ebook img

Business Statistics For Dummies PDF

411 Pages·2013·47.35 MB·English
Save to my drive
Quick download
Download
Most books are stored in the elastic cloud where traffic is expensive. For this reason, we have a limit on daily download.

Preview Business Statistics For Dummies

Business Statistics by Alan Anderson, PhD Business Statistics For Dummies® Published by John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, www.wiley.com Copyright © 2014 by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permit- ted under Sections 107 or 108 of the 1976 United States Copyright Act, without the prior written permis- sion of the Publisher. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748- 6008, or online at http://www.wiley.com/go/permissions. Trademarks: Wiley, For Dummies, the Dummies Man logo, Dummies.com, Making Everything Easier, and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc., and may not be used without written permission. All other trademarks are the property of their respective owners. John Wiley & Sons, Inc., is not associated with any product or vendor mentioned in this book. LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: THE PUBLISHER AND THE AUTHOR MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS WORK AND SPECIFICALLY DISCLAIM ALL WARRANTIES, INCLUDING WITH- OUT LIMITATION WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTY MAY BE CREATED OR EXTENDED BY SALES OR PROMOTIONAL MATERIALS. THE ADVICE AND STRATEGIES CONTAINED HEREIN MAY NOT BE SUITABLE FOR EVERY SITUATION. THIS WORK IS SOLD WITH THE UNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING LEGAL, ACCOUNTING, OR OTHER PROFESSIONAL SERVICES. IF PROFESSIONAL ASSISTANCE IS REQUIRED, THE SERVICES OF A COMPETENT PROFESSIONAL PERSON SHOULD BE SOUGHT. NEITHER THE PUBLISHER NOR THE AUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM. THE FACT THAT AN ORGANIZA- TION OR WEBSITE IS REFERRED TO IN THIS WORK AS A CITATION AND/OR A POTENTIAL SOURCE OF FURTHER INFORMATION DOES NOT MEAN THAT THE AUTHOR OR THE PUBLISHER ENDORSES THE INFORMATION THE ORGANIZATION OR WEBSITE MAY PROVIDE OR RECOMMENDATIONS IT MAY MAKE. FURTHER, READERS SHOULD BE AWARE THAT INTERNET WEBSITES LISTED IN THIS WORK MAY HAVE CHANGED OR DISAPPEARED BETWEEN WHEN THIS WORK WAS WRITTEN AND WHEN IT IS READ. For general information on our other products and services, please contact our Customer Care Department within the U.S. at 877-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002. For technical support, please visit www.wiley.com/techsupport. Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com. Library of Congress Control Number: 2013944875 ISBN 978-1-118-63069-3 (pbk); ISBN 978-1-118-78458-7 (ePub); ISBN 978-1-118-78449-5 (PDF) Manufactured in the United States of America 10 9 8 7 6 5 4 3 2 1 Contents at a Glance Introduction ................................................................ 1 Part I: Getting Started with Business Statistics .............. 5 Chapter 1: The Art and Science of Business Statistics .................................................7 Chapter 2: Pictures Tell the Story: Graphical Representations of Data ...................23 Chapter 3: Finding a Happy Medium: Identifying the Center of a Data Set ..............39 Chapter 4: Searching High and Low: Measuring Variation in a Data Set ..................55 Chapter 5: Measuring How Data Sets Are Related to Each Other .............................71 Part II: Probability Theory and Probability Distributions ............................................................. 91 Chapter 6: Probability Theory: Measuring the Likelihood of Events ........................93 Chapter 7: Probability Distributions and Random Variables ..................................111 Chapter 8: The Binomial, Geometric, and Poisson Distributions ............................121 Chapter 9: The Uniform and Normal Distributions: So Many Possibilities! ...........139 Chapter 10: Sampling Techniques and Distributions ................................................165 Part III: Drawing Conclusions from Samples............... 185 Chapter 11: Confidence Intervals and the Student’s t-Distribution ........................187 Chapter 12: Testing Hypotheses about the Population Mean .................................201 Chapter 13: Testing Hypotheses about Multiple Population Means .......................233 Chapter 14: Testing Hypotheses about the Population Mean .................................251 Part IV: More Advanced Techniques: Regression Analysis and Forecasting ......................... 281 Chapter 15: Simple Regression Analysis .....................................................................283 Chapter 16: Multiple Regression Analysis: Two or More Independent Variables ...............................................................................................309 Chapter 17: Forecasting Techniques: Looking into the Future ................................327 Part V: The Part of Tens ........................................... 351 Chapter 18: Ten Common Errors That Arise in Statistical Analysis .......................353 Chapter 19: Ten Key Categories of Formulas for Business Statistics .....................361 Index ...................................................................... 373 Table of Contents Introduction ................................................................. 1 About This Book ..............................................................................................1 Foolish Assumptions .......................................................................................2 Icons Used in This Book .................................................................................2 Beyond the Book .............................................................................................3 Where to Go from Here ...................................................................................3 Part I: Getting Started with Business Statistics .............. 5 Chapter 1: The Art and Science of Business Statistics . . . . . . . . . . . . . 