Course Title: Business Statistics

Assignment #3: Numerical Descriptive Measures

MCQs

1. The following histogram shows the distribution of the difference between the actual and
“ideal” weights for 119 female students. Notice that percent is given on the vertical axis. Ideal
weights are responses to the question “What is your ideal weight”?
The difference = actual −ideal.

The median of the distribution is approximately

a. −10 pounds.
b. 10 pounds.
c. 30 pounds.
d. 50 pounds.

2. Most of the women in this sample felt that their actual weight was
a. about the same as their ideal weight.
b. less than their ideal weight.
c. greater than their ideal weight.
d. no more than 2 pounds different from their ideal weight.

3. . Which of the following is NOT a measure of variability?

a. Median
b. Variance
c. Standard deviation
d. Range

4. Which of the following is NOT a common measure of central tendency?

a. Mode
b. Range
c. Median
d. Mean

Assignment #3 : Descriptive statistics Page 1

Questions #6, #7 and #8 are based on the following sample of ages (in months) of 18 children at a
day care:

36, 42, 18, 32, 22, 22, 25, 29, 30, 31, 19, 24, 35, 29, 26, 36, 24, 28

5. The median age of the children is...

a. 29
b. 28.2
c. 30.5
d. 28.5
e. 31

6. The interquartile range for this data set is...

a. 8
b. 12
c. 16
d. 20
e. 24

7. The standard deviation of the age of children is...

a. 41.24
b. 11.33
c. 10.20
d. 6.42
e. 6.24

8. Chebyshev’s theorem states that the percentage of measurements in a data set that fall within
three standard deviations of their mean is
a. 75%
b. at least 75%
c. 89%
d. at least 89%

9. …………………is used to compare the variation or dispersion in two or more sets of data
even though they are measured in different units
a. Range
b. standard deviation
c. coefficient of variation
d. mean deviation

The following four boxplots provide summary information from four datasets. Please answer
questions #11, #12, #13, #14 and #15.

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 10. Which sample has the highest median?
a. Sample1
b. Sample2
c. Sample3
d. Sample4
e. None of them

11. Which sample has a median value of 2?

a. Sample1
b. Sample2
c. Sample3
d. Sample4
e. None of them

12. Which sample has outliers with low scores?

a. Sample1
b. Sample2
c. Sample3
d. Sample4
e. None of them

13. Which sample has outliers with high scores?

a. Sample1
b. Sample2
c. Sample3
d. Sample4
e. None of them

14. If mean=10, median=8 and standard deviation=6, then coefficient of skewness is ….

15. In a symmetrical distribution Q1 = 20 and median= 30. The value of Q3 is:

a. 50
b. 35
c. 40
d. 25

Exercise #1

The file FastFood contains the amount that a sample of nine customers spent for lunch ($) at
a fast-food restaurant:

4.20 5.03 5.86 6.45 7.38 7.54 8.46 8.47 9.87

a. Compute the mean and median.

b. Compute the variance, standard deviation, range, and coefficient of variation.
c. Are the data skewed? If so, how?
d. Based on the results of (a) through (c), what conclusions can you reach concerning the
amount that customers spent for lunch?
Exercise#2

Suppose that another bank branch, located in a residential area, is also concerned with the
noon-to-1 P.M. lunch hour. The waiting time, in minutes, collected from a sample of 15
customers during this hour, is contained in the file WaitingTime and listed here:

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10.49 6.68 5.64 4.08 6.17 9.91 5.47 9.66 5.90 8.02 5.79 8.73 3.82 8.01 8.35
a. Compute the mean and median.
b. Compute the variance, standard deviation, range, coefficient of variation, and Z scores. Are
there any outliers? Explain.
c. Are the data skewed? If so, how?
d. As a customer walks into the branch office during the lunch hour, he asks the branch
manager how long he can expect to wait. The branch manager replies, “Almost certainly less
than five minutes.” On the basis of the results of (a) through (c), evaluate the accuracy of this
statement.
Exercise# 3

The file SUV contains the overall miles per gallon (MPG) of 2010 small SUVs:
Source: Data extracted from “Vehicle Ratings,” Consumer Reports, April 2010, pp. 33–34.

a. Compute the first quartile the third quartile and the interquartile range.
b. List the five-number summary.
c. Construct a boxplot and describe its shape.

