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A concept based exclusive material

Business Statistics

Sapna Gupta

M.Com. (ABHD)

Lecturer Deptt. of Commerce & Management Biyani Girls College, Jaipur

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Published by :

Think Tanks Biyani Group of Colleges

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**©Biyani Shikshan Samiti
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Sector-3, Vidhyadhar Nagar, Jaipur-302 023 (Rajasthan) Ph : 0141-2338371, 2338591-95 • Fax : 0141-2338007 E-mail : acad@biyanicolleges.org Website :www.gurukpo.com; www.biyanicolleges.org

First Edition : 2009

While every effort is taken to avoid errors or omissions in this Publication, any mistake or omission that may have crept in is not intentional. It may be taken note of that neither the publisher nor the author will be responsible for any damage or loss of any kind arising to anyone in any manner on account of such errors and omissions.

Leaser Type Setted by : Biyani College Printing Department

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Preface

I

am glad to present this book, especially designed to serve the needs of the

students. The book has been written keeping in mind the general weakness in understanding the fundamental concepts of the topics. The book is self-explanatory and adopts the “Teach Yourself” style. It is based on question-answer pattern. The language of book is quite easy and understandable based on scientific approach. This book covers basic concepts related to the microbial understandings about diversity, structure, economic aspects, bacterial and viral reproduction etc. Any further improvement in the contents of the book by making corrections, omission and inclusion is keen to be achieved based on suggestions from the readers for which the author shall be obliged. I acknowledge special thanks to Mr. Rajeev Biyani, Chairman & Dr. Sanjay Biyani, Director (Acad.) Biyani Group of Colleges, who are the backbones and main concept provider and also have been constant source of motivation throughout this Endeavour. They played an active role in coordinating the various stages of this Endeavour and spearheaded the publishing work. I look forward to receiving valuable suggestions from professors of various educational institutions, other faculty members and students for improvement of the quality of the book. The reader may feel free to send in their comments and suggestions to the under mentioned address. Author

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Average and Formula. Simple and Weighted Price Index Numbers.Com. Definition. Mode. Correlation Graph. □□□ Fore more detail:. 2. 6.Syllabus B. Uses. Coefficient of Correlation by Spearman’s. Average of Relatives and Aggregative Methods. SECTION-B 4. Rank Differences Method and Concurrent Deviation Method. Karl Pearson’s Coefficient of Linear Correlation between two Variables in Grouped and Ungrouped Data by Direct and Shortcut Methods. Uses and Interpretation of Measures of Dispersion. 3.gurukpo. Measures of Dispersion : Absolute and Relative Measures of Dispersion. Simple and Manifold Tabulation. Misuses and Limitation of Statistics. Scope. 8. Skewness : Measures of Skewness. Geometric and Harmonic Mean – Simple and Weighted. Statistical Errors. Splicing and Deflating. Median (including quartiles. Methods of Construction of Index Numbers. Scatter Diagram. Index Numbers : Meaning and Uses of Index Numbers. Uses and Limitations of Measures of Central Tendency. Part-I BUSINESS STATISTICS SECTION-A 1. Presentation of Data. Approximation and Accuracy. Fishers Ideal Index Number. Selection of Variables. Diagrammes/Graphs of Frequency Distribution and Histograms Ratio Scale Graph. 9. Standard Deviation and their Coefficients. Correlation : Meaning and Significance. Linear Regression. Quartile Deviation. Base. Classification and Tabulation of Data : Meaning and Characteristics. Measuring of Central Tendency : Arithmetic Mean (Simple and Weighted). Problems in Construction of Index Numbers. Base Shifting.http://www. Frequency Distribution. Collection of Primary & Secondary Data. Introduction of Statistics : Growth of Statistics. 5. Weight. Mean Deviation.com . SECTION-C 7. decides and percentiles).

6. 7. 9.No.Content S. 4. 2.gurukpo. Introduction of Statistics Collection and Editing of Data Classification and Tabulation of Data Measures of Central Tendency Measures of Dispersion Measures of Skewness Index Numbers Correlation Linear Regression Diagrammatic and Graphic Presentation Practical Exercise Page No. 5. Name of Topic Examination Paper 2008 1. 10. 3.http://www. 7-10 11-14 15-20 21-25 26-32 33-39 40-43 44-52 53-58 59-62 63-72 73-78 Fore more detail:. 8.com . 11.

