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Wednesday, July 23, 2008 

BUSINESS 
A REPORT ON ANALYSIS OF SHARE STOCK 
STATISTICS I 
(BA‐205)  PRICES OF FIVE COMPANIES 
 

 
A Report On-

Analysis of Share Prices


Of

Five Companies

Prepared for-
Tania Afroze
Assistant Professor
Business Administration Discipline
Khulna University

Prepared by-
Name ID
Abdur Rakib Akon 070305
Md Masrul Mollah 070314
Md Nazmul Huda 070323
Ahmed Ibtehaj 070324
SM Mazharul Islam 070351

Date of Submission: July 23, 2008

BBA Program
Business Administration Discipline
Khulna University
Letter of Transmittal

July 23, 2008

Tania Afroze
Assistant Professor
Business Administration Discipline
Khulna University

Dear Madam,

Here is the report on ‘Analysis of Share Prices Of Five Companies’. This is for you asked
to make a report on any topic on June 17.

As you will see, the statistical calculations we have used a variety of methods and that
resulted some conclusions about all the prices. These calculations are made by the
formulas and techniques we’ve learned through our course of ‘Business Statistics I’.

As a student of BA discipline we enjoyed to prepare this report. We tried our best to make
this report best to present.

Therefore we hope that our report will fulfill your requirements about share prices of the
five companies we’ve observed. Any short comings or mistakes are absolutely our fault
and we will be always available at any time to interpret any portion of the report.

Sincerely yours,

Abdur Rakib Akon (070305)

Md Masrul Mollah (070314)

Md Nazmul Huda (070323)


Ahmed Ibtehaj (070324)

SM Mazharul Islam (070351)

2nd Year, 1st Term


BBA Program
Business Administration Discipline
Khulna University
Acknowledgement

First we would like to thank the Almighty Allah for completing the report successfully.
And it was also a great pleasure to us to make this report. We wish to express thank to all
who helped me a lot during the making of the report.

We would like to express my gratitude and regards to our honorable course teacher and
instructor Mrs. Tania Afroze, Assistant Professor, Business Administration Discipline,
Khulna University.

It was very difficult to make such a report of statistical analysis without group work. We
are so glad that we have made it to complete this assignment. We have chosen these five
companies – Social Investment Bank Ltd., Lanka Bangla Finance Ltd., BD Autocars Ltd.,
Jamuna Oil Ltd., and Square Pharmaceuticals Ltd.

We have collected the prices of the shares from the ‘Daily Prothom-Alo’.

Finally we want to thank all who helped us to prepare this report. And again thank you
also to assign us such type of job.

V
Table of Contents

Contents Page No.


Letter of Transmittal III
Acknowledgement V

Summary of the report 01

Part 1: Introduction 01-05


Origin of the report 03
Purpose of the report 03
Scopes of the report 03
Limitations of making the report 04
Hard to find 04
Inaccuracy 04
Time Limit & Exam Time 04
Methodology 04
Sources of collecting data 04
Method of preparing the report 05

Part 2: Statistical Analysis 06-37


Business Statistics Chapter 2: Collection of Data 07
Category of data: Secondary data 07
Business Statistics Chapter 3: Presentation of Data 07
Type of data class: Geographical classified data 07
Frequency Distribution 07
Tabulation of Data 07
Type of Table 08
Diagrams 08
Business Statistics Chapter 4: Measures of Central Tendency 11
Arithmetic Mean 11
Direct Method 12
Short-cut method 13
Combined arithmetic mean 14
Median 15
Quartiles, Deciles, Percentiles 15
Mode 16
Geometric Mean 16
Harmonic Mean 17
Business Statistics Chapter 5: Measures of Variation 19
Range 19
Inerquartile range or Quartile deviation 19
Average deviation 20
Standard deviation 22
Combined Standard Deviation 24
Coefficient of variation 25
Business Statistics Chapter 7: Correlation Analysis 26
Scatter Diagram 26
Karl Pearson’s coefficient of correlation 30
Actual mean method 30
Assumed mean method 31
Probable error of coefficient correlation 32
Rank correlation coefficient 33
Business Statistics Chapter 6: Correlation Analysis 34
Regression equation 34
Regression equation using arithmetic mean 36

Part 3: Statistical Analysis 38-39


Conclusion 39

Appendix 40
Summary of the Report

Share market is like flowing river. Every time the prices of the shares are changing. We
have prepared a report which shows the statistical analysis of the share prices of five
selected companies of first seven working days of May and June. The prices list is given
below-

