3910 Semester 1 – 2014 Page 11 of 12

Appendix: Tables and Formulas

Population Sample
Sample size N n
Mean 1 N 1 n
µ = ∑ xi x = ∑ xi
N i =1 n i =1
Standard deviation 1 N
1 n
=σ ∑(x − µ) = ∑ ( xi − x )
2 2
s
n − 1 i =1
i
N i =1

Correlation
∑( x − µ )( y − µ )
N n

i x i y ∑ ( x − x )( y − y )
i i
ρ= i =1
r= i =1

∑ ( xi − µ x ) ∑ ( yi − µ y )
N N n n

∑ ( xi − x ) ∑ ( yi − y )
2 2 2 2

=i 1 =i 1 =i 1 =i 1

Selected quantiles from N(0,1) distribution:

Right tail probability Confidence level z*
0.10 80% 1.282
0.05 90% 1.645
0.025 95% 1.960
0.01 98% 2.326
0.005 99% 2.576

Selected quantiles from t distribution with various degrees of freedom (df):

t* Right tail probability
0.05 0.025 0.01 0.005
8 1.860 2.306 2.896 3.355
9 1.833 2.262 2.821 3.250
16 1.746 2.120 2.583 2.921
df
17 1.740 2.110 2.567 2.898
18 1.734 2.101 2.552 2.878
98 1.661 1.984 2.365 2.627

Standard deviations and standard error for various statistics:

Statistic Standard deviation Standard error
x σ s
n n
p̂ p (1 − p ) pˆ (1 − pˆ )
n n
x1 − x2 σ 12 σ 22 s12 s22
+ +
n1 n2 n1 n2
pˆ1 − pˆ 2 p1 (1 − p1 ) p2 (1 − p2 ) pˆ1 (1 − pˆ1 ) pˆ 2 (1 − pˆ 2 )
+ +
n1 n2 n1 n2

Interval estimate: statistic ± margin of error

100(1–α)% confidence interval: statistic ± zα* /2 × SE (using the N(0,1) distribution)
statistic ± tr*,α /2 × SE (using a t dist with df = r)
Required sample size for 100(1-α)% confidence interval:
2
for p : n  zα /2  p (1 − p )
2
µ:  z * σ  *
for n =  α /2  =
 ME   ME 
 3910 Semester 1 – 2014 Page 12 of 12

Test statistics for various null hypotheses:

Null hypothesis Test statistic
H 0 : µ = µ0 x −µ 
~ tn −1
s/ n
H 0 : p = p0 pˆ − p0 •
~ N (0,1)
p0 (1 − p0 ) / n
H 0 : µ1 = µ2 x1 − x2 
~ tn −1 n = min(n1 , n2 )
2 2
s s
1
+ 2
n1 n2
H 0 : p1 = p2 pˆ1 − pˆ 2  x1 + x2
~ N (0,1) pˆ =
1 1 n1 + n2
 +  pˆ (1 − pˆ )
 n1 n2 
P ( A and B )
Conditional probability: P ( A | B) =
P ( B)
Multiplicative rule: P ( A and B ) = P ( A | B ) P ( B )
Independence: P ( A | B ) = P( A)
Mutual exclusion: P ( A and B ) = 0
Law of total probabilities:
- P ( A ) P( A and B) + P( A and (not B))
=
P ( A ) P( A and B1 ) + P( A and B2 ) +  + P ( A and Bk ) ( B1 , B2 , , Bk are disjoint)
-=
Bayes’ rule:
P ( B | A ) P( A)
- P ( A | B) =
P ( B | 
A ) P ( A ) + P ( B | not A ) P(not A)
P ( B | Aj ) P( Aj )
- (
For j = 1, , k , P A | B =
j ) P ( B | A1 ) P ( A1 ) +  + P ( B | Ak ) P( Ak )
( A1 , A2 , , Ak are disjoint)

Suppose X follows a binomial distribution with parameters n and p.

n k n−k n!
Binomial probability: P( X =
k) =
  p (1 − p ) = p k (1 − p ) n − k
k  k !(n − k )!

Expected value: np Standard deviation: np(1 − p)

Given a simple linear regression: y =β 0 + β1 x + ε

100(1–α)% confidence interval of β k : bk ± tn*−2,α /2 × SEbk for k = 1, 2

t statistic for H 0 : β k = 0 : bk for k = 1, 2

t=
SEbk

t statistic for H 0 : ρ = 0 : r n−2

t=
1− r2

R 2: SSR
R=
2
r=
2

SST

SSE
Standard error of residuals: sε =
n−2