Undergraduate Modular Scheme Examination

Module Name: Managing Data

Module Code: BMA4003-20 Level: 4
Day and Date:
Start time: Duration:
Instructions to candidates:
 Answer the below four questions using information given in each question;
 Each question carries 25 marks;
 Each question is compulsory;
 Students need show key working and brief explanation in order to get full mark for each
question. It is not enough to get full mark for each question if only the result is
presented;
 Students are allowed to use calculators and Excel to answer these questions;
 Answers should be presented in Word document for submission;
 ONLY ONE Word file is allowed to submit for marking;
 If multiple files are submitted, ONLY the first Word file will be marked.
 You can include print screens of your excel working and formulas used.

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Question 1

Abbi is a final year student in Bath Spa University doing her dissertation. After discussing
with her supervisor, her research objective is to estimate the relationship between returns
of stocks and level of risk of stocks (i.e. standard deviation of stock returns). Abbi is using
primary data and secondary data for her research.

a. List 3 main sources to collect primary data and secondary data, respectively;

Primary Data:

 Primary data is the data which is gathered by the researcher himself.

 Primary data is original and factual and collected first handed.
 Primary data is Real time data.
 It is expensive.
 Primary data is collected in crude form.

Sources of Primary Data:

 Survey – It is the primary source of data and it is used to collect quantitative

information. A researches can do a survey and collect the data.
 Observations – It is a technique for gathering the information which involves
obtaining necessary data for measuring the variable under investigation.
 Interview – It is a technique which help us to obtain the data of motivation and
people’s reason behind his attitude.

Secondary Data:

 Secondary data is collected by someone else before and we reuse it for our
experiment.
 It is quick and easy to obtain secondary data
 Collection time is short.
 Secondary data is collected in refined form.

Sources of secondary data:

 Government publications – Government use to collect the data for survey and
we can directly take that data in use.
 Websites – Some of the websites sells the data.
 Books – We can collect the data from books.

b. Abbi collected the below data from Thomson Reuters Eikon of Tesco. How much is

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 - Arithmetic mean of the stock price?
A mean is used to calculate the central value of data.
Mean is the average of the numbers.
To calculate the mean:
Add all the numbers and then divide it by total numbers.

Arithmetic Mean = (220+224.1+…+218.8+223.9) / 13 = 2983.6 / 13 = 229.5

Arithmetic Mean = 229.5
Excel Formula = =AVERAGE(B2:B14)

- The median of the stock price?

Answer:
Median is one of the average out of mean, mode, median.
Median is the middle value of the list of numbers.
Median is middle value of a sorted list of numbers.

Median = Middle number in sorted list.

Median = 228.5

Excel Formula = MEDIAN(B2:B14)

- The monthly percentage change on 01/04/2020?

Answer:
((y2 – y1)/y1)*100
((218.8 – 228.8) / 228.8)*100 = -4.37%
Monthly Percentage Change = -4.37%
Excel Formula =(B13-B12)/B12

Date Tesco Stock Price

01/05/201
9 220.0
01/06/201
9 224.1
01/07/201
9 220.7
01/08/201
9 216.6
01/09/201
9 238.2
01/10/201
9 232.5
01/11/201
9 229.4

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 01/12/201
9 255.2
01/01/202
0 246.9
01/02/202
0 228.5
01/03/202
0 228.8
01/04/202
0 218.8
03/04/202
0 223.9

c. What is the best type of chart to represent the variable Tesco Stock Price?
Answer:
Bar chart is the best type of chart to represent the variable Tesco Stock Price.

For Showing the comparisons between categories of data we use bars and the graph
is known as bar graph. Bars can be in both way either horizontal or vertical.
Vertical bar graph: It is a bar graph which is vertical in shape.
Horizontal bar graph: It is a bar graph with horizontal in shape.
A bar graph consists of two Axis.
One axis is used for types of categories.
Another axis is used for Numeric values.

