chapter 3
Over the past 10 years, five mutual funds all had the same mean rate of return. The standard deviations for each of the five mutual funds are shown below. Capital Investment: 10.5%; Vanity: 7.6%; Global Advisor: 6.1%; International Equities: 9.2%; Nomad: 8.3% Which mutual fund was least consistent in rate of return?
Capital Investment
Identify the given statement as either true or false. The standard deviation can be negative.
FALSE
Identify the given statement as either true or false. The standard deviation is a RESISTANT MEASURE of spread.
FALSE
In 1994, major league baseball players went on strike. At the time, the average salary was $1,049,589, and the median salary was $337,500. If you were representing the owners, which summary would you use to convince the public that a strike was not needed? If you were a player, which would you use? Why was there such a large discrepancy between the mean and median salaries? Explain.
If you were representing the owners, you would use the average salary to convince the public that a strike was not needed. If you were a player, you would use the median salary to convince the public that a strike was needed. The average and median salaries differ so greatly because the distribution of salaries is skewed right.
The peak represents the ...
MODE
True or False: When comparing two populations, the larger the standard deviation, the more dispersion the distribution has, provided that the variable of interest from the two populations has the same unit of measure.
True, because the standard deviation describes how far, on average, each observation is from the typical value. A larger standard deviation means that observations are more distant from the typical value, and therefore, more dispersed.
The sum of the deviations about the mean always equals ...
ZERO
For a distribution that is symmetric, which of the following is true?
mean EQUALS median
For a distribution that is skewed right, which of the following is true?
mean GREATER THAN median
or a distribution that is skewed left, which of the following is true?
mean LESS THAN median
According to the Empirical Rule ...
According to the Empirical Rule, if a distribution is bell-shaped, then approximately 68% of the data will lie within 1 standard deviation of the mean; approximately 95% of the data will lie within 2 standard deviations of the mean; approximately 99.7% of the data will lie within 3 standard deviations of the mean.
What can be said about a set of data with a standard deviation of 0?
All the observations are the same value.
Why is the median resistant, but the mean is not?
The mean is not resistant because when data are skewed, there are extreme values in the tail, which tend to pull the mean in the direction of the tail. The median is resistant because the median of a variable is the value that lies in the middle of the data when arranged in ascending order and does not depend on the extreme values of the data.
