OAK UNIVERSITY

SCHOOL OF BUSINESS
DEPARTMENT OF BUSINESS STUDIES
END OF 2021 ACADEMIC YEAR
YEAR 2 FINAL EXAMINATION
BBA 213: BUSINESS STATISTICS JANUARY 2020 INTAKE
TH
29 NOVEMBER, 2021 TOTAL MARKS: 100 TIME ALLOWED: 2 HOURS
INSTRUCTIONS:
a.) Write all your details on the answer Booklet provided.
b.) There are Two Sections in this paper. Answer ALL Questions from Section A and any Two (2) from Section
B.
c.) Write all your necessary working on the Answer Booklet.
SECTION A: Answer ALL Questions from this Section.
Multiple choice. Choose one correct answer and justify your answer. 20 MARKS
1. If two events (both with probability greater than 0) are mutually exclusive, then:
a) They also must be independent.
b) They also could be independent.
c) They cannot be independent.
2. If two events (both with probability greater than 0) are mutually exclusive, then:
a) They also must be complements.
b) They also could be complements.
c) They cannot be complements.
3. Suppose that the probability of event A is 0.2 and the probability of event B is 0.4. Also, suppose that the two
events are independent. Then P(A|B) is:
a) P(A) = 0.2
b) P(A)/P(B) = 0.2/0.4 = ½
c) P(A) × P(B) = (0.2)(0.4) = 0.08
d) None of the above.
4. A sampling distribution is the probability distribution for which one of the following:
a) A sample
b) A sample statistic
c) A population
d) A population parameter
5. Which of the following is the most common example of a situation for which the main parameter of interest is
a population proportion?
a) A binomial experiment
b) A normal experiment
c) A randomized experiment
d) An observational study
6. Which statement is not true about confidence intervals?
a) A confidence interval is an interval of values computed from sample data that is likely to include the
true population value.
b) An approximate formula for a 95% confidence interval is sample estimate ± margin of error.
c) A confidence interval between 20% and 40% means that the population proportion lies between 20%
and 40%.
d) A 99% confidence interval procedure has a higher probability of producing intervals that will include
the population parameter than a 95% confidence interval procedure.

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7. Which statement is not true about the 95% confidence level?
a) Confidence intervals computed by using the same procedure will include the true population value
for 95% of all possible random samples taken from the population.
b) The procedure that is used to determine the confidence interval will provide an interval that includes
the population parameter with probability of 0.95.
c) The probability that the true value of the population parameter falls between the bounds of an
already computed confidence interval is roughly 95%.
d) If we consider all possible randomly selected samples of the same size from a population, the 95% is
the percentage of those samples for which the confidence interval includes the population
parameter.
8. Which one of the following probabilities is a "cumulative" probability?
a) The probability that there are exactly 4 people with Type O+ blood in a sample of 10 people.
b) The probability of exactly 3 heads in 6 flips of a coin.
c) The probability that the accumulated annual rainfall in a certain city next year, rounded to the
nearest inch, will be 18 inches.
d) The probability that a randomly selected woman's height is 67 inches or less.
9. Which one of these variables is a binomial random variable?
a) time it takes a randomly selected student to complete a multiple choice exam
b) number of textbooks a randomly selected student bought this term
c) number of women taller than 68 inches in a random sample of 5 women
d) number of CDs a randomly selected person owns
10. Five hundred (500) random samples of size n=900 are taken from a large population in which 10% are left-
handed. The proportion of the sample that is left-handed is found for each sample and a histogram of these
500 proportions is drawn. Which interval covers the range into which about 68% of the values in the
histogram will fall?
a) .1 ± .010
b) .1 ± .0134
c) .1 ± .0167
d) .1 ± .020
State whether True/False and justify your answer. 30 MARKS
11. The number of permutations of X objects selected from n objects is always greater than the number of
combinations of X objects selected from n objects.
12. P(A | B) = P(B | A).
13. If events X and Y are independent, then they are also mutually exclusive.
14. The General Addition Rules states that the probability of either event X or event Y occurring is the sum of P(X)
with P(Y).
15. If P(A) = 0.3 and P(B) = 0.2 and events A and B are statistically independent, then P(A and B) = 0.06.
16. If P(A and B) = 0, then either P(A) or P(B) must also be equal to zero.
17. The Multiplication Rule can be derived from the formula for conditional probability.
18. A Venn Diagram can be used to depict mutually exclusive events.
19. A group of 8 friends has assembled to play basketball against a rival team. If all 8 friends can play any position,
there are 6,720 different 5-person basketball teams that could be formed.
20. If P(X) = 0.5 and P(Y) = 0.3 and the two events are statistically independent, then P(Y | X) = P(Y).
21. Bayes’ Theorem is an extension of the conditional probability concept.
22. A contingency table or a Venn Diagram can be used as a basis for calculating probabilities associated with the
union, intersection, and conditional probability statements associated with two or more events.
23. P(A | B) = P(B | A).
24. If events X and Y are independent, then they are also mutually exclusive.
25. The General Addition Rules states that the probability of either event X or event Y occurring is the sum of P(X)
with P(Y).

