a. The breaking strengths of cables produced by a manufacturer have a mean of 1800 pounds (lb) and a
a. The breaking strengths of cables produced by a manufacturer have a mean of 1800 pounds (lb) and a standard deviation of 100 lb. By a new technique in the manufacturing process, it is claimed that the breaking strength can be increased. To test this claim, a sample of 50 cables is tested and it is found that the mean breaking strength is 18501b. Can we support
the claim at the 0.01 significance level? (6 marks)
b. Suppose that a stock analyst derives the following probability distribution for the earnings per share (EPS) of a firm.
| EPS($) |
P(x) |
EPS($) |
P(x) |
|
1.50 |
0.05 |
2.25 |
0.15 |
|
1.75 |
0.30 |
2.50 |
0.10 |
|
2.00 |
0.35 |
2.75 |
0.05 |
Calculate the;
i. Expected value for earnings per share. (4 marks)
ii. Standard deviation for earnings per share (6 marks)
c. Explain any four Non-parametric tests. (4 marks)
