexterity test on 20 current employees in order to predict watch production based on time to completion (in seconds). A portion of the data is shown below. Watches ………………………………………………………………………………………… Time 23 ………………………………………
