Statistics for Management

Unit 1: Introduction to Statistics

Self-Assessment Questions:

1. In which of the following situations would you like to use Statistics?

a) Buying a house
b) Purchasing medicine prescribed by a doctor
c) Investing funds in several options

d) Attending relatives marriages

2. Out of the following, which one does not refer to a mass of data?
a) Banking Statistics
b) Mathematical Statistics
c) Agricultural Statistics

d) Income Statistics

3. Which of the following statement is most appropriate?

a) Nature believed in statistics
b) Nature created statistics
c) Nature believed in variation

d) Nature believed in symmetrical variation

4. Which of the following statement is true?

a) Statistics enlarges physical vision

b) Statistics helps in estimation
c) Statistics quantifies uncertainty

d) Statistics is of no use to humanity.

5. The origin of statistics can be traced to

a) State b) Commerce c) Economics d) Industry

6. According to the definition of Statistics given by Croxton and Cowden, what are the
four components of Statistics?

The four components of Statistics are collection, presentation, analysis and

interpretation of data.

7. ‘Statistics may be called the science of counting’ is the definition given by

 a) Croxton
b) A.L.Bowley c) Boddington d) Webster

8. In the olden days statistics was confined only to state affair.

9. Mention some other areas where there is a scope of applying statistics.

Answer: Industrial Quality control, Investment policies, to find market potential for a
product.

10. Answer the following:

a) Should the same degree of accuracy be applied while measuring the height of a mountain
and the height of a person? NO
b) Does Statistics deal with qualitative data? NO

11. Categorise the following data as qualitative or quantitative data

1. a) The number of transactions occurring in an ATM per day - Quantitative data

2. b) The popular brand name in cars is Maruthi – Qualitative data

12. The total sale of a product in Area A is 840 for 30 working days. The total sale of the
same product in Area B is 784 for 28 working days. Should Statistics be applied to get an
appropriate picture regarding the comparison of sales? -YES

Activity Match the following:

A. Statistic -3
B. Parameter - 7
C. Discrete -4
E. Mutually exclusive - 1
F. Zero -5
G. Continuous -6
H. Inferential statistic -2

1. Do not contain the same outcome

2. The use of sample statistics to draw conclusions concerning the population.
3. A numerical characteristic of a sample.
4. Only finite values can exist on the X axis.
5. Sum of deviation around a mean.
6. Measurement may assume any value associated with uninterrupted Scale
7. A numerical characteristic of a population
Terminal Questions:

1. Mention the characteristics of Statistics.

There are several characteristics of Statistics:

i) Statics deals with an aggregate of facts

ii) Statistics get affected to a great extent by multiplicity of causes
iii) Statistics are numerically expressed
iv) Statistics are enumerated or estimated with required degree of accurancy
v) Statistics are collected for a pre-determined purpose
vi) Statistics are placed in relation to each other
2. Give the meaning of the word Statistics.

Statistics, deals with gathering, organising, presenting and analysing data.

According to Seligman, “Statistics is a science which deals with the method of

collecting, classifying, presenting, comparing and interpreting the numerical data to
throw light on enquiry”.

According to Croxton and Cowden, “Statistics is the science of collection,

presentation, analysis and interpretation of numerical data from logical analysis”.

The components of Statistics are:

i) Collection of data
ii) Presentation of data
iii) Analysis of data
iv) Interpretation of data
3. What are the limitations of Statistics?

The main limitations of statistics are as follows:

i) Statistics does not deal with qualitative data

ii) Statistics does not deal with individual facts
iii) Statistics inferences are not exact
iv) Statistics can be misused and misinterpreted
v) Common men cannot handle statistics properly
4. What are the functions of Statistics?

The main functions of Statistics are as follows:

i) Statistics simplifies mass data

ii) Statistics brings out trends and tendencies in the data
iii) Statistics brings out the hidden relations between variables
iv) Decision making power becomes easier
v) Statistics makes comparison easier
5. What is the importance of Statistics in modern business environment?

