College of Business and Finance

Advanced Diploma in Accounting / Accounting & Finance / Accounting & Big Data /
Financial Planning / Postgraduate Diploma in Professional Accounting
Business Economics (Statistics)
Assignment ONE (with suggested answers)

Question 1
A survey was conducted with a sample of 15 university students for their monthly
expenses (in HK$’000) last month and were recorded in the following frequency
distribution table.

Monthly expenses (in HK$000) Frequency (f)

2.1 – 2.5 6
2.6 – 3.0 7
3.1 – 3.5 1
3.6 – 4.0 1
Total 15

a. Calculate the mean from the above frequency distribution table. (8 marks)
Monthly expenses Class Mid- Freq Cumulative fx fx2
(in HK$000) point (x) (f) freq (cf)
2.1 – 2.5 2.3 6 6 13.8 31.74
2.6 – 3.0 2.8 7 13 19.6 54.88
3.1 – 3.5 3.3 1 14 3.3 10.89
3.6 – 4.0 3.8 1 15 3.8 14.44
∑ 15 40.5 111.95

Sample mean x =
∑ fx =
40.5
= 2.7 (in HK$’000)
∑f 15
The average monthly expenses of these 15 students is 2.7 (in HK$000)

b. Find out the median from the above frequency distribution table. (8 marks)
Middle item = n+1 th item = 15+1 th item = 8th item
2 2
Median class is ‘2.6 – 3.0’

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 ( n+1 )
Median = L + −cf *w = 2.6 + 8−6 * 0.4 = 2.6 + 0.114 = 2.714 (in HK$’000)
2
7
f med
The median monthly expenses for these 15 students is 2.714 (in HK$000).

c. Find out the mode for these university students. (8 marks)

Identify the modal class: ‘2.6 – 3.0’ with highest frequency of 7
f m−f m−1 7−6 1
Mode = L + *w = 2.6 + *0.4 = 2.6 +
( f m−f m−1 ) +( f m−f m +1) ( 7−6 ) +(7−1) 1+ 6

*0.4 = 2.6 + 1 *0.4 = 2.6 + 0.057 = 2.657 (in HK$000)

7
The mode for the expenses of these university students is 2.657 (in HK$000)

d. Calculate the variance and standard deviation from this grouped data, using the
short-cut method. (12 marks)
Sample variance
2

∑ f ( x−x ) = 2 ( ∑ fx ) 2
s =
2 ∑f x −
2
n = [111.95 – ( 40.5) /15] = 111.95 – (1640.25/15) =
n−1 14 14
n−1
(111.95 – 109.35) = 2.6 = 0.186
( ¿ HK $ 000 )2
14 14

Sample standard deviation

s = √ s 2 = √ 0.186 = 0.431 (in HK$000)

The variance and standard deviation from this grouped data is 0.186 ( ¿ HK $ 000 )2
and 0.431 (in HK$000) respectively.

e. Find out the coefficient of variation for this data set. (4 marks)

Coefficient of Variation (CV) = s x 100(%)

x

CV = 0.431 * 100(%) = 0.1596* 100(%) = 15.96%

2.7
The coefficient of variation for this data set is 15.96%.

Question 2
The price and quantity consumed for the past 2 years were recorded below.
Year 2021 2022

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 Item Price (in Quantity Price (in Quantity
HK$) consumed HK$) consumed
Rice per
90 800 85 750
5kg
Spaghetti
40 1,500 38 1,600
per pack
Potato
13 600 15 640
per pack
a. Compute the unweighted aggregate price index for 2022, using 2021 as the base
year. (4 marks)

Unweighted price index =

∑ P1 x 100
∑ P0
2020: ∑ P 0 = 90 + 40 + 13 = 143
2021: ∑ P1 = 85 + 38+ 15 = 138
Unweighted aggregates price index for 2022 = 138 *100 = 96.5
143
Price in 2022 has decreased by 3.5% when compared with the price in 2021.

b. Compute the Laspeyres Price Index for 2022, using 2021 as the base year.
Interpret your answer. (8 marks)
Year 2021 2022
Item Price (in Quantity P0q0 Price (in Quantity P1q0
HK$) (P0) consumed (q0) HK$) consumed
(P1)
Rice per 72,000 68,000
90 800 85 750
5kg
Spaghetti 60,000 57,000
40 1,500 38 1,600
per pack
Potato 7,800 9,000
13 600 15 640
per pack
total 139,800 134,000

Laspeyres price index =

∑ P 1 q0 x 100
∑ P 0 q0
Laspeyres price index for 2022 = 134,000 *100 = 95.85
139,800
The price index for 2022 is 95.85 using 2021 as base year, i.e., the price in 2022 has
gone down by 4.15% when compared with the price in 2021.