Date Social Lanka Bangla BD Autocars Jamuna Oil Square


Investment Finance Ltd. Ltd. Ltd. Pharmaceuticals
Bank Ltd. Ltd.
30 April 2008 341.00 115.60 202.25 265.50 4552.25
01 June 2008 361.75 175.60 190.00 210.00 5397.25
04 May 2008 338.00 121.90 203.00 263.30 4649.00
02 June 2008 357.25 181.10 191.00 206.90 5295.50
05 May 2008 335.75 127.10 196.50 264.40 4679.50
03 June 2008 369.00 182.20 190.00 204.30 5293.25
06 May 2008 336.00 131.80 199.75 263.20 4660.50
04 June 2008 431.00 191.10 191.50 201.30 5292.25
07 May 2008 334.00 135.10 196.00 261.00 4657.25
05 June 2008 414.00 210.90 190.00 204.90 5273.75
08 May 2008 335.25 137.30 203.75 260.60 4660.50
08 June 2008 414.50 205.20 187.75 201.50 5247.50
11 May 2008 330.00 136.70 207.50 256.60 4733.25
10 June 2008 399.25 195.30 181.25 221.80 5164.75
Holidays-
May 2008 - 01 (May Day), 02 (Friday), 03 (Saturday), 09 (Friday), 10 (Saturday)
June 2008 - 06 (Friday), 07 (Saturday), 09 (Budget Day)

Page | 1

 
Chapter 1 

Introduction 
 
 
 
 

   

 
Origin of the Report

Mrs. Tania Afroze, the honorable course instructor of ‘Business Statistics I’, assigned us
to prepare a report on June 17, 2008 about ‘Statistical Analysis on Five Companies of
May and June’ according to the rules we have learned through the course. So this is the
report as the result of that action.

The date of submission of this report is July 23, 2008.

Purpose of the Report

We are very much passionate to obtain educational background through practical work
besides the theoretical studies. We do not want to study only with the classroom
materials; I want to gather some practical knowledge so that it will help me in achieving
my personal objectives.

The purposes of our report are-

• To make a clear concept through making a relationship between my report writing


theoretical knowledge and my practices.

• To gather knowledge about ‘Stock Exchange’.

• To know something about how share market goes on and how a price change can
have effect on some other variables.

Scopes of the Report

We have collected data from newspaper. We got the needed information from the ‘Daily
Prothom-Alo’. But for the excess of holidays we have included a price of April 30. As the
report is calculation based we have used the secondary source to collect data. We got no
internal data to prepare this report but the secondary data we have collected was sufficient
enough to make it done. And we have used our text book ‘Business Statistics – Gupta and
Gupta’ as a guide to prepare this report.

Page | 3

 
Limitations of making the Report

We are lucky that we have completed the report successfully within this short time but we
had to face some problems in collecting the data and in making the report. We tried our
best to overcome the difficulties; Allah knows how much we could do. There were
basically 3problems.

Hard to Find

It was so tough to collect the newspaper cutting of May and June. But it we were so lucky
that we got those in collection.

Inaccuracy

The data we have collected was not so accurate. We have got the rates of the last of those
working days. But if we could manage to have the average rate of those days it would be
better for us.

Time Limit & Exam Time

It needs more time to well prepare this kind of report; but we had to prepare it within a
very short time. On the other hand now it took much time during preparatory leave for
our term final examination. We were so busy with my study. In this busyness we had to
give time for this report. This made us so confusing about the report.

Methodology

Sources of collecting data

Primary Sources

No primary sources found.

Secondary Sources

The ‘Daily Prothom-Alo’


(Share prices page)

Page | 4

 
Method of preparing the report

To prepare this report we have collected the data we needed and made the calculations we
have learned through our ‘Business Statistics I’. And finally we are submitting this report
today.

Page | 5

 
Chapter 2 

Statistical Analysis 
 
 
 
 

 
Business Statistics Chapter 2: Collection of Data
Category of Data: Secondary Data

We didn’t get any internal source of data. We have collected data from newspaper. So we
have collected data from ‘Secondary Source’.

Business Statistics Chapter 3: Presentation of Data


Type of Data Class: Geographical Classified Data

Our collected data is in a chronological order. So it can be defined as a ‘Chronological


Classified Data’. So this will be a ‘Geographical Classification’ of data type.

Frequency Distribution

Our collected data can’t be distributed in fixed frequency.

Tabulation of Data

Table 2.1: Prices of Shares (in tk.)


