1.3 Mastering Measures of Dispersion, Absolute Measures of Dispersion, Relative Measures of Dispersion

Mastering Measures of Dispersion, Absolute Measures of Dispersion, Relative Measures of Dispersion

Measures of dispersion is second important topic after Measures of Central Tendency in Statistics. In this article, we are going to discuss Measures of Dispersion, Absolute Measures of Dispersion, Relative Measures of Dispersion, theoretically and numerically with the help of formulas and solved example questions for better understanding for both ungrouped and grouped data.

Understanding Measures of Dispersion in Data Analysis

Introduction

Measures of dispersion calculate the spread, dispersion, or scatteredness of the data within the dataset around the average or central tendency. In other words, we can say that it calculates the variability. It presents a quantitative analysis that how values are spread around the central position of the data. In financial analysis, it is a very important measure that tells the investor about the risk associated with the investment. As the spread or variability is greater, the risk associated with that investment is also greater, and similarly, expected profit may also be greater or vice versa. Statisticians or data analysts not just rely on averages but also use variability analysis to confirm their predictions.

There are two types of dispersion one is called Absolute measures of dispersion and the other one is called relative measures of dispersion.

Absolute Measures of Dispersion

An Absolute measure of dispersion calculates the dispersion in terms of quantity while using units of the data and we can say that it calculates the variability in unit terms while ignoring central tendency.

Important Measures of Absolute Dispersion

Range

Range is an absolute measure of dispersion that is the difference between the highest and lowest values of the data.

Formula for ungrouped data

\[ \mathbf{Xm – Xo}\ \]

Formula for grouped data

\[ \mathbf{Xm – Xo}\ \]

Quartile Deviation or Semi Interquartile Range

Quartile Deviation or Semi Interquartile Range focuses on the center of the data or 50% of the data. It is the fraction of the difference of Quartile 3 and Quartile 1 by 2. It is normally used in skewed data.

Formula for ungrouped data

\[ \frac{\mathbf{Q}\mathbf{3 – Q}\mathbf{1}}{\mathbf{2}}\ \]

Formula for grouped data

\[ \frac{\mathbf{Q}\mathbf{3 – Q}\mathbf{1}}{\mathbf{2}}\ \]

Mean Deviation about Mean

Mean deviation through mean calculates the deviation of each X value of the data set around the mean while ignoring minus sign and it is an absolute measure of dispersion.

Formula for ungrouped data

\[ \frac{\mathbf{\sum}\left| \mathbf{X -}\overline{\mathbf{X}} \right|}{\mathbf{n}}\ \]

Formula for grouped data

\[ \frac{\mathbf{\sum f}\left| \mathbf{X -}\overline{\mathbf{X}} \right|}{\mathbf{\sum f}}\ \]

Mean Deviation about Median

Mean deviation through median calculates the deviation of each X value of the data set around the median while ignoring minus sign and it is an absolute measure of dispersion.

Formula for ungrouped data

\[ \frac{\mathbf{\sum}\left| \mathbf{X -}\widetilde{\mathbf{X}} \right|}{\mathbf{n}}\ \]

Formula for grouped data

\[ \frac{\mathbf{\sum f}\left| \mathbf{X -}\widetilde{\mathbf{X}} \right|}{\mathbf{\sum f}}\ \]

Mean Deviation about Mode

Mean deviation through median calculates the deviation of each X value of the data set around the mode while ignoring minus sign and it is an absolute measure of dispersion.

Formula for ungrouped data

\[ \frac{\mathbf{\sum}\left| \mathbf{X -}\widehat{\mathbf{X}} \right|}{\mathbf{n}}\ \]

Formula for grouped data

\[ \frac{\mathbf{\sum f}\left| \mathbf{X -}\widehat{\mathbf{X}} \right|}{\mathbf{\sum f}}\ \]

Standard Deviation

Standard Deviation is very important measure of dispersion and it is widely used measure of dispersion. It is square root of average squared deviation from the arithmetic mean of the dataset. It calculates the variability present in the dataset.

Formula for ungrouped data

\[ \sqrt{\left( \frac{\mathbf{\sum}\mathbf{X}^{\mathbf{2}}}{\mathbf{n}} \right)\mathbf{-}\left( \frac{\mathbf{\sum X}}{\mathbf{n}} \right)^{\mathbf{2}}}\ \]

Formula for grouped data

\[ \sqrt{\left( \frac{\mathbf{\sum f}\mathbf{x}^{\mathbf{2}}}{\mathbf{\sum f}} \right)\mathbf{-}\left( \frac{\mathbf{\sum fx}}{\mathbf{\sum f}} \right)^{\mathbf{2}}}\ \]

Variance

Variance is also very important measure of dispersion and it is widely used measure of dispersion. It is simply the average squared deviation from the arithmetic mean of the dataset. It calculates the variability present in the dataset.