II B.Com. What is bivariate frequency distribution? The mean wages of 100 labourers working in a factory running two shifts of 60 and 40 labourers respectively is Rs.38.gurukpo. whereas his height is 1.B. Write two causes of distrust of statistics.” Would you call these as data.com . the mean of 60 labourers working in the morning shift is Rs. & Bus.40. Find the mean wages of 140 labourers working in the evening shift.I) 1138-II-O Accy.(Part I) EXAMINATION.http://www. Name any four sources of collection of secondary data. state with reasons. Stat.Com (Pt.9 metres and weight 58 kg. 2008 (Faculty of Commerce) (Three – Year Scheme of 10+2+3 Pattern) PAPER 57 ACCOUNTANCY AND BUSINESS STATISTICS Second Paper (Business Statistics) OBJECTIVE PART-I Time Allowed : One Hour Maximum Marks – 40 Attempt all questions 1 Answer the following questions in not more than 20 words : (i) “Ram has secured 90 percent marks in Statistics. If the variance of a series is 144 and the mean is 50. find out the coefficient of variation. What is the formula given by Bowley for measuring skewness? Why are there two regression lines? What is cumulative frequency curve or ogive curve? (ii) (iii) (iv) (v) (vi) (vii) (ix) (x) (viii) What is the meaning of deflating of index numbers? Fore more detail:.

500 and 250 kms. Find the average speed for the entire trip.com . at speeds 500. (iv) When is the false base line used? (v) What is the difference between historigram and histogram? PAPER 56 DESCRIPTIVE PART-II Time Allowed : Two Hours Maximum Marks – 60 Attempt any three questions. if N = 100 and median is 30 : Marks 0 – 10 10 – 20 20 – 30 30 – 40 40 – 50 50 – 60 N o. selecting one question from each Section. of Students 10 ? 25 30 ? 10 4 Fore more detail:.2 Answer the following questions in not more than 50 words each : (i) What does the law of statistical regularity show? (ii) Draw a blank table to present information regarding the college students according to : (a) Faculty – Arts.gurukpo.http://www. Each question carries 20 marks SECTION-A 3 What is ‘Statistical Sampling’? Describe the various methods of statistical sampling. Commerce and Science (b) Sex – Male and Female (c) For 2 years – 2005 and 2006 (iii) An airplance travels distance of 2500. per hour respectively. Find the missing frequency in the following distribution. 1200 and 500 kms.

of Persons 5 15 20 45 32 20 8 Construct Fisher’s ideal index no. Calculate coefficient of correlation between and success in the Examination : Age in years 18 19 20 21 22 23 24 25 % of failure 38 40 35 32 34 37 42 46 Fore more detail:.Com. Examination is given below form the following data.SECTION-B 5 Calculate the standard deviation and its coefficient from the following data : Wages in Rs.com .http://www. from the following table : Articles Price Food Clothing Rent Fuel Misc.gurukpo. 48 and above 40 and above 32 – 40 16 – 32 8 – 24 Less than 16 Less than 8 6 No. 16 18 20 10 10 Base year Quantity 50 30 5 6 10 SECTION-C Current Year Price 24 24 15 12 14 Quality 45 25 8 6 12 7 The results of B.

http://www.26 27 8 52 56 From the data given below.gurukpo. of X variable ( x) = 5 S. Arithmetic mean of X variable = 40 Arithmetic mean of Y variable = 20 S. and find the expected value of Y when the value of X is 30.D.D. of Y variable ( y) = 7 Coefficient of correlation between X and Y variables r = + 0.com . find the expected value of X when value of Y is 15.90 □□□ Fore more detail:.

is for a builder. Therefore.1 Define ‘Statistics’ and give characteristics of ‘Statistics’. the process of collecting. bricks etc. Ans. analyzing and interpreting the numerical facts.2 What is meant by ‘Data’? Ans. mortar. ‘Statistics’ means a collection of numerical facts or data example price statistics.com .in plural form and in singular form.: ‘Statistics’ means numerical presentation of facts. Fore more detail:. analysis and interpretation of data are accomplished. Q. Characteristics of Statistics a) Aggregate of facts/data b) Numerically expressed c) Affected by different factors d) Collected or estimated e) Reasonable standard of accuracy f) Predetermined purpose g) Comparable h) Systematic collection. Its meaning is divided into two forms .http://www. comparable for some predetermined purpose are collectively known as “Statistics”. production statistics. etc. In plural form.: Data refers to any group of measurements that happen to interest us.CHAPTER-I Introduction of Statistics Q. presenting. In singular form. classifying. agricultural statistics.gurukpo. the word means the statistical methods with the help of which collection. Data are the foundation of any statistical investigation and the job of colleting data is the same for a statistician as collecting stone. cement. These measurements provide information the decision maker uses.

