IGNOU MBA MS-08 Solved Assignment

ASSIGNMENT
Course Code : MS - 08
Course Title : Quantitative Analysis for Managerial Applications
Assignment Code : MS-08/TMA/SEM - II / : All Blocks
Note: Answer all the questions and send them to the Coordinator of the Study Centre you are
attached with.

1.A tour operator charges Rs 136 per passenger for 100 passengers with a discount of Rs 4
each for 10 passengers in excess of 100. Determine the number of passengers that will
maximize the amount of money the tour operator receives.
 2.Calculate Bowley’s coefficient of skewness (based on quartiles) from the following
data
Weight No. of Weight No. of
(lbs) students (lbs) students
70-80 12 110-120 50
80-90 18 120-130 45
90-100 35 130-140 20
100-110 42 140-150 8

BELOW MENTIONED IS SAMPLE QUESTION ACTUAL QUESTION SOLVED

SEPARATELY.
.
QUESTION 2 SOLVED
3. A normal curve has mean=20 and standard deviation = 10. Find the area between
x1=15 and x2=40.
4. A simple random sample of the height of 6400 Englishmen has a mean of 67.85” and
a standard deviation of 2.56” while a simple random sample of heights of 1600
Austrians has a mean of 68.55” and standard deviation of 2.52”. Do the data
indicate that the Austrians are on average taller than the Englishmen? Give reasons
for your answer.
 5. Write short notes on:

a) One-tail & two-tail tests

b) Moving average models

c) Standard error of the slope

Ans:
a)One-tail & two-tail tests

Suppose we have a null hypothesis H0 and an alternative hypothesis H1. We consider the
distribution given by the null hypothesis and perform a test to determine whether or not the null
hypothesis should be rejected in favour of the alternative hypothesis.
There are two different types of tests that can be performed. A one-tailed test looks for an
increase or decrease in the parameter whereas a two-tailed test looks for any change in the
parameter (which can be any change- increase or decrease).

We can perform the test at any level (usually 1%, 5% or 10%). For example, performing the test
at a 5% level means that there is a 5% chance of wrongly rejecting H0.

If we perform the test at the 5% level and decide to reject the null hypothesis, we say "there is
significant evidence at the 5% level to suggest the hypothesis is false".

One-Tailed Test

We choose a critical region. In a one-tailed test, the critical region will have just one part (the red
area below). If our sample value lies in this region, we reject the null hypothesis in favour of the
alternative.

Suppose we are looking for a definite decrease. Then the critical region will be to the left. Note,
however, that in the one-tailed test the value of the parameter can be as high as you like.

Example

Suppose we are given that X has a Poisson distribution and we want to carry out a hypothesis test
on the mean, , based upon a sample observation of 3.

Suppose the hypotheses are:

H0:  = 9
H1:  < 9

We want to test if it is "reasonable" for the observed value of 3 to have come from a Poisson
distribution with parameter 9. So what is the probability that a value as low as 3 has come from a
Po(9)?

P(X ≤ 3) = 0.0212 (this has come from a Poisson table)

The probability is less than 0.05, so there is less than a 5% chance that the value has come from a
Poisson(3) distribution. We therefore reject the null hypothesis in favour of the alternative at the
5% level.

However, the probability is greater than 0.01, so we would not reject the null hypothesis in
favour of the alternative at the 1% level.

Two-Tailed Test

In a two-tailed test, we are looking for either an increase or a decrease. So, for example, H0 might
be that the mean is equal to 9 (as before). This time, however, H1 would be that the mean is not
equal to 9. In this case, therefore, the critical region has two parts:

Example

Lets test the parameter p of a Binomial distribution at the 10% level.

Suppose a coin is tossed 10 times and we get 7 heads. We want to test whether or not the coin is
fair. If the coin is fair, p = 0.5 . Put this as the null hypothesis:

H0: p = 0.5
H1: p ≠ 0.5

Now, because the test is 2-tailed, the critical region has two parts. Half of the critical region is to
the right and half is to the left. So the critical region contains both the top 5% of the distribution
and the bottom 5% of the distribution (since we are testing at the 10% level).

If H0 is true, X ~ Bin(10, 0.5).

If the null hypothesis is true, what is the probability that X is 7 or above?

P(X ≥ 7) = 1 - P(X < 7) = 1 - P(X ≤ 6) = 1 - 0.8281 = 0.1719

Is this in the critical region? No- because the probability that X is at least 7 is not less than 0.05
(5%), which is what we need it to be.

So there is not significant evidence at the 10% level to reject the null hypothesis.
b)Moving average models

In time series analysis, the moving-average (MA) model is a common approach for modeling
univariate time series models. The notation MA(q) refers to the moving average model of order
q:

where μ is the mean of the series, the θ1, ..., θq are the parameters of the model and the εt, εt−1,...
are white noise error terms. The value of q is called the order of the MA model.

That is, a moving-average model is conceptually a linear regression of the current value of the
series against previous (unobserved) white noise error terms or random shocks. The random
shocks at each point are assumed to come from the same distribution, typically a normal
distribution, with location at zero and constant scale. The distinction in this model is that these
random shocks are propagated to future values of the time series. Fitting the MA estimates is
more complicated than with autoregressive models (AR models) because the error terms are not
observable. This means that iterative non-linear fitting procedures need to be used in place of
linear least squares. MA models also have a less obvious interpretation than AR models.

Sometimes the autocorrelation function (ACF) and partial autocorrelation function (PACF) will
suggest that a MA model would be a better model choice and sometimes both AR and MA terms
should be used in the same model (see Box-Jenkins).

Note, however, that the error terms after the model is fit should be independent and follow the
standard assumptions for a univariate process: random drawings from a fixed distribution with
the distribution having fixed location and with the distribution having fixed variation.

The moving-average model is essentially a finite impulse response filter applied to white noise,
with some additional interpretation placed on it.

c) Standard error of the slope

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