QMB3250 MIDTERM EXAM QUESTIONS WITH
ACCURATE SOLUTIONS
What graphical tool is best used to display relative frequency of grouped quantitative
data? -- Answer ✔✔ Histogram
What may be revealed from a scatterplot? -- Answer ✔✔ Whether or not 2
quantitative variables are related in some systematic way
How is the median defined? -- Answer ✔✔ Middle value of a data set
How is the mode defined? -- Answer ✔✔ Most frequently occurring value in a data set
What is most commonly used measure of central location? -- Answer ✔✔ Arithmetic
mean, the average
What is one weakness of arithmetic mean? -- Answer ✔✔ Unduly influenced by outliers
How do you define the range? -- Answer ✔✔ Maximum value minus minimum value
, What is (are) the most widely used measure(s) of dispersion? -- Answer ✔✔ Variance
and standard deviation
What does the Sharpe ratio measures? -- Answer ✔✔ Extra reward per unit of risk
Is a z-score a unit less measure? If so, why? -- Answer ✔✔ Yes, units in numerator and
denominator cancel out. Identifies number of standard deviations.
What is the Empirical Rule? -- Answer ✔✔ 3.5 Analysis of Relative Location
X bar +- 1s, 2s, 3s is 68%, 95%, about 100%
What is probability? -- Answer ✔✔ Numerical value that measures the likelihood that
an event occurs
What is a priori probability? -- Answer ✔✔ Making a conclusion based on deductive
reasoning rather than research or calculation
What is empirical probability? -- Answer ✔✔ Observed relative frequency with which an
event occurs
What is subjective probability? -- Answer ✔✔ Personal assessment of probabilities
without referencing any data
What is objective probability? -- Answer ✔✔ Empirical and classical
ACCURATE SOLUTIONS
What graphical tool is best used to display relative frequency of grouped quantitative
data? -- Answer ✔✔ Histogram
What may be revealed from a scatterplot? -- Answer ✔✔ Whether or not 2
quantitative variables are related in some systematic way
How is the median defined? -- Answer ✔✔ Middle value of a data set
How is the mode defined? -- Answer ✔✔ Most frequently occurring value in a data set
What is most commonly used measure of central location? -- Answer ✔✔ Arithmetic
mean, the average
What is one weakness of arithmetic mean? -- Answer ✔✔ Unduly influenced by outliers
How do you define the range? -- Answer ✔✔ Maximum value minus minimum value
, What is (are) the most widely used measure(s) of dispersion? -- Answer ✔✔ Variance
and standard deviation
What does the Sharpe ratio measures? -- Answer ✔✔ Extra reward per unit of risk
Is a z-score a unit less measure? If so, why? -- Answer ✔✔ Yes, units in numerator and
denominator cancel out. Identifies number of standard deviations.
What is the Empirical Rule? -- Answer ✔✔ 3.5 Analysis of Relative Location
X bar +- 1s, 2s, 3s is 68%, 95%, about 100%
What is probability? -- Answer ✔✔ Numerical value that measures the likelihood that
an event occurs
What is a priori probability? -- Answer ✔✔ Making a conclusion based on deductive
reasoning rather than research or calculation
What is empirical probability? -- Answer ✔✔ Observed relative frequency with which an
event occurs
What is subjective probability? -- Answer ✔✔ Personal assessment of probabilities
without referencing any data
What is objective probability? -- Answer ✔✔ Empirical and classical
