Statistics for Business

Quantitative
Techniques for
Business

Individual assignment
Course
DIBA 1
Course constructor
Wasim Zoha
Prepared by
Jannatul Ferdous
0032M0FM0F0620
Contents
1.Introduction..............................................................................................................................................3
2. Literature review....................................................................................................................................3
2.0 Statistical analysis..................................................................................................................................3
2.1 Arithmetic mean:...................................................................................................................................5
2.2 Median:.................................................................................................................................................6
2.3 Mode:....................................................................................................................................................8
3. Standard deviation:.................................................................................................................................9
3.0 Variance:...............................................................................................................................................9
3.1 Scatter plot and Uses of scatter plot....................................................................................................11
3.2 correlation analysis..............................................................................................................................12
3.3 Regression...........................................................................................................................................12
3.3a Construction of Regression Models...................................................................................................12
3.3b Uses of Regression Analysis..............................................................................................................12
3.3c Basic Assumptions of a Regression Model.........................................................................................12
3.3d Conditions for Regression Inference.................................................................................................12
3.4 Interpretations....................................................................................................................................12
4.Task 2......................................................................................................................................................12
4.1 Steps in Hypothesis testing..................................................................................................................12
5.Task 3......................................................................................................................................................12
5.1Use of normal distribution....................................................................................................................12
6. Conclusion.............................................................................................................................................12
7.References..............................................................................................................................................12
8. Bibliography...........................................................................................................................................14
2.1...............................................................................................................................................................4
2.2 Median..................................................................................................................................................6
2.3 Mode.....................................................................................................................................................7
3. Standard deviation..................................................................................................................................8
 1. 1.Introduction

The aim of this assignment is to show how quantitative methods are put into practice in industry.
And basically the all-purpose is to learn how to use statistics to draw logical inferences about
how the data given would affect the variable depending on it. The data presented can be used to
perform certain statistical analysis, such as evaluating the mean, median or standard deviation.
For the assignment to be carried out, the sources of information within the supplied data and the
secondary sources are minimal. There are some disadvantages, such as the absence of time limits
and financial resources may be a big burden. The author talks more about the details and ways of
the assignment as the task progresses, and also provides some example to prove that it helps
company today.
The main focus of this assignment is to show how quantitative techniques is being applied in
business. So basically the all-purpose is to know how statistics can be used to make better
inferences on the how the given data will have an impact on the dependent variable. The given
data can be used to function some statistical analysis such as finding the mean, median or the
standard deviation.
2. Literature review
2.0 Statistical analysis
Data mining is an integral aspect of statistical analysis. The statistical analysis can be broken
down into five discrete measures below:

• Describe the basics of the data to be analyzed.

· Explore the relationship between data and the population that underlies it. (Singh,
from 2018)
 Creation of a model to summarize the understanding of how the data relates to the
underlying population.
· To claim (or disprove) the validity of the pattern. (2018 by Kaur, Stoltzfus and
Yellapu)
· To monitor future behaviors, using predictive scenario analytics.
Statistical analysis is a component of data analytics. Statistical analysis can be broken down into
five discrete steps, as follows:

 Describe the nature of the data to be analyzed.

 Explore the relation of the data to the underlying population.
 Create a model to summarize understanding of how the data relates to the underlying
population.
 Prove (or disprove) the validity of the model.
 Employ predictive analytics to run scenarios that will help guide future actions.
2.1 Arithmetic mean: The arithmetic mean of a set of data is calculated by taking the sum of
the data, and then dividing the sum by the total number of values in the set. A mean is usually
considered an average. (Larson,66).

