C723 QUANTITATIVE ANALYSIS FOR BUSINESS-
FINAL STUDY GUIDE
Hypothesis - Answers - is an assumption about a population parameter such as a mean
or a proportion
null hypothesis (H0) - Answers - -represents the status quo
-states a belief that the population parameter is ≤, =, or ≥ a specific value
-believed to be true unless there is overwhelming evidence to the contrary
alternative hypothesis (H1) - Answers - -represents the opposite of the null hypothesis
-believed to be true if the null hypothesis is found to be false
-always states that the population parameter is >, ≠, or < a specific value
two-tail hypothesis test - Answers - is used whenever the alternative hypothesis is
expressed as ≠
one-tail hypothesis test - Answers - is used when the alternative hypothesis is stated as
< or >
Type I error - Answers - -occurs when the null hypothesis is rejected when it is true
-when it occurs the producer is looking for a problem in its process that does not exist
Type II error - Answers - -occurs when we fail to reject the null hypothesis when it is not
true
-when it occurs the customer is getting a product from a process that is not performing
properly
Correlation analysis - Answers - -is used to measure both the strength and direction of a
linear relationship between two variables
-A relationship is linear if the scatter plot of the independent and dependent variables
has a straight-line pattern
correlation coefficient, r - Answers - -indicates both the strength and direction of the
linear relationship between the independent and dependent variables
population correlation coefficient (ρ) - Answers - refers to the correlation between all
values of two variables of interest in a population
confidence interval for the mean - Answers - is an interval estimate around a sample
mean that provides us with a range within which the true population mean is expected
to lie
confidence level - Answers - is defined as the probability that the interval estimate will
include the population parameter of interest
FINAL STUDY GUIDE
Hypothesis - Answers - is an assumption about a population parameter such as a mean
or a proportion
null hypothesis (H0) - Answers - -represents the status quo
-states a belief that the population parameter is ≤, =, or ≥ a specific value
-believed to be true unless there is overwhelming evidence to the contrary
alternative hypothesis (H1) - Answers - -represents the opposite of the null hypothesis
-believed to be true if the null hypothesis is found to be false
-always states that the population parameter is >, ≠, or < a specific value
two-tail hypothesis test - Answers - is used whenever the alternative hypothesis is
expressed as ≠
one-tail hypothesis test - Answers - is used when the alternative hypothesis is stated as
< or >
Type I error - Answers - -occurs when the null hypothesis is rejected when it is true
-when it occurs the producer is looking for a problem in its process that does not exist
Type II error - Answers - -occurs when we fail to reject the null hypothesis when it is not
true
-when it occurs the customer is getting a product from a process that is not performing
properly
Correlation analysis - Answers - -is used to measure both the strength and direction of a
linear relationship between two variables
-A relationship is linear if the scatter plot of the independent and dependent variables
has a straight-line pattern
correlation coefficient, r - Answers - -indicates both the strength and direction of the
linear relationship between the independent and dependent variables
population correlation coefficient (ρ) - Answers - refers to the correlation between all
values of two variables of interest in a population
confidence interval for the mean - Answers - is an interval estimate around a sample
mean that provides us with a range within which the true population mean is expected
to lie
confidence level - Answers - is defined as the probability that the interval estimate will
include the population parameter of interest
