Statistics Formulas & their use

Frequency Distribution (Group)-Steps

Situation I: Neither size (h) Situation II: If size/width of Situation III: If number of Situation IV: If initial class
nor number of class intervals class intervals (h) is given: class intervals (k) is given: intervals are prepared:
(k) given: Step 1: Number of observations; n. Step 1: Number of observations; n. Step 1: Number of observations; n.
Step 1: Number of observations; n. Step 2: Range, R = Xmax. – Xmin. Step 2: Range, R = Xmax. – Xmin. Step 2: Range, R = Xmax. – Xmin.
Step 2: Range, R = Xmax. – Xmin. Step 3: Size of class interval; h Step 3: No. of class intervals; k Step 3: Size of class interval; h
Step 3: No. of class interval; m h = _____ (Given) m = ____ (Given) h = *LCLi – LCLi – 1 or



k = 1 + 3.33 log (n) Step 4: No. of class intervals; k Step 4: Size of class intervals; h
=
h =** UCLi – UCLi – 1


Step 4: Size of class intervals; h


h= Step 4: No. of class intervals; k
=
 
h=
*LCL=Lower class limits of C. I.
**UCL=Upper class limits of C. I.
Graphical Representation

Graphs (Proper Scaling on both axes) Diagrams (whether no Scaling or on one axis)
1. Histogram: 1. Simple Bar Chart/Diagram (Individual Quantity):

Sales/Production)
Quantity (e.g.
Frequency (f)

Category (Normally Years)

Class boundary 2. Multiple Bar Diagram (More than single quantity e.g.
Sales in different regions):
2. Frequency Polygon:
Sales/Production)

North
Quantity (e.g.
Frequency (f)

South
East

Category (Normally Years)

Mid point (x)
3. Ogives: 3. Sub-divided/Component Bar Diagram(More than single
a. Cumulative frequency less than [C. F. (<)] Polygon: quantity e.g. Sales in different regions):
Sales/Production)

East
Quantity (e.g.

South
C. F. (<)

North

Category (Normally Years)

Upper Class Boundary
4. Pie/Sector Diagram:

θi⁰=∑  360 OR
b. Cumulative frequency more than [C. F. (>)]
Polygon:

 
10%
= 360
24%
 
19%

33% 14%
Where; θi⁰ is angle of the sector.
C. F. ( >)

Lower Class Boundary

Prepared by Irshad Ali Statistics Formulas & their Use ICMAP Page 1
 Measures of Central Tendency / Measures of Location
Arithmetic Mean (For sample: ?& For population: µ)
For Raw Data Frequency Distribution Weighted Combined Mean

∑A ∑ C.  ∑ E.  GH DH + GI D I + GJ DJ + ⋯ + G D 
Arithmetic Measures

(Ungrouped) (Ungrouped/Grouped) Mean

@= @= D E = DF =
GH + GI + GJ + ⋯ + G
B ∑C ∑E
Geometric Mean (G. M. ) Harmonic Mean (H. M.)

∑ E. QRS
For Raw Data Frequency Distribution Weighted Geometric Mean For Raw Frequency

∑ QRS ∑ C. QRS L. M. = NGOPQRS 5 8

(Ungrouped) (Ungrouped/Grouped) Data Distribution
∑E
L. M. = NGOPQRS 5 8 L. M. = NGOPQRS 5 8 n ∑C
(Ungrouped) (Ungrouped/Grouped)
G ∑C H. M. =
1 X. M. =
∑ % C
x ∑ %


Median (For sample: & For population: 

)
For Raw Data (Ungrouped): Frequency Distribution (Ungrouped) Frequency Distribution (Grouped)

&'
1. Data first arranged in array. 1. Compute C. F. (<). 1. Compute C. F. (<) and class
!"# &' (∑ 1)"#
2. x = % value 2. 0 2
boundary.
$
$
value 2. Median Class:
∑ 1 &'
% value
3. See position 3. See the value of step ‘2’ in
$
i. For odd number observations: the i.
C.F.(<) against x.
position in step 2 is median. 4. The value of ‘x’ against ii. See the value of step ‘2i’ in C.F.(<);
ii. For even number observations: C.F.(<) is median. this is median class.

x = a + 0.5(b − a) h ∑f
Decimal number with 0.5; then 3. Apply formula:
x =  + 5 − C8
Positional Measures

Where; a=positional value of whole number in f 2

step ‘2’ & b=next positional value after ‘a’ l/h/f=lower class boundary/size/frequency of
median class; C=preceding CF of median

Mode (For sample:9 & For population::)

class.