Formula: x = sum of total number / number of observations. (Wei, from 2020)

For example: Find the mean for all the numbers below. The arithmetic mean of a set of data is found
by taking the sum of the data, and then dividing the sum by the total number of values in the set.
A mean is commonly referred to as an average.
Formula: x=sum of total number /number of observation.
For example: Find the mean of the whole numbers listed below.
1, 8, 7, 6, 8, 3, 2, 5, 4, 5
ANSWER BOX:
1+8+7+6+8+3+2+5+4+5=49(Mean (statistics), 2020)
49/10=4.9(Sykes, Gani and Vally, 2020)

The mean is the most significant factor, without a standard pattern when dispersing data (Rouse,
2020). The mode will classify several commonly occurring values, and if there are loads of low
values the median can be distorted, but the mean can capture all the values. Such patterns that
emerge during the procurement process, where external factors vary in cost. (Larson,2006).The
mean is the most important value when data is scattered, without a typical pattern. The mode
may identify several values that occur frequently, and the median may be skewed if there are a
lot of low values, but the mean catches all the values. Such patterns can occur in procurement,
where costs vary according to external factors. The mean gives the average cost and forms a
good basis for estimating future costs, as long as the external factors remain the same.
Student GPA SAT
Score
1 2.45 1756
 2 2.65 1769
3 1.54 1650
4 3.26 1750
5 3.95 1800
6 2.33 1500
7 2.15 1450
8 2.16 1500
9 1.11 1300
10 3.15 1750
11 3.26 1700
12 1.45 1500
13 1.36 1450
14 2.45 1500
15 3.6 1600

total 120 36.87 23975

Average 8 2.458 1598.333

https://dictionary.cambridge.org/dictionary/english/mean

https://www.googleadservices.com/pagead/aclk?
sa=L&ai=DChcSEwjCjt2jsebqAhWGDisKHbIZAEQYABAAGgJzZg&ohost=www.google.com&cid=CAESQeD2
0yIvsEYkbMLq1W2FH95QWsZkpATASr7ClKHBi35G93D3T0K9pexJDFyL4CHZcNmWc8nwCs4o_NJuaLagBsJ
_&sig=AOD64_0aTRko0eJO27p3QxOfF-qeCjnWHg&q=&ved=2ahUKEwi-
utajsebqAhUgwzgGHSAVDHYQ0Qx6BAgOEAE&adurl=

https://www.purplemath.com/modules/meanmode.htm - :~:text=The%20%22mean%22%20is%20the
%20%22,in%20the%20list%20of%20numbers.

https://searchdatacenter.techtarget.com/definition/statistical-mean-median-mode-and-range

https://www.techopedia.com/definition/26136/statistical-mean

https://www.statisticshowto.com/probability-and-statistics/statistics-definitions/mean-median-mode/

https://medical-dictionary.thefreedictionary.com/Mean+(statistics)

http://www.scielo.org.za/scielo.php?script=sci_arttext&pid=S0011-85162016000600009

http://www.economicsdiscussion.net/essays/essay-on-statistics-meaning-and-definition-of-statistics/
2315
https://explorable.com/statistical-mean

https://statisticsbyjim.com/basics/measures-central-tendency-mean-median-mode/

2.2 Median: In the set the median of a set of data is the middlemost number. The median is also
the number which is halfway through the package. The data will be ordered first so that from least to
largest, in order to hit the mean. (Goldie, from 2016) The median of a set of data is the middlemost
number in the set. The median is also the number that is halfway into the set. To find the median,
the data should first be arranged in order from least to greatest.
formula :( n+1)/2
For example: 1,8,7,6,8,3,2,5,4,5.
10+1=11
11/2=5.5th item
=3 median
When the data has some frequently occurring values, and some comparatively very small values,
the median is the most important. The mode offers no specific answer, and the mean is skewed
towards the higher values (Stapel, 2020). The compensation analysis mostly focuses on the
commonly compensated rates but overlooks exceptions which are likely to be unusual events.
(Sykes, Gani and Vally, 2020).The median is the most important value when the data has several
values that occur frequently, and several comparatively very high values. The mode will not give
a unique answer, and the mean will be skewed toward the higher values. An analysis of salaries
often focuses on the amounts commonly paid but ignores extremes that are probably special
cases. The median salary
gives a value close to the average salary commonly paid, without taking the extreme values into
consideration.
Stude GPA SAT Score
nt
1 2.45 1756 1 1.11
2 2.65 1769 2 1.36
3 1.54 1650 3 1.45
4 3.26 1750 4 1.54
5 3.95 1800 5 2.15
6 2.33 1500 6 2.16
7 2.15 1450 7 2.33
8   2.16   1500     8 2.45  
9 1.11 1300 9 2.45
10 3.15 1750 10 2.65
11 3.26 1700 11 3.15
12 1.45 1500 12 3.26
13 1.36 1450 13 3.26
 14 2.45 1500 14 3.6
15 3.6 1600 15 3.95

