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Business Stats Terms
Business Statistics Terminology
72
Business
Undergraduate 3
01/13/2011

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Term
Alpha
Definition
"level of risk or significance"; the probability of rejecting the null hypothesis when it is true; the probability of making a Type 1 error
Term
Bar Chart
Definition
a graph in which the classes are reported on the horizontal axis and the class frequencies on the vertical axis. The class frequencies are proportional to the heights of the bars
Term
Central Limit Theorem
Definition
if all samples of a particular size are selected from any population, the sampling distribution of the sample mean is approximately a normal distribution. This approximation improves with larger samples.
Term
Cluster Sample
Definition
a population is divided into clusters using naturally occurring geographic or other boundaries. Then, clusters are randomly selected and a sample is collected by randomly selecting from each other.
Term
Alternate Hypothesis
Definition
a statement that is accepted if the sample data provide sufficient evidence that the null hypothesis is false
Term
Beta
Definition
the probability of committing a Type II error
Term
Chebyshev's Theorem
Definition
For any set of observations (sample or population), the proportion of the values that lie within k standard deviations of the mean is at least 1- 1/k^2, where k is any constant greater than 1.
Term
Coefficient of Correlation
Definition
a measure of the strength of the linear relationship between two variables.
Term
Coefficient of Determination
Definition
the proportion of the total variation in the dependent variable Y that is explained, or accounted for, by the variation in the independent variable X.
Term
Collectively Exhaustive
Definition
at least one of the events must occur when an experiment is conducted.
Term
Conditional Probability
Definition
the probability of a particular event occurring, given that another event has occurred.
Term
Confidence Interval
Definition
a range of values constructed from sample data so that the population parameter is likely to occur within that range at a specified probability. The specified probability is called the level of confidence.
Term
Contingency Table
Definition
a table used to classify sample observations according to two or more identifiable characteristics.
Term
Correlation Analysis
Definition
a group of techniques to measure the association between two variables.
Term
Critical Value
Definition
the dividing point between the region where the null hypothesis is rejected and the region where it is not rejected.
Term
Dependent Variable
Definition
the variable that is being predicted or estimated. It is scaled on the Y-axis.
Term
Descriptive Statistics
Definition
methods of organizing, summarizing, and presenting data in an informative way.
Term
Discrete Random Variable
Definition
a random variable that can assume only certain clearly separated values.
Term
Empirical Probability
Definition
the probability of an event happening is the fraction of the time similar events happened in the past.
Term
Empirical Rule
Definition
for a symmetrical, bell-shaped frequency distribution, approximately 68% of the observations will lie within plus and minus one standard deviation of the mean; about 95% of the observations will lie within plus and minus two standard deviations of the mean; and practically all (99.7%) will lie within plus and minus three standard deviations of the mean.
Term
Event
Definition
a collection of one or more outcomes of an experiment.
Term
Experiment
Definition
a process that leads to the occurrence of one and only one of several possible observations.
Term
Frequency Distribution
Definition
a grouping of data into mutually exclusive classes showing the number of observations in each class.
Term
Frequency Table
Definition
a grouping of qualitative data into mutually exclusive classes showing the number of observations in each class.
Term
Histogram
Definition
a graph in which the classes are marked on the horizontal axis and the class frequencies on the vertical axis. The class frequencies are represented by the heights of the bars and the bars are drawn adjacent to each other.
Term
Hypothesis
Definition
a statement about a population parameter subject to verification.
Term
Hypothesis Testing
Definition
a procedure based on sample evidence and probability theory to determine whether the hypothesis is a reasonable statement.
Term
Independence
Definition
the occurrence of one event has no effect on the probability of the occurrence of another event.
Term
Independent Variable
Definition
the variable that provides the basis for estimation. It is the predictor variable. It is scaled on the X-axis.
Term
Inferential Statistics
Definition
the methods used to estimate a property of a population on the basis of a sample.
Term
Joint Probability
Definition
a probability that measures the likelihood two or more events will happen concurrently.
