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ASSIGNMENT SOLUTIONS GUIDE (2014-2015)

M.C.O.-3
Research Methodology and Statistical Analysis
Disclaimer/Special Note: These are just the sample of the Answers/Solutions to some of the Questions given in the
Assignments. These Sample Answers/Solutions are prepared by Private Teacher/Tutors/Auhtors for the help and Guidance
of the student to get an idea of how he/she can answer the Questions of the Assignments. We do not claim 100% Accuracy
of these sample Answers as these are based on the knowledge and cabability of Private Teacher/Tutor. Sample answers
may be seen as the Guide/Help Book for the reference to prepare the answers of the Question given in the assignment. As
these solutions and answers are prepared by the private teacher/tutor so the chances of error or mistake cannot be denied.
Any Omission or Error is highly regretted though every care has been taken while preparing these Sample Answers/
Solutions. Please consult your own Teacher/Tutor before you prepare a Particular Answer & for uptodate and exact
information, data and solution. Student should must read and refer the official study material provided by the university.
Q. 1. Define research Methodology. Explain the major component of research methodology. What are the
procedural and procedural perspectives of methodology?
Ans. The Research Methodology is the process used to collect information and data for the purpose of making
business decisions. The methodology may include publication research, interviews, surveys and other research techniques, and could include both present and historical information.
Research methodologies can be quantitative (for example, measuring the number of times someone does something
under certain conditions) or qualitative (for example, asking people how they feel about a certain situation). Ideally,
comprehensive research should try to incorporate both qualitative and quantitative methodologies but this is not always
possible, usually due to time and financial constraints. Research methodologies are generally used in academic research
to test hypotheses or theories. A good design should ensure the research is valid, i.e. It clearly tests the hypothesis and not
extraneous variables, and that the research is reliable, i.e. It yields consistent results every time. Part of the research
methodology is concerned with the how the research is conducted. This is called the study design and typically involves
research conducted using questionnaires, interviews, observation and/or experiments.
The term research methodology, also referred to as research methods, usually encompasses the procedures followed
to analyze and interpret the data gathered. These often use a range of sophisticated statistical analyses of the data to
identify correlations or statistical significance in the results. Objective, representative research can be difficult to conduct
because tests can normally only be conducted on a small sample (e.g. You cannot test a drug on every person in the world
so a sample needs to be used in research). This means that researchers need to have a very detailed understanding of the
types and limitations of research methodologies which they are using.
The procedural methodology is appropriate for integrating the various requirements for doing research and it builds
bridges across different qualitative methods, methodology, and contemporary society analysis, just as between social
and environmental research. Its main characteristics are worked out as procedurality, sequentiality, multidimensionality,
reflexivity, and transdisciplinarity.
Your research will dictate the kinds of research methodologies you use to underpin your work and methods you use
in order to collect data. If you wish to collect quantitative data you are probably measuring variables and verifying
existing theories or hypotheses or questioning them. Data is often used to generate new hypotheses based on the results of
data collected about different variables. Ones colleagues are often much happier about the ability to verify quantitative
data as many people feel safe only with numbers and statistics.
However, often collections of statistics and number crunching are not the answer to understanding meanings, beliefs
and experience, which are better understood through qualitative data. And quantitative data, it must be remembered, are
also collected in accordance with certain research vehicles and underlying research questions. Even the production of
numbers is guided by the kinds of questions asked of the subjects, so is essentially subjective, although it appears less so
than qualitative research data.

