NORTH SOUTH UNIVERSITY

Center of Excellence in higher Education

The first private university in Bangladesh
School of Business and Economics
Department of Management
Mid I Assignment (25 marks)
Course: BUS 173 (Applied Statistics)

Q1. A psychologist claims that the mean age at which children start walking is 20 months. ZkH3 wanted to
check if this claim is true. He took a random sample of 20 children and found that the mean age at which
these children started walking was 18 months with a standard deviation of 4 months. It is known that the 6
ages at which all children start walking are approximately normally distributed. Test that the mean age
at which all children start walking is less than 20 months at 5% level of significance.

Q2. A company wanted to know if attending a course on “how to be a successful salesperson” can increase
the average sales of its employees. The company sent seven of its salespersons to attend this course.
The following table gives the 1-week sales of these salespersons before and after they attended this
course. 6
Before 10 16 20 11 12 28 30
After 12 22 25 12 17 25 35
Using the 5% significance level, can you conclude that the mean weekly sales for all salespersons increase
as a result of attending this course? Assume that the population of paired differences has a normal
distribution.

Q3. A 2008 survey of low- and middle-income households conducted by Demos, a liberal public group,
showed that consumers aged 65 years and older had an average credit card debt of $11,535 and
consumers in the 50- to 64-year age group had an average credit card debt of $10642 at the time of the 7
survey (USA TODAY, July 28, 2009). Suppose that these averages were based on random samples of
1000 and 1200 people for the two groups, respectively. Further assume that the population standard
deviations for the two groups were $2200 and $2500, respectively. Let μ1 and μ2 be the respective
population means for the two groups, people aged 65 years and older and people in the 50- to 64-year
age group.
(a) What is the point estimate of μ1 – μ2?
(b) Construct 98% confidence interval for μ1 – μ2 and interpret the results.
(c) What is the margin of error?
(d) Conduct the appropriate two-tailed test at 5% level of significance.

Q4. According to a Nationwide Mutual Insurance Company Driving While Distracted Survey conducted in
2008, 85% of the drivers interviewed said that they have talked on their cell phones while driving (The
New York Times, July 19, 2009). The survey included drivers aged 16 to 61 years selected from 48 states. 6
Assume that this result holds true for the 2008 population of all such drivers in the United States. In a
recent random sample of 800 drivers aged 16 to 61 years selected from the United States, 90% said that
they have talked on their cell phones while driving. Test at 5% level of significance the hypothesis that
the current percentage of such drivers who have talked on their cell phones while driving is greater than
85%.

The End.

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