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Reading 7: Statistical Concepts and Market Returns - LOS b

Q1. Which of the following statements regarding various statistical measures is least accurate?

A)   The coefficient of variation is calculated by dividing the mean by the standard deviation.

B)   The correlation coefficient is calculated by dividing the covariance of two random variables by the product of their standard deviations.

C)   Variance equals the sum of the squared deviations from the mean times the probability that that each outcome will occur.

Q2. Use the results from the following survey of 500 firms to answer the question.

Number of Employees     Frequency

300 up to 400     40

400 up to 500     62

500 up to 600     78

600 up to 700    101

700 up to 800    131

800 up to 900     88

The lower boundary of the fifth interval (class) is:

A)   700.

B)   800.

C)   701.

Q3. Use the results from the following survey of 500 firms to answer the question.

Number of Employees     Frequency

300 up to 400               40

400 up to 500               62

500 up to 600          78

600 up to 700          101

700 up to 800         131

800 up to 900          88

The width of each interval (class) for this frequency table is:

A)   101.

B)   100.

C)   50.

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