Statistics 101 lecture outline: Descriptive Statistics 3

Statistics 101: Descriptive statistics 3

Administrivia:
- Readings: Do them after class (sometime during the week listed)
- Homework due next class
The normal distribution
- generated by many small effects
- e.g. height of child = genes + food + protein + good health + ...
- single peaked
- two parameters--mean and standard deviation
The empirical rule. Much data is approximately normally and hence the follow is true:
- mean +/- 1 standard deviation is about 2/3s of the data
- mean +/- 2 standard deviation is about 95% of the data
- mean +/- 3 standard deviation is about 99.8% of the data
testing for a normal distribution
- Eye ball it. Does it look normal? (requires training)
- Normal probability plot
- Staying within the confidence bounds
Two years of GM stock returns: gm87.jml and gm92.jml.

last updated: $Date: 2006-04-05 17:38:25 -0400 (Wed, 05 Apr 2006) $