Download Module Handbook - Banks and Markets

MODULE LBSRE1021:
DATA INTERPRETATION
MODULE HANDBOOK
2009-10
Copies of lecture presentations, tutorial Excel
data and further reading are available using
Blackboard
Please ensure that you access Blackboard as
soon as possible and familiarise yourself with
the resources there.
MODULE LBSRE1021 DATA INTERPRETATION
Essential Text: Oakshott L. (2006), Essential Quantitative Methods for
Business, Management and Finance, 3rd ed., Palgrave. (You can use the
other editions but chapter numbers may be different.)
Students are recommended to study Ch. 1 for revision.
Weekly Topic Outlines:
1. Introduction to module - Week Commencing 11th Jan (tut answers
available from 21st Jan)
Index numbers (Ch.2)
2. Index numbers (cont.) – Week Commencing 17th Jan (tut answers available
from 28th Jan)
3. Descriptive statistics: Mean, median, mode, quartiles, standard deviation
and use of Excel. (Ch. 6) – Week Commending 25th Jan
4. Probability (Ch 7) – Week Commencing 1st Feb (tut answer available from
11 Feb 2010)
5. Normal distribution. (Ch. 8) - Week Commencing 8th Feb (tut answer week
commencing 28th Feb)
6. Directed Study week.
7. Distribution of sample means. Sampling and confidence intervals. (Ch. 9) –
Week Commencing 22th Feb
8. Simple hypothesis testing. Test of a population mean. (Z-test and t-test).
(Ch. 10) - Week Commending 1st March
9. Chi squared. (Ch. 10) - Week Commending 8th March
10. Correlation and Regression. (Ch. 11) - Week Commending 8th March
11. Revision
Assessment:
Coursework covering topics 1-2 (50%)
1hr exam covering topics 3-10 (50%)
Module LBSRE1021: Data Interpretation
Teaching staff contact details:
Name
Room
Tel. ext. (precede
by 231 if calling
from outside JMU)
e-mail
Binam Ghimire
(Module Leader)
3.18
3592
[email protected]
Seng Kiong, Kok
3.13
3844
[email protected]
Matthew Veasey
1.52
3447
[email protected]
If you need help with the Excel spreadsheet exercises please ask your tutor in
the tutorials.
Coursework
The module is assessed 50% by coursework and 50% by examination.
The coursework specification is given in this handbook. It must be handed in
to the Aldham Robarts LRC at the time specified. You are strongly advised
to commence the assignment in week 2 and complete each section of
the assignment immediately following the relevant lectures and
tutorials.
Late courseworks (except those accompanied by a
coursework extension form signed by a year tutor or programme leader)
will not be accepted by the Aldham Robarts LRC.
You are asked to undertake an analysis of a set of data using the methods
covered in the module and the Excel spreadsheet package. You must
prepare a word-processed report of approximately 1500 words on your
analysis. The 1500 words does not include any graphs, tables of data or
figures.
The marking scheme for the coursework is given in this handbook. Refer to
the marking scheme to ensure that you cover all the required elements of the
coursework.
LBSRE1021 Assignment 2009-10
This is an INDIVIDUAL assignment. Any instances of COLLUSION or
PLAGIARISM will be penalised (see Programme Handbooks for definition of
these terms).
Briefing
Your assignment must be submitted as a hard copy (i.e. on paper and not on
disc) and handed in to the Aldham Robarts LRC by 6 pm Monday 22 February
2010 (the Monday after Directed Learning Week). The assignment must be
produced using Excel for the calculations and any text must be word
processed. Hand written assignments will not be marked.
The data is held in the file ‘assign.xls’ which can be accessed from the
module Blackboard pages.
Your analysis must be undertaken on a part of the data according to the LAST
DIGIT OF YOUR STUDENT PERSON NUMBER as stated at the top of the
worksheet. Assignments submitted which have used the wrong data set will
receive a mark of 0. You are recommended to delete the data which is not
assigned to you.
