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Statistics For Business And Economics 13th Edition James T. McClave, P. George Benson, Terry Sincich - Solutions
The price of gold is used by some financial analysts as a barometer of investors' expectations of inflation, with the price of gold tending to increase as concerns about inflation increase. The table below shows the average annual price of gold (in dollars per ounce) from 1990 through 2015.a.
Explain in words how to calculate the following types of indexes: a. Simple composite index b. Weighted composite index c. Laspeyres index d. Paasche index
There has been phenomenal growth in the transportation sector of the economy over the past decade. The personal consumption expenditure figures (in billions of dollars) over the past 10 years are given in the table below.a. Compute exponentially smoothed values of this personal consumption time
The data in the table below are the amounts of crude oil (millions of barrels) imported into the United States from the Organization of Petroleum Exporting Countries (OPEC) for the years 1995-2015.a. Construct two exponentially smoothed series for this time series, using w = .1 and w = .9.b. Plot
Standard & Poor's 500 Composite Stock Index (S&P 500) is a stock market index. Like the Dow Jones Industrial Average, it is an indicator of stock market activity. The data in the table are end-of-quarter values of the S&P 500 for the years 2008-2015.a. Calculate and plot the
How does the choice of the smoothing constant w impact an exponentially smoothed forecast?
Refer to Exercise 14.4. The table with the prices for product A for the four quarters of last year is reproduced at right. Holt's smoothing method with w = .2 and v = .6 was applied to the data.a. Find the missing trend value for Quarter 3.b. Find the missing smoothed value for Quarter 4. c. Give
Refer to Exercise 14.7 and the data on U.S. beer production (in millions of barrels) for the years 2004-2015. a. Use the 2004-2013 values to forecast the 2014 and 2015 production, using simple exponential smoothing with w = .3. Repeat with w = .7. b. Use Holt's model with w = .7 and v = .3 to
Refer to the quarterly housing start series, Exercise 14.8. Suppose you want to forecast the number of new housing starts in 2015 using data for 2013 and 2014. a. Calculate the exponentially smoothed values for 2013 and 2014 using w = .6. b. Plot the housing starts series and the exponentially
The CPI measures the increase (or decrease) in the prices of goods and services relative to a base year. The CPI for the years 1990-2015 (using 1984 as a base period) is shown in the table below.a. Graph the time series. Do you detect a long-term trend?b. Calculate and plot the exponentially
Refer to the annual OPEC oil import data, Exercise 14.21. a. Use the exponentially smoothed (w = .9) series you constructed in Exercise 14.21a to forecast OPEC oil imports in 2015. b. Forecast OPEC oil imports in 2015 using the Holt's forecasting model with smoothing constants w = .3 and v = .8. c.
Refer to the quarterly Standard & Poor's 500 stock market index, Exercise 14.22.a. Use exponential smoothing with w = .7 to smooth the series from 2008 through 2014. Then forecast the quarterly values in 2015 using only the information through the fourth quarter of 2014.b. Repeat part a using w
Explain in words the difference between Laspeyres and Paasche indexes.
Refer to Exercise 14.29. Suppose you want to use only the 2013-2014 S&P values to forecast the quarterly 2015 values. Calculate the forecasts using Holt's model with w = .3 and v = .5. Repeat with w = .7 and v = .5.Use exponential smoothing with w = .7 to smooth the series from 2008 through
The fluctuation of gold prices is a reflection of the strength or weakness of the U.S. dollar. The table below shows monthly gold prices from January 2009 to December 2015.a. Use exponential smoothing with w = .5 to calculate monthly smoothed values from 2009 to 2014. Then forecast the monthly gold
Refer to the beer production forecasts, Exercise 14.25. In part a you obtained forecasts of 2014 and 2015 craft beer production using exponential smoothing with w = .3 and w = .7. a. Calculate the forecast errors for the w = .3 exponentially smoothed forecasts. b. Calculate the forecast errors for
Refer to the beer production forecasts, Exercise 14.25. In part b you obtained forecasts of 2014 and 2015 craft beer production using Holt's method with (w = .3, v = .7) and (w = .7, v = .3).a. Calculate the forecast errors for the w = .3, v = .7 Holt forecasts.b. Calculate the forecast errors for
Refer to your exponential smoothing forecasts of the quarterly S&P 500 for 2015, Exercise 14.29.a. Calculate MAD, MAPE, and RMSE for the forecasts with w = .7.b. Calculate MAD, MAPE, and RMSE for the forecasts with w = .3.c. Compare MAD, MAPE, and RMSE for the two simple exponential smoothing
Refer to your Holt forecasts of the quarterly S&P 500 for 2015, Exercise 14.30. a. Calculate MAD, MAPE, and RMSE for the forecasts with w = .3 and v = .5. b. Calculate MAD, MAPE, and RMSE for the forecasts with w = .7 and v = .5. c. Compare MAD, MAPE, and RMSE for the two Holt forecasts models.
