L2

Question 1

What is the arithmetic mean

Answer 1

The average x1+x2…xn/nx

Question 2

What ate the pros and cons when using mean to gain information about a population

Answer 2

It is commonly said sed but it is heavily swayed by outliers and does not necessarily represent something typical or even a number in the data set

Question 3

What is the median

Answer 3

The value in the middle if you order and flatten the set.

Question 4

What is the benefit of using median

Answer 4

It is not affected by outliers

Question 5

What is the mode in statistics

Answer 5

The value that is observed most frequently. Typvärde in swedish

Question 6

What are the pros and cons of using mode to calculate the most typical value in a sample

Answer 6

Pro is that it is intuitive but con is that it can only be used if variables repeat

Question 7

What does it mean that the distribution is unimodal or bimodal

Answer 7

That that there is one or two clusters of commonalities in the population f.ex the set could be 1122239988877 with modals around 2 and 8

Question 8

What does a uniform distribution mean

Answer 8

That every value in the set is the same

Question 9

What is told about median and mean in any symmetric distribution

Answer 9

They will be the same, if the distribution is unimodal the mode will also be equal

Question 10

What can be told about median and mean in f the distribution is skewed

Answer 10

Mean will be biased against the direction of the skew

Question 11

What is a weighted mean

Answer 11

A mean that is tampered with as some observations matter more than others

Question 12

How can one calculate mean when we find the observations grouped together such as in a frequency table or histogram

Answer 12

By using the frequency as weights, makes sense 2 * 1 + 3 * 2 = 2+3+3

Question 13

What is geometric mean

Answer 13

Mean that uses square root of multiplication instead of addition. Commonly used when calculating investment returns and average growth rates

Question 14

What are the pros of using geometric mean

Answer 14

It is usually smaller (don’t know if pro) and it is less sensitive to outliers

Question 15

What is dispersion

Answer 15

Dispersion, distribution or spread is how far the numbers are from each other, high spread on return often means high risk

Question 16

What is a common name for mean, median and mode

Answer 16

Measures of central location

Question 17

What are some ways of measuring dispersion

Answer 17

Mean absolute deviation (MAD), variance and standard deviation as well as the coefficient of variation

Question 18

What is the range of a sample

Answer 18

The distance between the highest and lowest value of a sample

Question 19

Why is n-1 used as a denominator when calculating sample variance when N is used for population

Answer 19

To ensure that the sample variance is an unbiased estimator whatever that means, checkout the appendix 7.2 when the book arives

Question 20

What is the coefficient of variation

Answer 20

The ratio between the standard deviation and the mean

Question 21

What is mean variance analysis

Answer 21

The comparison of risk and reward showing what you will get in the long tun and what you can loose if you are unlucky

Question 22

What is the sharp ratio

Answer 22

The risk to reward ratio

Question 23

What foes a high sharp ratio mean

Answer 23

That the investment compensates for the risk well