Statistics Cheat Sheets

Descriptive Statistics:
Term Meaning Population Formula Sample Formula Example {1,16,1,3,9}
Sort Sort values in
increasing order
{1,1,3,9,16}
Mean Average
N
X
N
i
i

n
X
n
X ... X X
X
n
i
i
n

+ + +

1 2 1
6
Median The middle value
half are belo and half
are above
3
Mode The value ith the
most a!!earances
1
Variance The average of the
s"uared deviations
beteen the values
and the mean
2

( )

N
i
i
X
N
1
2
1
( )
1
1
2
2

n
X X
s
n
i
i
#1$6%
&
' #1$6%
&
' #3$
6%
&
' #9$6%
&
' #16$6%
&

divided b( ) values *
16+,) * 33-6
Standard
Deiation
The s"uare root of
.ariance, thought of as
the /average0
deviation from the
mean-

2

( )
1
1
2
2

n
X X
s s
n
i
i
S"uare root of 33-6 *
)-1966
!oe""icient
o"
Variation
The variation relative
to the value of the
mean
X
s
CV
)-1966 divided b( 6 *
2-9661
Minimum The minimum value 1
Maximum The ma3imum value 16
#ange 4a3imum minus
4inimum
16 1 * 1)
Probability Terms:
Term Meaning $otation Example% &'ee "ootnote(
Pro)a)ilit* 5or an( event A, !robabilit( is re!resented ithin 2 6 1-
6#%
2-)
#andom
Experiment
A !rocess leading to at least & !ossible outcomes ith
uncertaint( as to hich ill occur-
7olling a dice
Eent A subset of all !ossible outcomes of an e3!eriment- 8vents A and 9
+nter'ection o"
Eent'
:et A and 9 be to events- Then the intersection of the to
events is the event that both A and 9 occur #logical A;<%-
A9
The event that a & a!!ears
,nion o" Eent' The union of the to events is the event that A or 9 #or both%
occurs #logical =7%-
A9
The event that a 1, &, >, ) or 6
a!!ears
!omplement :et A be an event- The com!lement of A is the event that A does
not occur #logical ;=T%-
A
The event that an odd number
a!!ears
Mutuall*
Exclu'ie Eent'
A and 9 are said to be mutuall( e3clusive if at most one of the
events A and 9 can occur-
A and 9 are not mutuall(
e3clusive because if a & a!!ears,
both A and 9 occur
!ollectiel*
Ex-au'tie
Eent'
A and 9 are said to be collectivel( e3haustive if at least one of
the events A or 9 must occur-
A and 9 are not collectivel(
e3haustive because if a 3
a!!ears, neither A nor 9 occur
.a'ic /utcome' The sim!le indecom!osable !ossible results of an e3!eriment-
=ne and e3actl( one of these outcomes must occur- The set of
basic outcomes is mutuall( e3clusive and collectivel(
e3haustive-
9asic outcomes 1, &, 3, >, ), and
6
Sample Space The totalit( of basic outcomes of an e3!eriment- {1,&,3,>,),6}
? 7oll a fair die once- :et A be the event an even number a!!ears, let 9 be the event a 1, & or ) a!!ears
105 Yoavi Liedersdorf (MBA03)
Statistics Cheat Sheets
Probability Rules:
If events A and B are mutually exclu'ie If events A and B are NOT mutually exclu'ie
Term
E0ual'
1rea2
Term E0ual'
Venn2
6#A%*
6#A% 6#A%* 6#A%
6# A %*
1 $ 6#A% 6# A %* 1 $ 6#A%
6#A9%*
2 6#A9%*
6#A% ? 6#9%
only if A and
B are
independent
6#A9%*
6#A% ' 6#9% 6#A9%* 6#A% ' 6#9%
6#A9%
6#A@9%*
[Bayes'
La: P(A
holds given
that B
holds)]
( )
( ) B P
B A P

!eneral probability rules:

"# Af P&13.( 4 P&1(, then A and 9 are independent
eent'B #for e3am!le, rolling dice one after the other%-
$# Af there are n !ossible outcomes hich are e"uall(
liCel( to occur:
6#outcome i occurs% *
1
n
for each i D1, &, ---, nE
*Example: Shuffle a de! of ards" and pi! one
at random# P(hosen ard is a $%) & $'()#
%# Af event A is com!osed of n e0uall* li5el* )a'ic
outcome':
6#A% *
*um+er of Basi ,utomes in A
n
*Example: Suppose -e toss t-o die# .et A
denote the event that the sum of the t-o die is
/# P(A) & 0'12 & $'/" +eause there are 0 out of
12 +asi outomes that -ill sum /#
6#A9% * 6#A@9% ? 6#9%
?See e3am!le in 9==F 1 !- )1
6#A9% * 6#9@A% ? 6#A%
6#A%*
6#A9% '
6#A
B
%
*
P&13.(P&.( 6
P&13
B
(P&
B
(

