CEA Data Analysis & Statistical Methods 3

Question 1

The Central Limit Theorem (CLT) states that as sample size increases, the sampling distribution of the sample mean:

Accepted Answer

Becomes approximately normal regardless of the population distribution

Answer

The CLT guarantees that the sampling distribution of the mean approaches normality as n increases, even if the underlying population is non-normal.

Question 2

A p-value of 0.03 in a hypothesis test with α = 0.05 means:

Accepted Answer

There is a 3% probability of observing a result this extreme if the null hypothesis is true

Answer

The p-value is the probability of obtaining a test statistic as extreme as observed, assuming the null hypothesis is true.

Question 3

Which of the following best describes heteroskedasticity in a regression model?

Accepted Answer

The variance of the error term changes with the level of an independent variable

Answer

Heteroskedasticity means the spread (variance) of residuals is not constant and often increases or decreases with the magnitude of an explanatory variable.

Question 4

An economist runs a regression and finds the R² = 0.85. This means:

Accepted Answer

85% of the variation in the dependent variable is explained by the independent variables

Answer

R² (coefficient of determination) measures the proportion of total variance in the dependent variable that is explained by the regressors.

Question 5

In a box plot, an observation is typically flagged as an outlier if it lies:

Accepted Answer

Beyond 1.5 × IQR from the nearest quartile

Answer

The conventional box plot rule labels values beyond Q1 − 1.5×IQR or Q3 + 1.5×IQR as outliers (shown as individual points).

(CEA) Certified Economic Analyst Practice Test

(CEA) Certified Economic Analyst Practice Test

CEA Data Analysis & Statistical Methods 3