KEY

FORMULAS

Chapter 3 and 4: Numerical Descriptive Measures

Topic Formula

å xi
Sample Mean x=
n
å xi
Population Mean µ=
N
Weighted Mean x = å wi xi

p
Percentile Location Lp = ( n + 1)
100
Range Range = Max – Min

å xi - x
Sample MAD Sample MAD =
n
å xi - µ
Population MAD Population MAD =
N
å ( xi - x )
2
Sample Variance s2 =
n -1
Sample Standard Deviation s = s2

å ( xi - µ )
2
Population Variance s2 =
N
Population Standard Deviation s = s2

s
Sample Coefficient of Variation Sample CV =
x
s
Population Coefficient of Variation Population CV =
µ
xI - R f
Sharpe Ratio Sharpe Ratio =
sI
x-x
z-Score z=
s
å mi fi
Sample Mean for Grouped Data x=
n
å ( mi - x ) fi
2
Sample Variance for Grouped Data 2
s =
n -1
å mi fi
Population Mean for Grouped Data µ=
N
å ( mi - µ ) fi
2
Population Variance for Grouped
Data s2 =
N

1
KEY FORMULAS

å ( xi - x )( yi - y )
Sample Covariance sxy =
n -1

Population Covariance s xy =
(
å ( xi - µ x ) yi - µ y )
N
sxy
Sample Correlation Coefficient rxy =
sx s y
s xy
Population Correlation Coefficient r xy =
s xs y

Chapter 5: Introduction to Probability

Topic Formula

Complement Rule ( )
P Ac = 1 - P ( A)

Addition Rule P ( A ! B ) = P ( A) + P ( B ) - P ( A " B )

Addition Rule for Mutually

P ( A ! B ) = P ( A) + P ( B )
Exclusive Events
P ( A ! B)
Conditional Probability P ( A | B) =
P ( B)

Multiplication Rule P ( A ! B) = P ( A | B) P ( B)

Total Probability Rule (

P ( A) = P ( A | B ) P ( B ) + P A | B c P B c ) ( )
P ( A | B) P ( B)
Bayes’ Theorem or P ( B | A ) =
( ) ( )
P ( A | B ) P ( B ) + P A | Bc P Bc

Chapter 6: Discrete Probability Distributions

Topic Formula

Expected Value of a Discrete

E ( X ) = µ = å xi P ( X = xi )
Random Variable
Variance of a Discrete Random
Var ( X ) = s 2 = å ( xi - µ ) P ( X = xi )
2
Variable
Standard Deviation of a Discrete
Random Variable SD ( X ) = s = s 2

n! n- x
Binomial Distribution P ( X = x) = p x (1 - p )
x !( n - x )!

2
KEY FORMULAS

Expected Value of a Binomial

E ( X ) = µ = np
Random Variable
Variance of a Binomial Random
Var ( X ) = s 2 = np (1 - p )
Variable
Standard Deviation of a Binomial
SD ( X ) = s = np (1 - p )
Random Variable
e- µ µ x
Poisson Distribution P ( X = x) =
x!
Expected Value of a Poisson
E( X ) = µ
Random Variable
Variance of a Poisson Random
Var ( X ) = s 2 = µ
Variable
Standard Deviation of a Poisson
SD ( X ) = s = µ
Random Variable
æ S öæ N - S ö
ç ÷ç ÷
è x øè n - x ø
Hypergeometric Distribution P ( X = x) =
æNö
ç ÷
ènø
Expected Value of a æSö
E ( X ) = µ = nç ÷
Hypergeometric Random Variable èNø
Variance of a Hypergeometric æ S öæ S öæ N - n ö
Var ( X ) = s 2 = n ç ÷ç1 - ÷ç ÷
Random Variable è N øè N øè N - 1 ø
Standard Deviation of a æ S öæ S öæ N - n ö
SD ( X ) = s = n ç ÷ç1 - ÷ç ÷
Hypergeometric Random Variable N
è øè N øè N - 1 ø

Chapter 7: Continuous Probability Distributions

Topic Formula

Cumulative Distribution Function F ( x) = P ( X £ x)

ì 1
ï for a £ x £ b, and
Continuous Uniform Distribution f ( x) = í b - a
ï0 for x < a or x > b
î
Expected Value of a Uniform a+b
E(X ) = µ =
Distribution 2
Standard Deviation of a Uniform
Distribution SD ( X ) = s = ( b - a )2 12

Standard Transformation of the X -µ

Z=
Normal Random Variable s
Inverse Transformation of the X = µ + Zs
Normal Random Variable

3
KEY FORMULAS

Mean of an Exponential 1
E(X ) =
Distribution l
Standard Deviation of an 1
SD ( X ) = E ( X ) =
Exponential Distribution l
Exponential Cumulative
P ( X £ x ) = 1 - e-l x
Distribution Function

Chapter 8: Sampling and Sampling Distributions

Topic Formula

Expected Value of the Sample

Mean
( )
E X =µ

s
Standard Error of the Sample Mean ( )
se X =
n
Standard Transformation of the X -µ
Z=
Sample Mean s n
Expected Value of the Sample
Proportion
( )
E P =p

Standard Error of the Sample p (1 - p )

Proportion ( )
se P =
n
P- p
Standard Transformation of the Z=
Sample Proportion p (1 - p )
n
s æ N -n ö
Finite Population Correction
Factor for the Sample Mean ( )
se X = ç ÷
n çè N - 1 ÷ø
p (1 - p ) æ N - n ö
Finite Population Correction
Factor for the Sample Proportion ( )
se P = çç ÷÷
n è N -1 ø
Confidence Interval for µ when s s
x ± za 2
is Known n
Confidence Interval for µ when s s
x ± ta 2,df ; df = n - 1
is Unknown n
p (1 - p )
Confidence Interval for p p ± za 2
n
2
Required Sample Size when æ za 2sˆ ö
n = çç ÷÷
Estimating the Population Mean
è E ø
Required Sample Size when æ za 2 ö
2
Estimating the Population n = çç ÷÷ pˆ (1 - pˆ )
Proportion è E ø

