CASE STUDIES

Case Study 3.1

An article in The Wall Street Journal (July 11, 2008) outlined a number of reasons as to
why the 16 teams in Major League Baseball's National League (NL) are inferior to the 14
teams in the American League (AL). One reason for the imbalance pointed to the
disparity in opening-day payrolls: the average AL payroll is greater than the NL average.
A portion of the data showing opening-day payroll for each team is in the accompanying
table; the complete data, labeled MLB Salaries, can be found on the Data sheet.
MLB Salaries
In a report, use the sample information to:
1. Discuss the mean and median of AL and NL opening-day salaries and comment
on skewness.
2. Compare the range and standard deviation of AL and NL opening-day salaries.
3. Use these summary measures to comment on the findings in The Wall Street
Journal.
Case Study 3.2
Five years after graduating from college, Lucia Li feels that she is finally ready to invest
some of her earnings. She has eliminated her credit card debt and has established an
emergency fund. Her parents have been pleased with the performance of their mutual
fund investments with Janus Capital Group. She has narrowed her search down to two
mutual funds:
Janus Funds
The Janus Balanced Fund: This core fund consists of stocks and bonds and its goal is
diversification. It has historically produced solid long-term returns through different
market cycles.
The Janus Overseas Fund: This fund invests in overseas companies based on their
individual merits instead of their geography or industry sector.
The following table reports the annual returns (in percent) of these two funds over the
past 10 years; these data, labeled Janus Funds, are also available on the Data sheet.
In a report, use the sample information to:
1. Calculate measures of central location to describe the similarities and the differences
in these two funds' returns.
2. Calculate measures of dispersion to assess the risk of each fund.
3. Calculate measures of correlation between the two funds.

Case Study 3.3

Nike's Online Annual Report provides total revenues (in millions of $) for the Asian and
Latin American regions for the years 2005 through 2009 as follows:

Adidas' Online Annual Report provides total revenues (in millions of ) for the Asian and
Latin American regions for the years 2005 through 2009 as follows:

In a report, use the sample information to:

1. Summarize the growth rates in Asia and Latin America for Nike.
2. Summarize the growth rates in Asia and Latin America for Adidas.
3. Discuss the similarities and the differences of the growth rates in the two
companies
Case Study 3.4
Due to a crisis in subprime lending, obtaining a mortgage has become difficult even for
people with solid credit. In a report by the Associated Press (August 25, 2007), sales of
existing homes fell for a 5th consecutive month, while home prices dropped for a record
12th month in July 2007. Mayan Horowitz, a research analyst for Quant Experts, wishes
to study how the mortgage crunch has impacted the once booming market of Florida.
He collects data on the sale prices (in $1,000s) of 25 single-family homes in Fort Myers,
Florida, in January 2007 and collects another sample in July 2007. For a valid
comparison, he samples only three-bedroom homes, each with 1,500 square feet or less
of space on a lot size of 10,000 square feet or less. A portion of the data is given below;
the complete data, labeled Ft. Myers Sales, are available on the Data sheet.
Ft. Myers Sales
In a report, use the sample information to:
1. Compare the mean, median, and mode in each of the two sample periods
2. Compare the standard deviation and coefficient of variation in each of the two
sample periods
3. Discuss significant changes in the housing market in Fort Myers over the 6-month
period.