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Q. 2. (a) What do you mean by Research Design? Discuss the role of research design in business research.
Ans. The research design refers to the overall strategy that you choose to integrate the different components of the
study in a coherent and logical way, thereby, ensuring you will effectively address the research problem; it constitutes the
blueprint for the collection, measurement, and analysis of data. Note that your research problem determines the type of
design you can use, not the other way around! The function of a research design is to ensure that the evidence obtained
enables you to effectively address the research problem logically and as unambiguously as possible. In social sciences
research, obtaining information relevant to the research problem generally entails specifying the type of evidence needed
to test a theory, to evaluate a program, or to accurately describe and assess meaning related to an observable phenomenon.
With this in mind, a common mistake made by researchers is that they begin their investigations far too early, before
they have thought critically about about what information is required to address the studys research questions. Without
attending to these design issues beforehand, the overall research problem will not be adequately addressed and any
conclusions drawn will risk being weak and unconvincing. As a consequence, the overall validity of the study will be
undermined.
A research design is a systematic plan to study a scientific problem. The design of a study defines the study type
(descriptive, correlational, semi-experimental, experimental, review, meta-analytic) and sub-type (e.g., descriptive-longitudinal case study), research question, hypotheses, independent and dependent variables, experimental design, and, if
applicable, data collection methods and a statistical analysis plan. Research design is the framework that has been created
to seek answers to research questions.
The role of research in business is to provide information that can help your company run efficiently and profitably.
A well researched business has an advantage over its competitors because its principals plan business operations in
reference to actual, verified data rather than speculative guesses. This minimizes costly mistakes and effectively focuses
marketing efforts.
Customer-based Marketing Research: Customer-based marketing research provides your company with essential
information about what your clientele wants, and whether your company is effectively providing it. Marketing research
can take the form of formal surveys such as online polls or in-person questionnaires with specific objectives evaluating
whether or not there is a market for your new idea.
Product Research: Product research provides you with the information you need to create durable, high-quality
offerings. If you own a toy manufacturing company, testing new products would involve subjecting them to the type of
harsh treatment they might endure at the hands of children to ensure they are sturdy and safe, as well as providing
prototypes to children to make sure they enjoy using them. If you own a food business, product research might include
testing product shelf life by tasting foods after different periods of time.
Operations Research: To effectively manufacture and market your product, your company must research information about the best way to produce and distribute it. This research involves investigating production processes and equipment, as well as sources for supplies and materials. By doing your homework and choosing the most appropriate equipment, your company will save the time and stress of using clumsy, inefficient systems.
Competitor-based Marketing Research: Competitor-based marketing research provides information necessary to
successfully introduce and brand your product. Competitor research includes studying comparable products to highlight
ways that your own offerings are different. It also involves researching the prices on items in your industry to understand
what customers will typically pay, and also to develop a pricing strategy that brands your product relative to the other
available alternatives. Observing marketing strategies that your competitors use enables you to understand your target
market, and strategize about ways to reach them.
(b) What are the main issues a researcher faces in formulating a research problem? Formulate five research
problems in each functional areas of business.
Ans. A research problem is a statement about an area of concern, a condition to be improved upon, a difficulty to be
eliminated, or a troubling question that exists in scholarly literature, in theory, or in practice that points to the need for
meaningful understanding and deliberate investigation. In some social science disciplines the research problem is typically posed in the form of one or more questions. A research problem does not state how to do something, offer a vague
or broad proposition, or present a value question. Perhaps the most important part of research is formulating a research
problem. Formulating a research problem shows a researcher where previous researchers have been deficient and identifies avenues of study that have not yet been pursued. Researchers must be careful to formulate their research problems
properly in order to make sure that their research intent is not ambiguous, and to make sure that the information obtained

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through the research is of significance.

Research Problem: Five Ways to Formulate the Research Problem
1. Specify the Research Objectives: A clear statement of objectives will help you develop effective research. It will
help the decision makers evaluate your project. Its critical that you have manageable objectives. (Two or three clear goals
will help to keep your research project focused and relevant.)
2. Define the Variable Relationships: Marketing plans often focus on creating a sequence of behaviours that occur
over time, as in the adoption of a new package design, or the introduction of a new product. Such programs create a
commitment to follow some behavioral pattern in the future.
3. The Consequences of Alternative Courses of Action: There are always consequences to any course of action.
Anticipating and communicating the possible outcomes of various courses of action is a primary responsibility in the
research process.
4. Review the Environment or Context of the Research Problem: As a marketing researcher, you must work
closely with your team. This will help you determine whether the findings of your project will produce enough information to be worth the cost. In order to do this, you have to identify the environmental variables that will affect the research
project.
5. Explore the Nature of the Problem: Research problems range from simple to complex, depending on the number
of variables and the nature of their relationship. If you understand the nature of the problem as a researcher, you will be
able to better develop a solution for the problem. To help you understand all dimensions, you might want to consider
focus groups of consumers, sales people, managers, or professionals to provide what is sometimes much needed insight.
Q. 3. (a) Discuss the criteria for workable hypothesis with suitable examples.
Ans. A working hypothesis is a hypothesis that is provisionally accepted as a basis for further research in the hope
that a tenable theory will be produced, even if the hypothesis ultimately fails. Like all hypotheses, a working hypothesis
is constructed as a statement of expectations, which can be linked to the exploratory research purpose in empirical
investigation and is often used as a conceptual framework in qualitative research. A hypothesis is an explanation for a set
of observations. Here are examples of a scientific hypothesis. Although you could state a scientific hypothesis in various
ways, most hypothesis are either If, then statements or else forms of the null hypothesis. The null hypothesis sometimes
is called the no difference hypothesis. The null hypothesis is good for experimentation because its simple to disprove.
If you disprove a null hypothesis, that is evidence for a relationship between the variables you are examining.
The Null and Alternative Hypotheses
The claim being investigated is that the average body temperature of 17 year olds is greater than 98.6 degrees This
corresponds to the statement x ? 98.6. The negation of this is that the population average is not greater than 98.6 degrees.
In other words the average temperature is less than or equal to 98.6 degrees. In symbols this is x < 98.6.
One of these statements must become the null hypothesis, and the other should be the alternative hypothesis. The null
hypothesis contains equality. So for the above, the null hypothesis H0 : x = 98.6. It is common practice to only state the
null hypothesis in terms of an equals sign, and not a greater than or equal to or less than or equal to.
The statement that does not contain equality is the alternative hypothesis, or H1 : x >98.6.
The statement of our problem will determine which kind of test to use. If the alternative hypothesis contains a not
equals to sign, then we have a two tailed test. In the other two cases, when the alternative hypothesis contains a strict
inequality, we use a one tailed test. This is our situation, so we use a one tailed test.
Choice of a Significance Level: Here we choose the value of alpha, our significance level. It is typical to let alpha be
0.05 or 0.01. For this example we will use a 5% level and alpha will be equal to 0.05.
Choice of Test Statistic and Distribution: Now we need to determine which distribution to use. The sample is from
a population that is normally distributed as the bell curve, so we can use the standard normal distribution. A table of zscores will be necessary.
(b) Explain the procedure for testing of hypothesis.
Ans. Procedure for Testing Hypothesis: To test a hypothesis means to tell (on the basis of the data researcher has
collected) whether or not the hypothesis seems to be valid. In hypothesis testing the main question is: whether the null
hypothesis or not to accept the null hypothesis? Procedure for hypothesis testing refers to all those steps that we undertake
for making a choice between the two actions i.e., rejection and acceptance of a null hypothesis. The various steps involved in hypothesis testing are stated below:
(1) Making a Formal Statement: The step consists in making a formal statement of the null hypothesis (Ho) and

