Chapter 3

Descriptive Statistics: Numerical Measures

Learning Objectives

1. Understand the purpose of measures of location.

2. Be able to compute the mean, weighted mean, geometric mean, median, mode, quartiles, and various
percentiles.

3. Understand the purpose of measures of variability.

4. Be able to compute the range, interquartile range, variance, standard deviation, and coefficient of
variation.

5. Understand skewness as a measure of the shape of a data distribution. Learn how to recognize when a
data distribution is negatively skewed, roughly symmetric, and positively skewed.

6. Understand how z scores are computed and how they are used as a measure of relative location of a
data value.

7. Know how Chebyshev’s theorem and the empirical rule can be used to determine the percentage of
the data within a specified number of standard deviations from the mean.

8. Learn how to construct a 5–number summary and a box plot.

9. Be able to compute and interpret covariance and correlation as measures of association between two
variables.

10. Understand the role of summary measures in data dashboards.

Exercises

16. The grade point average for college students is based on the weighted mean computation. For
most colleges, the grades are given the following data values : A(4), B(3), C(2), D(1), and F(0).
After 60 credit hours of course work, a student at State University earned 9 credit hours of A, 15
credit hours of B, 33 credit hours of C, 3 credit hours of D.

a. Compute the student's grade point average.

b. Students at State University must maintain a 2.5 grade point average for their first 60 hours of
course work in order to be admitted to the business college. Will this student be admitted?
19. Annual revenue for Corning Supplies grew by 5.5% in 2007; 1.1% in 2008; -3.5% in 2009, -
1.1% in 2010, and 1.8% in 2011. What is the mean growth annual rate over this period?

To calculate the mean growth rate we must first compute the geometric mean of the five
growth factors:
Yea Growth Factor
r % Growth xi
2007 5.5
2008 1.1
2009 -3.5
2010 -1.1
2011 1.8

xg  n
 x1   x2   x5   5
 1.055  1.011  0.965  0.989   1.018  5 1.036275  1.007152

The mean annual growth rate is (1.007152 – 1)100 = 0.7152%.

22. The current value of a company is $25 million. If the value of company six years ago was
$10 million, what is the company's mean annual growth rate over the past six years?

39. The results of a national survey showed that on average, adults sleep 6.9 hours per night.
Suppose that the standard deviation is 1.2 hours.
a. Use Chebyshev's theorem to calculate the percentage of individuals who sleep between 4.5 and
9.3 hours.

b. Use Chebyshev's theorem to calculate the percentage of individuals who sleep between 3.9
and 9.9 hours.

c. Assume that the number of hours of sleep follows a bell-shaped distribution. Use the empirical
rule to calculate the percentage of individuals who sleep between 4.5 and 9.3 hours. How does
this result compare to the value that you obtained using Chebyshev's theorem in part (a)?
41. The national average for the math portion of the College Board's SAT test is 515 (The World
Almanac, 2009). The College Board periodically rescales the test scores such that the standard
deviation is approximately 100. Answer the following questions using a bell-shaped distribution
and the empirical rule for the math test scores.

a. What percentage of students have an SAT math score greater than 615?

b. What percentage of students have an SAT math score greater than 715?

c. What percentage of students have an SAT math score between 415 and 515?

d. What percentage of students have an SAT math score between 315 and 615?

51.