INSTITUTE OF BANKERS IN MALAWI

CERTIFICATE IN BANKING EXAMINATION

SUBJECT: FUNDAMENTALS OF BUSINESS

STATISTICS (IOBM-C105)

Date: Saturday 3rd May 2008

Time Allocated: 3 hours (13.30 to 16.30 pm)

INSTRUCTIONS TO CANDIDATES

1 Read the instructions on the cover of the answer book.

2 This paper consists of TWO Sections, A and B.
3 Section A consists of 4 questions, each question carries 15 marks.
Answer ALL questions.
4 Section B consists of 4 questions, each question carries 20 marks.
Answer any TWO questions.
5 DO NOT open this question paper until instructed to do so.
SECTION A (60 marks)

Answer ALL questions from this section

QUESTION ONE

(a) A certain organisation conducted a telephone interview with a randomly

selected national sample of 1005 adults, aged 18years and above.
The survey asked the respondents, “How would you describe your own
physical health at this time?” Response categories were: Excellent,
Good, Only Fair, Poor, and No Opinion.

(i) What was the sample size for this survey? (1 mark)
(ii) Are the data qualitative or quantitative? (1 mark)
(iii) Would it make more sense to use averages or percentages as a
summary of the data for this question? Justify your answer.
(2 marks)

(iv) Of the respondents, 29% said their personal health was

‘excellent’. How many individuals provided this response.
(2 marks)
(v) Explain the difference between primary and secondary data.
(3 marks)

(vi) Under what conditions might secondary data be used and what
are its two possible disadvantages compared with the use of
primary data? (6 marks)

(Total 15 Marks)

QUESTION 2

(a) Sampling methods are widely used for the collection of statistical data
in industry and business. Explain the following, illustrating your
answers with one practical example on each.

(i) Simple random sampling

(ii) Stratification

(iii) Quota Sampling

(iv) Sample frame

(v) Cluster Sampling

(10 marks)

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(b) What are three possible relative advantages and two disadvantages of
the postal questionnaire and the personal interview as a means of
collecting data? (5 marks)

(Total 15 Marks)

QUESTION 3

The production of each manufacturing department of your company is

monitored weekly. The production in one department over a forty week period
is shown below:

364 382 367 364 365 371 370 372

365 354 359 359 360 357 362 364

406 361 380 382 394 396 398 402

451 469 466 459 454 460 457 452

355 371 437 445 347 365 456 446

(a) Construct a frequency distribution table of five groups for the number of
items produced per week. (8 marks)

(b) Construct a cumulative frequency curve for the frequency distribution

established in (a) above. (7 marks)

(Total 15 Marks)
QUESTION 4

The following data relates to personal incomes in Malawi Kwacha.

Total 675-1000 1000-1500 1500-2000 2000-3000 3000-4000

Income

No. of 1230 2500 2660 5190 4320

persons

Total Income 4000-6000 6000-8000 8000-10000 10000-20000

No. of persons 3470 970 310 130

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(a) Calculate estimates of the value of

(i) the mean

(ii) the median

(iii) the mode

(iv) 2 (mean – mode)

(v) 3 (median – mode)

(14 marks)

(b) Give a reason why the two values in a (iv) and a (v) should be
approximately equal for this distribution. (1
mark)

PTO FOR SECTION B

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SECTION B

Answer ANY TWO questions from this section

QUESTION 5

The analysis of a firm’s order book gives the following value of orders
received, values being recorded to the nearest thousand Kwacha.

47 80 43 52 45 54 52 69

56 82 55 48 56 59 58 68

64 81 60 58 62 62 62 72

67 83 66 61 66 69 69 60

72 86 70 67 71 74 73 63

77 89 75 72 76 79 78 68

(a) Tabulate the data into a grouped frequency distribution table, using
class intervals of 5. (5 marks)

(b) (i) Draw a histogram of the frequency distribution you obtained in (a)

(ii) Use the histogram to determine the mode of the distribution.

(5 marks)

(c) Use the frequency distribution to calculate

(i) the variance

(ii) the standard deviation

(iii) the quartile deviation

(10 marks)

(Total 20 Marks)

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QUESTION 6

(a) Mr. Banda’s Travel Agency runs various travel package tours to different
parts of Malawi and keeps a record of the weekly receipts. The figures
(K’000s) for the last two weeks are shown below:

Week 1 20 8 10 18 18 74

Week 2 22 10 13 21 23 89

(i) Draw a Z-chart for the receipts for week 2

(ii) Comment on your chart (6 marks)

(6 A TO BE REPLACED)

(b) The table below shows the output (in complete units) of a range of machinery
used in a small engineering company:-

Year

Machine 2005 2006 2007

A 3500 5000 6000

B 1500 2000 3000

C 600 800 900

D 400 200 100

(c) A sample of shoppers at a mall was asked the following questions.

Identify the type of data each question would produce.

(i) What is your age?

(ii) How much did you spend?

(iii) What is your marital status?

(iv) Rate the availability of parking: Excellent, Good, Fair or Poor.

(v) How many stores did you enter? (5 marks)

(Total 20 Marks)

QUESTION 7

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The exhaust pipe replacement unit of Ambewe, Garage records the following
times (in minutes) to complete 100 jobs undertaken in one week

Time(Minutes) Number of Jobs

10-20 10

20-30 45

30-40 25

40-50 8

50-60 5

60-70 4

70-80 2

80-90 1

(a) Draw a histogram to represent this data. (5 marks)

(b) Estimate

1. the mode

2. the quartile deviation

3. the percentage of jobs taking less than 25 minutes

4. the percentage of jobs taking more than 45 minutes

(7 marks)

(c) Calculate the deviation of the above distribution (5 marks)

(d) Assuming that the standard deviation for this distribution is 14.18,
calculate the coefficient of the skewness. Briefly comment on your
answer. (3 marks)

(Total 20 Marks)

QUESTION 8

(a) Give a specific business commercial or industrial example of when:

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 (i) the median could be used in preference to the arithmetic mean.

(ii) The mode would be used in preference to the median

(iii) The arithmetic mean would be used in preference to any other

average.

(6 marks)

(b) A group of workers have received 5.8%, 8.5% and 3.2% wage
increases over the last three years. What percentage do they need
this year in order to average 6% over the whole period? (6 marks)

(c) What is the best ‘average’ if any, to use in each of the following
situation? Justify each of your answers.

(i) To establish a typical wage to be used by an employer in wage

negotiations for a small company of 300 employees, a few of
whom are very highly paid specialists.

(ii) To determine the height of a bridge to be constructed where the

distribution of the heights of all ships which would pass under is
known and skewed to the right.

(iii) To ascertain the average annual income of all workers when it is

known that the mean annual income of skilled workers is
K450,000 while the mean annual income of unskilled workers is
K350,000.

(iv) To state the amount to be paid to each employee when the

company introducing a profit sharing scheme requires that each
employee receives the same amount (8 marks).

(Total 20 Marks)

END OF THE EXAMINATION PAPER

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