- When evaluating statistics for business from a samples & surveys perspective, answer the following questions:
- a) What is understood as a “population” in statistics?
b) How is a sample different than a population?
c) Why do we use samples instead of populations?
- How do we perform convenience sampling?
- Populations are characterized by their parameters, while samples are characterized by their statistics. When we use a sample instead of the population, what we can obtain is an estimate of the population’s parameter(s). We should also calculate the confidence interval of the estimate.
- a) What is a confidence interval?
- b) Assuming we’re working with the same data, would the 90% confidence interval be wider or narrower than the 95% confidence interval?
- c) How would you describe the concept of Margin of Error (E)?
- A chemical firm has been accused of polluting the local river system. State laws require the accuser to prove the polluting by a statistical analysis of water samples. Is the chemical firm worried about a Type I or a Type II error?
- The research labs of a corporation occasionally produce breakthroughs that can lead to multibillion-dollar blockbuster products. Should the managers of the labs be more worried about Type I or Type II errors?
- A stock market analyst recorded the number of stocks that went up or went down each day for 5 consecutive days, producing a contingency table with 2 rows (up or down) and 5 columns (Monday through Friday). Are these data suitable for applying the chi-squared test of independence?
- A bank makes loans to many types of customers. Some of these customers default on their loans. How could analysts at the bank use χ2 to identify characteristics associated with customers who default on loans?
- Managers in the human resources department suspect that sick-day absentee rates are higher on some weekdays than others. What test can they use to investigate this claim?
- What are the possible outcomes in an experiment that consist in rolling a single die?