For Raw Data (Ungrouped):
1. The value which is the most
repeated or frequent is mode.
2. If in the data where frequency of
each observation is same then mode
Frequency Distribution (Ungrouped)
1. See maximum frequency.
2. The value of ‘x’ against
maximum frequency is mode.
Frequency Distribution (Grouped)
1. Compute class boundary.
2. Modal Class:
Highest frequency class boundary is
modal class.

f= − f#
will not exist. 3. Apply formula:
x9 = l + < > xh
3. A distribution is bimodal if it has
two modes then 3 or more modes are 2f= − f# − f$
multimodal. l/h/fm=lower class boundary/size/frequency of
modal class; f1=preceding frequency of modal
class; & f2=succeeding frequency of modal
class.
Relationship between Mean, Median, and Mode

Symmetrical distribution Skewed to the right/Positively skewed Skewed to the left/Negatively skewed

Mean=Mean=Median Mean<Median<Mode
Mean>Median>Mode

Relationship between Arithmetic Mean, Empirical relation between Mean, Median, and
Geometric Mean, and Harmonic Mean Mode (Skewed distribution)

AM ≥ GM ≥ HM (Mean-Mode) = 3(Mean – Median) Or

(GM)2 = AM x HM (only for Geometric Progression) (xD − x9) = 3(xD − x)

Prepared by Irshad Ali Statistics Formulas & their Use ICMAP Page 2
 Quartiles
For Raw Data (Ungrouped): Frequency Distribution (Ungrouped) Frequency Distribution (Grouped)

(∑ 1)"# &'
1. Data first arranged in array. 1. Compute C. F. (<). 1. Compute C. F. (<) and class
!"# &'
QZ = i % value; where i=1, 2, i0 2 value; where i=1,
boundary.
\
\
2. 2. 2. Quartile Class:
∑ 1 &'
i % value
or 3 2, or 3
\
3. See position i.
3. See the value of step ‘2’ in
i. When obtained whole number in C.F.(<) against x. ii. See the value of step ‘2i’ in C.F.(<);
step 2 then the position is Qi. 4. The value of ‘x’ against this is Quartile class.

h ∑f
ii. For Decimal number with fraction C.F.(<) is Qi. 3. Apply formula:

QZ = a + F(b − a) QZ = l + 5i − C8
F:
f 4
Where; a=positional value of whole number in l/h/f=lower class boundary/size/frequency of
step ‘2’ & b=next positional value after ‘a’ quartile class; C=preceding CF of quartile
class.
Deciles
Quantiles / Partition Values

For Raw Data (Ungrouped): Frequency Distribution (Ungrouped) Frequency Distribution (Grouped)

(∑ 1)"# &'
1. Data first arranged in array. 1. Compute C. F. (<). 1. Compute C. F. (<) and class
!"# &'
DZ = i % value; where i=1, 2, i0 2 value; where i=1,
boundary.
#`
#`
2. 2. 2. Decile Class:
∑ 1 &'
i % value
3, 4, 5, 6, 7 ,8, or 9 2, 3, 4, 5, 6, 7, 8, or 9
#`
3. See position i.
3. See the value of step ‘2’ in
i. When obtained whole number in C.F.(<) against x. ii. See the value of step ‘2i’ in C.F.(<);
step 2 then the position is Di. 4. The value of ‘x’ against this is Decile class.

DZ = a + F(b − a) h ∑f
ii. For Decimal number with fraction F: C.F.(<) is Di. 3. Apply formula:
DZ = l + 5i − C8
Where; a=positional value of whole number in f 10
step ‘2’ & b=next positional value after ‘a’ l/h/f=lower class boundary/size/frequency of
quartile class; C=preceding CF of decile class.
Percentiles
For Raw Data (Ungrouped): Frequency Distribution (Ungrouped) Frequency Distribution (Grouped)

(∑ 1)"# &'
1. Data first arranged in array. 1. Compute C. F. (<). 1. Compute C. F. (<) and class
!"# &'
PZ = i % value; where i=1, 2, i0 2 value; where i=1,
boundary.
#``
#``
2. 2. 2. Percentile Class:
∑ 1 &'
i % value
3, 4, 5, 6, 7 ,8, 9, …, or 99 2, 3, 4, 5, 6, 7, 8, 9, …, or 99
#``
3. See position i.
3. See the value of step ‘2’ in
i. When obtained whole number in C.F.(<) against x. ii. See the value of step ‘2i’ in C.F.(<);
step 2 then the position is Pi. 4. The value of ‘x’ against this is Percentile class.