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c. Compute the Paasche Price Index for 2022, using 2021 as the base year.
Interpret your answer. (8 marks)
Year 2021 2022
Item Price (in Quantity P0q1 Price (in Quantity P1q1
HK$) (P0) consumed HK$) (P1) consumed (q1)
Rice per 67,500 63,750
90 800 85 750
5kg
Spaghett 64,000 60800
i per 40 1,500 38 1,600
pack
Potato 8,320 9600
13 600 15 640
per pack
total 139,820 134,150

Paasche price index =

∑ P 1 q1 x 100
∑ P 0 q1
Paasche price index for 2022: 134,150 *100 = 95.94
139,820
The price index of 2022 is 95.94 using 2021 as base year. The price in 2022 has
decreased by 4.06% when compared with the price in 2021.

Question 3
A survey was conducted to see if the IQ score has effect on the examination results
obtained in Statistics and the following results were presented below.
IQ score Marks obtained
105 80
100 75
110 84
95 76
100 78
96 75
a. Determine which one is the independent variable and which one is the dependent
variable. (4 marks)
IQ score is the independent variable (x), and marks obtained in Statistics is
dependent variable (y).
b. Derive the linear equation by least squares method for this data set. (14 marks)
2 2
IQ score Marks obtained x y xy
(x) (y)
105 80 11025 6400 8400

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 100 75 10000 5625 7500
110 84 12100 7056 9240
95 76 9025 5776 7220
100 78 10000 6084 7800
96 75 9216 5625 7200
606 468 61366 36566 47360

Regression line equation is ^y = a + bx

a= ∑ y ∑ x 2−∑ x ∑ xy = ( 468 ) ( 61366 )−(606)( 47360)

n ∑ x 2−( ∑ x )
2
6 ( 61366 )−(606)(606)

= 28719288−28700160 = 19128 = 19.925

368196−367236 960

b = n ∑ xy−∑ x ∑ y = ( 6 ) ( 47360 )−(606)(468) = 284160−283608 = 552

n ∑ x2−( ∑ x )
2
6 ( 61366 ) −(606)(606) 368196−367236 960

= 0.575

The regression equation is ^y = 19.925 + 0.575x

c. Predict the marks obtained by a student with IQ score of 90. (2 marks)

Substitute x = 90 into the linear equation.
^y = 19.925 + 0.575 * 90 = 19.925 + 51.75 = 71.675
The predicted marks in Statistics will be 71.7 if the student is having an IQ of 90.

d. Find out the coefficient of correlation for this set of data. Interpret your answer. (8
marks)
n ∑ xy −∑ x ∑ y
r=
√[ n ∑ x −(∑ x ) ][ n ∑ y −(∑ y ) ]
2 2 2 2

(6∗47360 – 606∗468)
=
√[(6∗61366 – (606)(606))( 6∗36566 – (468)(468))]
(284160−283608)
=
√[ ( 368196−367236 ) (219396 – 219024)]
552
= = 552 = 552 = 0.924
√[(960)(372)] √357120 597.6
The coefficient of correlation is 0.924 for this data set. It represents a very strong
and direct relationship between IQ score and Statistics result.

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e. Find out the rank coefficient of correlation. Interpret your answer. (8 marks)
IQ score Marks Rx Ry d d
2

(x) obtained (y)

105 80 2 2 0 0
100 75 3.5 5.5 -2 4
110 84 1 1 0 0
95 76 6 4 2 4
100 78 3.5 3 0.5 0.25
96 75 5 5.5 -0.5 0.25
∑x = 606 ∑y = 468 ∑d = 0 ∑d 2 = 8.5
6∑ d 2
r s= 1 -
n ( n −1 )
2

= 1 – (6∗8.5) = 1 – 51 = 1 - 0.243 = 0.757

6(36−1) 210
The rank coefficient of correlation is 0.757 in this data set and represent a strong and
direct relationship between the 2 variables.

f. Find out the coefficient of determination in this data set and interpret your answer.
(4 marks)
coefficient of determination r 2 = r * r = 0.924*0.924 = 0.854
85.4% of variation in marks obtained can be explained by IQ score.

Due date:
11:00a.m., 20 June 2023 (Class A, Monday class)
11:00a.m., 23 June 2023 (Class B, Thursday class)

You are required to quote relevant formula and show the steps
when working out your answers.

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