Institute of Cost and Management Accountants of Bangladesh

An Assignment On TA112
Submitted by:

Name: Raduone Hossain Mahi

Registration Number: 2024100263

 Answer to the question number:01

a) Compute Math:


 =

To add fractions, they need to have the same denominator. So, we find a common denominator,
which is the least common multiple (LCM) of 3 and 4, which is 12.

We can also express this as a mixed number:

 ÷3
÷3
÷3
÷3
÷3
b) Solution:

To find the values of the given expressions, let's first solve the system of equations x+y = 5 and
xy = 6. Then, we can substitute the values of x and y into the expressions.

Given:
1. x + y = 5
2. xy = 6

We can solve for x and y by rewriting equation 1 as y=5−x and substituting it into equation 2:

Now, we can solve this quadratic equation. Factoring or using the quadratic formula will yield the
solutions for x. Since it's given that x>y, we'll choose the solution that satisfies this condition.

The quadratic factors as (x−2)(x−3)=0, so the solutions are x=2 and x=3.

Given that x>y, we take x=3 and y=2.

Now, let's find the values of the given expressions using x=3 and y=2;


So, the values of the expressions are:

 = 26
 = -20
 = 275

c) Solution:

Forming an equation for the number of passengers on the deck (x):

Given:
 Total number of passengers = 752
 Fare per head for the deck = Tk. 30
 Total fare collected = Tk. 33840

Let x be the number of passengers on the deck.

Since the fare per head for the cabin is thrice that for the deck, the fare per head for the cabin is
3×Tk.30=Tk.90.

The number of passengers in the cabin would be 752−x.

Now, we can form an equation for the total fare collected:

30x+90(752−x)=33840

o Solving the equation to find the value of x (number of passengers on the deck):

So, the number of passengers on the deck is 564.

o Finding the number of passengers in the cabin:

The number of passengers in the cabin would be:

752−564=188

So, the number of passengers in the cabin is 188.

o Finding the fare per head for the cabin:

Given:
Total number of passengers = 752
Fare per head for the deck = Tk. 30
Total fare collected = Tk. 33840

Let x be the number of passengers on the deck.

Since the fare per head for the cabin is thrice that for the deck, the fare per head for the cabin
is = 3×Tk.30=Tk.90.

In summary:
Number of passengers on the deck: 564
Number of passengers in the cabin: 188
Fare per head for the cabin: Tk. 90
 Answer to the question number: 02

a) Solution:

Let's denote the number of students standing behind Zakir as x.

According to the given conditions:

o There are four more students standing in front of Zakir than the number of students standing

behind him, which means the number of students in front of Zakir is x+4.

o The total number of students in the queue is three times the number of students standing behind

Zakir, which means the total number of students is 3x.

Now, we can form an equation based on these conditions:

x+(x+4)+x=3x
Let's solve for x:

3x+4=3x

4=3x−3x

4=0
This equation is not possible. It means there's an error in the problem statement or it's not solvable with
the given information.

It seems there's a contradiction in the problem statement because it leads to an impossible equation.
 b) Solution:

To find the gross earnings of the person, we'll work backward from the tax paid to determine the taxable
amount:

Given:

Tax-free threshold: Tk. 250,000

Tax rate: 15%

Total tax paid: Tk. 75,000

Calculate Taxable Amount:

The tax paid can be considered as 15% of the earnings above Tk. 250,000. Let's denote the taxable
amount above Tk. 250,000 as x.

So, the equation would be:

Solving for x:

Calculate Gross Earnings:

The gross earnings are the sum of the taxable amount and the tax-free threshold.

Gross Earnings= Taxable Amount + Tax-free Threshold

=500,000+250,000

=750,000

Therefore, the person had Tk. 750,000 gross earnings.

 c) Solution:

To find the percentage price change in year 3, we need to calculate the difference between the selling
price at the end of the third year and the selling price at the end of the second year, and then express this
difference as a percentage of the selling price at the end of the second year.

