- | P a g e
pg. 1
ISYE 6501 MID-TERM 2 NEWEST 2025 ACTUAL EXAM|
COMPLETE 300 QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS)
ALREADY GRADED A+| ISYE 6501 MID -TERM EXAM
REVIEW| BRAND NEW!!
What is the order of the ARIMA parameters? - ANSWER - p d q
GARCH estimates what? - ANSWER - Variance.
Variance can be a proxy for ___ or ___. - ANSWER - volatility or Risk
What parameter does GARCH not have the ARIMA has? - ANSWER - d because GARCH doesn't deal with differences.
What is a simple linear regression? - ANSWER - Linear regression with one predictor.
A linear regression defines a relationship between what and what? - ANSWER - Predictor(S) and Response
What is the formula for a linear regression with M predictors? - ANSWER - Y=a0+sum (j=1..m, a(j)*(x(j)) 1 / 4
- | P a g e
pg. 2 What measure is used to determine the quality of a linear regression line to data? - ANSWER - Square of the difference between the line and the data points. (Sum squared error.)
What is the formula for point error in linear regression? - ANSWER - y(i)-Yhat(i)=y(i)-(a(0) + a(i)*x(i)
Taking partial derivates and setting them equal to zero and then solving that system equation helps us do what? - ANSWER - Minimize the error and optimize the coefficients for linear regression.
What does AIC stand for? - ANSWER - Akaike Information Criterion
What is "Likelihood"? - ANSWER - A measure for the probability density for any parameter set.
What is Maximum likelihood? - ANSWER - Parameters that give the highest probability.
What is MLE? - ANSWER - Maximum Likelihood Estimate... The set of parameters that minimizes the sum of square errors.
What is the formula for AIC? - ANSWER - AIC=2k - 2*ln(L*) where L* is the maximum likelihood value and K is the number of parameters estimated.
- / 4
- | P a g e
pg. 3 What is the penalty term in AIC and what does it do? - ANSWER - 2K - It helps prevent overfitting.
A model that is fit to random effects and not real ones is said to be? - ANSWER - Overfit
What does correct AIC account for? - ANSWER - The fact that we cannot have infinitely many data points.
If AIC for model 1 is 75 and AIC for model 2 is 80 how do you compute
which is better. - ANSWER - It is the relative likelihood: e^((AIC1-
AIC2)/2) = 8.2%
What is an outlier? – ANSWERS - A data point that is very different from the rest
What graph or plot can we use to find outliers? – ANSWERS - box-and- whisker plot
What are the parts of a box-and-whisker plot? – ANSWERS - The bottom and top of the box are the 25th and 75th percentile. The middle value is the median. The whiskers stretch up and down to reasonable range of values (10 and 90th or 5th and 95 percentiles)
Where would outliers exist in a box and whisker plot – ANSWERS - outside of the whiskers. 3 / 4
- | P a g e
pg. 4 What are some ways to deal with outliers that are bad data? – ANSWERS - Omit them or use imputation
What can change detection be used for? – ANSWERS - Determining whether action might be needed, determining impact of past action, determining changes to help plan.
What is Cumulative sum (CUSUM) used for – ANSWERS - detect increase, decrease or both
What is C used for in the Cusum formula – ANSWERS - Since we expect there to be some randomness, we include a value C to pull the running total down
What does BIC stand for? - ANSWER - Bayesian Information Criterion
If you have a lot more data than parameters should you use AIC or BIC?
- ANSWER - BIC
The "Rule of Thumb" deals with? - ANSWER - When comparing two models on the same data set by their BIC scores.
In exponential smoothing what does alpha do? - ANSWER - Adjust the tradeoff between current (x_t) and previous values.
- / 4