Which of the following describes a positive linear relationship between X and Y

1. Which of the following
describes a positive linear relationship between X and Y?

a. As the X values increase, the Y values
increase in a linear manner.
b. As the X values decrease, the Y values
decrease in a linear manner.
c. The X and Y values move uphill together in a
linear manner.
d. All
of these choices are true.

2. Which of the following is a property of the
slope, b1?

a. The slope equals one if X and Y have the same
variance.
b. The
slope has the same sign as r, the coefficient of correlation.
c. The slope equals one if r equals one.
d. All of these choices are true.

3. Dividends per share:

a. increase as the net income increases as long
as the number of shares outstanding remains constant.
b. decrease as the number of shares outstanding
decrease, all else constant.
c. are inversely related to the earnings per
share.
d. are based upon the dividend requirements
established by Generally Accepted Accounting Procedures.
e. are
equal to the amount of net income distributed to shareholders divided by the
number of shares outstanding.

4. What is the present value of 10 annual
payments of $500 at a discount rate of 12%?

a. $1,332
b. $1,761
c. $1,840
d.
$2,825
e. $3,040

5. It’s the end of the accounting period and no
electric bill has been received (but the expense has been incurred) you should
record an entry that:

a. increases the total assets and increases the
total expenses.
b. decreases the total liabilities and increases
the total expenses.
c.
increases the total liabilities and increases the total expenses.
d. decreases the total assets and increases the
total expenses.

6. Equipment with a cost of $150,000 has an
accumulated depreciation of $50,000. What is the historical cost of the
equipment?

a. $50,000
b. $200,000
c. $150,000
d. $100,000

7. Accumulated Depreciation is found on which of
the following financial statements?

a. Statement of Owner’s Equity
b. income statement
c. Balance sheet
d. All
of these answers are correct.

8. Mark’s Tree Service depreciation for the
month is $500. The adjusting journal entry is:

a.
Depreciation Expense 500 Equipment 500
b. Depreciation Expense 500 Accumulated
Depreciation 500
c. Accumulated Depreciation 500 Depreciation
Expense 500
d. Equipment 500 Accumulated Depreciation 500

9. Which of the following entries would record
the payment of a utility bill?

a. Accounts Payable, debit; Utilities Expense,
credit
b. Utilities Expense, debit; Accounts Payable,
credit
c.
Utilities Expense, debit; Cash, credit
d. Cash, debit; Utilities Expense, credit

GPA and Class
A statistics professor classifies his students
according to their grade point average (GPA) and their class rank. GPA is on a
0.0-4.0 scale, and class rank is defined as the under class (freshmen and
sophomores) and the upper class (juniors and seniors). One student is selected
at random.

GPA
Class Under 2.0 2.0 – 3.0 Over 3.0
Under 0.05 0.25 0.10
Upper 0.10 0.30 0.20

Class

Under 2.0

2.0 – 3.0

Over 3.0

Total

Under

0.05

0.25

0.10

0.40

Upper

0.10

0.30

0.20

0.60

Total

0.15

0.55

0.30

1.0

10. {GPA and Class Narrative} If the student
selected is in the upper class, what is the probability that her GPA is between
2.0 and 3.0?

11. {GPA and Class Narrative} What is the
probability that the student is in the lower class and has GPA over 3.0?

Real Estate

The joint probability distribution of variables
X and Y is shown in the table below. Amber and Bianca are real estate agents.
Let X denote the number of houses that Amber will sell in a month, and let Y
denote the number of houses Bianca will sell in a month.

X
Y 1 2 3
1 0.30 0.18 0.12
2 0.15 0.09 0.06
3 0.05 0.03 0.02

X/Y

1

2

3

1

0.30

0.18

0.12

2

0.15

0.09

0.06

3

0.05

0.03

0.02

12. {Real Estate Narrative} Determine the
marginal probability distribution of X.

13. {Real Estate Narrative} Calculate E(X) and
E(Y).

X

Marginal dist. Of X

E (X)

1

0.5

0.50

2

0.3

0.60

3

0.3

0.90

Lamps Lifetime

A certain brand of flood lamps has a lifetime
that has a normal distribution with a mean of 3,750 hours and a standard
deviation of 300 hours.

14. {Lamps Lifetime Narrative} What proportion
of these lamps will last less than 3,600 hours?

15. {Lamps
Lifetime Narrative} What proportion of these lamps will last between 3,800 and
4,100 hours?

Senior Citizens

A sample of 50 senior citizens is drawn at random
from a normal population whose mean age and standard deviation are 75 and 6
years, respectively.

16. {Senior Citizens Narrative} What is the
probability that the mean age is at most 73 years?

17. In a given
year, the average annual salary of a NFL football player was $205,000 with a
standard deviation of $24,500. If a simple random sample of 50 players was
taken, what is the probability that the sample mean will exceed $210,000?