What is your monthly payment, beginning next month, on a $19,000 loan, if you pay it off over 48 months and the interest rate is 5.9% per year, compounded monthly?
Answer(s): E
On the BAII Plus, press 48 N, 5.9 divide 12 = I/Y, 19000 PV, 0 FV, CPT PMT. On the HP12c, press 48 n, 5.9 ENTER 12 divide i, 19000 PV, 0 FV, PMT. Note that the answer will be displayed as a negative number. Make sure the BAII Plus has the value of P/Y set to 1.
A selected group of employees of Unique Buying Services is to be surveyed with respect to a new pension plan. In depth interviews are to be conducted with each employee selected in the sample. The employees are classified as follows.Classification Event Number of EmployeesSupervisors A 120Maintenance B 50Production C 1,460Management D 302Secretarial E 68What is the probability that the first person selected is either in maintenance OR in secretarial?
There are 2000 employees of which 50 are from maintenance and 68 in secretarial. Therefore (50 + 68)/2000 = 0.059.
A researcher has rejected the null hypothesis. The p-value in the test must be:
Answer(s): A
The lowest significance level at which the null hypothesis can be rejected is called the p-value of the test. Thus, if the p-value is less than the significance level, the null hypothesis can be rejected at that significance level. To fix this in your mind, think about the p-value as the maximum probability that the null hypothesis is true despite observing the value of the test statistic that you have in the sample at hand. For e.g., suppose the p-value for a given sample turns out to be 3%. Then, if you reject the null, the probability that you have made an error in rejecting it is at most 3%. Clearly, if a critic asked you, "Is the probability that you have made an error less than 5%?" your answer would be, "yes." The critic will then conclude that your test is significant at the 5% level and perhaps even at a lower level.
What deposit today is needed to have $2,000 in 4 years, assuming the money will earn interest at 5% per year, compounded monthly?
Answer(s): D
On the BAII Plus, press 48 N, 5 divide 12 = I/Y, 0 PMT, 2000 FV, CPT PV. On the HP12C, press 48 n, 5 ENTER 12 divide i, 0 PMT, 2000 FV, PV. Make sure the BAII Plus has the P/Y value set to 1.
An economic researcher estimates the following regression between the annual income, I, of a family and the amount it spends on consumption goods, C:C = 2,000 + 0.65 I + error termIf the R-square of the regression is just 0.3, estimate the amount that a family with an income of 50,000 will spend on consumption.
With the given regression, the amount that a family with an income of 50,000 will spend on consumption equals 2,000 + 0.65*50,000 = 34,500.
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