Term
Law of Large Numbers
Definition
over a large number of trials the empirical probability of an event will approach its true probability.
Term
Least Squares Principle
Definition
determining a regression equation by minimizing the sum of the squares of the vertical distances between the actual Y values and the predicted values of Y
Term
Level of Significance
Definition
the probability of rejecting the null hypothesis when it is true
Term
Median
Definition
the midpoint of the values after they have been ordered from the smallest to the largest, or the largest to the smallest
Term
Mean Deviation
Definition
the arithmetic mean of the absolute values of the deviations from the arithmetic mean
Term
Mode
Definition
the value of the observation that appears most frequently
Term
Multiplication Formula
Definition
if there are m ways of doing one thing and n ways of doing another thing, there are m x n ways of doing both.
Term
Mutually Exclusive
Definition
the occurrence of one event means that none of the other events can occur at the same time
Term
Null Hypothesis
Definition
a statement about the value of a population parameter developed for the purpose of testing numerical evidence
Term
Outcome
Definition
a particular result of an experiment
Term
Parameter
Definition
a characteristic of a population
Term
Permutation
Definition
any arrangement of r objects selected from a single group of n possible objects
Term
Pie Chart
Definition
a chart that shows the proportion or percent that each class represents of the total number of frequencies
Term
Point Estimate
Definition
the statistic, computed from sample information, which is used to estimate the population parameter
Term
Population
Definition
the entire set of individuals or objects of interest or the measurements obtained from all individuals or objects of interest
Term
Probability
Definition
a value between zero and one, inclusive, describing the relative possibility (chance or likelihood) an event will occur
Term
Probability Distribution
Definition
a listing of all the outcomes of an experiment and the probability associated with each outcome
Term
Proportion
Definition
the fraction, ratio, or percent indicating the part of the sample or the population having a particular trait of interest
Term
p-Value
Definition
the probability of observing a sample value as extreme as, or more extreme than, the value observed, given that the null hypothesis is true
Term
Random Variable
Definition
a quantity resulting from an experiment that, by chance, can assume different values
Term
Random Variation
Definition
the sum of the squared differences between each observation and its treatment mean
Term
Range
Definition
Largest value - smallest value
Term
Regression Equation
Definition
an equation that expresses the linear relationship between two variables
Term
Sample
Definition
a portion, or part, of the population of interest
Term
Sampling Error
Definition
the difference between a sample statistic and its corresponding population oarameter
Term
Sampling Distribution of Sample Mean
Definition
a probability distribution of all possible sample means of a given sample size
Term
Simple Random Sample
Definition
a sample selected so that each item or person in the population has the same chance of being included
Term
Standard Deviation
Definition
the square root of the variance
Term
Standard Error of Estimate
Definition
a measure of the dispersion, or scatter, of the observed values around the line of regression
Term
Statistic
Definition
a characteristic of a sample
Term
Statistics
Definition
the science of collecting, organizing, presenting, analyzing, and interpreting data to assist in making more effective decisions
Term
Stratified Random Sample
Definition
a population is divided into subgroups, called strata, and a sample is randomly selected from each stratum
Term
Subjective Concept of Probability
Definition
the likelihood (probability) of a particular event happening that is assigned by an individual based on whatever information is available
Term
Systematic Random Sample
Definition
a random starting point is selected, and then every kth member of the population is selected
Term
Test Statistic
Definition
a value, determined from sample information, used to determine whether to reject the null hypothesis
Term
Total Variation
Definition
the sum of the squared differences between each observation and the overall mean
Term
Treatment Variation
Definition
the sum of the squared differences between each treatment mean and the grand or overall mean
Term
Type I Error
Definition
rejecting the null hypothesis when it is true
Term
Type II Error
Definition
accepting the null hypothesis when it is false
Term
Variance
Definition
the arithmetic mean of the squared deviations from the mean
Term
Z Value
Definition
the signed distance between a selected value, designated X, and the mean, divided by the standard deviation
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