6
6
?83am!le: TaCe a decC of )& cards- TaCe out & cards se"uentiall(,
but donGt looC at the first- The !robabilit( that the second card (ou
chose as a is the !robabilit( of choosing a #event A% after
choosing a #event 9%, !lus the !robabilit( of choosing a #event
A% after not choosing a #event 9%, hich e"uals #1&,)1%#13,)&% '
#13,)1%#39,)&% * 1,> * 2-&)- Also see e3am!le in 9==F 1 !age )3-
106 Yoavi Liedersdorf (MBA03)
Statistics Cheat Sheets
Random &ariables and Distributions:
To calculate the Expected Value
( ) ( )

x X P x X E
, use the folloing table:
? *
Eent Pa*o"" Pro)a)ilit* 7eig-ted Pa*o""
Dname of first eventE D!a(off of first event in HE D!robabilit( of first event 261E D!roduct of 6a(off ? 6robabilit(E
Dname of second eventE D!a(off of second event in HE D!robabilit( of second event
261E
D!roduct of 6a(off ? 6robabilit(E
Dname of third eventE D!a(off of third event in HE D!robabilit( of third event 261E D!roduct of 6a(off ? 6robabilit(E
? See e3am!le in 9==F 1 !age )> Total &Expected Pa*o""(2 Dtotal of all Ieighted 6a(offs aboveE
To calculate the Variance .ar#J% *
( ) ( ) ( )

x X P X E x
2
and Standard Deiation ( ) ( ) X Var X , use:
$ * K&* ? *
Eent Pa*o"" Expected
Pa*o""
Error &Error(
8
Pro)a)ilit* 7eig-ted &Error(
8
D1
st

eventE
D1
st

!a(offE
DTotal from
aboveE
D1
st
!a(off minus
83!ected 6a(offE
1
st
8rror
s"uared
1
st
eventGs
!robabilit(
1
st
#8rror%
&
? 1
st
eventGs
!robabilit(
D&
nd

eventE
D&
nd

!a(offE
DTotal from
aboveE
D&
nd
!a(off minus
83!ected 6a(offE
&
nd
8rror
s"uared
&
nd
eventGs
!robabilit(
&
nd
#8rror%
&
? &
nd
eventGs
!robabilit(
D3
rd

eventE
D3
rd

!a(offE
DTotal from
aboveE
D3
rd
!a(off minus
83!ected 6a(offE
3
rd
8rror
s"uared
3
rd
eventGs
!robabilit(
3
rd
#8rror%
&
? 3
rd
eventGs
!robabilit(
Variance2 Dtotal of aboveE
Std9 Deiation2 Ds"uare root of .arianceE
'ountin( Rules:
Term Meaning Formula Example
.a'ic !ounting
#ule
The num+er of a(s to !icC x
things out of a set of n #ith
no regard to order%- The
pro+a+ility is calculated as 1,x
of the result-
( )! x n ! x
! n
x
n

,
_

The num+er of a(s to !icC

> s!ecific cards out of a
decC of )& is: )&B,##>B%
#>+B%% * &12,1&), and the
pro+a+ility is 1,&12,1&) *
2-22222369>
.ernoulli
Proce''
5or a se"uence of n trials, each
ith an outcome of either
success or failure, each ith a
!robabilit( of p to succeed
the !robabilit( to get x
successes is e"ual to the 9asic
Lounting 7ule formula
#above% times !
3
#1$!%
n$3
-
( ) p , n x X P
( )
( )
x n x
p p
! x n ! x
! n

,
_

1
Af an airline taCes &2
reservations, and there is a
2-9 !robabilit( that each
!assenger ill sho u!,
then the !robabilit( that
exactl* 16 !assengers ill
sho is:
! !
!
4 16
20
#2-9%
16
#2-1%
>
* 2-2+91+
.ernoulli
Expected Value
The e3!ected value of a
9ernoulli 6rocess, given n
trials and p !robabilit(-
8#J% * n!
An the e3am!le above, the
number of !eo!le e3!ected
to sho is: #&2%#2-9% * 1+
.ernoulli
Variance
The variance of a 9ernoulli
6rocess, given n trials and p
!robabilit(-
.ar#J% * n!#1 $ !%
An the e3am!le above, the
9ernoulli .ariance is #&2%
#2-9%#2-1% * 1-+
.ernoulli
Standard
Deiation
The standard deviation of a
9ernoulli 6rocess:
#J% *
) p ( np 1
An the e3am!le above, the
9ernoulli Standard
<eviation is
8 1.
* 1-3>
:inear
Tran'"ormation
#ule
Af J is random and M*aJ'b,
then the folloing formulas
a!!l(:
8#M% * a?8#J% ' b
.ar #M% * a
&
?.ar#J%
#M% * @a@?#J%
See e3am!le in 9==F 1
!age )9
10 Yoavi Liedersdorf (MBA03)
Statistics Cheat Sheets
)niform Distribution
Term;Meaning Formula
Expected Value
X
( )
2
b a+