The worksheet INDEX contains price and quantity data for 8 products
purchased by a company over a 10-year period. Convert these data to
Laspeyres' and Paasche's price indices. Present these indices in an
appropriate graph. Prepare a report to present your findings. This report
should be structured as indicated by the marking scheme on the following
page.
Note that 25 marks are available for Discussion of your results.
Referencing
In your assignment, you should ensure that you cite and reference all your
sources according to the Harvard convention.
If you have doubts about how to use this convention, refer to the on-line
guides on the John Moores website. These pages have a link to a
more detailed specification of the Harvard system, also accessible through the
'Resources' tab on Blackboard.
You should include references to all cited sources in a single list at the end of
the assignment. A bibliography should be a single list of all other consulted
works placed at the end of the reference list.
LBSRE1021 Data Interpretation,
Marking Scheme 2010.
Report
Section
Introduction
Methods
explanation
Calculations
and Results
Discussion
Sub Section (1)
Title page
Contents
Introduction text
Index Numbers
Index Numbers
Index Numbers
Conclusions
Structure &
Presentation
Sub Section
(2)
How
calculated
Examples of
practical use
Excel
Calculations:
Laspeyres'
Excel
Calculations:
Paasche's'
Graph
Increase/
decrease
Differences
between the
calculated
Lasp/Paas
values
Sectioning/
Layout
Written
quality
Referencing
Marks
1
1
3
10
10
Sub
Total
Notes
5
20
10
10
5
10
25
15
25
5
5
5
5
10
Total
20
100
Additionally a number of Graduate Skills have been identified as achievable
within this module and the assessments. Subsequently, the below table will
be included on your coursework feedback to be included within your portfolio.
Graduate
Skill
Code
Skill Description
D2
Structures information appropriately with clear
introduction and conclusion.
D4
Spelling, punctuation, grammar and
presentation are of the appropriate standard.
G3
Interprets data in charts, tables and graphs and
appreciates their importance in displaying data.
G5
Recognises patterns and underlying trends in
data, and can use them to generalise and
interpolate.
No skill
evidenced
Skill evidenced
but needs
further
development
Skill well
evidenced
HELPING YOU LEARN FROM THIS MODULE:
The course will be delivered by a lecture followed by a tutorial session which
is designed to enable you to solve problems. Some of these problems will be
tackled using Excel. You will also interpret and discuss the solutions
obtained.
Lectures:
Each lecture will be delivered by introducing a theme from the module. The
lecture will cover key issues for the topic.
Learning outcomes will be given at the beginning of each lecture. These are
things that you should be able to do once you have completed the session.
These learning outcomes are very important since they form the basis of
assessment for this module.
Reading:
At the end of each lecture you will be given directed reading for each session.
It is essential that you do purchase and read the recommended text as it
supplements the material covered in the lecture sessions. In addition
supporting notes are available on the module web pages.
Tutorials:
Problems are set for each tutorial. It is essential that you prepare thoroughly
by considering the lecture material, reading the set text, attempting to solve
the set problems and formulating your conclusions based on the results. This
will enable discussion of the methods and conclusions in the tutorial sessions.
Lively discussion enables students to enjoy the subject and to learn from each
other as well as sharpening your own views. Thorough preparation will enable
you to be confident and assertive and also stand you in good stead for the
assessments.
Attendance: The lectures and tutorials are key components of the delivery of
this module and if you wish to be successful in your studies it is essential that
you attend classes regularly. Registers are to be kept for all tutorials.
Please note: You will need a calculator for this module and the
examination – a mobile phone is not permitted for use during the exam
so please ensure you have a non-programmable calculator for the whole
module.
Excel Spreadsheet Data
Tutorials in weeks 4 and 5 will use Excel to summarise data and produce
statistics. You will also be expected to use Excel in your coursework.
MODULE LBSRE1021
TUTORIAL Week 2
1. The table below shows three items and the price and quantity purchased
by a family during a normal week over a two year period.
Item
Potatoes
Milk
Sugar
Price
56p/kg
40p/litre
96p/kg
2005
Quantity
3kg
8 litres
1 kg
Price
76p/kg
58p/litre
105p/kg
2006
Quantity
3kg
6 litres
2 kg
Calculate the Lespeyres' and Paasche's indices for 2006 using 2005 as the
base year.