: Statistical methods are used not only in the social. (i) (ii) Statistical Methods such as Collection. Can easily be manipulated. Contradiction of data from actual circumstances. damned lies and statistics – wicked in the order of their naming. Interpretation and Forecasting. and therefore people are easily led to believe them.: The scope of statistics is much extensive. Applied Statistics – It is further divided into three parts: a) b) Descriptive Applied Statistics : Purpose of this analysis is to provide descriptive information. analysis and solution of various problems in the field of business.” The main reasons for such views are a) b) c) d) e) f) Q.gurukpo. Ans. economic and political fields but in every field of science and knowledge. Lack of test of accuracy. Ans.” “There are three type of lies – lies. Statistical analysis has become more significant in global relations and in the age of fast developing information technology. Fore more detail:. Ignorance of limitation of statistics. It is often commented by people “Statistics can prove anything. Ans. Business Applied Statistics : Under this branch statistical methods are used for the study.4 Give reasons for distrust in Statistics.5 Figures are convincing. Classification. Analysis.: By distrust of statistics we mean lack of confidence in statistical statements and statistical methods. Tabulation. Lack of specific ability to arrive at correct and appropriate results. Presentation.com . It can be divided into two parts – c) Q.Q.3 Discuss the Scope of Statistics.http://www. Scientific Applied Statistics : Data are collected with the purpose of some scientific research and with the help of these data some particular theory or principle is propounded. Discuss the functions and importance/utility of Statistics.

Statistics proves to be much useful in unfamiliar fields of application and complex situations such as :a) b) c) d) e) f) g) h) i) a) b) c) d) Planning Administration Economics Trade & Commerce Production management Quality control Helpful in inspection Insurance business Railways & transport Co Banking Institutions Speculation and Gambling Underwriters and Investors Politicians & social workers. Helps in forecasting. To provide comparison.http://www. Test the accuracy of scientific theories. To enlarge human knowledge and experience.com . The use of statistics has become almost essential in order to clearly understand and solve a problem.gurukpo. To study extensively and intensively. “The proper function of statistics is to enlarge individual experiences”. □□□ Fore more detail:. To simplify complex facts. Helps in formulation of policies.According to Prof. To establish mutual relations. Bowley. Following are some of the important functions of Statistics : a) b) c) d) e) f) g) h) i) To provide numerical facts.

It means collection of facts and figures relating to particular phenomenon under the study of any problem whether it is in business economics. data. Difference between Primary & Secondary Data Primary Data Basis nature Secondary Data Primary data are Data which are original and are collected earlier by collected for the first someone else.: Collection of data is the basic activity of statistical science. and time.CHAPTER-2 Collection and Editing of Data Q.com .1 What do you mean by Collection of Data? Differentiate between Primary and Secondary Data. energy and Comparatively less time money has to be spent and money is to be in collection of these spent. social or natural sciences. These have to be analyzed and necessary changes have to be made to make them useful as per the requirements of investigation. Fore more detail:. Ans.gurukpo. Such material can be obtained directly from the individual units. These data are Secondary data were collected by the collected earlier by investigator himself some other person. Collecting Agency Post collection These data do not alterations need alteration as they are according to the requirement of the investigation Time & Money More time. which are now in published or unpublished state. called primary sources or from the material published earlier elsewhere known as the secondary sources.http://www.