Variance
2
X

( )
12
2
a b

Standard Deiation X

( )
12
a b

Pro)a)ilit* t-at < falls

)et=een c and d
( ) d 3 P
a +
d

Normal Distribution:
! 0"00 0"01 0"02 0"03 0"04 0"05 0"06 0"0 0"08 0"0#
0"0 "
000
0
"
004
0
"
008
0
"
012
0
"
016
0
"
01#
#
"
023
#
"
02
#
"
031
#
"
035
#
0"1 "
03#
8
"
043
8
"
04
8
"
051

"
055

"
05#
6
"
063
6
"
06
5
"
01
4
"
05
3
0"2 "
0#
3
"
083
2
"
08
1
"
0#1
0
"
0#4
8
"
0#8

"
102
6
"
106
4
"
110
3
"
114
1
0"3 "
11
#
"
121

"
125
5
"
12#
3
"
133
1
"
136
8
"
140
6
"
144
3
"
148
0
"
151

0"4 "
155
4
"
15#
1
"
162
8
"
166
4
"
10
0
"
13
6
"
1
2
"
180
8
"
184
4
"
18
#
0"5 "
1#1
5
"
1#5
0
"
1#8
5
"
201
#
"
205
4
"
208
8
"
212
3
"
215

"
21#
0
"
222
4
0"6 "
225

"
22#
1
"
232
4
"
235

"
238
#
"
242
2
"
245
4
"
248
6
"
251

"
254
#
0" "
258
0
"
261
1
"
264
2
"
26
3
"
20
4
"
23
4
"
26
4
"
2#
4
"
282
3
"
285
2
0"8 "
288
1
"
2#1
0
"
2#3
#
"
2#6

"
2##
5
"
302
3
"
305
1
"
30
8
"
310
6
"
313
3
6robabilit( <ensit( 5unction:
( )
( )
2
2
1
2
1

,
_

x
X
e x f
-here 1#$0$2 and e )#4$51
0"# "
315
#
"
318
6
"
321
2
"
323
8
"
326
4
"
328
#
"
331
5
"
334
0
"
336
5
"
338
#
1"0 "
341
3
"
343
8
"
346
1
"
348
5
"
350
8
"
353
1
"
355
4
"
35

"
35#
#
"
362
1
1"1 "
364
3
"
366
5
"
368
6
"
30
8
"
32
#
"
34
#
"
3
0
"
3#
0
"
381
0
"
383
0
108 Yoavi Liedersdorf (MBA03)
Statistics Cheat Sheets
1"2 "
384
#
"
386
#
"
388
8
"
3#0

"
3#2
5
"
3#4
4
"
3#6
2
"
3#8
0
"
3##

"
401
5
1"3 "
403
2
"
404
#
"
406
6
"
408
2
"
40#
#
"
411
5
"
413
1
"
414

"
416
2
"
41

Standard <eviations aa( from the mean:

X
Z
(6 and are s-appa+le7)
1"4 "
41#
2
"
420

"
422
2
"
423
6
"
425
1
"
426
5
"
42
#
"
42#
2
"
430
6
"
431
#
1"5 "
433
2
"
434
5
"
435

"
43
0
"
438
2
"
43#
4
"
440
6
"
441
8
"
442
#
"
444
1
1"6 "
445
2
"
446
3
"
44
4
"
448
4
"
44#
5
"
450
5
"
451
5
"
452
5
"
453
5
"
454
5
1" "
455
4
"
456
4
"
45
3
"
458
2
"
45#
1
"
45#
#
"
460
8
"
461
6
"
462
5
"
463
3
P(a 3 +) & area under f3(x) +et-een a and +:
( ) b X a P
1
]
1

,
_

,
_

b
Z
a
P
1"8 "
464
1
"
464
#
"
465
6
"
466
4
"
46
1
"
46
8
"
468
6
"
46#
3
"
46#
#
"
40
6
1"# "
41
3
"
41
#
"
42
6
"
43
2
"
43
8
"
44
4
"
45
0
"
45
6
"
46
1
"
46

2"0 "
4
2
"
4
8
"
48
3
"
48
8
"
4#
3
"
4#
8
"
480
3
"
480
8
"
481
2
"
481

2"1 "
482
1
"
482
6
"
483
0
"
483
4
"
483
8
"
484
2
"
484
6
"
485
0
"
485
4
"
485

Standard ;ormal Table $ seven usage scenarios: 2"2 "

486
1
"
486
4
"
486
8
"
48
1
"
48
5
"
48
8
"
488
1
"
488
4
"
488

"
48#
0

*

'

