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1. What do you mean by sample survey?

What are the


different sampling methods? Briefly describe them.

Sample is a finite subset of a population drawn from it to


estimate the characteristics of the population. Sampling is a tool
which enables us to draw conclusions about the characteristics of
the population.

Survey sampling describes the process of selecting a sample of


elements from a target population in order to conduct a survey.
A survey may refer to many different types or techniques of
observation, but in the context of survey sampling it most often
refers to a questionnaire used to measure the characteristics
and/or attitudes of people. The purpose of sampling is to reduce
the cost and/or the amount of work that it would take to survey
the entire target population. A survey that measures the entire
target population is called a census.

Sample survey can also be described as the technique used to


study about a population with the help of a sample. Population is
the totality all objects about which the study is proposed. Sample
is only a portion of this population, which is selected using
certain statistical principles called sampling designs (this is for
guaranteeing that a representative sample is obtained for the
study). Once the sample decided information will be collected
from this sample, which process is called sample survey.

It is incumbent on the researcher to clearly define the target


population. There are no strict rules to follow, and the researcher
must rely on logic and judgment. The population is defined in
keeping with the objectives of the study.

Sometimes, the entire population will be sufficiently small, and


the researcher can include the entire population in the study.
This type of research is called a census study because data is
gathered on every member of the population.

Usually, the population is too large for the researcher to attempt


to survey all of its members. A small, but carefully chosen
sample can be used to represent the population. The sample
reflects the characteristics of the population from which it is
drawn.

Sampling methods are classified as either probability or non-


probability. In probability samples, each member of the
population has a known non-zero probability of being selected.
Probability methods include random sampling, systematic
sampling, and stratified sampling. In non-probability
sampling, members are selected from the population in some
non-random manner. These include convenience sampling,
judgment sampling, quota sampling, and snowball
sampling. The advantage of probability sampling is that
sampling error can be calculated. Sampling error is the degree to
which a sample might differ from the population. When inferring
to the population, results are reported plus or minus the
sampling error. In non-probability sampling, the degree to which
the sample differs from the population remains unknown.

Probability Sampling Methods

1. Random sampling is the purest form of probability


sampling. Each member of the population has an equal and
known chance of being selected. When there are very large
populations, it is often difficult or impossible to identify every
member of the population, so the pool of available subjects
becomes biased.
2. Systematic sampling is often used instead of random
sampling. It is also called an Nth name selection technique.
After the required sample size has been calculated, every Nth
record is selected from a list of population members. As long
as the list does not contain any hidden order, this sampling
method is as good as the random sampling method. Its only
advantage over the random sampling technique is simplicity.
Systematic sampling is frequently used to select a specified
number of records from a computer file.
3. Stratified sampling is commonly used probability method
that is superior to random sampling because it reduces
sampling error. A stratum is a subset of the population that
share at least one common characteristic. Examples of
stratums might be males and females, or managers and non-
managers. The researcher first identifies the relevant
stratums and their actual representation in the population.
Random sampling is then used to select a sufficient number
of subjects from each stratum. "Sufficient" refers to a sample
size large enough for us to be reasonably confident that the
stratum represents the population.

Stratified sampling is often used when one or more of the


stratums in the population have a low incidence relative to the
other stratums.
Non Probability Methods

1. Convenience sampling is used in exploratory research


where the researcher is interested in getting an inexpensive
approximation of the truth. As the name implies, the sample
is selected because they are convenient. This non-probability
method is often used during preliminary research efforts to
get a gross estimate of the results, without incurring the cost
or time required to select a random sample.

2. Judgment sampling is a common non-probability method.


The researcher selects the sample based on judgment. This is
usually extension of convenience sampling. For example, a
researcher may decide to draw the entire sample from one
"representative" city, even though the population includes all
cities. When using this method, the researcher must be
confident that the chosen sample is truly representative of
the entire population.

3. Quota sampling is the non-probability equivalent of


stratified sampling. Like stratified sampling, the researcher
first identifies the stratums and their proportions as they are
represented in the population. Then convenience or
judgment sampling is used to select the required number of
subjects from each stratum. This differs from stratified
sampling, where the stratums are filled by random sampling.

