BUSINESS STATISTICS ASIGNMENT

1. Assume the variable X has a mean of 10 and a standard deviation of 2. What would be the
mean and standard deviation of a new variable (Y) that was created by multiplying each
element of X by 5 and then adding 4.

2. If scores are normally distributed with a mean of 30 and a standard deviation of 5, what
percent of the scores is:

(a) greater than 30?

z=(30-30)/5=0

= 50%

(b) greater than 37?

z=(37-30)/5=1.4

=8.08%

(c) between 28 and 34?

z1=(28-30)/5=-0.4

=34.46% (
 3. The table below shows the profit made by a company between 2001 and 2009

Year 2001 2002 2003 2004 2005 2006 2007 2008 2009

Profit(#m) 10.0 12.7 12.4 11.9 12.5 13.0 14.9 16.5 18.7

Use the least squares method to estimate the trend line. Estimate the profit for the year
2010.

Year V t v.t t2 trend

value

2001 10.0 -4 -4.0 16 10.13

2002 12.7 -3 -38.7 9 11.00

2003 12.4 -2 -24.8 4 11.88

2004 11.9 -1 11.9 1 12.75

2005 12.5 0 0 0 13.62

2006 13.0 1 13 1 14.49

2007 14.9 2 29.8 4 15.36

2008 16.5 3 49.5 9 16.24

2009 18.7 4 74.8 16 17.11

122.6 52.8 60

4. The mayor of a large city claims that the average net worth of families living in the city is K. shs
300,000. A random sample of 100 families selected produces a mean wealth of kshs 288, 000
with a standard deviation of Kshs 80,000.Using 5% level of significance, can you conclude the
mayors’ claim is false?
5. A departmental store gives in-service training to salesmen followed by a test. It is experienced
that the performance regarding sales of any sales man is linearly related to the scores secured by
him. The following data give test scores and sales by nine salesmen during fixed period.

Test score(X) 16 22 28 24 29 25 16 23 24

Sales (‘00$)(Y) 35 42 57 40 54 51 34 47 45

X = xi Y = yi Xi- x̄ yi- ȳ (x-x̄)2 (xi-x̄) (yi-ȳ)

16 35 -7 -10 49 70

22 42 -1 -3 1 3

28 57 5 12 25 60

24 40 1 -5 1 -5

29 54 6 9 36 54

25 51 2 6 4 12

16 34 -7 -11 49 77

23 47 0 2 0 0

24 45 1 0 1 0

27 405 0 0 166 271

n = 9, Σxi = 207, Σyi = 405

x̄ = Σxi / n = 207 / 9 = 23, ȳ = Σyi / n = 405 / 9 = 45
answers
(i) Find the regression line of Y on x
y - ȳ = byx(x - x̄) ….(i)
Where, byx = Σ (xi - x̄) (yi - ȳ) / Σ (x-x̄)2
= 271/166
= 1. 6325
From (i) equation of regression line Y on X is
(y - 45) = 1.6325 (x-23)
 Y - 45 = - 1.6325(23) + 1.6325x
y = 74525 + 1.6325x

(ii) Predict the sales from a salesman with test score of 30

y = 7.4525 + (1.6325) (30)
= 7.4525 + 48.975
= 56.4275
(iii) Find the correlation coefficient and comment on your result.

6. The following table provides data on the number of teachers according to the time devoted to
public activities by rank.
Time devoted Rank

Professors Lecturers Tutors

A good deal 25 13 9

Some time 63 53 49

None 12 34 43

Test the hypothesis that the time devoted to public activities is independent of the rank. Use 5% level of
significance

The hypothesis HO : Time denoted to public activities is independent of rank, against

H1