Nov 2018 Q7
a) Royal Driving School is considering investing in a profitable project. The school is given the following investment alternatives and percentage rates of return.
Over the past 300 days, market conditions have been moderate for 150 days and good for 60 days.
Required:
i) Calculate the expected return for each type of investment. (4 marks)
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ii) Determine the optimum investment strategy for Royal Driving School. (3 marks)
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Since the expected return of 6% is the highest and it is for property, the school should invest in Property.
b) The number of errors made by 294 students of Royal Driving School in their first attempt at a driving test is grouped in the following frequency distribution:
Required:
i) Compute an estimate of the mean and mode for the distribution. (3 marks)
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ii) Construct an ogive for the distribution. (4 marks)
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iii) Using the ogive in (ii) above estimate the median for the distribution. (3 marks)
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The median is at the 294/2 = 147th position. Thus from the graph the estimate of the median is 43.
iv) Use the ogive in (ii) above to estimate the percentage of errors within one standard deviation of the mean. (3 marks)
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Thus percentage of errors within one standard deviation of the mean is 64%