1.

Discuss the following on MS Excel-

a) EMI Computation- EMI or Equated Monthly Installments is a fixed amount that

is paid by the borrower to the financier, on a monthly basis. This amount will
contribute to the principal loan amount and the interest applicable on the loan.
Payment of EMI is spread over the loan tenure that is opted for by the borrower.

In the Excel sheet, choose a cell and enter the following formula:

=PMT(RATE,NPER,PV,FV,TYPE)

Here,

-Rate stands for rate of interest applicable on the loan

-NPER stands for total number of monthly installments/ loan tenure
-PV stands for present value/ loan amount/ principal amount
-FV stands for future value or cash balance once last payment has been made.
This can be omitted and the value will be counted as zero (0).
-Type is zero (numerical 0) or 1 – this indicates when the payment is due. If
payment is due at the end of the period, the type will be equal to zero. If the
payment is due at the commencement of the month, then the type will be set as 1.

b) Term Loan Calculations- Asset based short-term (usually for one to five years)
loan payable in a fixed number of equal installments over the term of the loan.
Term loans are generally provided as working capital for acquiring income
producing assets (machinery, equipment, inventory) that generate the cash flows
for repayment of the loan.

So, let’s say, for example, that you want to know the length of a loan in which you
borrow $20,000 at 5 percent interest per year (0.417 percent per month) if you
make a monthly payment of $350. You can use the NPER function to figure that
out. Here’s how:

-In Excel, create the labels needed for the structure of the worksheet. Fill in the
information you already know about the loan.
- Type =NPER( into the cell where the function should be placed. A ScreenTip
reminds you of the arguments to use and their proper order.
-Click or type the cell that contains the interest rate, and then type a comma.
- Click or type the cell that contains the payment amount, and then type a comma.
-Click or type the cell that contains the loan amount, and then press Enter to
complete the formula. The closing parenthesis is automatically added for you. If
you do the example correctly, the loan term will show as –58.95187.
c) Ration Analysis of any organization- The term “Ratio Analysis” refers to the
analytical technique wherein a plethora of financial ratios is computed based on
the financial information either available in the annual reports or public domain.
The ratio analysis helps in assessing the subject company’s financial and
operational position.

For very small businesses, calculating total current assets and total current
liabilities may not be an overwhelming endeavor. As businesses grow, however,
the number and types of debts and income streams can become greatly diversified.
Microsoft Excel provides numerous free accounting templates that help to keep
track of cash flow and other profitability metrics, including the liquidity analysis
and ratios template.

Once you have determined your asset and liability totals, calculating the current
ratio in Excel is very straightforward, even without a template.

First, input your current assets and current liabilities into adjacent cells, say B3
and B4. In cell B5, input the formula "=B3/B4" to divide your assets by your
liabilities, and the calculation for the current ratio will be displayed.

d) Weighted Average Cost of Capital- The weighted average cost of capital

(WACC) is a financial metric that shows what the total cost of capital (the interest
rate paid on funds used for financing operations) is for a firm. Rather than being
dictated by a company's management, WACC is determined by external market
participants and signals the minimum return that a corporation would take in on an
existing asset base, in its effort to capture the interest of investors, creditors, and
other capital providers.

Calculating WACC is a relatively straightforward exercise. As with most financial

modelling, the most challenging aspect is obtaining the correct data with which to
plug into the model.

The following illustration exemplifies the data needed to estimate a company's

WACC:
 The after-tax cost of debt may be sourced from the debt disclosures contained in a
company's filings. As mentioned, the cost of equity is calculated with CAPM.
Total capital is calculated by adding the debt to the market value of the equity.

2. What do you understand by measures of central tendency?

Central tendency is defined as “the statistical measure that identifies a single value as
representative of an entire distribution.” It aims to provide an accurate description of
the entire data. It is the single value that is most typical/representative of the collected
data. The term “number crunching” is used to illustrate this aspect of data description.
The mean, median and mode are the three commonly used measures of central
tendency.

Generally, the central tendency of a dataset can be described using the following
measures:

Mean (Average): Represents the sum of all values in a dataset divided by the total
number of the values.
Median: The middle value in a dataset that is arranged in ascending order (from the
smallest value to the largest value). If a dataset contains an even number of values, the
median of the dataset is the mean of the two middle values.
Mode: Defines the most frequently occurring value in a dataset. In some cases, a
dataset may contain multiple modes, while some datasets may not have any mode at
all.

3. Discuss the Measures of dispersion in detail.

What is Dispersion in Statistics?

Dispersion is the state of getting dispersed or spread. Statistical dispersion means the
extent to which a numerical data is likely to vary about an average value. In other
words, dispersion helps to understand the distribution of the data.
Measures of Dispersion
In statistics, the measures of dispersion help to interpret the variability of data i.e. to
know how much homogenous or heterogeneous the data is. In simple terms, it shows
how squeezed or scattered the variable is.

There are two main types of dispersion methods in statistics which are:
-Absolute Measure of Dispersion
-Relative Measure of Dispersion

a) Absolute Measure of Dispersion

An absolute measure of dispersion contains the same unit as the original data set.
Absolute dispersion method expresses the variations in terms of the average of
deviations of observations like standard or means deviations. It includes range,
standard deviation, quartile deviation, etc.