Due to advancement of communication networks, rapid change in consumer

behaviour, varied expectations of consumers and new market openings – modern
managers have difficulty in making quick and appropriate decisions. Thus they
depend and seek help of quantitative techniques like mathematical models and
 statistics.

i) Accounting

Public accounting firms use statistical sampling procedures when conducting audits
for their clients.

ii) Finance

Financial advisors use a variety of statistical information to guide their investment

recommendations.

iii) Marketing

Electronic scanners at retail checkout counters are being used to collect data for a
variety of marketing research applications.

iv) Production

Today’s emphasis is on quality. Quality is of utmost importance in production. A

variety of statistical quality control charts are used, to monitor the average output of a
production process.

6. Explain any two applications of Statistics.

Statistical methods are applied to specific problems in various fields such as Biology,
Medicine, Agriculture, Commerce, Business, Economics, Industry, Insurance,
Sociology and Psychology.

Statistical tools like t-test , index numbers, estimation theory, time series analysis,
Analysis of Variance (ANOVA) are used in medical, economical and agricultural
fields respectively.

Statistics is used in different activities such as:

i) Study of growth of plants

ii) Movement of fish population in ocean
iii) Migration patterns of birds
iv) Theories of heredity
v) Birth and death rate, Population growth etc..
 Unit 2: Statistical Survey

Self-Assessment Questions:

1. What are the main stages in a survey? – Planning and execution

2. Training of investigators belongs to which stage? - Planning
3. Analysis of data is a part of the execution of survey. Is this correct? - YES
4. Classify the following as finite or infinite population.
i) Production of a product in a factory for a day - finite

ii) The set of rational numbers -infinite

iii) The weight of new born babies measured up to first decimal place in a state
during the first week of February 2008 - finite

5. Classify the following as an attribute or a variable.

i) Eye colour of human beings - Attribute

ii) Number of pages in a book of various subjects - Variable

6. Classify the following as discrete or continuous variable

I. Number of shares sold each day in a stock market. - discrete

II. Temperatures recorded every half hour at a regional meteorological centre. -
Continuous

7. Statistics can best be considered as

i) both Art and Science

ii) Art
iii) Science
iv) neither Art nor Science

8. Data that possess numerical properties are known as

I. Quantitative data
II. Qualitative data
III. Primary data
IV. Parametric data

9. A tool of all science in research and making an intelligent judgement is

i) Statistics
ii) Collection
iii) Data
iv) Judgement

10. State whether the following data are Primary or Secondary.

I. An official of the Census Board of India is preparing a report on census of

population based on the survey data that is collected by the Census Board. –
Primary data
 II. An HR representative of a software company is deciding on the time taken to
perform a particular job on a project on the basis of random observations
collected by him. – Primary data
III. A neurologist is examining the relationship between cigarette smoking and brain
tumor based on the data published in a famous neurology journal. – Secondary
data

11. When population under investigation is infinite, we should use

I. sample method
II. census method
III. neither census nor sample method
IV. both a & b

12. State True or False:

i) Census conducted by Government of India is an example of primary data. - True
ii) TV News Bulletins gather information on any event through their agents. - True

iii) Schedules make respondents record their answers. -False

iv) A covering letter to the questionnaire brings confidence in respondents. -True

v) Questions in questionnaire should be lengthy. -False

13. State whether each of the following variables is qualitative or quantitative.

i) Age - Quantitative
ii) Gender - Qualitative

iii) Class Rank - Qualitative

iv) Number of people favouring the death penalty -Quantitative

14. State whether each of the following variables is qualitative or quantitative and
indicates the measurement scale that is appropriate for each.

i) Annual sales – Quantitative, Ratio

ii) Soft drink size (small, medium, large) – Qualitative, Nominal

iii) Employee classification (GSI through GSIS) - Qualitative, Ordinal

iv) Earning per share – Quantitative, Ratio

v) Methods of payments (cash, check, credit card) – Qualitative, Nominal

Terminal Questions:

1. What is statistical survey?

1. A Statistical Survey is a scientific process of collection and analysis of numerical

data. Statistical surveys are used to collect information about units in a population and
it involves asking questions to individuals. Surveys of human populations are
common in government, health, social science and marketing sectors.

