Flashcards in Chapter 1 Deck (52)

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31

## Standard deviation

### Measures spread by caluculating how far the observations are from their mean--> should only be used when the mean is chosen as the method of center

32

## n-1

### Degrees of freedom of the variance or standard deviation

33

## S=0

### Only when ther is no spread--> means all the observations have the same value, otherwise S is greater than 0

34

## What does it mean if the standard deviation is higher?

### S gets larger when the observations are more spread out across their mean

35

## Units

### S has the same units of measurement as the original observation

36

## S and the Mean

### Like the mean, S is not resistant a few outliers or strong skewness can greatly increase S

37

## How do you measure risk in finance

###
Taking a looking at the standard deviation of returns --> large spread --> less predictable--> more risky

BUT five number summary would be more informative

38

## Density curve

### A density curve is a mathematic model for the distribution of a quantitative variable

39

## What does a density curve describe?

### The overall pattern of a distribution. Thea area under the curve AND within any range of values is the proportion of all observations that fall within that range

40

## 68-95-99.7 rule

###
68% of observations fall within 1 standard deviation of the mean

95% of observations fall within 2 standard deviations of the mean

99.7% of observations fall within 3 standard deviations of the mean

41

## Z-Score

### Standardized value--> tells us how many standard deviations the observation falls away from the mean and in which direction

42

## Z-score positive

### Observations larger than the mean

43

## Z-score negative

### Observations smaller than the mean

44

## Sample survey

### Collects data from a sample of cases that represent a larger population of cases

45

## Observation vs Experiment

### We do not attempt to influence the responses by imposing a treatment (change)

46

## Training Data Set

###
In some studies we generate one set of data to generate a set of results

Ex. model to predict something

47

## Database

### Data sets for statistical analysis can be extracted

48

## Data warehouse

### System for organizing, storing, and analyzing complex data

49

## Sampling frame

### A list of items to be sampled

50

## Response rate

### The proportion of the original sample who actually provide usable data

51

## Undercoverage

### Some groups in the population are left out of the process of choosing the sample

52