PZ = a + F(b − a) h ∑f
ii. For Decimal number with fraction F: C.F.(<) is Pi. 3. Apply formula:
PZ = l + 5i − C8
Where; a=positional value of whole number in f 100
step ‘2’ & b=next positional value after ‘a’ l/h/f=lower class boundary/size/frequency of
quartile class; C=preceding CF of percentile
class.

Median = Q2 = D5 = P50 and Q1 = P25 and Q3 = P75

Mode is located at Histogram Median & Partition values are located at C. F. Polygon

∑b
2

Median ( )
Mode ( 9) ∑ 1 &'
i % ;
\
Similarly Quartiles can be located by

Prepared by Irshad Ali Statistics Formulas & their Use ICMAP Page 3
 Measures of Dispersion / Measures of Variation
Absolute Measures Relative/Coefficient Measures
cdef. g cdhi.
x 100
1. Range; R 1. Coefficient of Range; C. R.

cdef. " cdhi.

R = Xmax. – Xmin.
C. R. =

jk g jl jk g jl
x 100
2. Quartile Deviation; Q. D. 2. Coefficient of Quartile Deviation; C. Q. D.

$ jk " jl
Q. D. = C. Q. D. =
Note: Inter-quartile Range = Q3 – Q1
3. Mean Deviations 3. Coefficient of Mean Deviations

n.o. pq n.o.(cD)
C.M.D./C.M.D (x
D) = x100
∑|cg cD|
M. D./M. D.(x
D) =
a. Mean Deviation/Mean Absolute Deviation from Mean: a. Coefficient of Mean Absolute Deviation from Mean:

! cD
; for Raw Data
∑ 1.|cg cD|
M. D./M. D.(x
D) =
n.o.(c)
C.M.D (x
)
∑1
= x100
; for Frequency b. Coefficient of Mean Absolute Deviation from Median:

c
Distribution (Ungrouped or Grouped)

∑|cg c|
M. D.(x
) =
b. Mean Absolute Deviation from Median:

!
; for Raw Data
∑ 1.|cg c|
M. D.(x
) = ∑1
; for Frequency Distribution
(Ungrouped or Grouped)
4. Standard Deviation / Variance: 4. Coefficient of variation; C. V.

i. Population Variance: V(X) or σ$

a. Variance: a. For Population:

r
C.V. = x100
∑(vgs)w
s
For Raw Data: For frequency distribution:
σ = x by definition
$
∑ 1.(vgs)w
(ungrouped or grouped)
σ $
= ∑1
by definition b. For Sample:

∑ X$ ∑X
$
Computational formula:
t
σ$ = − { | ∑ f. X ∑ f. X
$ x100
Computational formula:
$
N N cD
σ$ = − { |
C.V. =
∑f ∑f
ii. Sample Variance: s $
Note 1: C.V. is used to compare the variability between two data. The
data which has less C.V. is more reliable and consistent and the data
which has more C.V. is less reliable and consistent.
∑(cgcD)w
For Raw Data: For frequency distribution:
s = !g# by definition
$
Note 2: M. D.(x
D) ≥ M. D.(x)
(ungrouped or grouped)
Normally we do not make

n ∑ x − (∑ x)
$ $
Computational formula: frequency distribution for sample

s$ = 1’ would be replaced by (∑ f) – 1
data; however if needed then ‘n-

n(n − 1) and other changes accordingly.

i. Population Standard Deviation: σ

b. Standard Deviation: (Square root of variance)

For Raw Data: For frequency distribution:

~=
∑(Ag@)I (ungrouped or grouped)
B
~=€
2
by definition
∑ f.(X−μ)
∑f
Computational formula: by definition
∑ AI ∑A
I
~=€ − { |
B B
Computational formula:
f. X2 ∑ f. X
2
∑
~=€ − { |
∑f ∑f
ii. Sample Standard Deviation: s
For Raw Data: For frequency distribution:

s =  !g# by definition
∑(cgcD)w
(ungrouped or grouped)
Normally we do not make
frequency distribution for sample
Computational formula:
would be replaced by (∑ f) – 1
n ∑ x − (∑ x)
data; however if needed then ‘n-1’
$ $
s=€
n(n − 1)
and other changes accordingly.