4. Snowball sampling is a special non-probability method


used when the desired sample characteristic is rare. It may
be extremely difficult or cost prohibitive to locate
respondents in these situations. Snowball sampling relies on
referrals from initial subjects to generate additional subjects.
While this technique can dramatically lower search costs, it
comes at the expense of introducing bias because the
technique itself reduces the likelihood that the sample will
represent a good cross section from the population.

2. What is the different between correlation and


regression? What do you understand by Rank
Correlation? When we use rank correlation and when
we use Pearsonian Correlation Coefficient? Fit a linear
regression line in the following data –
X 12 15 18 20 27 34 28
48
Y 123 150 158 170 180 184 176
130

Correlation

When two or more variables move in sympathy with other, then


they are said to be correlated. If both variables move in the same
direction then they are said to be positively correlated. If the
variables move in opposite direction then they are said to be
negatively correlated. If they move haphazardly then there is no
correlation between them.
Correlation analysis deals with
1) Measuring the relationship between variables.
2) Testing the relationship for its significance.
3) Giving confidence interval for population correlation measure.

Regression
Regression is defined as, “the measure of the average
relationship between two or more variables in terms of the
original units of the data.” Correlation analysis attempts to study
the relationship between the two variables x and y. Regression
analysis attempts to predict the average x for a given y. In
Regression it is attempted to quantify the dependence of one
variable on the other. The dependence is expressed in the form
of the equations.

Different between correlation and regression

Correlation and linear regression are not the same. Consider


these differences:
• Correlation quantifies the degree to which two variables are
related. Correlation does not find a best-fit line (that is
regression). You simply are computing a correlation
coefficient (r) that tells you how much one variable tends to
change when the other one does.

• With correlation you don't have to think about cause and


effect. You simply quantify how well two variables relate to
each other. With regression, you do have to think about cause
and effect as the regression line is determined as the best
way to predict Y from X.
• With correlation, it doesn't matter which of the two variables
you call "X" and which you call "Y". You'll get the same
correlation coefficient if you swap the two. With linear
regression, the decision of which variable you call "X" and
which you call "Y" matters a lot, as you'll get a different best-
fit line if you swap the two. The line that best predicts Y from
X is not the same as the line that predicts X from Y.

• Correlation is almost always used when you measure both


variables. It rarely is appropriate when one variable is
something you experimentally manipulate. With linear
regression, the X variable is often something you
experimental manipulate (time, concentration...) and the Y
variable is something you measure.

• The correlation answers the STRENGTH of linear association


between paired variables, say X and Y. On the other hand, the
regression tells us the FORM of linear association that best
predicts Y from the values of X.

(2a) Correlation is calculated whenever:

- Both X and Y is measured in each subject and quantifies


how much they are linearly associated.
- In particular the Pearson's product moment correlation
coefficient is used when the assumption of both X and Y are
sampled from normally-distributed populations are satisfied
- Or the Spearman's moment order correlation coefficient is
used if the assumption of normality is not satisfied.
- Correlation is not used when the variables are manipulated,
for example, in experiments.

(2b) linear regression is used whenever:

- At least one of the independent variables (Xi's) is to predict


the dependent variable Y. Note: Some of the Xi's are
dummy variables, i.e. Xi = 0 or 1, which are used to code
some nominal variables.
- If one manipulates the X variable, e.g. in an experiment.

• Linear regression are not symmetric in terms of X and Y. That


is interchanging X and Y will give a different regression model
(i.e. X in terms of Y) against the original Y in terms of X.
On the other hand, if you interchange variables X and Y in the
calculation of correlation coefficient you will get the same
value of this correlation coefficient.
• The "best" linear regression model is obtained by selecting
the variables (X's) with at least strong correlation to Y, i.e.
>= 0.80 or <= -0.80

• The same underlying distribution is assumed for all variables


in linear regression. Thus, linear regression will underestimate
the correlation of the independent and dependent when they
(X's and Y) come from different underlying distributions.