Refer to the monthly gold prices, Exercise 14.31. Two models were used to forecast the monthly 2015 gold prices: an exponential smoothing model with w = .5 and a Holt model with w = .5 and v = .5. a. Use MAD, MAPE, and RMSE criteria to evaluate the two models' accuracy for forecasting the monthly
The next table reports annual U.S. school enrollment (in thousands) for the period 1990-2014.a. Use the 1990 to 2011 enrollments and simple exponential smoothing to forecast the 2012-2014 school enrollments. Use w = .8.b. Use Holt's method with w = .8 and v = .7 to forecast the 2012-2014
The annual price of a finished product (in cents per pound) from 2000 to 2015 is given in the table below. The time variable t begins with t = 1 in 2000 and is incremented by 1 for each additional year.a. Fit the straight-line model, E(Yt) = β0 + β1t, to the data.b. Give the least squares
Retail sales in Quarters 1-4 over a 10-year period for a department store are shown (in hundreds of thousands of dollars) in the table below.a. Write a regression model that contains trend and seasonal components to describe the sales data. b. Use least squares regression to fit the model. Evaluate
The table below gives the prices for three products (A, B, and C) for the four quarters of last year.a. Compute a simple index for the Quarter 4 price of product A, using Quarter 1 as the base period.b. Compute a simple index for the Quarter 2 price of product B, using Quarter 1 as the base
What advantage do regression forecasts have over exponentially smoothed forecasts? Does this advantage ensure that regression forecasts will prove to be more accurate? Explain.
The level at which commercial lending institutions set mortgage interest rates has a significant effect on the volume of buying, selling, and construction of residential and commercial real estate. The data in the table are the annual average mortgage interest rates for conventional, fixed-rate,
Refer to Exercise 14.9 and the annual prices of natural gas from 1997 to 2015. A simple linear regression model, E(Yt) = β0 + β1t, where t is the number of years since 1997, is proposed to forecast the annual price of natural gas.a. Give the least squares estimates of the β's and interpret
In an effort to reduce gasoline consumption and curb carbon emissions, policymakers have proposed raising gasoline taxes. In the Journal of Applied Econometrics (Vol. 26, 2011), a group of economists investigated the effect of a gasoline tax on gas consumption. The researchers used least squares
Researchers at the University of West Florida used regression analysis to build a model for predicting the outcome of presidential elections (Political Analysis, Vol. 17, 2009). The dependent variable of interest was Yt = percentage of the two-party vote won by the incumbent party's candidate in
The table below represents all life insurance policies (in millions) in force on the lives of U.S. residents for the years 1985 through 2014.a. Use the method of least squares to fit a simple regression model to the data. b. Forecast the number of life insurance policies in force for 2015 and
The next table presents the quarterly sales index for one brand of graphing calculator at a campus bookstore. The quarters are based on an academic year, so the first quarter represents fall; the second, winter; the third, spring; and the fourth, summer.Define the time variable as t = 1 for the
The success of commercial banks that make loans often hinges on how quickly the bank recognizes that a loan will result in a default (loss). The longer the bank delays in this recognition, the more vulnerable the bank. A paper in the Journal of Accounting Research (June 2015) investigated the
Define autocorrelation. Explain why it is important in time series modeling and forecasting.