Prepared by Irshad Ali Statistics Formulas & their Use ICMAP Page 4
 Measures of Shapes
Skewness

1. Sk = (Mean – Mode)= ( ̅ − 9) ƒ„ †gƒ‡ˆ„

=
(̅ g9)
Absolute Measures Coefficient Measures:

‰Š †ˆ ‹ˆ Œ„Ž ŠŽ‡Ž† 
1. C.Sk. =

Sk = 3(Mean – Median) =3( ̅ − ) ‘(ƒ„ †gƒ„ˆŽ †) ‘(̅ g)

=
2.
‰Š †ˆ ‹ˆ Œ„Ž ŠŽ‡Ž† 
2. C.Sk. =
3. Sk = Q3 – 2Q2 + Q1
’k g$’w "’l
’k g ’l
4. Sk = m3 = µ 3 3. C.Sk. =
”k w •k w
“# = =
”w k •w k
4. C.Sk. =

Linear Regression & Correlation

Regression
Dependent Variable: The variable which is to be estimated or forecasted with the help of
Correlation
independent variable. Independent Variable: The input or the variable whose value is entered
into Regression line to estimate or forecast dependent variable.

n ∑ xy − (∑ x) (∑ y)
1. When ‘x’ is independent variable 2. When ‘y’ is independent variable 1. Karl Pearson’s Coefficient of Correlation:

˜=
and ‘y’ is dependent variable. and ‘x’ is dependent variable
š›n ∑ x $ − (∑ x)$ œ›n ∑ y $ − (∑ y)$ œ
y on x x on y
! ∑ c– g (∑ c) (∑ –) ! ∑ c– g (∑ c) (∑ –)
y =a + bx x =c + dy
˜ = √ž  Ÿ
! ∑ cw g (∑ c)w ! ∑ –w g(∑ –)w
b= d=
∑– ∑c ∑c ∑–
− b % − d %
Coefficient of determination: r2

! ! ! !
a= c= r2 = b x d

*b=byx *d=bxy
By Covariance

sc– sc–
y on x x on y
tf
y − yD = $ (x − xD) (y − yD)
! ∑ cw g(∑ c)w
x − xD = r=t sc = 
sc s– $ f .t !(!g#)
;
tf ! ∑ c–g (∑ c) (∑ –)
b = byx = t w; sc– =
tf ! ∑ c–g (∑ c) (∑ –)
d = bxy= t w; sc– = n ∑ y $ − (∑ y)$
f ! (!g#) ! (!g#) s– = €
n ∑ x $ − (∑ x)$ n ∑ y$ − y) (∑ $ n(n − 1)
sc $ = s– $ =
n(n − 1) n(n − 1) r = d.
t
& r = b.
tf
∑x ∑y ∑x ∑y tf t
xD = & yD = xD = & yD =
n n n n
s– ¤ ∑ ŸP I
2. Spearman’s Rank Correlation:

sc ˜£ = H −
b = r. d = r.
sc s– G(GI − H)
di = x(i) – y(i)

Prepared by Irshad Ali Statistics Formulas & their Use ICMAP Page 5
 Index Number
Simple Index Number Composite Index Number (More than one commodity)
Single Commodity’s Price Un-weighted (No weights allotted) Weighted (Weights allotted)