2. A company purchases four items of stationery. The price and quantity of
these for 2004, 2005 and 2006 are given below.
Item
Item A
Item B
Item C
Item D
2004
Price (p) Quantity
16
200
35
600
15
500
10
100
2005
Price (p) Quantity
22
220
33
500
18
400
16
150
2006
Price (p) Quantity
26
300
31
400
20
400
18
200
Calculate the Lespeyres' and Paasche's indices for 2005 and 2006 using
2004 as the base year.
MODULE LBSRE1021
TUTORIAL Week 3
1. Use the Excel spreadsheet to solve questions 1 and 2 from tutorial Week
2.
2. The table below shows a company's turnover (£M) and the RPI for a six
year period.
Year
Turnover
RPI
1995
30.5
106.3
1996
21.3
110.5
1997
25.2
115.0
1998
29.6
120.7
1999
47.8
136.8
2000
62.5
143.5
Deflate the turnover and plot both the turnover and deflated turnover on a
graph using Excel. What conclusions can you draw?
MODULE LBSRE1021
TUTORIAL Week 4 (a)
1).
Calculate the mean of the following figures:
4, 15, 22, 31, 40, 6, 8, and 42.
2).
Find the mode of the following figures:
16, 12, 13, 4, 5, 12, 2, 16, 8, 4, 8, 12, and 5.
3).
Find the median of the following figures:
21, 24, 36, 42, 51, 27, 33, 28, 48, 36, and 35.
4).
Calculate the standard deviation of the figures in no. 1.
5).
Calculate the mean of the following:
41, 25, 62, 34, 78, 64, 21, 23, 43, and 76.
6).
Find the mode of the following:
42, 65, 65, 74, 45, 42, 36, 74, 43, 66, 45, 42, and 65.
7).
Find the median of the following:
16, 40, 24, 12, 35, 37, 29, 26, 27, and 33.
8).
Calculate the standard deviation of the numbers in question 5.
9).
Standard Deviation.
Exam marks (%)
LBSRE1021 P.T.
46
48
54
58
54
LBSRE1021 F.T.
93
21
16
92
38
Calculate the mean and standard deviation for these two sets of exam marks.
What conclusions can you draw from these statistics?
10). Answer Question 1 from the past exam papers for May and August 2006
(Available from Blackboard)
MODULE LBSRE1021
TUTORIAL Week 4 (b) – This tutorial is a self-study exercise and will not
be covered in-class.
Calculation of location and dispersion statistics using Excel.
1.
Go to the LBSRE1021 module Blackboard pages
Go to Lecture 5: Using Excel in Statistical Calculations. Open the
Excel data file LBSRE1021.xls.
The data concern expenditure (£ spent on one visit) for a sample of 100
supermarket customers. You have to use Excel to calculate the mean,
standard deviation and coefficient of variation for the variable.
2.
Calculate the Mean:
Place the cursor in the cell where you want the mean to appear. The
cell immediately below the relevant column of data would be sensible.
Select ‘Insert Function’ from the Toolbar (marked fx).
Select Statistical for the category and Average from the list of
functions.
Click OK.
You now need to tell Excel which data you to average. Click on the
first item in the data column. Hold down the mouse button, drag to the
last data item and let go. The column of data should now be
surrounded by a dotted line.
Click OK. The average should now appear in the cell which you
selected.
To round the Average to a sensible number of decimal places (say 2):
Select Format, then Cells.
Select Number, then Number again under Category.
Select 0.00 for two decimal places.
Click on OK.
The Average should now be displayed to 2 decimal places.
Alternatively display as UK currency.
3. Calculate the Standard Deviation:
Place the cursor in the cell where you want the standard deviation to
appear. The cell immediately below the mean would be sensible.
Select ‘Insert Function’ from the Toolbar (marked fx).
Select ‘Statistical’ from Function Category.
Select STDEV for standard deviation.
Click OK.
Click and drag on the column of data again, then click on Finish.
