Ivy Software Business Math and Statistics
Exam Questions and 100% Verified Answers
Question 1
Referring to Illustration 9 in Chapter 5, it shows the decision tree for three projects in
which the AOK company can invest (they can only invest in one and must invest). In
which one of the three projects should AOK invest, based on EMV?
A) Project A
B) Project B
C) Project C
D) None of the above, they are all equal.
Correct Answer
C) Project C
Question 2
A band of treasure hunters is trying to determine whether eighteenth-century pirates
buried any treasures on a small island. They figure that if they find any signs of early
settlement on the island that there is a good chance that treasure is buried there.
Which of the following represents the left-most event or decision node on the
treasure hunter's decision tree?
A) Pirates bury or do not bury their treasure
B) Treasure hunters find or do not find signs of settlement
C) Settlement was or was not built
D) None of the above
Correct Answer
B) Treasure hunters find or do not find signs of settlement
Question 3
Which of the following are fixed costs: Sales, office payroll (receptionist & bookeeper),
advertising, home remodeling, office remodeling, sales commission, interest expense
Correct Answer
office payroll, advertising, office remodeling, interest expense
Page 1 of 39
,Question 4
Decomposition
Correct Answer
the process of breaking a decision down into parts and analyzing alternatives and
their consequences.
Question 5
True/False: When the following equation holds true, we are not at the breakeven level
in dollars: Sales - Variable Costs = Fixed Costs
Correct Answer
False
Question 6
When analyzing data where a steady increase or decrease over time can be observed,
which method of forecasting would best fit and would probably predict a similar
increase or decrease?
a. Modified Trend Method
b. Weighted Series Method
c. Trend Analysis Method
d. Normal Curve Method
e. Moving Average Method
Correct Answer
c. Trend Analysis Method
Question 7
Equation for Total Cost
Correct Answer
Total costs = (variable cost per unit * number of units produced) + Fixed Costs
Page 2 of 39
,Question 8
Playing poker, Frank needs the nine of clubs to complete his flush. He accidentally
sees that Jim has a club, but didnt see which one. Frank has four clubs in his hand.
What is the probability of Jim's card being the nine of clubs?
Correct Answer
1/9, or 0.11
There are 13 cards in the suite, and 4 clubs are accounted for. There is only one nine
of clubs, so the chances are 1 out of 9 (13-4)
Question 9
True/False: A point of uncertainty is represented by a circle.
Correct Answer
True
Question 10
When you develop a string of simple averages by adding a data sample at a new time
period and dropping the oldest data sample you have a:
a. Moving Average.
b. Simple Average.
c. Weighted Average.
d. Trend Analysis.
Correct Answer
a. Moving Average.
Question 11
Suppose a population numbers in the millions. If one takes a random sample from
that population of an appropriate size to meet normality assumptions, the mean of
the sample will be the same as the mean of the population.
a. always true
b. always false
c. may be true, but unlikely
d. may be false, but unlikely
Correct Answer
c. may be true, but unlikely
Page 3 of 39
, Question 12
Formula for standard deviation (and standard error)
Correct Answer
Standard deviation divided by the square root of the number of observations
Question 13
Weighted Average
Correct Answer
includes as many data samples as desired and assigns "weights" or measures of
importance to each
Question 14
There are ten ping pong balls in a bucket. Each is equally likely to be picked. If a
blindfolded person picks a ball out of the bucket 15 times (the number is noted and
the ball is placed back in the bucket each time), what is the probability that the
blindfolded person picks the same ball exactly four out of fifteen times(rounded to
three decimal places)?
Use the Binomial Distribution Probability Table in Ch 4, Appendix B
Correct Answer
0.043
n = 15
r=4
prob of ind. success = 1/10, or 0.1
Question 15
Which of the following is the binomial expression?
A) 4x^3 + 6x^4 +12x^3 + 45x^4 +6
B) 143x^4 + 3x^4
C) 143x^4 + 78x^4 + 6x^4 + 76
Correct Answer
C) 143x^4 + 78x^4 + 6x^4 + 76 - tis the only term where the x's can be added
together to get two terms
Page 4 of 39
Exam Questions and 100% Verified Answers
Question 1
Referring to Illustration 9 in Chapter 5, it shows the decision tree for three projects in
which the AOK company can invest (they can only invest in one and must invest). In
which one of the three projects should AOK invest, based on EMV?
