1) What is Maxima & Minima?

Ans: Maxima & Minima, collectively known as extrema are the largest values
(maximum) or smallest values (minimum) that a function takes in a point either
within a given neighborhood or in its entirety.
On a graph of a function, its local maxima will look like the top of a hill and a
local minima will lok like the bottom of a valley.

2) What do you mean by Primary and Secondary data?

Ans: Primary data are those which are collected for the first time and are original in
character. If an individual or an office collects the data to study a particular problem
it is called the primary data which is used to study any particular problem.
Secondary data are those which are already collected by someone for some
purpose and are available for the present study.

3) What purpose does a measure of central tendency serve?

Ans: The purpose of the central tendency is to represent a group of individual
values in a simple and concise manner, so that the mind can get a quick
understanding of the general size of the individuals in the group, in other words it
reduces a complex mass of data into a single typical figure.

4) What is dispersion? What is the purpose of measuring dispersion?

Ans: Dispersion or variation is the degree to which the numerical data tend to
spread about on an average.
“A Measure of variation or dispersion describes the degree of scatter shown by
observations and is examined as an average deviation about some critical value”.
Measures of dispersion enable a comparison to be made of two or more series with
regard to their variability.
Purpose of measure of dispersion:
To determine the reliability of an average
To serve as a basis for the control of the variability.
To compare two or more series with regard to their variability.
To facilitate the measures of other statistical measures.

5) What is skew ness? What are the different measures of skew ness?
Ans: Skew ness refers to the asymmetry or lack of symmetry in the shape of a
frequency distribution. Measures of skew ness tell us the direction and extent of
asymmetry in a series and permit us to compare two or more series with regard to
these.
The measures of skew ness are:
Absolute measure of skew ness: It can be found out by taking the difference
between mean and mode. If the value of mean is greater then mode, skew ness will
be positive and vice versa.
Relative measures of skew ness: There are 4 important measures of relative skew
ness namely:
The Karl Pearson’s coefficient of skew ness.
The Bowley’s Coefficient of Skew ness.
The Kally’s Coefficient of skew ness.
Measure of skew ness based on moments.

6) What is Kurtosis? Explain the three different curves under kurtosis?

Ans: Kurtosis is the degree of peaked ness or flatness in the region about the mode
of a frequency curve. The degree of kurtosis of a distribution is measured relative to
the peaked ness of a normal curve. In other words the measure of kurtosis tells us
the extent to which a distribution is more peaked or flat topped then a normal
curve. The three different curves under kurtosis are:
Leptokurtic: If a curve is more peaked than the normal curve, it is called leptokurtic.
In such a case items are more closely bunched around the mode.
Platykurtic: If a curve is more flat than a normal curve it is called platykurtic.
Mesokurtic: The normal curve itself is known as mesokurtic.

List the chief properties of a normal distribution?

Ans: The normal distribution curve is symmetrical; the distribution of the
frequencies on either side of the maximum ordinate of the curve is exactly the
same. It is a bell shaped curve and the number of cases above and below the mean
values is equal.
The value of Mean, Median and Mode will coincide because the distribution is
symmetrical and single peaked.

7) What are Ogives?

Ans: Ogives are the curves obtained by plotting the cumulative frequencies.

8) What is co efficient of variation? How is this measure useful?

Ans: Co Efficient of variation is the percentage of variation in mean, standard
deviation being considered as the as the total variation in the mean. Standard
deviation is the absolute measure of dispersion and this has to be converted to a
relative measure of dispersion for the purpose of comparison. This relative measure
of dispersion is known as Coefficient of variation.
Coefficient of variation as a measure can be used to compare the viability of
two or more series. The series or group of data for which the co efficient of variation
is greater indicates that the group is more viable, less consistent or less
homogeneous. If the Coefficient of variation is less, it indicates that the group is less
viable, more stable, more uniform, more consistent or more homogenous.

9) What are the characteristics of Statistics?

Ans: The characteristics of statistics are:
a) Statistics are aggregate of facts.
b) Statistics are numerically expressed.
c) Statistics are enumerated or estimated according to reasonable standards of
accuracy.
d) Statistics are collected in a systematic manner.
e) Statistics are collected for a pre defined purpose which is specific and well
defined.
f) Statistics should be places in relation to each other. i.e. If numeric facts are to be
called statistics, they should be comparable.

10) What are the limitations of a binomial distribution?

Ans: The major limitations of binomial distributions are:
a) It consists of a fixed number of trials.
b) The trials are independent of each other.
c) Each trial consists of only two outcomes, success or failure.
d) The probability of success is the same on each trial.
e) The binomial random variable is the number of successes on n trials.

11) What is standard error?

Ans: The standard deviation of the sampling distribution is called standard error. It
measures the sampling variability due to chance or random forces.

12) What is statistical average?

