Question 1

What time series component was exempliﬁed during the 1980's when the World economy enjoyed a
Period of prosperity?

Accepted Answer

A)  Irregular 
B)  Cyclical 
C)  Trend 
D)  Seasonal 
E)  Episodic 
A)  Irregular 
B)  Cyclical 
C)  Trend 
D)  Seasonal 
E)  Episodic

Question 2

i. The reason for deseasonalizing a sales series is to remove trend and cyclical ﬂuctuations so that
We can study seasonal ﬂuctuations.
ii. Using the ratio-to-moving-average method, dividing the actual sales for a month by the typical
Seasonal for that month results in a ﬁgure that includes only trend, cycle and irregular ﬂuctuations.
This procedure is called deseasonalizing the sales.
iii. Knowing the seasonal pattern in the form of indexes allows the retailer to deseasonalize sales.
This is accomplished by dividing the actual sales for a month by the typical index for that month.

Accepted Answer

A)  (i), (ii), and (iii) are all correct statements. 
B)  (i) and (ii) are correct statements but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  (i), (ii), and (iii) are all false statements. 
A)  (i), (ii), and (iii) are all correct statements. 
B)  (i) and (ii) are correct statements but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  (i), (ii), and (iii) are all false statements.

Question 3

You have a decision to invest $10,000 in any of four different companies. You estimate the
Probabilities that the economy will be favorable or unfavorable and you estimate the percent
Returns over the next year.  
Which company is chosen using the maximax criterion?

Accepted Answer

A)  Company 1 
B)  Company 2 
C)  Company 3 
D)  Company 4 
A)  Company 1 
B)  Company 2 
C)  Company 3 
D)  Company 4

Question 4

You are trying to decide in which of the three companies you should invest. Refer to the following
Payoff Table.  
If the probability of the Market rising in the next year is 0.60, which of the following statements are
Correct?
i. The Expected Monetary Value for Company A is $1,860.
ii. The Expected Monetary Value for Company B is $1,860.
iii. The Expected Monetary Value for Company C is $1,860.

Accepted Answer

A)  (i), (ii), and (iii) are all correct statements. 
B)  (i) is a correct statement but not (ii) or (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (i) and (ii) are correct statements but not (iii). 
E)  (i), (ii), and (iii) are all false statements. 
A)  (i), (ii), and (iii) are all correct statements. 
B)  (i) is a correct statement but not (ii) or (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (i) and (ii) are correct statements but not (iii). 
E)  (i), (ii), and (iii) are all false statements.

Question 5

You are trying to decide in which of the three companies you should invest. Refer to the following
Payoff Table.  
If the probability of the Market rising in the next year is 0.60, which of the following statements are
Correct?
i. The Expected Monetary Value for Company A is $1,860.
ii. The Expected Monetary Value for Company B is $1,860.
iii. The Expected Monetary Value for Company C is $1,540.

Accepted Answer

A)  (i), (ii), and (iii) are all correct statements. 
B)  (i) is a correct statement but not (ii) or (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (i) and (ii) are correct statements but not (iii). 
E)  (i), (ii), and (iii) are all false statements. 
A)  (i), (ii), and (iii) are all correct statements. 
B)  (i) is a correct statement but not (ii) or (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (i) and (ii) are correct statements but not (iii). 
E)  (i), (ii), and (iii) are all false statements.

Question 6

You are trying to decide in which of the three companies you should invest. Refer to the following
Payoff Table.  
If the probability of the market declining in the next year is 0.5, which of the following statements
Are correct?
i. The Expected Opportunity Loss for Company A is $120.
ii. The Expected Opportunity Loss for Company B is $75.
iii. The Expected Opportunity Loss for Company C is $200.

Accepted Answer

A)  (i), (ii), and (iii) are all correct statements. 
B)  (i) is a correct statement but not (ii) or (iii). 
C)  (ii) is a correct statement but not (i) or (iii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  (i), (ii), and (iii) are all false statements. 
A)  (i), (ii), and (iii) are all correct statements. 
B)  (i) is a correct statement but not (ii) or (iii). 
C)  (ii) is a correct statement but not (i) or (iii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  (i), (ii), and (iii) are all false statements.