Spearman's rank correlation coefficient or Spearman's


rho, named after Charles Spearman and often denoted by the
Greek letter ρ (rho) or as rs, is a nonparametric measure of
correlation – that is, it assesses how well an arbitrary monotonic
function could describe the relationship between two variables,
without making any other assumptions about the particular
nature of the relationship between the variables. Certain other
measures of correlation are parametric in the sense of being
based on possible relationships of a parameterized form, such as
a linear relationship.

In principle, ρ is simply a special case of the Pearson product-


moment coefficient in which two sets of data Xi and Yi are
converted to rankings xi and yi before calculating the coefficient.
In practice, however, a simpler procedure is normally used to
calculate ρ. The raw scores are converted to ranks, and the
differences di, between the ranks of each observation on the two
variables are calculated.

If there are no tied ranks, then ρ is given by:

Where:
di = xi − yi = the difference between the ranks of corresponding
values Xi and Yi, and
n = the number of values in each data set (same for both sets).
If tied ranks exist, classic Pearson's correlation coefficient
between ranks has to be used instead of this formula.
One has to assign the same rank to each of the equal values. It is
an average of their positions in the ascending order of the
values.

Conditions under which P.E can be used:

1. Samples should be drawn from a normal population.


2. The value of “r” must be determined from sample values.
3. Samples must have been selected at random.

3. What do you mean by business forecasting? What are


the different methods of business forecasting? Describe
the effectiveness of time-series analysis as a mode of
business forecasting. Describe the method of moving
averages.

Business forecasting refers to the analysis of past and present


economic conditions with the object of drawing inferences about
probable future business conditions. To forecast the future,
various data, information and facts concerning to economic
condition of business for past and present are analyzed. The
process of forecasting includes the use of statistical and
mathematical methods for long term, short term, medium term
or any specific term.

Following are the main methods of business forecasting:-

1. Business Barometers

Business indices are constructed to study and analyze the


business activities on the basis of which future conditions are
predetermined. As business indices are the indicators of future
conditions, so they are also known as “Business Barometers” or
“Economic Barometers‟. With the help of these business
barometers the trend of fluctuations in business conditions are
made known and by forecasting a decision can be taken relating
to the problem. The construction of business barometer consists
of gross national product, wholesale prices, consumer prices,
industrial production, stock prices, bank deposits etc. These
quantities may be converted into relatives on a certain base. The
relatives so obtained may be weighted and their average be
computed. The index thus arrived at in the business barometer.

The business barometers are of three types:

i. Barometers relating to general business activities: it is also


known as general index of business activity which refers to
weighted or composite indices of individual index business
activities. With the help of general index of business activity
long term trend and cyclical fluctuations in the „economic
activities of a country are measured but in some specific
cases the long term trends can be different from general
trends. These types of index help in formation of country
economic policies.
ii. Business barometers for specific business or industry: These
barometers are used as the supplement of general index of
business activity and these are constructed to measure the
future variations in a specific business or industry.
iii. Business barometers concerning to individual business firm:
This type of barometer is constructed to measure the
expected variations in a specific individual firm of an
industry.
2. Time Series Analysis is also used for the purpose of making
business forecasting. The forecasting through time series
analysis is possible only when the business data of various
years are available which reflects a definite trend and seasonal
variation.

3. Extrapolation is the simplest method of business forecasting.


By extrapolation, a businessman finds out the possible trend of
demand of his goods and about their future price trends also. The
accuracy of extrapolation depends on two factors:
i) Knowledge about the fluctuations of the figures,
ii) Knowledge about the course of events relating to the problem
under consideration.

4. Regression Analysis
The regression approach offers many valuable contributions to
the solution of the forecasting problem. It is the means by which
we select from among the many possible relationships between
variables in a complex economy those which will be useful for
forecasting. Regression relationship may involve one predicted or
dependent and one independent variables simple regression, or
it may involve relationships between the variable to be forecast
and several independent variables under multiple regressions.
Statistical techniques to estimate the regression equations are
often fairly complex and time-consuming but there are many
computer programs now available that estimate simple and
multiple regressions quickly.

