This report consists of two parts: Part 1 requires you to undertake data analysis. Part 2
requires you to discuss your findings from Part 1 with the help of academic literature,

which
is nothing else than a literature review with respect to your analysis from Part 1.
Each of the above elements carries a specific percentage towards the final mark of this part. You will
find their weights in the assessment criteria below.
The word limit for the literature review is 2000 words (± 10%). Submission via Turn-it-in only. The
deadline is 25 May 2014, 23.59pm.

The literature review should critically discuss the academic(!) literature of the problem(s) addressed
in part 1 of this assignment. This assignment is worth 50% of the total mark for this unit. Part 1 and
part 2 are each worth 50% of the final mark of this assignment. Submit both parts in one word file.
Part 1: Data Analysis
In the assignment 3 folder on BREO you find an Excel file called “salaries.xls”. Use this file and the
data provided for this part of the assignment. The file contains the data of 135 employees and their

salaries (in thousands of pounds). For each employee you also find data for how many years the
employee is employed by the company and for how many years, the employee is a senior officer in
the company.
It is recommended that you use Excel for all calculations. For your submission, you need to provide
this Excel table in your word document as an appendix. The table should contain all calculations. If

you do not provide the Excel table you will fail Part 1 of this assignment. The total of marks in part 1
is 50 marks.
1) Calculate the mean, median, standard deviation of “Salaries”, “Years in the Company” and
“Years as a Senior Officer”. (5 Marks)
2) Calculate the mean of grouped data from the series “Salaries”. Use the following salary

classes: £0-£50,000; £50,001-£100,000; £100,001-£150,000; £150,001-£200,000; £200,001-
£250,000; £250,001-£300,000; £300,001-£500,000; £500,001-£550,000. Show in detail how
you calculated the result. (10 Marks)
3) Assume that the population mean is £90,000 and that the population variance is 25mln.
What is the probability that an employee earns more than or equal to £113,000? Use the

Standard Normal Distribution to calculate the probability. Explain all your steps how you get
your result. (10 Marks)
4) Explain briefly the rationale that salary level depends upon how many years an employee
served in the company and how many years an employee served as a senior officer.
(5 Marks)
5) Test the hypotheses that the “Salaries” depend upon “Years in the Company” or “Years as a
Senior Officer”. In order to do so ran a simple OLS regression of the kind ???? = ???? + ????1????1 +

????2????2 where Y are “Salaries”, X1 are the “Years in the Company” and X2 are the “Years served
as a Senior Officer”. Present your results in a table. (10 Marks)
1
6) Interpret your results from 5) with respect to whether ß1 and ß2 are statistically different from zero using the t-test. (10 Marks)
Part 2: Literature Review (2000 words)

Write a critical literature review on what determines the salary levels of company executives. Critically evaluate whether the academic literature confirms your results or not and why.
The marking criteria for this part are below:
F
E
D
C
B
A

Work is of little or no merit
Insufficient discussion and use of the academic literature.
Very limited discussion and use of the academic literature.
A sound overview and discussion of the issues raised in the academic literature. A sound explanation of the theory.
A good explanation of the theory and a good discussion of the issues raised in the academic literature.
An excellent insight into the issues raised in the academic literature including an excellent explanation of the theory.
2