Bangladesh University of Professionals (BUP)

Department of Business Administration in Finance and Banking

MBA Program
Midterm Examination, July-December 2020
Advance Business Research Methodology (FIN5102)
Time: 1 hour, Marks: 30
Suppose a large consumer products company wants to measure the effectiveness of different types of advertising
media in the promotion of its products. Specifically, two types of advertising media are to be considered: radio
and television advertising and newspaper advertising (including the cost of discount coupons). A sample of 22
cities with approximately equal populations is selected for study during a test period of 1 month. Each is allocated
a specific expenditure level for both radio and television advertising and newspaper advertising. The sales of the
product (in thousands of dollars) and also the levels of media expenditure during the test month are recorded with
the following results:
Table A: Excel output:
Regression
Statistics
Multiple R 0.8993
R Square
Standard Error 158.9041
Observations 22
Table B: ANOVA Table
df SS MS F Significance
F
Regression 2028032.6896 1014016.3448 0.0000
Residual 479759.9014 25250.5211
Total 2507792.5909
Table C: Regression Table
Coefficients Standard t Stat P-value
Error
Intercept 156.4304 126.7579
RADIO&TV 13.0807 1.7594
NEWSPAPER 16.7953 2.9634
Based on the above results:
1. Compute the coefficient of multiple determination R 2 and interpret its meaning (Ref: Table A). [2]
2. Based on the sample and number of variables write the degrees of freedom for Regression, residual and total
(Ref: Table B) [2]
Regression________ Residual_____________ Total __________
3. Calculate the F-value. (Ref: Table B) [2]

4. Write the null and alternative hypothesis for F-test (Ref: Table B). [2]

5. What conclusion you can draw form the findings of F-test (Ref: Table B). [2]

6. Calculate the t value and p value for each components in the blank space. For p value use the Z-table. (Ref:
Table C) [3]
7. Interpret the meaning of the p-value. [2]
8. Based on the results obtained state the multiple regression equation. (Ref: Table C) [2]
9. Interpret the meaning of the slopes in this problem. (Ref: Table C) [3]
10. Predict the average sales for a city in which radio and television advertising is $20,000 and newspaper
advertising is $20,000. (Ref: Table C) [2]
11. Test each of the individual coefficients to see if they are significant at 1% level. Explain the regression
results based on the findings of t-value and p- value. (Ref: Table C) [3]
12. For comparing two sample means, which statistical test you will apply. [2]
13. Illustrates graphically how the total variation in the dependent variable (SST) is composed of RSS and SSE.
[3]