Semester 2, 2015

Business Modelling and Analysis (FIN60003)

Assignment

Contents

Objectives ................................................................................................................................................ 2

Background ............................................................................................................................................. 2

Presentation of a business report ......................................................................................................... 2

Tasks ......................................................................................................................................................... 3

1. Select a Random Sample ........................................................................................................... 3

2. Descriptive Statistics .................................................................................................................. 3

3. Confidence intervals .................................................................................................................. 4

4. Hypothesis Testing .................................................................................................................... 4

5. Correlation and Regression ....................................................................................................... 4

Assignment structure: ............................................................................................................................ 5

Executive summary ........................................................................................................................... 5

Introduction ........................................................................................................................................ 5

Analysis ................................................................................................................................................ 5

Conclusion and limitations ............................................................................................................... 6

Reference list ...................................................................................................................................... 6

Appendices ......................................................................................................................................... 6

Marking allocations and submission instructions .............................................................................. 7

FIN60003 Assignment Page 1

Objectives

In this assignment you are expected to develop and present a business report to the senior

manager of a real estate company. The report should be informative but concise. It should

follow a specific structure to allow the document to be easily read and understood. For this

purpose, please ensure that you have studied supplementary material about the academic report

writing available on e-tivity 5.3 before you start the assignment. This assignment is worth 20% of

your final mark.

This assignment provides students with opportunity to:

• combine statistical analysis and report writing skills to prepare a concise and non-

technical business report,

• draw a random sample to complete statistical analysis,

• develop and enhance computing skills, specifically the use of MS Word and MS Excel

built-in functions,

• apply statistical techniques to a data set, and

• reinforce taught concepts including descriptive statistics, sampling and estimation,

hypothesis testing, correlation and regression.

Background

Margaret is the manager of a real estate company. She is concerned about the recent rising trend

of house prices and would like to further investigate the current market conditions. She would

also like to know whether the common assumptions in the property market are still valid. For

that purpose, Margaret asked Jason, a newly appointed research officer, to conduct a number of

statistical tests (discussed in the following sections) using a dataset related to the total number of

property purchased in three states of New South Wales, Victoria and Queensland in the first

week of September 2015.

The excel file that contains these data is named FIN60003_Assingment Data.xls and is available

on e-tivity 7.5. There are seven variables and 1000 cases in this data set. They are:

GENDER: Gender of property buyers (F: Females and M: Males)

AGE: Age of the property buyers in years

STATE: Location of property (NSW: New South Wales, Vic: Victoria and Qld: Queensland)

LAND SIZE: Property land size (in square meters)

NO of ROOMS: Number of rooms in the property

PRICE: Total purchase price in whole dollars

SALE TYPE: (1: Auction and 0: Private Sale)

Presentation of a business report

You are going to help Jason in developing a report that addresses Margaret’s concerns. Since

Margaret is not very familiar with statistical terms try to not just quote statistics or analysis

FIN60003 Assignment Page 2

results, but explain what they mean. In general, do not include in the report formulae,

calculations, definitions of statistical terms or discussions on how graphs are constructed. Where

appropriate these may be included in the appendices. Follow the Harvard Style Guide (available

on e-tivity 5.3) for all in text references, reference lists and bibliographies.

It is important to properly analyse, discuss and interpret the results of your calculations. A

written description of the key features of the tables and graphs should be presented as well. The

emphasis will be on interpretation and analysis, not just the computation of statistics and

construction of graphs. The assessment should be in one single Microsoft Word compatible

document and should be written in 12 point font. It is expected that all work submitted, will

have been edited for spelling, grammar and clarity.

Tasks

Most of your statistical calculations should be carried out using Excel only. You will use

Microsoft Word and Excel to complete this assignment.

1. Select a Random Sample

Select a random sample of size 100 from the given 1000 cases (assume this data set is the

population of interest and you are not allowed to calculate any parameters such as mean and

standard deviation). You will use this sample data to complete tasks 2 to 6. Since repeat cases

may occur when you draw random numbers and each case can be included only once in your

sample, some of you may end up with a sample size less than 100. In this situation do not draw

another sample to reach 100 values. You will continue to work on your originally drawn sample,

even if the sample is smaller than 100.