total 120 36.87 23975

Avera 8 2.458 1598.333

ge

https://www.investopedia.com/terms/m/median.asp - :~:text=Key%20Takeaways-,The%20median%20is
%20the%20middle%20number%20in%20a%20sorted%2C%20ascending,the%20average%20of%20the
%20values.

https://stattrek.com/statistics/dictionary.aspx?definition=median

https://www.purplemath.com/modules/meanmode.htm

https://searchdatacenter.techtarget.com/definition/statistical-mean-median-mode-and-range

https://study.com/academy/lesson/what-is-the-median-definition-lesson-quiz.html

https://mathworld.wolfram.com/StatisticalMedian.html

https://www.mathgoodies.com/lessons/vol8/median

https://www.robertniles.com/stats/median.shtml

https://www.thoughtco.com/what-is-the-median-3126370

http://www.icoachmath.com/math_dictionary/median.html

https://statistics.laerd.com/statistical-guides/measures-central-tendency-mean-mode-median.php

2.3 Mode: The mode is the number that occurs most frequently inside a packet. A number
collection may have one mode, one mode, or absolutely no mode. Examples: 1,8,7,6,8,3,2,5,4,5.

Mode 5, 8. (Mester, 2018)The mode is the number that appears most frequently in a set. A set of
numbers may have one mode, more than one mode, or no mode at all. For example:
1,8,7,6,8,3,2,5,4,5.
Mode 5,8.
When an experiment looks for what happens most often, mode is the most important. While
evaluating the prices, most of the transactions occur at a set list price or probably at a reduced
selling price. Even if transactions may have taken place at certain prices, very few consumers
will pay an average or a mean price. Therefore, when setting rates in terms of what other consumers
have charged these principles are less important (Frost, 2020).The mode is the most important when
an analysis is looking for what happens most often. In analyzing prices, most of the sales occur
at a particular list price or possibly at a reduced, sale price. While there may have been sales at
other prices, very few customers will have paid an average or a mean price. Those values are
therefore less important when setting pricing in terms of what most customers paid.
Stud GPA SAT Score
ent
1 2.45 1756 1 1.11 1.11
2 2.65 1769 2 1.36 1.36
3 1.54 1650 3 1.45 1.45
4 3.26 1750 4 1.54 1.54
5 3.95 1800 5 2.15 2.15
6 2.33 1500 6 2.16 2.16
7 2.15 1450 7 2.33 2.33
8   2.16   1500     8 2.45   2.45
9 1.11 1300 9 2.45 2.45
10 3.15 1750 10 2.65 2.65
11 3.26 1700 11 3.15 3.15
12 1.45 1500 12 3.26 3.26
13 1.36 1450 13 3.26 3.26
14 2.45 1500 14 3.6 3.6
15 3.6 1600 15 3.95 3.95

total 120 36.8 23975

7

Aver 8 2.45 1598.333

age 8
3. Standard deviation: Standard deviation is measure of the dispersion of a set of data
from its mean. The total variability of a distribution is measured; the greater the dispersion or
difference, the higher the standard deviation and the higher the variance of the mean value

(Niles, 2017).: The formula of SD : Standard deviation is the

measure of dispersion of a set of data from its mean. It measures the absolute variability of a
distribution; the higher the dispersion or variability, the greater is the standard deviation and
greater will be the magnitude of the deviation of the value from their mean.