2. The term ‘Survey’ is defined as measurement procedure to gather people’s opinions.

3. When the population is large, a sample unit of selected people are asked to take the
survey. The selected people are called as sample.
4. A search for knowledge by analysing numerical data is known as Statistical Survey or
Statistical Investigation.
5. Surveys differ from each other since purpose, field of study, scope and source of
information differ for each survey
6. The relevance, time-lines and accuracy of data are standard tools for statistical study.
Quality of data and conclusions derived from data depend on these characteristics
7. Statistical Survey Definition: It is a scientific process of collection and analysis of
numerical data. Statistical surveys are used to collect information about units in a
population and asking questions to individuals.

2. Enumerate the factors which should be kept in mind for proper planning.

The steps involved in Statistical planning are as follows:

I. Nature of problem to be investigated should be clearly defined in ana

unambiguous manner.
II. Objectives of the investigation should be stated at the outset.
III. The scope of investigation has to be made clear. Which means the area to be
covered, identification of units to be studied, nature of characteristics to be
observed accuracy of measurement , analytical methods, time cost and other
resources required
IV. Whether to use data collected from primary or secondary source should be
determined in advance
V. The organisation of investigation is the last step. It explains the determination
of the investigators required, their training, supervision work needed, and
funds required

3. What do you understand by the unit of measurement? Explain with examples.

It refers to the unit of the population on which measurements are made, for example,
the height of employees in an office. Employees are individuals or units. Height is the
measurement made on them.

4. Distinguish between:
 a) Primary and secondary data
b) Direct and indirect investigation

c) Questionnaire and schedule

a) Data collected for the first time by the investigator is primary data. Data collected
by some other persons but used by the investigator for his/her study is known as
secondary data.

Primary Data Secondary Data

It is original thus it is accurate and reliable Not original for current survey hence not
reliable
Expensive cheap
Not easily accessible Accessible through internet or other sources
Homogeneous Not homogeneous
Requires more time Takes less time
Gives detail information Data may not be adequate
Extra precautionary measures need to be Data selection needs extra care
taken in collectin of data

b) Direct investigations are carried out directly by the investigator. Investigation

conducted through mail questionnaire is called indirect investigation.

Direct Indirect
Can get original data which is more accurate Data extracted from third party or witness
and reliable
Satisfactory information can be extracted Degree of accuracy of collected information
through indirect questions is less
Data is homogeneous and comparable Information is unbiased and reliable
Additional information can also be gathered It is used to people view regarding the
enquiry
Expensive economical
Consumes more time Save time
Method is not feasible with wide scope Method is feasible when area of scope is
large
Data is confidential Confidential information can be gathered

c) Questionnaires contain simple questions and are filled by respondents. Schedules

also contain questions but responses are recorded directly by the investigator.

Questionnaire Schedule filled by investigator

All questions are responded by the selected Information is collected by investigator
people directly from the respondents
Questionnaire process needs to be explained Interviewer can directly ask the questions
Misunderstandings may not be answered Investigator can cross verify and get clarity
 Unit 3: Classification, Tabulation and Presentation of Data

Self-Assessment Questions:

1. Classification is a systematic Grouping of the units according to their common

characteristics.

2. Classification reduces Bulk of the data.

3. Classification of data that are non-measurable is known as Attributes.
4. Classification done according to two attributes or variables is Two-way classification.
5. Manifold classification involve more than two variables.
6. Data arranged according to time of occurrence is known as Chronological
classification.
7. Geographical classification means classification of data according to:

i) Location ii) Time

iii) Attributes iv) Class intervals

8. Classification is a process of arranging the data into:

i) Different columns ii) Different rows

iii) Different rows and columns

iv) Groups of related facts in different classes

9. The data that can be classified on the basis of time is:

i) Geographical ii) Chronological

iii) Qualitative iv) Quantitative

10. State True or False

I. Tabulation presents the data in a minimum space. -True

II. Tabulation is a process of analysis -False
III. General purpose table deals with specific objectives. -False
IV. Derived tables deal with total, percentages, ratios, etc -True

11. Fill in the blanks

i) If the data readings are 3, 4, 5, 6, 7, then it is called Discrete variable. Height is

generally Continuous variable.

ii) There are five derived frequency distributions for any frequency distribution.

iii) Width of class-interval is given by the difference between upper class limit and
lower class limit.

iv) There are two marginal distributions for a distribution.

v) Sturge’s formula is used to calculate the number of class- intervals.
 vi) The relative frequency distribution is obtained from frequency distribution by
calculating ____f/N_______.