Date Social Lanka BD Jamuna Oil Square
Month

Investment Bangla Autocars Ltd. Pharmaceuticals


Bank Ltd. Finance Ltd. Ltd.
Ltd.
30 April 2008 341.00 115.60 202.25 265.50 4552.25
04 May 2008 338.00 121.90 203.00 263.30 4649.00
05 May 2008 335.75 127.10 196.50 264.40 4679.50
May

06 May 2008 336.00 131.80 199.75 263.20 4660.50


07 May 2008 334.00 135.10 196.00 261.00 4657.25
08 May 2008 335.25 137.30 203.75 260.60 4660.50
11 May 2008 330.00 136.70 207.50 256.60 4733.25
01 June 2008 361.75 175.60 190.00 210.00 5397.25
02 June 2008 357.25 181.10 191.00 206.90 5295.50
03 June 2008 369.00 182.20 190.00 204.30 5293.25
June

04 June 2008 431.00 191.10 191.50 201.30 5292.25


05 June 2008 414.00 210.90 190.00 204.90 5273.75
08 June 2008 414.50 205.20 187.75 201.50 5247.50
10 June 2008 399.25 195.30 181.25 221.80 5164.75

Page | 7
N.B.: May 2008 - 01 (May Day), 02 (Friday), 03 (Saturday), 09 (Friday), 10 (Saturday), June 2008 - 06
(Friday), 07 (Saturday), 09 (Budget Day) were holidays.

Type of Table

The table we have presented is a ‘Simple Table’.

Diagrams

The diagrams of the rates of the shares are given below -


N.B.: Here we calculated the prices by first seven working days.

Page | 8
Page | 9
Page | 10
As the data is not distributed in frequency we have only made ‘Bar Diagrams’. It is not
possible to draw ‘Histogram’, ‘Frequency Polygon’, or ‘Cumulative Frequency Curves or
Ogives’.

Business Statistics Chapter 4: Measures of Central Tendency


To calculate ‘Central Tendency’ of the prices of shares we got our data is not ‘Grouped
Data’; this is ‘Ungrouped Data’. So, we followed only rules of ‘Ungrouped Data’ for this
chapter.

Arithmetic Mean

We have calculated the ‘Arithmetic Mean’ in two approaches -

Page | 11
1. Direct Method
2. Indirect Method

Direct Method
N

X + X 2 + ... + X N ∑X 1
Formula: X = 1 = i =1

N N

If the subscripts are dropped, the formula becomes:

X =
∑X
N

Here,
X = Average
X = Observation
N = Number of Observations

Average of the Prices of Social Investment Bank Ltd. of May:


N

X 1 + X 2 + ... + X N ∑X 1
X = = i =1

N N
341.00 + 338.00 + 335.75 + 336.00 + 334.00 + 335.25 + 330.00
X =
7
X = 335.71

Averages:

Prices of May

Social Investment Bank Ltd. = 335.71


Lanka Bangla Finance Ltd. = 129.36
BD Autocars = 201.25
Jamuna Oil = 262.09
Square Pharmaceuticals Ltd. = 4656.04

Prices of June

Social Investment Bank Ltd. = 392.3929


Lanka Bangla Finance Ltd. = 191.6286

Page | 12
BD Autocars = 188.7857
Jamuna Oil = 207.2429
Square Pharmaceuticals Ltd. = 5280.6071

Short-cut Method

Formula: X = A+
∑d
N

Here,
X = Average
d = ( X − A) [Here, A = Assumed Mean]
N = Number of Observations

Average of the prices of Social Investment Bank Ltd. of June:

We take,
Assumed Mean, A = 400

Calculation of Average Price


X d
( Tk. ) ( X − 400)
361.75 -38.25
357.25 -42.75
369.00 -31.00
431.00 +31.00
414.00 +14.00
414.50 +14.50
399.25 -00.75
∑ d = -53.25

X = A+
∑d
N
− 53.25
X = 400 +
7
X = 392 .3929

Averages:

Averages of May

Page | 13
Social Investment Bank Ltd. = 335.71
Lanka Bangla Finance Ltd. = 129.36
BD Autocars = 201.25
Jamuna Oil = 262.09
Square Pharmaceuticals Ltd. = 4656.04

Averages of June

Social Investment Bank Ltd. = 392.3929


Lanka Bangla Finance Ltd. = 191.6286
BD Autocars = 188.7857
Jamuna Oil = 207.2429
Square Pharmaceuticals Ltd. = 5280.6071

Combined Arithmetic Mean

N1 X 1 + N 2 X 2
Formula: X 12 =
N1 + N 2

Here,
X 12 = Combined mean of the two groups.
X 1 = Arithmetic mean of the first group.
X 2 = Arithmetic mean of the second group.
N1 = Number of the observations in the first group.
N 2 = Number of the observations of the second group.