Ans: A statistical average is a single value that represents the characteristic of an
entire mass of data. Since an average represents the entire data, its value lies
somewhere between the two extremes. I.e. the largest and the smallest values.

13) What are the desirable properties of an average?

Ans: An average must possess the following characteristics:
a) It should be easy to understand and simple to compute.
b) It should be rigidly defined so that there is no confusion to its meaning.
c) Its definition should be in the form of mathematical formula.
d) It should be based on all the items in the data.
e) It should not be unduly influenced by any single item or a group of items.
f) It should be capable of further algebraic treatment.
g) It should have sampling stability.
h) It should be capable of being used in further statistical computation.

14) What are the limitations of statistics?

Ans: Some of the important limitations of statistics are:
a) Statistics does not study individual items but deals with aggregates.
b) Statistical laws are not exact.
c) Statistical applications are only quantative in nature and it does not study
qualitative phenomenon.
d) Statistical results may be misleading if quoted out of context.
e) Statistical studies are true on averages and long term runs.
f) Statistical methods are only the means and not an end for solving the problems.

15) What is the importance of statistics in managerial decision making?

Ans: To summarize, following areas of decision making can make use of statistical
tools:
a) Marketing and Sales.
b) Production Management.
c) Materials Management.
d) Finance, Investment and Budgeting.
e) Personal Management.
f) Research and Development.
g) Defense.

16) What is probability?

Ans: Probability is the likelihood that something is the case or will happen.
Probability theory is used extensively in the areas such a statistics, mathematics,
science, philosophy etc to draw conclusions about the likelihood of potential events
and the underlying mechanics of complex systems.
17) What is Poisson distribution?
Ans: Poisson distribution is a discrete probability distribution and explains the
behavior of those discrete varieties where the probability of occurrence of the event
is small and the total number of possible cases are sufficiently large.

18) What is binomial distribution?

Ans: Binomial distribution is the probability distribution expressing the probability
the probability of one set of dichotomous alternatives i.e. Success or Failure.
The binomial distribution can be used under the following conditions:
19) The number of trials is fixed and finite.
In every trial, there are only two possible outcomes – Success or Failure.
The trials are independent. I.e. The outcome of one trial does not affect the other.

20) What is a Decision Tree? What are the steps involved in decision tree analysis?
Ans: A decision tree is a graphic model of a decision process in which probabilities
can be introduced for the analysis of complex decisions.
Decision trees are of great help in complicated kinds of decision making as it
structures the decision process making managers approach decision making in an
orderly sequential fashion.

21) What is decision making under uncertainty?

Ans: When the state of nature is unknown and there is no objective information on
which probabilities can be based, the procedure is referred to as decision making
under uncertainty.

22) What is sampling?

Ans: Sampling is the process of learning about the population on the basis of a
sample drawn from it. Thus, in a sampling technique instead of every unit of the
universe only a part of the universe is studied and the conclusions are drawn from
that basis for the entire universe.

23) Define Stratified Random Sampling?

Ans: When the population is heterogonous or of different segments or strata with
respect to the variable or characteristic under study, then it is said to be stratified.
First the population is divided into a number of subgroups or strata such that each
stratum is homogeneous. A sample is then drawn from each stratum at random.

24) Explain Systematic Sampling?

Ans: A systematic sample is formed by selecting one unit at random and then
selecting additional units at evenly spaced intervals which is referred to as sampling
interval or sampling ratio. This method is popularly used in those cases where a
complete list of the population from which sample is to be drawn is available.

If K = Sampling Interval, Capital N = Universe Size & Small n = Sample Size,

Then: K = Capital N by Small n

25) What is Cluster Sampling? When is it used?

Ans: Cluster Sampling is also called as the sampling stages. It refers to the sampling
procedure which is carried out in several stages. The whole population is divided
into sampling units and these units are again divided into sub units. This process is
continued till we reach a least number.
Cluster sampling introduces flexibility in the sampling method. It is helpful in
large scale survey where the preparation list is difficult, time consuming or
expensive. It is valuable in underdeveloped countries where no detailed and
accurate framework is available.

26) What is sum of square and what is mean square with respect to ANOVA?
Ans: Sum of squares is the total of the square of deviations of various items in a
sample from the mean value of the respective samples.
The sum of the squares divided by its degree of freedom gives the
corresponding variance or the sum of the squares.

27) What are the 3 basic assumptions considered in Analysis Of Variance?

Ans: The 3 basic assumptions considered in analysis of variance are:
Normality: The values in each group are normally distributed.
Homogeneity: The variance within each group should be equal for all groups. This
assumption is needed in order to combine or pool the variance within the groups
into a single ‘within groups’ source of variation.
Independence of error: It states that the error (variation of each value around its
own group mean) should be independent for each value.

28) List out the merits and demerits of sampling?

