Quantitative Research Examples Step By Step Examples

Quantitative Research Example

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Top 4 Examples of Quantitative Research

Example #1 – Using Mean for Opinion Poll

There is a new marketing campaign for the launch of your product, which is a smartphone with some added camera benefits. The audience was to rate the additional features on a scale of 1 to 5, 5 being the highest.

Below is the result of the poll that was taken for a sample size of 50 people from different areas and age groups:

Since there is a different count of respondents for each of the ratings, hence we need to calculate the result by using the Weighted Average Mean method. Weighted Average Mean can be calculated using the sumproduct() function in excelSumproduct() Function In ExcelThe SUMPRODUCT excel function multiplies the numbers of two or more arrays and sums up the resulting products.read more.

On calculating, we see that the mean is higher than 3, which means that the observation has resulted in a positive response. The additional features in the camera of the smartphone have created a positive impact, and this survey on the pilot sample creates a go-ahead situation for the company.

Example #2 – Calculating Portfolio Return

The portfolio a client has invested in has to be managed by an authorized portfolio managerPortfolio ManagerA portfolio manager is a financial market expert who strategically designs investment portfolios.read more. This portfolio contains 60% common stocks, 30% in bonds, and 10% in cash. The return on common stocksCommon StocksCommon stocks are the number of shares of a company and are found in the balance sheet. It is calculated by subtracting retained earnings from total equity.read more is 14%, the return on bonds is 8%, and the return on cash is 3.5%.

The portfolio returnPortfolio ReturnThe portfolio return formula calculates the return of the total portfolio consisting of the different individual assets. The formula is computed by calculating the return on investment on individual asset multiplied with respective weight class in the total portfolio and adding all the resultants together. Rp = ∑ni=1 wi riread more can be calculated using the concept of the important investment where the overall return is the weighted average of the returns of the individual assets in the portfolio.

Therefore, the weighted average on each asset classAsset ClassAssets are classified into various classes based on their type, purpose, or the basis of return or markets. Fixed assets, equity (equity investments, equity-linked savings schemes), real estate, commodities (gold, silver, bronze), cash and cash equivalents, derivatives (equity, bonds, debt), and alternative investments such as hedge funds and bitcoins are examples.read more can be calculated as,

=60% * 14%

=8.400%

Similarly, we can calculate the weighted average of other assets class as shown above

As seen below, the return on the overall Portfolio can be easily calculated if we know the returns on each of the asset classes. In this scenario, the portfolio is generating a return of 11 % per annum for the investor.

=8.400% + 2.400% + 0.3500%

Return on Overall Portfolio =11%

The step-by-step details of how we can arrive at the portfolio return when each of the asset classes has a different weightage in the portfolio can be calculated using the concept of Weighted Average.

Example 3 – Risk Assessment

Risk assessment is a combination of risk analysis and risk evaluation.

Risk analysis is the different methods and ways of identifying and analyzing potential future events impacting current situations, while risk evaluation is making estimations and judgments based on the risk analysis done. This is one of the most important processes the management needs to do to handle a team and its employees.

The risk assessment score is the average of the Likelihood, Impact, and Current Values.The above 3 components are rated on a scale of 1 to 3, 3 being the highest. However, the overall assessment is done on a scale of 0 to 5. The scale of 1 to 3 is converted to 0-5 by the risk analytics.

Let us check for the current scenario of a business idea where:

Likelihood = MediumImpact = MediumCurrent Impact = High

In order to calculate the Risk Assessment on a scale of 0 to 5, we can solve the same using the Excel spreadsheet features:

The calculation of risk assessment will be –

=((2+2+3)/3)*2 – 1

Risk Assessment =3.67

Example #4 – Calculation of Average Annual Return

The stock price for one stock of Microsoft corporation approximately 10 years back as on 13th February 2009 was $14.898. The current stock price for the same, as on 11th February 2019, is $105.25.

The average annual returnAnnual ReturnThe annual return is the income generated on an investment during a year as a percentage of the capital invested and is calculated using the geometric average. This return provides details about the compounded return earned yearly and compares the returns supplied by various investments like stocks, bonds, derivatives, mutual funds, etc.read more for a given stock or fund can be calculated using the concept of Geometric Mean:

The Average Annual Return can be calculated as follows,

=((14.90/105.25)^(1/10)-1)*100%

Average Annual Return = 21.59%

As seen, the stock has given a more than satisfactory returns as compared to its peers when compared over the same 10 years. This kind of analysis is further used for peer comparison, built estimates as well as creating any detailed valuation model or numbers around this.

Conclusion

Quantitative Methodology is used in almost all the fields of humanity today, and the reason being facts and numbers being used. The dependency, variables, and estimation become easier and valid, weighing this research and methodology more than anything else. On the other hand, qualitative research methodologies are used as and when appropriate. Gradually, we are also developing mixed-methods research tools that mix the use of qualitative and quantitative requirements, methods, and paradigms.