Given:

 Initial selling price of product TS: $30

 Price increase at the end of the first year: 5%
 Price increase at the end of the second year: 6%
 Selling price at the end of the third year: $35.73

Let's break down the calculation step by step:

Calculate the selling price at the end of the second year:

Selling price at the end of the second year

= Initial selling price × ( 1 + first year increase ) × ( 1 + second year increase )

= 30×(1+0.05)×(1+0.06)

= 30×1.05×1.06

= 30×1.113

= 33.39

Calculate the percentage price change in year 3:

Percentage price change in year 3:

Therefore, the percentage price change in year 3 is approximately 7.01%.

d) Solution:

Let's solve each inequality step by step:


(add 3 to both sides)

So, y can take any value less than 8.


(distribute 3)
(add 6 to both sides)

(Divide both sides by 3)

So, x can take any value less than 4.

 3x−2>2x−1
3x−2x−2>−1
x−2>−1
x−2+2>−1+2
x>1

So, x can take any value greater than 1.

In summary:

 y<8
 x<4
 x>1
 Answer to the question number: 03

a) Solution:

To find the Cartesian product of sets, we pair each element of the first set with each element of the second
set.

Given:

A={1,2,3,4,5}

B={2,4}

C={1,3,5}

Let's find the Cartesian products:

I. × B:
× B= {(a,b) | a ∈ A b ∈B

A ×B = {(1,2),(1,4),(2,2),(2,4),(3,2),(3,4),(4,2),(4,4),(5,2),(5,4)}

II. B×C:
B×C={(b,c)∣b∈B,c∈C}
B×C={(2,1),(2,3),(2,5),(4,1),(4,3),(4,5)}

III. C×A:
C×A={(c,a)∣c∈C,a∈A}
C×A={(1,1),(1,2),(1,3),(1,4),(1,5),(3,1),(3,2),(3,3),(3,4),(3,5),(5,1),(5,2),(5,3),(5,4),(5,5)}

So, the Cartesian products are:

(i)A×B={(1,2),(1,4),(2,2),(2,4),(3,2),(3,4),(4,2),(4,4),(5,2),(5,4)}

(ii)B×C={(2,1),(2,3),(2,5),(4,1),(4,3),(4,5)}B×C={(2,1),(2,3),(2,5),(4,1),(4,3),(4,5)}

(iii)C×A={(1,1),(1,2),(1,3),(1,4),(1,5),(3,1),(3,2),(3,3),(3,4),(3,5),(5,1),(5,2),(5,3),(5,4),(5,5)}
 b) Solution:

To find the answers to the questions, we'll use the principles of set theory and set operations.

Let's define the sets:

 S: Set of students studying Spanish

 G: Set of students studying German
 F: Set of students studying French

Given:

Total number of students surveyed: 100

Number of students studying Spanish (|S|): 28

Number of students studying German (|G|): 30

Number of students studying French (|F|): 42

Number of students studying Spanish and French (|S ∩ F|): 10

Number of students studying Spanish and German (|S ∩ G|): 8

Number of students studying German and French (|G ∩ F|): 5

Number of students studying all three languages (|S ∩ G ∩ F|): 3

Survey of Students:

Students took Spanish: 28 + 10 + 8 + 3 = 49

Students took German and Spanish but not French: 8

Students took French but not Spanish: 42 – 10 = 32

Using the principle of inclusion-exclusion, we can find the number of students taking each combination of
languages.
 c) Solution:

To prove that the study results are not correct, we'll use the principle of inclusion-exclusion and
compare the total number of consumers who liked each product individually with the total
number of consumers who liked all three products combined.

Let’s define the sets:

 A: Set of consumers who liked product A
 B: Set of consumers who liked product B
 C: Set of consumers who liked product C

Given:

Total number of consumers: 20,000

∣A∣=7420: Number of consumers who liked product A

∣B∣=6230: Number of consumers who liked product B

∣C∣=5980: Number of consumers who liked product C

∣A∩B∩C∣=1500: Number of consumers who liked all three products

∣A∩B∣=2580: Number of consumers who liked both products A and B

∣A∩C∣=1200: Number of consumers who liked both products A and C

∣B∩C∣=1950: Number of consumers who liked both products B and C

We'll use the principle of inclusion-exclusion to find the total number of consumers who liked at least
one of the products. According to the principle of inclusion-exclusion:

∣A∪B∪C∣=∣A∣+∣B∣+∣C∣−∣A∩B∣−∣A∩C∣−∣B∩C∣+∣A∩B∩C∣

Let's calculate ∣A∪B∪C∣:

∣A∪B∪C∣=7420+6230+5980−2580−1200−1950+1500

= 20,000

Since ∣A∪B∪C∣=20,000, this implies that every consumer in the survey liked at least one of the products
A, B, or C. However, this contradicts the total number of consumers given in the problem statement,
which is 20,000.

