Q1 Explain the different method to find mean along with example?

Ans Mean
Mean is an essential concept in mathematics and statistics. In general, the mean is
referred to the average or the most common value in a collection of numbers.

In statistics, it is a measure a central tendency of a probability distribution along median and

mode. It is also referred to an expected value.

There are different ways of measuring the central tendency of a set of values, while the average
is one of the most popular ones, there are multiple ways to calculate the mean. Here are the four
most popular ones

Arithmetic Mean
Arithmetic mean (or, simply, “mean”) is nothing but the average. It is computed by adding all
the values in the data set divided by the number of observations in it. If we have the raw data,
mean is given by the formula
Where, ∑ (the uppercase Greek letter sigma), X refers to summation, refers to the individual
value and n is the number of observations in the sample (sample size). The research articles
published in journals do not provide raw data and, in such a situation, the readers can compute
the mean by calculating it from the frequency distribution (if provided).

Where, f is the frequency and X is the midpoint of the class interval and n is the number of
observations. Readers are cautioned that the mean calculated from the frequency distribution is
not exactly the same as that calculated from the raw data. It approaches the mean calculated from
the raw data as the number of intervals increase
Furthermore, there are more ways to find mean under name of arithmetic mean which is known
as shortcut method and step deviation.
Short Method

Step Deviation
Geometric Mean
There are two type of geometric mean group and ungroup. In group frequency is
mentioned where as in ungroup frequency is not mentioned.
Ungroup

Group
Harmonic Mean

Harmonic mean is a type of average that is calculated by dividing the number of values in the
data series by the sum of reciprocals (1/xi) of each value in the data series. A harmonic mean is
one of the three Pythagorean means. The harmonic mean always shows the lowest value among
the Pythagorean means. The harmonic mean is often used to calculate the average of the ratios or
rates. It is the most appropriate measure for ratios and rates because it equalizes the weights of
each data point. For instance, the arithmetic mean places a high weight to large data points, while
geometric mean gives a lower weight to the smaller data points. IN finance, the harmonic mean
is used to determine the average for financial multiples such as price-to-earnings (P/E) ratio. The
financial multiples should not be averaged using the arithmetic mean because it is biased toward
larger values. One of the most common problems in finance that uses the harmonic mean is the
calculation of the ratio of a portfolio that consists of several securities.

Ungroup

Group
Weighted Mean
The weighted mean is a type of mean that is calculated by multiplying the weight (or
probability) associated with a particular event or outcome with its associated quantitative
outcome and then summing all the products together. It is very useful when calculating a
theoretically expected outcome where each outcome shows a different probability of occurring,
which is the key feature that distinguishes the weighted mean from the mean. It is important to
note that all the probabilities or weights must be mutually exclusive (i.e., no two events can
occur at the same time) and that the total weights and probabilities must add up to 100%.When
calculating an arithmetic mean, we make the assumption that all numbers used in the calculation
show an equal probability of occurring or associated weights. Thus, we do not need to account
for the differences and can simply sum up the numbers that we are interested in finding the mean
of and then dividing the sum by the number of observations.

 Uses of Weighted Means

Weighted means are useful in a wide variety of scenarios. For example, a student may use a
weighted mean in order to calculate his/her percentage grade in a course. In such an example, the
student would multiply the weighing of all assessment items in the course (e.g., assignments,
exams, projects, etc.) by the respective grade that was obtained in each of the categories.
Consider a student with the following grades:

In the example above, we can arrive at the weighted mean by multiplying the weights associated
with each assessment item by the grade that the student obtained on each of the items. Then, we
can sum the products and arrive at the student’s final grade.

Here, we see that the student is actually able to get a better than expected grade by doing well in
the most heavily weighted component of the course: the final. Given the knowledge of the
weighing of each assessment element in the course, students can allocate their study time more
effectively. Taking a step back, students will also be better equipped to balance a particular
assessment item against other time-consuming activities (e.g., social life, personal hobbies, other
courses, etc.) and make decisions that match their personal utility function.

Expected Returns

In the context of finance, the (weighted) means are used to calculate expected values or returns
on certain investments. For instance, suppose that financial analysts observe the behavior of
certain securities under different market conditions over a large period of time.

Next, financial analysts can take into account the macroeconomic climate that pervades in the
relevant jurisdictions and determine the likelihood of a bull market, as well as the likelihood of a
bear market. From the analysis, we can make better investment choices by calculating an
expected return figure that will summarize the level of investment returns that we can expect to
see.

Consider the following stock, Stock A:

Similar to the student grade example, we can calculate the weighted mean (in this case, the
expected return) of the stock by summing the products of the probabilities and returns.

While we see that the stock can achieve a high return of 25%, the return will only occur if market
conditions are exceptional, which is a case with a fairly low probability. As opposed to such a
situation, we see that the expected return under poor market conditions is of comparatively
smaller magnitude, but the likelihood of the market doing poorly is far greater than the likelihood
of the market doing well.

Q2 What is survey and write down different steps involving in survey?

Ans A field of applied statistics of human research surveys, survey methodology studies the
sampling of individual units from a population and associated techniques of survey data
collection, such as questionnaire construction and methods for improving the number and
accuracy of responses to surveys.

Steps
1. Determine who will participate in the survey.
2. Decide the type of survey (mail, online, or in-person)
3. Design the survey questions and layout.
4. Distribute the survey.
5. Analyze the responses.
6. Write up the results

Q3 Describe the types of test used in inferential statistics?

Ans Inferential statistics is generally used when the user needs to make a conclusion about the
whole population at hand, and this is done using the various types of tests available. It is a
technique which is used to understand trends and draw the required conclusions about a large
population by taking and analyzing a sample from it. Descriptive statistics, on the other hand, is
only about the smaller sized data set at hand – it usually does not involve large populations.
Using variables and the relationships between them from the sample, we will be able to make
generalizations and predict other relationships within the whole population, regardless of how
large it is.
Types of Inferential Statistics Tests
There are many tests in this field, of which some of the most important are mentioned below.

1.      Linear Regression Analysis

In this test, a linear algorithm is used to understand the relationship between two variables from
the data set. One of those variables is the dependent variable, while there can be one or more
independent variables used. In simpler terms, we try to predict the value of the dependent
variable based on the available values of the independent variables. This is usually represented
by using a scatter plot, although we can also use other types of graphs too.

2.      Analysis of Variance
This is another statistical method which is extremely popular in data science. It is used to test and
analyses the differences between two or more means from the data set. The significant
differences between the means are obtained, using this test.

3.      Analysis of Co-variance
This is only a development on the Analysis of Variance method and involves the inclusion of a
continuous co-variance in the calculations. A co-variate is an independent variable which is
continuous, and are used as regression variables. This method is used extensively in statistical
modelling, in order to study the differences, present between the average values of dependent
variables.
4.      Statistical Significance (T-Test)
A relatively simple test in inferential statistics, this is used to compare the means of two groups
and understand if they are different from each other. The order of difference, or how significant
the differences are can be obtained from this.

5.      Correlation Analysis
Another extremely useful test, this is used to understand the extent to which two variables are
dependent on each other. The strength of any relationship, if they exist, between the two
variables can be obtained from this. You will be able to understand whether the variables have a
strong correlation or a weak one. The correlation can also be negative or positive, depending
upon the variables. A negative correlation means that the value of one variable decrease while
the value of the other increases and positive correlation means that the value both variables
decrease or increase simultaneously. Now that you know what inferential statistics are and how
important these tests are, you can start your journey to become a capable data scientist using the
many courses that Cadged has to offer