Posted: September 13th, 2017
Paper, Order, or Assignment Requirements
ASB-2411 Quantitative Methods for Business
Coursework assignment
In the spreadsheet file list.xlsx, you have been assigned to study consumer price inflation in two countries, Country A and Country B. (The pair of countries assigned is different for each student).
Annual Consumer Price Index (CPI) data for the period 1979-2010 for your two assigned countries can be extracted from the spreadsheet file cpi.xlsx. (The data in this file for all other countries should be ignored). Hints on how to go about answering questions 1 to 6 below can be found in the Word file assignment_hints.doc.
| Mean inflation | Standard deviation of inflation | Median inflation | Minimum inflation | Maximum inflation |
Country A | | | | | |
1980-1999 | ? | ? | ? | ? | ? |
2000-2010 | ? | ? | ? | ? | ? |
Country B | | | | | |
1980-1999 | ? | ? | ? | ? | ? |
2000-2010 | ? | ? | ? | ? | ? |
[Total – 25 marks]
(i) country A for the period 1980-2010. (5 marks)
(ii) country B for the period 1980-2010. (5 marks)
[Total – 10 marks]
(i) 95% confidence interval for the population mean inflation rate of Country A. (5 marks)
(ii) 99% confidence interval for the population mean inflation rate of Country A. (5 marks)
(iii) 95% confidence interval for the population mean inflation rate of Country B. (5 marks)
(iv) 90% confidence interval for the population mean inflation rate of Country B. (5 marks)
[Total – 20 marks]
(i) Country A’s (population) mean inflation throughout the period 1980-2010 was
3%. (5 marks)
(ii) Country B’s (population) mean inflation throughout the period 2000-2010 was
less than 3.5%. (5 marks)
(iii) Country A’s (population) mean inflation during the 11-year period of euro membership 2000-2010 was significantly less than Country A’s (population) mean inflation during the 20-year period prior to euro membership 1980-1999. [Treat the observations on pt for the two periods as independent samples.]
(5 marks)
(iv) Country A’s (population) mean inflation during the period 2000-2010 was significantly different from Country B’s (population) mean inflation during the same period. [Treat the samples of observations on pt for the two countries during the period 2000-2010 as matched pairs.] (5 marks)
[Total – 20 marks]
(i) Calculate the probability that Country C’s inflation rate in any future year is
less than 1.5%. (5 marks)
(ii) Calculate the probability that Country C’s inflation rate in any future year is
greater than 2.5%. (5 marks)
(iii) Calculate the probability that Country C’s average inflation rate over the next
4 years is greater than 2%. (5 marks)
[Total – 15 marks]
In a certain emerging country D, which has an economic structure similar to that of Country B during the 1980s and 1990s, episodes of annual inflation above 5% are known to occur randomly, with a probability of p (as calculated above). The Governor of Country D’s central bank had set a maximum annual inflation target of 5% in each of the next 6 years.
(i) Calculate the probability that Country D’s inflation target will not be breached
in any of the next 6 years. (5 marks)
(ii) Calculate the probability that Country D’s inflation target will be breached in exactly 2 of the next 6 years. (5 marks)
[Total – 10 marks]
Submission requirements: Submission of the hard-copy of a report containing the solutions to Q1-Q6 is required. The hard copy should be submitted at the College Administrative Centre. Turnitin submission of an electronic copy of this report is not required.
For Q1-Q2, only the completed table and graphs are required. It is not necessary to show the supporting calculations, and the spreadsheet file in which you have done the calculations is not required.
For Q3-Q6, all solutions and supporting calculations are required. These may be either typed or (legibly) hand-written.
No marks will be awarded for solutions that refer to countries other than those you have been assigned personally (Please see ‘List of assigned countries’ on Blackboard for your assigned countries)
Submission deadline: Tuesday 16th December, 3pm.
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