The file Ass3.

txt contains 20 years of data on two rms, being General Motors

and US Steel. There are three columns of data, with the first column recording
the gross investment in plant and equipment, the second column being the
value of the rm as measured by the value of common and preferred stock, and
the third column measuring the stock of capital. The rst 20 rows of data relate
to General Motors and the remaining 20 are for US Steel.
(a) Formulate a linear model that would enable us to obtain the average
gross investment for both General Motors and US Steel. Provide a
complete description of any additional variables that you might need to
construct in order to do this

INV = 0 + 1 V + 2 K + ei
Se trata de un sistema multilineal en el que la inversin es funcin de V y K.
Los coeficientes

0, 1 , 2

se obtienen de la regresin multilineal. El factor

e i es el error tpico. Es necesario considerar tambin el coeficiente de ajuste

R2, que indica que tan cercanos estn los datos respecto a la lnea de
tendencia.
Ya que se solicita la inversin promedio se aplica

= INV
INV
t

donde t es el

tiempo durante el cual se realiza la inversin.

(b) Fit this model by least squares and report the results in the form of an
equation. (Be sure to include all the relevant descriptive statistics.)
General Motors

= 55,27+ 0,17 V +0,41 K + 98,37

INV
t
El coeficiente de regresin R2 es de 0,91 por lo que el modelo es vlido cumple
con un modelo lineal
Se usa el valor de 98, 37 que es el error tpico, los factores
obtienen de la regresin multilineal.
US Steel

0, 1 , 2

se

 = 193,77+ 0,12V + 0,37 K + 90,64

INV
t
Se usa el valor de 90,64 que es el error tpico,.
El coeficiente de regresin R2 es de 0,32 por lo que el modelo no se ajusta bien
a un modelo lineal, sin embargo al aplicar el logaritmo log en estos datos y
generar el modelo, el coeficiente de regresin apenas cambia a 0,33 lo que no
justifica la transformacin.

(c) On the basis of your results to part 1(b), formulate a model that would
allow you to and the proportion of years for which each firm was
investing amounts of money above their own 20 year average. Provide a
complete description of any additional variables that you might need to
construct in order to do this.

=Exceso de inversion
INV INV
(d) Fit this model by least squares and report the results in the form of an
equation. (Be sure to include all the relevant descriptive statistics. )

Inversin GM
1000.00
800.00

f(x) = 1x - 608.02
R = 1

600.00

Inv

400.00

Linear (Inv)

200.00
0.00
-200.00

200 400 600 800 1000 1200 1400 1600

-400.00
-600.00

Inversin de General Motors

Exceso de inversion=Inversin-608

Inversin US Steel
300.00
200.00

f(x) = 1x - 410.46
R = 1

Inversin

100.00

Linear (Inversin)
0.00
100
-100.00

200

300

400

500

600

700

-200.00
-300.00

Inversin de US Steel
Exceso de inversin=Inversin-410,46

2. As part of an evaluation of the food services offered by the Student Union, a

collection of students are asked to rate the offerings as poor, good, or
excellent. The students all belonged to one of the faculties of Arts, Economics
and Commerce (EcoComm), and Science. The following results were obtained:

Rating
Poor
Good
Excellent
Total

Arts
30
80
60
170

Faculty
EcoComm
20
65
65
150

Science
10
35
35
80

What is the probability that a student chosen at random:

(a) is from the Faculty of Science? (1 mark)

Pr ( A ) =

Events A
Total Events

Pr ( A ) =

80
=0,2
400

Total
60
180
160
400

(b) is from the Faculty of Economics and Commerce and rates the food services
as excellent? (1 mark)

Pr ( C )=

65
=0,1625
400

(c) is from the Faculty of Arts, given that they have rated the food services as
excellent. (2 marks)

Pr ( Arts Excelent ) =

Pr ( Arts Excelent )
Pr ( Excelent )

60
400
Pr ( Arts Excelent ) =
=0,375
160
400

(d) rated the food services as excellent, given that they are from the Faculty of
Arts.

Pr ( Excelent Arts ) =

Pr ( Excelent Arts )
Pr ( Arts )

60
400
Pr ( Arts Excelent ) =
=0,3 53
17 0
400
3. You are planning a sample survey of small businesses in your area. You will
choose a sample of independent businesses listed in the Yellow Pages
telephone book. Experience shows that only half of the businesses that you
contact will respond.

(a) If you contact 150 businesses, it is reasonable to use the B(x; 150; 0:5)
distribution for the number of businesses X who respond. Explain why. (3
marks)
B: Only two choices, respond or not
I: It is reasonable to believe that all responses are independent
N: n = 150
S: All have the same probability of success (response) = 0,5
(b) What is expected number who will respond? (1 mark)
m = 150(0.5) = 75 responses
(c) What is the probability that 70 or fewer will respond? (1 mark)

Pr ( X 70 )=[ Pr ( X=0 )+ Pr ( X =1 )+ Pr ( X=2 )+ + Pr ( X =70 ) ]

[ ( )( )

Pr ( X 70 )= C 0150

1
2

1
2

1500

+C 1150

1
2

1
2

1501

( )( )

+C 2150

1
2

1
2

1502

( )( )

+ +C 70
150

1
2

70

1
2

15070

()()

(e) How many firms would you need to contact to increase the expected
number of respondents to 100?
You must increase the sample to 200, since (200)(0.5) = 100

4. You work for a company that manufactures mobile phones. The lifetime of a
mobile phone (the period of time before it needs to be replaced) is normally
distributed with a mean of 48 months and a standard deviation of 4 months.
Your company offers its customers a two year warranty any mobile phones that
need to be replaced before then is replaced free of charge. If a mobile phone
needs replacing after more than two years then it is considered to be out of
warranty.
What is the probability that a randomly selected mobile phone:
(a) is replaced out of warranty? (2 marks)

F ( x )=

( x
)

=0,2312

Pr ( X > 2 )=1Pr ( X 2 )=1F ( 2 )

=

48
=4
12

=4 / 12
Pr ( X > 2 )=1Pr ( X 2 )=1F ( 2 )=1

(b) is replaced out of warranty and is less than three years old? (2 marks)

Pr ( 2< x <3 )=F ( 3 )F ( 2 ) =0,0 0 13

(c) is replaced out of warranty if it is less than three years old? (2 marks)

Pr ( X >3 )=1Pr ( X 3 )=1F ( 3 )=0,9 9 8

(d) is replaced out of warranty or is less than three years old? (2 marks)

Pr ( 2< x x<3 )=Pr ( x >2 ) + F ( x <3 )=1+ 0,0013 1