The standard deviation should appear in the cell which you selected.
Round this number to 2 decimal places by following the instructions
given above.
4. Calculate the Coefficient of Variation.
This expresses the Standard Deviation as a % of the Mean.
Place the cursor in the cell where you want the Coefficient of Variation
to appear. The cell immediately below the standard deviation would be
sensible.
Enter an appropriate formula (see note 1) into this cell to calculate the
standard deviation divided by the mean. Click on the % button (see
note 2) to display as a percentage. This is the Coefficient of Variation.
5. Calculate the Median, Quartiles and Mode using a similar procedure to that
above but selecting MEDIAN, MODE and QUARTILE from the Paste
Function.
6. To the left of the calculated values enter an appropriate key, i.e.
Mean
Standard Deviation
Coefficient of Variation
Median
1st Quartile
3rd Quartile
Mode
You will need to Right Justify these to display them fully.
7. Interpret the statistical calculations.
Compare the mean, standard deviations, coefficients of variation, median,
quartiles and mode for the variable. What conclusions can you draw?
Notes:
1. To enter a formula to calculate the coefficient of variation:
You want to divide the s.d. by the mean. You need to know the column letter
and row number for these two statistics. Let’s say they are C25 and C24.
Click on the cell where you want the result of the formula to be displayed.
Type
=C25/C24
and Return
The result of C25 divided by C24 should now be displayed where you require
it.
2. If the % button is not shown you need to display the toolbar. To do this
click on the View menu and select Toolbars. Click on the box next to
Formatting so that it shows a X and then click on OK. The toolbar with the %
button should now be displayed.
MODULE LBSRE1021
TUTORIAL Week 5
1.
The probabilities that three computer components will need replacing
within one year are 1/10, 1/12 and 1/15 respectively.
(a)
(b)
Draw the probability tree
Use your tree to find the probability that within one year
(i)
at least one component will need replacing
(ii)
no components will need replacing
(iii)
all three components will need replacing
2.
Number of defective items per batch
0
1
2
3 or more
Supplier A
500
200
200
100
Supplier B
320
160
80
40
Supplier C
600
100
50
50
(a)
(b)
(c)
(d)
(e)
If a batch is randomly selected, what is the probability it came from
Supplier A, Supplier B, Supplier C.
If a batch is randomly selected, what is the probability it contains two
defective items?
If a batch is randomly selected, what is the probability it would be free
from defective items and come from Supplier A?
Given that the batch selected came from Supplier B, what is the
probability that it contained one or two defective items?
If it is known that the batch has two defective items, what is the
probability it came from Supplier C?
3. A company is bidding for 2 contracts. The probability that the company
will win contract A is 0.4 and the probability that the company will win
contract B is 0.7. Use a probability tree to find the probability that the
company will
(a) win at least one of these contracts
(b) win no more than one contract
(c) win neither contract
(d) win both contracts
MODULE LBSRE1021
TUTORIAL Week 7
1. A company packing biscuits knows that the weights are normally distributed
about a mean of 500 g with a standard deviation of 5 g. Find the percentage of
production which will have weights of:(a) more than 512 g
(b) between 506 and 513 g
(c) between 488 and 509 g
(d) more than 497 g
2. Assuming the hub thickness of a certain type of gear is normally distributed
around a mean of 2.00 cm, with a standard deviation of 0.04 cm, find:(a) the percentage of gears which will have a thickness of between 1.95 and
2.06 cm.
(b) in a production run of 5,000 gears, how many will have a thickness of more
than 1.90 cm?
3. A manufacturer makes chocolate bars with a mean weight of 110 g and a
standard deviation of 2 g. The weights are normally distributed.
What
proportion of the bars are likely to be less in weight than 105 g? The
manufacturer decides to make 'bigger' bars with a mean weight of 115 g, but the
same standard deviation as before. What proportion of the new bars is likely to
be less in weight than the old ones? What mean weight will have to be aimed at
if no more than 1 bar in 100 of the new 'bigger' bars is to be less than 115 g in
weight?