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also of the alternative hypothesis (Ha). This means that hypothesis should clearly state, considering the nature of the
research problem. For instance, Mr. X of the Civil Engineering Department wants to test the load bearing capacity of an
old bridge which must be more than 10 tons, in that case he can state his hypothesis as under:
Null hypothesis HO: =10 tons
Alternative hypothesis Ha: >10 tons
Take another example. The average score in an aptitude test administered at the national level is 80. To evaluate a
states education system, the average score of 100 of the states students selected on the random basis was 75. The state
wants to know if there is a significance difference between the local scores and the national scores. In such a situation the
hypothesis may be state as under:
Null hypothesis HO: =80
Alternative hypothesis Ha: ? 80
The formulation of hypothesis is an important step which must be accomplished with due care in accordance with the
object and nature of the problem under consideration. It also indicates whether we should use a tailed test or a two tailed
test. If ha is of the type greater than, we use alone tailed test, but when Ha is of the type whether greater or smaller then
we use a two-tailed test.
2) Selecting a Significant Level: The hypothesis is tested on a pre-determined level of significance and such the
same should have specified. Generally, in practice, either 5% level or 1% level is adopted for the purpose. The factors that
affect the level of significance are:
The magnitude of the difference between sample ;
The size of the sample;
The variability of measurements within samples;
Whether the hypothesis is directional or non - directional (A directional hypothesis is one which predicts the direction
of the difference between, say, means). In brief, the level of significance must be adequate in the context of the purpose
and nature of inquiry.
3) Deciding the Distribution to Use: After deciding the level of significance, the next step in hypothesis testing is to
determine the appropriate sampling distribution. The choice generally remains between distribution and the t distribution.
4) Selecting a Random Sample and Computing an Appropriate Value: Another step is to select a random sample(S)
and compute an appropriate value from the sample data concerning the test statistic utilizing the relevant distribution. In
other words, draw a sample to furnish empirical data.
5) Calculation of the Probability: One has then to calculate the probability that the sample result would diverge as
widely as it has from expectations, if the null hypothesis were in fact true.
6) Comparing the Probability: Yet another step consists in comparing the probability thus calculated with the
specified value for ?, the significance level. If the calculated probability is equal to smaller than ? value in case of one
tailed test (and ?/2 in case of two-tailed test), then reject the null hypothesis (i.e. accept the alternative hypothesis), but if
the probability is greater than accept the null hypothesis.
Q. 4. (a) How would you apply t-test for independent sample and t-test for dependent samples? Explain with
examples.
Ans. A t-test is any statistical hypothesis test in which the test statistic follows a Students t distribution if the null
hypothesis is supported. It can be used to determine if two sets of data are significantly different from each other, and is
most commonly applied when the test statistic would follow a normal distribution if the value of a scaling term in the test
statistic were known. When the scaling term is unknown and is replaced by an estimate based on the data, the test statistic
(under certain conditions) follows a Students t distribution. A t-test helps you compare whether two groups have different
average values (for example, whether men and women have different average heights). Lets say youre curious about
whether New Yorkers and Kansans spend a different amount of money per month on movies. Its impractical to ask every
New Yorker and Kansan about their movie spending, so instead you ask a sample of each-maybe 300 New Yorkers and
300 Kansans-and the averages are $14 and $18. The t-test asks whether that difference is probably representative of a real
difference between Kansans and New Yorkers generally or whether that is most likely a meaningless statistical fluke.
Technically, it asks the following: If there were in fact no difference between Kansans and New Yorkers generally,
what are the chances that randomly selected groups from those populations would be as different as these randomly
selected groups are? For example, if Kansans and New Yorkers as a whole actually spent the same amount of money on
average, its very unlikely that 300 randomly selected Kansans each spend exactly $14 and 300 randomly selected New

