1) The Kingston Review (KR) is testing a new GMAT question.

The KR wants to
determine what proportion of test-takers will answer the question correctly, in order to
assess its difficulty. In a random sample of 144 test-takers, 75% answered the question
correctly.

What is the 95% confidence interval for the proportion of test-takers answering the
question correctly?

[65.7%, 84.3%]

[67.9%, 82.1%] R

[69.1%, 80.9%]

The answer cannot be determined from the information provided.

2) A nutrition researcher wants to determine the mean fat content of hen's eggs. She
collects a sample of 40 eggs. She calculates a mean fat content of 23 grams, with a
sample standard deviation of 8 grams.

What is the 95% confidence interval for this sample?

[22.6 grams; 23.4 grams]

[7.0 grams; 39.0 grams]

[20.5 grams; 25.5 grams] R

[19.7 grams; 26.3 grams]

3) The table below displays data on the composition and performance of the
Massachusetts Bubble Growth (MBG) technology stock fund over the last year. The
table includes data on the distribution of stocks in the fund by technology sector
(information technology [IT] or biotechnology) and by last year's "performance"
(positive or negative net change in share price over the last year).

Regarding the stocks that made up the MBG fund last year, which of the following
statements

Technology sector and performance are statistically independent.

The fact that a given stock's performance was positive tells us nothing about its sector.

The fact that a given stock is from the biotech sector tells us nothing about its
performance.

None of the above

4) In a finance class, the midterm exam's scores were distributed approximately

normally, with mean 13 (out of 20), and standard deviation 4.

Approximately what proportion of the test takers scored no higher than 17?

16%

32%

 68%

84% R

5) The regression analysis at the bottom characterizes the relationship between the daily
number of visitors at an amusement park and the variable "school day." "School day"
is an independent variable that is equal to 1 when a given day is a school day and
equal to 0 when it is not.

What does the coefficient of -13,644 tell us?

On average, the number of visitors on school days is 13,644 lower than on non-school
days.

On every school day, the number of visitors is exactly 13,644 lower than on non-
school days. B

On average, the number of visitors on school days is 13,644.

On average, the number of visitors on non-school days is 13,644.

6) After a series of major corporations admitted to large accounting irregularities, a
public policy research institute conducts a survey to determine whether the public
favors increased governmental regulation and oversight of corporations.

Which of the following questions will deliver an unbiased response?

In light of the recent wave of shocking corporate accounting fraud, should government
increase its regulation and oversight of corporations? B

Should privately-owned companies be subjected to intrusive governmental regulation

and oversight?

Is the government doing enough to protect American shareholders from corporate

greed?

None of the above

7) Jaune Magazine (JM) must decide whether or not to publish a tell-all story about a
celebrity. If the story ends up having major impact, JM will realize substantial profits
from additional magazine sales, subscriptions, and advertising revenues. However, if
JM publishes the story, JM will face a lawsuit; if it loses the suit, the penalties could
be substantial. The tree below summarizes JM's decision.

If JM publishes the story, the publisher may feel remorse for having violated the
celebrity's privacy. For what values of the cost of remorse would not publishing the

story be preferable to publishing the story on the basis of EMV?

Higher than $10,000

Lower than $10,000

Lower than $12,500



None of the above

8) A filling machine in a brewery is designed to fill bottles with 355 ml of hard cider. In
practice, however, volumes vary slightly from bottle to bottle. The brewer suspects
that the filling machine has been underfilling the bottles. In a sample of 49 bottles, the
mean volume of cider is found to be 354 ml, with a standard deviation of 3.5 ml. To
determine if the machine is underfilling bottles, the brewer performs a one-sided
hypothesis test.

What is the best formulation of the null hypothesis?

The true mean cider volume of each bottle is 354 ml.

The true mean cider volume of each bottle is at least 355 ml. B

The machine is underfilling the bottles.

The machine is underfilling the bottles by 1 ml.

9) The correlation coefficient of two variables is -1. What does this mean?

There is no linear relationship between the two variables.

There is a perfect linear relationship between the two variables.

The two variables are statistically independent.

There is a strong nonlinear relationship between the two variables. B

10) GMAT scores are reported to be distributed normally, with a mean of around 520.

Approximately, where will ninety-five percent of all test-takers' scores fall?