12. State true of false

i) Diagrams give an accurate value. (True/False)

ii) Pie diagram is drawn according to degree subtended at the centre of a circle.
(True/False)

iii) Simple bar diagram is drawn for multiple characteristics. (True/False)

13. The graph plotted in the form of series of rectangles is

i) Frequency ii) Frequency polygon

iii) Pie iv) Histogram

14. The diagram which are used to show percentages break down is

I. A circle
II. A square
III. A pie diagram
IV. A rectangle

15. A line graph indicates

I. Comparison
II. Range
III. Variation
IV. All the above

16. Which of the following is not a type of bar chart?

i) Multiple ii) Percentages

iii) Subdivided iv) Ogive

 Unit 4: Measures of Central Tendency and Dispersion

Self-Assessment Questions:

1. State whether the following questions are ‘True’ or ‘False’.

i. For a given set of values if we add a constant 5 to every value, then the
arithmetic mean is affected. -True
ii. Arithmetic mean can be calculated for distribution with open-end classes. -
False
iii. Arithmetic mean is affected by extreme values. -True
iv. Arithmetic mean of 12, 16, 23, 25, 28, 32 is 22. -False
2. A single value within the range of the entire mass of data that is used to represent
the whole data is

i) Measures of Central tendency

ii) Statistics

iii) Measures of Dispersion

iv) Skewness

3. If X1, X2, X3, ............ Xn are a set of n values of a variate, then the mean is given by

i) N/Xi
ii) Xi/n

iii)NXi
N1X1N2X2
iv) X12

N1  N2

4. (a) Find the Arithmetic mean 68,41,75,91,53,86,59

i) 67.57 ii) 47.57 iii) 37.57 iv) 27.57

(b) The average computed by considering the relative importance of each of values to the
total value, is called

i) Arithmetic mean ii) Geometric mean iii) Weighted arithmetic mean iv) Harmonic average.

5. State whether the following questions are ‘True’ or ‘False’.

i) Mode is based on all values -False

ii) Mode = 3 Median – Mean -False

iii) Geometric mean is used when we are interested in rate of growth of any phenomena.
-True

iv) Harmonic mean exists if one of the values is zero. -False

 v) A.M < G.M < H.M for any two values ‘a’ and ‘b’. -False

vi) Arithmetic mean can be calculated accurately even when the distribution has open-
end class. -False

vii) Mode can be located graphically. -True

viii) Mode is used when data is on interval scale. -True

6. If the values of the variables are arranged in ascending order of magnitude, the middle
term is

i) mean ii) mode iii) median iv) quartile

7. In a symmetrical distribution the mean, median and mode

i) differ ii) coincide

iii) mean-median = mode iv) differ by 0.5

8. The relation between mean, median and mode is given by

i) Mode= 3 Median-2 Mean iii) Mode= 3Median –Mean

ii) Mode=2 Mean-Median iv) Mode= Mean- Median

9. The harmonic mean of 30 and 20 is

i) 25 ii) 24

iii) 20 iv) 30

10. If assumed mean A=32.5, i=8,  fd =-13 and f= 90

i) mean = 35.31 ii) mean=31.35

iii) mean = 33.15 iv) mean=35.35

11. In any distribution when the original items differ in size, the value of Arithmetic mean
(AM), Geometric mean (GM) and Harmonic mean (HM) would also differ in the
following order
i) AM>GM>HM ii) AM=GM=HM

iii) AM<HM<GM iv) AM.GM>HM

12. State whether the following questions are ‘True’ or ‘False’.

i) Quartiles are positional value. -True

ii) Quartiles help us to find percentage of readings below or above a certain value. -True

iii) Q2 = P50 = D7 = Median -False

13. State whether the following questions are ‘True’ or ‘False’.

i) The cost of living index numbers calculated are based on weighted averages. -True

ii) Many of the items which we use in our life can be assigned weights. -True

14. State whether the following questions are ‘True’ or ‘False’

i. Standard deviation is based on all the values. -True

ii)Standard deviation of a set of values is increased if every value of the set is

increased by a constant. -False

iii. Standard deviation can be calculated for distributions with open-

end classes. -False
iv. Coefficient of variation can be used to compare the variability of
two sets of data measuring the same characteristics. -True

