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Set+1 Descriptive+statistics+Probability+

The document summarizes key concepts in descriptive statistics and probability. It provides examples calculating measures of central tendency (mean, median), variability (standard deviation, variance), outliers, and probability concepts like binomial distribution. Sample problems calculate interquartile range from a box plot, skewness from a histogram, probability of errors in phone calls, and expected value and risk analysis for a business venture.

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Anusha Meesala
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113 views4 pages

Set+1 Descriptive+statistics+Probability+

The document summarizes key concepts in descriptive statistics and probability. It provides examples calculating measures of central tendency (mean, median), variability (standard deviation, variance), outliers, and probability concepts like binomial distribution. Sample problems calculate interquartile range from a box plot, skewness from a histogram, probability of errors in phone calls, and expected value and risk analysis for a business venture.

Uploaded by

Anusha Meesala
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Topics: Descriptive Statistics and Probability

1. Look at the data given below. Plot the data, find the outliers and find out μ , σ , σ 2

Name of company Measure X


Allied Signal 24.23%
Bankers Trust 25.53%
General Mills 25.41%
ITT Industries 24.14%
J.P.Morgan & Co. 29.62%
Lehman Brothers 28.25%
Marriott 25.81%
MCI 24.39%
Merrill Lynch 40.26%
Microsoft 32.95%
Morgan Stanley 91.36%
Sun Microsystems 25.99%
Travelers 39.42%
US Airways 26.71%
Warner-Lambert 35.00%

● There is one outlier at 91.36 which is “Morgan Stanley”


● Mean = 33.27
● Standard deviation = 16.945
● Variance = 287.14

Questions referred to from Aczel A., Sounderpandian J., Complete Business Statistics (7ed.)
2.

Answer the following three questions based on the box-plot above.


(i) What is inter-quartile range of this dataset? (please approximate the numbers) In one
line, explain what this value implies. Ans: (12-5)=7, IQR implies that middle half of data
set falls in this range
(ii) What can we say about the skewness of this dataset? Ans: Positive skewed
(iii) f it was found that the data point with the value 25 is actually 2.5, how would the new
box-plot be affected? Ans: The left whisker and right whisker would be of same length

3.

Questions referred to from Aczel A., Sounderpandian J., Complete Business Statistics (7ed.)
Answer the following three questions based on the histogram above.
(i) Where would the mode of this dataset lie? Ans: Mode lies in (4-8)interval on x-axis as
more number of values of Y fall in that interval
(ii) Comment on the skewness of the dataset. Ans: Right skewed
(iii) Suppose that the above histogram and the box-plot in question 2 are plotted for the
same dataset. Explain how these graphs complement each other in providing
information about any dataset. Ans: We can find mode using histogram and median,
outliers using boxplots

4. AT&T was running commercials in 1990 aimed at luring back customers who had switched to
one of the other long-distance phone service providers. One such commercial shows a
businessman trying to reach Phoenix and mistakenly getting Fiji, where a half-naked native on a
beach responds incomprehensibly in Polynesian. When asked about this advertisement, AT&T
admitted that the portrayed incident did not actually take place but added that this was an
enactment of something that “could happen.” Suppose that one in 200 long-distance telephone
calls is misdirected. What is the probability that at least one in five attempted telephone calls
reaches the wrong number? (Assume independence of attempts.)
Binomial distribution
Ans:  The probability of failure(q) is just 1 minus the probability of success(p): P(F) = 1 – p. 
One wrong number in 200 calls
Probability of one call misdirecting p = 1/200 = 0.005
Probability of one call not misdirecting q= 1-0.005 = 0.995

Questions referred to from Aczel A., Sounderpandian J., Complete Business Statistics (7ed.)
Number of calls = 5
Using,
P(x) = ⁿCₓpˣqⁿ⁻ˣ
Probability that at least one in five attempted telephone calls reaches the wrong number
= 1- None of the call reaches wrong number
= 1- 5C0 * 0.005^0 * 0.995^5
= 1- 0.995^5
=0.024
5. Returns on a certain business venture, to the nearest $1,000, are known to follow the following
probability distribution
x P(x)

-2,000 0.1

-1,000 0.1

0 0.2

1000 0.2

2000 0.3

3000 0.1

(i) What is the most likely monetary outcome of the business venture?
Ans: The most likely monetary outcome of the business venture is 0.3
(ii) Is the venture likely to be successful? Explain\
Ans: Yes the venture is likely to be successful
p(x=1000)+p(x=2000)+p(x=3000)=0.2+0.3+0.1=0.6
(iii) What is the long-term average earning of business ventures of this kind? Explain
Ans: (0.1)(-2000)+(0.1)(-1000)+(0.2)(0)+(0.2)(1000)+(0.3)(2000)+(0.1)(3000)=800
(iv) What is the good measure of the risk involved in a venture of this kind? Compute this
measure
Good Measure of risk is standard deviation

Questions referred to from Aczel A., Sounderpandian J., Complete Business Statistics (7ed.)

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