5. Modern Econometric Methods


Econometric techniques, which originated in the eighteenth
century, have recently gained in popularity for forecasting. The
term econometrics refers to the application of mathematical
economic theory and statistical procedures to economic data in
order to verify economic theorems. Models take the form of a set
of simultaneous equations. The value of the constants in such
equations is supplied by a study of statistical time series.

6. Exponential Smoothing Method

This method is regarded as the best method of business


forecasting as compared to other methods. Exponential
smoothing is a special kind of weighted average and is found
extremely useful in short-term forecasting of inventories and
sales.
7. Choice of a Method of Forecasting
The selection of an appropriate method depends on many factors
– the context of the forecast, the relevance and availability of
historical data, the degree of accuracy desired, the time period
for which forecasts are required, the cost benefit of the forecast
to the company, and the time available for making the analysis.

Effectiveness of Time Series Analysis:

Time series analysis is also used for the purpose of making


business forecasting. The forecasting through time series
analysis is possible only when the business data of various years
are available which reflects a definite trend and seasonal
variation. By time series analysis the long term trend, secular
trend, seasonal and cyclical variations are ascertained, analyzed
and separated from the data of various years.

Merits:

i) It is an easy method of forecasting.


ii) By this method a comparative study of variations can be
made.
iii) Reliable results of forecasting are obtained as this method is
based on mathematical model.

Method of Moving Averages

One of the most simple and popular technical analysis indicators


is the moving averages method. This method is known for its
flexibility and user-friendliness. This method calculates the
average price of the currency or stock over a period of time.

The term “moving average” means that the average moves or


follows a certain trend. The aim of this tool is to indicate to the
trader if there is a beginning of any new trend or if there is a
signal of end to the old trend. Traders use this method, as it is
relatively easy to understand the direction of the trends with the
help of moving averages.

Moving average method is supposed to be the simplest one, as it


helps to understand the chart patterns in an easier way. Since
the currency’s average price is considered, the price’s volatile
movements are evened. This method rules out the daily
fluctuation in the prices and helps the trader to go with the right
trend, thus ensuring that the trader trades in his own good.
We come across different types of moving averages, which are
based on the way these averages are computed. Still, the basis
of interpretation of averages is similar across all the types. The
computation of each type set itself different from other in terms
of weightage it lays on the prices of the currencies. Current price
trend is always given a higher weightage. The three basic types
of moving averages are viz. simple, linear and exponential.

A simple moving average is the simplest way to calculate the


moving price averages. The historical closing prices over certain
time period are added. This sum is divided by the number of
instances used in summation. For example, if the moving
average is calculated for 15 days, the past 15 historical closing
prices are summed up and then divided by 15. This method is
effective when the number of prices considered is more, thus
enabling the trader to understand the trend and its future
direction more effectively.

A linear moving average is the less used one out of all. But it
solves the problem of equal weightage. The difference between
simple average and linear average method is the weightage that
is provided to the position of the prices in the latter. Let’s
consider the above example. In linear average method, the
closing price on the
15th day is multiplied by 15, the 14th day closing price by 14 and
so on till the 1st day closing price by 1. These results are totalled
and then divided by 15.

The exponential moving average method shares some similarity


with the linear moving average method. This method lays
emphasis on the smoothing factor, there by weighing recent data
with higher points than the previous data. This method is more
receptive to any market news than the simple average method.
Hence this makes exponential method more popular among
traders.

Moving averages methods help to identify the correct trends and


their respective levels of resistance.

4. What is definition of Statistics? What are the different


characteristics of statistics? What are the different
functions of Statistics? What are the limitations of
Statistics?
According to Croxton and Cowden, ‘Statistics is the science of
collection, presentation, analysis and interpretation of numerical
data.’ Thus, Statistics contains the tools and techniques required
for the collection, presentation, analysis and interpretation of
data. This definition is precise and comprehensive.

