THE INSTITUTE OF ADMINISTRATION AND COMMERCE

STATISTICS MARCH 2022 COURSEWORK

DUE DATE: 25 FEBRUARY 2022 TOTAL MARKS : 100

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QUESTION ONE [40 MARKS]

1.1 For each of the following random variables, indicate (i) the data type

(Qualitative or quantitative), and (ii) the measurement scale (nominal, ordinal,

interval or ratio).

(a) Temperature of water. [1]

(b) Colour of racehorses. [1]

(c) The number of students at IAC. [1]

(d) The size categories of shoes. [1]

(e) The age of a person. [1]

1.2 Distinguish between the following terms as used in statistics:

(a) Population and sample. [2]

(b) Parameter and statistic [2]

1.3 A large university has 30,000 students of whom 9,000 are white. Suppose an

opinion poll is being conducted on racial discrimination. A sample of 5,000

students is to be selected for the survey using stratified random sampling, with

the proportional allocation. Select a sample. [6]

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1.4 A box contains 300 discs of different colours. There are 100 pink discs, 100

blue discs and 100 orange discs. The discs of each colour are numbered from 0

to 99. Five discs are selected at random, one at a time, with replacement.

Find

(i) the probability that no orange discs are selected. [3]

(ii) the probability that exactly 2 discs with numbers ending in a 6 are selected.

[4]

(iii) the probability that exactly 2 orange discs with numbers ending in a 6 are

selected. [4]

(iv) the mean and variance of the number of pink discs selected. [8]

1.5 The mean number of defective batteries in packs of 20 is 1.6. Use a

binomial distribution to calculate the probability that a randomly chosen pack of

20 will have more than 2 defective batteries. [6]

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QUESTION TWO [15 MARKS]

The Zimbabwean Council of Education reported that 47% of college freshmen

earn a degree and graduate within five years. Assume that graduation records

show women make up 50% of the students who graduated within five years, but

only 45% of the students who did not graduate within five years. The students

who had not graduated within five years either dropped out or were still

working on their degrees.

a. Let A1 - the student graduated within five years.

A2 - the student did not graduate within five years.

W - the student is a female student.

Using the given information, what are the values for

(i) P (A1) [2]

(ii) P (A2) [2]

(iii) P (W | A1) [2]

(iv) P (W | A2) [2]

b. What is the probability that a female student will graduate within five years?

[2]

c. What is the probability that a male student will graduate within five years?

[2]

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d. Given the preceding results, what are the percentage of women and the

percentage of men in the entering freshman class? [3]

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QUESTION THREE [15 MARKS]

Cooper Realty is a small real estate company located in Albany, New York,

specializing primarily in residential listings. They recently became interested in

determining the likelihood of one of their listings being sold within a certain

number of days. An analysis of company sales of 800 homes in previous years

produced the following data.

Days Listed Until Sold

Initial Under 30 31–90 Over 90 Total

Asking Price Under $150,000 50 40 10 100

$150,000–$199,999 20 150 80 250

$200,000–$250,000 20 280 100 400

Over $250,000 10 30 10 50

Total 100 500 200 800

a. If A is defined as the event that a home is listed for more than 90 days before

being sold, estimate the probability of A. [3]

b. If B is defined as the event that the initial asking price is under $150,000,

estimate the probability of B. [3]

c. What is the probability of A ∩ B? [3]

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d. Assuming that a contract was just signed to list a home with an initial asking

price of less than $150,000, what is the probability that the home will take

Cooper Realty more than 90 days to sell? [4]

e. Are events A and B independent? [2]

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QUESTION FOUR [15 MARKS]

Consider the following quarterly demand levels for electricity (in 1000

megawatts) in Harare from 2008 to 2011.

Months 2008 2009 2010 2011

Jan-Mar 21 35 39 78

Apr-Jun 42 54 82 114

Jul-Sep 60 91 136 160

Oct-Dec 12 14 28 40

(a) Plot the time series of quarterly electricity demand graphically. [3]

(b) Find the least squares trendline for quarterly electricity demand in Cape

Town. [4]

(c) Find the seasonal index for each quarter. [6]

(d) Estimate the seasonally adjusted trend values of quarterly electricity demand

for quarters 3 and 4 of 2012. [2]

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QUESTION FIVE [15 MARKS]

Jensen Tire & Auto is in the process of deciding whether to purchase a

maintenance contract for its new computer wheel alignment and balancing

machine. Managers feel that maintenance expense should be related to usage,

and they collected the following information on weekly usage (hours) and

annual maintenance expense (in hundreds of dollars).

Weekly Usage (Hours) Annual Maintenance Expense ($ hundreds)

13 17

10 22

20 30

28 37

32 47

17 30.5

24 32.5

31 39

40 51.5

a. Develop the estimated regression equation that relates annual maintenance

expense to weekly usage. [5]

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b. Test the significance of the relationship in part (a) at a 0.05 level of

significance. [4]

c. Jensen expects to use the new machine 30 hours per week. Develop a 95%

prediction interval for the company’s annual maintenance expense. [4]

d. If the maintenance contract costs $3000 per year, would you recommend

purchasing it? Why or why not? [2]

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