MNS601 – HOMEWORK #1 Name: ___________________ Directions: a) Enter all your answers into this Word document (immediately following the relevant question) and submit the entire document. IMPORTANT: The name of your Word document MUST begin with your LAST NAME. b) When you use a Template to calculate an answer, copy and paste the results into this document. c) While putting your answers in a different color font is helpful, please DO NOT use red font since this is the color used to provide feedback on your answers. 1. The following table shows a data set containing information for 25 of the shadow stocks tracked by the American Association of Individual Investors. Shadow stocks are common stocks of smaller companies that are not closely followed by Wall Street analysts. a. How many variables are in the data set? b. Which of the variables are categorical and which are quantitative? c. For the Exchange variable, show the frequency and the percent frequency for AMEX, NYSE, and OTC. Construct a bar graph similar to Figure 1.4 (in the textbook) for the Exchange variable. d. Show the frequency distribution for the Gross Profit Margin using he five intervals: 0 – 14.9, 15 – 29.9, 30 – 44.9, 45 – 59.9, and 60 – 74.9. Construct a histogram similar to Figure 1.5 (in the textbook). e. What is the average price/earnings ratio? DATA SET FOR 25 SHADOW STOCKS Company DeWolfe Companies North Coast Energy Hansen Natural Corp. MarineMax, Inc. Nanometrics Inc. Team Staff, Inc. Environmental Tectonics Measurement Specialties SEMCO Energy, Inc. Party City Corporation Embrex, Inc. Tech/Ops Sercon, Inc. Exchange AMEX OTC OTC NYSE OTC OTC AMEX AMEX NYSE OTC OTC AMEX Ticker Symbol DWL NCEB HANS HZO NANO TSTF ETC MSS SEN PCTY EMBX TO Market Price/ Cap ($ Earnings millions) Ratio 36.4 52.5 41.1 111.5 228.6 92.1 51.1 101.8 193.4 97.2 136.5 23.2 8.4 6.2 14.6 7.2 38.0 33.5 35.8 26.8 18.7 15.9 18.9 20.7 Gross Profit Margin (%) 36.7 59.3 44.8 23.8 53.3 4.1 35.9 37.6 23.6 36.4 59.5 35.7 ARCADIS NV Qiao Xing Universal Tele. Energy West Inc. Barnwell Industries, Inc. Innodata Corporation Medical Action Industries Instrumentarium Corp. Petroleum Development Drexler Technology Corp. Gerber Childrenswear, Inc. Gaiam, Inc, Artesian Resources Corp. York Water Company OTC OTC OTC AMEX OTC OTC OTC OTC OTC NYSE OTC OTC OTC ARCAF XING EWST BRN INOD MDCI INMRY PETD DRXR GCW GAIA ARTNA YORW 173.4 64.3 29.1 27.3 66.1 137.1 240.9 95.9 233.6 126.9 295.5 62.8 92.2 8.8 22.1 9.7 7.4 11.0 26.9 3.6 6.1 45.6 7.9 68.2 20.5 22.9 9.6 30.8 16.3 73.4 29.6 30.6 52.1 19.4 53.6 25.8 60.7 45.5 74.2 2. People often wait till middle age to worry about having a healthy heart. However, recent studies have shown that earlier monitoring of risk factors such as blood pressure can be very beneficial (The Wall Street Journal, January 10, 2012). Having higher than normal blood pressure, a condition known as hypertension, is a major risk factor for heart disease. Suppose a large sample of individuals of various ages and gender was selected and that each individual’s blood pressure was measured to determine if they have hypertension. For the sample data, the following table shows the percentage of individuals with hypertension. a. Develop a side-by-side bar chart with age on the horizontal axis, the percentage of individuals with hypertension on the vertical axis, and side-by-side bars based on gender. b. What does the display you developed in part (a), indicate about hypertension and age? c. Comment on differences in gender. Age 20 - 34 35 – 44 45 – 54 55 – 64 65 – 74 75 + Male 11.0% 24.0% 39.0% 57.0% 62.0% 73.3% Female 9.0% 19.0% 37.0% 56.0% 64.0% 79.0% 3. The department of transportation’s study on driving speed and miles per gallon for midsize automobiles resulted in the data below. a. Plot the speed and miles per gallon using a scatter plot with speed on the horizontal axis. b. Compute the sample mean and standard deviation for each variable. c. Compute the sample correlation coefficient. Is there a positive or negative correlation between these two variables? Comment. Speed (Miles per Hour) Miles per Gallon 30 50 40 55 30 25 60 25 50 55 28 25 25 23 30 32 21 35 26 25 4. The U.S. Census Bureau serves as the leading source of quantitative data about the nation’s people and economy. The following cross-tabulation shows the number of households (1,000s) and the household income by the highest of level of education for the head of the household (U.S. Census Bureau website, 2013). Only households in which the head has a high school diploma or more are included. a. Develop a joint probability table b. What is the probability of the head of one of these households having a master’s degree or more education? c. What is the probability of a household headed by someone with a high school diploma earning $100,000 or more? d. What is the probability of one of these households having an income below $25,000? e. What is the probability of a household headed by someone with a bachelor’s degree earning less than $25,000? f. Is household income independent of educational level? Highest Level of Education High School Graduate Bachelor’s Degree Master’s Degree Doctoral Degree TOTAL Under $25,000 9880 Household Income $25,000 to $50,000 to $100,000 $49,999 $99,999 and Over 9970 9441 3482 TOTAL 32,773 2484 4164 7666 7817 22,131 685 1205 3019 4094 9003 79 160 422 1076 1737 13,128 15,499 20,548 16,469 65,644
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