Formula for ungrouped data

\[ \left( \frac{\mathbf{\sum}\mathbf{X}^{\mathbf{2}}}{\mathbf{n}} \right)\mathbf{-}\left( \frac{\mathbf{\sum X}}{\mathbf{n}} \right)^{\mathbf{2}}\ \]

Formula for grouped data

\[ \left( \frac{\mathbf{\sum f}\mathbf{x}^{\mathbf{2}}}{\mathbf{\sum f}} \right)\mathbf{-}\left( \frac{\mathbf{\sum fx}}{\mathbf{\sum f}} \right)^{\mathbf{2}}\ \]

Relative Measures of Dispersion

Relative measures of dispersion calculates the dispersion of the dataset with respect to central tendency. It is a percentage based measure of dispersion. Simply, we can say that it calculates the dispersion in relative terms. There are different relative measures of dispersion discussed below:

Important Measures of Absolute Dispersion

Coefficient of Range

Coefficient of Range is a relative measure of dispersion that is the quotient of the negative and positive difference between the highest and lowest values of the data.

Formula for ungrouped data

\[ \frac{\mathbf{Xm – Xo}}{\mathbf{Xm + Xo}}\ \]

Formula for grouped data

\[ \frac{\mathbf{Xm – Xo}}{\mathbf{Xm + Xo}}\ \]

Coefficient of Quartile Deviation

Coefficient of Quartile Deviation is a relative measure of dispersion that focuses on the center of the dataset. It is the negative and positive fraction of the difference of Quartile 3 and Quartile 1. It is normally used in skewed data.

Formula for ungrouped data

\[ \frac{\mathbf{Q}\mathbf{3 – Q}\mathbf{1}}{\mathbf{Q}\mathbf{3 + Q}\mathbf{1}}\ \]

Formula for grouped data

\[ \frac{\mathbf{Q}\mathbf{3 – Q}\mathbf{1}}{\mathbf{Q}\mathbf{3 + Q}\mathbf{1}}\ \]

Coefficient of Mean Deviation through Mean

The coefficient of Mean deviation through the mean is a relative measure of dispersion that calculates the deviation of each X value of the data set around the mean while ignoring the minus sign in relative terms. It is the quotient of Mean deviation through mean and mean.

Formula for ungrouped data

\[ \frac{\mathbf{Mean\ Deviation\ through\ Mean}}{\mathbf{Mean}}\ \]

Formula for grouped data

\[ \frac{\mathbf{Mean\ Deviation\ through\ Mean}}{\mathbf{Mean}}\ \]

Coefficient of Mean Deviation through Median

The coefficient of Mean deviation through the median is a relative measure of dispersion that calculates the deviation of each X value of the data set around the median while ignoring the minus sign in relative terms. It is the quotient of Mean deviation through median and median.

Formula for ungrouped data

\[ \frac{\mathbf{Mean\ Deviation\ through\ Median}}{\mathbf{Median}}\ \]

Formula for grouped data

\[ \frac{\mathbf{Mean\ Deviation\ through\ Median}}{\mathbf{Median}}\ \]

Coefficient of Mean Deviation through Mode

The coefficient of Mean deviation through the mode is a relative measure of dispersion that calculates the deviation of each X value of the data set around the mode while ignoring the minus sign in relative terms. It is the quotient of Mean deviation through mode and mode.

Formula for ungrouped data

\[ \frac{\mathbf{Mean\ Deviation\ through\ Mode}}{\mathbf{Mode}}\ \]

Formula for grouped data

\[ \frac{\mathbf{Mean\ Deviation\ through\ Mode}}{\mathbf{Mode}}\ \]

Coefficient of Standard Deviation

As we discussed above, Standard Deviation is a very important measure of dispersion and it is a widely used measure of dispersion. It is the square root of the average squared deviation from the arithmetic mean of the dataset. It calculates the variability present in the dataset. On the other hand coefficient of standard deviation tells us the same variability in relative terms.

Formula for ungrouped data

\[ \frac{\mathbf{Standard\ Deviation}}{\mathbf{Mean}}\ \]

Formula for grouped data

\[ \frac{\mathbf{Standard\ Deviation}}{\mathbf{Mean}}\ \]

Coefficient of Variation

As we discussed above, the variance is also a very important measure of dispersion and it is widely used measure of dispersion. It is simply the average squared deviation from the arithmetic mean of the dataset. It calculates the variability present in the dataset. On the other hand coefficient of variation tells us the variability calculated by variance in relative terms.