Q. Requirements of a good questionnaire :• • • • • • • • • Questions should be simple. the variations in the component parts tend to balance each other and. Ans.Q.2 What do you mean by Questionnaire? Give merits of a good Questionnaire. Simple alternative or multiple choice questions. therefore. larger the size of sample.gurukpo.: Based on the mathematical theory of probability.http://www.3 What is Law of ‘Statistical Regularity’ and the Law of ’Inertia of Large Numbers’? Ans. Assurance of secrecy to the informants. It states that. it is possible for one to depict fairly accurately the characteristics of the population by studying only a part of it. The Law of ‘Inertia of Large Numbers’ is a corollary of the law of statistical regularity. No restricted questions affecting personal whims. Questions should be in sequence.com . Directly relative questions. other things being equal. If this condition is satisfied. Fore more detail:. Law of Statistical Regularity states that if a sample is taken at random from a population. clear and short. Test of accuracy.: Questionnaire is a document containing questions related to the specific requirement of a statistical investigation for collection of information which is filled by the informants personally. more accurate the results are likely to be. the variation in the aggregate is insignificant. This is because when large numbers are considered. Probability of a perfect answer. it is likely to possess the characteristics as that of the population. Unambiguous and precise. A sample selected in this manner would be representative of the population.

Q. b) Rotating the drum.255 but in round figures it is written as 1. d) Routed wheel method e) By random numbers Q.: The difference between the actual value of the figure and its approximated value is called statistical error. Ans.http://www. “In statistical sense. For example if number of students of a college is 1. ‘error’ means the difference between the approximate value and the true or ideal value. accurate determination of which is not possible”. Difficult to estimate Can be estimated be avoided c) d) Estimation Prevention Can be avoided by Cannot carefulness easily.300. Random Sampling is based on probability and it is free from bias. Fore more detail:. Connor.: Random Sampling is one in which selection of items is done in such a way that every item of the universe has an equal chance of being selected.5 What do you mean by Statistical Error? Give the difference between Mistake and Error? Ans. In the words of Prof. Difference between Mistake and Error Basis a) Nature Mistake Committed deliberately Error Not deliberate b) Source Due to use of wrong Difference between method actual and approximate value. then the difference is called ‘Statistical error’.4 What is Random Sampling? OR Define Random Sampling. The different methods of Random Sampling are :a) Lottery method.gurukpo.com . c) By systematic arrangement.

variation in the date/period to which data is related etc. the following points should be considered :• • • • Editing for consistency Editing for completeness Editing for accuracy Editing for uniformity or homogeneity Editing of Secondary Data : Since secondary data have already been obtained.: Before analysis and interpretation. so that accurate and impartial results may be obtained. it is highly desirable that a proper scrutiny of such data is made before they are used by the investigator.http://www. analysis and interpretation.gurukpo. Ans. Q.e) State Occurrence of Can be committed at Creeps in only at the any stage state of collecting. The task of editing is a highly specialized one and requires high level of skill and carefulness to attain the proper degree of accuracy. For example if our object Fore more detail:. Whether the Data is Adequate for the Investigation : Adequacy of data is to be judged in the light of the requirements of the survey and the geographical area covered by the available data. Editing of Primary Data : While editing primary data. Bowley rightly points out that “secondary data should not be accepted at their face value”.6 Write a note on the Editing of Primary Data and Secondary Data for the purpose of Analysis and Interpretation. it is necessary to edit the date to detect possible errors and inaccuracies. Hence before using secondary data.com • . Thus editing means the process of checking for the errors and omissions and making corrections. the investigators should consider the following aspects :• Whether the Data are Suitable for the Purpose of Investigation in View : Quite often secondary data do not satisfy immediate needs because they have been compiled for other purpose. The variation can be in units of measurement. if necessary.

tabulating conscientiously done. it would not serve the purpose.http://www.the wage rates of the workers in sugar industry in India and the available data cover only the state of Rajasthan.is to study . A proper check on the accuracy of the field work. Was the editing. and analysis carefully and □□□ Fore more detail:. • Whether the Data are Reliable : The following points should be checked to find out the reliability of secondary data (i) (ii) (iii) (iv) The collecting agency was unbiased. The enumerators are properly trained.com .gurukpo.

Classification should be so exhaustive and complete that every individual unit is included in one or the other class.CHAPTER-3 Classification and Tabulation of Data Q. Fore more detail:. Essentials of an Ideal Classification :- (iv) (v) (vi) Q. it is called manifold classification.1 What is the meaning of Classification? Give objectives of Classification and essentials of an ideal classification. Ans.: Classification is the process of arranging data into various groups. To arrange the data in proper and systematic way The data can be presented in a proper tabular form only. Data should be classified according to homogeneity.com . classes and sub-classes according to some common characteristics of separating them into different but related parts.gurukpo.: When the data are classified into more than two classes according to more than one attribute.2 The facts should be arranged in proper and systematic way. It should be arithmetically accurate.http://www. There should be stability in the basis of classification so that comparison can be made. Main objectives of Classification :(i) (ii) (iii) (iv) (v) (i) (ii) (iii) To make the data easy and precise To facilitate comparison Classified facts expose the cause-effect relationship. What is Manifold Classification? Ans. Classification should be suitable according to the objectives of investigation.