Within 1 standard deviation of the mean

Within 2 standard deviations of the mean

Within 3 standard deviations of the mean

Above the mean

11) The regression analysis below characterizes the relationship between monthly ice
cream consumption (in pints per household) and the independent variables "average
monthly temperature" (in degrees Fahrenheit) and "average price" (in dollars per pint).

What does the coefficient of 0.027 for average monthly temperature inform us about?

The relationship between temperature and ice cream consumption when not
controlling for price (i.e. allowing price to range freely).

The relationship between temperature and ice cream consumption when controlling
for price (i.e. fixing price). B

The relationship between temperature and ice cream price when controlling for
consumption (i.e. fixing consumption).

The relationship between temperature and ice cream price when not controlling for
consumption (i.e. allowing consumption to range freely).
12) The regression analysis below characterizes the relationship between monthly ice
cream consumption (in pints per household) and the independent variable "average
monthly temperature" (in degrees Fahrenheit).

Which of the following would be a reasonably accurate prediction?

If the average monthly temperature is 48 degrees, average per household ice cream
consumption will be around 3.1 pints. B

If average monthly temperature is 48 degrees, average per household ice cream

consumption will be around 2.6 pints.

If average monthly temperature is 48 degrees, average per household ice cream

consumption will be around 86.3 pints.

If average monthly temperature is 48 degrees, average per household ice cream

consumption will be around 1.3 pints.

13) A campaign strategist wants to determine whether demographic shifts have caused a
drop in allegiance to the Uniformian Party in Bowie County. Historically, around 62%
of the county's registered voters have supported the Uniformians. In a survey of 196
registered voters, 57% indicated that they would vote for the Uniformians in the next
election.

Assuming a confidence level of 95% and conducting a one-sided hypothesis test,

which of the following should the strategist do?

Accept the hypothesis that the proportion of Uniformian voters has not changed.

Accept the hypothesis that the proportion of Uniformian voters has decreased.

Conclude that the proportion of Uniformian voters is now between 56% and 62%.


There is not enough evidence to support the hypothesis that the proportion of
Uniformian voters has decreased. B

14) The histogram below graphically represents the distribution of the number of
passengers embarking at the 135 busiest airports in the United States in 1990.

Which of the following statements can be inferred from this histogram?

The mean number of passengers embarking per airport is greater than the median
number of passengers embarking per airport.

The median number of passengers embarking per airport is greater than the mean
number of passengers embarking per airport.

The mean and median numbers of passengers embarking per airport are equal.

The relative sizes of the mean and median numbers of passengers embarking per
airport cannot be inferred from the histogram. B

15) In a regression analysis, which of the following cannot happen when a new
independent variable is added?

R-squared increases and adjusted R-squared increases. B



R-squared increases and adjusted R-squared decreases.

R-squared decreases and adjusted R-squared decreases.

Any of the above can occur when a new independent variable is added.

16) A market researcher plans to sample sales receipts at a natural food store to estimate
the average size (in dollars) of a customer purchase. Previous analysis suggests that
the standard deviation of the purchase amount is approximately $25.

In order to calculate a 95% confidence interval of total width less than $5, how many
sales records should the researcher include in her sample?

97

271

385

The answer cannot be determined from the information provided.

17) Jaune Magazine (JM) must decide whether or not to publish a tell-all story about a celebrity.
If the story ends up having major impact, JM will realize substantial profits from additional
magazine sales, subscriptions, and advertising revenues. However, if JM publishes the story,
JM will face a lawsuit; if it loses the suit, the penalties could be substantial. The tree below
summarizes JM's decision.

The EMV of publishing the story is $10,000. Based on this EMV, JM should publish the story.
If the publisher chooses not to publish the story, which of the following best describes the
publisher's attitude towards this decision?
 Risk averse

Risk neutral R

Risk seeking

Risqu

18) The regression analysis below characterizes the relationship between monthly ice
cream consumption (in pints per household) and the independent variables "average
monthly temperature" (in degrees Fahrenheit) and "average price" (in dollars per pint).

At a significance level of 0.05, which independent variables contribute significantly to

the consumption of ice cream?

