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BUAD 310-Midterm First Draft Dr. Ansari 10/17/07 Part 1 -MULTIPLE CHOICE [2 points each] 1. A newspaper examines the correlation between weight of large cars and the death rates in car accidents. Initially they looked at large cars and found the correlation to be 0.3, now they decide to study the correlation between all types of cars and the death rates , In general, what would be the new sample correlation? a) Lower than 0.3 b) Higher than 0.3 Answer, In general, without range restriction correlation becomes larger. c) Zero d) Cannot be predicted to be lower or higher. 2. If a study is found to be statistically significant (Reject Ho) at 1 % significance Level and it is a lower-tail test then we can say the most likely test statistics is a) t ts = -3 Answer, Lower-Tail test, most evidence by large magnitude negative number b) t ts = -1 c) t ts = 0 d) t ts = 1 e) t ts = 3 3. Suppose we wish to test Ho: µ = 0.5 Vs Ha: µ 0.5. What will result if we don’t reject Ho ? a) We have made a Type I error b) We have made a Type II error c) We have made a correct decision d) We did not make Type I error Answer e) We did not make Type II error Since we don’t reject Ho, either we committed a type II error or made a correct decision. We cannot say it for sure. But we did not make a type I error. Ho is True Ho is False Reject Ho Type I error Correct Decision Don’t Reject Ho Correct Decision Type II error This is copyrighted material, cannot be copied or sold without the approval of Dr. Ansari and USC. 2
BUAD 310-Midterm First Draft Dr. Ansari 10/17/07 4. Which of the following statements best describes what is meant by the correlation between two variables? a)

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