Chapter 7

Question 1

what are the two types of data that can be relied on?

Answer 1

Primary data

secondary data

Question 2

What are features of primary data?

Answer 2

• Data collected by an investigator
• With a specific project or task in mind
• ‘new data’
• Tailored to requirements but time consuming

Question 3

What are features of secondary data?

Answer 3

• Data collected by someone else for some other purpose

* E.g. using census data in a research project

Question 4

What is a population?

Answer 4

A population is all members of a defined group e.g. all males in the UK

Question 5

What is a sample?

Answer 5

A sample is a subset of a population

• A sample should be representative and thus sufficiently large to reflect the population

Question 6

What are types of sample?

Answer 6

Sample types
o Random – each member of the population has an equal change of being selected
o Non-random – a selection criteria is used

Question 7

What are types of data and their features?

Answer 7

Discrete data
• Can only take certain values e.g. the result of rolling two dice
• Discrete data is counted

Continuous data
• Can take any value (on an interval) of the line from minus infinity to plus infinity (the ‘real line’), e.g. time taken in a race
• Continuous data is measured

Question 8

what are measures of central tendency

Answer 8

Arithmetic mean
o Simple average (add all together an then divide)

Median
o Middle item

Mode
o The most frequently occurring

Question 9

what is a range?

Answer 9

Range = the difference between the highest and lowest values in a data set

Question 10

What does the interquartile range represent?

Answer 10

Represents the ‘middle 50%’ of a data set

Question 11

Features of the first quartile

Answer 11

o First quartile (‘25th percentile’)
25% of observations lie below this
Mid-point between the lowest value and the median

Question 12

Features of the second quartile

Answer 12

o Second quartile
50% of observations lie below this
The median

Question 13

Features of the third quartile

Answer 13

75% of observations lie below this

Mid-point between the median and the highest value

Question 14

what is skew?

Answer 14

Skewness is a measure of the degree of asymmetry of a distribution.

Question 15

in skew what happens to mode, mean and median?

Answer 15

skew the mode does not move and stays anchored to the highest point. The median will always be in the middle of the two. And it is the mean that is the one most effected.

Question 16

What are the key UK indices

Answer 16

• FTSE 100
• FTSE 250
• FTSE all share
• FT30

Question 17

What does the FTSE 100 measure?

Answer 17

• 100 largest UK Companies
• Captures 70% of the value of UK listed shares
• ‘blue chip’ companies

Question 18

What does the FTSE 250 measure?

Answer 18

• The NEXT most valuable 250 UK companies (‘mid-cap stocks’)

Question 19

What does the FTSE all share measure?

Answer 19

• Top 900 UK companies

Question 20

What does the TF 30 measure?

Answer 20

• Oldest UK index (set at 100 pts in 1935)

* Calculation: geometric mean (is a geometric index)

Question 21

What are the key US indices? and what do they measure?

Answer 21

• Dow Jones Industrial Average
o 30 largest industrial stocks on the NYSE and NASDAQ
o Calculation: Unweighted arithmetic mean
• Standard & Poor’s (S&P) 500
o 500 largest US companies

Question 22

What is the key french index?

Answer 22

• CAC40

Question 23

What is the key German index?

Answer 23

• DAX

Question 24

What is the Key Japanese index and how is it calculated / how is it special?

Answer 24

Nikkei 225

o Calculation: unweighted arithmetic mean
o i.e. Not a market valuated index