2. Descriptive Statistics

Use appropriate data summary methods to describe each of the variables in your dataset. Use an

appropriate graphical and/or summary statistical technique, chosen according to the type of

variable. These techniques will be chosen from:

Tabular Techniques: Frequency tables and Grouped (joint) frequency tables.

Graphical Techniques: Pie chart, Bar graph, Histogram (avoid using 3D effects).

Summary Statistics: Mode, Median, Mean, Standard Deviation, Range, Coefficient of

Variation and Interquartile Range.

You will need to choose the most appropriate technique(s) for each variable being analysed. Less

appropriate/inappropriate techniques will receive fewer/no marks.

For a nominal or an ordinal variable draw a graph and present a frequency table in percentages.

For a ratio or an interval variable draw a graph and a summary statistics table.

FIN60003 Assignment Page 3

Try to use varying visualisation techniques such as pie chart, bar chart, and histograms in

drawing graphs. Do not draw two different graphs for the same variable.

3. Confidence intervals

Estimate the following quantities, using 95% confidence level. Interpret the meaning of your

confidence intervals.

i. The average age of property buyers for the AUCTION sales only.

ii. The average total purchase price for all types of sales.

Compare both intervals with their respective true population means.

4. Hypothesis Testing

Margaret has some assumptions about the property market and wants to check their validity in

the new market conditions. Investigate these contentions by carrying out appropriate hypothesis

tests.

i. It is often felt that female property buyers spend less on average than male property

buyers. To test relevant hypothesis only consider AUCTION sales.

ii. It is often felt that the average property prices differs for New South Wales and two

other states (consider Vic and Qld as one sample). For this hypothesis use STATE.

iii. It is often felt that the average number of rooms for properties in Victoria is more than

those for properties in New South Wales.

In the main section of the report, only include the non-technical explanations of your

methodology and findings. The immediate calculations and excel outputs should be presented in

an appendix. Use 95% confidence level.

5. Correlation and Regression

In this section, first, Jason intends to investigate the relationship between the property price and

age of the property buyers for AUCTION sales only. As the second test, he investigates the

relationship between the property price and land size.

Use these variables to develop two separate regression models and explore the relationship

between average property prices on the one hand, and age of buyers and the land size on the

other. Make sure that you undertake full regression analyses, with appropriate discussions for

each test. Please include:

• a scattergram coupled with a brief description of the output

• an estimate of the linear regression model

• the coefficients of correlation and the coefficients of determination

• test results of a hypothesis for whether or not there is a linear relationship between

dependent and independent variables.

FIN60003 Assignment Page 4

Assignment structure:

Presentation is an important feature of a business report. The guide to presentation that follows

includes an Executive summary, Introduction, Analysis and Appendices (please refer to the

instructions given in e-tivity 5.3). Your assignment should contain the following sections:

Executive summary

This is your first page and not to be included in the page count. Executive summary should be a

combined form of Introduction and Conclusions.

• Report only the highlights of the findings

• Entice an Executive to read on

• Essentially a lively summary of the main conclusions

• It should be no longer than one page and it must be on a separate page from the rest of

the report.

Introduction

This should contain information about what we expect to read in the project.

• State the purpose of the report, e.g. what you will discuss in the report

• Outline the report structure

• Provide a brief description of the methodology and the software used in analysis

• Describe the source of the data

THIS SHOULD TAKE ABOUT HALF A PAGE.

Analysis

This section contains a thorough yet non-technical description of all the findings (graphs and

tables will be included only where they help this discussion). It details the results that were

highlighted in the Executive Summary. No calculation is required here but appropriate graphs

and tables should be included. Your analysis section should contain the following sub-sections:

• DESCRIPTIVE STATISTICS

There are 7 variables in your data sets. Depending on the level of measurement (Nominal,

Ordinal or Interval/Ratio measure) you will need to provide an appropriate graph, a summary

statistics table and interpretations related to each variable. Take one variable at a time.

THIS SHOULD TAKE ABOUT TWO PAGES.

• CONFIDENCE INTERVAL

“We are 95% confident that………….”

Do not show the method of calculating a confidence interval (Calculation details should be

reported in appendices). Do not draw a graph. THIS WILL TAKE HALF A PAGE OR LESS.

