ISOM2002 STATISTICS AND DATA ANALYSIS

Chapter 3 – Numerical Descriptive Measures

Practice Questions

Summary

Population mean:  
X i
Sample mean: X 
x i

N n
N 1 n 1
Population median: Median  ranked value Sample median: Median  ranked value
2 2
Population range: Range  X H  X L Sample range: Range  x H  x L

 x  X
2

Population variance:  2

 X i  
2

Sample variance: S 2

i

N n 1

 x  X
2 2

Population standard deviation:  

 X i  
Sample standard deviation: S 
i

N n 1
 S
Population C.V.: CV   100% Sample C.V.: CV   100%
 X

Example 1
We are interested in the number of patents granted by US government to 12 automobile
companies in U.S. The following table shows the number of patents granted to these 12
automobiles company last year.
Company No. of patents Company No. of patents
A 511 G 210
B 385 H 97
C 275 I 50
D 257 J 36
E 249 K 23
F 234 L 13

a. What is the target population in this analysis?

b. What is the mean and median number of patents granted?

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c. Determine the range, variance, and standard deviation of the number of patents granted.

Example 2
The Merrill Lynch Global Fund specializes in long-term obligations of foreign countries. We are
interested in the interest rate on these obligations. A random sample of six bonds revealed the
following.
9.50% 7.25% 6.50% 4.75% 12.00% 8.30%

a. What is the mean interest rate on this sample of long-term obligations?

b. What is the modal interest rate on these sample of long-term obligations?

c. Determine the variance and standard deviation of the interest rate.

Example 3
The following is the number of oil changes for the last seven days at the Jiffy Lube. What is the
median oil change?
41 15 39 54 31 15 33

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Example 4
The annual salaries of quality-control managers in selected states are shown below. What is the
modal annual salary?
Arizona $35,000 Illinois $58,000 Ohio $50,000
California 49,100 Louisiana 60,000 Tennessee 60,000
Colorado 60,000 Maryland 60,000 Texas 71,400
Florida 60,000 Massachusetts 40,000 West Virginia 60,000
Idaho 40,000 New Jersey 65,000 Wyoming 55,000

Example 5
The following is the return (in %) on the small cap mutual funds with high risk in the year 2017,
compute the modal return.
37.3 37.3 44.2 44.5 53.8 53.8

Example 6
The table below is the median monthly employment earnings of Macao employed local residents
Q4 of 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
MOP 9300 10000 10000 11000 13000 15000 15000 18000 18000 19000 20000 20000

Let’s search from internet: what are the corresponding statistical figures in Q4 of 2020 and 2021?

Example 7
A set of 20 data values is calculated to have a mean of 36.80. It is then found that one of the
values, which should have been 45.3, had been incorrectly entered as 34.5. Calculate the correct
value of the mean.

Example 8 (Explaining the concept of variance and standard deviation)

A simple measure of variation around the mean might take the difference between each value
and the mean, and then compute the average of these differences. Suppose a dataset with 2
observations from a population, = 110; = 90; thus = 100.
Variation =

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Example 9
The graph below shows the histogram constructed by using the data of daily temperature in
chapter 2. Describe the shape of the following histogram in terms of skewness. Comment on the
skewness of this distribution by comparing the mean to the median.

Example 10
Stock A:
Average return last year = 5%
Standard deviation in return = 0.5%

Stock B:
Average return last year = 20%
Standard deviation in return = 1.5%

Which stock is more volatile (波動)?

Example 11
An organization is studying the variability in the weight of luggage for each passenger. For a large
group of passengers of British Airway, the mean is 23 kg with a standard deviation of 8 kg. For a
large group of passengers of American Airlines, the mean is 53 lb. (pounds), and the standard
deviation is 15 lb. Which group of passengers has larger variability in the weight of luggage?

 Pg. 173: Qs. 3.6, 3.8, 3.12 (in part (b), no need to find the Z-score and determine the existence
of any outliers), and 3.14

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