(i) Individual Series : In individual series. Discrete Series : A discrete series is that in which the individual values are different from each other by a different amount. of workers (iii) 5 6 10 9 15 8 20 5 Ans.Q.http://www. the frequency of each item or value is only one for example . values are in integers.: There are three types of frequency distributions - (ii) Continuous Series : When the number of items are placed within the limits of the class. Suitability It is suitable in all It is suitable only when the situations. For example: Daily wages No.: The two values which determine a class are known as class limits. included in the next class. Fore more detail:.gurukpo. the series obtained by classification of such data is known as continuous series. into exclusive series for calculation purpose. Inclusion Conversion It does not require Inclusive series is converted any conversion. First or the smaller one is known as lower limit (L1) and the greater one is known as upper limit (L2) Q.3 What are Class Limits? Ans. The value equal to Both upper & lower limits are the upper limit is included in the same class.com . For example Marks obtained No.4 How many types of Series are there on the basis of Quantitative Classification? Give the difference between Exclusive and Inclusive Series.marks scored by 10 students of a class are written individually.of students 0-10 10 10-20 20-30 30-40 18 22 25 Difference between Exclusive and Inclusive Series Exclusive Series Limits Inclusive Series Upper limit of one The two limits are not equal. class is equal to the lower limit of next class.

“Tabulation in its broad sense is an orderly arrangement of data in columns and rows. Objects of Tabulation : • • • • • Orderly and systematic presentation of data. Kinds of Table : The different kinds of tables are showned in the following chart - Fore more detail:. Sturges.http://www.5 What is Bivariate Frequency Distribution? Ans.6 Give Sturges Formula for determining Magnitude of Classes? Ans. A.” Tabulation is a process of presenting the collected and classified data in proper order and systematic way in columns and rows so that it can be easily compared and its characteristics can be elucidated. Ans.com .: According to Blair. To facilitate comparison.Q.gurukpo.322 log N Where I = L = Q. H. To make the problem clear and self evident. class interval can be found using the following formula.7 class interval Largest value N S = = No.: A frequency distribution obtained by the simultaneous classification of data according to two characteristics is known as a bivariate frequency distribution. I = L-S 1 + 3. Making data precise and stable. State the objectives of Tabulation and kinds of Tables. Q. of observations Smallest value Define Tabulation. To facilitate analysis & interpretation of data.: According to Prof.

explanatory notes may be given at the end of the table. Ruling and Spacing : Ruling and leaving the space depends on the needs of the topic and makes the table attractive and beautiful. Stubs : Stubs are the designations of the rows or row headings. : Each table should be numbered so that the table may be referred with that number. However.8 Triple / Three – way Table Multiple / Higher Order Table What are the main parts of a good Table? Ans. Title : Every table must be given a suitable title which should be short. Footnotes : In order to explain the figures shown in the table.: The number of parts depends mostly on the nature of the data. (i) (ii) (iii) (iv) (v) (vi) (vii) Table No. the source or origin of given data is □□□ .Table On the basis of Purpose On the basis of Origin On the basis of Construction General Purpose Table Specific Purpose Table Original / Primary Table Derived Secondary Table Simple Table Complex Table Double / Two-way Table Q.http://www.gurukpo. The body of the table contains the numerical information. clear and complete. Body : It is the heart of the table.com (viii) Source : At the end of the table. mentioned. Fore more detail:. Captions : Caption refers to the column heading which explains what the column represents. a table should have the following parts.

