SCHOOL OF FINANCE, ACTUARIAL STUDIES AND APPLIED STATISTICS

QUANTITATIVE RESEARCH METHODS (STAT1008)

SEMESTER 1, 2015

Assignment 3
This assignment is worth 10% of your overall course mark. Solutions should be placed in
the STAT1008 assignment box labelled with your tutors name by 11am on Friday 22nd May,
2015. The boxes are located adjacent to the office of the School of Finance, Actuarial
Studies and Applied Statistics, on level 4 of Building 26C.
Please present your assignment in a single stack of pages held together by a staple in the
upper left hand corner. (That is, do not use folders, plastic sheaths or other devices to join
pages together.) Also, please print single sided.
On a cover sheet, a copy of which is available on the Wattle site for the course, clearly state
the details required, including your student number and your tutorial group details (tutorial
group number, day, time and tutors name).
Data relating to each question (if relevant), can be found in a MINITAB worksheet file
(.mtw) on the STAT1008 Wattle site.
You will be assessed on your understanding of statistics and your ability to use Minitab, not
on your typing and word-processing expertise.
In the interests of equity, late assignments will not be accepted. Please see the course outline
for more information on this matter.
Minitab should be used to produce the relevant graphics and statistics, unless the question
directs you otherwise. Answers should be presented as an edited Microsoft Word file,
obtained as illustrated in Tutorial 3. You should include all relevant graphs and values
generated in Minitab (e.g. if a question directs you to create and discuss a graph, you should
include the graph itself as well as your discussion in your submitted assignment).
All numeric answers should be rounded to 4 decimal places as appropriate, clearly stating
where rounding has been used.
You should show all relevant calculations and working for questions which you are instructed
to do by hand. These can be typed in Word, or handwritten. Marks may be deducted for
failure to show working or calculations. Additionally, you should be careful to define all
notation used. Marks may be deducted for unexplained notation. Further, you should be
careful to specify and include units where appropriate.
HINT: In using Minitab, you may find the keyboard F3 operation useful for removing
previously stored options.

Scenario
Recall the Handedness data used in Question 2 of Assignment 1 (review the situation
appropriate to the problem). The dataset has been updated after several unusual values were
checked and the data corrected. It is stored in a Minitab file called Handedness Assignment
3.
Question 1 (10 marks)
Specific interest lies in the income of the current and former students of The University of
Statsville, with one famously left-handed alumnus stating that left-handers make at least
$5000 more per year than right-handers on average. Determine if this statement is supported
by the data. Be sure to write a conclusion which the alumnus (who did not complete any
statistics units in her degree) will be able to understand, and use a significance level of 2%.
You may use Minitab or complete the task by hand, and should be sure to state clearly (and
test where appropriate) any assumptions you are marking.
Question 2
A current member of the teaching staff at The University of Statsville is interested in whether
average mark at graduation can be used to predict annual income for alumni.
a) (4 marks) It has been decided that the investigation between average mark and annual
income will only be undertaken for members of the sample who are currently in full
time employment. Create a new worksheet which involves only these students/alumni
(i.e. a subset of the main worksheet). Show all session window comments created; and
then examine (and show) some basic descriptive statistics for the variables Annual
Income and Average Marks in the new (subset) worksheet.
b) (10 marks) Perform a regression in Minitab appropriate to determining the
relationship between average grade and annual income for the full time workers in the
sample. Create all relevant graphs and interpret these graphs. What is the coefficient
of determination? What is the standard error of the estimate? Give interpretations for
both these values. Discuss the assumptions of regression and whether they appear to
be met in this case.
c) (6 marks) Consider all p-values created in the regression output in (b) and specify the
pair of hypotheses being tested, and the conclusion you would draw from each test.