In addition, standard deviation is useful when measuring the distribution of two

different sets of data that have around the same mean. The data set with the smaller
standard deviation has a wider dispersion of measurements across the mean, and thus
therefore has comparatively less high or low values.

https://www.youtube.com/watch?v=uRfRH01UyjU

https://link.springer.com/content/pdf/10.1007/978-3-642-60262-7_6.pdf

https://www.allaboutcircuits.com/technical-articles/average-deviation-standard-deviation-
variance-signal-processing/

https://mathworld.wolfram.com/Variance.html
 https://corporatefinanceinstitute.com/resources/knowledge/accounting/variance-analysis/

3.0 Variance: Data variance is the average square distance between the mean of each data

and its value. The Formula on Quality:

The variant has the characteristics of:

• This is never negative since each term is square in the sum of the difference, and thus either positive
or zero.

• The units are quadrangular. For example, the variance of a collection of heights measured in
centimetres will be given in centimeters squared. Because population variance is rectangular, it is not

directly comparable with the mean or the data it contains itself.

Student GPA SAT

Score
1 2.45 1756
2 2.65 1769
3 1.54 1650
4 3.26 1750
5 3.95 1800
 6 2.33 1500
7 2.15 1450
8 2.16 1500
9 1.11 1300
10 3.15 1750
11 3.26 1700
12 1.45 1500
13 1.36 1450
14 2.45 1500
15 3.6 1600
Averag 2.458 1598.333
e

x1 xber
2.45 2.458 -0.008 -0.008 6.4E-05
2.65 2.458 0.192 0.192 0.036864
1.54 2.458 -0.918 -0.918 0.842724
3.26 2.458 0.802 0.802 0.643204
3.95 2.458 1.492 1.492 2.226064
2.33 2.458 -0.128 -0.128 0.016384
2.15 2.458 -0.308 -0.308 0.094864
2.16 2.458 -0.298 -0.298 0.088804
1.11 2.458 -1.348 -1.348 1.817104
3.15 2.458 0.692 0.692 0.478864
3.26 2.458 0.802 0.802 0.643204
1.45 2.458 -1.008 -1.008 1.016064
1.36 2.458 -1.098 -1.098 1.205604
2.45 2.458 -0.008 -0.008 6.4E-05
3.6 2.458 1.142 1.142 1.304164
total 10.41404

varienc
e

standered
deviation 1.23794E-63
3.1 Scatter plot and Uses of scatter plot
A scatter plot (aka scatter map, scatter graph) uses the dots to represent values for two different
numerical variables. The position of the dot on the horizontal and vertical axis shows values for a given
data point. Scatter plots are used to track intervals between variables.

Recognition of correlational relationships with the scatter plots is common. In these cases we want to
know what a fair approximation would be if we were given a particular horizontal value for the vertical
value. Often you can see the variable on the horizontal axis denoted as an independent variable, and the
dependent on the vertical axis. There are many ways the relationships between variables can be
defined: positive or negative, strong or weak, linear or nonlinear.

Examples of data structure:

Studen GPA SAT

t Score
1 2.45 1756
2 2.65 1769
3 1.54 1650
4 3.26 1750
5 3.95 1800
6 2.33 1500
7 2.15 1450
8 2.16 1500
9 1.11 1300
10 3.15 1750
11 3.26 1700
12 1.45 1500
13 1.36 1450
14 2.45 1500
15 3.6 1600
 SAT Score
2000
1800
1600
1400
1200
1000
800
600
400
200
0
0.5 1 1.5 2 2.5 3 3.5 4 4.5

https://whatis.techtarget.com/definition/scatter-plot
https://sixsigmastudyguide.com/scatter-analysis-regression/
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4048834/

3.2 Correlation analysis

Correlation analysis is a statistical tool used to assess the correlation significance between two
quantitative variables. A strong correlation means that two or more variables are closely correlated
while a low correlation means that the variables are loosely related. That is, it's the process of analyzing
the strength of the relationship with the available statistical data. This approach is directly related to the
study of linear regression which is a statistical method of modeling the relationship between a
dependent variable, called response, and one or more explanatory or independent variables.