According to Clark. Ans.gurukpo. “Average is an attempt to find one single figure to describe whole of figures. Mediam and Mode. Arithmetic mean may be of two types : • • Simple Arithmetic mean Weighted arithmetic mean Individual Series Direct Method : X = ∑X N Where – X N Values No.1 What do you mean by Measures of Central Tendency? Define Arithmetic Mean.com + ∑dx N Where – fX N Values X frequencies Total of frequencies X = A + ∑f dx N Discrete & continuous series Direct Method : X = ∑f X N Calculation of Arithmetic Mean : Shortcut Method : Shortcut Method : . hence this value representing the central tendency of the series is called measures of central tendency or average.” Arithmetic Mean (X) : The most popular and widely used measure of representing the entire data by one value is known as arithmetic mean. Its value is obtained by adding together all the items and by dividing this total by the number of items. of Items X = A Where – Fore more detail:. : The central tendency of a variable means a typical value around which other values tend to concentrate.http://www.CHAPTER-4 Measures of Central Tendency Q.

com . Apply formula M = N+1 2 The value (X) corresponding to this in the cumulative frequency will be the median.gurukpo. Arrange the variables in ascending or descending order. Apply formula – M = l1 + i (m – c) th th item item. Calculate cumulative frequencies. Calculate cumulative frequencies. one part comprising all values greater than.http://www. Determine median class by using (N/2). N = Total of frequency. and the other all values less than the median Calculation of Median : a) Individual Series : • • Arrange the variables in ascending or descending order. Continuous Series : • • • • Fore more detail:. M = size of N+1 2 where N –> No.A dx Assumed Mean X-A Step-Deviation Method : X = A Where – dx ’ i X–A i Class interval + ∑f dx ’ X i N Not applicable Step-Deviation Method : Median (M) : Median is that value of the variable which divides the group into two equal parts. of items b) Discrete Series : • • • • c) Arrange the variables in ascending or descending order.

http://www.gurukpo. frequency of median group Mode (Z) : Mode is the value that appears most frequently in a series i. Calculation of Mode : a) Individual Series : (i) (ii) (iii) b) By inspection – value repeated most. By empirical relationship.f l1 i m c f lower limit of median group class interval N/2 cumulative frequency preceding the median group. By converting individual series into discrete series. it is the value of the item around which frequencies are most densely concentrated. By grouping. By empirical relationship between the averages Z = 3M – 2X Discrete Series : (i) (ii) (iii) c) (i) (ii) By inspection – value having highest frequency.com . First calculate model class by inspection or by grouping. frequency of succeeding class class interval Continuous Series : Fore more detail:. Then apply the following formula l1 + where l1 ∆1 ∆2 f1 f0 f2 i ∆1 ∆1 + ∆2 lower limit of modal class f1 – f0 f1 – f2 frequency of modal class frequency of preceding class.e.

com .gurukpo. Simple to compute. Should be easy to understand. Capable of further Algebraic treatment. Based on all the observations. Discrete & Continuous Series G = Antilog ∑f log X N Ans.3 What is Geometric Man? Give Algebraic Characteristics of Geometric Mean and state when Geometric Mean is useful. In determining rates of increase or decrease. Geometric mean is appropriate or useful :Q. (ii) (iii) (iv) (v) (vi) (vii) Ans.: (i) Q. Geometric mean cannot be found if the value of some item in the series is negative or zero. Least affected by fluctuations.: Harmonic mean of a series is the reciprocal of the arithmetic mean of the reciprocal of the values of its items.Q. Not affected by changing the sequence of items.4 What is Harmonic Mean? In which circumstances Harmonic Mean is used. When the different values are at vast difference.: Geometric mean is the nth root of the product of N items or values.http://www. Sampling stability. Calculation of Geometric Mean (G) : Individual Series G = Antilog ∑ log X N Algebraic Characteristics of Geometric Mean : (i) (ii) (iii) (iv) The product of the items remain unchanged if each item is replaced by geometric mean. Fore more detail:. Ans. The product of corresponding ratios on either side of the geometric mean is always equal. When ratios or percentages are to be found. Clearly and rigidly defined.2 What are the essentials of an Ideal Average.

