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ISOM111 Midterm 2008

# ISOM111 Midterm 2008 - ISMT111 Business Statistics Midterm...

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ISMT111 Business Statistics Midterm Examination For L5 only 17 October 2008 Directions 1) Answer ALL FIVE questions. Marks are shown in square brackets. 2) There are 4 pages in this examination paper, which includes a normal table. Check to make sure you have a complete set and notify the invigilator immediately if part of it is missing. 3) Key formulas are provided separately. 4) Calculator may be used in this examination. 5) You are given TWO HOURS to complete this examination. Do not begin until you are told to do so.

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Question 1: [16 Marks] The relative change of a stock market index is defined to be yesterday Index yesterday Index - y Index toda Change Relative = . The histogram of relative changes for Heng Seng Index in 2006 is given below. . 0.027 0.018 0.009 0.000 -0.009 -0.018 -0.027 50 40 30 20 10 0 Frequency Histogram of Relative Changes (a) Please find the class width used in this histogram (b) Please describe the important features of the histogram. (c) If someone invested in Hong Kong stock market in 2006, do you think he would have a profit or a loss? Please explain briefly. (d) What can you say about large daily gains or losses in Hong Kong stock market in 2006? (relative changes > 2% or < -2% are considered to be large) Q u e s t i o n 2 : [ 2 0 M a r k s ] In the past, a company spent 90% of its advertising budget on TV commercials and only 10% on other alternatives such as event marketing, word-of-mouth campaign,
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ISOM111 Midterm 2008 - ISMT111 Business Statistics Midterm...

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