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a. Compute the mean of the following sample values: \(1.3,7.0,3.6,4.1,5.0 .\) b. Show that \(\Sigma(X-\bar{X})=0\).

Short Answer

Expert verified
a. The mean is 4.2. b. \( \Sigma(X-\bar{X}) = 0 \), verified.

Step by step solution

01

Sum the Sample Values

Add all the sample values together. The sample values are 1.3, 7.0, 3.6, 4.1, and 5.0. Compute the sum: \( 1.3 + 7.0 + 3.6 + 4.1 + 5.0 = 21.0 \).
02

Calculate the Mean

To find the mean, divide the sum of the sample values by the number of samples. There are 5 sample values in total. Thus, the mean \( \bar{X} \) is calculated as: \( \bar{X} = \frac{21.0}{5} = 4.2 \).
03

Find Deviations from the Mean

Subtract the mean from each sample value to find their deviations. \( X - \bar{X} = 1.3 - 4.2, 7.0 - 4.2, 3.6 - 4.2, 4.1 - 4.2, 5.0 - 4.2 \) which are \( -2.9, 2.8, -0.6, -0.1, 0.8 \).
04

Compute the Sum of Deviations

Add all deviations calculated in Step 3: \( -2.9 + 2.8 - 0.6 - 0.1 + 0.8 = 0.0 \).
05

Conclusion

The sum of deviations from the mean is \( 0 \), which verifies that \( \Sigma(X-\bar{X}) = 0 \).

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Key Concepts

These are the key concepts you need to understand to accurately answer the question.

Understanding the Sample Mean
To understand the concept of the sample mean, we first need to recognize it as a measure of central tendency. The sample mean gives us an average of our data values, offering a central point that represents the entire sample set. Calculating the sample mean involves simple arithmetic.
Start by adding together all the sample values. For example, in our exercise with the data set consisting of 1.3, 7.0, 3.6, 4.1, and 5.0, the sum is 21.0.
Once the total sum is computed, divide this sum by the number of data points, which is 5 in this case. Thus, the mean, denoted by \( \bar{X} \), is calculated as follows:
  • Sum of values: 21.0
  • Number of values: 5
  • Mean: \( \bar{X} = \frac{21.0}{5} = 4.2 \)
This value of 4.2 is considered the central point of our sample data and offers a simple summary of the dataset.
Exploring Deviation from the Mean
Once we have the sample mean, the next step is to explore deviations from it. Deviation refers to how far each data point is from the sample mean. This is calculated by subtracting the mean from each individual sample value.
In the exercise example, the sample mean is 4.2. Thus, for each value in the dataset:
  • 1.3 - 4.2 = -2.9
  • 7.0 - 4.2 = 2.8
  • 3.6 - 4.2 = -0.6
  • 4.1 - 4.2 = -0.1
  • 5.0 - 4.2 = 0.8
These deviations help us understand the spread and variation of the data. A higher deviation indicates that the value is far from the mean, while a lower deviation means it is close. Understanding deviations is crucial as they provide insights into the consistency and reliability of the data.
Summing Up Deviations
A fascinating property of the deviations from the mean is that their sum always equals zero. This occurs because the mean is essentially a balancing point within the data set.
In our exercise, after calculating the deviations \(-2.9, 2.8, -0.6, -0.1, 0.8\), we add them together: \[ -2.9 + 2.8 - 0.6 - 0.1 + 0.8 = 0.0 \]
This results in a sum of zero, demonstrating that deviations above the mean (positive) perfectly counterbalance those below the mean (negative). This neat characteristic confirms the correctness of our sample mean calculation and reinforces the nature of mean as a perfect central measure of the dataset.

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Most popular questions from this chapter

There are many financial websites that provide information on stocks by industry. For example, go to http://biz.yahoo.com and select Stock Research; under Analyst Research select Sector/Industry. There are many choices available here such as Energy, Financial, and Healthcare. Select one of these sectors, such as Healthcare. Another list of choices is now available; select one such as Major Drug. A list of companies in that industry will appear. Select one of the variables available, such as the price to earnings ratio, listed as \(\mathrm{P} / \mathrm{E}\). This variable is the ratio of the selling price of a share of the company's common stock to the earnings per share of common stock. Download this information into Excel and find the mean, median, and standard deviation. Go back to Sector/Industry and choose another Sector and Industry. You might want to select Energy and then Coal. A list of companies will appear. Select the same variable as before. Download the information to Excel and find the mean, median, and standard deviation for this industry. Compare the information on the two sectors. Write a brief report summarizing your findings. Are the means different? Is there more variability in one industry than another?

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