https://www.youtube.com/watch?v=eFVNyjq0TB8

https://www.scielo.br/scielo.php?pid=S1677-54492018005019103&script=sci_arttext&tlng=en

https://arxiv.org/pdf/1705.02479

https://journals.lww.com/anesthesia-analgesia/fulltext/2018/05000/
correlation_coefficients__appropriate_use_and.50.aspx

https://www.ssrn.com/abstract=3416918
3.3 Regression
Regression analysis helps us understand how the standard value (or 'criterion variable') of the
dependent variable changes as us of the independent variables is changed, while the other independent
variables are kept constant. Take an example:

y x x^2 xy
1 1250 41 1681 51250
2 1380 54 2916 74520
3 1425 63 3969 89775
4 1425 54 2916 76950
5 1450 48 2304 69600
6 1300 46 2116 59800
7 1400 62 3844 86800
8 1510 61 3721 92110
9 1575 64 4096 100800
10 1650 71 5041 117150
‍
sum 14365 564 32604 818755
‍
N*Sum x y 8187550 n Sum X^2 326040
‍
‍
Sum 8101860 (Sum 318096
X*SumY x)^2
‍
‍
‍
B top 85690
bottom 7944
‍
b 10.78676

3.3a Construction of Regression Models

Triple A Development aims to estimate revenue related to the region's payroll.

Y = Sat score

X = GPA

Error = (actual value)-( projected value)

Triple a Development, Intercept and slope values for the simple linear regression model may be
intercept values, and the slope may be determined.

H0: ρ = 0

H1: ρ ≠ 0

Essentially here hypothesis testing is to show whether the independent variable has a correlation with
the income level or a correlation is zero. If the confidence interval is 95 per cent, the remaining 5 per
cent is the alpha degree. It gives the degree of freedom which is n-2 n being the number of observations
which is 15-2 which is 13 which means df is. This is a two tailed test which means there will two critical
values one positive and one negative.

3.3b Uses of Regression Analysis

Study of regression can do a great many issues. You may use the regression model, for example, to do
the following:

• Model several standalone variables

• Contains set, categorical variables

• Curvature architecture, using polynomial terms

• Assess the conditions of interaction to assess whether the effect of one independent variable depends
on the value of another.
3.3c Basic Assumptions of a Regression Model
When we make some assumptions about the errors in a regression model, statistical tests can be carried
out to decide whether the model is useful

1. Faults are evident

2. Errors are usually dealt with

3. Faults say zero

4. Errors can differ constantly

3.3d Conditions for Regression Inference

• Linear: scatterplot analysis to evaluate overall pattern is essentially linear, residuals must concentrate
on 0, residual pattern quest curved.

• Independent: when sampling without substitution, look for 10 percent condition of random
assignment or experiment check.

• Standard: construct a stem plot, histogram, or regular residual probability plot and check for skewing
or deviation from normality.

• Equal variance: The residual distribution will be roughly the same (above and below line).

• At random: were random sampling or random allocation data generated?

3.4 Interpretations
SUMMARY OUTPUT
‍
Regression Statistics
Multiple R 0.732049061
R Square 0.535895828
Adjusted R 0.500195507
Square
Standard Error 0.609741396
Observations 15

It is a regression run with the point of profit, with the one value independent. This demonstrates a
multiple R value of 0.73 showing a clear positive relationship between the independent value and the
amount of income. For R SQUARE, the figure above shows a value of 0.53, indicating 53 per cent of the
values fall on the regression axis. This then shows an Modified R Square value of 0.50. Modified R square
helps to measure the values that appear to decide the dependent variable, and also penalizes for having
values that do not play a part in the variable’s choice. Now to one of the most significant point that is
the standard error that indicates the distance that values are from the regression of a line. With this
regression figure the default error is 0.60. And the last one is simply the number of observations made
and from the figure; it looks at 15 values and the answer is 15.
 ANOVA
  df SS MS F Significanc
eF
Regression 1 5.580841 5.580841 15.01095 0.001917
Residual 13 4.833199 0.371785
Total 14 10.41404      

Sum-of-squares

The total SS stays the same. This makes sense. This measures the total variation among the 18 values.