Question 7

In the linear trend equation, how is the average change in the dependent variable represented for
Every unit change in time?

Accepted Answer

A)  a 
B)  b 
C)  t 
D)  ŷ 
E)  r 
A)  a 
B)  b 
C)  t 
D)  ŷ 
E)  r

Question 8

What is the general equation for the logarithmic trend equation is log   =

Accepted Answer

A)  Ln a + Ln b (t) 
B)  Ln a t Ln b (t) 
C)  a t b(t) 
D)  ab(t) 
E)  atb 
A)  Ln a + Ln b (t) 
B)  Ln a t Ln b (t) 
C)  a t b(t) 
D)  ab(t) 
E)  atb

Question 9

i. EVPI = Expected value under conditions of certainty-Optimal decision under conditions of
Uncertainty.
ii. Three regret strategies that are often used are Maximin, Maximax, and Minimax.
iii. Rankings of the decision alternatives are frequently not highly sensitive to changes in the applied
Probabilities within a plausible range.

Accepted Answer

A)  (i), (ii), and (iii) are all correct statements. 
B)  (i) is a correct statement but not (ii) or (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  (i), (ii), and (iii) are all false statements. 
A)  (i), (ii), and (iii) are all correct statements. 
B)  (i) is a correct statement but not (ii) or (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  (i), (ii), and (iii) are all false statements.

Question 10

The following linear trend equation was developed for annual sales from 1995 to 2001 with 1995 the
Base or zero year. ŷ = 500 + 60t ($000). What are the estimated sales for 2005 ($000)?

Accepted Answer

A)  $500 
B)  $560 
C)  $600 
D)  $1,040 
E)  $1,100 
A)  $500 
B)  $560 
C)  $600 
D)  $1,040 
E)  $1,100

Question 11

A plastics manufacturing performed a quarterly time series analysis for demands over the last ﬁve
Years (periods 1 through 20). The analysis resulted in the following trend equation and seasonal
Indexes:  
= 920.0 + 22.6 t  
Using the trend line question and the seasonal indexes, predict demand for the third period of the
Next year, i.e., period 23.

Accepted Answer

A)  1439.8 
B)  519.8 
C)  629.0 
D)  1195.2 
E)  1742.2 
A)  1439.8 
B)  519.8 
C)  629.0 
D)  1195.2 
E)  1742.2

Question 12

The Westberg Electric Company sells electric motors. The monthly trend equation, based on four
Years of monthly data, is Y' = 4.4 + 0.5t. The seasonal factor for the month of April is 98. Determine
The seasonally adjusted forecast for April of the ﬁfth year.

Accepted Answer

A)  29.8 
B)  29.5 
C)  33.0 
D)  26.3 
E)  28.9 
A)  29.8 
B)  29.5 
C)  33.0 
D)  26.3 
E)  28.9

Question 13

Given the payoff table below, determine the proﬁt and size of warehouse that would be built, using
The maximin criterion.

Accepted Answer

A)  $8 million, small warehouse 
B)  $5 million, medium warehouse 
C)  $22 million, large warehouse 
D)  $15 million, medium warehouse 
A)  $8 million, small warehouse 
B)  $5 million, medium warehouse 
C)  $22 million, large warehouse 
D)  $15 million, medium warehouse

Question 14

i. A typical monthly seasonal index of 107.0 indicates that sales (or whatever the variable is) are 7
Percent above the annual average.
ii. Seasonal variation is quite common in the retail and wholesale industries.
iii. A typical seasonal index of 103.7 for January indicates that sales for January are below the
Annual average.

Accepted Answer

A)  (i), (ii), and (iii) are all correct statements. 
B)  (i) and (ii) are correct statements but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  (i), (ii), and (iii) are all false statements. 
A)  (i), (ii), and (iii) are all correct statements. 
B)  (i) and (ii) are correct statements but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  (i), (ii), and (iii) are all false statements.