∑ PZ . W
a. Fixed base: (Price Relative, V) a. Simple/Un-weighted Aggregative: a. Simple Weighted Aggregative:
¥¦qq§!& ¨qZ©§ ¨ ∑ ¨h
x100 = h x 100
³¦= p1 ¥¦qq§!& ¨qZ©§t
x100 = ∑ x100 I= x100
∑ P` . W
ª«t§ ¨qZ©§ ¨¬ ³¦= p1 ´«t§ ¨qZ©§t ¨¬
V= I=
b. Chain base: b. Un-weighted Average-of-Relative:
i. Link Relative. (L. R.) b. Special Weighted Aggregative Indices:
i. Fixed Base:
¥¦qq§!& ¨qZ©§ ¨
x100 = h x 100 ∑ PZ . Q`
i. Laspeyre’s price index:
Step 1: Price relatives of each
·¸ = x100
¨q§©§­Z!® ¨qZ©§ ¨h¯l
L.R.=
∑ P` . Q`
commodity.
°.±.(h) c¥.².(h¯l)
ii. Chain Indices: (C.I.) Step 2: Take average of each price
∑ PZ . QZ
ii. Paasche’s price index:
#``
relative. Average may be Arithmetic
·¹ = x100
C.I. =
∑ P` . QZ
Mean, Geometric Mean, or Median.
ii. Chain Base:
1. Consumer’s Price Index Number: Step 1: Link relative of each iii. Fisher’s price index: (GM of
Method 1: Aggregate Expenditure Laspeyre’s and Paasche’s)
·º = √·¸ ·¹
commodity.
Method: Laspeyre’s price index. Step 2: Take average of each link
∑ ¨ .j ∑ ¨ .j
=∑ h ¬ x ∑ h h H»»
Method 2: Family Budget Method: relative. Average may be Arithmetic
¨¬ .j¬ ¨¬ .jh
Weighted Average of relative Mean, Geometric Mean, or Median.
(Arithmetic Mean as an Average) Step 3: Calculate chain indices of
∑ PZ . Q` + ∑ PZ . QZ
iv. Marshall & Edgeworth:
·M¼ = x100
2. Purchasing power of rupee:
#
x100
each averaged link relative.
P.P. =
¥p!t¦=§q ÂqZ©§ Z!­§c
Note: If average information is incomplete so ∑ P` . Qp + ∑ P` . QZ
3. Real income/Deflated income: we will take Arithmetic Mean as an average.
c. Weighted Average-of-Relative:
¥¦qq§!& xp=Z!«Ã ²!©p=§
x100 or
¥p!t¦=§q ÂqZ©§ Z!­§c !¦=´§q ∑ V. W
i. Arithmetic Mean as an average:
ÄÅQPFƟ GÆE £Æ˜PÆ£
=
RQŸ PGŸÆ PG ŸP£FRGOPGÇÈOPRG ÅƘPRŸ I=
= (GÆE PGŸÆ). ∑W
=(Current nominal income) x
(purchasing power of rupee) GÆE PGŸÆ PG ŸP£FRGOPGÇÈOPRG ÅƘPRŸ
ÄÅQPFƟ RQŸ £Æ˜PÆ£
∑ W. logV
ii. Geometric Mean as an average:
GÆE PGŸÆ PG ŸP£FRGOPGÇÈOPRG ÅƘPRŸ
= (RQŸ PGŸÆ). I = Antilog 5 8
RQŸ PGŸÆ PG ŸP£FRGOPGÇÈOPRG ÅƘPRŸ
∑W

PROBABILITY (Study of chance phenomena)

Counting Sample Units/Counting Techniques

1. Multiplicative Rule: If first operation in an experiment can be performed in n1 ways, the second in n2 ways, the third is n3 ways, …, and
the kth in nk ways, then all the k operations can be performed together in: n1 x n2 x n3 x … x nk ways
2. Permutation (Arrangement: Order is important):
Situation # 1 Situation # 4:
i. ‘n’ distinct objects iii. ‘n’ distinct objects
ii. Arranged in ‘n’ places iv. Arranged in ‘r’ places
iii. Without replacement/repetition v. With replacement/repetition
n
Permutation = n! Pr =(n)r
Situation # 2: Situation # 5:
i. ‘n’ distinct objects i. For ‘n’ non-distinct items out of which n1 are of
ii. Arranged in ‘r’ places one kind, n2 are of another kind…, nk are of another

G!
iii. Without replacement/repetition kind.
Pr = (Gg˜)! ; where r<n
G!
n ii. n1 + n2 +…+nk = n, then:

(GH )!(GI )!(GJ )!…(G )!