Characteristic of Statistics

a. Statistics Deals with aggregate of facts: Single figure cannot


be analyzed.
b. Statistics are affected to a marked extent by multiplicity of
causes: The statistics of yield of paddy is the result of factors
such as fertility of soil, amount of rainfall, quality of seed used,
quality and quantity of fertilizer used, etc.
c. Statistics are numerically expressed: Only numerical facts can
be statistically analyzed. Therefore, facts as ‘price decreases with
increasing production’ cannot be called statistics.
d. Statistics are enumerated or estimated according to
reasonable standards of accuracy: The facts should be
enumerated (collected from the field) or estimated (computed)
with required degree of accuracy. The degree of accuracy differs
from purpose to purpose. In measuring the length of screws, an
accuracy upto a millimetre may be required, whereas, while
measuring the heights of students in a class, accuracy upto a
centimetre is enough.
e. Statistics are collected in a systematic manner: The facts
should be collected according to planned and scientific methods.
Otherwise, they are likely to be wrong and misleading.
f. Statistics are collected for a pre-determined purpose: There
must be a definite purpose for collecting facts.
Eg. Movement of wholesale price of a commodity
g. Statistics are placed in relation to each other: The facts must
be placed in such a way that a comparative and analytical study
becomes possible.
Thus, only related facts which are arranged in logical order can
be called statistics.

Functions of Statistics

1. It simplifies mass data


2. It makes comparison easier
3. It brings out trends and tendencies in the data
4. It brings out hidden relations between variables.
5. Decision making process becomes easier.

Major limitations of Statistics are:


1. Statistics does not deal with qualitative data. It deals only with
quantitative data.
2. Statistics does not deal with individual fact: Statistical
methods can be applied only to aggregate to facts.
3. Statistical inferences (conclusions) are not exact: Statistical
inferences are true only on an average. They are probabilistic
statements.
4. Statistics can be misused and misinterpreted: Increasing
misuse of Statistics has led to increasing distrust in statistics.
5. Common men cannot handle Statistics properly: Only
statisticians can handle statistics properly.

5. What are the different stages of planning a statistical


survey? Describe the various methods for collecting data
in a statistical survey.

The planning stage consists of the following sequence of


activities.

1. Nature of the problem to be investigated should be clearly


defined in an un- ambiguous manner.
2. Objectives of investigation should be stated at the outset.
Objectives could be to obtain certain estimates or to establish
a theory or to verify a existing statement to find relationship
between characteristics etc.
3. The scope of investigation has to be made clear. It refers to
area to be covered, identification of units to be studied,
nature of characteristics to be observed, accuracy of
measurements, analytical methods, time, cost and other
resources required.
4. Whether to use data collected from primary or secondary
source should be determined in advance.
5. The organization of investigation is the final step in the
process. It encompasses the determination of number of
investigators required, their training, supervision work
needed, funds required etc.

Collection of primary data can be done by anyone of the


following methods.

i. Direct personal observation


ii. Indirect oral interview
iii. Information through agencies
iv. Information through mailed questionnaires
iv. Information through schedule filled by investigators

6. What are the functions of classification? What are the


requisites of a good classification? What is Table and
describe the usefulness of a table in mode of
presentation of data?

The functions of classification are:

a. It reduce the bulk data


b. It simplifies the data and makes the data more
comprehensible
c. It facilitates comparison of characteristics
d. It renders the data ready for any statistical analysis

Requisites of good classification are:

i. Unambiguous: It should not lead to any confusion


ii. Exhaustive: every unit should be allotted to one and only
one class
iii. Mutually exclusive: There should not be any overlapping.
iv. Flexibility: It should be capable of being adjusted to
changing situation.
v. Suitability: It should be suitable to objectives of survey.
vi. Stability: It should remain stable throughout the
investigation
vii. Homogeneity: Similar units are placed in the same class.
viii. Revealing: Should bring out essential features of the
collected data.

Table is nothing but logical listing of related data in rows and


columns.
Objectives of tabulation are:-

i. To simplify complex data


ii. To highlight important characteristics
iii. To present data in minimum space
iv. To facilitate comparison
v. To bring out trends and tendencies
vi. To facilitate further analysis