Therefore, the study results are not correct.

d) Solution:

To draw the Venn diagram representing the sets A, B, and C, we'll use circles to represent each
set and place them within a rectangle representing the universal set U. We'll place the elements of
each set in the appropriate region of the diagram-

Given Sets:
A = {1,2,3,4}
B = {3,4,5,6}
C = {4,5,6,8}
U = {1,2,3,4,5,6,7,8}

Let's start by drawing the rectangle representing the universal set U:

U= {1,2,3,4,5,6,7,8,9}

Now, we'll draw circles to represent sets A, B, and C within this rectangle. We'll place the

elements of each set in the appropriate region of the Venn diagram:

 U

A
1 2 9

B 5 6 8 C
7

Venn Diagram

In the Venn diagram:

 Set A is represented by the circle on the left, containing elements 1, 2, 3, and 4.

 Set B is represented by the circle in the middle, containing elements 3, 4, 5, and 6.
 Set C is represented by the circle on the right, containing elements 4, 5, 6, and 8.

The overlapping regions show the elements common to the corresponding sets.
 Answer to the question number: 04

(a) How long will it take money to treble at 12% interest compounded quarterly?

Solution:

Compound interest formula: A=P×

Where:

A is the final amount (in this case, 3 times the initial amount)

P is the principal amount (initial amount)

r is the annual interest rate (in decimal form)

n is the number of times the interest is compounded per year

t is the time (in years)

We need to solve for t. Given:

A=3P (since the money needs to treble)

r=0.12 (12% interest rate)

n=4 (interest compounded quarterly)

We have:
4t =

t=

t ≈

t ≈

t ≈

t ≈ 8.998 (rounded)
Therefore, it will take approximately 9 years for the money to treble at 12% interest compounded
quarterly.
 (b ) In how many ways can 4 men and 3 women be arranged at a round table if the 3 women (i) never
sit together, (ii) always sit together?

Solution:

I. The number of arrangements in which the women don’t sit together can be obtained by
subtracting the total number of arrangement, the number of arrangements in which the women
can be together.
Since the total number of arrangements is 7!
The number of arrangements where 3 women can sit together is 5! × 3!
Therefore, the number of arrangements 3 women do not sir together= 7!-5! × 3!
= 5! (7 ×6 - 3 ×2)
= 5! (42-6)
= 120×3
= 4320 (Answer)

II. Since, the women always sit together

So, they can be arranged in (4+1)! ×3! Ways = 5! × 3!

= 120 × 6
= 720 (Answer)
 Answer to the question number: 05

a. Solution:
To find the rate of interest and the sum invested, we can use the formula for compound interest:

Where:
A is the amount at the end of the investment period
P is the principal amount (initial investment)
r is the annual interest rate (in percentage)
n is the number of years

Given:
At the end of the 2nd year, the amount is Tk. 21,632
At the end of the 3rd year, the amount is Tk. 22,497.28

Let's denote:
A 2 as the amount at the end of the 2nd year (Tk. 21,632)
A 3 as the amount at the end of the 3rd year (Tk. 22,497.28)
P as the principal amount (initial investment)
r as the annual interest rate
n as the number of years

From the given data, we have:

Now, we equate the expressions for P from both equations and solve for r:

A
A
A
 A
A
A
A
Once we find the value of r, we can substitute it into any of the equations for P to find the principal
amount.