Ans: Sampling is a device for learning about large masses by observing a few
individuals.
Merits of Sampling:
It saves time because fewer items are collected and processed.
It reduces cost
It provides more detailed information.
It is sometimes the only method possible is the population under study is infinite.
The organization and administration of sample survey are easy.
Demerits of sampling:
If a sample enquiry is not carefully planned and executed, the conclusions may be
inaccurate and misleading.
Sometimes sampling plan may be complicated.
There is organizational problem in sample investigation.
There may be personal biases and prejudices with regard to the choice of technique
and drawing of sampling units.
If information is required for each and every item of the universe, then a complete
enumeration survey is better.

29) What are the advantages of stratified random sampling?

Ans: The advantages of stratified random sampling are:
a) More Representative: Since the population is divided into various strata and then
a sample is drawn from each stratum there is a little possibility of any essential
group of population completely being excluded. A more representative sample is
thus secured.
b) Greater Accuracy: Stratified sampling ensures greater accuracy and the accuracy
is maximum if each stratum is so formed that it consists of uniform or homogenous
items.
c) Greater geographical concentration: As compared with random sample, stratified
samples can be more concentrated geographically i.e. the units from the different
strata can be selected in such a way that all of them are localized in one
geographical area as this would greatly reduce the time and expense of reviewing.

30) What are the various methods of sampling?

Ans: Sampling can be broadly classified as follows:
1) Random Sampling or Probability Sampling:
a) Simple Random Sampling.
b) Stratified Random Sampling.
c) Systematic Sampling.
d) Cluster Sampling.
e) Sequential Sampling.
f) Multi Stage Sampling.
g) Sampling with probability proportional to size.

31) Non Random or Non Probability sampling:

a) Quota Sampling: It is the most commonly used sampling technique in non
probability category. In this method, quotas are set up according to specified
characters such as so many in each of several income groups, so many in each age
and so on.
b) Convenience Sampling: A convenience sample is obtained by selecting
convenient population units; it is selected neither by probability nor by judgment
but by convenience.
c) Judgment: When the sample elements are either picked up on previous
experience basis or with no set rule procedure but based on hunch is referred

32) What is Simple Random Sampling?

Ans: Simple random sampling is a technique in which each and every unit of the
population has an equal opportunity of being selected in the sample, selection of
items is just a matter of chance.

33) What is Sequential Sampling?

Ans: Sequential sampling is the process of selecting a small number of samples
from a large population on the basis of a sequence for the purpose of making
inferences.

34) What is Correlation? What is its significance?

Ans: Correlation refers to the relationship of two or more variables. E.g. There exists
a correlation between price and demand, yield and rainfall and so on. Correlation is
the statistical analysis which measures and analyses the degree or extent to which
two variables fluctuate with reference to each other.
Correlation us very useful to economists to study the relationship between
variables, like price and quantity demanded. It helps to estimate costs , sales, price
and other related variables.
35) What is lag in correlation?
Ans: In the field of economic series one may find that there is some time gap before
a cause and effect relationship is established. For instance, the supply of raw
materials many increase today but it may not have immediate effect on the price
and take a few days for prices to adjust to the increased supply. This difference in
the period is known as lag in correlation.

36) Explain regression analysis?

Ans: Regression analysis is a method of predicting or estimating one variable
knowing the value of the other variable, regression analysis predicts the value of
dependant variables from the values of independent variables.

37) What are the components of a time series?

Ans: A time series is a set of statistical observations arranged in chronological
order. The four components of time series are:
Secular trend.
Seasonal trend.
Cyclical Variations.
Irregular Variations.

38) List the different methods that can be used for determining trend?
Ans: The various methods that can be used for determining trend are:
Freehand or graphic method.
Semi average method.
Moving Average Method.
Method of least squares.

39) What is an index number?

Ans: An index number is a number which by reference to a base period, shows by
its variations, the change in the magnitude over a period of time.

40) What is positive & Negative Correlation?

Ans: Positive and negative correlation depend upon the direction of the change of
variables. If two variables tend to move together in the same direction i.e. an
increase in the value of one variable is accompanied by the increase in the value of
the other variable or a decrease in the value of one variable is accompanied by a
decrease in value of another variable then the correlation is said to be positive or
direct correlation. E.g. Height & Weight; Price & Supply etc.
If two variables tend to move in opposite directions so that an increase or
decrease in the value of one variable is accompanied by decrease or increase in the
value of other variable, then the correlation is called negative or inverse correlation.
E.g. Price and Demand, Yield of Crops & Price etc.

41) What is an Index Number?

Ans: An Index number is a statistical measure designated to show changes in a
variable or a group of variables with respect to time, geographical location or other
characteristics such as income, profession etc.
An Index number is a specialized average designed to measure the change in
group or related variables over time.