# Jack Lawler, a financial analyst, wants to prepare an article on the Shadow Stock portfolio developed by the American Association of Individual Investors (AAII). A list of the 30 companies in the Shadow Stock portfolio as of March 2014 is contained in the DATAfile named ShadowStocks (AAII website March 27, 2014). Jack would like to select a simple random sample of 5 of these companies for an interview concerning management practices. a. In the DATAfile the Shadow Stock companies are listed in column A of an Excel worksheet. In column B we have generated a random number for each of the companies. Use these random numbers to select a simple random sample of 5 of these companies for Jack. b. Generate a new set of random numbers and use them to select a new simple random sample. Did you select the same companies?

13th Edition
Anderson
Publisher: CENGAGE L
ISBN: 9781305881884

13th Edition
Anderson
Publisher: CENGAGE L
ISBN: 9781305881884

#### Solutions

Chapter
Section
Chapter 7, Problem 42SE
Textbook Problem

## Jack Lawler, a financial analyst, wants to prepare an article on the Shadow Stock portfolio developed by the American Association of Individual Investors (AAII). A list of the 30 companies in the Shadow Stock portfolio as of March 2014 is contained in the DATAfile named ShadowStocks (AAII website March 27, 2014). Jack would like to select a simple random sample of 5 of these companies for an interview concerning management practices. a. In the DATAfile the Shadow Stock companies are listed in column A of an Excel worksheet. In column B we have generated a random number for each of the companies. Use these random numbers to select a simple random sample of 5 of these companies for Jack. b. Generate a new set of random numbers and use them to select a new simple random sample. Did you select the same companies?

Expert Solution

a.

To determine

Draw a random sample of 5 of the companies of Jack.

## Answer to Problem 42SE

The random sample of 5 of these companies are tabulated below,

 Company Random Number Hardinge Inc. (HDNG) 0.4298384 Medical Action Industries (MDCI) 0.3792011 Mitcham Industries, Inc. (MIND) 0.4257654 Rocky Brands Inc (RCKY) 0.7556817 Willis Lease Finance Corporati (WLFC) 0.9063183

### Explanation of Solution

Calculation:

Answers may vary. One of the possible answers is given:

The given data represents the Shadow Stock of 30 companies.

Software procedure:

Step-by-step software procedure to obtain a random samples using MINITAB software:

• Click on Calc > Random Data > Sample from columns.
• In Number of rows to sample, enter 5.
• In the Store in column, enter column C2.
• Click OK.
• Click on Data > Display Data
• Select C2.
• Click Ok.

Output using MINITAB software is as follows:

Therefore, the random sample of 5 of these companies is,

 Company Random Number Hardinge Inc. (HDNG) 0.4298384 Medical Action Industries (MDCI) 0.3792011 Mitcham Industries, Inc. (MIND) 0.4257654 Rocky Brands Inc (RCKY) 0.7556817 Willis Lease Finance Corporati (WLFC) 0.9063183
Expert Solution

b.

To determine

Generate a new simple random sample and compare it with the sample in part (a).

## Answer to Problem 42SE

The random sample of 5 of these companies is,

 Company Random Number Marlin Business Services Corp. (MRLN) 0.6827254 International Shipholding Corp (ISH) 0.227759457 VOXX International Corp (VOXX) 0.629674789 Hardinge Inc. (HDNG) 0.429838402 Rocky Brands Inc (RCKY) 0.755681737

The random samples in these data set does not match with the random samples of part (a).

### Explanation of Solution

Calculation:

Software procedure:

Step-by-step software procedure to obtain a random sample using MINITAB software is as follows,

• Click on Calc > Random Data > Sample from columns.
• In Number of rows to sample, enter 5.
• In the Store in column, enter column C2.
• Click OK
• Click on Data > Display Data
• Select C2.
• Click Ok.

Output using MINITAB software is as follows,

Therefore the random sample of 5 of these companies is,

 Company Random Number Marlin Business Services Corp. (MRLN) 0.6827254 International Shipholding Corp (ISH) 0.227759457 VOXX International Corp (VOXX) 0.629674789 Hardinge Inc. (HDNG) 0.429838402 Rocky Brands Inc (RCKY) 0.755681737

Here, it is observed that the drawn sample is not same as the sample drawn in part (a).

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