# Exam 1 Answers - ECN 425[Form A KEY for the FIRST MID-TERM...

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1 ECN 425 KEY for the FIRST MID-TERM EXAM DR. AHN [Form A] Q1. for 1): d ; for 2): c ; for 3): d ; for 4): c ; for 5): d for 6): c ; for 7): b ; for 8): d ; for 9): d ; for 10): b Q2. (1) 0.755 0.71 0.045, 0 () 0.245 0.24 0.005, 1 x if x fx if x  . (2) (1,1) 0.005 Pr( 1| 1) 0.0204 (1) 0.245 x f YX f  . Q3. (1) 2 Pr[ (2) 5.99] 0.05.  (2) 1 Pr( ) 1 Pr( 1.74) 1 0.9591 0.0419 pZ t Z    < 0.05 Reject 0 H . (3) 7,000 ( ) 23,600 1.96 23,600 1,372 22,228 100 7,000 ( ) 23,600 1.96 23,600 1,372 24,972 100 YcS E Y E Y   Pr(\$22,228 \$24,972) 0.95 Y  . Q4. (1) 10 1 40 ˆˆ ˆ 0.5; 0.1 0.5 0.5 0.15 80   . (2) 22 2 2 1 2 ˆ 0.5 80 0.4 5 0 ii XX ESS R TSS Y Y  . Q5. (1) Average earnings of non-top 10 MBA program graduates are \$80,598. (2) 01 11 :0 ; HH  . [5 points. Zero points for those who use two-tailed tests!] 0.8477 1.884 0.45 t ; 1.645 c tc  Reject H 0 in favor of 1 H . That is, top-10 program graduates make higher earnings. So, worth going to top-10. Pr( 1.844) 0.0325 pv a l Z  < 0.05 Same conclusion.

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2 [Form B] Q1. for 1): b ; for 2): b ; for 3): a ; for 4): d ; for 5): c for 6): b ; for 7): b ; for 8): c ; for 9): c ; for 10): d Q2. (1) 2 Pr[ (2) 5.99] 0.05.  (2) 1 Pr( ) 1 Pr( 1.54) 1 0.9382 0.0618 pZ t Z    > 0.05
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Exam 1 Answers - ECN 425[Form A KEY for the FIRST MID-TERM...

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