Q1. An equity analyst needs to select a representative sample of manufacturing stocks. Starting with the population of all publicly traded manufacturing stocks, she classifies each stock into one of the 20 industry groups that form the Index of Industrial Production for the manufacturing industry. She then selects a number of stocks from each industry based on its weight in the index. The sampling method the analyst is using is best characterized as: A) data mining. B) nonrandom sampling. C) stratified random sampling.
Q2. An analyst divides the population of U.S. stocks into 10 equally sized sub-samples based on market value of equity. Then he takes a random sample of 50 from each of the 10 sub-samples and pools the data to create a sample of 500. This is an example of: A) simple random sampling. B) stratified random sampling. C) systematic cross-sectional sampling.
Q3. Which of the following is least likely a step in stratified random sampling? A) The population is divided into strata based on some classification scheme. B) The size of each sub-sample is selected to be the same across strata. C) The sub-samples are pooled to create the complete sample.
Q4. Thomas Merton, a car industry analyst, wants to investigate a relationship between the types of ads used in advertising campaigns and sales to customers in certain age groups. In order to make sure he includes manufacturers of all sizes, Merton divides the industry into four size groups and draws random samples from each group. What sampling method is Merton using? A) Cross-sectional sampling. B) Stratified random sampling. C) Simple random sampling.
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