Description

1. Individual Exercise 1 (10 Points)
   (Q1 and 2 is worth 0.5 points each, Q 3 is worth 2 points, Q4-6 is worth 1 point each and Q7 is worth 4 points)

    

   1.       In Dallas, 50% of families subscribe to the morning newspaper, 65% of the families subscribe to the evening newspaper and 85% subscribe to either the morning or the evening newspaper. Then, what % families subscribe to both morning and evening newspaper? Show how you arrived at your answer.

   2.       Your friend Bill, comes to you with the following situation and asks for your comments. Bill has recently inherited $10,000 and he wants to invest it. He is looking at several options.

   a.       Option A: Invest all of it in a broad-based mutual fund that has generated about an average of 8% return (after tax and fees) over the years with a standard deviation of 5%.

   b.       Option B: Invest all of it in a mixture of long/medium/short-term bonds that has generated an average of 4% return (after tax and fess) over the years with a standard deviation of 2%.

   What would you tell him and why? Assume past performance is a good indicator of what may happen in the future.

    

   3.       If two balanced dice are rolled, what is the probability that the difference between the two numbers that appear will be less than 3? Explain how you arrived at your answer (hint: write out all possibilities of numbers in the throw of the dice 1 and dice 2).              

    

    

   4.       Sally, a brand manager is considering several options for her company. Her company has recently developed and test marketed a new brand in a regional market. Based on the market test data, it appears that her customers like the new brand. However, during the market test, her competitors were not running any heavy promotions for their own brands. Sally feels there is a 60% chance that her competitors will run heavy promotions with their own brands if she launches her new brand in the national market. Her estimate is that she will lose about $2.5 million if she launches the new brand nationally and her competitors run heavy promotion. She estimates she will make $5 million if she launches nationally and competitors do not run heavy promotion. Can you help her figure what will happen if she launches nationally and explain to her why?

    

   5.       MSBAN program at OSU uses both GMAT (assume to be distributed Normally with a mean 500 and a standard deviation of 100) and GRE (assume to be distributed Normally with a mean 300 and a standard deviation of 15) to select potential candidates. Candidate A has a GMAT score of 650 while candidate B has a GRE score of 320. Who is a better candidate and why?

    

   6.       Assume that average time spent by customers in a company’s web site is normally distributed with mean of 32 secs and a standard deviation of 2.3 seconds. The most typical 70% of customers spend between what two time periods on the company’s web site?

   
   

    

    

   7.       In Q2 2008, the digital marketing team at a company (MART) started two test campaigns – SMART Awareness and SMART Conversion. The stated primary goal of the awareness campaign is to generate broad-based awareness of MART. The stated primary goal of the conversion campaign is to drive traffic to its website and increase sales for its PC products (Laptops and Desktops). Each campaign used different content categories (such as technology, news etc.), different creatives (such as save money, super value, etc.), different creative sizes (such as 728X90, 336X280 etc.), different sites (such as CNN, MSN, etc.). You are provided with the campaign advertising data (filename: Exercise1 in Excel format) available from the double click DFA ad-server. The media cost represents the total cost for each line item in US dollars. Suppose you are hired as a consultant to analyze this test data and produce a brief report for the management of MART. For now, create a short report (2 pages maximum) about just two important metrics: CTR (click-through-rate defined as clicks recorded per impressions delivered for each row of data) and CPC (cost-per-click defined as media cost per clicks delivered for each row of data). Write your report in a manager-friendly language but back up your assertions with appropriate statistics and graphs as needed. For this report, please ignore the following variables: Date, Content_Category, Product, Creative, Creative_Size and Site_Name.