Pir Mehr Ali Shah

Arid Agriculture University, Rawalpindi

Office of the controller of Examinations
Mid Exam Spring 2021 (Paper Duration 12 hours)
To be filled by Teacher

Course No.: Stt-500……………………………Course Title:………Statistics and Probability

Total Marks:……18…………………Date of Exam:…………27-04-2021……......................................
Degree: ………BS(IT)……… ……….Semester:………2nd ………………… Section:……(A/B) ………………
Marks
Q. No. 1 2 3 4 5 6 7 8 9 10 Obtained/
TotalMarks
Marks
Obtained
Total Marks in Words:
Name of the teacher: Mufzala Raheem
Who taught the course: Signature of teacher / Examiner:

To be filled by Student

Registration No.: ……………20-ARID-4152…………….……… Name:………Shaheryar Hashmi………………..

Answer the following questions.

Question 1:-

a) An investigator took a random sample of Chief Financial Officers (CFOs)

of public listed firms in Singapore, recorded their annual salaries and
found that the salary distribution was skewed to the right. She then
proceeded to calculate three measures of location for this data, namely the
mean, median and mode. The mean was found to be SGD ($) 230,000.35
with a standard deviation of SGD ($) 50,000.85 but the mode was not
available.
Answer:-The annual salaries of CFOs are recorded and it is find to be skewed right.
The mean was found to be 230000.5 and the standard deviation was found to be
50000.85.
i. You are required to state and explain which you expect to
have a larger value: their mean annual salary or their median
annual salary.
Answer:- It is stated that the data is skewed right. Right skewness is also known as
positive skewness. For a right skewed data, the mean will be higher than the
median. Mean will be having a greater value than the median. Mean is always
depended upon the value of each observation. It speaks upon the sum of all data
values. Median is independent from the extreme values. So, mean annual salary
will have larger value than the median annual salary.

ii. Explain whether the mode will make a good measure of

location of annual salaries and why it may not show up in
standard computer output.
Answer:- For a right skewed distribution the mode value will be lowest value among
the mean, median and mode. Mode is defined as the most repeated term in a
dataset. When a right skewed distribution occurs, the most repeated term will be the
lowest generated value. We cannot consider it as the best value that speaks about
the entire data since the data is skewed.
b) Interpret the value for the standard deviation of annual salaries of CFOs in
Singapore.
Answer:- Standard deviation is nothing but the distance between the values of the
data and the mean. So, the standard deviation will be less than the mean. It says
that, an average distance of data from the mean of the data set. Standard deviation
is calculated by taking the sum of the squares of the data. Here, the standard
deviation of annual salary is 50000.85. It implies that there is an average distance
of 50000.85 exist between each data value and the mean obtained. It also says
about the spread of the data. A low standard deviation indicates that the data
points tend to be very close to the mean; a high standard deviation indicates
that the data points are spread out over a large range of values.

i. Explain why the coefficient of variation can be a better

measure of dispersion in certain circumstances.

Answer:- Coefficient of variation tells about the exact level of deviation in a data set.
It is shown in percentages. When we calculate the mean and standard deviation,
standard deviation speaks about the deviation of each data value from the mean.
Where as the coefficient of variation deals with the exact percentage of deviation.
Coefficient of variation is an independent value. Standard deviation is always
depended upon mean. For eg, If the mean is 50 and standard deviation is 10. Then
we will say that the deviation from the mean is 10. Coefficient of variation says that
the deviation is 20%.

c) Take 50 observations at random ranged from (117- 254). Make a grouped

frequency distribution. Find the 6th decile and 67th percentile.
Answer:-
50 values are randomly taken between 117 and 254.
Data: 117, 118, 121, 123, 124,130, 132, 234, 243, 251, 253, 254, 233, 212, 201,
188, 197, 192, 176, 162, 153, 145, 128, 144, 149, 154, 157, 166, 168, 173, 203, 202,
210, 240, 243, 217, 218, 223, 159, 174, 133, 199, 201, 208, 225, 229, 232, 247, 129,
146
Data arranged in ascending order: 117, 118, 121, 123, 124, 128, 129, 130, 132, 133,
144, 145, 146, 149, 153, 154, 157, 159, 162, 166, 168, 173, 174, 176, 188, 192, 197,
199, 201, 201, 202, 203, 208, 210, 212, 217, 218, 223, 225, 229, 232, 233, 234, 240,
243, 243, 247, 251, 253, 254
Range = 254-117 = 137. Let there be 10 classes. Class width will be 137/10 =
13.7 13
Cumulative
Class Interval Frequency
Frequency
117-130 8 8
131-144 3 11
145-158 6 17
159-172 4 21
173-186 3 24
 187-200 4 28
201-214 7 35
215-228 4 39
229-242 5 44
243-256 6 50

b.1). 9th Decile

We need find out the 9th decile class interval. (9n / 10)th value in cumulative
frequency. (9n / 10)th = 9*50 = 450 / 10 = 45th term. It lies in class 243-256. The 9th
decile class will be 242.5-256.5
9th Decile =

