Chapter 7

Directions:

Read the description of the Century Bank data set and complete the tasks described in the steps provided. Submit both a Microsoft Word and a Microsoft Excel document that contain the results of the tasks thatshow the completion of the tasks.

Century National Bank Description:

Assume that you work in the Planning Department of the Century National Bank and report to Ms. Lamberg. You will need to do some data analysis and prepare a short written report. Remember, Mr. Selig is the president of the bank, so you will want to ensure that your report is complete and accurate. A copy of the data appears in Appendix A.6.

Century National Bank has offices in several cities in the Midwest and the southeastern part of the United States. Mr. Dan Selig, president and CEO, would like to know the characteristics of his checking account customers. What is the balance of a typical customer? How many other bank services do the checking account customers use? Do the customers use the ATM service and, if so, how often? What about debit cards? Who uses them, and how often are they used?

To better understand the customers, Mr. Selig asked Ms. Wendy Lamberg, director of planning, to select a sample of customers and prepare a report. To begin, she has appointed a team from her staff. You are the head of the team and responsible for preparing the report. You select a random sample of 60 customers. In addition to the balance in each account at the end of last month, the data set includes (1) the number of ATM (automatic teller machine) transactions in the last month; (2) the number of other bank services (a savings account, a certificate of deposit, etc.) the customer uses; (3) whether the customer has a debit card (this is a bank service in which charges are made directly to the customer's account); and (4) whether or not interest is paid on the checking account. The sample includes customers from the branches in Cincinnati, Ohio; Atlanta, Georgia; Louisville, Kentucky; and Erie, Pennsylvania.

Use to the Century National Bank data set to complete the tasks described below.

Part I

1.      Find the mean and the sample standard deviation of account balance for the sample of 60 customers.

2.      Create a histogram of the account balances using any software tool such as SPSS, or Excel. Indicate the mean and 1, 2, and 3 standard deviations from the mean on the X-axis of the histogram.

3.      Compare the histogram with the Normal distributionand describe what you observe.
I.e. do they have the same shape? What percent of the data is within 1, 2, and 3 standard deviations of the mean? Etc.

4.      Is it reasonable that the distribution of checking account balances approximates a normal probability distribution?

5.      Copy the data into the worksheet "Sorted Data" and sort the balances is descending order.

Copy the of the first 20 records with lowest balances into the worksheet "Group 1". Copy the next 20 records with the middle balances into the worksheet "Group 2" and the next 20 records that contain the 20 highest balancesinto the worksheet "Group 3".

See the screenshot below as a guide.

Part II

6.   Find descriptive statistics for each group. Use the table below as a guide.

7.      Next, develop a frequency table that shows the number of account balances in each of the categories by city. Use the table below as a guide.

8.      Does it appear that account balances are related to the branch?
Comment on your findings.

9.      Create one graphic to help you better understand the data.

10.  What insight to the data does your graphic provide?