Topic: Measures of Dispersion

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  • 20 Marks

QTB – Nov 2014 – L1 – SB – Q2 – Measures of Dispersion

Compare the risk and return of two investments by calculating mean and standard deviation.

In finance, the standard deviation is frequently used to measure the risk of an investment.
An investor is considering two possible investments A and B. A sample of 10 rates of return is recorded for each investment. These rates of return, given as percentages, are as follows:

Investment A:
4, 6, 6, 5, 4, 5, 8, 5, 5, 8

Investment B:
0, -2, 6, 12, 9, 16, -4, 16, 25, 12

Required:
a. Calculate the mean rate of return for each of the two investments. (6 Marks)
b. Calculate the standard deviation of the rate of return for each of the investments. (6 Marks)
c. Which of the two investments is riskier and why? (8 Marks)

(Total: 20 Marks)

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  • 20 Marks

QT – Nov 2017 – L1 – Q4 – Data Collection | Measures of Central Tendency | Measures of Dispersion

Analyze the frequency distribution of access time to a medical consultant, draw an ogive, and calculate measures of central tendency.

Data on access time, in minutes, to a medical consultant who charges by the hour was recorded by his accountant’s assistant over a period of one week. Using a class width of 4 minutes, the following frequency distribution table was obtained:

Access Time (Minutes) Number of Patients
15 – 19 2
20 – 24 5
25 – 29 8
30 – 34 10
35 – 39 13
40 – 44 17
45 – 49 20
50 – 54 16
55 – 59 12
60 – 64 15

Required:
a) Using a graph sheet, draw a less than or a greater than (more than) cumulative frequency curve (ogive) of the data. (6 marks)
b) From the ogive in (a) above, estimate the median access time. (2 marks)
c) Calculate the mean and the mode of the access times. (6 marks)
d) Calculate the standard deviation of the distribution. (4 marks)
e) Using the values in (b) and (c) above, comment on the skewness of the distribution. (2 marks)
(Total: 20 marks)

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  • 20 Marks

QTB – Nov 2014 – L1 – SB – Q2 – Measures of Dispersion

Compare the risk and return of two investments by calculating mean and standard deviation.

In finance, the standard deviation is frequently used to measure the risk of an investment.
An investor is considering two possible investments A and B. A sample of 10 rates of return is recorded for each investment. These rates of return, given as percentages, are as follows:

Investment A:
4, 6, 6, 5, 4, 5, 8, 5, 5, 8

Investment B:
0, -2, 6, 12, 9, 16, -4, 16, 25, 12

Required:
a. Calculate the mean rate of return for each of the two investments. (6 Marks)
b. Calculate the standard deviation of the rate of return for each of the investments. (6 Marks)
c. Which of the two investments is riskier and why? (8 Marks)

(Total: 20 Marks)

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  • 20 Marks

QT – Nov 2017 – L1 – Q4 – Data Collection | Measures of Central Tendency | Measures of Dispersion

Analyze the frequency distribution of access time to a medical consultant, draw an ogive, and calculate measures of central tendency.

Data on access time, in minutes, to a medical consultant who charges by the hour was recorded by his accountant’s assistant over a period of one week. Using a class width of 4 minutes, the following frequency distribution table was obtained:

Access Time (Minutes) Number of Patients
15 – 19 2
20 – 24 5
25 – 29 8
30 – 34 10
35 – 39 13
40 – 44 17
45 – 49 20
50 – 54 16
55 – 59 12
60 – 64 15

Required:
a) Using a graph sheet, draw a less than or a greater than (more than) cumulative frequency curve (ogive) of the data. (6 marks)
b) From the ogive in (a) above, estimate the median access time. (2 marks)
c) Calculate the mean and the mode of the access times. (6 marks)
d) Calculate the standard deviation of the distribution. (4 marks)
e) Using the values in (b) and (c) above, comment on the skewness of the distribution. (2 marks)
(Total: 20 marks)

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