For each case, indicate the decision regarding the test of the null hypothesis of no first-order autocorrelation against the alternative hypothesis of positive first-order autocorrelation.a. k = 2, n = 20, α = .05, d = 1.1b. k = 2, n = 20, α = .01, d = 1.1c. k = 5, n = 65, α = .05, d = .95d. k =
Refer to Exercise 14.4. The next table gives the quantities purchased for three products (A, B, and C) for the four quarters of last year.a. Compute a Laspeyres index for the Quarter 4 price of all three products, using Quarter 1 as the base period.b. Compute a Paasche index for the Quarter 4 price
What do the following Durbin-Watson statistics suggest about the autocorrelation of the time series residuals from which each was calculated? a. d = 3.9 b. d = .2 c. d = 1.99
Refer to the Journal of Management Accounting Research (Vol. 27, 2015) investigation of the link between the amount a company donates to a charity and the financial inflexibility of the firm, Exercise 12.62. Recall that the researchers measured financial inflexibility as the ratio of restricted
Forecasts of automotive vehicle sales in the United States provide the basis for financial and strategic planning at large automotive corporations. The following forecasting model was developed for Yt, total monthly passenger car and light truck sales (in thousands):where x1 = average monthly
Refer to the Political Analysis (Vol. 17, 2009) study on predicting presidential elections, Exercise 14.44. Recall that a regression model with five independent variables was fit to data collected for n = 24 election years in order to predict Yt = percentage of the two-party vote won by the
Refer to the data on annual mortgage interest rate (Yt), Exercise 14.41. You fit the simple linear regression model, E(Yt) = β0 + β1t, to the data for the years 1990-2015 (t = 0, 1, 2, c, 25). a. Find and plot the regression residuals against t. Does the plot suggest the presence of
Refer to the annual data on natural gas price (Yt), Exercise 14.42. You fit the simple linear regression model, E(Yt) = β0 + β1t, to the data for the years 1997 to 2015 (t = 1, 2, c, 19). a. Find and plot the regression residuals against t. Does the plot suggest the presence of autocorrelation?
Refer to the annual data on number of life insurance policies in force 1Yt2, Exercise 14.45. You fit the simple linear regression model, E(Yt) = β0 + β1t, to the data for the years 1985 to 2014. (t = 1, 2, c, 30). a. Find and plot the regression residuals against t. Does the plot suggest the
Exploratory research published in the Journal of Professional Services Marketing (Vol. 5, 1990) examined the relationship between deposit share of a retail bank and several marketing variables. Quarterly deposit share data were collected for 5 consecutive years for each of nine retail banking
Workers insured under the Social Security program are categorized as fully and permanently insured, fully but not permanently insured, or insured in the event of disability. The number of workers (in millions) in each insured category from 2000 to 2015 are provided in the accompanying table.a.
Refer to Exercise 14.58.a. Compute the exponentially smoothed series for the annual number of workers who are fully and permanently insured for Social Security. Use the smoothing constant w = .5. b. Plot the number of workers and the exponentially smoothed values on the same graph. c. Use
The table below lists the U.S. median annual family income every 5 years during the period 1975-2015. It also contains several values for each of two simple indexes for median family income.a. Calculate the missing values of each simple index.b. Interpret the index for 1990.
In 1990, the average weekly food cost for a suburban family of four was estimated to be $154.40. The table (next column) presents the retail prices of four food items for selected years from 1990 to 2015. Assume a typical suburban family of four purchased the following quantities of food, on
With the advent of managed care, U.S. hospitals have begun to operate like businesses. More than ever before, hospital administrators need to know and apply the theories and methods taught in business schools. Richmond Memorial Hospital in Richmond, Virginia, uses regression analysis to forecast
Refer to the annual interest rate time series, Exercise 14.41. Use w = .3 and v = .7 to compute the Holt forecasts for 2016-2017. Compare these with the linear regression forecasts obtained in Exercise 14.41 using MAD, MAPE, and RMSE.Data from Exercise 14.41
The yearly closing prices of Abbott Laboratories stock are shown in the table below.a. Use exponential smoothing with w = .8 to forecast the 2016 and 2017 closing prices. If you buy at the end of 2015 and sell at the end of 2017, what is your expected gain (loss)?b. Repeat part a using Holt's
Refer to Exercise 14.63.a. Fit a simple linear regression model to the stock price data.b. Plot the fitted regression line on a scatterplot of the data.c. Forecast the 2016 and 2017 closing prices using the regression model.d. Construct 95% prediction intervals for the forecasts of part c.
