SDS Statistics and probability

Written by Saad Rahman (ACCA)

ACCA · New at Strategic Professional level · 7 questions

Name: ____________________ Date: ____________

The mean of 12, 15, 11, 18 and 14 is:
- A 14.0
- B 15.0
- C 12.0
- D 13.5
Which measure of central tendency is least affected by an extreme outlier?
- A Mean
- B Range
- C Variance
- D Median
A correlation coefficient of -0.9 between two variables means:
- A A strong negative linear relationship
- B A weak positive relationship
- C No relationship
- D One causes the other
A p-value of 0.03 at a 5 percent significance level leads to:
- A Proving the alternative is true
- B Rejecting the null hypothesis
- C No conclusion
- D Accepting the null hypothesis as true
Rejecting a null hypothesis that is actually true is a:
- A Type I error
- B Rounding error
- C Sampling error only
- D Type II error
2 percent of invoices are fraudulent. A test flags 90 percent of fraudulent and 5 percent of genuine invoices. The probability that a flagged invoice is fraudulent is closest to:
- A 2%
- B 95%
- C 27%
- D 90%
The expected value of an action with a 60 percent chance of $10,000 and a 40 percent chance of -$5,000 is:
- A $5,000
- B $2,000
- C $6,000
- D $4,000

Answer key

1. A, 2. D, 3. A, 4. B, 5. A, 6. C, 7. D

The sum is 70 and 70 / 5 = 14.
The median depends on the middle position, not on the size of the extreme values.
The sign shows the direction and the size shows the strength, and correlation does not show cause.
The p-value is below 0.05, so the result is statistically significant at that level.
A Type II error is failing to reject a false null hypothesis.
0.018 / (0.018 + 0.049) = 0.269.
0.6 x 10,000 + 0.4 x (-5,000) = 6,000 - 2,000 = 4,000.