5.1 Basics of statistics

  1. What is a population?
    All elements of the group you are interested in.
  2. What is a sample?
    A sub set of the elements in the population.
  3. Describe a frequency table?
    when is it good?
    • A data set having a relatively small number of distinct values can
    • be conveniently presented in a frequency table,

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  4. What is the relative frequency and how is it used?
    • It stands for ratio of f/n.
    • f is a particular frequency and n all the f´s combined.
  5. What is the sample mean?
    • Sample mean. Consider a data set consisting of the n numerical values
    • The sample mean is the arithmetic average of these values.
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  6. What is the sample median?
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  7. What is the sample variance?
    used for?
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    • Is measures the spread of the data.

    • The variance measures how far each number in the set is from the mean. Variance
    • is calculated by taking the differences between each number in the set
    • and the mean, squaring the differences (to make them positive) and
    • dividing the sum of the squares by the number of values in the set.
  8. What is the sample standard deviation?
    Used for?
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  9. What is the difference between variance and standard deviation?
    • Standard deviation is simply the square root of the variance. (1)The calculation of variance uses squares because it weights outliers more heavily than data very near the mean. (2)This also prevents differences
    • above the mean from canceling out those below, which can sometimes
    • result in a variance of zero.

    • (3)However, because of this squaring, the variance is no longer in the
    • same unit of measurement as the original data. Taking the root of the
    • variance means the standard deviation is restored to the original unit
    • of measure.
    • For traders and analysts, these two concepts are of paramount importance as the standard deviation is used to measure market volatility, which in turn plays a large role in creating a profitable trade strategy.
  10. How does a normal histogram distribution look in?
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  11. Histogram of a approximately normal data set look like?
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  12. (c) Left skewed histogram of a data set looks like?
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  13. Right skewed histogram of a data set look like?
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  14. What does the empirical rule mean?
    what are its relevant numbers?
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  15. What does the sample correlation coefficient represent? How do we calculate this?
    • "messure of how well a line can messure the ralationship of a at least bivalue data." alltså x and y finns
    • "The sample correlation coecient expresses both the strength of the linear relationship between the x
    • and the y values of a data pair and its direction."
    • Formula is just taking the x - x mean and then divide that number by x standard deviation number. then do the same for all y values
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Card Set
5.1 Basics of statistics