DADM1.2 - Data Analysis for Decision Making Part II Data...

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Data Analysis for Decision Making Part II: Data Summarization 1
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Summarization of Information 2
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Frequency Distribution Raw Data : Numbers and facts in the original format in which the data have been collected Need to convert the raw data into information for managerial decision making 3 Raw Data Information Frequency Distribution : Summarized table of raw data arranged in classes and frequencies
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Guidelines for Construction Calculate Range = Max − Min Number of Classes: Choice is up to you Between 5 and 20 Width of the Class Interval = Formulate the Boundaries of the Classes: All the observations included No ambiguity Count the no of observations in each class 4
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Histogram Visual representation of frequency distribution . X-axis represents the classes and the Y-axis represents the frequencies. Rectangular bars are constructed at the boundaries of each class with heights proportional to the frequency or relative frequency Depicts the pattern or shape of the data distribution 5
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Example of a Histogram 6 0 20 40 60 80 100 120 140 160 180 Histogram of Expense Ratio of 868 MFs Frequency
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Cumulative Frequency Distribution A type of frequency distribution that shows how many observations are above or below the lower boundaries of the classes 7 0 20 40 60 80 100 120 140 160 180 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% Histogram and Cumulative Frequency Frequency Cumulative % Frequency
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Case Study of Mutual Funds A sample of mutual funds are considered on various aspect of their performance. An asset manager would like to consider various aspects of the funds before she can advise her clients for investment. Expense Ratio: Ratio of expenses to net assets 3-Year annualized return: 2004-2006 5-Year annualized return: 2002-2006 8
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Case Study of Mutual Funds Comparison of Histograms across Categories
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