Average monthly temperature only R

Average price of a pint of ice cream only

Both independent variables

Neither independent variable

19) The scatter diagram and regression line below

characterize the relationship between monthly ice
cream consumption (in pints per household) and the
independent variable "average monthly temperature"
(in degrees Fahrenheit).

The residual errors are defined as

 The vertical distances from the data points to the horizontal axis.

The horizontal distances from the data points to the vertical axis.

The vertical distances from the data points to the regression line.

The shortest distance from the data points to the regression line

20) The regression analysis below characterizes the relationship between monthly ice
cream consumption (in pints per household) and the independent variable "average
monthly temperature" (in degrees Fahrenheit).

Based on this analysis, which of the following statements is correct?

For every increase of 0.027 degrees in average monthly temperature, average ice
cream consumption increases by 1 pint.

For every increase of 1 degree in average monthly temperature, average ice cream
consumption increases by 0.027 pints.

For every increase of 1.797 degrees in average monthly temperature, average ice
cream consumption increases by 1 pint.

For every increase of 1 degree in average monthly temperature, average ice cream
consumption increases by 1.797 pints.
21) A market research firm wants to find out if men and women feel differently about
SilkyTouch facial tissues. In a survey of 90 men, 76% said they had a favorable
impression of SilkyTouch. Out of 182 surveyed women, 64% said they had a
favorable impression of SilkyTouch.

At a 95% confidence level, which conclusion should the research firm draw?

Overall, about 70% of the population has a favorable impression of SilkyTouch.

Men and women feel differently about SilkyTouch. B

More women than men have a favorable impression of SilkyTouch.

There is insufficient evidence to show that men and women feel differently about
SilkyTouch.

22) When calculating a confidence interval for a mean, which of the following measures
will reduce the width of the confidence interval?

Increasing the confidence level

Decreasing the sample size

Increasing the sample size B

None of the above

23) Jaune Magazine (JM) must decide whether or not to publish a tell-all story about a
celebrity. If the story ends up having major impact, JM will realize substantial profits
from additional magazine sales, subscriptions, and advertising revenues. However, if
 JM publishes the story, JM will face a lawsuit; if it loses the suit, the penalties could
be substantial. The tree below summarizes JM's decision.

The EMV of publishing the story is $10,000. Based on this EMV, JM should publish
the story. For what values of p = Prob[story has major impact] is publishing the story
preferable to not publishing the story on the basis of EMV?

p < 10%

p > 10%

p < 90%

None of the above

24) In a sample of 6 software developers, the mean length of the work week is 60 hours,
with standard deviation 5 hours.

What is the 95% confidence interval for the average work week in the software
development trade?

[56.0, 64.0]

[55.4, 64.6]

[54.6, 63.4]

[54.8, 65.2]
25) The regression analysis below characterizes the relationship between the current
month's ice cream consumption (in pints per household) and the independent variables
"current month's average temperature" (in degrees Fahrenheit), "previous month's
average temperature" (in degrees Fahrenheit), and "average price" (in dollars per pint).

What will be the variable "previous month's temperature" in this analysis?

A lagged variable B

A dependent variable

Not statistically significant at the

0.05 level

All of the above

26) The table below displays data on the composition and performance of the
Massachusetts Bubble Growth (MBG) technology stock fund over the last year. The
table includes data on the distribution of stocks in the fund by technology sector
(information technology [IT] or biotechnology) and by last year's "performance"
(positive or negative net change in share price over the last year).

What is the probability that a randomly-chosen MBG stock is a biotech stock?

30%

23%

7%

None of the above

27) When an additional independent variable is added to a regression analysis, which of
the following could be indications of multicollinear independent variables?

A drop in R-squared and a drop in significance for one or more independent variable

A drop in adjusted R-squared and an increase in significance for one or more

independent variable

An increase in adjusted R-squared and an increase in significance for one or more

independent variable

An increase in adjusted R-squared and a drop in significance for one or more

independent variable

28) The regression analysis below characterizes the relationship between monthly ice
cream consumption (in pints per household) and the independent variable "average
monthly temperature" (in degrees Fahrenheit).

Which of the following statements about the term "1.797" is true?

It tells us the maximum amount above which ice cream consumption cannot possibly
grow.

It tells us the minimum amount below which ice cream consumption cannot possibly
fall.

 It tells us the x-intercept of the regression equation.

It tells us the y-intercept of the regression equation.