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SECTION B: Answer Any Two Questions from this Section.

QUESTION ONE
Lusaka Stock Exchange: Stocks and Bonds; do bonds reduce the overall risk of an investment portfolio? Let be a
random variable representing annual percent return for Vanguard Total Stock Index (all stocks). Let be a random
variable representing annual return for Vanguard Balanced Index (60% stock and 40% bond). For the past several
years, we have the following data (Reference: Business Research Group, Zambia):

11 0 36 21 31 23 24 11 11 21
10 2 29 14 22 18 14 4 3 10
a.) Compute and the sample mean, variance, and standard deviation for x and for y. Further, Compute a 75%
Chebyshev’s interval around the mean for x values and also for y values. Use the intervals to compare the
two funds. (10 marks)
b.) Compute the coefficient of variation for each fund. Use the coefficients of variation to compare the two
funds. If s represents ̅ risks and represents expected return, then s/ ̅ can be thought of as a measure of
risk per unit of expected return. In this case, why is a smaller CV better? Explain. (10 marks)
c.) Give the statistical definition and state the formula for; Skewness and kurtosis. (5 marks)

QUESTION TWO
In 1965, data on the connection between radioactive waste exposure and cancer mortality was published. The
data was collected from 9 counties that were located near an Atomic Energy Commission facility in Hanford,
Washington. The data give the index of exposure and the cancer mortality rate during 1959-1964 for the nine
counties affected. Higher index of exposure values represents higher levels of contamination. Variable description:
Exposure Mortality
Index Number Cancer mortality per 100, 000 man years
Exposure Mortality
2.49 147.1
2.57 130.1
3.41 129.9
1.25 113.5
1.62 137.5
3.83 162.3
11.64 207.5
6.41 177.9
8.34 210.3
a.) Draw a scatter plot for the above data. (5 marks)
b.) Derive and compute the regression equation for the above data interpreting the relationship between
exposure and mortality rate. Find the mortality rate if exposure is 13.5 (5 marks)
c.) Calculate and interpret the;
i. Coefficient of determination, (5 marks)
ii. Pearson’s correlation coefficient. (5 marks)
d.) Distinguish with examples descriptive from inferential statistics. (5 marks)

QUESTION THREE
Lungo Enterprise offers soft loans and mobile money services to the public across the country. The enterprise
offers loans at different rates based on the period possible return and accounts for the number of successfully paid
up loans quarterly. The higher the number of successfully paid up loans, the more profitable is the business.
Assume that the enterprise has been operating since 2018 till date. According to the enterprise’s accounting
books, the above information is summarized in the table below;

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 Year Quarter Number of loans paid
2018 1 100
2 125
3 127
4 102
2019 1 104
2 128
3 130
4 107
2020 1 110
2 131
3 133
4 107
2021 1 109
2 132
Use the 4 point Moving Average (4MA) to compute the deseasonalised values and further find the trend equation.
(25 marks)

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