eight. To find out average price. ten and hundred equal parts known as Quartiles.X N Harmonic Mean is used in the following cases :For determining average speed or velocity. If the item given in the question which is variable is to be kept as constant in the answer.http://www.: Values of the items that divide the series into many parts are known as partition values. = Reciprocal ∑ (Reci.Calculation of Harmonic Mean (H.M. Quintiles.5 What is Partition Value.gurukpo.f) N Q. The aforesaid partition values gives an idea of the formation of the series which are used in the calculation of dispersion and skewness. Formula used for Calculating Partition Values : Measures Quartiles : Q1 Size of N + 1 th item 4 Q3 Size of 3 N + 1 th item 4 Quintiles : Qn4 Octiles : O2 Deciles : D7 Size of 4 N + 1 th item 5 Size of 2 N + 1 th item 8 Size of 7 N + 1 th item 10 q1 = (N/4) th item & Q1 = l1 + i (q1 – c) f q3 = 3 (N/4) th item & Q3 = l1 + i (q3 – c) f qn4 = 4 (N/5) th item & Q3 = l1 + i (qn4 – c) Individual & Discrete Series Continuous Series f o2 = 2 (N/8) th item & O2 = l1 + i (o2 – c) f d3 = 7 (N/10) th item & D3 = l1 + i (d7 – c) f f Percentiles: Size of 75 N + 1 th item p15 = 75(N/100)th item & P75 = l1 + i (p75 – c) P15 100 Fore more detail:. or vice versa. Deciles and Percentiles. Values? Ans. then harmonic mean will be calculated.M. A variable may be divided into four. Give formula for calculating different Partition Discrete & Continuous Series H.) : Individual Series H. five.X . Octiles.M. = Reciprocal ∑ Reci.com .

□□□ Fore more detail:.http://www.: Relation between arithmetic mean. whereas in harmonic mean the smaller values are given much more weightage than to the larger values.com . Therefore.gurukpo. geometric mean and harmonic mean can be given by (i) X>g>h and (ii) g2 = X. arithmetic mean is greater than geometric mean and geometric mean is greater than harmonic mean.6 How are Arithmetic Mean. Geometric Mean and Harmonic Mean related to each other? Why is Arithmetic Mean greater than the Geometric Mean and Geometric Mean is greater than the Harmonic Mean. Ans.Q.h. While calculating arithmetic mean. the bigger values are given more weightage than the small values.

weight etc.gurukpo. Q.2 Explain the various methods for measuring Dispersion. Absolute Measure : The figure showing the limit or magnitude of dispersion is known as absolute measure and it is shown in the same unit as .http://www. Give the meaning of Absolute Measure and Relative Measure with example. Ans.CHAPTER-5 Measures of Dispersion Q.1 What do you mean by Dispersion. Relative Measure : For comparative study the concerning absolute measure is divided by the corresponding mean or some other characteristic value to obtain a ratio or percentage.: Following are the important methods of studying dispersion (1) Numerical Methods : a) Methods of limits i) ii) iii) (2) i) Range Inter-quartile range Percentile Range b) Methods of average deviation: i) ii) iii) Quartile Deviation Mean Deviation Standard Deviation and Graphic Method . : Dispersion is a measure of the extent to which the individual item vary from a central value Dispersion is used in two senses. example measures of dispersion in the age of students. (i) difference between the extreme items of the series and (ii) average of deviation of items from the mean. their height.Lorenz Curve : Range : The difference between the value of the smallest item the value of the largest item of the series is called range.com . Fore more detail:.S L+S Merits of Range : Simple and easy to be computed.those of the original data. which is known as the relative measure. Also give their merits and demerits? Ans. Range = Largest item – Smallest item Co-efficient of Range = L .

Can be measured in open end distributions. Inter-quartile range = Q3 – Q1 Merits : - It is easy to calculate. As it is not based on all the values it is not considered as a good or appropriate measure. It is calculated by using the formula Fore more detail:. Demerits : It does not represent all the values.gurukpo. Percentile Range : It is the difference between the values of the 90th and 10 th percentile. Cannot be computed in case of open-end distributions. Percentile range has almost the same merits and demerits as those of inter-quartile range. It is based on the middle 80% items of the series. only smallest and largest value is required. Not based on all the items.http://www. Not necessary to know all the values. Helpful in quality control of products.- It takes minimum time to calculate. It is least affected by the uncertainty of the extreme values. Demerits of Range : ii) Inter-Quartile Range : Inter-quartile range represents the difference between the third-quartile and the first quartile. It is very much affected by sampling fluctuations. Quartile deviation is an absolute measure of dispersion. Percentile Range = P90 – P10 Merits and Demerits : Its use is limited. iii) iv) Quartile Deviation / Semi – Interquartile Range : Quartile Deviation gives the average amount by which the two quartiles differ from the median. Subject to fluctuation/uncertain measure.com . It is an uncertain measure. It is also known as the range of middle 50% values.