A) Project A
B) Project B
C) Project C
D) None of the above, they are all equal.
Correct Answer
C) Project C
Question 2
A band of treasure hunters is trying to determine whether eighteenth-century pirates
buried any treasures on a small island. They figure that if they find any signs of early
settlement on the island that there is a good chance that treasure is buried there.
Which of the following represents the left-most event or decision node on the
treasure hunter's decision tree?
A) Pirates bury or do not bury their treasure
B) Treasure hunters find or do not find signs of settlement
C) Settlement was or was not built
D) None of the above
Correct Answer
B) Treasure hunters find or do not find signs of settlement
Question 3
Which of the following are fixed costs: Sales, office payroll (receptionist & bookeeper),
advertising, home remodeling, office remodeling, sales commission, interest expense
Correct Answer
office payroll, advertising, office remodeling, interest expense
Page 1 of 39
,Question 4
Decomposition
Correct Answer
the process of breaking a decision down into parts and analyzing alternatives and
their consequences.
Question 5
True/False: When the following equation holds true, we are not at the breakeven level
in dollars: Sales - Variable Costs = Fixed Costs
Correct Answer
False
Question 6
When analyzing data where a steady increase or decrease over time can be observed,
which method of forecasting would best fit and would probably predict a similar
increase or decrease?
a. Modified Trend Method
b. Weighted Series Method
c. Trend Analysis Method
d. Normal Curve Method
e. Moving Average Method
Correct Answer
c. Trend Analysis Method
Question 7
Equation for Total Cost
Correct Answer
Total costs = (variable cost per unit * number of units produced) + Fixed Costs
Page 2 of 39
,Question 8
Playing poker, Frank needs the nine of clubs to complete his flush. He accidentally
sees that Jim has a club, but didnt see which one. Frank has four clubs in his hand.
What is the probability of Jim's card being the nine of clubs?
Correct Answer
1/9, or 0.11
There are 13 cards in the suite, and 4 clubs are accounted for. There is only one nine
of clubs, so the chances are 1 out of 9 (13-4)
Question 9
True/False: A point of uncertainty is represented by a circle.
Correct Answer
True
Question 10
When you develop a string of simple averages by adding a data sample at a new time
period and dropping the oldest data sample you have a:
a. Moving Average.
b. Simple Average.
c. Weighted Average.
d. Trend Analysis.
Correct Answer
a. Moving Average.
Question 11
Suppose a population numbers in the millions. If one takes a random sample from
that population of an appropriate size to meet normality assumptions, the mean of
the sample will be the same as the mean of the population.
a. always true
b. always false
c. may be true, but unlikely
d. may be false, but unlikely
Correct Answer
c. may be true, but unlikely
Page 3 of 39
, Question 12
Formula for standard deviation (and standard error)
Correct Answer
Standard deviation divided by the square root of the number of observations
Question 13
Weighted Average
Correct Answer
includes as many data samples as desired and assigns "weights" or measures of
importance to each
Question 14
There are ten ping pong balls in a bucket. Each is equally likely to be picked. If a
blindfolded person picks a ball out of the bucket 15 times (the number is noted and
the ball is placed back in the bucket each time), what is the probability that the
blindfolded person picks the same ball exactly four out of fifteen times(rounded to
three decimal places)?
Use the Binomial Distribution Probability Table in Ch 4, Appendix B
Correct Answer
0.043
n = 15
r=4
prob of ind. success = 1/10, or 0.1
Question 15
Which of the following is the binomial expression?
A) 4x^3 + 6x^4 +12x^3 + 45x^4 +6
B) 143x^4 + 3x^4
C) 143x^4 + 78x^4 + 6x^4 + 76
Correct Answer
C) 143x^4 + 78x^4 + 6x^4 + 76 - tis the only term where the x's can be added
together to get two terms
Page 4 of 39
