3- 1

The Arithmetic Mean is
the most widely used measure
of location and shows the
central value of the data.

It is calculated by
summing the values
and dividing by the
number of values.

The major characteristics of the mean are:

A verage
Joe

It

requires the interval scale.
All values are used.
It is unique.
The sum of the deviations from the mean is 0.
Characteristics of the Mean

For ungrouped data, the
Population Mean is the
sum of all the population
values divided by the total
number of population
values:

3- 2

X


N

where
µ is the population mean
N is the total number of observations.
X is a particular value.
 indicates the operation of adding.
Population Mean

A Parameter is a measurable characteristic of a
population.
The Kiers
family owns
four cars. The
following is the
current mileage
on each of the
four cars.

X


N

3- 3

56,000
42,000
23,000
73,000
Find the mean mileage for the cars.

56,000  ...  73,000

 48,500
4
Example 1

3- 4

For ungrouped data, the sample mean is
the sum of all the sample values divided
by the number of sample values:

X
X 
n
where n is the total number of
values in the sample.
Sample Mean

16.0.4 n 5 5 Example 2 .0. 15..0.  15. A sample of five executives received the following bonus last year ($000): 14.0.0 X 14.3.0 77 X     15.5 A statistic is a measurable characteristic of a sample. 15. 17..0  .

Properties of the Arithmetic Mean Every 3. A set of data has a unique mean. The mean is affected by unusually large or small data values. Properties of the Arithmetic Mean . All the values are included in computing the mean.6 set of interval-level and ratio-level data has a mean. The arithmetic mean is the only measure of location where the sum of the deviations of each value from the mean is zero.

The mean is 5. 8. and 4.3. Illustrating the fifth property ( X  X )   (3  5)  (8  5)  (4  5)  0 Example 3 .7 Consider the set of values: 3.

. is computed from the following formula: ( w1 X 1  w2 X 2  .  wn X n ) Xw  ( w1  w2  ..wn ) Weighted Mean .8 The Weighted Mean of a set of numbers X1.. .3.... with corresponding weights w1.wn. Xn. X2.. w2. ....

90.15) Xw  5  15  15  15 $44.75)  15($0.75. 5($0.3.9 During a one hour period on a hot Saturday afternoon cabana boy Chris served fifty drinks.10.50.90)  15($1.50   $0. and fifteen for $1. fifteen for $0. Compute the weighted mean of the price of the drinks.50)  15($0. fifteen for $0. He sold five drinks for $0.89 50 Example 4 .

3. For an even set of values. the median will be the arithmetic average of the two middle numbers and is found at the (n+1)/2 ranked observation. There are as many values above the median as below it in the data array. The Median .10 The Median is the midpoint of the values after they have been ordered from the smallest to the largest.

Arranging the data in ascending order gives: 19. 25.3. The median (continued) . 25. 19. 21. 22. 22. Thus the median is 21.11 The ages for a sample of five college students are: 21. 20. 20.

5th data point. 80 Thus the median is 75.3. 75. Example 5 . The median is found at the (n+1)/2 = (4+1)/2 =2. in inches.5. are: 76. 75. 73.12 The heights of four basketball players. 80. 76. Arranging the data in ascending order gives: 73.

It can be computed for an open-ended frequency distribution if the median does not lie in an open-ended class. Properties of the Median . and ordinal-level data. intervallevel.13 Properties of the Median There is a unique median for each data set. It is not affected by extremely large or small values and is therefore a valuable measure of location when such values occur.3. It can be computed for ratio-level.

81. The Mode: Example 6 . three modes. it is referred to as bimodal. 75. 87. 84. Example 6: The exam scores for ten students are: 81. 81. 68.14 The Mode is another measure of location and represents the value of the observation that appears most frequently. Data can have more than one mode. it is the mode. 87. 93. trimodal. 75.3. and the like. Because the score of 81 occurs the most often. If it has two modes.

Symmetric distribution: 3. or bimodal The Relative Positions of the Mean. Median. Can be positively or negatively skewed. and Mode .15 A distribution having the same shape on either side of the center Skewed distribution: One whose shapes on either side of the center differ. a nonsymmetrical distribution.

Median.Zero skewness Mean =Median =Mode M ean M e d ia n M ode The Relative Positions of the Mean. and Mode: Symmetric Distribution 3.16 .

Mean>Median>Mode M ode M ean M e d ia n The Relative Positions of the Mean. Median.17 . and Mode: Right Skewed Distribution 3.• Positively skewed: Mean and median are to the right of the mode.

Median. Mean<Median<Mode M ean M ode M e d ia n The Relative Positions of the Mean.3. and Mode: Left Skewed Distribution .18 Negatively Skewed: Mean and Median are to the left of the Mode.

19 The Geometric Mean (GM) of a set of n numbers is defined as the nth root of the product of the n numbers. The formula is: GM  n ( X 1)( X 2 )( X 3).. indexes.. Geometric Mean . and relatives.3.( Xn ) The geometric mean is used to average percents.