Exercise #4

A sample of 12 small accounting firms reveals the following numbers of professionals per
office.
7 10 9 14 11 8 5 12 8 3 13 6
a. Determine the variance.
b. Determine the standard deviation.
c. Determine the interquartile range.
d. What is the z score for the firm that has six professionals?
e. What is the coefficient of variation for this sample?

Exercise# 5

The Air Transport Association of America publishes figures on the busiest airports in
the United States. The following frequency distribution has been constructed from
these figures for a recent year. Assume these are population data.
a. Calculate the mean of these data.
b. Calculate the mode.
c. Calculate the median.
d. Calculate the variance.
e. Calculate the standard deviation.

Number of Passengers Arriving Number of

and Departing (millions) Airports
20–under 30 8
30–under 40 7
40–under 50 1
50–under 60 0
60–under 70 3
70–under 80 1

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Exercise #6

Consider a population of 1,024 mutual funds that primarily invest in large companies. You
have determined that the mean one-year total percentage return achieved by all the funds, is
8.20 and that the standard deviation, is 2.75.
a. According to the empirical rule, what percentage of these funds are expected to be within
standard deviation of the mean?
b. According to the empirical rule, what percentage of these funds are expected to be within
standard deviations of the mean?
c. According to the Chebyshev rule, what percentage of these funds are expected to be within
or standard deviations of the mean?
d. According to the Chebyshev rule, at least 93.75% of these funds are expected to have one-
year total returns between what two amounts?
Exercise #7 (Lab session)

The file CEO-Compensation includes the total compensation (in millions of $) of CEOs of
197 large public companies and the investment return in 2009. Complete the following for the
total compensation (in $).
Source: Data extracted from D. Leonard, “Bargains in the Boardroom,” The NewYork Times,
April 4, 2010, pp. BU1, BU7, BU10, BU11.
a. Compute the mean, median, first quartile, and third quartile.
b. Compute the range, interquartile range, variance, standard deviation, and coefficient of
variation.
c. Construct a boxplot. Are the data skewed? If so, how?
d. Based on the results of (a) through (c), what conclusions can you reach concerning the total
compensation (in $millions) of CEOs?
e. Compute the correlation coefficient between compensation and the investment return in
2009.
f. What conclusions can you reach from the results of (e)?

Exercise #8

Financial analysts like to use the standard deviation as a measure of risk for a stock. The
greater the deviation in a stock price over time, the more risky it is to invest in the stock.
However, the average prices of some stocks are considerably higher than the average price of
others, allowing for the potential of a greater standard deviation of price. For example, a
standard deviation of $5.00 on a $10.00 stock is considerably different from a $5.00 standard
deviation on a $40.00 stock. In this situation, a coefficient of variation might provide insight
into risk. Suppose stock X costs an average of $32.00 per share and showed a standard
deviation of $3.45 for the past 60 days. Suppose stock Y costs an average of $84.00 per share
and showed a standard deviation of $5.40 for the past 60 days. Use the coefficient of variation
to determine the variability for each stock.

Exercise #9

According to a Human Resources report, a worker in the industrial countries spends on

average 419 minutes a day on the job. Suppose the standard deviation of time spent on the job
is 27 minutes.
a. If the distribution of time spent on the job is approximately bell shaped, between what two
times would 68% of the figures be? 95%? 99.7%?

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b. If the shape of the distribution of times is unknown, approximately what percentage of the
times would be between 359 and 479 minutes?
c. Suppose a worker spent 400 minutes on the job. What would that worker’s z score be, and
what would it tell the researcher?
Exercise #10

During the 1990s, businesses were expected to show a lot of interest in Central and Eastern
European countries. As new markets began to open, American business people needed a
better understanding of the market potential there. The following are the per capita GDP
figures for eight of these European countries published by the World Almanac. Note: The per
capita GDP for the U.S. is $44,000.