The negative value indicates a decrease, which is not possible for compound interest. So, let's take the
absolute value:

r=∣−3.864∣

r=3.864

Now, let's use this value of r to find P using either of the equations for P. Let's use the equation for A 2:
:

P ≈ 20063.842

Therefore, the principal amount (sum invested) is approximately Tk. 20,063.84 and the rate of interest is
approximately 3.864%.
 b. Solution:
To calculate the annual payment for the balance of Tk. 2,00,000 to be paid in 10 equal
installments with 10% interest per annum, we can use the formula for the present value of an
annuity.
The present value of an annuity formula is:

Where:
PV is the present value of the annuity (the amount of the loan)
Pmt is the annual payment
r is the interest rate per period (in decimal form)
n is the number of periods

Given:
PV=Tk.2,00,000 (the balance to be paid)
r=0.10 (10% interest per annum, so 0.10 in decimal form)
n=10 (10 equal installments)

We need to solve for Pmt.

First let’s calculate

≈2.59374

Now, let's substitute the values into the formula:

So, the annual payment for the balance of Tk. 2,00,000 to be paid in 10 equal installments with 10%
interest per annum is approximately Tk. 32,555.62.
c. Solution:

To find the sum to be invested every year at 5% p.a. compound interest for 20 years to replace the
machine, we can follow these steps:

 Present cost of the machine (initial investment) = Tk. 1,00,000

 Effective life of the machine = 20 years
 Scrap value = Tk. 5,000
 Replacement cost of the machine = 25% more than the present cost
 Interest rate = 5% p.a.
 Number of years = 20

Replacement cost = Present cost + 25% of present cost

= Tk. 1,00,000 + (25/100) * Tk. 1,00,000
= Tk. 1,00,000 + Tk. 25,000
= Tk. 1,25,000

Determine the total amount needed to replace the machine, considering the scrap value.

Total amount needed = Replacement cost - Scrap value

= Tk. 1,25,000 - Tk. 5,000
= Tk. 1,20,000

Pmt is the annual payment

PV is the present value or total amount needed (Tk. 1,20,000)
r is the interest rate per period (5% or 0.05 in decimal)
n is the number of periods (20 years)

The calculated annual payment is approximately Tk. 9,630.24.

 d. Solution:
To determine whether it is wise to invest in this project, we can calculate the Net Present Value
(NPV) of the investment. NPV helps us assess the profitability of an investment by comparing the
present value of expected cash inflows with the present value of cash outflows (initial
investment). If the NPV is positive, the investment is expected to be profitable; if negative, it may
not be wise to invest.

Initial investment (cash outflow) = Tk. 18,000

Returns per year for 5 years (cash inflows) = Tk. 5,600
Discount rate = 10%

We'll use the NPV formula:

Where,

NPV is the Net Present Value

Rt is the net cash inflow during period
r is the discount rate
t is the time period
I is the initial investment In this case, the net cash inflow (R t ) is constant over the 5-year period,
so we can simplify the NPV calculation:

NPV≈5600×3.790786769408451−18000
NPV≈21288.62−18000
NPV≈3288.62

The calculated NPV is approximately Tk. 3,288.62. Since the NPV is positive, it is wise to invest
in this project. The positive NPV indicates that the project's expected returns exceed the initial
investment, considering the discount rate

.
 Answer to the question number: 06

a. Solution:

 Skewness is a measure of the asymmetry of the probability distribution of a random variable,

indicating whether the data is symmetrically distributed around the mean.
 Skewness measures the asymmetry of the probability distribution of a random variable around its
mean, while dispersion measures the extent to which data points spread out or cluster around the
mean. Skewness focuses on the shape of the distribution, whereas dispersion focuses on the
spread or variability of the data values.
 The commonly used measures of skewness include:
 Pearson's skewness coefficient (also known as the moment coefficient of skewness).
 Fisher-Pearson coefficient of skewness.
 Bowley's coefficient of skewness.
 Median skewness.
 Karl Pearson's coefficient of skewness.
 The statement suggests that averages, measures of dispersion, and skewness play complementary
roles in providing a comprehensive understanding of a frequency distribution:

Averages: Averages, such as the mean, median, and mode, offer insights into the central
tendency of the data. They summarize where the bulk of the data points are located and provide a
single representative value. However, averages alone may not fully describe the distribution's
characteristics, especially in the presence of outliers or asymmetric distributions.