Situation # 3: n
Pn1, n2, n3,…, nk=
i. ‘n’ distinct objects
ii. Arranged in a circle
Permutation = (n -1 )!
3. Combination (Selection: Order is not important):
i. ‘n’ distinct objects Properties of Probability:
ii. ‘r’ to be chosen
1. 0≤P(Event)≤1, P(Φ)=0, & P(S) = 1
G!
iii. Without replacement
2. P(Not A)=P(A’) = 1- P(A)
nC
r = ˜!(Gg˜)!

Prepared by Irshad Ali Statistics Formulas & their Use ICMAP Page 6
 Classical Approach of Probability -Single Event Probability
x¦=´§q p1 1«Ëpq«´Ã§ ©«t§t !(Í)
or P(A) =
Ìp&«Ã !¦=´§q p1 ©«t§t !(³)
Probability (Event) =

Laws of Probability (Two or more events)

1. ADDITION LAWS (OR / U) 2. MULTIPLICATION LAWS (AND / ∩)
a. Mutually exclusive/Disjoint events: a. Independent events (normally with replacement):
P(AUB) = P(A) + P(B) P(A∩B) = P(A) x P(B)
b. Non-mutually exclusive: b. Dependent events (normally without replacement):
P(AUB) = P(A) + P(B) – P(A∩B) P(A∩B) = P(A) x P(B/A)
¹(N∩Ï)
¹(N)
Conditional Probability: When Probability of ‘B’ is calculated if ‘A’ already occurred: P(B/A) =

¹(N∩Ï)
¹(Ï)
When Probability of ‘A’ is calculated if ‘B’ already occurred: P(A/B) =

Special Probability Distributions

Discrete Random Variable Continuous Random Variable
Binomial Distribution: Poisson Distribution Hyper geometric Distribution Normal Distribution
1. The experiment consists of ‘n’ 1. Number of items or events of 1. A random sample of size ‘n’ 1. Normal curve bell shaped
independent repeated trials. either time or space. is selected from a population usually mean, median and
2. Two possible outcomes; Æ¯Ö . Ö of ‘N’ items. mode are equal.
!
2. Formula: P(x) =
cgs
“Success” or “Failure”. 2. ‘k’ of the ‘N’ items may be 2. Convert ‘x’ into ‘z’

4. 0 ≤x≤ ∞ r
3. Probability of success is ‘p’, 3. Mean=Variance=λ classified as successes and
z=
5. Parameter (λ); x~P(λ)
remains constant from trial to ‘N – k’ classified as failures.
Ú
trial. p+q =1; q=probability of ¥f . Û¯Ú¥i¯f . 3. i. P(z≤k); directly from table.
Û¥
P(x) = ii. P(z≥k) = 1 – P(z≤k)
i
failure. Poisson Approximation to

4. Parameters: μ & Þ; ~(ß, Þ)

Formula: P(X=x) = Binomial: Binomial will follow iii. P(a≤z≤b) = P(z≤b)-P(z≤a)
! 3. i. x=0, 1, 2, …, k when n≥k.
Poisson if:
Ð GÑ (Å) (H − Å)Gg i. ‘n’ is very large; say n≥20
ii. x=0, 1, 2, …, n when n<k Normal Approximation to

x~h(N, n, k)
cÒ`
4. Parameters: (N, n, & k); Binomial: Binomial will follow
ii. ‘p’ is very small; say p≤0.05
!Ý
4. Mean =np & Variance =npq iii. ‘n.p’ is finite. normal: i. ‘n’ is very large; say
Ư(GÅ) . (GÅ)
6. Parameters ( n & p); x~b(n, p)
x
5. 0≤x≤n 5. Mean (µ) = & Variance n≥20 & ii. ‘p’ is moderate; say
cg(!Â)
xg! Ý Ý
! σ$ = . n. 1− %
P(x) =
š(!Âà)
p=0.5. then z =
xg# x x

SAMPLING (simple random sampling)

With Replacement Without Replacement

 = á†
1. Possible number of samples; m
m =NCn
2. Mean of Sample Mean is Population Mean/Sample mean is an unbiased estimator of population mean (µ)
∑ ̅ ∑ã ∑ ̅ ∑ã
â( ̅ ) = ß; where â( ̅ ) = &ß= â( ̅ ) = ß; where â( ̅ ) = &ß=
” ä ” ä
3. Standard Error (åæ? )
∑ ̅ $ ∑ã $ ∑ ̅ $ ∑ã $
; where ޏ̅ =  % &Þ=  ; where ޏ̅ =  % &Þ = 
 äg† ∑ ̅ w ∑ã
ޏ̅ =  − − %
 ∑ ̅ w ∑ã w
ޏ̅ = − − %
w