Unit 5: Theory of Probability

Self-Assessment Questions:

1. To which approach does the following probability estimates belong:

i. Probability that India will win the game -Relative Frequency

ii. Probability that Mr. Ram will resign from the post. -Subjective

iii. Probability of drawing a red card. -Classical

iv. Probability that you will go to America this year -Subjective

2. Find the probabilities in the following cases:

i. Getting an even number when a die is thrown -1/2
ii. Getting 53 Mondays in ordinary year -1/7
3. Given P(A) = 0.6, P(B) = 0.7, and P(A  B) = 0.5. Find P(A U B)? -0.8
4. State whether the following questions are true or false:

I. Bayes’ probability estimates sample value. - False

II. Conditional probability can incorporate costs. - False
III. Bayes’ probability gives up to date information. -True

5. Fill in the blanks:

I. For a random variable  P(Xi) = ____1_______.

II. Expectation of a random variable is same as Mean of the probability
distribution of that variable.
III. Var (X) = E (X2) – [E(X)]2
 Unit 6: Theoretical Probability Distributions

Self-Assessment Questions:

1. State whether the following statements are ‘True’ or ‘False’.

i) The sum of probabilities sometimes will be greater than 1. -False

ii) The amount of time you study for an exam is a discrete random variable. -
False

iii) The Bernoulli distribution has only one parameter ‘p’. -True

2. State whether the following statements are ‘True’ or ‘False’.

i) Mean of binomial distribution is ‘npq’. -False

ii) ‘n’ and ‘p’ are the parameters of Binomial distribution. -True

iii) If the mean and variance of a Binomial distribution are 6 and 5, then p =
1/6. -True

iv) Each trial in a binomial experiment has the different probability of success
‘p’. -False

3. State whether the following statements are ‘True’ or ‘False’

i) ‘X’ is a Poisson variate if p < 0.1 and n > 10. -True

ii) Poisson distribution is a unimodal distribution. -False

4. State whether the following statements are ‘True’ or ‘False’.

i) Quartile deviation of normal distribution is 4/ 5 . -False

ii) Mean and standard deviation of Standard normal distribution are ‘1’ and ‘0’. -False

iii) Mean, Median and Mode coincide in a Normal distribution. -True

 Unit 7: Sampling and Sampling Distributions

Self-Assessment Questions:

1. State whether the following statements are True or False.

i) Population is aggregate of objects under study. -True
ii) Sampling method consume time and resources. -False

iii) Population is a subset of sample. -False

iv) An unbiased sample gives an accurate prediction of characteristics of an entire

population. -True

v) The standard deviation of sampling distribution of a statistic is known as standard

error of that statistic. -True

vi) Standard error is used as a reliability measure. -True

vii) Faulty selection of sample contributes to sampling error. -True

viii) Personal bias increases the non-sampling errors. -True

ix) Unbiased errors are cumulative in nature. -False

2. State whether the following statements are true ‘T’ or false ‘F’.

i) Sample in which units are selected by judgment is known as probability sample. -False

ii) Judgment sampling does not give representativeness of a sample. -True

iii) Large sample size always results in minimising the standard error. -True

iv) A sampling plan that divides the population into well-defined groups from which
random samples are drawn is known as cluster sampling. -False

v) The principles of simple random sampling are the theoretical basis for statistical
inference. -True

vi) If the mean of a certain population is 20, it is likely that most of the sample means will
be 20. -False

vii) Any sampling distribution can be totally described by its mean and standard
deviation. -False

viii) The central limit theorem assures the sampling distribution of the mean approaches
normal distribution as the sample size increases -True

ix) Stratified sampling is used when each group considered are more homogenous
within itself and heterogeneous between group. -True
 Unit 8: Estimations

Self-Assessment Questions:

1. XY Pizza has developed quite a business in Bangalore by delivering pizza orders

promptly. It guarantees that its pizzas will be delivered in 30 minutes or less from the time
the order was placed, and if the delivery is late, the pizza is free. The time that it takes to
deliver each pizza order, that is, the on time is recorded in the pizza time book (PTB), and
the delivery time for those pizzas that are delivered late is recorded as 30 minutes in the
PTB. A sample of 12 random entries from the PTB is depicted in table 8.5.

