All peices of data are referred to as the population, a subset of that is taken to form a sample.
Greek letters differ based on whether the test refers to the Population or a sample. (not able to be shown here is a small bar over the top of the x as an indicator of the Arithmetic mean of a Sample).
Population / Sample
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Arithmetic mean |
μ |
x- |
Standard deviation |
s |
s |
Correlation coefficient |
r |
r |
Regression coefficient |
b |
b |
Information may be grouped into classes where the number of classes to use is 2 raised to the square root of the number of classes (k) and 2^K equals the number (or less than) of the sample.
Relative frequency = frequency / total observations
Calculations for estimating the arithmetic mean |
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and the variance from a frequency distribution |
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Midpoint |
Frequency |
||||||
(x) |
(f) |
fx |
(x-µ) |
(x-µ)²f |
|||
210 |
23 |
4.830 |
(146) |
490.268 |
|||
330 |
18 |
5.940 |
(26) |
12.168 |
|||
450 |
8 |
3.600 |
94 |
70.688 |
|||
570 |
6 |
3.420 |
214 |
274.776 |
|||
690 |
4 |
2.760 |
334 |
446.224 |
|||
810 |
1 |
810 |
454 |
206.116 |
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60 |
21.360 |
1.500.240 |
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Arithmetic mean from frequency distribution: |
=C16/B16 |
356 |
= 21.360 / 60 |
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Actual arithmetic mean: |
=MITTELWERT(Dataset!E11:E71) |
358 |
Sales |
(millions) |
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Variance from frequency distribution.: |
=E16/B16 |
25.004 |
= 1500240 / 60 |
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Standard deviation from frequency distribution: |
=WURZEL(E21) |
158 |
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Actual variance: |
=VARIANZEN(Dataset!E11:E70) |
24.878 |
Sales |
(millions) |
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Actual standard deviation: |
=STABWN(Dataset!E11:E70) |
158 |
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|
Percentage |
Growth |
Actual Sales |
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Year |
Change |
factors |
($ billions) |
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|
(1) |
(2) |
|
C8 | D8 |
20X0 |
25% |
=1+B9 |
=D8*C9 |
1,25 |
18,75 |
20X1 |
-30% |
=1+B10 |
=D9*C10 |
0,7 |
13,13 |
20X2 |
40% |
=1+B11 |
=D10*C11 |
1,4 |
18,38 |
20X3 |
-20% |
=1+B12 |
=D11*C12 |
0,8 |
14,70 |
Arithmetic mean of growth factors |
D15 = MITTELWERT(C9:C12) |
1,04 |
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Geometric mean of growth factors |
D16 = GEOMITTEL(C9:C12) |
0,99 |
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Average growth rate |
D17 = D16-1 |
(0,01) |
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Year 20X3: |
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Applying arithmetic mean |
=D8*D15^4 |
17,38 |
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Applying geometric mean |
=D8*D16^4 |
14,70 |
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In determination of the relative variability of a set of data to another, compare their coefficent of variation. That is the ratio of the standard deviation to the mean.
sample 1 CV = 0,5%
sample 2 CV = 2,5%
Sample 2 is twice as variable a sample 1.
There may be uncontrollable factors which affect samples such as state of the economy, geopolitical events, weather, interest rates, and other. So when studying investments, these factors may affect final outcomes despite historical rates and consideration of risk.
The coefficient of variation is useful if investments have the same standard of deviation. Looking to the CV, one can build a better picture of risk.
A sample proportion = x/n, x=sample event, n=sample population.