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Yorkers each spend exactly $18. So if youre sampling yielded those results, you would conclude that the difference in the
sample groups is most likely representative of a meaningful difference between the populations as a whole.
A t-test asks whether a difference between two groups averages is unlikely to have occurred because of random
chance in sample selection. A difference is more likely to be meaningful and real if
(1) the difference between the averages is large,
(2) the sample size is large, and
(3) responses are consistently close to the average values and not widely spread out (the standard deviation is low).
The t-tests statistical significance and the t-tests effect size are the two primary outputs of the t-test. Statistical
significance indicates whether the difference between sample averages is likely to represent an actual difference between
populations (as in the example above), and the effect size indicates whether that difference is large enough to be practically meaningful.
The One Sample T-Test is similar to the Independent Samples T-Test except it is used to compare one groups
average value to a single number (for example, do Kansans on average spend more than $13 per month on movies?). For
practical purposes you can look at the confidence interval around the average value to gain this same information.
The paired t-test is used when each observation in one group is paired with a related observation in the other group.
For example, do Kansans spend more money on movies in January or in February, where each respondent is asked about
their January and their February spending? In effect a paired t-test subtracts each respondents January spending from
their February spending (yielding the increase in spending), then take the average of all those increases in spending and
looks to see whether that average is statistically significantly greater than zero (using a one sample t-test).
(b) What is a research report? What are the important points to be kept in mind, while writing a research
report?
Ans. Research reports present the results of formal investigations into the properties, behavior, structures, and principles of material and conceptual entities. Almost any physical phenomenon or concept may be investigated in a research
framework. The following are some key differences between formal research, and other less structured kinds of inquiry.
1. Problem definition: the rigorous reduction of the inquiry to a narrow question with a quantifiable answer. The
most significant preliminary phase of research writing is that of effective problem definition. This process is one of
identifying an interesting question and narrowing the research inquiry to a manageable size.
2. Research approach: the structuring of the research according to a methodology associated with a specialized
field of inquiry. Specialized fields have research methodologies that are followed in investigating problems. These range
from general methods of interviewing and literature researching to highly specialized procedures for using materials and
mechanical devices to establish appropriate conditions for generating data. Adapting a sound research methodology to
the investigation of your problem is a major milestone in the conduct of your inquiry.
3. Research report: the presentation of the research and its results in a rigorously formatted document that follows
a conventional structure. In presenting your research, you pull all its elements together into a focused, coherent document.
Research reports contain a standard set of elements that include
front matter
body
end matter
A document prepared by an analyst or strategist who is a part of the investment research team in a stock brokerage or
investment bank. A research report may focus on a specific stock or industry sector, a currency, commodity or fixedincome instrument, or even on a geographic region or country. Research reports generally, but not always, have actionable recommendations (i.e. investment ideas that investors can act upon). Research reports are produced by a variety of
sources, ranging from market research firms to in-house departments at large organizations.
Q. 5. (a) Discuss the usefulness of Chi-square test in business research. What are the essential conditions for
applying Chi-square test?
Ans. Chi-square is a statistical test commonly used to compare observed data with data we would expect to obtain
according to a specific hypothesis. For example, if, according to Mendels laws, you expected 10 of 20 offspring from a
cross to be male and the actual observed number was 8 males, then you might want to know about the goodness to fit
between the observed and expected. Were the deviations (differences between observed and expected) the result of
chance, or were they due to other factors. How much deviation can occur before you, the investigator, must conclude that
something other than chance is at work, causing the observed to differ from the expected. The chi-square test is always