Combined Average of May and June Prices of Social Investment Bank Ltd.:

N1 X 1 + N 2 X 2
X 12 =
N1 + N 2
7 × 335.71 + 7 × 392.3929
X 12 =
7+7
X 12 = 364.0515

Averages:

Social Investment Bank Ltd. = 364.0515

Page | 14
Lanka Bangla Finance Ltd. = 160.4943
BD Autocars = 195.0179
Jamuna Oil = 234.6665
Square Pharmaceuticals Ltd. = 4968.3236

Median

N +1
Formula: Median = Size of th observation
2
7 +1
= Size of th observation
2
= Size of 4th observation

Medians:

Medians of May

Social Investment Bank Ltd. = 336.00


Lanka Bangla Finance Ltd. = 131.80
BD Autocars = 199.75
Jamuna Oil = 263.20
Square Pharmaceuticals Ltd. = 4660.50

Medians of June

Social Investment Bank Ltd. = 431.00


Lanka Bangla Finance Ltd. = 191.10
BD Autocars = 191.50
Jamuna Oil = 201.30
Square Pharmaceuticals Ltd. = 5292.25

Quartiles, Deciles, Percentiles etc.

As our data is ungrouped, we didn’t get any formula to calculate Quartiles, Deciles, or
Percentiles.

Page | 15
Mode

Modes:

Modes of May

Social Investment Bank Ltd. = No mode


Lanka Bangla Finance Ltd. = No mode
BD Autocars = No mode
Jamuna Oil = No mode
Square Pharmaceuticals Ltd. = No mode

Modes of June

Social Investment Bank Ltd. = No mode


Lanka Bangla Finance Ltd. = No mode
BD Autocars = 190.00
Jamuna Oil = No mode
Square Pharmaceuticals Ltd. = No mode

Mode is calculated by determining the value repeated most.

Geometric Mean:

Formula: G.M . = anti log


∑ log X
N

Here,
G.M . = Geometric Mean
X = Observations
N = Number of Observation

Geometric Mean of Prices Lanka Bangla Finance Ltd. of May:

Log List of Prices


Price, X log X
115.60 2.0630
121.90 2.0860
127.10 2.1041

Page | 16
131.80 2.1199
135.10 2.1307
137.30 2.1377
136.70 2.1358
∑ log X = 14.7771
14.771
G.M . = anti log
7
G.M . = anti log 2.110
G.M . = 129.1269

Geometric Means:

Geometric Means of May

Social Investment Bank Ltd. = 335.6996


Lanka Bangla Finance Ltd. = 129.1269
BD Autocars = 201.2139
Jamuna Oil = 262.0711
Square Pharmaceuticals Ltd. = 4655.7677

Geometric Means of June

Social Investment Bank Ltd. = 391.4397


Lanka Bangla Finance Ltd. = 191.2499
BD Autocars = 188.7570
Jamuna Oil = 207.1415
Square Pharmaceuticals Ltd. = 5280.2190

Harmonic Mean

N
Formula: H .M . =
⎛1⎞
∑ ⎜⎝ X ⎟⎠

Here,
H .M . = Harmonic Mean
X = Observations
N = Number of Observation

Page | 17
Harmonic Mean of Prices of Lanka Bangla Finance Ltd. of June:

1
list
X
X, 1
Price X
175.6 0.0057
181.1 0.0055
182.2 0.0055
191.1 0.0052
210.9 0.0047
205.2 0.0049
195.3 0.0051
⎛1⎞
∑ ⎜⎝ X ⎟⎠ = 0.0367

N
H .M . =
⎛1⎞
∑ ⎜⎝ X ⎟⎠
7
H .M . =
0.0367
H .M . = 190.8755

Harmonic Means:

Harmonic Means of May

Social Investment Bank Ltd. = 335.6849


Lanka Bangla Finance Ltd. = 128.8907
BD Autocars = 201.1778
Jamuna Oil = 262.0565
Square Pharmaceuticals Ltd. = 4655.4982

Harmonic Means of June

Social Investment Bank Ltd. = 390.4852


Lanka Bangla Finance Ltd. = 190.8755
BD Autocars = 188.7277
Jamuna Oil = 207.0430
Square Pharmaceuticals Ltd. = 5279.8308

Page | 18
Business Statistics Chapter 5: Measures of Variation
Range

Formula: Range = L − S
L = Largest Value
S = Smallest Value

Range of the prices of BD Autocars Ltd. of May:

Range = 207.50 – 196.00


= 11.50

Ranges:

Ranges of May

Social Investment Bank Ltd. = 11.00


Lanka Bangla Finance Ltd. = 21.70
BD Autocars = 11.50
Jamuna Oil = 8.90
Square Pharmaceuticals Ltd. = 181.00

Ranges of June

Social Investment Bank Ltd. = 73.75


Lanka Bangla Finance Ltd. = 35.30
BD Autocars = 10.25
Jamuna Oil = 20.50
Square Pharmaceuticals Ltd. = 232.50

Inerquartile Range or Quartile Deviation

Inerquartile Range or Quartile Deviation can’t be determined by ‘Ungrouped Data’.

