Note: Only for reference
In the first week of our course, we dealt with three chapters which included basic concepts of Statistics, its use in our daily life and business, types of statistics, types of variables, different data levels of measurement (nominal, ordinal, interval and ratio), frequency tables and distribution, etc. We also discussed the practice of statistics should be guided by ethical behavior. Along with this some of the numeric measures like mean and median gave been discussed as well. This week 1 DQ2 is mainly focused on numerical illustration and graphical presentation of frequency distribution and histogram for the purpose of making a decision.
- Total number of participants (n)= 70
- Highest data value(H) = 1002.2
- Lowest data value(L) = 3.3
Frequency Distribution Table
Table 1: Frequency distribution table for Merrill
Therefore, for the class interval I would like to suggest 7 classes.
For number of classes
For class interval value
Total no. of observations (n) = 70
According to “2 to the K rule”,
2K > n
2k > 70
Trying k = 6 then:
26 > 70
64 > 70 (i.e., 64 is less than 70, so 6 classes is not enough.)
Trying next highest number k = 7 then:
128>70 (i.e., 128 is greater than 70 so the suggested number of classes is 7.)
i = (highest value-lowest value)/K
i=150 (i.e., approximately figure, the value should be in multiplication of 10 or 100)
Figure 1: Histogram for Merrill Lynch’s online investment portfolios
From the above question and graphical presentation of the histogram, it is clear that this age group of people has at least five times their salary saved so at the time of retirement in 10-15 years one should have an investment portfolio of $500,000. By taking this assumption as a benchmark only 8 out of 70 people (i.e., 11.43%) have a portfolio greater than $500000 which indicates that only 8 people’s investment supports retirement. This conclusion is generated as per the above frequency distribution table only 8 people have invested more than $500000.