Measures of Dispersion: Measures of dispersion, such as the range, variance, and standard
deviation, quantify the spread or variability of the data points around the central tendency. They
provide information about the degree to which data points deviate from the average. A high
dispersion suggests that data points are widely spread out, while low dispersion indicates that data
points are tightly clustered around the average. Measures of dispersion complement averages by
revealing the extent of variability within the dataset.

Skewness: Skewness measures the asymmetry of the frequency distribution. It indicates whether
the distribution is symmetric or skewed to one side. Positive skewness suggests that the tail of the
distribution extends to the right, while negative skewness indicates a tail extending to the left.
Skewness provides additional information about the shape of the distribution beyond central
tendency and dispersion. It helps identify departures from symmetry and highlights the direction
and extent of skew in the distribution.

By considering averages, measures of dispersion, and skewness together, analysts gain a more
comprehensive understanding of the underlying characteristics of the frequency distribution.
Averages provide information about central tendency, measures of dispersion reveal the spread of
data points, and skewness indicates the distribution's asymmetry. Together, they paint a more
nuanced picture of the dataset, facilitating better interpretation and decision-making.
b. Solution:

 The coefficient of variation (CV) is a statistical measure that expresses the relative variability of a
dataset compared to its mean. It is calculated by dividing the standard deviation of the dataset by
the mean, and then multiplying by 100 to express the result as a percentage.

 The coefficient of variation (CV) offers several advantages over other measures of dispersion:
Unit-free comparison: Unlike measures such as the standard deviation or variance, which are in
the same units as the data, the coefficient of variation is dimensionless because it is expressed as a
percentage. This allows for easy comparison of variability across datasets with different units or
scales.
Relative measure: The CV provides a relative measure of variability, indicating the degree of
dispersion relative to the mean. This makes it particularly useful for comparing the variability of
datasets with different means. For example, a CV of 10% would signify relatively low variability
compared to a mean of 100, but relatively high variability compared to a mean of 10.

Interpretability: Because the CV is expressed as a percentage, it is easy to interpret. A CV of

20% means that the standard deviation is 20% of the mean, providing a clear understanding of the
magnitude of variability relative to the average.

Stability under transformations: The coefficient of variation remains unchanged under linear
transformations of the data, such as scaling or shifting. This property makes it robust and stable
when dealing with datasets that are transformed or normalized.

Useful for decision-making: The CV can help decision-makers assess risk and uncertainty.
Higher CV values indicate greater relative variability, which may signal increased risk or
instability in the dataset. Conversely, lower CV values suggest greater consistency or stability.

Overall, the coefficient of variation provides a simple yet informative measure of dispersion that
is particularly valuable for comparing the variability of datasets with different means or units. Its
unit-free nature, interpretability, and stability under transformations make it a versatile tool in
statistical analysis and decision-making.

 To determine whether the scores of male students exhibit greater variability compared to female
students, we can compare their coefficients of variation (CV). The coefficient of variation is
calculated as the standard deviation divided by the mean, multiplied by 100.

For male students:

Mean (male) = 3.0
Standard deviation (male) = 0.25
CV (male) = (0.25 / 3.0) * 100 ≈ 8.33%

For female students:

Mean (female) = 2.9
Standard deviation (female) = 0.25

CV (female) = (0.25 / 2.9) * 100 ≈ 8.62%

Comparing the coefficients of variation:

CV (male) = 8.33%
CV (female) = 8.62%

Since the coefficient of variation for female students (8.62%) is slightly higher than that of male
students (8.33%), it suggests that the scores of female students exhibit slightly greater variability
compared to male students. Therefore, based on the coefficient of variation, the variability in the
scores of female students appears to be slightly greater.
 Answer to the question number: 07

(a) Solution:

**Frequency Table:**

Class Interval Frequency

10-50 5
50-60 8
60-70 17
70-80 17
80-90 6
90-100 1
100-110 1

Arithmetics Mean ( )) = =7.86

(b) Solution:

Class Interval Frequency Midpoint Frequency *

Midpoint
5-10 8 7.5 60
10-15 18 12.5 225
15-20 42 17.5 735
20-25 62 22.5 1395
25-30 30 27.5 825
30-35 10 32.5 325
35-40 4 37.5 150
Total= 174 Total= 3715

Now, we can calculate the mean:

Variance (σ2) =
Variance ( )=
Variance (σ2)≈35.04
Calculate the standard deviation: Standard Deviation

Standard Deviation (σ)=

Standard Deviation (σ)≈5.92

Calculate the coefficient of variation:

Coefficient of Variation (CV)= (

Coefficient of Variation (CV)≈28.02%

So, the standard deviation is approximately 5.92 and the coefficient of variation is approximately 28.02%.

(C) Solution:

Calculate the mean (average) of heights X and Y=

Xˉ=

_Y = =69.9
Use the covariance and standard deviations to calculate the correlation coefficient (Pearson's r):

Let's perform the calculations: Step 1: Calculate the mean (average) of heights X and Y:

Xˉ= = =66.1
Yˉ= = =69.9

the covariance between X and Y:

Covariance (X , Y) =

Calculate the standard deviation of heights X and Y:

σX=

σX≈

σX≈3.58
Standard Deviation ( σ) = 5.92
correlation coefficient:: = 0.153 (Ans.)
 Answer to the question number: 08

a. Solution:

Let's analyze each statement to identify the mistakes:

Statement: "The probabilities that a certain truck driver in Dhaka city would have no, one, and two or
more accidents during the year are 0.90, 0.02, and 0.09 respectively."

Mistake: The sum of probabilities should equal 1, as these are mutually exclusive events (the driver can
have either 0, 1, or 2 or more accidents). However, the sum provided (0.90 + 0.02 + 0.09) is equal to 1.01,
which exceeds 1. Hence, there is a mistake in the calculation or reporting of probabilities.

Statement: "A stockbroker claims that the probability that a stock’s price will go up is 0.38, remain
unchanged 0.52, and go down 0.12." Mistake: Similar to the previous statement, the sum of probabilities
provided (0.38 + 0.52 + 0.12) is equal to 1.02, which exceeds 1. Again, this violates the principle of
probability, as the sum should be exactly 1. Therefore, there is an error in the assignment of probabilities.

Statement: "The probabilities that there would be no, one, two, or three rainy days next week are 0.54,
0.28, 0.14, and 0.04 respectively."

Mistake: Once more, the sum of probabilities (0.54 + 0.28 + 0.14 + 0.04) is equal to 1.00, which is
correct. However, the probabilities provided for each event should be between 0 and 1. In this case, the
probability assigned for three rainy days (0.04) is less than the probability for two rainy days (0.14),
which doesn't align with the logical order of probabilities for these events. This inconsistency suggests a
mistake in the assignment of probabilities.

In summary, the mistakes in these statements primarily arise from errors in calculating or reporting
probabilities, violating the fundamental principles of probability theory. 3 / 3
b. Solution:

Conditional Probability: Given

⚫ P(D) = 0.83 ) (probability of departure on time)(

⚫ P(A) = 0.82 ) (probability of arrival on time)(

⚫ P(D \cap A) = 0.78 ) (probability of departure and arrival on time)(a) Arrival on Time
given Departure on Time: [ P(A|D) = \frac{P(A \cap D)}{P(D)} = \frac{P(D \cap A)}{P(D)} =
\frac{0.78}{0.83} ](b) Departure on Time given Arrival on Time: [ P(D|A) = \frac{P(D \cap
A)}{P(A)} = \frac{P(D \cap A)}{P(A)} = \frac{0.78}{0.82} ]

Conditional Probability: Given

(a) Arrival on Time given Departure on Time: [ P(A|D) = \frac{P(A \cap D)}{P(D)} =
\frac{P(D \cap A)}{P(D)} = \frac{0.78}{0.83} ](b) Departure on Time given Arrival on Time:
[ P(D|A) = \frac{P(D \cap A)}{P(A)} = \frac{P(D \cap A)}{P(A)} = \frac{0.78}{0.82} ]
c. Solution:

Probability of Meteor Observations: Given:

