BRUNEL UNIVERSITY Master of Science Degree examination Specimen Exam Paper 2005-2006 EC5002: Modelling Financial Decisions and Markets EC5030: Introduction to Quantitative Methods Time allowed: 1.5 hours Answer all of question 1 and at least two other questions

1. COMPULSORY Provide brief answers to all the following: (a) A sample of 20 observations corresponding to the model: Y = + X + u, gave the P P P following data: (X X)2 = 215:4, (Y Y )2 = 86:9, and (X X)(Y Y ) = 106:04. Estimate . (5 marks) (b) Prove that r2 = byx bxy , where byx is the least-squares (LS) slope in the regression of Y on X , bxy is the LS slope in the regression of X on Y , and r is the coe¢ cient of correlation between X and Y . (5 marks) (c) Present four alternative in‡ ation/unemployment regressions. (5 marks) (d) Give one reason for autocorrelated disturbances. (5 marks) (e) Explain how we might use the Breusch-Godfrey statistic to test estimated residuals for serial correlation. (5 marks) (f) The following regression equation is estimated as a production function for Q: lnQ = 1:37 + 0:632 lnK + 0:452 lnL, cov(bk ; bl ) = 0:055;

(0:257) (0:219)

where the standard errors are given in parentheses. Test the hypothesis that capital (K ) and labor (L) elasticities of output are identical. (5 marks) Continued (Turn over)

1

ANSWER TWO QUESTIONS FROM THE FOLLOWING: 2. (a) Economic theory supplies the economic interpretation for the predicted relationships between nominal (in‡ ation) uncertainty, real (output growth) uncertainty, output growth, and in‡ ation. Discuss …ve testable hypotheses regarding bidirectional causality among these four variables. (25 marks) + yt

(b) An investigator estimates a linear relation for German output growth (yt ): yt = 1 + ut , t = 1850; : : : ; 1999. The values of …ve test statistics are shown in Table 1: Discuss the results. Is the above equation correctly speci…ed? (10 marks)

3. (a) i) Show how various examples of typical hypotheses …t into...

...Introduction
The hospital manager is studying and evaluating some options of Blood bank services to be more efficient as he has three options; each one is different in terms of cost, benefits and efficiency, and he is trying to evaluate which one will most suitable for making this service more efficient our role is to develop a multi criteria model for his problem and options he has, to help him taking the right decision Utilizing the multi attribute value analysis supported by V.I.S.A software.
Problem structuring:
The checklist cause criteria, alternatives, uncertainties, stakeholders and environmental factors or constraints will help to ensure that all the important facets of the problem have been considered.
Expanding briefly on these aspects in relation,
Stakeholders: is the hospital manger however there are some other stakeholder including as the senior medical staff and other department managers
Alternatives: there are three alternatives:
1. Keep the Blood Bank as it is without changing. And we will call it Option A
2. Expand the Blood Bank to content more blood supply. And we will call it Option B
3. Implementing an IT inventory system with automatic supply order. And we will call it Option C
The criteria: different between the available options.
The external factor is often considered as a source of uncertainty, as traffic or weather problems is a factor to be taken into consideration
Building Value Tree...

...Quantitative Research MethodsQuantitative means quantity which implies that there is something that can be counted. Quantitative research has been defined in many ways. It is the kind of research that involves the tallying, manipulation or systematic aggregation of quantities of data (Henning, 1986)
John W. Creswell defined quantitative research as an inquiry into a social or human problem based on testing a theory composed a theory composed of variables, measured with numbers, and analysed with statistical procedures in order to determine whether the predictive generalisations of the theory holds true. (Creswell, 2003)
On the other hand, another author defined quantitative research as the collection of numerical data in order to explain, predict and/or control phenomena of interest. Quantitative research is explaining phenomena by collecting numerical data that are analysed using mathematically based methods (Aliaga & Gunderson, 2000)
Quantitative research can also be said to be a research based on traditional scientific methods, which generates numerical data and usually seeks to establish causal relationships (or association) between two or more variables, using statistical methods to test the strength and significance of the relationships (A dictionary of Nursing, 2008)
Simply put, quantitative...

...
Quantitative Research
Research Methods in Criminal Justice and Security
Professor Beshears
27 February 2014
Quantitative research collects numerical data through surveys, questionnaires, and polls. Quantitative research main purpose is to find the relationship between two variables. According to Babbie (2010) a descriptive study establishes only associations between variables while experimental defines the casualties (pg. 1). The data that is collected from the research is usually used for bigger representation of a population. The data can also be repeated if it was considered to be very accurate and reliable. Every part of quantitative research is scrutinized very carefully before the data is actually collected. The data that is collected is always in a statistics form or number form. Quantitative research can be used to investigate causal relationships, tell the future, or generalize concepts more widely. According to Babbie (2010) to the main purpose of quantitative research study is to classify features, count them, and construct statistical models in an attempt to explain what is observed (pg. 1). There are four approaches under the Quantitative research and they are descriptive research, correlation research, causal-comparative research, and experimental research.
The research that gathers the information to test the...