Types of bar graph:

1. Vertical bar graph
2. Horizontal bar graph
3. Range bar graph

1. Vertical bar graph: Vertical bar graph is used to compare between two or
more independent variables. The bars are in Vertical alignment.
2. Horizontal bar graph: Horizontal bar graph is used to compare between two
or more independent variables. The bars are in horizontal alignment.
3. Range Bar graph: Range bar graph represents a range of any independent
variable which is represented by bar.

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 d. In her dissertation, Abbi states that primary data is qualitative data. Is it correct? If
not, how would you explain to Abbi?
Answer:
No, It is not necessary that primary data is qualitative data.
Primary data and secondary data can either be qualitative or quantitative.
Quantitative data can be measured, counted, expressed using numbers whereas
Qualitative data is descriptive and conceptual.
Examples:
Qualitative data – Colour of eyes, softness of skin.
Quantitative data – Grades of students, Number of pens, etc.

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Question 2

Mike is a first year university student who is trying to understand his financial situation.
Mike currently lives 1.5 miles away from campus. He works part time in a retail centre that
pays him £800 per month. Mike saves £200 out of the part time job pay for his further
education plan.

a. As to the below Travel Expenses table published by the Students’ Union, 185
students were randomly selected to help understand the travel expenses and
distance to campus. What’s the probability for Mike to spend over £10 on journeys
to campus?

Answer:
Probability = Favourable outcomes / Total outcomes
Favourable outcomes = 19
Total outcomes = 185
Probability = 19 / 185 = 0.1027 ~ 10.3%

Probability = 0.103 = 10.3%

Distance to Campus (miles)

Amount spent, 0.1 to 0.25 0.26 to 1.0 Over 1.0 Total

£

0 – 4.99 35 26 10 71

5.00 – 9.99 18 39 20 77

10.00+ 4 14 19 37

Total 57 79 49 185

b. How much is the frequency for students living over 1 mile away from the campus?
Answer:
Frequency = Number of students living over 1 miles
Frequency = 10 + 20 + 19
Frequency = 49

c. As to the category of Amount Spent, £, what is the modal group?

Answer:
Modal Group = Maximum Frequency Group

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 Maximum Frequency = 77
Modal Group = (5.00 – 9.99)

d. Assuming Mike is saving the same amount per month in the next 3 years. How much
does Mike get for his saving after 3 years, if his saving account pays simple interest
rate 3% per annum?
Answer:
Simple interest:
By principal if we calculate the daily interest rate it is called simple interest rate.
Mike saving = 200
N=3
Simple interest(r) = 0.03

Formula:
Amount = PV(1 + N*r)
Amount = 200(1 + 3*0.03)
Amount = 218

Mike will get 218 for his saving after 3 years.

e. Assuming Mike is saving the same amount per month in the next 3 years. How much
does Mike get for his saving after 3 years, if his saving account pays compound
interest rate 3% per annum?
Answer:
Compound interest = It is also known as interest on interest. Compound interest is
the addition of interest to the principal sum of a loan or deposit.

N=3
Compound interest(r) = 0.03
PV = 200

Formula:
Amount = PV(1 + r)n
Amount = 200(1 + 0.03)3
Amount = 218.5454

Mike will get 218.5454 for his saving after 3 years.

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8
Question 3

After post-graduate study, Mike found a job as HR analyst in London. The company is
currently recruiting Chief Marketing Officer. The HR department recently sent out a
knowledge test to the applicants after the initial CV screening. At this stage of selection, the
company does not invite the lowest scoring 30% back for the next face-to-face interview.
According to the historical data, the test scores on this test are normally distributed and has
a mean of 70 with standard deviation of 10.

a. What mark (to the nearest whole number) must a candidate achieve in order to
secure an interview?
P(Z < x) = 0.30
P(Z < -0.524 ) = 0.30 {From excel}
-0.524 = (X - mean) / Standard deviation
-0.524 = (X - 70)10
X = 64.76
X = 65 {Nearest whole number}

b. How much is the 95% confidence interval for the test scores?
95% confidence interval:
Mean = 70
Sd = 10
Alpha = 0.05
As the sample size is not given we assume sample size = 50

Confidence interval = (67.228, 72.772)

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 Excel Formula =CONFIDENCE(alpha,standard_dev,size)

=CONFIDENCE(B5,B3,B4)
(7 marks)

c. The company offers free buffet lunch for candidates attending the interview. As a
HR analyst, Mike is asked to estimate the amount of salad to order for the interview
day. Sampling suggests that the amount of salad taken by each candidate distributes
as the below diagram. What is the distribution as described and probability density
function of the distribution in the diagram? What is the probability of the blue area
in the diagram?

