Quantitative Methods - Statistics

Question 1

What is the floor with being a decision maker?

Answer 1

In nearly all instances, there is information asymmetry.

Question 2

What is probability theory?

Answer 2

Probability theory allows decision makers to assess risks and benefits associated with different decisions.

Question 3

What is inference?

Answer 3

A conclusion based on evidence,

Question 4

What is statistical inference?

Answer 4

The drawing of conclusions from a sample of data.

Question 5

What is the frequentist view?

Answer 5

The proportion of trials in which the event occurs, calculated as if the number of trials approaches infinity.

Question 6

What is the subjective view?

Answer 6

Someone’s degree of belief about the likelihood of an event occurring.

Question 7

How would you work out the probability of head that come up on the toss of the coin? *as the number of trials approaches infinity.

Answer 7

Pr(H) = Number of heads/ number of trials.

Question 8

What is empirical evidence?

Answer 8

Derived from or guided by experience or experiment.

Question 9

What is an experiment?

Answer 9

An activity such as tossing a coin, which has a range of possible outcomes or events.

Question 10

What is a trial?

Answer 10

A single performance of an experiment?

Question 11

What is the sample space?

Answer 11

All possible outcomes of an experiment.

For tossing a coin, the sample space would be {heads, tails}.

Question 12

What are the two different types of statistics>

Answer 12

Descriptive and inferential.

Question 13

What is descriptive statistics?

Answer 13

Summarises a mass of information. E.g. Bar charts and pie charts.
We can use graphical and/or numerical methods. e.g. averages and standard deviations

Question 14

What is inferential statistics?

Answer 14

Methods used to make estimates and predictions about a population on the basis of a sample taken from the population.

Question 15

What is the difference between population and sample with respect to statistics?

Answer 15

Population include the whole group of interest whilst sample included only part of the whole group.

Question 16

What is the purpose of descriptive statistics?

Answer 16

To present information in a clear, concise and accurate manner.

Question 17

What are the key attributes of quantitative measures?

Answer 17

1. Numerical
2. Can be measured
3. Can be ordered

Question 18

What are the key attributes of qualitative measures?

Answer 18

1. Nonnumerical
2. Categorical
3. Describe quality of something.

Question 19

What are the three different levels of measurement?

Answer 19

1. Nominal level data.
2. Ordinal level data.
3. Ratio level data.

Question 20

What is nominal data?

Answer 20

Only classified and counted.

Question 21

What is ordinal data?

Answer 21

Classified, counted, but order matter.

Question 22

What is ratio level data?

Answer 22

Ratios have meanings, zero means absence of chahracteristics.

Question 23

What is the general rule of thumb for knowing how many class intervals there should be on a frequency table?

Answer 23

The square root of the number of observations.

Question 24

Formula for frequency density of a histogram?

Answer 24

Frequency density =

Frequency/ Class width

Question 25

Describe the frequency density.

Answer 25

Measures the frequency per unit of class width. This allows direct comparison between different class intervals.

Question 26

What is the relative frequency?

Answer 26

Shows the proportion of observations that fall into each class interval.

Question 27

What is the relative frequency formula?

Answer 27

Relative frequency =
Frequency /
Sum of Frequencies
Should be a percentage.

Question 28

What are the three numerical measures for graphs?

Answer 28

1. Location
2. Dispersion
3. Skewness.

Question 29

What are the four measures of dispersion?

Answer 29

1. Range
2. Inter-Quartile
3. Variance
4. Standard Deviation

Question 30

What is the variance? (formula in words)

Answer 30

The average of all squared deviations from the mean. Remember to square root the variance at the end though.

Question 31

What values signify greater and lesser dispersion for variance?

Answer 31

The larger the variance value, the greater the dispersion of the observations.

Question 32

Can you remember the sample variance (population variance)?

Answer 32

Well? Week 3 QMS…

Question 33

What is the coefficient of variation?

Answer 33

Variation /
Mean.
Its a measure of relative dispersion and doesn’t depend on the units.

Question 34

What is the link between probability and statistical inference?

Answer 34

Probability underlies statistical inference.

Question 35

What is probability theory?

Answer 35

Allows both mangers to assess risks and benefits associated with different decisions.

Question 36

What is a compound event?

Answer 36

The probability that more than one event happen.

Question 37

What is another name for a mutually exclusive event?

Answer 37

A disjoint event.

Question 38

If two events are indecent, how is their probability worked out?

Answer 38

P(AnB) = P(A) + P(B)

Question 39

What is an independent event?

Answer 39

When one event doesn’t affect the outcome of another event.

Question 40

What is a permutation?

Answer 40

A permutation is any arrangement of r objects selected from n possible options.

Question 41

What is significant about permutations?

Answer 41

Order matters!

Question 42

What are posterior probabilities?

Answer 42

The statistical probability that a hypothesis is true calculated in the light of relevant observations. e.g. Probability that its Box A or B given that is a Red ball.