Q.gurukpo. It is not capable of further algebraic treatment.D.│dZ│ = │X . = Q3 – Q1 .http://www. QD is not affected by the presence of extreme values. It has a special utility in measuring variation in open end distributions. It is very much affected by sampling fluctuations.X│ N Coefficient of X = X b) Mean Deviation from Median : M = ∑│dM│ .M│ N Coefficient of M = M M c) Mean Deviation from Mode : Z = ∑│dZ│ .│dM│ = │X .com . Q3 + Q1 Demerits : Mean Deviation ( ) : Mean Deviation is also known as average deviation or first measure of dispersion. It does not give an idea of the formulation of the series. It is the average difference between the items in a distribution and the median mean or mode of that series.D. │dx│ = │X .Z│ N Coefficient of Z = Z M b) Mean Deviation Median : M = ∑f│dM│ N from b) Mean Deviation Mode : M = ∑f│dZ│ N from Fore more detail:. coefficient of Q. = Q3 – Q1 2 Merits : v) It is easy to calculate and understand. Computation of Mean Deviation : Individual Series Discrete & continuous series a) Deviation from Mean : X = ∑f│dx│ N X a) Deviation from Mean : X = ∑│dx│ .

gurukpo. relative measure of standard deviation is computed which is called coefficient of standard deviation. median or mode. It is the most important and widely used measure of studying dispersion. of Items Discrete & Continuous Series Direct Method : σ = ∑fd2 N Shortcut Method : σ = ∑dx2 - Shortcut Method : ∑dx 2 σ = ∑fdx2 - ∑fdx 2 Fore more detail:. Standard Deviation is the square root of the average of the square deviations from the arithmetic mean of a distribution. When comparison of variability in two or more series is required. Signs are ignored therefore mathematically it is incorrect and not a significant measure.http://www. Does not give accurate results. Individual Series Direct Method : σ = ∑d2 N Where – d2 N (X – X) 2 No. Cannot be compared if mean deviations of different series are based on different averages. It can be computed from any average. Least affected by the extreme values. mean.com . Based on each and every item of the data. as it is free from those defects from which the earlier methods suffer and satisfies most of the properties of a good measure of dispersion. Co-efficient of Standard Deviation : Standard deviation is an absolute measure.Merits : It is simple to understand and easy to compute. Demerits : vi) Standard Deviation (σ) : Standard Deviation was introduced by Karl Pearson in 1823.

V Merits : Based on all the items. = σ / X Variance = σ2 Coefficient of variation : Coefficient of variation is used for the comparative study of stability or homogeneity in more than two or more series.D. Standard Deviation is comparatively difficult to calculate. C. Much importance is given to the extreme values.N Where – dx2 A (X – A) 2 Assumed Mean N N N Computation of Standard Deviation : Coefficient of S.com . Max O’Lorenz. Comparison can be done in two or more series. Least affected by sample fluctuations. attractive and effective measure of dispersion. It is simple. Well-defined and definite measure of dispersion. Concentration or density of frequency can be known from the curve.http://www. Attractive & effective. = σ X 100 X Demerits : vii) Graphical Method . Suitable for algebraic treatment.Lorenz Curve : This curve was devised by Dr. Merits : Easy to understand from the graph.gurukpo. He used this technique to show inequality of wealth and income of a group of people. yet it is not scientific since it does not provide a figure to measure dispersion. Fore more detail:.

.http://www. Write the formula for calculating combined S. of items of two series S..gurukpo. What is the best method of measuring Dispersion.. Ans. therefore it is not definite as a mathematical measure.: Standard Deviation is the best method of measuring dispersion as deviations taken from mean and algebraic signs are not ignored and it is algebraically correct. of the two series = N1 (σ12 + D12) + N2 (σ22 + D22) + .com ...D.org Fore more detail:. Drawing of curve requires more time and labour... Formula for calculating combined Standard Deviation : σ12 Where – N1 & N2 σ1 & σ 2 D1 D2 X12 No.D.N1 + N2 X1 – X12 X2 – X12 Combined arithmetic mean □□□ Send your requisition at info@biyanicolleges.Demerits : Q..3 It is not a numerical measure.

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