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Average Deviation

Formula: A.D.( Med .) =


∑ | X − Med . |
N
A.D.
Coefficient of A.D.( Med .) =
Median

Here,
A.D. = Average Deviation
X = Observation
Med. = Median
N = Number of Observations

Average Deviation of the Prices of BD Autocars Ltd. of June:

Here,
Median = 191.50

Average Deviation Chart


X, | X − Med . |
Price
190 1.5
191 0.5
190 1.5
191.5 0
190 1.5
187.75 3.75
181.25 10.25
∑ | X − Med. |= 19

A.D.( Med .) =
∑ | X − Med . |
N
19
A.D.( Med .) =
7
A.D.( Med .) = 2.7142

Average Deviations:

Average Deviations of May

Social Investment Bank Ltd. = 2.2900


Lanka Bangla Finance Ltd. = 6.3571
BD Autocars = 3.5000

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Jamuna Oil = 2.1429
Square Pharmaceuticals Ltd. = 30.6786

Average Deviations of June

Social Investment Bank Ltd. = 38.6071


Lanka Bangla Finance Ltd. = 10.6571
BD Autocars = 2.7143
Jamuna Oil = 5.9429
Square Pharmaceuticals Ltd. = 42.8571

Coefficient of Average Deviation of the Prices of Jamuna Oil Ltd. of May:

Here,
A.D. = 2.1429
Median = 263.20

2.1429
∴ Coefficient of A.D.( Med .) =
263.20
= 0.0081

Coefficients of Average Deviations:

Coefficients of Average Deviations of May

Social Investment Bank Ltd. = 0.0068


Lanka Bangla Finance Ltd. = 0.0482
BD Autocars = 0.0175
Jamuna Oil = 0.0081
Square Pharmaceuticals Ltd. = 0.0066

Coefficients of Average Deviations of June

Social Investment Bank Ltd. = 0.0896


Lanka Bangla Finance Ltd. = 0.0558
BD Autocars = 0.0142
Jamuna Oil = 0.0295
Square Pharmaceuticals Ltd. = 0.0081

Page | 21
Standard Deviation

Formula: σ=
∑(X − X ) 2

; (Deviation taken from Actual Mean)


N

Here,
σ = Standard Deviation
X = Observation
X = Average
N = Number of Observations

∑d ⎛ ∑d ⎞
2 2

σ= −⎜ ⎟ ; (Deviation taken from Assumed Mean)


N ⎜ N ⎟
⎝ ⎠

Here,
σ = Standard Deviation
d= X−A
A = Assumed Mean
N = Number of Observations

Standard deviation taken from Actual Mean of the Prices of Jamuna Oil Ltd. of
June:

Here,
Average = 207.2429

Standard Deviation Chart


X, ( X − X )2
Prices
210 7.6018
206.9 0.1176
204.3 8.6604
201.3 35.3176
204.9 5.4890
201.5 32.9804
221.8 211.9104
∑ ( X − X ) 2 = 302.0771
302.0771
∴σ =
7
σ = 6.5692

Standard Deviations:

Page | 22
Standard Deviations of May

Social Investment Bank Ltd. = 3.1408


Lanka Bangla Finance Ltd. = 7.6150
BD Autocars = 3.8126
Jamuna Oil = 2.7570
Square Pharmaceuticals Ltd. = 49.8210

Standard Deviations of June

Social Investment Bank Ltd. = 27.2943


Lanka Bangla Finance Ltd. = 12.1066
BD Autocars = 3.2635
Jamuna Oil = 6.5692
Square Pharmaceuticals Ltd. = 64.0233

Standard deviation taken from Assumed Mean of the Prices of Square


Pharmaceuticals Ltd. of May:

Take,
Assumed Mean = 4660.50

Assumed Mean Chart


X, d, d2
Prices X−A
4552.25 -108.25 11718.0625
4649.00 -11.50 132.25
4679.50 19.00 361
4660.50 0.00 0
4657.25 -3.25 10.5625
4660.50 0.00 0
4733.25 72.75 5292.5625
∑ d = −31.25 ∑ d 2 = 17514.4375
17514.4375 ⎛ − 31.25 ⎞
2

∴σ = −⎜ ⎟
7 ⎝ 7 ⎠
σ = 49.9760

Standard Deviations

Standard Deviations of May

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Social Investment Bank Ltd. = 3.1408
Lanka Bangla Finance Ltd. = 7.6150
BD Autocars = 3.8126
Jamuna Oil = 2.7570
Square Pharmaceuticals Ltd. = 49.9760

Standard Deviations of June

Social Investment Bank Ltd. = 27.2943


Lanka Bangla Finance Ltd. = 12.1066
BD Autocars = 3.2635
Jamuna Oil = 6.5692
Square Pharmaceuticals Ltd. = 64.0233

