FACULTY OF COMMERCE AND LAW

MASTER OF BUSINESS ADMINISTRATION

MBAZ504: STATISTICS FOR MANAGERS

May 2018

Time: 3 Hours

INSTRUCTIONS

Answer ALL questions in Section A and any THREE (3) questions from
Section B.

All questions in Section B carry equal marks.

Show all workings and give answers to 4 decimal places where

appropriate.

Graphs should be plotted on graph paper.

Candidates will be provided with Statistics List of Formulae, Statistical

Tables and graph paper.

The use of silent and non-programmable calculators is permissible

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SECTION A: Answer all questions from this section being careful to number
them A1 to A3. (40 marks)

Question A1

The table shows ZIMRA’s monthly revenue collection (US$ millions) for the first nine
months of 2016 and 2017.

Month January February March April May June July August September
2017 262.13 246.17 317.24 247.9 290.68 318.35 286.49 307.95 373.32
2016 232.01 235.94 260.33 265.7 233.98 325.66 246.22 256.01 351.99

(a) For each year, calculate the:

i. Mean [4]
ii. Standard deviation [6]
iii. Coefficient of variation [4]
(b) State, with justification, the year (first 9 months) in which ZIMRA collected:

i. More revenue? [2]

ii. More consistent amounts of revenue? [2]

Question A2

The computer output below shows multiple regression results of the impact of money
supply (M1), bank lending rate (Interest, %), an index of local prices (CPI), and the
exchange rate (Exchange) on a country’s exports.

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 Dependent Variable: EXPORTS
Method: Least Squares
Date: 08/22/14 Time: 11:36
Sample: 2009M01 2011M06
Included observations: 30

Variable Coefficient Std. Error t-Statistic Prob.

C -9.927463 5.071488 -1.957505 0.0615

M1 -0.170930 0.071989 -2.374381 0.0256
INTEREST 0.402707 0.105967 3.800321 0.0008
EXCHANGE 3.117108 2.252334 1.383946 0.1786
CPI 0.030099 0.010193 2.952848 0.0068

R-squared 0.809696 Mean dependent var 3.663333

Adjusted R-squared 0.779247 S.D. dependent var 0.747632
S.E. of regression 0.351270 Akaike info criterion 0.896491
Sum squared resid 3.084772 Schwarz criterion 1.130024
Log likelihood -8.447361 Hannan-Quinn criter. 0.971200
F-statistic 26.59211 Durbin-Watson stat 1.208151
Prob(F-statistic) 0.000000

(a) State the sample size of the study. [1]

(b) Describe the impact of each explanatory variable on exports. [8]

(c) Comment on magnitude of the adjusted R2. [3]

Question A3

Before an increase in excise duty on tea, 400 people out of a sample of 500 persons
were found to be tea drinkers. After the increase in duty, 400 people were tea
drinkers in a sample of 600 people. Test at 5% level of significance whether there is
a significant decrease in the consumption of tea following the increase in excise
duty. [10]

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Section B (60 marks). Answer any three questions from this section. Each
question carries 20 marks.

Question B4

(a) Batteries produced by a company are known to be defective with a probability of

0.02. In a random sample of six batteries, what is the probability that:

i. exactly half of the batteries are defective? [3]

ii. at least 5 of the batteries are defective? [5]

(b) A certain drug was administered to 456 males out of a total of 720 in a certain
locality to test its efficacy against typhoid. The table below shows the
incidence of typhoid.

Infectio No infection Total

n
Administering the drug 144 312 456
Without administering the 192 72 264
drug
Total 336 384 720

Test at 5% whether administration of the drug and incidence of typhoid are

independent i.e. that the drug is effective against typhoid. [12 marks]

Question B5

The weekly wages for a random sample of farm workers are shown below:

Wages ($) Number of workers

70 – 79 5
60 - 69 14
50 - 59 10
40 – 49 4
30 – 39 1

(a) Find the proportion of farm workers who receive at least $50 per week. [2]

(b) Use the data to estimate the:

i. mean, [3]
ii. median, [3]
iii. mode, and [3]
iv. standard deviation of weekly wages. [5]
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(c) Draw a histogram of the data and comment on the distribution of wages. [4]
Question B6

(a) The following data give the prices and quantities of two commodities sold in
2011 and 2012:

Product 2011 2012

Price Quantity Price Quantity
X 30 3 000 50 1 500
Y 15 400 20 250

Using 2011 as the base period and interpreting the result in each case,
calculate the:

i. Laspeyre Price Index. [4]

ii. Paasche Price Index. [4]
iii. Fisher Price index. [4]

(b) Explain any four challenges that are encountered in the construction of index
numbers. [8]

Question B7

The following data give the quarterly sales (US$ millions) figures for a retail outlet for
the period 2002 to 2004.

