C723 QUANTITATIVE ANALYSIS FOR BUSINESS
PRACTICE EXAM 2026 QUESTIONS AND
SOLUTIONS 100% CORRECT
● null hypothesis (H0) Answer: -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) Answer: -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 Answer: is used whenever the alternative
hypothesis is expressed as ≠
● one-tail hypothesis test Answer: is used when the alternative
hypothesis is stated as < or >
● Type I error Answer: -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 Answer: -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 Answer: -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 Answer: -indicates both the strength and
direction of the linear relationship between the independent and
dependent variables
● population correlation coefficient (ρ) Answer: refers to the correlation
between all values of two variables of interest in a population
● confidence interval for the mean Answer: 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 Answer: is defined as the probability that the interval
estimate will include the population parameter of interest
● Student's t-distribution Answer: is used in place of the normal
probability distribution when the sample standard deviation, s, is used in
place of the population standard deviation, σ
● probability sample Answer: is a sample in which each member of the
population has a known, nonzero, chance of being selected for the
sample
● simple random sample Answer: is a sample in which every member of
the population has an equal chance of being chosen
● Sampling error Answer: is defined as the difference between the
sample statistic and the population parameter
● Central Limit Theorem Answer: states that the sample means of large-
sized samples will be normally distributed regardless of the shape of
their population distributions
● normal probability distribution Answer: is useful when the data tend
to fall into the center of the distribution and when very high and very
low values are fairly rare
PRACTICE EXAM 2026 QUESTIONS AND
SOLUTIONS 100% CORRECT
● null hypothesis (H0) Answer: -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) Answer: -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 Answer: is used whenever the alternative
hypothesis is expressed as ≠
● one-tail hypothesis test Answer: is used when the alternative
hypothesis is stated as < or >
● Type I error Answer: -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 Answer: -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 Answer: -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 Answer: -indicates both the strength and
direction of the linear relationship between the independent and
dependent variables
● population correlation coefficient (ρ) Answer: refers to the correlation
between all values of two variables of interest in a population
● confidence interval for the mean Answer: 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 Answer: is defined as the probability that the interval
estimate will include the population parameter of interest
● Student's t-distribution Answer: is used in place of the normal
probability distribution when the sample standard deviation, s, is used in
place of the population standard deviation, σ
● probability sample Answer: is a sample in which each member of the
population has a known, nonzero, chance of being selected for the
sample
● simple random sample Answer: is a sample in which every member of
the population has an equal chance of being chosen
● Sampling error Answer: is defined as the difference between the
sample statistic and the population parameter
● Central Limit Theorem Answer: states that the sample means of large-
sized samples will be normally distributed regardless of the shape of
their population distributions
● normal probability distribution Answer: is useful when the data tend
to fall into the center of the distribution and when very high and very
low values are fairly rare