...multi-dimensional analysis.
4. Explain ‘Options’ trading. State their significance in modern day
trading.
5. Comment on the business models of private equity funds.
6. Comment on valuation of ‘distressed companies’.
7. Illustrate with an example any three capital structure ratios.
8. Illustrate with an example any three profitability ratios.
9. State and explain ‘time value of money’.
10. Explain with an example, the ‘if-then’ analysis & features in excel
enabling it.
11. Explain any three significant financial analysis features of
excel.
12. Explain ‘derivatives’ trading. State its significance in modern day
trading.
13. Comment on the business valuation through the ‘build-up’ method.
14. State & Explain and two methods of appraisal of a company or
project.
15. Illustrate with an example any three liquidity ratios.
16. Illustrate with an example any three capital market ratios.
This article describes the formula syntax and usage of the VLOOKUP function in Microsoft Excel.
Description
You can use the VLOOKUP function to search the first column of a range of cells, and then return a value from any cell on the same row of the range. For example, suppose that you have a list of employees contained in the range A2:C10. The employees' ID numbers are stored in the first column of the range, as shown in the following illustration.
If you...

...QuantitativeMethods
BITS Pilani
Pilani Campus
Course handout
BITS Pilani
Pilani Campus
Session-1
Instructor Details
Dr. Remica Aggarwal 1214 C ; FD-1 Department of Management Email: remica_or@rediffmail.com
Mobile: 09772054839
BITS Pilani, Pilani Campus
Course Details
• • • • • • •
Management Science Use of QM/QA Modelling Techniques Data Analysis Techniques MS Excel QM for Windows Test
BITS Pilani, Pilani CampusQuantitativeMethods
• • • • • • • Operations Research Statistics Management Science Data IT & QM Business intelligence Theory Vs. Use?
BITS Pilani, Pilani Campus
Operational Research
...is concerned with scientifically deciding how best to design and operate man-machine systems under conditions requiring allocation of scarce resources
BITS Pilani, Pilani Campus
Definition of OR
–T.L. Saaty:
A collection of tools and techniques which provide bad answers to problems ………………………….…………….. which otherwise have ………………… worse answers
BITS Pilani, Pilani Campus
Evolution of OR
• History –U.S. Navy –Naval Research Forum –P.M.S. Blackett –Naval Research Logistics • Need – civilian applications • OR – Blend of art and science
BITS Pilani, Pilani Campus
Application Areas
• • • • • • • • Allocation (product-mix) Scheduling & Sequencing Routing Replacement Inventory Queueing Search Competitive
BITS Pilani, Pilani Campus
Application …(contd.)
•...

...1. How you would use the concept of probabilities to apply to profiles for hiring more satisfied individuals and
2. Other ways that probability is used in business (Use the Business Source Elite Database in the Cybrary, research how probability is used in business).
Begin your email to AIU by first providing an overview of the database, i.e., a story.
Include the following pieces of information.
Part I
a) What is the gender distribution (%females and %males)?
Solution. From the database, we know that there are 168 female people, 120 male people
among 288 people. So,
168/288=58.33% is female,
120/288=41.67% is male.
b) What is the “tenure with company” distribution by gender?
We look at all males. You can do that for females similarly. We get the following table.
From this table, we know that there are 120 males:
26 with code 2 meaning they stay in the company for 2 to 5 years.”
14 with code 3 meaning they stay in the company over 5 years”
80 with code 1 meaning they stay in the company for less than 2 years
So, the “tenure with company” distribution by male is
26/120=21.67% among 120 males stays in the company for 2 to 5 years.
14/120=11.67% among 120 males stays in the company over 5 years;
80/120=66.66% among...

...
Development of Automated Voting System
Methods of Research
By:
Melanie R. Collado
Ana-rose A. Montanez
Angier Mae G. Uno
Chapter 1
Introduction
Background of the Study
Living in a postmodern world is dominated by electronic gadgets, cyber technology and scientific and genetic breakthroughs. In spite of the fact that the Philippines are still just in the process of industrializing, it manages to cope with global trend of development and industrialization. Technology today is the biggest part of an individual.
Elections have been the usual mechanism by which modern democracy operates since the 17th century. It is where people used a specialized computer to vote their candidate instead of the usual ballot boxes where people cast their votes by way of writing on the ballot.
Voting is an election which is formal and critical decision making by which a population chooses an individual. This process is also used in many other private organizations, corporations and now in universities.
Automate voting system is a combination of mechanical, electromechanical, or electronic equipment. It includes the software required to program, control, this is where people used a specialized computer to vote their candidate instead of the usual ballot boxes where people cast their votes by way of writing on the ballot. This process provides much more efficiency and reliability than the conventional way of...

...An Introduction to univariate
financial time series analysis
1 Introduction: what is a time-series?
Time-series is a sequence
{x1, x2, ..., xT } or {xt} , t = 1, ..., T,
where t is an index denoting the period in time in which x occurs. We
shall treat xt as a random variable; hence, a time-series is a sequence
of random variables ordered in time. Such a sequence is known as a
stochastic process. The probability structure of a sequence of random
variables is determined by the joint distribution of a stochastic process.
A possible probability model for such a joint distribution is:
xt = α + t, t ∼ n.i.d.
¡
0, σ2 ¢
,
i.e., xt is normally independently distributed over time with constant
variance and mean equal to α. In other words, xt is the sum of a constant
and a white-noise process. If a white-noise process were a proper model
for financial time-series, forecasting would not be very interesting as
the best forecast for the moments of the relevant time series would be
their uncoditional moments. However this is certainly not the case for
all financial time series. Consider the dataset STOCKINT.XLS which
contains, in Excel format, retrieved from Datastream, quarterly timeseries
data for stock index and valuation ratio and consumer price index
for US, Germany and the UK, over the sample period 1973:1-2010:4.
TOTMKUS_PI: US Datastream Stock Market Price Index;...