BUS-120 {SPRING 2017-2018 Assignment}

SPRING 2017-2018
ASSIGNMENT-Individual
EXAMINATION INFORMATION

Course Code: BUS-120 Course Title: Business Statistics

Due Date: 5th April 2018 Instructor(s): Muhammad Akram
Assignment Type: Individual Total Marks: 20 Weightage: 20%

STUDENT INFORMATION

Mohamed Ahmed Hamad Alameri

Student Name

ID Number 201630015

EXAMINATION GUIDED INSTRUCTIONS

1. This is an individual Assignment. Each student MUST submit his/her work along with this cover page.
2. Read the questions carefully before solving it. Practice work for each question MUST be presented on the
answer sheet when and where it requires.
3. Before submitting your assignment/homework, kindly READ the MCM plagiarism policy in your student’s
handbook.
4. Any plagiarism work will be strictly dealt as per MCM Plagiarism Policy.

FOR EXAMINER’S USE ONLY

Item Questions Total

Question No. Q-1 Q-2 Q-3 Q-4

CLO’s Addressed CLO: 5 CLO: 5 CLO: 5 CLO: 5

Marks allocated 5 marks 6 marks 4 marks 5 marks 20

Marks obtained (Weight: 20%)

Marks obtained
(in words)

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 BUS-120 {SPRING 2017-2018 Assignment}

Question-1:
Demonstrate the importance of Hypothesis Testing in Statistical Analysis. Explain
the steps required for the process of statistical hypothesis testing? (5 marks)

Answer

Hypothesis Testing
Hypothesis testing in statistics is a way for you to test the results of a survey or
experiment to see if you have meaningful results. You’re basically testing whether
your results are valid by figuring out the odds that your results have happened by
chance. If your results may have happened by chance, the experiment won’t be
repeatable and so has little use.

Importance of Hypothesis Testing

Hypothesis testing is one of the most important concepts in statistics because it is
how you decide if something really happened, or if certain treatments have positive
effects, or if groups differ from each other or if one variable predicts another. In
short, you want to proof if your data is statistically significant and unlikely to have
occurred by chance alone. In essence then, a hypothesis test is a test of significance.

Steps for the process of statistical hypothesis testing

 Step 1: State the null hypothesis, H0, and the alternative hypothesis, Ha. The
alternative hypothesis represents what the researcher is trying to prove. The
null hypothesis represents the negation of what the researcher is trying to
prove. (In a criminal trial in the American justice system, the null hypothesis
is that the defendant is innocent; the alternative is that the defendant is
guilty; either the jury rejects the null hypothesis if they find that the
prosecution has presented convincing evidence, or the jury fails to reject the
null hypothesis if they find that the prosecution has not presented convincing
evidence).

 Step 2: State the size(s) of the sample(s). This represents the amount of
evidence that is being used to make a decision. State the significance level, a,
for the test. The significance level is the probability of making a Type I error.
A Type I error is a decision in favor of the alternative hypothesis when, in
fact, the null hypothesis is true. A Type II error is a decision to fail to reject
the null hypothesis when, in fact, the null hypothesis is false.

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 BUS-120 {SPRING 2017-2018 Assignment}

 Step 3: State the test statistic that will be used to conduct the hypothesis test
(the appropriate test statistics for the different kinds of hypothesis tests are
given in the tables of the reference page, Statistical Inference for Values of
Population Parameters). The following statement should appear in this step:
The test statistic is _________ , which under H0 has a _____________ probability
distribution (with _____ degrees of freedom).

 Step 4: Find the critical value for the test. This value represents the cutoff
point for the test statistic. If the null hypothesis were true, there would be
only a probability of a of obtaining a value of the test statistic that would be
at least this extreme. If the value of the test statistic computed from the
sample data is beyond the critical value, the decision will be made to reject
the null hypothesis in favor of the alternative hypothesis.

 Step 5: Calculate the value of the test statistic, using the sample data. (If you
are using Excel or SAS, or some similar computer package, you will calculate
the value of the test statistic, along with a p-value.)

 Step 6: Decide, based on a comparison of the calculated value of the test

statistic and the critical value of the test, whether to reject the null
hypothesis in favor of the alternative. (If you have a calculated p-value, then
decide based on a comparison of the p-value with a. If the p-value is less than
a, reject H0. Otherwise, fail to reject H0.)

If the decision is to reject H0, the statement of the conclusion should read as follows:
We reject H0 at the (value of a) level of significance. There is sufficient evidence to
conclude that (statement of the alternative hypothesis).

If the decision is to fail to reject H0, the statement of the conclusion should read as
follows: We fail to reject H0 at the (value of a) level of significance. There is not
sufficient evidence to conclude that (statement of the alternative hypothesis).

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 BUS-120 {SPRING 2017-2018 Assignment}

Question-2:
(6 marks)

The hourly wages of a sample of eight individuals is given below;

Individual Hourly Wages ($)

A 27
B 25
C 20
D 10
E 12
F 14
G 17
H 19

For the above sample, determine the following measures:

a) The mean.
b) The standard deviation.
c) Interpret your result

Answer

Mean = Sum of all data value /Number of data value)

Mean = (27+25+20+10+12+14+17+19)/8 = 144/8
Mean = 18

_
2
Standard deviation = s = s where s2 = ∑ ( xi – x )2 / (n-1)
= √( (1/8-1) * (27-18)2+(25-18)2+(20-18)2+(10-18)2+(12-18)2+(14-18)2+(17-
18)2+(19-18)2)
= √( (1/7) * (92 + 72 + 22 + -82 + -62 + -42 + -12 + 12))
= √( (1/7) * (81 + 49 + 4 + 64 + 36 + 16 + 1 + 1))
= √ 36
σ= 6

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 BUS-120 {SPRING 2017-2018 Assignment}

Question-3: (4 marks)

An Introduction to Economics Class has 10 students. Their grades on the last test
were 85, 90, 87, 93, 100, 54, 75, 85, 99 and 82. By using this data calculate the
followings;
a. Calculate range of grades
b. What is the average grade of the students?
c. What is the median grade?
d. What grade occurred most frequently among the students?

Answer

Ascending Order: 54, 75, 82, 85 85 ,87 ,90, 93 ,99 ,100

a. Range = (Biggest Value- Smallest Value ) = 100-45 = 46

b. Average =(Sum of all data value /Number of data value) =

(54+75+82+85+85+87+90+93+99+100)/10 = 850/10 = 85

c. Median = (Average of the two middle values. ) = (85+87)/2 = 86

d. Mode = (Most Common Value ) = 85

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 BUS-120 {SPRING 2017-2018 Assignment}

Question-4: (1 + 2 + 2 = 5 marks)

The values of x and y are shown in the table below

x 0 1 2 3 4

Y 2 3 5 4 6

a) Construct the regression equation

b) Estimate the value of y when x = 10
c) Interpret the results

Answer

X Y XY X2 Y2
0 2 0 0 4
1 3 3 1 9
2 5 10 4 25
3 4 12 9 16
4 6 24 16 36
Σ 10 20 49 30 90

(20)(30)−(10)(49)
𝑎= ≈ 2.2
5(30)−(10)2

5(49)−(10)(20)
𝑏= ≈ 0.9
5(30)−(10)2

The regression equation 𝑦 = 𝑎 + 𝑏𝑥

𝑦 = 2.2 + 0.9𝑥

When x=10
𝑦 = 2.2 + 0.9𝑥
𝑦 = 2.2 + 0.9(10)
𝑦 = 11.2

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