Faculty of Commerce and Law

Quantitative Techniques
COQT111
Examination B – June 2017

Internal Examiner: Jotham Nzombe

External Examiner: Zack Besong
Total Marks: 100
Duration: 3 Hours
Subminimum: 40%
Section A: Basic Theory & Exploratory Data Analysis 30 Marks
Section B: Probability 18 Marks
Section C: Hypothesis Testing 26 Marks
Section D: Regression analysis and Index Number 26 Marks

Instructions to Candidates:
1. Read each question carefully.
2. You must answer ALL sections.
3. Answer all questions in the answer book provided.
4. Where rounding is necessary, answers should all be rounded off correct to three decimal
places unless if the question specifies.
5. All rough work should be done in the back of the answer book and indicated as such.
6. This examination paper should not be removed from the examination venue.
7. Students will require a scientific calculator for the examination.

NB This examination paper consists of 8 pages

This examination contributes 60% towards the final mark.

EXAM COQT111 June 2017 Page 1 of 9

Pearson Institute of Higher Education
Formerly Midrand Graduate Institute
Section A
Basic Theory & Exploratory Data Analysis 20 Marks
Answer the following questions in your answer book.
Question 1 [20]
The following 25 measurement represent the number of business trips taken annually by a sample
of 25 claim adjusters of an insurance company:
2 17 33 10 12
8 27 8 5 28
16 18 10 12 9
15 22 18 28 24
12 17 15 21 38

Determine the following for this data:

1.1. The mean number of business trips. (3)
1.2. The median number of business trips. (2)
1.3. The standard deviation of the 25 measurements. (5)
1.4. Make use of the value obtained for the mean, median and standard deviation and calculate
the Pearson measure of skewness (SKp). Comment on your answer. (3)
1.5. State three advantages of using a sample instead of a population when carrying out a
survey. (3)
1.6. State two disadvantages of using primary data (4)

SUBTOTAL: [20]

EXAM COQT111 June 2017 Page 2 of 9

Pearson Institute of Higher Education
Formerly Midrand Graduate Institute
Section B
Probability 15 Marks
Answer the following questions in your answer book.

Question 2 [15]
2.1. State five properties of normal distribution (5)
2.2. If a shop sells five shirts every two days, then;
2.2.1. what is the probability of selling three shirts today? (3)
2.2.2. what is the probability that the shop will sell 2 shirts in one day if the average sales per two-
day period increased to six? (4)
2.3. A manufacturer of metal component finds that on the average, 12% of the company’s
manufactured units are rejected because they are either oversize or undersize.
2.3.1. What is the probability that a batch of 11 units manufactured will contain no reject at all?
(2)
2.3.2. What is the probability that the entire batch of 23 units will be rejected? (3)
2.4. If a call centre receives 6 calls on average in every 20minutes, what is the probability of
receiving more than 2 calls in 10 minutes? (5)

SUBTOTAL: [15]

EXAM COQT111 June 2017 Page 3 of 9

Pearson Institute of Higher Education
Formerly Midrand Graduate Institute
Section C
Hypothesis Testing 35 Marks
Answer the following questions in your answer book.
Question 3 [10]
A car manufacturer wishes to test whether or not there is any preference amongst buyers for cars
of different colours. The manufacturer intends to limit his range of colours to only three, i.e., red,
blue and black. Market research survey of 150 potential buyers is conducted. The survey reveals
that 48 favour red, 62 favour blue and only 40 favour black coloured cars. Do the survey results
indicate significant differences in preferences? Test at the 5% level of significance. [Hint: Use 5,991
as the critical value]

Question 4 [15]
4.1. Study the following information and answer Questions 5.1.1. and 5.1.2.
Given a sample of 𝑛1 = 40 from a population with standard deviation 𝜎1 = 20, and an
independent sample of size 𝑛2 = 50 from another population with a known standard
deviation 𝜎2 = 10.
4.1.1. What is the value of 𝑍𝑆𝑡𝑎𝑡 when testing for the difference in two population means if 𝑥̅1 = 72
and 𝑥̅2 = 66? (3)
4.1.2. What critical values of 𝑍 will lead to rejection of the Null hypothesis, H0? (2)
4.2. One-litre milk cartons are advertised to contain 1𝑙 litre of milk. To test this claim, a random
sample of 20 one-litre cartons was selected and the contents were accurately measured by
the South African Bureau of Standards (SABS) from which it was found that the average fill
was 0.982𝑙 with a sample standard deviation of 0.068𝑙. Assume that the fill of one-litre milk
cartons is normally distributed, conduct a hypothesis test at 𝛼 = 5% on the above claim.
Follow the procedure below:
4.2.1. Define the hypothesis to be tested (2)
4.2.2. State the decision rule (2)
4.2.3. Calculate the test statistic (4)
4.2.4. Make a conclusion on your results [Use 𝑡𝑠𝑡𝑎𝑡 = 1.729] (2)

