University of Phoenix Material

Week Six Calculations

Read the following scenarios, and answer the accompanying questions.

1. A research team conducted a study of soft- drink preferences among residents in a test market prior to an advertising campaign for a new cola product. Of the participants, 130 are teenagers and 130 are adults. The researchers secured the following results:

Cola Non-cola

Teenagers 50 80

Adults 90 40

· Apply the steps in testing a research hypothesis.

· Perform a chi-square test and interpret the results.

· Determine how to present the results.

· How might the results obtained from the test affect the advertising strategy?

2. The expense ratio of a mutual fund measures the percentage of the fund’s assets used to pay for annual administrative overhead. Funds with higher ratios spend more of the fund’s return to operate the fund. A random selection of 16 stock mutual funds last year revealed the following data:

Expense Ratio, |
Total Return, |

0.62 1.21 1.03 0.67 0.40 1.12 0.78 0.47 0.75 0.92 0.57 0.95 0.20 1.00 1.25 1.03 |
34.3 33.0 31.4 30.8 32.9 27.6 30.3 31.9 33.8 27.9 32.6 24.3 36.3 31.7 29.9 34.7 |

· Construct a scatter plot of the data.

· Draw the least squares line on the scatter plot.

· Find the equation for the least squares line of best fit.

· Interpret the regression coefficients. Does expense hurt or help the fund’s return?

· Predict the total return for a stock fund with an expense ratio of 0.81%. What can you conclude?

3. Fill in the missing blocks for the ANOVA summary table on net profits and market value used with regression analysis.

ANOVA-One Factor Summary Table

Sum of Squares Mean Square *F*

Regression 1 11,116,995.47 __________ ________

Error ____ ____________ 116,104.63

Total 9 12,045,832.50

- What does the
*F*tell you? (alpha 5.05) - What is the
*t*-value? Explain its meaning.

4. Answer the questions below using the following Forbes data set.

Forbes 500 Random Subsample ($, millions)

Assets Sales Market Net Cash Number of (thousands)

Value Profit Flow

1,034.00 1,510.00 697.00 82.60 126.50 16.60

956.00 785.00 1,271.00 89.00 191.20 5.00

1,890.00 2,533.00 1,783.00 176.00 267.00 44.00

1,133.00 532.00 752.00 82.30 137.10 2.10

11,682.00 3,790.00 4,149.00 413.50 806.80 11.90

6,080.00 635.00 291.00 18.10 35.20 3.70

31,044.00 3,296.00 2,705.00 337.30 425.50 20.10

5,878.00 3,204.00 2,100.00 145.80 380.00 10.80

1,721.00 981.00 1,573.00 172.60 326.60 1.90

2,135.00 2,268.00 2,634.00 247.20 55.50 21.20

· Conduct a correlation matrix using the Forbes 500 dataset. Determine which variables have a significant relationship.

· Select an independent and dependent variables and run a regression analysis. What can you conclude from the findings?

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