Question 15

The Westberg Electric Company sells electric motors. The monthly trend equation, based on four
Years of monthly data, is Y' = 4.4 + 0.5t. The seasonal factor for the month of March is 100.
Determine the seasonally adjusted forecast for March of the ﬁfth year.

Accepted Answer

A)  29.9 
B)  29.5 
C)  33.0 
D)  26.3 
A)  29.9 
B)  29.5 
C)  33.0 
D)  26.3

Question 16

i. In the linear trend equation, the letter "b" is the average change in t for each change of one unit
(either increase or decrease) in y.
ii. In the linear trend equation, t is any value that corresponds with a time period, i.e., month or
Quarter.
iii. The least squares method of computing the equation for a straight line going through the data of
Interest gives the "best ﬁtting" line.

Accepted Answer

A)  (i), (ii), and (iii) are all correct statements. 
B)  (i) and (ii) are correct statements but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  (i), (ii), and (iii) are all false statements. 
A)  (i), (ii), and (iii) are all correct statements. 
B)  (i) and (ii) are correct statements but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  (i), (ii), and (iii) are all false statements.

Question 17

What is Ln of the forecast for year 9?

Accepted Answer

A)  3.337 
B)  19.325 
C)  1.087 
A)  3.337 
B)  19.325 
C)  1.087

Question 18

The table below shows the sales for a plastics manufacturer recorded over the past year. The
Seasonal indexes for each quarter are also provided). To track the trend for these four quarters, use
The indexes to deseasonalize the sales data)  
What are deseasonalized sales for quarter 2?

Accepted Answer

A)  973.1 
B)  1052.5 
C)  1291.5 
D)  1012.0 
E)  1027.7 
A)  973.1 
B)  1052.5 
C)  1291.5 
D)  1012.0 
E)  1027.7

Question 19

Teton Village contains shops, restaurants and motels. They have two peak seasons, - winter for
Skiing, and summer, for tourists visiting nearby parks. The speciﬁc seasonal with respect to the total
Sales volume for recent years are:  
Using the seasonal indexes below, explain the typical index for the fall season.

Accepted Answer

A)  Total sales for the fall season are typically 25.8% below the annual average. 
B)  Total sales for the fall season are typically 74.2% below the annual average 
C)  Total sales for the fall season are typically 74.2% above the annual average. 
D)  Total sales for the fall season are typically 31.2% below the annual average. 
A)  Total sales for the fall season are typically 25.8% below the annual average. 
B)  Total sales for the fall season are typically 74.2% below the annual average 
C)  Total sales for the fall season are typically 74.2% above the annual average. 
D)  Total sales for the fall season are typically 31.2% below the annual average.

Question 20

i. In the ratio-to-moving-average procedure, using the median or modiﬁed mean eliminates trend.
ii. A typical seasonal index of 103.7 for January indicates that sales for January are below the annual
Average.
iii. The total of the four typical quarterly indexes should equal 100.0.

Accepted Answer

A)  (i), (ii), and (iii) are all correct statements. 
B)  (i) and (ii) are correct statements but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  (i), (ii), and (iii) are all false statements. 
A)  (i), (ii), and (iii) are all correct statements. 
B)  (i) and (ii) are correct statements but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  (i), (ii), and (iii) are all false statements.

What time series component was exempliﬁed during the 1980's when the World economy enjoyed a Period of prosperity?

You have a decision to invest $10,000 in any of four different companies. You estimate the Probabilities that the economy will be favorable or unfavorable and you estimate the percent Returns over the next year. Which company is chosen using the maximax criterion?

In the linear trend equation, how is the average change in the dependent variable represented for Every unit change in time?

What is the general equation for the logarithmic trend equation is log =

The following linear trend equation was developed for annual sales from 1995 to 2001 with 1995 the Base or zero year. ŷ = 500 + 60t ($000). What are the estimated sales for 2005 ($000)?

