This homework assignment will help to develop your skills in numerical measures, probability and normal distribution. Please complete/answer the following in one Word document and attach your excel file with calculations.
Week 11 Homework
The file BondFunds.xls Download BondFunds.xls contains information regarding nine variables from a sample of 184 mutual bond funds:
Fund number—Identification number for each bond fund
Type—Bond fund type (intermediate government or short-term corporate)
Assets—In millions of dollars
Fees—Sales charges (no or yes)
Expense ratio—Ratio of expenses to net assets in percentage
Return 2009—Twelve-month return in 2009
Three-year return—Annualized return, 2007–2009
Five-year return—Annualized return, 2005–2009
Risk—Risk-of-loss factor of the mutual fund (below average, average, or above average)
1. You want to compare intermediate government to the short-term corporate bond funds. For each of these two groups, use the variables expense ratio, three-year return, and five-year return and complete the following.
- Compute the mean, median, first quartile, and third quartile.
- Compute the range, interquartile range, variance, standard deviation, and coefficient of variation.
- Construct a boxplot. Are the data skewed? If so, how?
- Based on the results of (a) through (c), what conclusions can you reach about differences between intermediate government and short-term corporate bond funds?
- For the expense ratio, three-year return, and five-year return, decide whether the data are approximately normally distributed by:
- comparing data characteristics to theoretical properties.
- constructing a normal probability plot.
- Assume that three-year return is normally distributed.
- calculate the probability of getting a positive return over three years.
- calculate the probability of getting over 5% return.
- At least what return could be earned in 90% of cases (in other words, 90% of all returns is higher than what value)?
- What is the preferred way for people to order fast food? A survey results, based on a sample of 200 males and 200 females, were as follows:
f a respondent is selected at random, what is the probability that
- they prefer to order at the drive-through?
- the person is male and prefers to order at the drive-through?
- the person is male or prefers to order at the drive-through?
- Explain the difference in the results in (b) and (c).
- Given that a respondent is a male, what is the probability that he prefers to order at the drive-through?
- Given that a respondent is a female, what is the probability that she prefers to order at the drive-through?
- Is dining preference independent of gender? Explain.
- The editor of a textbook publishing company is trying to decide whether to publish a proposed business statistics textbook. Information on previous textbooks published indicates that 10% are huge successes, 20% are modest successes, 40% break even, and 30% are losers. However, before a publishing decision is made, the book will be reviewed. In the past, 99% of the huge successes received favorable reviews, 70% of the moderate successes received favorable reviews, 40% of the break-even books received favorable reviews, and 20% of the losers received favorable reviews.
- If the proposed textbook receives a favorable review, how should the editor revise the probabilities of the various outcomes to take this information into account?
- What proportion of textbooks receives favorable reviews?
Please note that you need to submit all your answers in a report format in a Word document that contains all your tables, charts, etc. In addition please upload your excel file with all calculations, table and charts created as a support to your report. . You grade will be based on the content of the Word document submitted.
