Average Salaries of Transportation Operators (AED1,000s)
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Locomotive Engineer
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Truck Driver
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Bus Driver
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Taxi and Limousine Driver
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54.7
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40.5
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32.4
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26.8
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53.2
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42.7
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31.2
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27.1
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55.1
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41.6
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30.9
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28.3
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54.3
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40.9
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31.8
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27.9
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51.5
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39.2
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29.8
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29.9
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= 53.76
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= 40.98
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= 31.22
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= 28.00
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Grand mean: = 38.49
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a.
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Construct an ANOVA table and estimate the p-value.
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b.
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Specify the competing hypotheses in order to determine whether the average salaries of the transportation operators differ.
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c.
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At the 5% significance level, can we conclude that the average salaries of the four transportation operators differ?
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Problem: 5) A machine that is programmed to package 1.20 pounds of cereal in each cereal box is being tested for its accuracy. In a sample of 36 cereal boxes, the mean and standard deviation are calculated as 1.22 pounds and 0.06 pound, respectively.
Set up the null and the alternative hypotheses to determine if the machine is working improperly—that is, it is either underfilling or overfilling the cereal boxes.
Calculate the value of the test statistic.
At a 5% level of significance, can you conclude that the machine is working improperly? Explain.
Problem: 6) According to data from the Organization for Economic Cooperation and Development, the average U.A.E worker takes 16 days of vacation each year (The Gulf News). Assume that these data were based on a sample of 225 workers and that the sample standard deviation is 12 days.
a.) Construct the 95% confidence interval for the population mean.
b.) At the 95% confidence level, can we conclude that the average U.S. worker does not take 14 days of vacation each year?
Problem:7) A research analyst is trying to determine whether a firm’s price-earnings (P/E) and price-sales (P/S) ratios can explain the firm’s stock performance over the past year. Generally, a high P/E ratio suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E ratio. Investors use the P/S ratio to determine how much they are paying for a dollar of the firm’s sales rather than a dollar of its earnings (P/E ratio). In short, the higher the P/E ratio and the lower the P/S ratio, the more attractive the investment. The accompanying table shows a portion of the 30 firms included in the Dow Jones Industrial Average. Data within data sheet DOW
Estimate: Return = β0 + β1P/E + β2P/S Show the regression results in a well-formatted table.
What do you say about the strength of the model?
Determine whether P/E and P/S are jointly significant at the 5% significance level.
Establish whether the explanatory variables are individually significant at the 5% significance level. Specify compelling hypothesis.
What is the predicted return for a firm with a P/E ratio of 10 and a P/S ratio of 2?
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