 = Lower class boundary = 242.5

 = Cumulative frequency above the decile class = 44
 = Frequency of the decile class = 6
 = Class width = 14

9th Decile = = 242.5 + 2.333 = 244.833

b.2) 67th Percentile

We need find out the percentile class interval. (67n / 100)th value in cumulative
frequency. (67n / 100)th = 67*50 = 3350/100 = 33.5th term. It lies in class 201-214.
The percentile class will be 200.5-214.5
67th Percentile =

 = Lower class boundary = 200.5

 = Cumulative frequency above the percentile class = 28
 = Frequency of the percentile class = 7
 = Class width = 14

67th Percentile = = 200.5 + 11 = 211.5

d)

Question#3:- a) “Statistics are numerical statements of facts but all facts numerically
stated are not statistics”. Comment upon the statement.

Answer:-“Statistics are numerical statements of facts but all facts numerically stated
are not statistics”. Comment upon the statement?

Answer:- 1. Statistics are Aggregates of Facts :- Simple or isolated items cannot be

termed as statistics unless they are a part of aggregate of facts relating to any
particular field of enquiry. For instance, the height of an individual or the price of a
particular commodity, do not form Statistics as such figures are unrelated and
incomparable. However the aggregates of the figures of births, deaths, sales,
purchases, production, profit etc. will constitute Statistics.
2. Statistics are affected to marked extent by multiplicity of causes :- Facts and
figures are generally affected to a considerable extent by multiplicity of causes. It has
the particular validity in social sciences.
 a) Descriptive statistics for the closing stock prices (in $USD) of two companies
for several trading periods are shown below.

Baby, Inc Mummy, Inc.

Mean 4.00 Mean 15.91

Standard Error 0.11 Standard Error 0.29

Median 3.92 Median 16.59

Mode 4.19 Mode 15.58

Standard Standard
Deviation 1.12 Deviation 3.21

Sample Variance 1.25 Sample Variance 10.31

Kurtosis -1.15 Kurtosis 3.52

Skewness 0.08 Skewness -2.09

Range 3.95 Range 13.45

Minimum 2.03 Minimum 5.55

Maximum 5.98 Maximum 18.99

Sum 436.32 Sum 1972.61

Count 109 Count 124

a. Which company’s stock price has a more dispersed distribution? Explain in

your own words what these dispersions indicate. (Discuss all the dispersion
measures studied in class. (2 marks)

Answer:- The company Mummy,Inc.'s stock price has a more dispersed distribution.
Dispersion in statistics is a way to tell how spread out a data set is. Most common
measures of dispersion are range, standard deviation, variance . These dispersions
measure indicates the variability of the data . Here we see the range, standard
deviation, variance of the Mummy,Inc. company is more than the Baby,Inc. company
,so the stock price of Mummy,Inc.'s company is more dispersed.
b. Compare the performance of these two firms using appropriate measures of
location. You are also required to explain the Skewness (of the distribution of
prices) of the two firms and explain what is indicated. (2 marks)

Answer:- By using appropriate measures of location we can tell that the mean
stock price of Mummy,Inc.'s company is15.91 whereas the mean stock price of
Baby,Inc.'s company is 4. Next we can conclude that the middle most stock
price for Mummy,Inc.'s company is 16.59 whereas for Baby,Inc.'s company is
3.92. The minimum and maximum stock price for Mummy,Inc.'s company is
5.55 and 18.99 respectively. The minimum and maximum stock price for
Baby,Inc.'s company is 2.03 and 5.98 respectively.
Skewness is a measure of asymmetry of the probability distribution of the real
valued random variable about its mean. Here we see that the skewness of the
Baby,Inc.'s is positive that is the distribution of the prices of this firm is
positively skewed . The the skewness of the Mummy,Inc.'s is negative that is
the distribution of the prices of this firm is negatively skewed.