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The following regression equation was calculated for class of 24 CPA II students.
Required:
a) Calculate the t ratio and the 95% confidence interval for each regression...
(Solved)
The following regression equation was calculated for class of 24 CPA II students.
Standard error (0.0190) (0.034) (0.018)
Where y=students score on a theory examination
x1 = Students rank (from the bottom) in high
school x2 = Students verbal aptitude score
x3 =A measure of students character
Required:
a) Calculate the t ratio and the 95% confidence interval for each regression coefficient.
b) What assumptions did you make in (a) above? How reasonable are they?
c) Which regressor gives the strongest evidence of being statistically discernible?
d) In writing up a final regression equation, should one keep the first regressor in the equation, or drop if?
Why?
Date posted:
January 1, 2019
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Answers (1)
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The following data have been collected relating to returns which would have been earned from an investment
of an equal sum of money in the shares...
(Solved)
The following data have been collected relating to returns which would have been earned from an investment
of an equal sum of money in the shares of E.T. plc and a group of market shares:
You are required to:
a) Plot the original data on a graph, calculate the least squares regression of y on x and draw the regression
line on the graph;
b) Test the significance of the slope of the line at the 5% level;
c) Discuss the outcomes of (a) and (b) in the context of a comparison of the two investments
Date posted:
December 14, 2018
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Answers (1)
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Unlisted plc hopes to achieve a Stock Market quotation for its shares. A profit forecast is necessary and, in order to achieve such a forecast,...
(Solved)
Unlisted plc hopes to achieve a Stock Market quotation for its shares. A profit forecast is necessary and, in order to achieve such a forecast, the company has experimented with a number of approaches. The following are details from a linear regression on the last 11 years profit figures:
x = years (expressed 1 to 11)
y = annual profit figures
You are required:
a) To obtain the simple least squares regression line of Y on X;
b) To use the line to estimate profit in each of the next two years;
c) To calculate the coefficient of determination for the line and to explain its meaning;
d) To calculate the standard error of the regression line and to use this to obtain the 95% confidence
interval for the line;
e) On the basis of the information given on your answer (a) to (d) to determine whether it is likely that the regression line will be a good estimator of profit.
Date posted:
December 14, 2018
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Answers (1)
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Because of economic conditions, a firm reports that 30 per cent of its accounts receivable from other
business firms are overdue. The firm's policy is that...
(Solved)
Because of economic conditions, a firm reports that 30 per cent of its accounts receivable from other
business firms are overdue. The firm's policy is that if an accountant takes a random sample of five such accounts and finds that exactly 20 per cent of the accounts are overdue 10 per cent of the time, then a warning letter should be written to the particular firm.
Required:
Should the warning letter be written?
Date posted:
December 14, 2018
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Answers (1)
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Mia Shillings Department Stores has compiled the following data concerning its daily sales. The sales of
each day of the week are normally distributed with the...
(Solved)
Mia Shillings Department Stores has compiled the following data concerning its daily sales. The sales of
each day of the week are normally distributed with the following parameters.
Required:
Which day of the week has the lowest probability that the store will sell between Sh.110,000 and
Sh.150,000 worth of goods?
Date posted:
December 14, 2018
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Answers (1)
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What do confidence limits measure?
(Solved)
What do confidence limits measure?
Date posted:
December 14, 2018
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Answers (1)
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Under what conditions can the normal distribution be used as an approximation to the binomial
distribution?
(Solved)
Under what conditions can the normal distribution be used as an approximation to the binomial distribution?
Date posted:
December 14, 2018
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Answers (1)
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Give some examples of the type of data that form a normal distribution
(Solved)
Give some examples of the type of data that form a normal distribution.
Date posted:
December 14, 2018
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Answers (1)
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A manager is convinced that a new type of machine does not affect production at the
company's major shop floor. In order to test this, 12...
(Solved)
A manager is convinced that a new type of machine does not affect production at the
company's major shop floor. In order to test this, 12 samples of this week's hourly output is
taken and the average production per hour is measured as 1158 with a standard deviation of 71. The
output per hour averaged 1196 before the machine was introduced.
Required:
Test the manager's conviction
Date posted:
December 14, 2018
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Answers (1)
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Prior to an advertising campaign, 35 per cent of a sample of 400 housewives used a certain product.
After the campaign, 40 per cent of a...
(Solved)
Prior to an advertising campaign, 35 per cent of a sample of 400 housewives used a certain product.
