Download ECON 260-03 Statistics for Business and Economics Dominican

ECON 260-03
Statistics for Business and Economics
Dominican University Spring 2015-2016
Lawrence Morgan
PRACTICE EXERCISE #2
Chapter 3: Descriptive Statistics: Numerical Measures
1.
(based on page 166, #67)
Public transportation and the automobile are two methods an employee can use to get to
work each day. Samples of time recorded for each method are shown in spreadsheet
Transportation.xlsx.
a.
b.
c.
2.
Compute the sample mean time to get to work for each method.
Compute the sample standard deviation for each method.
On the basis of your results from parts (a) and (b), which method of transportation
should be preferred? Explain.
(based on text page 167, #68)
In 2007 the New York Times reported that the median annual household income in the
United States was $55,500 (New York Times website, August 21, 2013). Answer the
following questions based on the following sample of 14 household incomes for 2013
($1000s)
(there is no spreadsheet – you will have to make your own spreadsheet and enter the
data)
49.4
52.2
52.4
64.5
a.
b.
What is the median household income for the sample data for 2013?
Based on the sample data, estimate the percentage change from the median
household income from 2007 to 2013.
What is the mean household income for the sample data?
Compute the standard deviation of the data.
Using the z-score approach, do the data identify any outliers? (you will have to
calculate the z-scores in their own column)
Produce a grouped frequency distribution of the data. Choose your own groups.
Also make a percentage frequency distribution and make a bar chart or
histogram of that.
c.
d.
e.
f.
3.
53.4
51.6
51.3
46.5
52.1
52.9
48.7
52.5
52.1
51.2
(based on textbook page 170, #75)
The Panama Railroad Company was established in 1850 to construct a railroad across the
isthmus that would allow fast and easy access between the Atlantic and Pacific Oceans.
The table in the spreadsheet PanamaRailroad2.xlsx provides annual rates of return for
Panama Railroad stock from 1853 through 1880 (The Big Ditch, Mauer and Yu, 2011).
a.
Calculate the geometric mean of annual return on Panama Railroad Company
stock from 1853 through 1880.
To do this you first have to create a new column to convert the percent returns
to a decimal, as we did in class. So in column C, begin in cell C2 with
=1+0.01*B2 and copy that down to C29. Then use function
Page 1 of 2
ECON 260-03
Statistics for Business and Economics
Dominican University Spring 2015-2016
Lawrence Morgan
=GEOMEAN(C2:C29). You get the 28th root of the product of all the numbers
in column C. Then sutract 1 from that number and multiply the result by 100 to
get the geometric average annual return in percentage terms.
b.
Create a graph of the annual returns on the stock. The New York Stock
Exchange earned an annual average return of 8.4% form 1853 through 1880.
Can you tell from the graph if the Panama Railroad Company stock
outperformed the New York Stock Exchange?
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