CB2200 Business Statistics, 2020/2021 Semester B Individual Assignment 1 Instructions
CB2200 Business Statistics, 2020/2021 Semester B Individual Assignment 1 Instructions
CB2200 Business Statistics, 2020/2021 Semester B Individual Assignment 1 Instructions
Business Statistics, 2020/2021 Semester B
Individual Assignment 1
Instructions:
1. Answer all questions.
2. Show all calculations and steps clearly. Separate marks will be awarded for correct answers and steps.
3. Display all non‐integer numeric values to 4 decimal places.
Question 1 (20 marks)
A common method for measuring the size of a listed company is to use its market capitalization, which is
computed by multiplying the number of stock shares by the price of a share of stock. The entire population
of market capitalization values is known to follow the normal distribution with 2.28% of the companies over
900 billion and 15.87% of the companies below 300 billion.
(a) Find the mean and standard deviation of the population distribution. (7 marks)
(b) An investment portfolio is formed by randomly selecting 16 listed companies. Find the probability that
the total market capitalization value of the selected companies is over 6400 billion. (5 marks)
(c) Two investment portfolios have been formed, each of which consisting of ten randomly selected listed
companies whose market capitalizations in billion are tabulated below.
Portfolio 1 370 558 385 345 219 507 675 488 322 234
Portfolio 2 667 620 166 683 599 204 613 451 331 339
By considering the median and the range only, compare the central tendency and variation of the two
portfolios. (8 marks)
Question 2 (10 marks)
Two mutual funds, (I) and (II), have independent yearly performance over the next five years. Fund (I) and
fund (II) have constant probability of 0.6 and 0.7 of growth in any one year, respectively.
(a) Explain which one of the two mutual funds has a higher expected growth over the next five years.
(4 marks)
(b) Explain which one of the two mutual funds has yearly growths which are more spread out over the next
five years. (4 marks)
(c) Find the probability that fund (I) records three years of growth at the end of the fifth year. (2 marks)
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