BADM 7200 Exam 2 – Questions and
Answers 2026 Update LSU
Course: Economic Environment of the Firm
(MBA Level)
Topics: GDP, Inflation, Unemployment, IS-
LM Model, Monetary Policy, Decision-
Making Biases
QUESTION 1
Which measure is most appropriate for
describing the average of highly skewed
financial data?
A) Mode
B) Mean
C) Median
1
,D) Range
ANSWER: C
RATIONALE: The median is resistant to
extreme values and best represents skewed
distributions .
QUESTION 2
A p-value of 0.03 indicates:
A) 3% chance null hypothesis is true
B) 97% chance null is true
C) Strong evidence against the null hypothesis
2
,D) No statistical significance
ANSWER: C
RATIONALE: A p-value below 0.05 typically
indicates statistical significance, providing
strong evidence against the null hypothesis .
QUESTION 3
Which regression output value indicates model
fit strength?
A) Intercept
B) R-squared
3
, C) P-value
D) Standard error
ANSWER: B
RATIONALE: R² explains the proportion of
variance explained by the model .
QUESTION 4
Multicollinearity occurs when:
A) Variables are unrelated
B) Independent variables are highly correlated
4
Answers 2026 Update LSU
Course: Economic Environment of the Firm
(MBA Level)
Topics: GDP, Inflation, Unemployment, IS-
LM Model, Monetary Policy, Decision-
Making Biases
QUESTION 1
Which measure is most appropriate for
describing the average of highly skewed
financial data?
A) Mode
B) Mean
C) Median
1
,D) Range
ANSWER: C
RATIONALE: The median is resistant to
extreme values and best represents skewed
distributions .
QUESTION 2
A p-value of 0.03 indicates:
A) 3% chance null hypothesis is true
B) 97% chance null is true
C) Strong evidence against the null hypothesis
2
,D) No statistical significance
ANSWER: C
RATIONALE: A p-value below 0.05 typically
indicates statistical significance, providing
strong evidence against the null hypothesis .
QUESTION 3
Which regression output value indicates model
fit strength?
A) Intercept
B) R-squared
3
, C) P-value
D) Standard error
ANSWER: B
RATIONALE: R² explains the proportion of
variance explained by the model .
QUESTION 4
Multicollinearity occurs when:
A) Variables are unrelated
B) Independent variables are highly correlated
4
