PGDM (2013-15) END-TERM EXAMINATION Business Decisions Making with Statistics

Time: 2 hours Date Maximum Marks: 100. Wt. 40%

Full Name of the Student: Roll No.: Sec.: Signature of the Invigilator
INSTRUCTIONS:

1. Question 1 is compulsory 2. Answer any four of the next five questions. 3. It is not necessary to shorten formulas to single numbers. For example the form (12+8)/3 will do. You do not have to state the answer as 6.66 4. This is an open book exam.
Q1. In a sample study about the food habits in two towns the following observations were made: (Sample was equal in size from the two towns) Town A 50% persons were males 30% persons were non-vegetarian 18% were male non vegetarians Town B 45% persons were males 25% persons were non-vegetarian 16% were male non vegetarians

Populate the table below based on the information provided above:

Town Town A Town B Gender Male Female Male Female Veg 32 38 29 46 Non Veg 18 12 16 9

a. b. c. d. e.

State the probability of a person picked up at random from the entire sample being a female non-vegetarian from Town A being a male from Town A, given that he is a vegetarian being a non-vegetarian female from Town B being a non-vegetarian given that the person is a female being either a vegetarian or a non-vegetarian male (Each question carries 4 marks)

You do not have to calculate the exact integer. Fractional notation will do.

Q2. Interpret the box plot and answer the questions that follow

Apart from Hybrids a. Which vehicle type has the largest variation in mileage? b. In which vehicle type there are more outliers with higher mileage? c. If mileage was the sole criteria for choosing a vehicle, which vehicle type would you prefer? d. Why would you prefer the vehicle type in c above? e. What is the median mileage of sedans (approximately)? (Each question carries 4 marks) Q3 In Mumbai, 60% of people prefer Amul while 70% prefer Baskin Robins. 65% prefer Vadilal. 50%

prefer both Amul and Baskin Robins, 45% prefer Amul and Vadilal and 55% prefer Baskin Robins and Vadilal. 40% prefer all three ice creams. a. Draw a suitable Venn diagram (8 Marks) b. What % of people do not prefer any of these three ice-creams? (6 Marks) c. What is the probability that a person prefers Vadilal, given that she prefers Amul? (6 Marks)

Q4. Because of relatively high interest rates, most consumers attempt to pay off their credit card bills promptly. However, this is not always possible. An analysis of the amount of interest paid monthly by a banks Visa card holders reveals that the amount is normally distributed with a mean of $27 and a standard deviation of $7. a. What proportion of the banks Visa cardholder pay more than $30 in interest? (5 Marks) Z = (30-27)/7 = .42 (1-.6628) = 0.3372 or 33.72% b. What proportion of the banks Visa cardholders pay more the $40 in interest? (5 Marks) Z = (40-27)/7 = 1.85 (1-.9678) = 0.0322 or 3.22% c. What proportion of the banks Visa cardholders pay between $15 and $25 in interest (5 Marks) Z = (15-27)/7 = -1.71 0.0436 and Z = (25-27)/7 = -0.28 0.3897 (0.3897-0.0436 = 0.3461) or 34.61% d. What interest payment is exceeded by only 20% of the banks Visa cardholders? (5 Marks) Z value of .84 corresponds to 20%. 0.84 = (x-27)/7 X=$32.88 5. The following table shows results of the regression analysis carried out with salary as the dependent variable and number of years of education as the independent variable. Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations

0.797 0.636 0.603 5437.071 13

Intercept Education

Coefficients 1226.92 1833.016

a) b) c) d)

Jot down the regression equation. (5 Mark) If the salary is Rs 38,000, what is the expected number of years of education? (5 Marks) How much salary will you predict for a person whose number of years of education is 12 (5 Marks) Would you say that your predictions are good? Justify your answer using the data provided above (either yes or no) (5 Marks)

6. The correlation between dollar exchange rate and gold prices is given below. $ Rate Gold Price

$ Rate Gold Price

1 -0.89443

a. With respect to dollar rate when is a good time to buy gold? (10 Marks) b. Would you term the association between dollar rate and gold price as a strong association? Whether your answer is yes or no, please explain the rationale. (10 Marks)