EXAM COQT111 June 2017 Page 4 of 9

Pearson Institute of Higher Education
Formerly Midrand Graduate Institute
Question 5 [10]
A survey amongst a random sample of 250 male and female respondents was conducted into their
music listening preferences. Each respondent was asked whether they enjoyed listening to jazz.
Of the 140 males surveyed, 46 answered ‘YES’. Of the 110 female respondents, 89 answered
‘NO’. By following the hypothesis procedure, test if there is a statistical evidence at 5% level of
significance that males and females equally enjoy listening to jazz? What conclusion can be
reached? (10)

SUBTOTAL: [35]

EXAM COQT111 June 2017 Page 5 of 9

Pearson Institute of Higher Education
Formerly Midrand Graduate Institute
Section D
Regression analysis and Index Number 25 Marks
Answer the following questions in your answer book.
Question 6 [25]
6.1. Some measurements of the volume (in cubic centimeter, cc) of a casting at seven different
temperatures (in degrees Celsius) of the casting are shown below.
Temperature (𝑡) 18 19 20 21 22 23 24
Volume (𝑣) 10.10 10.80 11.45 12.18 12.80 13.35 15.90

6.1.1. Estimate the simple linear regression equation between the two variables, 𝑡 and 𝑣, in the
table. (8)
6.1.2. Compute the Pearson correlation coefficient between 𝑣 and 𝑡. (7)
6.1.3. What temperature level can achieve a volume of 13 cc? (2)

6.2. Consider the following data regarding the price changes of motorcycles.
2010 2011
Motorcycle
Unit price Quantity sold Unit price Quantity sold
model
(R1000s) (R1000s)
A 25 10 30 7
B 15 55 19 58
C 12 32 14 40

Calculate the composite quantity index for 2011 with 2010 as the base period using Paasche
weighted aggregates method. (8)

SUBTOTAL: [25]

TOTAL: [100]

EXAM COQT111 June 2017 Page 6 of 9

Pearson Institute of Higher Education
Formerly Midrand Graduate Institute
 APPENDIX

STATISTICAL FORMULAE SHEET

1. Measures of Central Position

x f x
x x
n n
n 
c  f ()
c( f m  f m1 ) 2 
Mo  Omo  M e  Ome 
2 f m  f m 1  f m  1 f me

2. Measures of Dispersion

R  xmax  xmin
R  Upper Class Boundary(Highest Class)  Lower Class Boundary(Lowest Class)

s
 (x  x) 2

s 2

 f (x  x) 2

n 1 n 1

 x 2  nx 2  fx 2  nx 2
S 
2
s 
2
n 1 n 1
3x  M e  S
Sk P  CV   100%
S x
Q3  Q2   Q2  Q1 
Sk B 
Q3  Q1 

3. Probability

r P( A  B)  P( A)  P( B)
P A  when A and B are independent.
n
P A  B 
P A  B  P A  P B  P A  B P A/ B  
P B 

n! n!
n Pr  n Cr 
n  r ! r ! n  r  !

4. Probability Distributions

EXAM COQT111 June 2017 Page 7 of 9

Pearson Institute of Higher Education
Formerly Midrand Graduate Institute
 e a a x ,
Px  n C r p x (1  p) n x  , x  0,1,2,3,, n. P x   x  0,1,2,3,
x!
where   a ,   a .
where µ = np,   np(1  p)

x
z


5. Confidence Intervals

  s s
xz
n
xz
n
x t    x t
n n

p(1  p) p(1  p)  p1  p2   z p1q1 p2 q2


pz   p z n1 n2
n n

12  22 s12 s22

 x1  x2   z 
n1 n2
 x1  x2   t 
n1 n2

6. Hypothesis Testing

x x
z calc  t calc 
 s
n n

zcalc 
p
zcalc 
 x1  x2   1   2 
 1    12  22
n 
n1 n2

t calc 
 x1  x2   1   2  where s 2 
n1  1s12  n2  1s22
s2 s2 n1  n2  2

n1 n2

zcalc 
 p1  p2    1   2  where  
x1  x2
1 1 n1  n2
 1     
 n1 n2 

Hypothesis Testing cont. …

EXAM COQT111 June 2017 Page 8 of 9

Pearson Institute of Higher Education
Formerly Midrand Graduate Institute
  p1  p2   1   2   f o  f e 2
zcalc   2calc 
1 1  1   2 1   2  fe

n1 n2

7. Index Numbers

PL 
  p1  q0   100 % PP 
  p1  q1   100 %
  p0  q0    p0  q1 

QL 
p 0  q1 
 100 % QP 
  p  q   100%
1 1

p 0  q0  p  q 
1 0

8. Regression

 y b x n  xy   x  y
yˆ  a  bx where a  and b  .
n  x 2   x 
2
n

9. Linear Correlation

n  xy   x  y
r
n  x 2

  x   n  y 2   y 
2 2


EXAM COQT111 June 2017 Page 9 of 9

Pearson Institute of Higher Education
Formerly Midrand Graduate Institute