The Westberg Electric Company sells electric motors. The monthly trend equation, based on four Years of monthly data, is Y' = 4.4 + 0.5t. The seasonal factor for the month of April is 98. Determine The seasonally adjusted forecast for April of the ﬁfth year.

Given the payoff table below, determine the proﬁt and size of warehouse that would be built, using The maximin criterion.

The Westberg Electric Company sells electric motors. The monthly trend equation, based on four Years of monthly data, is Y' = 4.4 + 0.5t. The seasonal factor for the month of March is 100. Determine the seasonally adjusted forecast for March of the ﬁfth year.

What is Ln of the forecast for year 9?

The table below shows the sales for a plastics manufacturer recorded over the past year. The Seasonal indexes for each quarter are also provided). To track the trend for these four quarters, use The indexes to deseasonalize the sales data) What are deseasonalized sales for quarter 2?

i. In the ratio-to-moving-average procedure, using the median or modiﬁed mean eliminates trend. ii. A typical seasonal index of 103.7 for January indicates that sales for January are below the annual Average. iii. The total of the four typical quarterly indexes should equal 100.0.

What Is Statistics

Describing Data: Frequencydistributions and Graphic Presentation

Describing Data: Numerical Measures

Describing Data: Displaying and Exploring Pata

A Sulvey of Probability Concepts

Discrete Probability Distributions

Continuous Probabilitydistributions

Sampling Methods and the Central Umit Theorem

Estimation and Confidence Intervals

One-Sample Tests of Hypothesis

Two Sample Tests of Hypothesis

Analysis of Variance

Linear Regression and Correlation

Multiple Regression and Correlation Analysis

Chi-Square Applications

Filters

Exam 16: Decision Making and Payoff Tables in Investment Scenarios

What time series component was exempliﬁed during the 1980's when the World economy enjoyed a Period of prosperity?

You have a decision to invest $10,000 in any of four different companies. You estimate the Probabilities that the economy will be favorable or unfavorable and you estimate the percent Returns over the next year. Which company is chosen using the maximax criterion?

In the linear trend equation, how is the average change in the dependent variable represented for Every unit change in time?

What is the general equation for the logarithmic trend equation is log =

The following linear trend equation was developed for annual sales from 1995 to 2001 with 1995 the Base or zero year. ŷ = 500 + 60t ($000). What are the estimated sales for 2005 ($000)?

The Westberg Electric Company sells electric motors. The monthly trend equation, based on four Years of monthly data, is Y' = 4.4 + 0.5t. The seasonal factor for the month of April is 98. Determine The seasonally adjusted forecast for April of the ﬁfth year.

Given the payoff table below, determine the proﬁt and size of warehouse that would be built, using The maximin criterion.

The Westberg Electric Company sells electric motors. The monthly trend equation, based on four Years of monthly data, is Y' = 4.4 + 0.5t. The seasonal factor for the month of March is 100. Determine the seasonally adjusted forecast for March of the ﬁfth year.

What is Ln of the forecast for year 9?

The table below shows the sales for a plastics manufacturer recorded over the past year. The Seasonal indexes for each quarter are also provided). To track the trend for these four quarters, use The indexes to deseasonalize the sales data) What are deseasonalized sales for quarter 2?

i. In the ratio-to-moving-average procedure, using the median or modiﬁed mean eliminates trend. ii. A typical seasonal index of 103.7 for January indicates that sales for January are below the annual Average. iii. The total of the four typical quarterly indexes should equal 100.0.

What Is Statistics

Describing Data: Frequencydistributions and Graphic Presentation

Describing Data: Numerical Measures

Describing Data: Displaying and Exploring Pata

A Sulvey of Probability Concepts

Discrete Probability Distributions

Continuous Probabilitydistributions

Sampling Methods and the Central Umit Theorem

Estimation and Confidence Intervals

One-Sample Tests of Hypothesis

Two Sample Tests of Hypothesis

Analysis of Variance

Linear Regression and Correlation

Multiple Regression and Correlation Analysis

Chi-Square Applications

Filters