7 Representing the Key Properties of Data .....................................................8 Analyzing data with graphs ..................................................................8 Defining properties and relationships with numerical measures ..................................................................11 Probability: The Foundation of All Statistical Analysis ............................13 Random variables ................................................................................14 Probability distributions .....................................................................15 Using Sampling Techniques and Sampling Distributions .........................17 Statistical Inference: Drawing Conclusions from Data ..............................18 Confidence intervals ............................................................................18 Hypothesis testing ...............................................................................19 Simple regression analysis .................................................................20 Multiple regression analysis ...............................................................21 Forecasting techniques .......................................................................21 Chapter 2: Pictures Tell the Story: Graphical Representations of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Analyzing the Distribution of Data by Class or Category .........................24 Frequency distributions for quantitative data .................................25 Frequency distribution for qualitative values ..................................29 Cumulative frequency distributions ..................................................30 Histograms: Getting a Picture of Frequency Distributions ......................31 Checking Out Other Useful Graphs .............................................................34 Line graphs: Showing the values of a data series ............................34 Pie charts: Showing the composition of a data set .........................35 Scatter plots: Showing the relationship between two variables .....................................................................36 vi Business Statistics For Dummies Chapter 3: Finding a Happy Medium: Identifying the Center of a Data Set . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Looking at Methods for Finding the Mean ..................................................40 Arithmetic mean ..................................................................................40 Geometric mean ...................................................................................42 Weighted mean.....................................................................................44 Getting to the Middle of Things: The Median of a Data Set ......................48 Comparing the Mean and Median ...............................................................49 Determining the relationship between mean and median .............50 Acknowledging the relative advantages and disadvantages of the mean and median ..................................................................52 Discovering the Mode: The Most Frequently Repeated Element ............53 Chapter 4: Searching High and Low: Measuring Variation in a Data Set . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Determining Variance and Standard Deviation .........................................55 Finding the sample variance...............................................................56 Finding the sample standard deviation ............................................57 Calculating population variance and standard deviation ..............61 Finding the Relative Position of Data ..........................................................64 Percentiles: Dividing everything into hundredths ..........................64 Quartiles: Dividing everything into fourths ......................................66 Interquartile range: Identifying the middle 50 percent ...................67 Measuring Relative Variation .......................................................................68 Coefficient of variation: The spread of a data set relative to the mean .........................................................................69 Comparing the relative risks of two portfolios ................................70 Chapter 5: Measuring How Data Sets Are Related to Each Other . . . . 71 Understanding Covariance and Correlation ..............................................71 Sample covariance and correlation ...................................................73 Population covariance and correlation coefficient .........................77 Comparing correlation and covariance ............................................82 Interpreting the Correlation Coefficient .....................................................85 Showing the relationship between two variables ............................86 Application: Correlation and the benefits of diversification ..........88 Part II: Probability Theory and Probability Distributions .............................................................. 91 Chapter 6: Probability Theory: Measuring the Likelihood of Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Working with Sets ..........................................................................................93 Membership ..........................................................................................94 Subset ....................................................................................................94 vii Table of Contents Union .....................................................................................................95 Intersection ...........................................................................................96 Complement .........................................................................................97 Betting on Uncertain Outcomes ..................................................................98 The sample space: Everything that can happen ..............................99 Event: One possible outcome .............................................................99 Computing probabilities of events ..................................................101 Looking at Types of Probabilities ..............................................................102 Unconditional (marginal) probabilities: When events are independent ......................................................102 Joint probabilities: When two things happen at once ..................103 Conditional