Use only the space provided to answer the following questions. Whenever possible, show your work for potential partial credit. NOTE: When performing numerical calculations, keep at least 4 decimals. (i.e., do NOT round .2265 to .227 or .23)The following data describes some accounting information about the world’s largest banks at the beginning of the decade. For the variables Capital and Net Income, calculate 2 measures of location and 2 measures of dispersion. (20 points)

1. Which of the above variables are qualitative and which are quantitative? (10 points)

2. Which variable, Capital or Net Income shows the most relative volatility? Explain your answer. (20 points)
3. Using only the Net Income data, construct a frequency and relative frequency distribution table. Make some observations about the distribution of net income for these banks. (20 points)

 4. The covariance between 1991 Capital and Net Income is equal to –3,966,946. Interpret this finding. Calculate the correlation coefficient between these two variables and interpret your result. (20 points)

5. Using probabilities and your intuition, explain the difference between mutually exclusive events and independent events. (15 points)

 

 

 

 

 

 

 

 

 

 

 

 

 

6. During Spring break, 1000 college students travel to Panama City, FL for a week of beachcombing and quiet reflection. 830 of these college students plan to drink beer while they are on vacation and 170 don’t drink beer at all. 640 students also smoke cigarettes, and all of the smokers are also beer drinkers. If a student is selected randomly, what is the probability that the student is a smoker, given that he/she is a beer drinker? Are the events "beer drinker" and "smoker" independent events? Are they mutually exclusive events? Explain. (20 points)

 

 

 

 

 

 

 

 

 

 

 

 

 

7. To help forecast the winner in a Democratic senate primary, a survey was conducted. A random sample of 681 registered Democrats was asked for whom they intended to vote in the primary to be held the following day. The results are below. (15 points each)

1. Estimate with 90% confidence the proportion of all voters who will vote for Pat Bush.

 

 

 

 

 

2. Test the hypothesis (90%) that Quail will receive more than 35% of the vote.

5. A new diet program claims that participants will lose on average at least 8 pounds during the first week of the program. A random sample of 20 people participating in the program showed a sample mean weight loss of 7 pounds. The sample standard deviation was 3.2 pounds. Use z-scores or p-values to test this hypothesis. Explain your conclusions to potential customers of this diet program. (20 points)

9. It was hypothesized that the age of a classic Ford Mustang (X) was a significant determinant of its selling price (Y). Below are regression results that attempt to shed light on this empirical relationship. Thoroughly comment upon, interpret, and explain these results. (25 points)

Read very carefully! If you respond to this question, I will grade it and replace your lowest lab score with the score on this question. If you do not respond to this question, your lowest lab score will stand and be included in the calculation of your final course grade.

An article titled "The Bloodbath In Market Research" in Business Week (February 11, 1991) stated that "the validity of surveys is being jeopardized by the growing refusal of Americans to participate. Annoyed by the intrusiveness, 36 percent of consumers declined to answer a phone query in 1990."

1. How does refusal to participate jeopardize the validity of surveys?

 

 

 

 

 

2. How could you test the correctness of the claim that 36 percent of Americans called would not respond to questions?