Country Per Capita GDP (U.S. $)

Albania 5,700
Bulgaria 10,700
Croatia 13,400
Czech Republic 21,900
Hungary 17,600
Poland 14,300
Romania 9,100
Bosnia/Herzegovina 5,600
a. Compute the mean and standard deviation for Albania, Bulgaria, Croatia, and Czech
Republic.
b. Compute the mean and standard deviation for Hungary, Poland, Romania, and
Bosnia/Herzegovina.
c. Use a coefficient of variation to compare the two standard deviations. Treat the data as
population data.

Supplementary Exercises
Exercise #11

A quality characteristic of interest for a tea-bag-filling process is the weight of the tea in the
individual bags. If the bags are underfilled, two problems arise. First, customers may not be
able to brew the tea to be as strong as they wish. Second, the company may be in violation of
the truth-in-labeling laws. For this product, the label weight on the package indicates that, on
average, there are 5.5 grams of tea in a bag. If the mean amount of tea in a bag exceeds the
label weight, the company is giving away product. Getting an exact amount of tea in a bag is
problematic because of variation in the temperature and humidity inside the factory,
differences in the density of the tea, and the extremely fast filling operation of the machine
(approximately 170 bags per minute). Table 1 shows the weights, in grams, of a sample of 50
tea bags produced in one hour by a single machine. Use the results of the following SPSS
output to evaluate the process.

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 Table 1
5.65 5.44 5.42 5.40 5.53 5.34 5.54 5.45 5.52 5.41
5.57 5.40 5.53 5.54 5.55 5.62 5.56 5.46 5.44 5.51
5.47 5.40 5.47 5.61 5.53 5.32 5.67 5.29 5.49 5.55
5.77 5.57 5.42 5.58 5.58 5.50 5.32 5.50 5.53 5.58
5.61 5.45 5.44 5.25 5.56 5.63 5.50 5.57 5.67 5.36

Statistics : Weight tea

Valid 50
N
Missing 0

Mean 5,5014

Median 5,5150

Std. Deviation ,10583

Skewness ?

Std. Error of Skewness

Kurtosis ,127

Std. Error of Kurtosis ,662

Range ,52

Minimum 5,25

Maximum 5,77

25 5,4350

Percentiles 50 5,5150

75 5,5700

Exercise #12

In this exercise, we consider the annual food spending per household of 200 different
households from various regions and locations in the United States.
1. Interpret in your own words the Minitab Output 1 and figures 1 and 2. (don’t exceed
10 lines)
2. Compute the coefficients of variation and skewness
Minitab Output 1

Descriptive Statistics: Annual Food Spending ($)

Total

Variable Count Mean StDev CoefVar Minimum Q1 Median Q3

Annual Food Spen 200 8966 3125 ? 2587 6903 8932 10962

Variable Maximum Skewness

Annual Food Spen 17740 ?

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 Figure 1. Histogram of Annual Food Spending ($)

30

25

20

Frequency 15

10

0
4000 6000 8000 10000 12000 14000 16000 18000
Annual Food Spending ($)

Figure 2. Boxplot of Annual Food Spending ($)

20000
Annual Food Spending ($)

15000

10000

5000

Exercise #13

To learn more about the size of withdrawals at a banking machine, the owner took a sample of
75 withdrawals and recorded the amounts. Table 1 and Figure 1 show some descriptive
statistics and the Box plot respectively. Describe what these statistics tell you about the
withdrawal amounts. (Hint: Describe the central tendency, variation and shape. Don’t exceed
15 lines)

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 Table 1 : Statistics : Withdrawals

Valid 75
N
Missing 0
Mean 175,73
Median 160,00
Std. Deviation 62,063
Skewness 2,630
Std. Error of Skewness ,277
25 140,00

Percentiles 50 160,00

75 200,00

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