Table 8.5: Twelve Random Entries of Pizza Delivery Time

15.3 29.5 30 10.1 30 19.6

10.8 12.2 14.8 30 22.1 18.3

i) Find the mean for the sample.

Answer: For the given sample the mean is 20.225 minutes

ii) From what population was this sample drawn?

Answer: The population was drawn from the Pizza Time Book (PTB) of XY Pizza

iii) Can this sample be used to estimate the average time that it takes for Pizza Hut to deliver
a pizza? Explain.
Answer: No. As the time over 30 minutes is recorded as 30 and hence, it will underestimate
the delivery time

2. Madhu, a frugal student, wants to buy a used bike. After randomly selecting 125
wanted advertisements, he found the average price of the bike to be Rs. 3250 with a
standard deviation of Rs. 615. Establish an interval estimate for the average price of
bike so that Madhu can be:
1. i) 68.3% certain that the population mean lies in this interval.
2. ii) 95.5% certain that the population mean lies in this interval.
3. Given the following confidence levels, express the lower and upper limits

of the confidence interval for these levels in terms of X and x (Use the normal
distribution tables).

i) 54 percent

ii) 75 percent

iii) 94 percent

iv) 98 percent
4. From a population of 540, a sample of 60 individuals is taken. From this sample the
mean is found to be 6.2 and the standard deviation to be 1.368.

i) Find the estimated standard error of the mean.

ii) Construct a 96 % confidence interval of the mean.

5. For the following sample sizes and confidence levels, find the approximate ‘t’ values
for constructing confidence intervals (use the ‘t’ table).

i) n = 28; 95%

ii) n = 8; 98%

iii) n = 13; 90%

iv) n = 25; 95%

 Unit 9: Testing of Hypothesis in Case of Large and Small Samples

Self-Assessment Questions:

1. For the following cases; specify which probability distribution to use in

hypothesis testing:

i. H0:=27,H1:27, X =33,sample  =4,n=25 - Normal distribution

ii. H0:=98.6,H1:>98.6, X =99.1,  =1.5,n=50 - Normal distribution
iii. H0:=3.5,H1:<3.5, X =2.8,sample  =0.6,n=18 - t distribution
iv. H0:=57,H1:>57, X =65,sample  =12,n=42 - Normal distribution

2. i) Null hypothesis states that there is a significant difference between observed and
hypothetical values. (True/False)
ii) 1% level of significance means we are ready to reject a true hypothesis in 99% of
cases. (True/False)

iii) IftheNullhypothesisH0:=X orH0:p=ps orH0:1 =2 orH0:p1 = p2 then it is two-tailed

test. (True/False)

iv) If the calculated value of a statistic is not in the rejection region R, then Ho is
accepted. (True/False)

v) 1 -  is called power of the test. (True/False)

vi) Ifn1 =300,n2 =500,1 =50,2 =60,1 =10,2 =12 areresultsof two samples taken
from two cities A and B then we test for between means under different population.
(True/False)

vii) If n < 30, then we do not apply z test unless, population S.D is known.
(True/False)

3. i) ‘t’ distribution is Continuous probability distribution.

ii) ‘t’ distribution’s parameter is Degree of freedom.

iii) The mean and variance of the ‘t’ distribution are Zero and Greater than one.
 Unit 10: Chi-Square Test

Self-Assessment Questions:

1. 2 – test is a Non-Parametric test.

2. A table with 4 rows and 2 columns has the degrees of freedom of 3
3. 2 – test is wholly based on Sample data.
4. If there are four rows and five columns in classification for 2 – test, then the number
of degrees of freedom equal to 12.
5. If the calculated 2 value is less than the tabulated 2 value, then the null hypothesis
is Not Rejected.