The types of absolute measures of dispersion are:

-Range: It is simply the difference between the maximum value and the minimum
value given in a data set. Example: 1, 3,5, 6, 7 => Range = 7 -1= 6
-Variance: Deduct the mean from each data in the set then squaring each of them and
adding each square and finally dividing them by the total no of values in the data set
is the variance. Variance (σ2)=∑(X−μ)2/N
-Standard Deviation: The square root of the variance is known as the standard
deviation i.e. S.D. = √σ.
-Quartiles and Quartile Deviation: The quartiles are values that divide a list of
numbers into quarters. The quartile deviation is half of the distance between the third
and the first quartile.
-Mean and Mean Deviation: The average of numbers is known as the mean and the
arithmetic mean of the absolute deviations of the observations from a measure of
central tendency is known as the mean deviation (also called mean absolute
deviation).

b) Relative Measure of Dispersion

The relative measures of dispersion are used to compare the distribution of two or
more data sets. This measure compares values without units. Common relative
dispersion methods include:

Co-efficient of Range
Co-efficient of Variation
Co-efficient of Standard Deviation
Co-efficient of Quartile Deviation
Co-efficient of Mean Deviation
 Discuss the procedure of calculation of correlation coefficient through SPSS.

a) Enter pairs of scores in SPSS using the data editor. Enter each subject’s scores on
a single row. If you only had two variable, enter one variable in the first column
and the other variable in the second column. Once the data are entered, select
Correlate from the Analyze tab and select Bivariate from the Correlate options.
b) A dialog box will appear listing your variables. In this example, we have two
variables. Most data files would contain a range of variables. Click on the first
variable in the dialog box that you wish to include in your correlation analysis and
press the –> to move it into the Variables box. You could also double click on the
variable name to move it into the Variable box.
c) Once you have moved the two variables you wish to analyze to the Variables box,
click on OK. By default, the system has selected Pearson and two-tailed
significance.
d) Your output will appear in a separate window. The output shows Pearson’s
correlation coefficient (r=.988), the two-tailed statistical significance (.000 —
SPSS does not show values below .001. In actuality, there is always a chance of
error, so you should report the value as p<.001 if SPSS reports .000), and the
number of pairs (N=9).

4. Explain the need of hypothesis testing, also explain MS Excel functions of Z & T
Test. How we can test Hypothesis testing in the SPSS.

The need of Hypothesis testing

According to the San Jose State University Statistics Department, hypothesis testing is
one of the most important concepts in statistics because it is how you decide if
something really happened, or if certain treatments have positive effects, or if groups
differ from each other or if one variable predicts another. In short, you want to proof
if your data is statistically significant and unlikely to have occurred by chance alone.
In essence then, a hypothesis test is a test of significance.

MS Excel functions of Z & T Test

With the help of the Z-Test, we compare the means of two datasets in Excel that are
equal or not. In Excel, we have a function for Z-Test named as ZTest, where, as per
syntax, we need to have Array and X value (Hypothesized sample mean) and Sigma
value (Optional). Mostly X is considered a minimum of 95% of probability for that it
can be taken from 0 to 5. Another way of doing Z-Test is from the Data Analysis
option from the Data menu tab. There we would need 2 variable ranges, 2 variances
of each range. If Z < Z Critical then we will reject the null hypothesis.

The Z TEST function gives you the probability that the supplied hypothesized sample
mean is greater than the mean of the supplied data values.

How we can test Hypothesis testing in the SPSS

Unpaired t-test:
 a. Under ‘Variable View’ label your columns as follows:
a. Column 1= ‘Grouping Variable’ (Ex. Sex)
b. Column 2= ‘Data Variable’ (Ex. Height)
b. In ‘Data View’ enter your data as
follows:                                                                               
Dru time
g
N 2.6
N 5.1
P 3.2
 
c. Click ‘Analyze’ on the upper toolbar and highlight ‘Compare Means’
d. Click ‘Independent Samples T Test’
e. Click on your Grouping Variable (Ex. Sex) and click the arrow to put it into the
Grouping Variable box
f. Click the tab labeled ‘Define Groups’ and type in your 2 group names.  You need
to type this exactly as it appears in your data column.  Click ‘Continue’
g. Click on your Data Variable and click on the arrow to put this into the Test
Variable box
h. Click OK.

5. Explain the ANOVA testing and it’s need. Discuss the procedure for finding
solution of Chi-Square and ANOVA testing through SPSS.

ANOVA Testing

Analysis of variance (ANOVA) is an analysis tool used in statistics that splits an

observed aggregate variability found inside a data set into two parts: systematic
factors and random factors. The systematic factors have a statistical influence on the
given data set, while the random factors do not. Analysts use the ANOVA test to
determine the influence that independent variables have on the dependent variable in a
regression study.

Need for ANOVA Testing

a. The ANOVA test is the initial step in analysing factors that affect a given
data set.
b. Once the test is finished, an analyst performs additional testing on the
methodical factors that measurably contribute to the data set's
inconsistency.
c. The analyst utilizes the ANOVA test results in an f-test to generate
additional data that aligns with the proposed regression models.
d. The ANOVA test allows a comparison of more than two groups at the
same time to determine whether a relationship exists between them.
e. ANOVA formula, the F statistic (also called the F-ratio), allows for the
analysis of multiple groups of data to determine the variability between
samples and within samples.
The procedure for finding solution of Chi-Square and ANOVA testing through SPSS:

Chi-Square

1. Click on Analyse -> Descriptive Statistics -> Crosstabs

2. Drag and drop (at least) one variable into the Row(s) box, and (at least) one into
the Column(s) box
3. Click on Statistics, and select Chi-square
4. Press Continue, and then OK to do the chi square test
5. The result will appear in the SPSS output viewer.

ANOVA Testing

1. Click on Analyse -> Compare Means -> One-Way ANOVA

2. Drag and drop your independent variable into the Factor box and dependent
variable into the Dependent List box
3. Click on Post Hoc, select Tukey, and press Continue
4. Click on Options, select Homogeneity of variance test, and press Continue
5. Press the OK button, and your result will pop up in the Output viewer.