Econ2P91_midterm_final_SOLUTIONS_Fall2009

# Econ2P91_midterm_final_SOLUTIONS_Fall2009 - ECON2P91:...

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ECON2P91: Business Econometrics with Applications Mid-term Examination Date: October 17, 2009 NAME:_______________________________ STUDENT NO: ________________________ LECTURE SECTION: Section 1 Monday night: 7:00-10:00 pm. Section 2 Friday afternoon: 2:00-5:00 pm. Instructions: Answer all questions from Sections A and B The Standard Normal Distribution table is provided ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Section A: Multiple Choice [40 points; 2 points each] 1. The expected value of a discrete random variable a. is the outcome that is most likely to occur b. can be found by determining the 50% value in the cumulative distribution. c. equals the population mean d. is computed as a weighted average of the possible outcome of that random variable, where the weights are the probabilities of that outcome Answer: _D_____ 2. The correlation between X and Z a. cannot be negative since variances are always positive b. is the covariance squared c. can be calculated by dividing the covariance of X and Z by the product the two standard deviations d. is given by corr (X,Z) = cov (X,Z) / (var (X) var (Z)) Answer: __C____ 3. To standardize a variable you a. subtract its mean and divide by its standard deviation b. integrate the area below two points under the normal distribution c. add and subtract 1.96 times the standard deviation to the variable d. divide by its standard deviation, as long as its mean is 1 Answer: __A____ 4. The sample average is a random variable and a. is a single number and as a result cannot have a distribution b. has a probability distribution called its sampling distribution c. has a probability distribution called the standard normal distribution d. has a probability distribution that is the same as for the i.i.d. variables Answer: __B____ THIS BOX IS FOR MARKERS ONLY: Section A _____/40 Section B _____/60 Total _____/100 1

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5. According to the Central Limit Theorem, the mean of y is a. n y / μ b. y c. n y / d. n y / σ Answer: __B____ 6. An estimator is a. an estimate b. a formula that gives an efficient guess of the true population value c. a random variable d. a nonrandom number Answer: __B____ 7. The correlation coefficient a. lies between 0 and 1 b. is a measure of linear association c. is close to one if X causes Y d. takes on a high value if you have a strong nonlinear relationship Answer: ___B___ 8. Which of the following is an example of panel data? a. Prices of 10 commonly traded stocks at 11:00 EST on October 2 nd 2009 b. Daily prices of IBM stocks over the past seven days c. Daily prices of 10 commonly traded stocks over the past seven days d. None of the above Answer: _C_____ 9. The covariance between X and Z a. has no units b. has units that depend on the units of both X and Y c. lies between -1 and +1 d. none of the above Answer: __D____ 10. If the p-value for a hypothesis test is less than the level of significance a. the null hypotheses if accepted b. the null hypothesis is rejected c. the t-statistic will be small d. all of the above Answer: ___B___ 2
11. Which of the following formulas best describes a 95 percent confidence interval

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## This note was uploaded on 04/28/2011 for the course ECON 2P91 taught by Professor Ogwang during the Winter '09 term at Brock University, Canada.

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Econ2P91_midterm_final_SOLUTIONS_Fall2009 - ECON2P91:...

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