FIN60003 Assignment Page 5

• HYPOTHESIS TESTING

Do not write H 0 , H A etc. Only your interpretation of results such as “hypothesis test was

performed on………” Also report the type of hypothesis (i.e., upper, lower, two-tail), the test

statistic, p-value, and degrees of freedom. Report the sample data used for analysis of this section

in the appendix. THIS WILL TAKE AROUND ONE PAGE OR LESS.

• CORRELATION and REGRESSION

Present your scatter plots with a line of best fit included in the graphs. Clearly specify the

dependent and independent variables and describe the strength of relationships using R and R

squared values.

Interpret the slope and intercept coefficients as well as hypothesis test result (t-value, p-value,

etc.). Report the sample data used for analysis of this section in the appendix. THIS WILL

TAKE ABOUT ONE AND HALF PAGES OR LESS.

Conclusion and limitations

All the important findings and results of your work should be presented here in a concise

format. Do not include any tables or graphs. This section is

• Essentially an expansion of the Executive Summary written from the point of view that

the Executive Summary has not been read.

• It ends with a discussion of the limitations of your analysis.

THIS WILL TAKE HALF A PAGE

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Reference list

Follow the Harvard Style Guide (available on e-tivity 5.3) for all in text references, reference lists

and bibliographies (reference list and appendices are not included in the page count).

Appendices

• Each appendix must be numbered and be referred to in the main body of the report (if

possible print double-sided).

• Must contain your selection of random numbers and related random data and any

additional calculations and computer outputs (do not print the entire population).

• Also attach your EXCEL outputs for descriptive statistics, confidence intervals,

hypothesis testing, and regression analyses.

Graphs must be presented in the main body along with relevant tables and discussion. Those

Graphs that are presented in the appendices only will not be marked. Only include relevant

Excel outputs in the report, and place the rest of outputs in the appendices. However, try to

keep the appendices to a moderate size. Remember that examination is entirely based on the

FIN60003 Assignment Page 6

report itself and any excel outputs appeared in appendices are only to confirm your excel

calculations.

Instructions above about the page lengths are only a guideline. You will not be penalized for

changing these, as long as your report remains within the 6-page limit.

Marking allocations and submission instructions

This assignment contributes 20% to the final assessment.

Presentation 1%

Executive Summary 1%

Introduction 1%

Descriptive statistics 4%

Confidence intervals 2%

Hypothesis Tests 4%

Correlation and Regression 4%

Conclusion and Limitations 1%

Appendix with EXCEL outputs 2%

• Students must work independently on this assignment and submit only their own work.

They are expected to submit genuine attempts at the assignment.

Note: no extension will be given to students on the grounds that they tried to print their

assignment on the due day but the print failed for any reasons.

• This assignment must have the correct cover page (available on e-tivity 7.5) which

includes your ID number, family name, given name, tutorial day and time and your

lecturer’s name. Do not use heavy plastic covers or put each page into a separate plastic

pocket.

• Marks will be awarded for presentation. Assignments must be word processed and

include page numbers. Students are to use MS-Excel to perform the data analysis. All

relevant Excel outputs, referred to but not included in the report itself, is to be placed in

an appendix.

• Assignment maximum lengths: 6 single-sided A4 pages, plus cover sheet, Executive

Summary and Appendices. Executive Summary, Reference List and Appendices are not

included in the page count.

• Each student must keep a copy of their assignments for their own records.

• Students are required to submit their assignments in both electronic copy and hard copy

formats. Electronic copies should be submitted through Turnitin. Students are allowed to

submit only one document in MS Word format (including the assignment coversheet).

Turnitin provides a matching service which will compare final submission with a range of

data bases, including comparisons with other assignments, to avoid plagiarism. In

addition, a hard copy of your assignment including an assignment coversheet must be

submitted to your lecturer.

FIN60003 Assignment Page 7

• Due date : All hard copies should be submitted by Thursday 29 October at 5pm.

Please drop your assignment in an assignment box at the 11 th floor of BA building

(opposite the lifts’ doors). The unit code and title are written on the box. All assignments

must also be submitted through Turnitin by the same date (29 October).

• The submission time is recorded on Turnitin and the penalty for a late submission of

assignments is 20% of awardable marks per overdue day.

FIN60003 Assignment Page 8

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