Business Stats Unit #1

Descriptive Statistics

Summary of important aspects

Inferential Statistics

Drawing conclusions about a population based on a sample

Population

everyoneof interest

Sample

subset of population

Cross-Sectional Data

Data collected at the same point in time

Time Series Data

Data collected over several time periods focused on certain things/ppl/etc

Structured Data

Numerical data that is organized

Unstructured Data

Multi media with an implied structure

Big Data

A volume of structure and unstructured data

Categorical Variable

Qualitative data

Numeric Variable

Quantitative data

Nominal Scale

Least sophisticated; represent categories

Ordinal Scale

Categorizes data with respect to some characteristic

Interval Scale

Categorize and rank meaningful data; ratios have no meaning

Ratio Scale

Strongest measurement with a true zero point; ratios matter

Frequency Distribution

A table that groups data into categories and includes the relative frequency for each category.

Cumulative Frequency

These use the same number of intervals, interval widths, and interval limits developed when constructing the frequency distribution, but instead show the number of observations that fall below the upper limit of a particular interval

Relative Frequency

Indicates the proportion (fraction) of the observations that falls below the upper limit of that interval

Contigency Table

Used to examine the relationship between two categorical variables

Clustered Column Chart

Used to visualize more than one categorical variable

Scatterplot w/ Categoricak Variable

Modifies a basic scatterplot by incorporating a categorical variable

Sample Mean

Shown as x

Population Mean

Shown as U

Boxplot Symmetry

Median is in the center of the box, and the left and right whiskers are equally distant from their respective quartiles

Positivley Skewed Boxplot

Median is left of center and the right whisker is longer than the left whisker

Negativley Skewed Boxplot

Median is right of center and the left whisker is longer than the right whisker

Interquartile Range (IQR)

The difference between the 3rd quartile and the 1st quartile

Mean Absolute Difference (MAD)

The average of the absolute differences between the observations and the mean

Variance

The average of the squared differences between the observations and the mean

Standard Deviation

The positive square root of the variance

Coefficient of Variation

A way to evaluate comparisons of mean-adjusted dispersion across different data sets in a unitless way

Sharpe Ration

“reward-to-variability” ratio

Chebyshev’s Theorem

The proportion of observations that lie within k standard deviations from the mean is at least 1-1/k^2 where k=any number > 1

Empirical Rule

Distributions will be a symmetric bell-shape & follow the 68-95-99 split

Correlation Coefficient

Describes both the direction and strength of the linear relationship between x and y

Exhaustive Events

Include all outcomes in the sample space

Mutually Exclusive Events

The occurrence of one event precludes the occurrence of others (no common outcomes)

Union of 2 Events

Evaluates all outcomes of either event A or event B (A U B)

Intersection of 2 Events

All outcomes in event A and event B ( A n B)

Complement of Event A

All outcomes that are not in event A

Subjective Probability

calculated by drawing on personal and subjective judgement

Empirical Probability

calculated as a relative frequency of occurrence

Classical Probability

based on logical analysis