Formula for ungrouped data

\[ \frac{\mathbf{Standard\ Deviation}}{\mathbf{Mean}}\mathbf{\times 100}\ \]

Formula for grouped data

\[ \frac{\mathbf{Standard\ Deviation}}{\mathbf{Mean}}\mathbf{\times 100}\ \]

Mastering Measures of Dispersion, Absolute Measures of Dispersion, Relative Measures of Dispersion

Practical Example Questions for Understanding

Example Solved Question for Ungrouped Data

We have a data containing marks of the 10 students in the subject of Statistics given below:

Students12345678910
Marks50706580459080403025

Calculate all measures of dispersion both absolute and relative measures.

Solution:

First step is to arrange the data into ascending form:

S/NoMarks (X)\[ \left| \mathbf{X -}\overline{\mathbf{X}} \right|\ \]\[ \left| \mathbf{X -}\widetilde{\mathbf{X}} \right|\ \]\[ \left| \mathbf{X -}\widehat{\mathbf{X}} \right|\ \]\[ \mathbf{X}^{\mathbf{2}}\ \]
12532.536.2555625
23027.531.2550900
34017.521.25401600
44512.516.25352025
5507.511.25302500
6657.53.75154225
77012.58.75104900
88022.518.7506400
98022.518.7506400
109032.528.75108100
 ∑X=575\[ \mathbf{\sum}\left| \mathbf{X -}\overline{\mathbf{X}} \right|\textbf{=195} \]\[ \mathbf{\sum}\left| \mathbf{X -}\widetilde{\mathbf{X}} \right|\mathbf{=}\textbf{195} \]\[ \mathbf{\sum}\left| \mathbf{X -}\widehat{\mathbf{X}} \right|\mathbf{=}\textbf{245} \]\[ \mathbf{\sum}\mathbf{X}^{\mathbf{2}}\mathbf{= \ }\textbf{37675} \]

Absolute & Relative Measures of Dispersion

Range

\[ \mathbf{Range = \ Xm – Xo}\ \]

\[ \mathbf{Range = 90 – 25 = 65}\ \]

Coefficient of Range

\[ \mathbf{Coefficient\ of\ Range =}\frac{\mathbf{Xm – Xo}}{\mathbf{Xm + Xo}}\ \]

\[ \mathbf{Coefficient\ of\ Range =}\frac{\mathbf{90 – 25}}{\mathbf{90 + 25}}\mathbf{=}\frac{\mathbf{65}}{\mathbf{115}}\mathbf{= 0.5652}\ \]

Quartile Deviation or Semi Interquartile Range

\[ \frac{\mathbf{Q}\mathbf{3 – Q}\mathbf{1}}{\mathbf{2}}\ \]

First we have to calculate Q3 and Q 1

\[ \mathbf{Q}\mathbf{3 = The\ value\ of\ 3}\left( \frac{\mathbf{n + 1}}{\mathbf{4}} \right)\mathbf{th\ item.}\ \]

\[ \mathbf{Q}\mathbf{3 = The\ value\ of\ 3}\left( \frac{\mathbf{10 + 1}}{\mathbf{4}} \right)\mathbf{th\ item.}\ \]

\[ \mathbf{Q}\mathbf{3 = 8.25th\ item}\ \]

\[ \mathbf{Q}\mathbf{3 = 8}\mathbf{th\ item + 0.25(9}\mathbf{th – 8}\mathbf{th\ item)}\ \]

\[ \mathbf{Q}\mathbf{3 = 8}\mathbf{th\ item + 0.25(9}\mathbf{th – 8}\mathbf{th\ item)}\ \]

\[ \mathbf{Q}\mathbf{3 = 80 + 0.25(80 – 80)}\ \]

\[ \mathbf{Q}\mathbf{3 = 80}\ \]

\[ \mathbf{Q}\mathbf{3 = The\ value\ of\ 3}\left( \frac{\mathbf{n + 1}}{\mathbf{4}} \right)\mathbf{th\ item.}\ \]

\[ \mathbf{Q}\mathbf{1 = The\ value\ of\ 1}\left( \frac{\mathbf{10 + 1}}{\mathbf{4}} \right)\mathbf{th\ item.}\ \]

\[ \mathbf{Q}\mathbf{1 = 2.75}\mathbf{th\ item}\ \]

\[ \mathbf{Q}\mathbf{1 = 2}\mathbf{nd\ item + 0.75(3}\mathbf{rd – 2}\mathbf{nd\ item)}\ \]

\[ \mathbf{Q}\mathbf{1 = 30 + 0.75(40 – 30)}\ \]

\[ \mathbf{Q}\mathbf{1 = 30 + 0.75(10)}\ \]

\[ \mathbf{Q}\mathbf{1 = 37.5}\ \]