What is the distribution as described?

Uniform Distribution is described.

Probability density function:

P(x) = 1/(b-a)

P(x) = 1 / (24-9)

P(x) = 1/15 , x ∈ [9, 24]

0 , otherwise

What is the probability of the blue area in the diagram?

P(18 < X < 24) = (24 - 18) / (24 - 9) = 0.40

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 (15 marks)

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Question 4

The below data represent the advertising expenditure and sales of Little Liu Ltd from
year 2008 to 2017.

Table: Advertising Expenditure vs. Sales from 2008 to 2017

Advert.
Year Expenditure Sales
(x, £000) (y, £000)
2008 8 30
2009 12 40
2010 11 29
2011 5 29
2012 14 43
2013 3 17
2014 6 20
2015 8 30
2016 4 22
2017 9 40
Total 80 300

Figure: Scatter Diagram of Advertising Expenditure and Sales with Trend line

50
45
43
40 40 40
35
30 29 30 29
Sales £000

25
22
20 20
17
15
10
5
0
2 4 6 8 10 12 14 16
Advertising Expenditure £000

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 a. What is the statistical relationship shown in the Figure and list out 3 characteristics
of this relationship?
It is strong linear positive relationship between the two variables.
All the points are falling nearly along the straight line.
The high values corresponding to high values and the low values corresponding to
low values.

Three Characteristics:
1. Form: It is LINEAR form.
2. Direction: It is POSITIVE direction.
3. Strength: Strong linear Association.

(4 marks)

b. Work out the values of parameters of the relationship shown in the Figure (i.e. work
out the equation of the relationship).

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 Sales=13.1034+2.1121AdvertExpenditure

Y = 13.1034 + 2.1121X

With Help of excel:

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 Scatter Plot:
The representation of scatter plot is shown by dots on a graphic which represents two
different numeric variables. The main aim of scatter diagram is to find the relationship
between independent variable and dependent variable. Each dot’s position on the vertical
and horizontal axis depict the individual data point value. Association between independent
variable and dependent variable id found by the help of scatter diagram.

Different Types of scatter diagrams:

i) Positive correlation between two independent and dependent variables.
ii) Negative correlation between two independent and dependent variables.
iii) None correlation between two independent and dependent variables.

Positive correlation:
Positive correlation is a relationship between an independent variable and an dependent
variable in which move in same direction.
In other word, If an independent variable increases the dependent variable also increases
and vice versa.
A perfect positive correlation value is +1.

Negative correlation:
Negative correlation is a relationship between an independent variable and an dependent
variable in which if one variable increases other decreases and vice versa.
In other words, If one variable decreases other will increase and if one variable increases
other must decrease.
A perfect negative correlation value is -1.

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 No correlation:
When correlation value become 0 and there is no relation between an independent variable
and dependent variable.

(10 marks)

c. Explain the relationship and make recommendation to Little Liu Ltd based on the
information given.

Correlation coefficient:

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 R = 0.857

With the Help of excel:

Regression Statistics
0.8573354
Multiple R 07
0.7350240
R Square 01
0.7019020
Adjusted R Square 01
Standard Error 4.8288599
Observations 10

Recommendations:

Correlation coefficient values differ between the range -1 to +1.

If our correlation coefficient comes greater than +1 or less than -1 then there is an
error in calculations.

A correlation coefficient -1 shows a perfect negative correlation.

A correlation coefficient +1 shows a perfect positive correlation.

As correlation coefficient = 0.857 Mean it is a strong positive correlation and he is

copping up with sales and expenditures.

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