The average number of meteors found in any 30-second interval is 1.81.To find the probability
of no meteors in a one-minute interval, we need to consider two consecutive 30-second
intervals. Since the occurrences are independent: [ P(\text{No meteors in one-minute interval})
= P(\text{No meteors in 30 seconds})
\times P(\text{No meteors in another 30 seconds}) ] [ = (1 – 1.81) \times (1 – 1.81) ]
 Answer to the question number: 09

a. Solution:
Distinction between z and t statistics
 Z-statistic: It is used when the population standard deviation (σ) is known.Z-statistic follows the
standard normal distribution with a mean of 0 and a standard deviation of 1. It is used for large
sample sizes (typically n ≥ 30).
 t-statistic: It is used when the population standard deviation (σ) is unknown and is estimated
from the sample data. T-statistic follows the t-distribution, which is similar to the normal
distribution but has heavier tails. It is used for small sample sizes (typically n < 30).similar to the
normal distribution but has heavier tails. It is used for small sample sizes (typically n < 30).

Particular quantity distinguishing these statistics: The main difference between the z and t
statistics is the use of the population standard deviation (σ) in the z-statistic and the sample
standard deviation (s) in the t-statistic.

Class of research questions suitable for testing via the z statistic: The z-statistic is appropriate
when:The population standard deviation is known.The sample size is large (typically n ≥ 30).The
sampling distribution of the sample mean is approximately normally distributed.

Characteristics of questions and data suitable for z statistic:The research questions involve large
sample sizes.The population standard deviation is known.The data follow a normal distribution
or the sample size is large enough for the central limit theorem to apply.
b. Solution:
Hypothesis Testing for Sales Compensation Plan:Null Hypothesis (H0): The average sales per
salesperson remains unchanged or does not increase due to the new compensation plan. (H0:
\mu = $8000)Alternative Hypothesis (Ha): The average sales per salesperson increases due to
the new compensation plan. (Ha: \mu > $8000)

Type I Error: Type I error occurs when the null hypothesis is rejected when it is actually true.In
this situation, it means concluding that the compensation plan increases average sales when it
actually does not.The consequence is implementing the new plan, which might lead to
unnecessary changes in the company’s policies, wasting resources, and potentially harming
salespersons’ morale.

Type II Error: Type II error occurs when the null hypothesis is not rejected when it is actually
false.In this situation, it means failing to conclude that the compensation plan increases average
sales when it actually does.The consequence is missing the opportunity to implement a
beneficial compensation plan, potentially leading to missed sales opportunities and decreased
company profitability.
 Answer to the question number: 10

a) Solution:

The calculation of index number according to different formula is below:

Commodity p0 q0 p1 q1 p1q0 p0q0 p1q1 p0q1

A 12 20 15 25 300 240 375 300
B 10 8 16 10 128 80 160 100
C 15 2 12 1 24 30 12 15
D 60 1 65 1 65 60 65 60
E 3 2 10 1 20 6 10 3
Total 537 416 622 478

a. Paasche’s Index:

b. Laspeyre's Index:
c. Fishers Index:

= 139.49
 b) Solution:

To fit a straight line trend to the given data using the method of least squares, we'll use the
following linear regression equation:

Y=aX+b
Where:

 Y represents the profit (dependent variable)

 X represents the year (independent variable)
 a represents the slope of the line
 b represents the y-intercept

We'll use the formulae to calculate the slope and y-intercept:

b=

Where:

 n is the number of data points

 and are the sums of the squares of the years and the products of the years and
profits, respectively

Given data:

Years (X) = [ 1982 , 1983 , 1984 , 1985 , 1986 , 1987 , 1988 , 1989 , 1990 ]

Let's calculate the values needed for a and b first:

n=9

= 19820

= 792

Yi = 157394

Now, let’s calculate a and b:

≈0.397

b≈−36.06

So, the equation of the trend line is approximately Y=0.397X−36.06.

Now, we'll use this equation to estimate the profit for the year 2000 (X = 2000):

Y=0.397×2000−36.06

Y≈792.94

Therefore, the estimated profit for the year 2000 is approximately Rs. 792,940 (in thousands of rupees).
The End