The SS values for the interaction and for the systematic effects of rows and columns (the top three rows)
are the same in all four analyses.

The SS for residual is smaller when you assume repeated measures, as some of that variation can be
attributed to variation among subjects. In the final columns, some of that variation can also be
attributed to interaction between subjects and either rows or columns.

Degrees of freedom
The degrees of freedom is equal to the sum of the individual degrees of freedom for each sample.
Since each sample has degrees of freedom equal to one less than their sample sizes, and there are
k samples, the total degrees of freedom is k less than the total sample size: df = N - k.

Mean squares
Each mean square value is computed by dividing a sum-of-squares value by the corresponding
degrees of freedom. In other words, for each row in the ANOVA table divide the SS value by the
df value to compute the MS value. 3.2 correlation analysis
3.3 Regression
3.3a Construction of Regression Models

3.3b Uses of Regression Analysis

3.3c Basic Assumptions of a Regression Model

3.3d Conditions for Regression Inference

3.4 Interpretations

The Multiple R
R-Squared or Multiple R-Squared
 Adjusted R-Squared
The Standard Error
Significance F
F ratio
Each F ratio is computed by dividing the MS value by another MS value. The MS
value for the denominator depends on the experimental design.

For two-way ANOVA with no repeated measures: The denominator MS value is

always the MS residual.
For two-way ANOVA with repeated measures in one factor (p 596 of Maxwell and
Delaney):
For interaction, the denominator MS is MS residual
For the factor that is not repeated measures, the denominator MS is MS subjects
For the factor that is repeated measures, the denominator MS is MS residual

Standar Lower Upper Lower Upper

  Coefficients d Error t Stat P-value 95% 95% 95.0% 95.0%
Intercep 1.71581 0.03058 - - - -
t -4.161698361 3 -2.4255 8 7.86849 0.45491 7.86849 0.45491
X
Variable 0.00106 3.87439 0.00191 0.00183 0.00645 0.00183 0.00645
1 0.004141626 9 7 7 2 1 2 1

The population regression model is: y = β1 + β2 x + u

Where the error u is assumed to be distributed independently with mean 0 and
constant variance.
Here we focus on inference on β2, using the row that begins with hh size.
Similar interpretation is given for inference on β1, using the row that begins with
intercept.

The column "Coefficient" gives the least squares estimates of β1 and β2.
 The column "Standard error" gives the standard errors (i.e.the estimated standard
deviation) of the least squares estimate of β1 and β2 .

The second row of the column "t Stat" gives the computed t-statistic for H0: β2 = 0
against Ha: β2 ≠ 0.
This is the coefficient divided by the standard error: here 0.4 / 0.11547 = 3.464.
It is compared to a T distribution with (n-k) degrees of freedom where here n = 5and
k = 2.

The column "P-value" gives for hh size are for H0: β2 = 0 against Ha: β2 ≠ 0.
This equals the Pr{|T| > t-Stat}where T is a T-distributed random variable with n-k
degreres of freedom and t-Stat is the computed value of the t-statistic given is the
previous column.
Note that this P-value is for a 2-sided test.
For a 1-sided test divide this P-value by 2 (also checking the sign of the t-Stat).

The columns "Lower 95%" and "Upper 95%" values define a 95% confidence
interval for β2.