Combined Standard Deviation

N 1σ 1 + N 2σ 2 + N 1 d1 + N 2 d 2
2 2 2 2
Formula: σ 12 =
N1 + N 2

Here,
N1 = Number of observations of the first group
N 2 = Number of observations of the second group
σ 1 = Standard Deviation of the first group
σ 2 = Standard Deviation of the second group
d1 = | X 1 − X 12| |
d 2 = | X 2 − X 12| |
X 1 = Average of the first group
X 2 = Average of second group
X 12 = Combined Average of the two groups

Combined Standard Deviation of the Prices of Square Pharmaceuticals Ltd.:

Here,
N1 = 7
N2 = 7
σ 1 = 49.8210

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σ 2 = 64.0233
X 12 = 5292.25
X 1 = 4656.04
X 2 = 5280.6071
d1 = 312.2836
d 2 = 312.2835

N 1σ 1 + N 2σ 2 + N 1 d1 + N 2 d 2
2 2 2 2

σ 12 =
N1 + N 2
7 × 49.8210 2 + 7 × 64.0233 2 + 7 × 312.2836 2 + 7 × 312.2835 2
σ 12 =
7+7
σ 12 = 317.5084

Combined Standard Deviations

Social Investment Bank Ltd. = 34.3607


Lanka Bangla Finance Ltd. = 32.7357
BD Autocars = 7.1717
Jamuna Oil = 27.8677
Square Pharmaceuticals Ltd. = 317.5084

Coefficient of Variation

σ
Formula: C.V . = × 100
X

Here,
C.V . = Coefficient of Variation
σ = Standard Deviation
X = Arithmetic Mean of the observations

Coefficient of Variation of the prices of Square Pharmaceuticals Ltd. of June:

Here,
σ = 64.0233
X = 5280.6071

64.0233
∴ C.V . = × 100
5280.6071
= 1.2124

Page | 25
Coefficients of Variations

Coefficients of Variations of May

Social Investment Bank Ltd. = 0.9356


Lanka Bangla Finance Ltd. = 5.8868
BD Autocars = 1.8945
Jamuna Oil = 1.0519
Square Pharmaceuticals Ltd. = 1.0700

Coefficients of Variations of June

Social Investment Bank Ltd. = 6.9559


Lanka Bangla Finance Ltd. = 6.3177
BD Autocars = 1.7287
Jamuna Oil = 3.1698
Square Pharmaceuticals Ltd. = 1.2124

Combined Coefficients of Variations (Combined Standard Deviation×100/Combined


Arithmetic Mean)

Social Investment Bank Ltd. = 9.4384


Lanka Bangla Finance Ltd. = 20.3968
BD Autocars = 3.6764
Jamuna Oil = 11.8754
Square Pharmaceuticals Ltd. = 6.3907

Business Statistics Chapter 7: Correlation Analysis


Scatter Diagram

Here the scatter diagrams of the share prices are drawn.

Page | 26
 

Page | 27
 

Page | 28
 

Page | 29
Karl Pearson’s Coefficient of Correlation

Actual Mean Method

Formula: r=
∑ ( X − X )(Y − Y )
∑ ( X − X ) ∑ (Y − Y )
2 2

The above formula can be written as:

r=
∑ xy
∑x ∑y2 2

Where, x = ( X − X ) and y = (Y − Y )

Here,
X = Observation from the first group
X = Arithmetic Mean of the first group
Y = Observation from the second group
Y = Arithmetic Mean of the second group

Calculation of Correlation Coefficient of the prices of Social Investment Bank Ltd.


(of May and June)

Take X as the prices of May and take Y as the prices of June.

Page | 30
Working
May ( X − X ), June (Y − Y ),
Prices, x2 Prices, y2 xy
Day x y
X Y
1 341.0000 +5.2900 27.9841 361.7500 -30.6429 938.9873 -162.1009
2 338.0000 +2.2900 5.2441 357.2500 -35.1429 1235.0234 -80.4772
3 335.7500 +0.0400 0.0016 369.0000 -23.3929 547.2278 -0.9357
4 336.0000 +0.2900 0.0841 431.0000 +38.6071 1490.5082 +11.1961
5 334.0000 -1.7100 2.9241 414.0000 +21.6071 466.8668 -36.9481
6 335.2500 -0.4600 0.2116 414.5000 +22.1071 488.7239 -10.1693
7 330.0000 -5.7100 32.6041 399.2500 +6.8571 47.0198 -39.1540
∑X = ∑x = ∑x 2
= ∑Y = ∑y= ∑y 2
= ∑ xy =
2350.0000 0.0300 69.0537 2746.7500 -0.0003 5214.3571 -318.5893

r=
∑ xy
∑x ∑y
2 2

− 318.5893
r=
69.0537 × 5214.3571
r = −0.5309

Correlation Coefficients between May and June Prices:

Social Investment Bank Ltd. = -0.5309


Lanka Bangla Finance Ltd. = 0.8746
BD Autocars = -0.6982
Jamuna Oil = -0.5775
Square Pharmaceuticals Ltd. = -0.9390

Assumed Mean Method

N ∑ dxd y − ∑ dx ∑ d y
Formula: r=
N ∑ d x − (∑ d x ) N ∑ d y − (∑ d y )
2 2 2 2

Here,
r = Correlation Coefficient
N = Number of Observations
dx = X − Ax
X = Observation of the first group
Ax = Assumed Mean of the first group
dy = Y − Ay
Y = Observation of the second group
Ay = Assumed Mean of the second group

Page | 31
Calculation of Correlation Coefficient of the prices of Lanka Bangla Finance Ltd.
(of May and June):

Take X as the prices of May and take Y as the prices of June.