The arithmetic mean is (5+21+4)/3 =10.3. and 4 percent. The geometric mean is GM  3 (5)(21)(4)  7. Example 7 .20 The interest rate on three bonds were 5.49 The GM gives a more conservative profit figure because it is not heavily weighted by the rate of 21percent.0. 21.

3.21 Another use of the geometric mean is to determine the percent increase in sales. GM  n ( Value at end of period) 1 (Value at beginning of period) Geometric Mean continued . production or other business or economic series from one time period to another.

000 in 1992 to 835. 835.3. the geometric mean rate of increase is 1.0127 755.000 in 2000.27%.22 The total number of females enrolled in American colleges increased from 755. That is.000 GM  8  1  .000 Example 8 .

mean deviation.23 Dispersion refers to the spread or variability in the data. and standard deviation. range.3. variance. Measures of dispersion include the following: Range = Largest value – Smallest value Measures of Dispersion .

24 The following represents the current year’s Return on Equity of the 25 companies in an investor’s portfolio.1 Range = Highest value – lowest value = 22.3. Highest value: 22.1) = 30.2 Example 9 .1-(-8.1 Lowest value: -8.

3. M D = The main features of the mean deviation are:  All values are used in the calculation.25 Mean Deviation The arithmetic mean of the absolute values of the deviations from the arithmetic mean.  It is not unduly influenced by large or small values.  The absolute values are difficult to manipulate.  X .X n Mean Deviation .

X = 102 The mean deviation is: MD  X X  103  102  . 101. 103 Find the mean deviation.4 5 5 Example 10 ..3.26 The weights of a sample of crates containing books for the bookstore (in pounds ) are: 103. 106.  103  102 n 1 5 1 4  5   2. 97..

Standard deviation: deviation The square root of the variance.27 Variance: the arithmetic mean of the squared deviations from the mean. Variance and standard Deviation .3.

3. All values are used in the calculation. Population Variance . the square of the original units. The units are awkward.28 The major characteristics of the Population Variance are: Not influenced by extreme values.

3.)2 N X is the value of an observation in the population m is the arithmetic mean of the population N is the number of observations in the population Population Standard Deviation formula:    2 Variance and standard deviation .29 Population Variance formula:   =  (X .

6 ..)2 N ( .5 .6 2 ) 2 25   = 4 2 .1 .1 .8 . the variance and standard deviation are:      =  (X .6 .. 4 9 8 Example 9 continued . + ( 2 2 .2 2 7  =  6 .30 In Example 9.6 .1 .6 2 ) 2 + .6 2 ) 2 + ( .3.

31 Sample variance (s2) 2 s = (X .X ) n -1 2 Sample standard deviation (s) s s 2 Sample variance and standard deviation .3.

$6.30 5 1 2 s s 2 2  2 5. $11.4   ..   6  7.32 The hourly wages earned by a sample of five students are: $7.2   5. $8.4  2 s   n 1 5 1 21..40 n 5   X  X  7  7.30 Example 11 . X 37 X    7.30  2.3. Find the sample variance and standard deviation. $5.

3. Chebyshev’s theorem . the minimum proportion of the values that lie within k standard deviations of the mean is at least: 1 where 1 k 2 k is any constant greater than 1.33 Chebyshev’s theorem: For any set of observations.

34 Empirical Rule: For any symmetrical. bell-shaped distribution: About 68% of the observations will lie within 1s the mean About 95% of the observations will lie within 2s of the mean Virtually all the observations will be within 3s of the mean Interpretation and Uses of the Standard Deviation .3.

7%          Interpretation and Uses of the Standard Deviation .3. 68% 95% 99.35 Bell -Shaped Curve showing the relationship between  and .

3.36 The Mean of a sample of data organized in a frequency distribution is computed by the following formula: Xf X  n The Mean of Grouped Data .

X 66 X    6.3.37 A sample of ten movie theaters in a large metropolitan area tallied the total number of movies showing last week.6 n 10 Example 12 . Compute the mean number of movies showing.

The Median of Grouped Data . CF is the cumulative frequency preceding the median class.3.38 The Median of a sample of data organized in a frequency distribution is computed by: n  CF Median  L  2 (i ) f where L is the lower limit of the median class. f is the frequency of the median class. and i is the median class interval.

For example. if n=50. Finding the Median Class . 50/2 = 25. Divide the total number of data values by 2.39 To determine the median class for grouped data Construct a cumulative frequency distribution. Determine which class will contain this value. then determine which class will contain the 25th value.3.

3.40 Example 12 continued .

33 f 3 Example 12 continued .3. i=2. L=5. n=10. f=3.41 From the table. CF=3 n 10  CF 3 Median  L  2 (i )  5  2 (2)  6.

3. The modes in example 12 are 6 and 10 and so is bimodal. The Mode of Grouped Data .42 The Mode for grouped data is approximated by the midpoint of the class with the largest class frequency.