Professional Documents
Culture Documents
Assignment II
Name of Student:
Student ID:
Date Submitted:
Fergie Mc Nish
806005929
August 31, 2014
QUESTION #8
Table 1: Model Summary - Overall Model Fit
The Model Summary gives us a measure of how well our overall model fits and how well our
predictors; location, advertisement, age and income is able to predict sales of RY stocks
Multiple Correlation Coefficient [R]
Multiple correlation coefficient [R] is a measure of the strength of the relationship between the
sales of RY stocks and the predictors; location, advertisement, age and income. In this case R=
0.982 which tells us theres a strong direct relationship.
Coefficient of Determination [R Square- R2]
The coefficient of determination [R Square- R2] statistic enables us to determine the amount of
explained variation [variance] in sales of RY stocks from the four [4] predictors; location,
advertisement, age and income. R Square varies between zero [0] and one [1].
Conclusion
The R Square indicates that 96.5% of the variations in the dependant variable [sales of RY
stocks] are explained by changes in the independent variable [location, advertisement, age and
income]. The regression equation appears to be very useful for making predictions since the
value of R2 is close to 1. The overall fit is very good. The unexplained variables account for 3.5%
[100% - 96.5%].
Page 1
Page 2
Page 3
QUESTION #9
Categorical financial data is captured by the table given. There are both nominal data and ordinal
data.
The name of the test conducted is the Chi-square test for independence, also called Pearsons
Chi-square test or the Chi-square test of association. This test is used to discover if there is a
relationship between two categorical variables.
Null Hypothesis: H0
Alternative Hypothesis: H1
Hypothesis
H0: Type of Financial Institutions and Level of Strict Financial Regulations are independent; no
relationship exists between Type of Financial Institutions and Level of Strict Financial
Regulations.
H1: Type of Financial Institutions and Level of Strict Financial Regulations are dependent; a
relationship exists between Type of Financial Institutions and Level of Strict Financial
Regulations.
Decision rule
If p-value [sig. value] < 0.05 reject the Null Hypothesis [H0]
A relationship exists between Type of Financial Institutions and
Level of Strict Financial Regulations.
If p-value [sig. value] > 0.05 fail to reject the Null Hypothesis [H0]
No relationship exists between Type of Financial Institutions and
Level of Strict Financial Regulations.
Conclusion
The p-valve [sig. value] of 0.007 is less that 0.05 which means that the researcher should reject
the null hypothesis [H0]; a relationship exists between of Financial Institutions and Level of
Strict Financial Regulations.
Page 4
QUESTION #10
The T-Test is a statistical examination of two population mean. A two-sample T-Test examines
whether two samples are different and is commonly used when the variances of two normal
distributions are unknown and when an experiment used a small sample size.
Null Hypothesis: H0
Alternative Hypothesis: H1
Hypothesis
H0: Blackberry stock price = Nokia stock price
[The population means of Blackberry stock price and Nokia stock price are the same]
or
H0: 1 - 2 = 0
H0: 1 = 2
H1: Blackberry stock price Nokia stock price
[The population means of Blackberry stock price and Nokia stock price are different]
H1: 1
or
H1: 1 -
2 0
Decision rule
If p-value [sig. value] < 0.05 reject the Null Hypothesis [H0]
There is no difference in mean Blackberry stock price and the
Nokia stock price.
If p-value [sig. value] > 0.05 fail to reject the Null Hypothesis [H0]
There is a difference in mean Blackberry stock price and the Nokia
stock price.
Conclusion
The p-valve [sig. value] of 0.0000 is less that 0.05 which means that the researcher should reject
the null hypothesis [H0]; therefore the population means of Blackberry stock price and Nokia
stock price are different.
Page 5
QUESTION #11
Combinations: nCr
The order is not important once the items are in the box.
n = what we have
r = what we want
a)
Sector
Energy
Housing
Level of Risk
Low
High
Number of shares
available [n]
8
7
Number of shares
we want [r]
2
4
= 8C27C4
= [28] [35]
= 980
Conclusion
Two [2] low risk stocks and four [4] high risk stocks can be selected by an investor in 980 ways.
Page 6
b)
Sector
Energy
Housing
Level of Risk
Low
High
Number of shares
available [n]
8
7
Number of shares
we want [r]
3
3
= 8C37C3
= [56] [35]
= 1,960
Conclusion
Three [3] low risk stocks and three [3] high risk stocks can be selected by an investor in
1,960 ways.
c) If the investor chooses the first combinations of two [2] low risk stocks and four [4] high
risk stocks the investor will have 980 choices. On the other hand if the investor chooses
the second combinations of three [3] low risk stocks and three [3] high risk stocks the
investor will have 1,960 choices. Therefore is the investors wants the combinations with
the most number of choices, the investor should select the second combination of three
[3] low risk stocks and three [3] high risk stocks. The second combination will give the
investor 980 [1,960=980] more choices than the first combinations.
Page 7