CSSYB Free Practice Questions (Review Mode)

Free sample questions

3 questions from this set, shown in full with the correct answer and the reasoning behind it. Read them as a study resource.

1. Q1.A regression model predicts weekly sales from advertising spend as $\hat{y} = 500 + 8x$, where $x$ is spend measured in hundreds of dollars.
   
   $$\begin{array}{c|c} \textbf{Ad spend} & \textbf{Predicted sales} \\ \hline \$1{,}000 & ? \end{array}$$
   
   What is the predicted sales value for $1,000 in advertising spend?

   • A.508
   • B.580✓ Correct answer
   • C.8,500
   • D.80

   Explanation

   Since $x$ is measured in hundreds of dollars, $1,000 corresponds to $x = 10$, giving:
   
   $$\hat{y} = 500 + 8(10) = 580$$
   
   508 comes from mistakenly using $x = 1$ instead of converting $1,000 into hundreds. 8,500 comes from plugging in the raw dollar figure of 1,000 for $x$ without converting units at all, and 80 comes from computing only the slope term, $8 \times 10$, while forgetting to add the intercept of 500.

   Reference: CSSYB BoK IV

2. Q2.A quality team's hypothesis test yields a p-value of 0.03 against a significance level of 0.05. Which conclusion is correct?

   • A.Fail to reject the null hypothesis; the result is not significant
   • B.The test is inconclusive regardless of the p-value obtained
   • C.Reject the null hypothesis; the result is statistically significant✓ Correct answer
   • D.The significance level should be lowered to match the p-value

   Explanation

   Since the p-value of 0.03 is smaller than the 0.05 significance level, the result falls within the rejection region, supporting a decision to reject the null hypothesis as statistically significant. Failing to reject would be the correct call only if the p-value were larger than 0.05, which is not the case here. The test is not inconclusive; the p-value gives a clear basis for a decision, and the significance level is set before the test as a threshold, not adjusted afterward to match whatever p-value comes out.

   Reference: CSSYB BoK IV

3. Q3.Two proposed fixes are compared.
   
   $$\begin{array}{l|c|c} \textbf{Fix} & \textbf{Upfront cost} & \textbf{Annual benefit} \\ \hline \text{Fix 1} & \$90{,}000 & \$18{,}000 \\ \text{Fix 2} & \$45{,}000 & \$15{,}000 \end{array}$$
   
   Which fix has the shorter payback period?

   • A.Fix 2✓ Correct answer
   • B.Fix 1
   • C.Both are equal
   • D.This cannot be determined from the table

   Explanation

   Fix 1's payback period is $\frac{90{,}000}{18{,}000} = 5$ years, while Fix 2's is $\frac{45{,}000}{15{,}000} = 3$ years, so Fix 2 pays back sooner despite its smaller annual benefit. Since 3 years is clearly shorter than 5 years, the two fixes are not equal in payback speed. The table gives exactly the cost and benefit figures needed to calculate payback for both fixes, so it is fully possible to determine from this data.

   Reference: CSSYB BoK V

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