RMIT UNIVERSITY VIETNAM BUSINESS STATISTICS 1 ASSIGNMENT 2 Name: DUONG VAN ANH ID: S3324159 Group: 12 Program: Diploma
a of commerce
1. (15 marks) Company Name: ACB Bank Time interval of data: From 01/8/2011 to 01/11/2011 Sample Size = 65 Confidence Interval for the Mean and Interpretation Confidence Level: 95%
Confidence Interval for Mean using t from Infinite Population or with Replacement
95% of confident level, that means 95% sure the average return rate of ACB Bank is between -0.0031 and 0.0041.
Lower limit = Upper Limit = Margin for Error (Half Width) = Sample Mean = Sample Standard Deviation = % Confidence Interval = Sample Size =
-0.0031 0.0041 0.0036 0.0005 0.0145
95%
65
2. (15 marks) Company Name: SHB Bank Time interval of data: From 01/8/2011 to 01/11/2011 Sample Size = 65 Confidence Level: 95%
Confidence Interval for the Mean and Interpretation
Confidence Interval for Mean using t from Infinite Population or with Replacement
95% of confident level, that means 95% sure the average return rate of SHB Bank is between -0.0094 and 0.0064. -0.0094 0.0066 0.0080 -0.0014 0.0324
95%
Lower limit = Upper Limit = Margin for Error (Half Width) = Sample Mean = Sample Standard Deviation = % Confidence Interval = Sample Size =
65
3. (20 marks) Comparisons of the confidence intervals. Do they contain zero? What would you advise to a riskaverse investor? Invest one of them, neither of them? The sample mean of ACB Bank is bigger than SHB Bank (0.0005 > -0.0014), so it has higher return rate on average. That means ACB Bank makes more money on average. Therefore, it is expected that the return rate of ACB Bank on the whole is also bigger than SHB Bank (because the sample mean is usually near the population mean). The Margin of Error of ACB Bank is smaller than SHB Bank (0.0036 < 0.0080) and the Standard Deviation of ACB Bank is also smaller than SHB Bank (0.0145 < 0.0324), so the data range of ACB Bank is smaller than SHB Bank and its shape is also taller, and the change for sample mean to catch the population mean of ACB Bank is also larger than SHB Bank. 95% confident interval of these two companies contains 0 meaning that 95% of the chance ACB Bank and SHB Bank have the opportunity to gain, lose or make no profit. Moreover, because the sample mean of SHB Bank is negative( -0.0014) and its margin of error is also bigger than ACB Bank, so SHB Bank has higher chance to lose money in the short run. To conclude, I think investors should not invest on both companies because they contains some risk and also not remains stable.
4. (15 marks) Company Name: ACB Bank Time interval of data: From 01/8/2011 to 01/11/2011 Sample Size = 65 Confidence Level: 95%
Confidence Interval for the Proportion of Negative Returns and Interpretation
Confidence interval for Population Proportion 0.25191 Lower Limit =
95% of confident level, that means 95% sure the proportion of negative return for ACB Bank is between 0.25191 and 0.4866.
Upper Limit = Margin for Error (Half Width) = Successes =
0.4866 0.1173
24 Trials = 65.0000 % Confidence Interval = 0.9500 pi-hat = 0.369231
5. (15 marks) Company Name: SHB Bank
Time interval of data: From 01/8/2011 to 01/11/2011
Sample Size = 65
Confidence Level: 95%
Confidence Interval for the Proportion of Negative Returns and Interpretation
Confidence interval for Population Proportion 0.370770272 Lower Limit =
95% of confident level, that means 95% sure the proportion of negative return for SHB Bank is between 0.37077 and 0.6138.
Upper Limit = Margin for Error (Half Width) = Successes =
0.6138 0.1215
32 Trials = 65.0000 % Confidence Interval = 0.9500 pi-hat = 0.492307692
6. (20 marks) Compare of the confidence intervals. Suppose that the investor wouldnt invest if the proportion of negative returns is higher than 50%, would you advise him/her to invest on these companies? Which one? Either, both, neither? How is this related to your confidence level? SHB Banks pi-hat (0.4923) is bigger than ACBs pi-hat (0.3692), that means it has bigger percentage of time to get negative return of losing money, so the worse of SHB Bank.
In ACB Bank stock, the whole Confident Interval is <0.5 values (from 0.2591 to 0.466). That means the
company has the chance to have less than half of the time to get negative value return rate, the better of ACB Bank. In SHB Bank stock, the whole Confident Interval includes 0.5 (from 0.3708 to 0.6138). That means the company has the mix chance to have more than half, half or less than half of the time to get the negative return rate, the worse of SHB Bank. Basing on these evidences, SHB Bank stock seems more likely to have more negative returns than ACB Bank stock and it also contains more potential risk than ACB Bank ( its value includes >= 50% of negative returns while ACB Banks gets lower than 50% of negative returns).
Depending on the information above, investors should not take a risk to invest on SHB Bank because more chance to get negative return more chance to lose money. On the other hand, ACB Bank seems to be a good company for investors to put money on because it has low rate of getting negative returns, so the chance for company to lose money is smaller than the chance they can earn profits.
