Exhibit 10.1 the Following Questions Are Based on the Problem Description and Description

question 104

Multiple Choice

Exhibit 10.1
The following questions are based on the problem description and the output below.
A college admissions officer wants to evaluate graduate school applicants based on their GMAT scores, verbal and quantitative. Students are classified as either successful or not-successful in their graduate studies. The officer has data on 20 current students, ten of whom are doing very well (Group 1) and ten who are not (Group 2) . ​ ​ ​ ​
-Refer to Exhibit 10.1. Suppose that for a given observation, the difference between Mahalanobis distances between group 1 and 2 (G1-G2) is big and negative. This means that

• A) The observation is likely to be classified correctly to group 2
• B) The observation is likely to be classified correctly to group 1
• C) The observation is likely to be classified incorrectly to group 2
• D) The observation is likely to be classified incorrectly to group 1

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Definitions:

Cost Estimation

The process of predicting the costs associated with a particular action or project, crucial for budgeting and project planning.

Operating Leverage

A measure of how sensitive net operating income is to a given percentage change in unit sales.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed costs in a company's cost structure.

Break-Even Point

The level of production or sales at which total revenues equal total costs, resulting in no profit or loss.