Workshop 12-Exam Review-II Hypothesis testing and Regression Analysis, Exercises of Finance

Download Workshop 12-Exam Review-II Hypothesis testing and Regression Analysis and more Exercises Finance in PDF only on Docsity! Workshop 12 Exam Revision-II STATISTICS FOR BUSINESS AND FINANCE (BUS5SBF) Topics: Hypothesis Testing, Simple and Multiple Regression Analyses Objectives: To make inference about difference between unknown population means both in small and large samples using step-by-step hypothesis testing approach and confidence interval estimation. To develop the linear relationship between dependent variable and two or more independent (control) variables and using this relationship to predict the value of the dependent variable. Learning Outcomes By the end of this workshop, you would be able to; • Perform hypothesis testing to compare two population means • Distinguish between independent samples • Identify the appropriate test statistic in case of small and large samples • Compute the p-value of the tests • Infer about population parameter using confidence intervals • Estimate and interpret the meaning of regression coefficients in multiple regression setting • Conduct hypothesis test on regression coefficients • Calculate and interpret the meaning of coefficient of determination R2 and adjusted-R2 • Compute and interpret confidence intervals for regression coefficients • Perform test of goodness of fit (overall model utility/validity) • Predict values of the dependent variable for given values of the independent variables • Testing normality assumption • Apply these tools to real world problems Learning Resources Moodle: Weeks 7,8,9, 10 Workbooks (Multiple Regression Analysis) YouTube: https://youtu.be/Cam2vFsRYDs https://youtu.be/tlbdkgYz7FM https://youtu.be/MZYIGxc-KL0 Online Forum (Optional) Task 1: A labour economists is interested in determining whether male workers are paid more than female workers. He takes a random sample of 17 females and 13 male workers and collects data on hourly wage rate to get the following table of descriptive statistics and box plot. a. Test the hypothesis that the average wage paid to male workers is greater than $30. b. Can she infer that there exists a wage differential? Perform a relevant test by following all the steps of hypothesis testing. In particular, specify the choice of the test statistic, any underlying assumptions and the distribution of the test statistic under the null. c. To validate the results, she takes a larger sample of 85 male and female workers each. Using the information from this sample, can she infer that there exists a wage differential? Perform a relevant test using all the steps of hypothesis testing. WWAGE HWAGE Mean 26.66862 31.58181 Standard Error 2.638418 3.584792 Median 23.4375 28.5715 Mode 22.959 #N/A Standard Deviation 10.87847 12.92515 Sample Variance 118.3412 167.0595 Kurtosis 2.998855 -0.97093 Skewness 1.664357 0.664975 Range 41.4285 37.2115 Minimum 16.0715 17.1385 Maximum 57.5 54.35 Sum 453.3665 410.5635 Count 17 13 WWAGE HWAGE Mean 25.25 32.80 Standard Error 1.57 1.64 Median 20.50 30.61 Mode 41.67 40.00 Standard Deviation 14.50 15.15 Sample Variance 210.14 229.66 Kurtosis 2.11 3.31 Skewness 1.51 1.44 Range 68.07 87.08 Minimum 10.08 6.54 Maximum 78.15 93.62 Sum 2146.14 2787.71 Count 85 85 Descriptive Statistics of Wages