4. Components made by a certain process have a thickness of 3.00 cm and a
standard deviation of 0.03 cm. A component is classified as defective if its
thickness lies outside the range 2.96 to 3.05 cm.
(a) What proportion of defective components does the process produce?
(b) Find the change in the proportion of defective components if the mean
thickness is increased to 3.01 cm, with the standard deviation remaining the
same.
MODULE LBSRE1021
TUTORIAL Week 8
1. If a sample of 100 items is drawn from a population and the mean is found to
be 200g with a standard deviation of 5g, find:
(a) a 95% confidence interval estimate for the population mean.
(b) a 99% confidence interval estimate for the population mean.
(c) if a sampling error of only ± 0.5g is allowed, calculate the size of sample
which should be selected for parts (a) and (b) of this question.
2. What proportion of samples of size 100, drawn from a population which has a
mean of 490g and a standard deviation of 10g, will have means greater than
491g?
3. A random sample of 60 men was found to have a mean height of 170cm and
a standard deviation of 5cm. Determine 95% and 99% confidence interval
estimates for the mean height of the male population.
4. A firm wants to know the average value of sales invoices. A random sample
of 80 sales invoices was selected and found to have a mean of £275 with a
standard deviation of £45.50.
(a) Find a 95% confidence interval estimate for the population mean invoice
value.
(b) What size sample should have been selected in order to have a sampling
error of only ± £5 at this level?
5. Samples of 100 items are selected at random from a population with a mean
of 150g and a standard deviation of 20g. What proportion of samples will have
means:
(a) between 146 and 156g
(b) greater than 148g
6. A manufacturer claims that his products have a mean weight of 500g. A
sample of 50 of his products is selected and found to have a mean of 498g with
a standard deviation of 6g. Test the validity of the manufacturer's claim. ( Use
the 5% level of significance initially)
TUTORIAL WEEK 8 CONT.
7. A firm wants to know the average value of sales invoices. A random sample
of 100 sales invoices was selected and the mean was found to be £160 with a
standard deviation of £22.50.
(a) Find a 95% confidence interval estimate for the population mean.
(b) Find a 99% confidence interval estimate for the population mean.
(c) What size sample should be taken if a sampling error of plus or minus £10
is required at the 95% level?
8. A large supermarket chain took a sample of 100 customer bills during one
week and found that the mean was £35.70 with a standard deviation of £6.30.
(a) Obtain a 95% interval estimate for the population average shopping bill.
(b) What size sample should they take in order to have a sampling error of
only £5 at this level?
9. A grocer wants to know whether or not his supplier of bagged potatoes is
providing too many bags of incorrect weight. He would be happy if the bags
were within plus or minus 100g of the correct weight and he wants to be 99%
confident that this is the case. If the initial sample gives a standard deviation of
400g, what size sample would enable him to obtain his required level?
10. Samples of 100 items are drawn at random from a population with a mean
of 150g and a standard deviation of 20g. What proportion of samples will have
means:
(a) greater than 155g
(b) less than 148g
(c) between 146 and 156g
MODULE LBSRE1021
TUTORIAL Week 9
Hypothesis Testing (test of mean using large samples)
1. A street in the city centre has been investigated for the level of traffic noise.
The average noise level in the past has always been 130 decibels with a
standard deviation of 20 decibels. The residents claim that the noise is getting
worse. They take a sample of 50 readings and obtain an average level of 134
decibels. Is their claim justified at the 95% level?
2. A baker, Mr X, makes cakes which he claims have an average weight of
1000g. A shop wishes to buy these cakes and wants to check that the claim for
the average weight is correct. They therefore take a sample of 50 cakes and
find that their average weight is 950g, with a standard deviation of 200g. Does
this result show any significant difference from the baker’s claim for average
weight?
3. At the beginning of the year a fast food chain claimed that the average salary
earned by its managers will be £18500. Recently, a random sample of 35
managers was taken and their average salary was found to be £16750 with a
standard deviation of £3100. Set up a suitable hypothesis and test to see if this
sample supports the claim made by the fast food chain.