Annual retirement assets (in trillions of dollars) for three fund types in selected years are given in the table below.a. Compute simple indexes for each of the three time series using 2000 as the base period.b. Construct a time series plot that displays the three indexes.c. Using the results of
The gross domestic product (GDP) is the total U.S. output of goods and services valued at market prices. The quarterly GDP values (in billions of current dollars) for the period 2011-2015 are given in the accompanying table. Using weights w = .5 and n = .5, calculate Holt forecasts for the four
Refer to Exercise 14.66.Data from Exercise 14.66a. Use the simple linear regression model fit to the data to forecast the 2016 quarterly GDP. Place 95% prediction limits on the forecasts.b. The GDP values given are seasonally adjusted, which means that an attempt to remove seasonality has been made
Refer to Exercises 14.66 and 14.67. For each of the forecasting models, apply the MAD, MAPE, and RMSE criteria to evaluate the forecasts for the four quarters of 2016. Which of the forecasting models performs best according to each criterion? (You will need to obtain the actual 2016 GDP values to
A major portion of total consumer credit extended is in the category of revolving credit loans. Amounts outstanding (in billions of dollars) for the period 1995-2015 are given in the table.a. Use a simple linear regression model to forecast the 2016 and 2017 values. Place 95% prediction limits on
While overall beer production in the United States has declined the past several years, craft beer production has increased dramatically. The table below lists the U.S. craft beer production (in millions of barrels) for the period 2004-2015. a. Use 2004 as the base period to compute the simple
The number of dollars a person receives in a year is referred to as his or her monetary (or money) income. This figure can be adjusted to reflect the purchasing power of the dollars received relative to the purchasing power of dollars in some base period. The result is called a person's real
Refer to Example 14.1 and the 2015 monthly IBM stock prices. a. Use the exponentially smoothed series (with w = .5) from January to September 2015 to forecast the monthly values of the IBM stock price from October to December 2015. Calculate the forecast errors. b. Use a simple linear regression
T. C. Chiang considered several time series forecasting models of future foreign exchange rates for U.S. currency (The Journal of Financial Research, Summer 1986). One popular theory among financial analysts is that the forward (90-day) exchange rate is a useful predictor of the future spot
The quarterly numbers of single-family housing starts (in thousands of dwellings) in the United States from 2013 through 2015 are recorded below.a. Using Quarter 1, 2013, as a base period, calculate the simple index for this quarterly time series.b. Interpret the simple index for Quarter 2, 2014.c.
The table shown in the next column lists the spot price of natural gas (in dollars per Btu) between 1997 and 2015. a. Using 1997 as the base period, calculate and plot the simple index for the spot price of natural gas from 1997 through 2015. b. Use the simple index to interpret the trend in the
Refer to the IHS Journal of Hydraulic Engineering (September 2012) study of commercial pipes used in a water distribution network, Exercise 6.63. Of interest was the ratio of repair to replacement cost of the pipe. The ratios for a sample of 13 different pipe sizes are listed in the table. Assume
Refer to Exercise 6.36. Recall that stock screeners are automated tools used by investment companies to help clients select a portfolio of stocks to invest in. The annualized percentage returns on investment (as compared to the Standard & Poor's 500 Index) for 13 randomly selected stock
Refer to the Journal of Business Logistics (Vol. 36, 2015) study of the factors that lead to successful performance-based logistics projects, Exercise 7.52. Data on years of experience for 6 Department of Defense (DoD) commercial suppliers and 11 DoD government employees are reproduced in the
Do men and women differ in their attitudes toward public corruption and tax evasion? This was the question of interest in a study published in Contemporary Economic Policy (October 2010). The data for the analysis were obtained from a representative sample of over 30,000 Europeans. Each person was
Many golf teaching professionals believe that a greater hip-to-shoulder differential angle during the early downswing-dubbed the "X-Factor"-leads to improved golf performance. The Journal of Quantitative Analysis in Sports (Vol. 5, 2009) published an article on the X-Factor and its relationship to
Refer to the Journal of Accounting Education (Vol. 25, 2007) study on homework assistance for accounting students, Exercise 8.18. Recall that students were randomly assigned different levels of assistance on the homework. Some (20 students) were given the completed solution, some (25 students) were
