Review:

Chapter 1:

Statistic is the way to get information from data.

 Data: Facts, especially numerical facts, collected together for reference

or information.

 Information: Knowledge communicated concerning some particular

fact.

Population: a group contains all items for examine.

Usually very large, maybe infinite

 Parameter: descriptive measure of a population

Sample: set of data drawn from population

 Statistic: descriptive measure of a sample

Descriptive Statistics: method of organizing, summarizing, and presenting data in

logical, informative way

 Graphical Method

 Numerical Method

Inferential Statistics: method used to draw conclusions or inferences about the

characteristics of population based on data from a sample.

The Confidence level: the proportions of times that an estimating procedure will be
correct.

The Significance level: measures how frequently the conclusion will be wrong
Chapter 2:

Three types of data:

Interval: Real numbers, Ordinal or Nominal

Nominal: Represent categories, not interval or ordinal

Ordinal: Represent ranked order, nominal but not interval

Linear Relationship:

Positive: y axis increases, x axis increases

Negative: y axis decreases, x axis increases

No relationship
Chapter 4:

Mean: sum of observations divided by number of observations

Median: value that falls in the middle of a set of observations that is arranged in
magnitude order.

Mode: value that occurs most frequently

Variance: based on the difference between data and the mean (standard deviation
squared)

Standard deviation: square root of Variance (s: sample, σ: population)

Covariance: measures the extent to which two variables vary together.

Used to determine the total risk associated with investments.

Explains by signs

The Coefficient of Variation: standard deviation of the populations divided by the

mean

The Coefficient of Correlation: indicates whether the variables have strong or weak
relationship

Goes from -1 to +1

Calculated by dividing the covariance by the standard

deviation of the data

Least Square Method: Best fit line is the line in which the sum of square differences
between it and the data points is minimized.
Chapter 8:

Sum of all the probability is 1.

A random variable is said to be uniformly distributed if its density function is 1/ (b-a)

Calculating uniformly distributed variable: y=1/(overall range), x= specific range

required to find the probability

Exponential Distribution: 1/given distributed variable

Calculating Probability: e^(exponentially distributed number*given variable)

Note: If the data contains negative variables (data variables), when calculating
area, ADD .5 TO the z value of that variable.

If given a percents of area to calculate the variable, when asked for below or
less, always negative z number.

Example:

• Example 8.6

– The service rate at a supermarket checkout is 6 customers per hour.

– If the service time is exponential, find the following probabilities:

• A service is completed in 5 minutes,

• A customer leaves the counter more than 10 minutes after

arriving

• A service is completed between 5 and 8 minutes.

• Solution

– A service rate of 6 per hour =

A service rate of .1 per minute (l = .1/minute).

– P(X < 5) = 1-e-lx = 1 – e-.1(5) = .3935

– P(X >10) = e-lx = e-.1(10) = .3679

– P(5 < X < 8) = e-.1(5) – e-.1(8) = .1572