After the campaign, 40 per cent of a second sample of 400 housewives used the same product.
Required:
Did the campaign increase sales?
Date posted:
December 14, 2018
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Answers (1)
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Two researchers in marketing, Catherine Mbugua and George Otieno, reviewed the theory of product
life cycle with respect to a specific product. They conducted a research...
(Solved)
Two researchers in marketing, Catherine Mbugua and George Otieno, reviewed the theory of product
life cycle with respect to a specific product. They conducted a research project to determine the
applicability of the theory to popular music records. As part of the study, they collected extensive
information on a sample of 12 music records judged on the basis of certain well-defined criteria to be successes and a sample of 10 music records to be failures. They collected data on each music record for
a period of 16 weeks from the date the record was released to the market. One item of information they
collected on each music record was radio airplay. Measurement of this variable yielded the following
means and standard deviations for the two samples of music records.
ii) What assumptions are we making in order to use the pooled estimate of the common population
variance?
Date posted:
December 14, 2018
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Answers (1)
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If a Type II error is costly but a Type I error is not, why should you set the level of significance $\alpha$ at 0.10,...
(Solved)
If a Type II error is costly but a Type I error is not, why should you set the level of significance $\alpha$ at 0.10, 0.20 or even higher?
Date posted:
December 14, 2018
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Answers (1)
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What is wrong with the following hypotheses?
(Solved)
What is wrong with the following hypotheses?
Date posted:
December 14, 2018
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Answers (1)
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What is a one-sided confidence interval? When is it necessary?
(Solved)
What is a one-sided confidence interval? When is it necessary?
Date posted:
December 14, 2018
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Answers (1)
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The General Manager of a large hotel in Bombay wishes to know whether or not the personal services
provided to its customers are uniform throughout the...
(Solved)
The General Manager of a large hotel in Bombay wishes to know whether or not the personal services
provided to its customers are uniform throughout the hotel industry. Whether the clients in the less
expensive rooms get the same service as that of clients of more expensive rooms. The data collected from the comment cards is tabulated below:
Were the customers treated differently according to their room charges? Test the hypothesis at 0.05 level of significance.
Date posted:
December 14, 2018
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Answers (1)
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Two different models are available for the same machine. The production statistics (number of units
produced per hour) of these two models are given below. The...
(Solved)
Two different models are available for the same machine. The production statistics (number of units
produced per hour) of these two models are given below. The data was collected on different days.
Will you conclude that Model A and Model B have the same productivity?
Date posted:
December 8, 2018
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Answers (1)
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The sales Manager of a large sales force is interested in finding whether or not average number of weekly
sales contacts per sales representative (15) has...
(Solved)
The sales Manager of a large sales force is interested in finding whether or not average number of weekly
sales contacts per sales representative (15) has changed. The sample information was collected and it was
found that 200 sales representatives had an average of 16.5 contacts per week with a standard deviation of
3.5. At 5 per cent level of significance, what should the sales manager conclude?
Date posted:
December 8, 2018
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Answers (1)
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Suppose it is known that the mean annual income of workers in a certain community is Rs.5,000 with a
standard deviation of Rs.1,200. A researcher suspects...
(Solved)
Suppose it is known that the mean annual income of workers in a certain community is Rs.5,000 with a
standard deviation of Rs.1,200. A researcher suspects the “son of soil” workers have higher than the average income. He draws a random sample of 144 local workers and obtains the sample mean of Rs.5,500. Can he say the local workers have significantly higher income than the total population?
Date posted:
December 8, 2018
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Answers (1)
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KK accounting firm has noticed that of the companies it audits, 85% show no inventory shortages, 10%
show small inventory shortages and 5% show large inventory...
(Solved)
KK accounting firm has noticed that of the companies it audits, 85% show no inventory shortages, 10%
show small inventory shortages and 5% show large inventory shortages. KK firm has devised a new
accounting test for which it believes the following probabilities hold:
P (Company will pass test/no shortage) = 0.90
P (Company will pass test/small shortage) = 0.50
P (Company will pass test/large shortage) = 0.20
Required:
i) Determine the probability if a company being audited fails this test has large or small inventory
shortage.
ii) If a company being audited passes this test, what is the probability of no inventory shortage?
Date posted:
December 8, 2018
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Answers (1)
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Define probability as used in Quantitative Analysis
(Solved)
Define probability as used in Quantitative Analysis.
Date posted:
December 8, 2018
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Answers (1)