Statistics Flashcards
What is the Arithmetic Mean?
The sim of all the inputs divided by the number of them. Usually called the Average.
What is the Mode?
The data item that occurs most frequently. Just look for the most frequently occurring number
What is the Median?
The middle number in a sequence, if there is an even number take the Mean of the middle two!
What is the Deviation?
It is the difference between the actual data and the arithmetic mean of the data set.
How do you get variance from deviation?
You square each deviation to get rid of the negative numbers and then take the arithmetic mean of them.
What is variance?
It is the mean of the squared deviations.
What is standard deviation?
Square root of the variance. Gets you back into numbers that are similar to the original data.
What is Correlation?
The strength of the relationship between two sets of variables.
What is regression?
Determines the Nature of the relationship between two variables.
What is a Normal Distribution?
If you take enough samples of data then the will form a bell curve shape around the mean. This is how we get to SD and SEM.
How do you estimate population level Standard Deviation, o?
You take SDsample x Square root(n/n-1)
What is Standard Error?
ITs the Standard deviation of the Means. If you did lots of different sample groups of the population and plotted there means they would be normally distributed on a bell curve. The mean of this curve will be the population mean, u. This curve has a SD called SEM.
What is the calculation for SEM?
SE= SDpopulation/Square root n
What is a 95% confidence level?
It is 2 SEMs away from the population mean. or 1.96 to be precise. Similar to 2 SDs.
How do we get a 95% Confidence Interval?
Sample Mean +/- 1.96x population SD o/square root n
What is regarded as a large sample size?
30
What do we get when we have a small sample size?
A t-type distribution
What are degrees of freedom?
In small sample sizes, you use degrees of freedom instead of SEM. Degrees of freedom are always -1 from the sample size. (1 has 0 degrees of freedom)
Where do you find degrees of freedom confidence intervals?
In the t-distribution chart.
What is the Correlation Coefficient?
A number between -1 and 1
How do you work out Correlation Coefficient?
Excel!!!
What is the Coefficient of Determination, or R squared?
Correlation Coefficient Squared! Expressed as a percentage!
What is a Regression Line?
Its the calculated line that best fits the data around a scatter diagram. y=a+bx Where a is the intercept and b is the slope of the line. Use Excel! Formula for finding a new y for any x.
How do you know how accurate a Regression Line is?
The Correlation Coefficient.
What is the point of considering the Time Value of Money?
Money today isn’t worth the same as money in the future. If you were to accept 100 next year instead of today you would loose out as you can invest/inflation.
What is the formula for Compound Interest?
= C x (1+r)^n
What is Discounting?
Basically the reverse of Compounding. You can work back to Present Value by the Formula.
PV=FV x 1/(1+r)^n
What is an Annuity?
A product that provides equal payments over a defined period, in exchange for a lump payment at the start.
Is a Mortgage an Annuity?
Yes, its the same but the bank is the one giving the payment.
What is Perpituity?
An Annuity with no defined end period!
