QUANTITATIVE & STATISTICAL METHOD

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 Table of Contents
Introduction ..................................................................................................................................... 3

Question 1: Mean, Median, Mode and Standard Deviation............................................................ 3

Question 2: Normal probability and fitted line plot ........................................................................ 3

Question 3 ....................................................................................................................................... 5

a. Correlation for dependent and independent variables ............................................................. 5

b. Existence of linear relationship ............................................................................................... 5

Question 4 ....................................................................................................................................... 6

Conclusion ...................................................................................................................................... 6

Reference list .................................................................................................................................. 8

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Introduction

The current study is related to the datasets of the rates from Interbank Foreign Exchange Market
associated with Kuala Lumpur (Bnm.gov.my, 2019). In the dataset, the date has been selected as
the dependent factor. On the other hand, USD and GBP has been selected as the independent
factor. The dataset involves 40 observations from 3rd September 2019 to 31st October 2019. The
dataset has been retrieved from the website of Bank Negara Malaysia and is associated with
exchange rates in the domain of finance and economy.

Question 1: Mean, Median, Mode and Standard Deviation

The mean value can be referred to as the average of numbers or values. In terms of statistics, it
can be referred to as sum divided by count (Chaamwe and Shumba, 2016). The value of mean
obtained for USD is 4.186783 and that for GBP is 5.231955. In terms of interpretation, it can be
said that the mean value for USD indicates that 4.186783 has been the most common exchange
rate between 3rd September and 31st October 2019. Similarly, for GBP, 5.231955 has been the
most common exchange rate between the time span. On the other hand, the value of median
obtained for USD is 4.18625 and that for GBP is obtained as 5.19055. Median value refers to the
middle value within a list of numbers or values. Similarly, the value obtained through evaluation
of mode for the independent factor USD is 4.193. On the other hand, mode of a dataset can be
referred to as values appearing the most within it (Kanal and Raman, 2016). Hence, the value of
mode obtained for GBP is 0, as the values do not have frequency. Moreover, the value obtained
for standard deviation of USD is 0.011111 and that for GBP is derived as 0.105498.

Question 2: Normal probability and fitted line plot

The value obtained for multiple R is 0.053368 and that for R squared is derived as 0.002848.
Multiple R is the correlation coefficient that indicates the strength of linear relationship. A value
of 1 indicates a positive relationship, whereas, a value of 0 indicates that no relationship exists at
all. On the other hand, the R squared value is a statistical measure indicating the closeness of
data towards fitted regression line. The value evaluated for adjusted R square is (-0.0241). In
terms of standard error, the value obtained from the regression test is 0.009455. In relation to

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ANOVA, the value of F is obtained as 0.105683 and that for significance F is evaluated as
0.746945259.

Figure 1: Plot for USD exchange rate

(Source: Created by author)

For USD exchange rate, the equation can be framed as y = -5E-05x + 4.187, where R squared is
0.002. Therefore, this indicates that 2% variation in y data is the result of variation in x data.

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 Figure 2: Plot for GBP exchange rate

(Source: Created by author)

Similarly, in terms of GBP exchange rate, the equation can be framed as y = 0.007x + 5.082,
where value of R squared is 0.652. This explains that 65% variation in y data is caused by
variation in x data.

Question 3

a. Correlation for dependent and independent variables

The correlation coefficient indicates how strong the relationship is between two variables.
Correlation coefficient that is positive indicates a perfectly positive association between two
variables. Therefore, as the factor X increases, there weill an an increase in factor Y as well.
Similarly, if value of factor X decreases, there will be a decrease in value of factor Y as well
(Sethi, 2015).

In terms of exchange rate for USD, the value obtained for correlation between the time and the
exchange rate is 4.225. Therefore, an increase in time by 4.225 will result in an increase in USD
exchange rate by 4.225 as well. On the other hand, the value of correlation obtained for
association between time and GBP exchange rate is 5.0839. Hence, an increase in time by 5.0839
will lead to increase in GBP exchange rate by 5.0839 as well.

b. Existence of linear relationship

From the t-test, it can be seen that the value obtained for mean in terms of USD exchange rate is
4.185803. On the other hand, the value of mean obtained for GBP exchange rate is 5.235751. On
the other hand, the value of variance obtained for USD exchange rate is 8.7289E-05 and that for
GBP exchange rate is obtained as 0.010831. In addition to this, the t stat value is derived as -
62.455049.

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Question 4

Figure 3: Bar chart for the variables

(Source: Created by author)

The above bar chart compares the different values obtained for USD exchange rate and GBP
exchange rate. It can be seen that the correlation value for GBP exchange rate is greater than that
of USD exchange rate. Similarly, the value of mean, median and mode for GBP exchange rate is
greater than that of USD exchange rate (Ibrahim and Ghani, 2015).

Conclusion

It can be concluded that the mean value obtained in this case is USD 4.186783 and the GBP
value accounted is 5.231955. It has been observed that t6his USD value is the most commonly
used exchange rate in between 3rd September to 31st October, 2019. It has been observed that the
mode value of the independent parameter is USD 4.193. It has been observed that the multiple
regression value R is 0.053368 along with R Squared value estimated at 0.002848. This implies
the correlation coefficient value. It can be observed that the R Square value is a measurement of
the closeness of data towards regression line. This has been evaluated to be a negative value of -
0.0241. F value is obtained to be 0.105683. In addition to this, the exchange rate in terms of USD
is referred by the equation of y= f(x) + c. The squared value is estimated to be 0.002 and it

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indicates a variation of 2%. Similarly, the GBP exchange rate is accounted and the R- Squared
value is accounted to 0.652. This signifies a variation of 65% in the y data range.

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Reference list

Bnm.gov.my (2019), Exchange Rates, Retrieved on: 8th November 2019, Retrieved from:
http://www.bnm.gov.my/index.php?ch=statistic&pg=stats_exchangerates&lang=en&StartMth=9
&StartYr=2019&EndMth=11&EndYr=2019&sess_time=1200&pricetype=Mid&unit=rm

Chaamwe, N. and Shumba, L., 2016. ICT integrated learning: using spreadsheets as tools for e-
learning, a case of statistics in microsoft excel. International Journal of Information and
Education Technology, 6(6), pp.435-440.

Ibrahim, M.T. and Ghani, I., 2015. AN APPLICATION OF NON-LINEAR REGRESSION

ANALYSIS FOR FOOD SCIENCE DATA WITH MICROSOFT EXCEL
SOLVER. International Journal of Science, Environment and Technology, Recuperado de
http://www. ijset. net/journal/509. pdf.

Kanal, A. and Raman, A., 2016. Data Analysis And Business Modelling In Microsoft Excel
Using Analysis Tollpax. International Journal Of Computer Science And Information
Technologies, 7(5).

Sethi, A.P., 2015. Use of Excel in Statistics: Problem Solving vs Problem

Understanding. International Journal on Integrating Technology in Education, 4(4).