*

'

2"3 "
48#
3
"
48#
6
"
48#
8
"
4#0
1
"
4#0
4
"
4#0
6
"
4#0
#
"
4#1
1
"
4#1
3
"
4#1
6
2"4 "
4#1
8
"
4#2
0
"
4#2
2
"
4#2
5
"
4#2

"
4#2
#
"
4#3
1
"
4#3
2
"
4#3
4
"
4#3
6

*

$

*

$

2"5 "
4#3
8
"
4#4
0
"
4#4
1
"
4#4
3
"
4#4
5
"
4#4
6
"
4#4
8
"
4#4
#
"
4#5
1
"
4#5
2
2"6 "
4#5
3
"
4#5
5
"
4#5
6
"
4#5

"
4#5
#
"
4#6
0
"
4#6
1
"
4#6
2
"
4#6
3
"
4#6
4

*

$

*

$

2" "
4#6
5
"
4#6
6
"
4#6

"
4#6
8
"
4#6
#
"
4#
0
"
4#
1
"
4#
2
"
4#
3
"
4#
4
2"8 "
4#
4
"
4#
5
"
4#
6
"
4#

"
4#

"
4#
8
"
4#
#
"
4#
#
"
4#8
0
"
4#8
1
10# Yoavi Liedersdorf (MBA03)
Statistics Cheat Sheets

*

'

2"# "
4#8
1
"
4#8
2
"
4#8
2
"
4#8
3
"
4#8
4
"
4#8
4
"
4#8
5
"
4#8
5
"
4#8
6
"
4#8
6
3"0 "
4#8

"
4#8

"
4#8

"
4#8
8
"
4#8
8
"
4#8
#
"
4#8
#
"
4#8
#
"
4##
0
"
4##
0
'orrelation:
Af J and M are to different sets of data, their correlation is re!resented b( Lorr#JM%, rJM, or <> #rho%-
Af M increases as J increases, 2 N JM N 1- Af M decreases as J increases, $1 N JM N 2-
The e3tremes JM * 1 and JM * $1 indicated !erfect correlation info about one results in an e3act !rediction about the other-
Af J and M are com!letel( uncorrelated, JM * 2-
The !oariance of J and M, Lov#JM% , has the same sign as JM, has unusual units and is usuall( a means to find JM-
Term Formula $ote'
!orrelation
( )
( )
Y X
XY
XY
Cov
Corr

Osed ith Lovariance formulas belo

!oariance #& formulas%
( )
( )( ) [ ] Y Y X X E Cov
XY

(diffiult to alulate)
Sum of the !roducts of all sam!le !airsG distance from their
res!ective means multi!lied b( their res!ective !robabilities
( )
( ) ( )( ) Y X XY E Cov
XY

Sum of the !roducts of all sam!le !airs multi!lied b( their
res!ective !robabilities, minus the !roduct of both means
Finding !oariance
gien !orrelation
( ) ( ) XY Y X XY
Corr Cov
Portfolio Analysis
Term Formula Example%
4ean of an( 6ortfolio /S0
S Y b X a +
S * P#+-2Q%' R#11-2Q% * +-1)Q
8norrelate
d
6ortfolio .ariance

&
2 2 2 2
Y X
b a +

&
* #P%
&
#2-)%
&
' #R%
&
#6-2%
&
* &-3926
6ortfolio Standard <eviation

2 2 2 2
Y X
b a +
* 1-)>6&
9orrelated
6ortfolio .ariance
( ) ( ) XY Y X bY aX
abCov b a 2
2 2 2 2 2
+ +
+

6ortfolio Standard <eviation
( ) ( ) XY Y X bY aX
abCov b a 2
2 2 2 2
+ +
+

? 6ortfolio /S0 com!osed of P StocC A #mean return: +-2Q, standard deviation: 2-)Q% and R StocC 9 #11-2Q, 6-2Q res!ectivel(%
T*e 'entral Limit T*eorem:
;ormal distribution can be used to a!!ro3imate
binominals of more than 32 trials #n32%:
'ontinuity 'orrection:
OnliCe continuous #normal% distributions #i-e- H, time%, discrete
binomial distribution of integers #i-e- S !eo!le% must be corrected:
Term Formula /ld cuto"" $e= cuto""
Mean
8#J% * n! 6#JT&2% 6#JT&2-)%
Variance
.ar#J% * n!#1 $ !% 6#JN&2% 6#JN19-)%
Standard
Deiation
#J% *
) p ( np 1
6#J&2% 6#J19-)%
6#J&2% 6#J&2-)%
110 Yoavi Liedersdorf (MBA03)
Statistics Cheat Sheets
111 Yoavi Liedersdorf (MBA03)
Statistics Cheat Sheets
112 Yoavi Liedersdorf (MBA03)