√† ” ” ä ä √† äg# ” ” ä ä
4. ?) = åæ?
Variance of sample mean; V(æ I

w ∑ ̅ w ∑ ̅ $ ∑ ãw ∑ã $ w äg† ∑ ̅ w ∑ ̅ $ ∑ ãw ∑ã $
V( ̅ ) = ޏ̅ =
$ ; where ޏ̅ =
$ − % & Þ$ = − % V( ̅ ) = ޏ̅ $ = % ; where ޏ̅ $ = − % & Þ$ = − %
† ” ” ä ä † äg# ” ” ä ä
5. Mean of Sample Variance is Population Variance
∑ èw † ∑  w g(∑ )w
â(ç $ ) = Þ $ ; where â(ç $ ) = , ç$ = ∑ èw † ∑  w g(∑ )w ä ∑ ã w g(∑ ã)w
” †(†g#)
â(ç $ ) = ê $ ; where â(ç $ ) = , ç$ = , & ê$ =
, &
∑ é$ ∑é
$ ” †(†g#) ä(äg#)
Þ$ = −{ |
á á

Prepared by Irshad Ali Statistics Formulas & their Use ICMAP Page 7
 ESTIMATION
(1- ë)% Confidence Interval for single population mean (µ)
σ is known σ is not known

Þ
z-distribution When n ≥ 30 When n < 30
̅ ± íî ï ð ç
t-distribution
√
z-distribution (σ is replaced by ‘s’)
è
$ ̅ ± íî ï ð ̅ ± ñ, ˆ. %; where d.f. = n-1
$ à w à

Note: α is level of significance, (1- α) is level of confidence, & (1–β) is power of the test. If α is not given then it is taken
as α = 0.05.

Type I Error= α = P [Reject H0 when it is true]

Level of confidence =1 – α = P [Accept H0 when it is true]

Type II Error = β = P [Accept H0 when it is false]

Power of a test = 1 – β = P [Reject H0 when it is false]

TESTS OF HYPOTHESES

Testing single population mean (µ)

1. Establishing Hypotheses:
*Situation (I) Situation (II) Situation (III)
H0: µ=K µ≤ K µ≥K

H1: µ≠K µ>K µ<K

(Two-tailed test) Both sides (One-tailed test) Right tail (One-tailed test) Left tail
*One situation is possible at one time.

2. Level of Significance:

α
Situation (I) Situation (II) Situation (III)

ó ó
2
3. Test Statistic: (For calculated value)
σ is known σ is not known
z-test When n ≥ 30 When n < 30
Dg@
~
z-test (σ is replaced by ‘s’) t-distribution
ô G Dg@ Dg@
z=
√ z=£ t=£
ô G ô G
√ √

4. Rejection Region or Critical Region: (For tabulated value)

Situation (I) Situation (II) Situation (III)

-∞ z/t +∞ -∞ z/t +∞ -∞ z/t +∞

íñ Or ñ,­.1. ; where d.f. = n -1 íõ Or t õ, íõ Or t õ,

From Table(s): From Table(s): From Table(s):
­.1. ; where d.f. = n -1 ­.1. ; where d.f. = n -1
w w
Notes:

i. Shaded region(s) show rejection/critical region(s); start from the tabulated value while the remaining is acceptance region.
ii. The shaded tail (rejection region) is decided on the basis of Alternative Hypothesis (H1).

Prepared by Irshad Ali Statistics Formulas & their Use ICMAP Page 8
 5. Rejection Rule:
Reject Ho if |zcal.|> |ztab.| Or Reject Ho if |tcal.|> |ttab.|
6. Conclusion/Decision:
If calculated value lies in rejection region so we reject Ho and accept H1 Or if calculated value lies in acceptance region so we accept Ho and reject
H1. The test will be significant if Ho is rejected otherwise the test will be insignificant.

Prepared by Irshad Ali Statistics Formulas & their Use ICMAP Page 9