CUMULATIVE PROBABILITIES FOR THE STANDARD NORMAL DISTRIBUTION
Cumulative
Entries in the table
probability
give the area under the
curve to the left of the
z value. For example, for
z = 1.25, the cumulative
probability is .8944.
0
z
z
.00
.01
.02
.03
.04
.
xviii
Contents
Confidence Interval for
1
587
F Test 588
Some Cautions About the Interpretation of Significance Tests 590
Using the Estimated Regression Equation for Estimation
and Prediction 594
Point Estimation 594
Interval Estimation 594
Confidence Inte
xi
Contents
0 Exploratory Data Analysis 109
Five-Number Summary 109
Box Plot 110
1 Measures of Association Between Two Variables 115
Covariance 115
Interpretation of the Covariance 117
Correlation Coefficient 119
Interpretation of the Correlation Coeffici
xxii
Contents
Chapter 19 Nonparametric Methods
855
Statistics in Practice: West Shell Realtors 856
Sign Test 857
Hypothesis Test About a Population Median 857
Hypothesis Test with Matched Samples 862
Wilcoxon Signed-Rank Test 865
Mann-Whitney-Wilcoxon Tes
xxi
Contents
Glossary 780
Key Formulas 780
Supplementary Exercises 781
Chapter 18 Time Series Analysis and Forecasting
784
Statistics in Practice: Nevada Occupational Health Clinic 785
(
Time Series Patterns 786
Horizontal Pattern 786
Trend Pattern 788
Se
xix
Contents
Testing for Significance 658
F Test 658
t Test 661
Multicollinearity 662
Using the Estimated Regression Equation for Estimation
and Prediction 665
Categorical Independent Variables 668
An Example: Johnson Filtration, Inc. 668
Interpreting the
4
Chapter 1
Data and Statistics
Finance
Financial analysts use a variety of statistical information to guide their investment recommendations. In the case of stocks, the analysts review a variety of financial data including
price/earnings ratios and divid
1.4 Descriptive Statistics
13
consider the contribution of the statistical analysis to the decision-making
process. The cost of data acquisition and the subsequent statistical analysis
should not exceed the savings generated by using the information to ma
11
1.3 Data Sources
TABLE 1.3 EXAMPLES OF DATA AVAILABLE FROM SELECTED GOVERNMENTAGENCIES
Government Agency
Census Bureau
Some of the Data Available
Population data, number of households, and household
income
Federal Reserve Board
Data on the money supply
34
Chapter 2 Descriptive Statistics: Tabular and Graphical Presentations
TABLE 2.2
FREQUENCY
DISTRIBUTION OF
SOFT DRINK
PURCHASES
Soft Drink
Frequency
Coke Classic
19
Diet Coke
8
Dr. Pepper
5
Pepsi
13
Sprite
5
Total
50
To develop a frequency distribution
18
Chapter 1 Data and Statistics
Statistical methods play an
important role in data
mining, both in terms of
discovering relationships
in the data and predicting
future outcomes. However,
a thorough coverage of
data mining and the use of
statistics in dat
53
2.4 Crosstabulations and Scatter Diagrams
Daily
Resort
Location
Beaver Creek
Colorado
Deer Valley
Utah
Diamond Peak
Resort
Location
Okemo
Vermont
$ 86
115
Park City
Utah
145
California
95
Butternut
Massachusetts
75
Heavenly
California
145
Steamboat
Col
WEB file
Shadow02
27
Supplementary Exercises
TABLE 1.8
DATA SET FOR 25 SHADOW
STOCKS
Gross
Ticker
Company
Exchange
Market
Price/
Profit
Cap
Earnings
Margin
Ratio
(%)
Symbol ($ millions)
DeWolfe Companies
AMEX
DWL
36.4
8.4
36.7
North Coast Energy
OTC
NCEB
2.4 Crosstabulations and Scatter Diagrams
61
Refer to the initial crosstabulations. For those players with low handicaps (better
play-ers), which group (male or female) shows the highest percentage saying the
greens are too fast?
Refer to the initial cros
64
Chapter 2
Descriptive Statistics: Tabular and Graphical Presentations
FIGURE 2.9 TABULAR AND GRAPHICAL METHODS FOR SUMMARIZING DATA
Data
Categorical
Quantitative
Data
Data
Tabular
Graphical
Tabular
Graphical
Methods
Methods
Methods
Methods
Frequency
D
xx
Contents
Transformations Involving the Dependent Variable 720
Nonlinear Models That Are Intrinsically Linear 724
16.2 Determining When to Add or Delete Variables 729
General Case 730
Use of p-Values 732
Analysis of a Larger Problem 735
Variable Selecti
xxvi
Preface
with its parametric counterpart and describe how fewer assumptions are
required for the nonparametric procedure. The sign test emphasizes the
test for a population median, which is important in skewed populations
where the median is often the
xxvii
Preface
focus is on finding evidence to support a research finding, the research
hypothesis is the alternative hypothesis. In situations where the focus is on
challenging an as-sumption, the assumption is the null hypothesis.
New PrecisionTree Softw
6
Chapter 1
Data and Statistics
5-Year Average Return (%): The average annual return for the fund over
the past 5 years
Expense Ratio: The percentage of assets deducted each fiscal year for fund expenses
Morningstar Rank: The overall risk-adjusted star ra
Chapter 1
Data and Statistics
FIGURE 1.5 BAR CHART FOR MUTUAL FUND TYPE
70
y
60
requ
enc
50
40
30
Percent
14
20
10
0
Domestic Equity International Equity
Fixed Income
Fund Type
A graphical summary of the data for the quantitative variable Net Asset
Value,
1.7 Data Mining
17
Computers and Statistical Analysis
Minitab and Excel
data sets and the Excel
add-in StatTools are
available on the
website for this text.
Statisticians frequently use computer software to perform the statistical
computations re-quired w
xvi
Contents
Glossary 436
Key Formulas 437
Supplementary Exercises 438
Case Problem: Par, Inc. 441
Appendix 10.1 Inferences About Two Populations Using Minitab 442
Appendix 10.2 Inferences About Two Populations Using Excel 444
Appendix 10.3 Inferences Abo
2.3 Exploratory Data Analysis: The Stem-and-Leaf Display
In a stretched stem-and-leaf
display, whenever a stem
value is stated twice, the first
value corresponds to leaf
values of 0 4, and the
second value corresponds to
leaf values of 59.
51
we would pla
Preface
The purpose of
STATISTICS
FOR BUSINESS
AND
ECONOMICS is
to give students,
pri-marily those
in the fields of
business
administration
and economics,
a
conceptual
introduc-tion to
the field of
statistics and its
many
applications.
The
text
is
applica
56
Chapter 2
Descriptive Statistics: Tabular and Graphical Presentations
Simpsons Paradox
The data in two or more crosstabulations are often combined or aggregated to
produce a summary crosstabulation showing how two variables are related. In
such cases,
xxviii
Preface
At the end of many sections, we provide Notes and Comments designed to give the student additional insights about the statistical methodology and its application. Notes and
Comments include warnings about or limitations of the methodology,
1.5 Statistical Inference
15
mean. Using the data on 5-Year Average Return for the mutual funds in Table 1.1, we can
compute the average by adding the returns for all 25 mutual funds and dividing the sum by 25.
Doing so provides a 5-year average return of
26
Chapter 1
Data and Statistics
A survey of 131 investment managers in Barrons Big Money poll revealed the
following:
43% of managers classified themselves as bullish or very bullish on the stock market.
The average expected return over the next 12 month