Unit 11: F-Distribution and Analysis of Variance(ANOVA)

Self-Assessment Questions:

1. State whether the following statements are ‘True’ or ‘False’

i) Analysis variance is useful to test several means. -True

ii) Another tool applied to test several means is Z/t–test. -False

iii) F-ratio is always calculated with respect to mean square error. -True

iv) The F-distribution curve depends on the degrees of freedom. -True

v) In applying analysis of variance, the sample sizes must be equal. -False

vi) In one-way ANOVA, the null hypothesis always states that all the population
means are different. -True

vii) The F-statistic is the ratio of variance between the samples to the variance within
the samples. -True

2. we take only one factor and investigate the difference amongst its various
categories having numerous possible values, we are said to use

i) Two-way ANOVA ii) One-way ANOVA iii) Multi-way ANOVA iv) Four-way
ANOVA

3. The sum of squares for variance between samples is 8 and the sum of
squares for variance within samples is 24, then the sum of squares for total
variance is

i) 16 ii) 32 iii) 48 iv) 8

4. A test used as a test of goodness fit is

i) Chi-square test iii) t-test ii) Z-test iv) u-test

5. A test used to compare the variance of the two independent samples is

i) F- test ii) Z- test

iii) t - test iv) u –test

Unit 12: Simple Correlation and Regression

Self-Assessment Questions:

1. Calculate the required correlation coefficients.

i. From the following data, calculate the correlation between variables 1 and 2
keeping the 3rd constant.

r12 =0.7; r13 =0.6 r23 =0.4

ii. Calculate r23.1 and r13.2 from the following:

r12 = 0.60; r13 = 0.51; r23 = 0.40
iii. Given the zero order correlation coefficients, calculate the partial correlation
between variables 1 and 3 keeping the 2 nd variable constant. Interpret your
result.

r12 =0.8; r13 =0.6; r23 =0.5

2. State whether the following statements are ‘True’ or ‘False’.

i. Scatter diagram does not give us a quantitative measure of correlation coefficient. -

True
ii. Correlation estimates the value of one variable from the knowledge of the other. -
False
iii. Correlation coefficient is an absolute measure. -False

3. State whether the following statements are ‘True’ or ‘False’.

i) Correlation coefficient is a geometric mean between regression coefficients. -True

ii) The regression lines always intersect at (X, Y) . -True

 x/  y -True
iii) bxy = r.

iv) The higher the angle between regression coefficients, the lower is the correlation
coefficient -True
 Unit 13: Business Forecasting

Self-Assessment Questions:

State whether the following statements are ‘True’ or ‘False’.

1. Forecast is an estimate based solely on past data of the series under investigation. -
False
2. In time series analysis method a comparative study of variations can be made. -True
3. In exponential smoothing, old observations are given increasing exponential
weightage. -False

Terminal Questions:

1. What is business forecasting?

2. Explain the objectives of business forecasting.
3. Explain the steps involved in forecasting.
4. Explain the characteristics of business forecasting.
5. Differentiate between prediction, projection and forecasting.
6. Describe the limitations of business forecasting.
7. Explain the main methods of business forecasting.
8. Critically examine the important theories of business forecasting.

Unit 14: Time Series Analysis

Self-Assessment Questions:

1. State‘True’or‘False’

i) ‘The prices of cooking oils reduce after the harvesting of oil seeds

and go up after some time’ is an example of cyclic variations in a

time series. -False

ii) The effect of national strikes, floods, earthquakes are examples of

random variations in time series. -True

2. Fill in the following blanks.

1. i) A set of numerical value observed at regular interval of time is called Time Series .
2. ii) Long term movements in time series are called Secular Trend .
3. iii) Variations that occur within a year are known as Seasonal variations.
4. iv) Semi averages method is used to measure Trend
5. v) Method of moving averages does not show any Funcional relationship.
 Unit 15: Index Numbers

Self-Assessment Questions:

1. Find out the price index number using simple aggregate method for the data
represented in

Commodity Price based year 2001 Price based on current

year
Wheat 80 100
Rice 120 250
Gram 100 150
Pulses 200 300

Answer: means that the price has increased by 60% in 2002 as compared to 2001

2. The data in table 15.10 is related to workers in an industrial town. Calculate consumer
price index number by using family budget method.

Item of consumption Price index P Percentage expenditure

Food 200 50
Clothing 175 10
Fuel & lighting 160 12
Housing 225 15
Miscellaneous 150 13

Answer: the consumer price index number by family budget method is 189.95.