4
KEY FORMULAS

Chapter 9: Hypothesis Testing

Topic Formula

Test Statistic for µ when s is x - µ0

z=
Known s n
Test Statistic for µ when s is x - µ0
tdf = ; df = n - 1
Unknown s n
p - p0
Test Statistic for p z=
p0 (1 - p0 ) n

Chapter 10: Comparisons Involving Means

Topic Formula

Confidence Interval for µ1 - µ2 if s12 s 22

s12 and s 22 are known
( x1 - x2 ) ± za 2 +
n1 n2
æ1 1 ö
Confidence Interval for µ1 - µ2 if ( x1 - x2 ) ± ta 2,df s 2p ç + ÷ ;
è n1 n2 ø
s12 and s 22 are unknown but
assumed equal (n1 - 1) s12 + (n2 - 1) s22
s 2p = ; df = n1 + n2 - 2
n1 + n2 - 2

s12 s22
Confidence Interval for µ1 - µ2 if ( x1 - x2 ) ± ta 2,df + ;
n1 n2
s12 and s 22 are unknown and
(s / n1 + s22 / n2 )
2 2

cannot be assumed equal df =

1

( s12 / n1 )2 /(n1 - 1) + ( s22 / n2 ) 2 /(n2 - 1)

( x1 - x2 ) - d0
Test Statistic for µ1 - µ2 if s12 and z=
s 12 s 22
s 22 are known +
n1 n2
( x1 - x2 ) - d0 ;
tdf =
Test Statistic for µ1 - µ2 if s12 and æ1 1 ö
s 2p ç + ÷
s 22 are unknown but assumed è n1 n2 ø
equal (n1 - 1) s12 + (n2 - 1) s22
s 2p = ; df = n1 + n2 - 2
n1 + n2 - 2
( x1 - x2 ) - d0 ;
tdf =
Test Statistic for µ1 - µ2 if s12 and s12 s22
+
n1 n2
s 22 are unknown and cannot be
(s / n1 + s22 / n2 )
2
assumed equal 2
1
df =
( s12 / n1 )2 /(n1 - 1) + ( s22 / n2 ) 2 /(n2 - 1)

5
KEY FORMULAS

Confidence Interval for µD d ± ta 2,df sD n ; df = n - 1

d - d0
Test Statistic for µD tdf = ; df = n - 1
sD n
p1 (1 - p1 ) p2 (1 - p2 )
Confidence Interval for p1 - p2 ( p1 - p2 ) ± za 2 +
n1 n2
p1 - p2
Test Statistic for Testing p1 - p2 if z=
æ1 1 ö
d 0 is zero p (1 - p ) ç + ÷
è n1 n2 ø
( p1 - p2 ) - d0
Test Statistic for Testing p1 - p2 if z=
p1 (1 - p1 ) p2 (1 - p2 )
d 0 is not zero +
n1 n2

Chapter 11: Comparisons Involving Proportions

Topic Formula
c ni

Grand Mean for ANOVA åå x

i =1 j =1
ij

x=
nT
c
Sum of Squares Due to Treatments
ån ( x - x )
2
SSTR = i i
SSTR
i =1
SSTR
Mean Square for Treatments MSTR MSTR =
c -1
c
Error Sum of Squares SSE = å (ni - 1) si2
i =1

SSE
Mean Square Error MSE =
nT - c
Test Statistic for a One-way MSTR
F( df ,df ) = ; df1 = c - 1 and df 2 = nT - c
ANOVA Test 1 2
MSE

Chapter 12: Basics of Regression Analysis

Topic Formula

Simple Linear Regression Model y = b0 + b1 x + e

Sample Regression Equation for

the Simple Linear Regression ŷ = b0 + b1x
Model

6
KEY FORMULAS

Slope b1 of the Sample Regression ∑(𝑥" − 𝑥̅ )(𝑦" − 𝑦*)

𝑏! =
Equation ∑(𝑥" − 𝑥̅ )#
Intercept b0 of the Sample
b0 = y - b1 x
Regression Equation

Standard Error of the Estimate se = se2 = MSE =

SSE
=
ei2
;
å
n - k -1 n - k -1
k = number of independent variables

Total Sum of Squares SST = å ( yi - y )2

Sum of Squares due to Regression SSR = å ( yˆi - y )2

Sum of Squares due to Error SSE = å ( yi - yˆi )2

SSR SSE
Coefficient of Determinant R 2 R2 = = 1-
SST SST

Adjusted R 2 Adjusted R 2 = 1 - 1 - R 2 ç(
æ n -1 ö
÷
è n - k -1 ø
)
Test Statistics for the Test of 𝑡$%& =
'! ()!"
; 𝑑𝑓 = 𝑛 − 𝑘 − 1
Individual Significance *+,'!-

Confidence Interval for b j 𝑏. ± 𝑡/⁄#,12 𝑠𝑒4𝑏. 5; 𝑑𝑓 = 𝑛 − 𝑘 − 1

Confidence Interval for the

Expected Value of y
yˆ 0 ± ta 2, df ( )
se yˆ 0 ; 𝑑𝑓 = 𝑛 − −𝑘 − 1

Prediction Interval for an

( se ( yˆ ))
2
Individual Value of y yˆ 0 ± ta 2, df
0
+ se2 ; 𝑑𝑓 = 𝑛 − 𝑘 − 1

Residuals for the Regression Model e = y - yˆ