Topics: Descriptive Statistics and Probability: Name of Company Measure X

Topics: Descriptive Statistics and Probability
1. Look at the data given below. Plot the data, find the outliers and find out μ , σ , σ 2
Name of company Measure X

Allied Signal 24.23%
Bankers Trust 25.53%
General Mills 25.41%
ITT Industries 24.14%
J.P.Morgan& Co. 29.62%
Lehman Brothers 28.25%
Marriott 25.81%
MCI 24.39%
Merrill Lynch 40.26%
Microsoft 32.95%
Morgan Stanley 91.36%
Sun Microsystems 25.99%
Travelers 39.42%
US Airways 26.71%
Warner-Lambert 35.00%
91.36% ie., Morgan Stanley is the only outlier.

Standard Deviation σ = 16.945401
Variance σ2 = 287.14661
Population mean μ= 33.2713
Questions referred to from Aczel A., Sounderpandian J., Complete Business Statistics (7ed.)
2.
Answer the following three questions based on the box-plot above.

(i) What is inter-quartile range of this dataset? (please approximate the numbers) In one
line, explain what this value implies.
i.q range from 5 to 12 . viscous 0 to19. And 1 outlier
(ii) What can we say about the skewness of this dataset?

Left skewness
(iii) If it was found that the data point with the value 25 is actually 2.5, how would the new
box-plot be affected?
It scale the chart
3.
Answer the following three questions based on the histogram above.
(i) Where would the mode of this dataset lie?
4 to 8
(ii) Comment on the skewness of the dataset.
Left skewness
(iii) Suppose that the above histogram and the box-plot in question 2 are plotted for the
same dataset. Explain how these graphs complement each other in providing
information about any dataset.
We can’t diff mode in box plot but we can do that in histogram.
4. AT&T was running commercials in 1990 aimed at luring back customers who had switched to
one of the other long-distance phone service providers. One such commercial shows a
businessman trying to reach Phoenix and mistakenly getting Fiji, where a half-naked native on a
beach responds incomprehensibly in Polynesian. When asked about this advertisement, AT&T
admitted that the portrayed incident did not actually take place but added that this was an
enactment of something that “could happen.” Suppose that one in 200 long-distance telephone
calls is misdirected. What is the probability that at least one in five attempted telephone calls
reaches the wrong number? (Assume independence of attempts.)
To find : probability that at least one in five attempted telephone calls reaches the wrong
numbe
Solution:
one in 200 long-distance telephone calls is misdirected
=> probability of call misdirecting p = 1/200
Probability of call not Misdirecting = 1 - 1/200 = 199/200
Number of Calls = 5
P(x) = ⁿCₓpˣqⁿ⁻ˣ
n=5
p = 1/200
q = 199/200
at least one in five attempted telephone calls reaches the wrong number
= 1 - none of the call reaches the wrong number
= 1 - P(0)
= 1 - ⁵C₀(1/200)⁰(199/200)⁵⁻⁰
= 1 - (199/200)⁵
= 0.02475
probability that at least one in five attempted telephone calls reaches the wrong number
= 0.02475
5. Returns on a certain business venture, to the nearest $1,000, are known to follow the following
probability distribution
x P(x)
-2,000 0.1
-1,000 0.1
0 0.2
1000 0.2
2000 0.3
3000 0.1
(i) What is the most likely monetary outcome of the business venture?
(ii) Is the venture likely to be successful? Explain
(iii) What is the long-term average earning of business ventures of this kind? Explain
(iv) What is the good measure of the risk involved in a venture of this kind? Compute this
measure
To Find : most likely monetary outcome of the business venture

is the venture likely to be successful
what is the long-term average earning of business ventures of this kind
Solution:
most likely monetary outcome of the business venture is 2000 $
as it has maximum probability = 0.3
E(X) P(x) E(X)P(X)
-2,000 0.1 -200
-1,000 0.1 -100
0 0.2 0
1000 0.2 200
2000 0.3 600
3000 0.1 300
800
Expected value = ∑E(X)P(X) = 800
long-term average earning of business ventures = 800 $
venture is likely to be successful as Expected value is + ve = 800 $

Topics: Descriptive Statistics and Probability: Name of Company Measure X

Uploaded by

Copyright:

Available Formats

Topics: Descriptive Statistics and Probability: Name of Company Measure X

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Topics: Descriptive Statistics and Probability: Name of Company Measure X

Uploaded by

Copyright:

Available Formats

Topics: Descriptive Statistics and Probability

Name of company Measure X

91.36% ie., Morgan Stanley is the only outlier.

Answer the following three questions based on the box-plot above.

(ii) What can we say about the skewness of this dataset?

To Find : most likely monetary outcome of the business venture

You might also like