Session 2: Quantitative Methods: Basic Concepts
Reading 7: Statistical Concepts and Market Returns
LOS c: Calculate and interpret relative frequencies and cumulative relative frequencies, given a frequency distribution.
Monthly returns for a set of small cap stocks are 1.3%, 0.8%, 0.5%, 3.4%, -3.5%, -1.2%, 1.8%, 2.1%, and 1.5%. An analyst constructs a frequency distribution and a frequency polygon using the following intervals: -4.0% to -2.0%, -2.0% to 0.0%, 0.0% to 2.0%, and 2.0% to 4.0%. Which of the following statements about these data presentations is least accurate?
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A) |
A frequency polygon plots the midpoint of each interval on the horizontal axis and the absolute frequency of that interval on the vertical axis. | |
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B) |
The relative frequency of the interval -2.0% to 0.0% equals the relative frequency of the interval 2.0% to 4.0%. | |
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C) |
The absolute frequency of the interval 0.0% to 2.0% is 5. | |
When completed, the frequency distribution table should look as follows:
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Frequency Distribution of Monthly Small Cap Stock Returns |
|
Interval |
Absolute Frequency |
Relative Frequency |
|
-4.0% to -2.0% |
1 |
11.1% |
|
-2.0% to 0.0% |
1 |
11.1% |
|
0.0% to 2.0% |
5 |
55.6% |
|
2.0% to 4.0% |
2 |
22.2% |
|
Total |
9 |
100.0% |
The relative frequency of the interval -2.0% to 0.0% does not equal the relative frequency of the interval 2.0% to 4.0%.
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发表于 2011-3-1 14:27
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