25705 mid exam

Topics: Statistical hypothesis testing, Linear regression, Regression analysis Pages: 14 (2224 words) Published: October 30, 2014
Cover Type B

TO BE RETURNED AT THE END OF THE EXAMINATION.
THIS PAPER MUST NOT BE REMOVED FROM THE EXAM CENTRE.
STUDENT NAME:

________________________

STUDENT NUMBER: _______________________
LECTURER’S NAME:

____________________

LECTURE DAY & TIME:
_________________
_____________________________________________________________________

MID-SEMESTER EXAM
SPRING SEMESTER 2013
SUBJECT NAME

: Financial Modelling and Forecasting

SUBJECT NO.

: 25705

DAY/DATE

: Monday 23 September 2013

TIME ALLOWED : 10 minutes reading time followed by 90 minutes exam time START/END TIME : 6:00PM/7:40PM

NOTES/INSTRUCTIONS TO CANDIDATES:
1.
Write your details at the top of this exam paper.
2.
All questions are compulsory.
3.
The paper is marked out of 25.
Part A: 10 multiple-choice questions each worth 1 mark.
Part B: 4 short answer questions worth a total of 15 marks.
4.
Use a pencil to indicate your answers to Part A on the ‘General Purpose Answer Sheet.’ Ensure you correctly enter your name and student number on this sheet. Neatly write your answers to Part B in the space provided on the exam paper. Show all workings.

5.
Financial calculators are allowed.
6.
A formula sheet and statistical tables are attached to the rear pages of this exam paper.

Page 1

PART A: MULTIPLE CHOICE QUESTIONS (10 MARKS)
Indicate your answers using a pencil on the ‘General Purpose Answer Sheet.’ 1. Which one of the following is not affected by outliers?
a) mean
b) standard deviation
c) correlation coefficient
d) median
e) least-squares regression line

2. The sales of a product over an 8-month period are shown below: Year
Sales

Jan
63

Feb Mar Apr May Jun
72 81
83 80
89

Jul
85

Aug
98

What is the five-month moving average sales forecast for July? a)
b)
c)
d)
e)

75.8
78
81
81.375
87

3. You are performing a hypothesis test to determine if the mean weekly rental expense is different from $640 and have decided that the null hypothesis should be: H0: ̅ = $640. What, if anything, is wrong with this hypothesis? a) The null hypothesis should be H0: ̅  $640.

b) The null hypothesis should be H1: ̅ = $640.
c) There is nothing wrong with the null hypothesis.
d) The null hypothesis should be H0:  = $640.
e) The null hypothesis should be H0:   $640.
4. A regression analysis between the dependent variable “Sales” and the independent variable “Advertising” results in the equation: y = 80 + 5x. Which one of the following statements is correct?
a) As advertising increases by $1, sales increase by $80 on average. b) The correlation between advertising and sales equals 5.
c) As sales increase by $5, advertising increases by $80 on average. d) The p-value of “Advertising” equals 5.
e) As advertising increases by $1, sales increase by $5 on average.

Page 2

5. If you reject a true null hypothesis, then you have:
a)
b)
c)
d)
e)

made a correct decision.
decreased the p-value.
made a Type II error.
increased the significance level.
made a Type I error.

6. Which one of the following statements regarding exponential smoothing is correct? a) The smoothing coefficient should always be greater than one b) It requires an initial condition
c) All observations receive the same weight
d) Forecasts for all future periods increase by a constant positive trend e) Recent observations receive less weight than older observations 7. The average Australian salary is normally distributed with a mean of $53,000 and a standard deviation of $12,000. You randomly sample sixteen Australians. What is the probability that the sample mean salary is greater than $45,000? a)

b)
c)
d)
e)

0.7486
0.9962
0.5038
0.0038
0.4962

8. The critical value for a hypothesis test
a) is calculated using sample data
b) has the same value as the significance level
c) becomes larger as the significance level increases
d) has a mean of zero
e) has the same value as the test...
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