4. The lifetime of electric light bulbs produced by a given process is normally
distributed and is claimed to have a mean of 1500 hours. A batch of 50 was
taken and found to have a mean lifetime of 1410 hours. The standard deviation
of the sample is 90 hours. Test the hypothesis that the mean lifetime of the
electric light bulbs has not changed.
MODULE LBSRE1021
TUTORIAL Week 9 Cont.
Hypothesis Testing (small samples)
1. After treatment with a standard fertiliser, the average yield per acre is 4.2 tons
of wheat. A new fertiliser is administered to 10 acres and the yields are given
below. Is this new fertiliser as effective as the standard treatment?
Sample yields (tons per acre):
4.3
6.0
4.9
6.1
6.2
5.4
4.1
4.2
3.8
3.9
2. The expected life of electric bulbs is 1500 hours. To test a new batch of light
bulbs a sample of 10 was drawn. They had a mean life of 1410 hours and a
standard deviation of 90 hours. Test the hypothesis that the new batch has a
lower life.
4. A company has been accused of selling underweight products. This product
is supposed to weigh 500g. A sample of 6 was weighed and the results
were:
495, 512, 480, 505, 490, 502 (g)
Is there any evidence that the mean weight is less than 500g? (The weight
of the product is known to be normally distributed.)
MODULE LBSRE1021
TUTORIAL Week 10
1. A manufacturer produces video recorders at four different factories, A, B, C
and D. The reliability of these video recorders is very important to the company.
A random sample of video recorders was selected from each of the four
factories and tested for reliability. The results of the tests are shown below:
RELIABILITY
FACTORY
A
B
C
D
Satisfactory
90
124
92
120
Minor faults found
10
12
16
9
You are required to carry out a suitable test on these results to investigate the
possibility that there may be an association between the reliability of the video
recorders and the factory at which they are produced. Comment on the
usefulness of your results to the manufacturer.
2. Binkshire University is in the process of reviewing the extent to which the
degrees offered by its School of Business and Management Studies prepare
graduates for the practical aspects of work in a business environment. A random
sample of students who graduated from the School over the last five years, and
who subsequently gained employment in the business sector, was taken.
Each graduate was asked the same question...'How well do you think your
degree course equipped you for the work situation?'
The results of the survey are tabulated below:
TYPE OF DEGREE
RESPONSE
ACCOUNTANCY
MANAGEMENT
STUDIES
BUSINESS
STUDIES
Very well
60
45
55
Adequate
34
33
42
Inadequate
16
20
4
Don't know
20
12
9
Test whether or not there is any evidence to suggest an association between
the type of degree studied and the response to the question. Use the 5% level of
significance initially. Comment on the usefulness of such a test in this case.
MODULE LBSRE1021
TUTORIAL Week 11
1. In an agricultural experiment, a newly developed fertiliser was applied at
different concentrations to ten identical plots of land. Grass seed was then sown
on these plots and, several weeks later, the mean height of the grass on each
plot was measured. The results of the experiment are tabulated below:
APPLICATION OF FERTILISER
(gms per square metre)
10
20
30
40
50
60
70
80
90
100
MEAN HEIGHT OF GRASS
(cms)
9.8
11.0
13.2
11.6
14.8
14.8
16.0
19.4
20.6
18.8
Use Excel to
(a) Produce a scatter graph to display the information.
(b) Find the equation of the regression line for the data and superimpose
this line on the scatter graph and calculate the regression coefficient
2. The test department of a major motor manufacturing company can simulate a
year's corrosion on car body components in one month under laboratory
conditions. The company is investigating the corrosion resistance provided by
different thicknesses of paint, and the results of their tests carried out so far are
as follows:
THICKNESS OF PAINT (mm)
0.25
0.30
0.35
0.40
0.45
0.50
0.55
EQUIVALENT YEARS OF PROTECTION
3.8
5.2
4.6
6.7
6.6
6.9
7.0
Use Excel to
(a) Produce a scatter graph to display the information.
(b) Find the equation of the regression line for the data and superimpose
this line on the scatter graph and calculate the regression coefficient