probabilities: When one event depends on another .......................................................................................104 Determining independence of events..............................................105 Following the Rules: Computing Probabilities .........................................106 Addition rule .......................................................................................106 Complement rule ...............................................................................108 Multiplication rule .............................................................................109 Chapter 7: Probability Distributions and Random Variables . . . . . . .111 Defining the Role of the Random Variable ...............................................111 Assigning Probabilities to a Random Variable ........................................114 Calculating the probability distribution .........................................114 Visualizing probability distribution with a histogram ..................116 Characterizing a Probability Distribution with Moments ......................117 Understanding the summation operator (Σ) .................................117 Expected value ...................................................................................117 Variance and standard deviation .....................................................119 Chapter 8: The Binomial, Geometric, and Poisson Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 Looking at Two Possibilities with the Binomial Distribution ................122 Checking out the binomial distribution ..........................................122 Computing binomial probabilities ...................................................123 Moments of the binomial distribution ............................................127 Graphing the binomial distribution .................................................129 Determining the Probability of the Outcome That Occurs First: Geometric Distribution ...........................................................................131 Computing geometric probabilities.................................................131 Moments of the geometric distribution ..........................................132 Graphing the geometric distribution ..............................................134 Keeping the Time: The Poisson Distribution ...........................................134 Computing Poisson probabilities ....................................................135 Graphing the Poisson distribution ..................................................137 viii Business Statistics For Dummies Chapter 9: The Uniform and Normal Distributions: So Many Possibilities! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Comparing Discrete and Continuous Distributions ................................140 Working with the Uniform Distribution ....................................................142 Graphing the uniform distribution ..................................................143 Discovering moments of the uniform d istribution ........................144 Computing uniform probabilities ....................................................147 Understanding the Normal Distribution ...................................................150 Graphing the normal distribution ....................................................151 Getting to know the standard normal distribution .......................154 Computing standard normal probabilities .....................................154 Computing normal probabilities other than standard normal ....161 Chapter 10: Sampling Techniques and Distributions . . . . . . . . . . . . . 165 Sampling Techniques: Choosing Data from a Population ......................166 Probability sampling .........................................................................167 Nonprobability sampling ..................................................................172 Sampling Distributions ...............................................................................174 Portraying sampling distributions graphically ..............................175 Moments of a sampling distribution ...............................................178 The Central Limit Theorem ........................................................................179 Converting to a standard normal random variable ...................179 Part III: Drawing Conclusions from Samples ............... 185 Chapter 11: Confidence Intervals and the Student’s t-Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 Almost Normal: The Student’s t-Distribution ..........................................188 Properties of the t-distribution ........................................................188 Graphing the t-distribution ...............................................................190 Probabilities and the t-table .............................................................193 Point estimates vs. interval estimates ............................................194 Estimating confidence intervals for the population mean ...........195 Chapter 12: Testing Hypotheses about the Population Mean . . . . . . 201 Applying the Key Steps in Hypothesis Testing for a Single Population Mean ..................................................................202 Writing the null hypothesis ..............................................................202 Coming up with an alternative hypothesis .....................................202 Choosing a level of significance .......................................................205 Computing the test statistic .............................................................207 Comparing the critical value(s) .......................................................208 Using the decision rule......................................................................216

Description:
Score higher in your business statistics course? Easy. Business statistics is a common course for business majors and MBA candidates. It examines common data sets and the proper way to use such information when conducting research and producing informational reports such as profit and loss statement
See more

The list of books you might like

Most books are stored in the elastic cloud where traffic is expensive. For this reason, we have a limit on daily download.