May ( X − 131.80) June (Y − 191.10),


Worki 2 2
dxd y
ng Day
Prices, dx dx Prices, dy dy
X Y
1 115.60 -16.20 262.44 175.60 -15.50 240.25 -3982.05
2 121.90 -9.90 98.01 181.10 -10.00 100.00 -990.00
3 127.10 -4.70 22.09 182.20 -8.90 79.21 -372.287
4 131.80 0 0 191.10 0 0 0
5 135.10 +3.30 10.89 210.90 +19.80 392.04 +1293.732
6 137.30 +5.50 30.25 205.20 +14.10 198.81 +1093.455
7 136.70 +4.90 24.01 195.30 +4.20 17.64 +86.436

∑X = ∑d x = ∑d x
2
= ∑Y = ∑d y = ∑d y
2
= ∑d x dy =
905.50 -17.10 447.69 3.70 1027.95 -2780.714
1341.40

(7 × −2780.714) − (−17.10 × 3.70)


∴r =
(7 × 447.69) − (−17.10}2 (7 × 1027.95) − (3.70) 2
∴ r = −4.2949

Correlation Coefficients between May and June Prices:

Social Investment Bank Ltd. = 44.9742


Lanka Bangla Finance Ltd. = -4.2949
BD Autocars = 10.2148
Jamuna Oil = -20.2547
Square Pharmaceuticals Ltd. = -0.5551

Probable Error of Coefficient of Correlation

1− r2
Formula: P.E.r = 0.6745
N

Here,
P.E.r = Probable error of Coefficient of Correlation
r = Correlation Coefficient
N = Number of observations

Probable Error of Coefficient of Correlation of the prices of May and June of BD


Autocars Ltd.:

Page | 32
1 − (10.2148) 2
P.E.r = 0.6745 ×
7
P.E.r = −26.3457

Probable Errors of Correlation Coefficients of the share prices of May and June:

Social Investment Bank Ltd. = -515.4008


Lanka Bangla Finance Ltd. = -4.4477
BD Autocars = -26.3457
Jamuna Oil = -104.3337
Square Pharmaceuticals Ltd. = 0.1764

Rank Correlation Coefficient

6∑ D 2 6∑ D 2
Formula: R = 1− or1 −
N ( N 2 − 1) N3 − N

Here,
R = Rank Correlation Coefficient
D = R1 − R2
R1 = Rank of observation of the first group
R2 = Rank of observation of the second group
N = Number of Observations

Rank Correlation Coefficient of the prices of BD Autocars Ltd. of May and June:

Take, R1 as the Prices of May and R2 as the Prices of June

Rank for Rank for


Working ( R1 − R2 ) 2 ,
May Prices May Prices, June Prices June Prices,
Days D2
R1 R2
1 202.25 4 190.00 1 9
2 203.00 5 191.00 4 1
3 196.50 2 190.00 2 0
4 199.75 3 191.50 5 4
5 196.00 1 190.00 3 4
6 203.75 6 187.75 7 1
7 207.50 7 181.25 6 1
N = 10 ∑D 2
= 20

Page | 33
6∑ D 2
∴ R = 1−
N3 − N
20
∴ R = 1− 3
7 −7
∴ R = 0.6429

Rank Correlation Coefficients:

Social Investment Bank Ltd. = -0.5000


Lanka Bangla Finance Ltd. = 0.8929
BD Autocars = 0.6429
Jamuna Oil = 0.0000
Square Pharmaceuticals Ltd. = -0.7500

Business Statistics Chapter 8: Regression Analysis


Regression Equation

Formula:
Regression Equation of X on Y:
X = a + bY

To determine the values of a and b the following two normal equations are
to be solved simultaneously:
∑ X = Na + b∑ Y
∑ XY = a∑ Y + b∑ Y 2

Regression Equation of Y on X:
Y = a + bX

To determine the values of a and b the following two normal equations are
to be solved simultaneously:
∑ Y = Na + b∑ X
∑ XY = a∑ X + b∑ X 2

Regression Equation of the prices of Jamuna Oil Ltd.:

May Prices, X X2 June Prices, Y Y2 XY


265.50 70490.25 210.00 44100.00 55755.00
Page | 34
263.30 69326.89 206.90 42807.61 54476.77
264.40 69907.36 204.30 41738.49 54016.92
263.20 69274.24 201.30 40521.69 52982.16
261.00 68121.00 204.90 41984.01 53478.90
260.60 67912.36 201.50 40602.25 52510.90
256.60 65843.56 221.80 49195.24 56913.88

∑ X = 1834.60 ∑ X 2
= 480875.66 ∑ Y = 1450.70 ∑ Y 2
=300949.29 ∑ XY =
380134.53

From this, using the formula, we can say that-


1834.60 = 7a + 1450.70b
380134.53 = 1450.70a + 300949.29b

From these equations, we get-


a = 312.3160
b = -0.2424

Then the regression equation of the prices of May on the prices of June of Jamuna Oil
Ltd. is –
X = 312.3160 – 0.2424Y

Regression equations:

Price of May on Price of June

Social Investment Bank Ltd. → X = 359.6885 – 0.0611Y

Lanka Bangla Finance Ltd. → X = 23.9350 + 0.5504Y

BD Autocars Ltd. → X = 355.2364 – 0.8157Y

Jamuna Oil Ltd. → X = 312.3160 – 0.2424Y

Square Pharmaceuticals Ltd. → X = 8514.7970 – 0.7307Y

Price of June on Price of May

Social Investment Bank Ltd. → Y = 1941.1260 – 4.6132X


Lanka Bangla Finance Ltd. → Y = 11.7540 + 1.3905X
BD Autocars Ltd. → Y = 309.0680 – 0.5977X
Jamuna Oil Ltd. → Y = 567.8763 – 1.3760X
Square Pharmaceuticals Ltd. → Y = 10898.4480 – 1.2066X

Page | 35
Regression Equation using Arithmetic Mean

Formula: Y − Y = b yx ( X − X )
X − X = bxy (Y − Y )

Here,
X = Observation of the first group
Y = Observation of the second group
X = Arithmetic Mean of the first group
Y = Arithmetic Mean of the second group

b yx =
∑ xy and b = ∑ xy
∑ x2 ∑ y2
xy

x = X−X
y = Y −Y

Regression Equation of the prices of Square Pharmaceuticals Ltd.:

Working May June


Day Prices, X x=X−X x2 Prices, Y
y = Y −Y y2 xy

1 4552.25 -103.7860 10771.4745 5397.25 5397.25 13605.56 -12105.900


2 4649.00 -7.0357 49.5013 5295.50 5295.50 221.7972 -104.7820
3 4679.50 23.4643 550.5727 5293.25 5293.25 159.8418 296.6556
4 4660.50 4.4643 19.9298 5292.25 5292.75 135.5561 51.9770
5 4657.25 1.2143 1.4745 5273.75 5273.75 47.0204 -8.3265
6 4660.50 4.4643 19.9298 5247.50 5247.50 1096.0830 -147.8000
7 4733.25 77.2143 5962.0459 5164.75 5164.75 28688.7300 -8945.8300
Total 32592.25 0.0000 17374.9300 36964.25 0.0000 28688.73 -20963.96

Here,
X = 32592.25 and Y = 5280.6071

− 20963.96
b yx =
17374.9300
b yx = 1.2066

Then the equation of the price of June on price of May of Square Pharmaceuticals Ltd. is-
(Y − 32592.25) = 1.2066( X − 5280.6071)
Or, Y = 10898.4480 – 1.2066X

Regression equations:

Price of May on Price of June

Social Investment Bank Ltd. → X = 359.6885 – 0.0611Y

Page | 36
Lanka Bangla Finance Ltd. → X = 23.9350 + 0.5504Y

BD Autocars Ltd. → X = 355.2364 – 0.8157Y

Jamuna Oil Ltd. → X = 312.3160 – 0.2424Y

Square Pharmaceuticals Ltd. → X = 8514.7970 – 0.7307Y

Price of June on Price of May

Social Investment Bank Ltd. → Y = 1941.1260 – 4.6132X


Lanka Bangla Finance Ltd. → Y = 11.7540 + 1.3905X
BD Autocars Ltd. → Y = 309.0680 – 0.5977X
Jamuna Oil Ltd. → Y = 567.8763 – 1.3760X
Square Pharmaceuticals Ltd. → Y = 10898.4480 – 1.2066X

Page | 37
Chapter 3 

Report Ending 

 
Conclusion

It was really a tough job to complete this report without any error. But our group work made this
possible to make this without any error. We are thanking again to the Almighty, you who gave us
such an assignment and those who helped us and made this report more beautiful and complete
in information.

Page | 39
 
Appendix 
 
 
 
 
 

 
 

We have collected our all the data from newspaper. We have attached the copies of the paper
with this report.