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QMM240 Descriptive Statistics - I Statistical Methods for Business I - Lecture NotesPage: 1 Descriptive Statistics I Characteristic Interpretation Central tendency Data concentration? Typical or "middle values? Dispersion How variable? Unusual values? Shape Symmetric? Skewed? Flat? Peaked? Multimodal? Example: PERatios.xls I) Measures of Central Tendency: Can use dot plot, histogram and/or several statistics 1) Mean (or Average) The average of the sample nXXnii1The mean of the population NXNiix1Pro Con Familiar Sensitive to outliers Uses all the data
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QMM240 Descriptive Statistics - I Statistical Methods for Business I - Lecture NotesPage: 2 Obs #Value10.220.134.842.7525.6Average6.68Notice how the mean falls between data point 5 and the rest of the data. No values are very "close" to the mean. Example: JDPowers.xls Use =Average(data range)in Excel 1879398...1591641734639125.383737niixxnCharacteristics of the Mean 1()0niixxSum of differences of each data point from the mean is ALWAYS = 0 1()niixx= (42 –65) + (60 –65) + (70 –65) + (75 –65) + (78 –65) = (-23) + (-5) + (5) + (10) + (13) = -28 + 28 = 0 Mean is like a fulcrum. The data is balanced at the mean.