Example: Finding a Geometric

Mean
Period Return in Growth
percentage Factor
1 -6.0 0.940
2 -8.0 0.920
3 -4.0 0.960
4 2.0 1.020
5 5.4 1.054

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or

Copyright 2019, 2015, 2012, Pearson Education, Inc.

service or otherwise on a password-protected website or school-approved learning management system for classroom use.
76
Example: Finding a Geometric
Mean
Period Return in Growth
percentage Factor
1 -6.0 0.940
2 -8.0 0.920
3 -4.0 0.960
4 2.0 1.020
5 5.4 1.054

The average growth rate per period is (0.97752 – 1)(100) = –2.248%.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or

Copyright 2019, 2015, 2012, Pearson Education, Inc.

service or otherwise on a password-protected website or school-approved learning management system for classroom use.
77
Example: Finding a Geometric
Mean
Period Return in Growth
percentage Factor
1 -6.0 0.940
2 -8.0 0.920
3 -4.0 0.960
4 2.0 1.020
5 5.4 1.054

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or

Copyright 2019, 2015, 2012, Pearson Education, Inc.

service or otherwise on a password-protected website or school-approved learning management system for classroom use.
78
 Mean of Grouped Data
Mean of a Frequency Distribution
• Approximated by
xf
x n  f
n
where x and f are the midpoints and frequencies of a
class, respectively.

. Copyright 2019, 2015, 2012, Pearson Education, Inc. 79

 Finding the Mean of a
Frequency Distribution
In Words In Symbols
1. Find the midpoint of each (Lower limit)+(Upper limit)
x
class. 2

2. Find the sum of the

products of the midpoints xf
and the frequencies.
3. Find the sum of the n  f
frequencies.
4. Find the mean of the xf
x
frequency distribution. n
. Copyright 2019, 2015, 2012, Pearson Education, Inc. 80
 Example: Find the Mean of a
Frequency Distribution
The frequency distribution
shows the out-of-pocket
prescription medicine
expenses (in dollars) for 30
U.S. adults in a recent year.
Use the frequency distribution
to estimate the mean expense.
Using the sample mean
formula, the mean expense is
$285.50. Compare this with
the estimated mean.
. Copyright 2019, 2015, 2012, Pearson Education, Inc. 81
 Solution: Find the Mean of a
Frequency Distribution

8631
= 287.7
30

The mean expense is $287.70. This value is an estimate because it is

based on class midpoints instead of the original data set.

. Copyright 2019, 2015, 2012, Pearson Education, Inc. 82

 Example
The marks scored by 30 students of a class in the Maths
paper consisting of 100 marks is given below in the
tabular form. Find the mean of the marks obtained by
these students.

x̄ = 1779/30
x̄ = 59.3

. Copyright 2019, 2015, 2012, Pearson Education, Inc. 83

 Example
The grouped frequency distribution table for the above-
given example is as follows:

. Copyright 2019, 2015, 2012, Pearson Education, Inc. 84

 Example

x̄ = 1860/30
= 62

. Copyright 2019, 2015, 2012, Pearson Education, Inc. 85

 The Shape of Distributions
Symmetric Distribution
• A vertical line can be drawn through the middle
of a graph of the distribution and the resulting
halves are approximately mirror images.

. Copyright 2019, 2015, 2012, Pearson Education, Inc. 86

 The Shape of Distributions
Uniform Distribution (rectangular)
• All entries or classes in the distribution have equal
or approximately equal frequencies.
• Symmetric.

. Copyright 2019, 2015, 2012, Pearson Education, Inc. 87

 The Shape of Distributions

Skewed Left Distribution (negatively skewed)

• The “tail” of the graph elongates more to the left.
• The mean is to the left of the median.

. Copyright 2019, 2015, 2012, Pearson Education, Inc. 88

 The Shape of Distributions

Skewed Right Distribution (positively skewed)

• The “tail” of the graph elongates more to the right.
• The mean is to the right of the median.

. Copyright 2019, 2015, 2012, Pearson Education, Inc. 89

 Chapter Outline
• 2.1 Summarizing Data for a Qualitative Variable

• 2.2 Summarizing Data for a Quantitative Variable

• 2.3 Summarizing Data for Two Variables

• 2.4 Measures of Central Tendency

• 2.5 Measures of Variation

• 2.6 Measures of Position

Copyright 2019, 2015, 2012, Pearson Education, Inc. 90

 Section 2.5 Objectives
• How to find the range of a data set
• How to find the variance and standard deviation of a
population and of a sample
• How to use the Empirical Rule and Chebychev’s
Theorem to interpret standard deviation
• How to approximate the sample standard deviation
for grouped data
• How to use the coefficient of variation to compare
variation in different data sets

. Copyright 2019, 2015, 2012, Pearson Education, Inc. 91

 Range
Range
• The difference between the maximum and minimum
data entries in the set.
• The data must be quantitative.
• Range = (Max. data entry) – (Min. data entry)

. Copyright 2019, 2015, 2012, Pearson Education, Inc. 92

 Example: Finding the Range
Two corporations each hired 10 graduates. The starting
salaries for each graduate are shown. Find the range of
the starting salaries for Corporation A.

. Copyright 2019, 2015, 2012, Pearson Education, Inc. 93

 Solution: Finding the Range
• Ordering the data helps to find the least and greatest
salaries.
37 38 39 41 41 41 42 44 45 47
minimum maximum

Range = (Max. salary) – (Min. salary)

= 47 – 37 = 10

The range of starting salaries for Corporation A is 10, or

$10,000.

. Copyright 2019, 2015, 2012, Pearson Education, Inc. 94

 Variation
• Both data sets in the last example have a mean of
41.5, or $41,500, a median of 41, or $41,000, and a
mode of 41, or $41,000. And yet the two sets differ
significantly.

. Copyright 2019, 2015, 2012, Pearson Education, Inc. 95

 Variation

The difference is that the entries in the second set have

greater variation. As you can see in the figures on the next
slide, the starting salaries for Corporation B are more
spread out than those for Corporation A.

. Copyright 2019, 2015, 2012, Pearson Education, Inc. 96