Refer to the Journal of Business Logistics (Vol. 36, 2015) study of the factors that lead to successful performance-based logistics projects, Exercise 15.14. Data on years of experience for 6 Department of Defense (DoD) commercial suppliers and 11 DoD government employees are reproduced in the
What is the level of collaboration between nurses and resident doctors working in the intensive care unit (ICU)? This was the question of interest in an article published in the Journal of Advanced Nursing (Vol. 67, 2011). Independent samples of 31 nurses and 46 resident doctors, all working in the
Refer to the Academy of Management Journal (October 2007) study on rudeness in the workplace, Exercise 8.21. Recall that 98 college students enrolled in a management course were randomly assigned to one of two experimental conditions: rudeness condition (where students were berated by a facilitator
Use Table I of Appendix D to calculate the following binomial probabilities:a. P(x ( 7) when n = 8 and p = .5b. P(x ( 5) when n = 8 and p = .5c. P(x ( 8) when n = 8 and p = .5d. P(x ( 10) when n = 15 and p = .5. Also use the normal approximation to calculate this probability and then compare the
A paired difference experiment with n = 30 pairs yielded T+ = 354.a. Specify the null and alternative hypotheses that should be used in conducting a hypothesis test to determine whether the probability distribution for population 1 is located to the right of that for population 2.b. Conduct the
Refer to The Public Manager (Summer 2008) performance ratings of government agencies, Exercise 8.32. Evaluation scores for all agencies were obtained for two consecutive years and are saved in the file. Data for a random sample of five of these agencies are shown in the table below. Suppose you
Does handling a museum object have a positive impact on a sick patient's well-being? To answer this question, researchers at the University College London collected data from 32 sessions with hospital patients (Museum & Society, November 2009). Each patient's health status (measured on a
The U.S. Department of Agriculture (USDA) requires schools to offer nutritional food items at lunch. Two methods for identifying and quantifying food items in the a la carte line-a detailed inventory approach and a checklist approach-were compared in the Journal of School Health (December 2009). In
Refer to the study of "power naps" during work breaks, Exercise 8.37. Recall that you analyzed data collected by a major airline that had recently begun encouraging reservation agents to nap during their breaks. The number of complaints received about each of a sample of 10 reservation agents
Civil engineers have developed a 3D model to predict the response of jointed concrete pavement to temperature variations (The International Journal of Pavement Engineering, September 2004). To validate the model, model predictions were compared with field measurements on key concrete stress
Refer to the International Journal of Energy and Environmental Engineering (December 2013) study of solar panels constructed above national highways to generate energy, Exercise 8.39. Recall that solar panels were constructed above sections of both east-west and north-south highways in India. The
Teachers Involve Parents in Schoolwork (TIPS) is an interactive homework process designed to improve the quality of homework assignments for elementary, middle, and high school students. TIPS homework assignments require students to conduct interactions with family partners (parents, guardians,
Data were collected from three populations, A, B, and C, using a completely randomized design. The following describes the sample data:nA = nB = nC = 15RA = 230 RB = 440 RC = 365a. Specify the null and alternative hypotheses that should be used in conducting a test of hypothesis to determine
Suppose you want to use the Kruskal-Wallis H-test to compare the probability distributions of three populations. The following data represent independent random samples selected from the three populations:I ..... 66, 23, 55, 88, 58, 62, 79, 49II .... 19, 31, 16, 29, 30, 33, 40III ...... 75, 96,
The International Journal of Wildland Fire (December 2011) published a study of the time it takes to contain wildfires, both with and without aerial support. Containment time (in hours) was estimated by fire management personnel for a particular wildfire scenario that had no aerial support. Fire
The Canadian Journal of Civil Engineering (January 2013) published a study of the optimal layout (design) of streets in a neighborhood to maximize road safety. Five different community road patterns were compared: (1) traditional grid, (2) fused grid, (3) cul-de-sac, (4) Dutch sustainable road
Refer to the Human Factors (May 2014) study of improving driving performance while fatigued, Exercise 9.31. Recall that 40 college students were assigned to drive a long distance in the simulator while performing a verbal task. Ten student-drivers performed the verbal task continuously (continuous
Suppose you wish to conduct a test of the research hypothesis that the median of a population is greater than 75. You randomly sample 25 measurements from the population and determine that 17 of them exceed 75. Set up and conduct the appropriate test of hypothesis at the .10 level of significance.