A simple summary of the above output is that

4.Task 2
4.1 Steps in Hypothesis testing
In statistics, hypothesis testing is an act whereby an analyst checks an inference about
a population parameter. The analyst's approach depends on the quality of the data
used, and the justification for the analysis.
Four approaches to checking hypothesis
• Step one: In symbolic form, state null hypothesis and alternative hypothesis.
The hypothesis typically involves the importance of a population parameter.
 How to express, in symbolic form, null hypothesis and alternative hypothesis
First Define H1. If the question's original argument uses terms like "greater, bigger,
increased, enhanced, etc.", using ">" for H1. If wording such as "less, reduced,
smaller and so on" is used, add "<" to H1. When terms like "the same, shift,
difference, and so on" appear in the argument, use "how" for H1. For H0 the opposite
symbol is used. (Note: Always using "=" for H0, for MATH 1257)
• Step two: Measure the value of the test statistics.
• Step three: Classify tables with the essential or P-value.
When looking up the critical value in the table, be mindful of how many tails exist.
When H1 uses the symbols ">, <, ubiquitously," it is one-tailed. If H1 uses the
symbol "belly" two tails.
Significance rates are widely used 1 percent, 5 percent, and 10 percent.

Confidence Level + Level of Importance = 1 i.e. Level of trust = 1-Degree of

meaning. Therefore, if the value level is equal to 1 % , 5% or 10%, the trust
‍
level is equal to 99%, 95% or 90% respectively. The respective essential z
values are indicated as follows:

Significance Level Confidence Level Critical z Value

1% 99%=0.99 2.575
5% 95%=0.95 1.96
10% 90%=0.90 1.645
‍

‍
 • Step 4: Draw a graph showing the value of the test data, the vital value
And the critical region(s) or relation of the P-value to meaning level
α. And then bring the theory to a conssclusion.
Traditional Method: Reject H0. if the value of the test statistics falls within the
critical region(s). If the value of the test statistics in the crucial region(s) does not
decline, then fail to reject H0.
P-value Method: Reject H0 if the P-value is less than or equal to the significance
point α. If the value of P is higher than the degree of significance α, then reject H0.
http://onlinestatbook.com/2/logic_of_hypothesis_testing/steps.html
(500 Words)

5.Task 3
5.1Use of Nnormal distribution
Normal distribution, also known as the Gaussian distribution, is a probability distribution that is
symmetric about the mean, showing that data near the mean are more frequent in occurrence than
data far from the mean. In graph form, normal distribution will appear as a bell curve.
X is a normally normally distributed variable with mean μ = 30 and standard deviation σ = 4.
Find
a) P(x < 40)?
For x = 40, the z-value z = (40 - 30) / 4 = 2.5
Hence P(x < 40) = P(z < 2.5) = [area to the left of 2.5] = 0.9938
b) P(x > 21)?
For x = 21, z = (21 - 30) / 4 = -2.25
Hence P(x > 21) = P(z > -2.25) = [total area] - [area to the left of -2.25]
= 1 - 0.0122 = 0.9878
c) P(30 < x < 35)?
For x = 30 , z = (30 - 30) / 4 = 0 and for x = 35, z = (35 - 30) / 4 = 1.25
Hence P(30 < x < 35) = P(0 < z < 1.25) = [area to the left of z = 1.25] - [area to the left of 0]
= 0.8944 - 0.5 = 0.3944
Use of Normal distribution
The assumption of a normal distribution is applied to asset prices as well as price action. Traders
may plot price points over time to fit recent price action into a normal distribution. The further
price action moves from the mean, in this case, the more likelihood that an asset is being over or
undervalued. Traders can use the standard deviations to suggest potential trades. This type of
trading is generally done on very short time frames as larger timescales make it much harder to
pick entry and exit points.
Data may be "distributed" (disseminated) in different ways.

Can be common

(Kiersz, 2014)

Much things to the extreme

And something will get jumbled up

(McLeod, 2019)

But there are many cases where the data tends to be around a central value with no left or right bias,
and a "normal distribution" like this approaches:
A Standard Distribution follows several items closely

• People's Highs

• Size of machine-produced stuff

• Measurement Errors (Kate, 2017)

• Hypertension

• Check signs

(500 words)

6. Conclusion

Statistics play a crucial role in the analysis of business decision making. In a dynamic market climate, a
company can't succeed simply by making instinct-based decisions, guessing work and approximations.
Acquiring scientific data and knowledge, and correctly interpreting the knowledge will help the business
company make more efficient choices.

https://www.frontiersin.org/articles/10.3389/fpsyg.2012.00325/full

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