Midterm Answer Sheet and Assignment

Of Business Statistics
Submitted to:
Dr. Md. Main Uddin, PhD
Professor
Department of Banking and Insurance
University of Dhaka

Submitted by:

Md. Abdllah Al Noman

Id: 51840071
Course Title: Business Statistics
Department of Banking and Insurance

MBA (Evening) program

Date of Submission: 31 December, 2020

1. State the limitations of using grouped data.

Answer:

 It needs selection of relevant stratification variables which can be more difficult.

 It is not useful when there are no homogeneous subgroups.

 It can be expensive to implement.

 It plays significant role when we have to deal with large data.

 Information may be lost- if only grouped data is published then it may lead to problems in

statistical analysis.

2. Why regression is called least squares regression?

Answer:

Regression is a statistical method used in finance, investing, and other disciplines that

attempts to determine the strength and character of the relationship between one

dependent variable and other variables known as independent variables. Least square

regression also represents the relationship between a known independent variable and an

unknown dependent variable. That’s why regression is called least square regression.
 3. What is the benefit of using regression over simple average for prediction?

Answer: The benefit of using regression over simple average for prediction because we

rather get samples which may be close or far away from the average so it may be

uncertain as to the simple average. So using regression method gets better result for

prediction rather than simple average.

4. How is significance level used in statistics along with probability value?

Answer:

The significance level is the probability of rejecting the null hypothesis when it is true. For

example, a significance level of 0.05 indicates a 5% risk of concluding that a difference exists

when there is no actual difference. That is the way Significance level used in statistics along

with probability value.

5. What is meant by statistically significantly different?

Answer: Basically, a statistically significant result (usually a difference) is a result that's not

attributed to chance. More technically, it means that if the Null Hypothesis is true

(which means there really is no difference), there's a low probability of getting a result that large

or larger.
 6. Differentiate between false positive and false negative.

Answer: A false positive is an error in binary classification in which a test result incorrectly

indicates the presence of a condition such as a disease when the disease is not present, while

a false negative is the opposite error where the test result incorrectly fails to indicate the

presence of a condition when it is present. These are the two kinds of errors in a binary test, in

contrast to the two kinds of correct result, a true positive and a true negative.
 7. What is the use of relative and cumulative frequency?

Answer: A frequency is the number of times a given datum occurs in a data set. A. Relative

Frequency of a class is the percentage of the data that falls in that class, on the other hand A

Cumulative Frequency of a class is the sum of the frequencies of that class and all previous

classes. To find the relative frequencies, divide each frequency by the total number. Relative

frequencies can be written as fractions, percent’s, or decimals. Cumulative relative frequency is

the accumulation of the previous relative frequencies. To find the cumulative relative frequencies,

add all the previous relative frequencies to the relative frequency for the current row.

Assignment

8. Show the relationship between margin of error and interval estimate?

Answer: A margin of error tells you how many percentage points your results will differ from the

real population value. For example, a 95% confidence interval with a 4 percent margin of

error means that your statistic will be within 4 percentage points of the real population value

95% of the time. An interval estimate is defined by two numbers, between which a population

parameter is said to lie. Interval estimation is the use of sample data to calculate an interval of

possible values of an unknown population parameter. Margin of error is an interval estimate—a

pair of percentages surrounding a guess about some attribute of the full population based on a

random sample from that population. That is the main relationship between margin of error and

interval estimate.