Year Quarter 1 Quarter 2 Quarter 3 Quarter 4

2002 10 12 13 11
2003 12 15 16 13
2004 14 16

(a) Construct a centered 4-point moving average series for the data. [5]

(b) Plot the original time series and the moving average series on the same axes.
[6]

(c) Estimate the trend line using the Ordinary Least Squares method. [6]

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(d) Forecast the sales for the last quarter of year 2004. [3]

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 MBAZ504 STATISTICS FOR MANAGERS
LIST OF FORMULAE

1.1 Measures for Describing Ungrouped Data

1.1.1 Measures of central tendency

Median
a. if n is odd

b. if n is even.

Population mean,

Sample mean,

1.1.2 Measures of position

th

The position of the p percentile is given by:

1.1.3 Measures of dispersion

Range = highest observed value – lowest observed value

Inter-quartile range =

Sample variance

Population variance

Coefficient of variation (CV)

Coefficient of skewness, Skp

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1.2 Measures for Describing Grouped Data

1.2.1 Measures of central tendency

Mean

Median =

Mode

1.2.2 Measures of position

Lower quartile, Q1 =

Upper quartile, Q3 =

Pth percentile

1.2.3 Measures of Dispersion

Population variance

Sample variance

1.3 Discrete Probability Distributions

Expectation of a discrete random variable X

Expectation of a function of a random variable

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Expected value of a linear function of a random variable

Variance of a discrete random variable

Binomial probability distribution

for x = 0, 1, 2,… n.
If X~ B (n, p), then
E(X) = n p
Var(X) = n p (1 – p)
Poisson probability distribution

for x = 0, 1, 2, …
If X~ Po( ), then the mean and variance of X both equal to
1.4 Normal Distribution
An arbitrary normal value X is transformed to a standard normal variable Z by the
transformation

1.5 Statistical Estimation

1.5.1 Point estimators

Sample mean,

Sample variance,

Sample population proportion,

1.5.2 Confidence interval estimation
If the population standard deviation is known, a 100(1 )% confidence interval for is
given by:

If the population standard deviation is unknown and , then a 100(1 % confidence

interval for population mean is given by:

If the population standard deviation is unknown and , then a

confidence interval for is given by:

When populations variances are known, a confidence interval for is

given by:
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When populations variances are unknown and samples are large, a confidence
interval for is given by:

When populations variances are unknown and samples are small, that is ,a
confidence interval for is given by

Pooled variance

A confidence interval for the mean difference of the paired observations is given
by:

The minimum sample size necessary to ensure that the error in estimating will not
exceed a specified amount is given by:

A 100(1 % confidence interval for the population proportion is given by:

For large samples, the confidence interval estimate for is given by:

When samples are small we use the t-distribution. A confidence interval for
is given by:

The minimum sample size required to estimate the population proportion to be within a
specified amount with confidence is given by:

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1.6 Hypothesis Testing

1.6.1 Tests concerning the mean of a single population

Test statistic for testing for the mean of a single population
When is known When is unknown
Case I: n is large or small Case II: n is large
~ N(0,1) ~N(0,1)

Case III: n is small

~ t(n-1)

1.6.2 Tests concerning means of two populations

When the variances ( and ) are known, the test statistic is given by:

When variances are unknown but samples are large (both n 1 and n2 are greater than 30), the
test statistic is given by:

When variances are unknown and sample sizes are small, and assuming that populations are
normally distributed with homogeneous variance, the test statistic is:

1.6.3 Test concerning a population proportion

The test statistic for testing for a proportion of a single population is given by:

1.7 Chi-Square Tests

Expected frequency =

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 2
Test statistic, cal =

1.8 Simple Linear Regression Analysis

The least squares estimates of and are and respectively

where

and
1.9 Correlation Analysis
Pearson’s product moment correlation coefficient is given by

Spearman’s Rank Correlation Coefficient is given by

1.10 Introduction to Time Series Analysis

1.10.1 Trend Analysis
The fitted trend line is
and

1.10.2 Seasonal Analysis

Seasonal ratio

Deseasonalised Y =

1.11 Index Numbers

1.11.1 Simple Index Numbers

Simple Price Index

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Simple Quantity Index

1.11.2 Weighted Index Numbers

Laspeyre Price Index, LPI

Laspeyre Quantity Index, LQI

Paasche Price Index, PPI

Paasche Quantity Index, PQI

Fisher Price Index, FPI

Fisher Quantity Index, FQI

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