Rehabilitation medicine researchers at the University of Washington investigated whether virtual-reality hypnosis can relieve pain in trauma patients (International Journal of Clinical and Experimental Hypnosis, Vol. 58, 2010). Study participants were 20 patients treated at a major Level 1 trauma
Random samples of seven lawyers employed as public defenders were selected from each of three major cities. Their salaries are recorded in the table on the top of the next column. You have been hired to determine whether differences exist among the salary distributions for public defenders in the
Refer to the Journal of Accounting Education (Vol. 25, 2007) study of assisting accounting students with their homework, Exercise 15.24 (p. 15-19). A completely randomized design was employed, with students randomly assigned to receive one of three different levels of assistance on the homework:
Data were collected using a randomized block design with four treatments (A, B, C, and D) and b = 6. The following rank sums were obtained:RA = 11 RB = 21 RC = 21 RD = 7a. How many blocks were used in the experimental design?b. Specify the null and alternative hypotheses that should be used in
Refer to the Journal of Managerial Issues (Spring 2008) study of the impact of peer mentor training at a large software company, Exercise 9.55. Recall that participants volunteered to attend a 1-day peer mentor training session. The trainee's level of competence in peer mentoring (measured on a
Refer to the Business & Economics Research Journal (April 2015) study of occupational accidents at three construction sites in Turkey, Exercise 7.53. The total number of accidents at each of the three randomly selected sites was 51, 104, and 37, respectively. Suppose an occupational safety
Refer to the Journal of Food Science (February 2014) study of two numerical taste test scales, Exercise 9.58. Recall that subjects taste-tested five food/beverage items: black coffee (BC), cheesecake (CC), grapefruit juice (GF), orange juice (OJ), and pepperoni (PP). Half (n = 200) of the subjects
The journal eCAM (November 2006) published a study of the quality of the research methodology (e.g., statistical analysis) used in medical papers. For each in a sample of 13 research papers, the quality of the methodology on several dimensions was measured, with scores ranging from 1 (low quality)
Citrus fruit stacked on pallets is susceptible to damage from high temperatures. Consequently, containers have been designed to keep the fruit cool. The Journal of Food Engineering (September 2013) published an article that investigated the cooling performance of an existing fruit container design
Refer to the Experimental Psychology (January 2014) investigation of irrelevant facial similarity effects on judgment, Exercise 9.61. Recall that subjects (university students) were trained and then rated each of three different job applicants on a scale of 0 (not at all suitable) to 100 (very
Use Table XIV at the end of this chapter to find each of the following probabilities:a. P(rs > .508) when n = 22b. P(rs > .448) when n = 28c. P(rs ( .6482) when n = 10d. P(rs < -.738 or rs > .738) when n = 8
Specify the rejection region for Spearman's nonparametric test for rank correlation in each of the following situations: a. H0: ( = 0; Ha: ( ( 0, n = 10, a = .05 b. H0: ( = 0; Ha: ( > 0, n = 20, a = .025 c. H0: ( = 0; Ha : ( < 0, n = 30, a = .01
The following sample data were collected on variables x and y:a. Specify the null and alternative hypotheses that should be used in conducting a hypothesis test to determine whether the variables x and y are correlated.b. Conduct the test of part a using α = .05.c. What is the approximate
According to U.S. News & World Report's Business School Rankings, the median earnings for graduates of full-time, highly ranked MBA programs 4 years after graduating is $125,000. A random sample of 50 recent graduates from a particular highly ranked MBA program was mailed a questionnaire and
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