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testing what scientists call the null hypothesis, which states that there is no significant difference between the expected
and observed result. The chi-square (c2) test measures the alignment between two sets of frequency measures. These
must be categorical counts and not percentages or ratios measures (for these, use another correlation test). Note that the
frequency numbers should be significant and be at least above five (although an occasional lower figure may be possible,
as long as they are not a part of a pattern of low figures).
Goodness of fit: A common use is to assess whether a measured/observed set of measures follows an expected
pattern. The expected frequency may be determined from prior knowledge (such as a previous years exam results) or by
calculation of an average from the given data.
The null hypothesis, H0 is that the two sets of measures are not significantly different.
Independence: The chi-square test can be used in the reverse manner to goodness of fit. If the two sets of measures
are compared, then just as you can show they align, you can also determine if they do not align.
The null hypothesis here is that the two sets of measures are similar.
The main difference in goodness-of-fit vs. independence assessments is in the use of the Chi Square table. For
goodness of fit, attention is on 0.05, 0.01 or 0.001 figures. For independence, it is on 0.95 or 0.99 figures (this is why the
table has two ends to it).
Example
Goodness of fit: English test grade distributions have changed from last year, with grade Bs somewhat lower.
To conduct the chi-square test, the researcher enters observed frequencies corresponding to combinations of levels of
relevant factors (here, called condition and group, but these are labels of convenience). Sums of elements within
rows and within columns are then computed (call these marginal Ns). The chi-square test of independence is used to test
the null hypothesis that the frequency within cells is what would be expected, given these marginal Ns. The chi-square
test of goodness of fit is used to test the hypothesis that the total sample N is distributed evenly among all levels of the
relevant factor.
The expected value within each cell, if the null condition is true (i.e., if the factors have no significant influence on
observed frequencies in the population), is simply the product of the row total and column total divided by the overall
sample N for the test of independence and N divided by the number of levels of the single factor for the test of goodness
of fit. If Oij is the observed frequency and Eij the expected frequency for the cell corresponding to the ith condition and
the jth group, then chi-square is:

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X2 =

(O3 E 3 )2
E3

If there is only one factor of interest with (k > 1) levels, the same formula will work, with i or j being set to 1. The test
presented here can be used to test only 1- or 2-dimensional arrays.
(b) Why do we study probability? Explain the procedure involved in fitting binomial and continuous probability distribution.
Ans. Probability is used to quantify an attitude of mind towards some proposition of whose truth we are not certain.
The proposition of interest is usually of the form Will a specific event occur? The attitude of mind is of the form How
certain are we that the event will occur? The certainty we adopt can be described in terms of a numerical measure and
this number, between 0 and 1 (where 0 indicates impossibility and 1 indicates certainty), we call probability. Thus the
higher the probability of an event, the more certain we are that the event will occur. A simple example would be the toss
of a fair coin. Since the 2 outcomes are deemed equi-probable, the probability of heads equals the probability of tails
and each probability is 1/2 or equivalently a 50% chance of either heads or tails. Probability can be represented
numerically with a number between zero and one, with zero representing the impossibility of something specific happening and one representing the certainty of that thing happening. This number is often transferred to a percentage in order to
predict something useful, such as a weather person predicting the likelihood of rain on the following day. Such an
individual uses probability by taking available data on weather and making the most accurate prediction possible. Probability theory differs from statistics because statistics requires the examination of what has already occurred in order to
determine how such a result occurred. One frequent use of probability is the determination of events that are effectively
impossible to quickly predict when a random determination needs to be made. This is commonly seen in sporting events
in which a coin flip can influence aspects of the game. In truth, a coin flip can be influenced by factors such as coin speed,

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but the relative impossibility of using this information to predict which side the coin lands on makes it a useful tool for
arbitrary determinations.
When confronted with data that needs to be characterized by a distribution, it is best to start with the raw data and
answer four basic questions about the data that can help in the characterization. The first relates to whether the data can
take on only discrete values or whether the data is continuous; whether a new pharmaceutical drug gets FDA approval or
not is a discrete value but the revenues from the drug represent a continuous variable. The second looks at the symmetry
of the data and if there is asymmetry, which direction it lies in; in other words, are positive and negative outliers equally
likely or is one more likely than the other. The third question is whether there are upper or lower limits on the data;; there
are some data items like revenues that cannot be lower than zero whereas there are others like operating margins that
cannot exceed a value (100%). The final and related question relates to the likelihood of observing extreme values in the
distribution; in some data, the extreme values occur very infrequently whereas in others, they occur more often.

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