\[ \mathbf{Quartile\ Deviation\ or\ Semi\ Interquartile\ Range =}\frac{\mathbf{Q}\mathbf{3 – Q}\mathbf{1}}{\mathbf{2}}\ \]

\[ \mathbf{Quartile\ Deviation\ or\ Semi\ Interquartile\ Range =}\frac{\mathbf{80 – 37.5}}{\mathbf{2}}\ \]

\[ \mathbf{Quartile\ Deviation\ or\ Semi\ Interquartile\ Range = 21.25}\ \]

\[ \mathbf{Coefficient\ of\ Quartile\ Deviation\ =}\frac{\mathbf{Q}\mathbf{3 – Q}\mathbf{1}}{\mathbf{Q}\mathbf{3 + Q}\mathbf{1}}\ \]

\[ \mathbf{Coefficient\ of\ Quartile\ Deviation\ =}\frac{\mathbf{80 – 37.5}}{\mathbf{80 + 37.5}}\mathbf{=}\frac{\mathbf{42.5}}{\mathbf{117.5}}\ \]

\[ \mathbf{Coefficient\ of\ Quartile\ Deviation\ = 0.3617}\ \]

Mean Deviation about Mean

\[ \frac{\mathbf{\sum}\left| \mathbf{X -}\overline{\mathbf{X}} \right|}{\mathbf{n}}\ \]

First we have to calculate Mean:

\[ \mathbf{Arithmetic\ Mean\ }\overline{\mathbf{X}}\mathbf{=}\frac{\mathbf{\sum X}}{\mathbf{n}}\mathbf{=}\frac{\mathbf{575}}{\mathbf{10}}\mathbf{= 57.5}\ \]

\[ \mathbf{Mean\ Deviation\ through\ Mean =}\frac{\mathbf{\sum}\left| \mathbf{X -}\overline{\mathbf{X}} \right|}{\mathbf{n}}\ \]

\[ \mathbf{Mean\ Deviation\ through\ Mean =}\frac{\mathbf{195}}{\mathbf{10}}\mathbf{= 19.5}\ \]

\[ \mathbf{Coefficient\ of\ Mean\ Deviation\ through\ Mean =}\frac{\mathbf{Mean\ Deviation\ through\ Mean}}{\mathbf{Mean}}\ \]

\[ \mathbf{Coefficient\ of\ Mean\ Deviation\ through\ Mean =}\frac{\mathbf{19.5}}{\mathbf{57.5}}\mathbf{= 0.3391}\ \]

Mean Deviation about Median

\[ \frac{\mathbf{\sum}\left| \mathbf{X -}\widetilde{\mathbf{X}} \right|}{\mathbf{n}}\ \]

First, we have to calculate Median:

\[ \mathbf{Median = The\ value\ of\ }\left( \frac{\mathbf{n + 1}}{\mathbf{2}} \right)\mathbf{nd\ item.}\ \]

\[ \mathbf{Median = The\ value\ of\ }\left( \frac{\mathbf{10 + 1}}{\mathbf{2}} \right)\mathbf{nd\ item.}\ \]

\[ \mathbf{Median = The\ value\ of\ 5.5}\mathbf{th\ item.}\ \]

\[ \mathbf{Median = 5}\mathbf{th\ item + 0.5(6}\mathbf{th – 5}\mathbf{th\ item)}\ \]

\[ \mathbf{Median = 50 + 0.5(65 – 50)}\ \]

\[ \mathbf{Median = 50 + 0.75(15)}\ \]

\[ \mathbf{Median = 61.25}\ \]

\[ \mathbf{Mean\ Deviation\ through\ Median = \ }\frac{\mathbf{\sum}\left| \mathbf{X -}\widetilde{\mathbf{X}} \right|}{\mathbf{n}}\mathbf{=}\frac{\mathbf{195}}{\mathbf{10}}\mathbf{= 19.5}\ \]

\[ \mathbf{Coefficient\ of\ Mean\ Deviation\ through\ Median =}\frac{\mathbf{Mean\ Deviation\ through\ Median}}{\mathbf{Median}}\ \]

\[ \mathbf{Coefficient\ of\ Mean\ Deviation\ through\ Median =}\frac{\mathbf{19.5}}{\mathbf{61.25}}\mathbf{= 0.3183}\ \]

Mean Deviation about Mode

\[ \frac{\mathbf{\sum}\left| \mathbf{X -}\widehat{\mathbf{X}} \right|}{\mathbf{n}}\ \]

First we have to calculate Mode

\[ \mathbf{Mode = Most\ repeated\ value}\ \]

\[ \mathbf{Mode = Most\ repeated\ value\ is\ 80\ so\ mode\ is\ 80}\ \]

\[ \mathbf{Mean\ Deviation\ through\ Mode =}\frac{\mathbf{\sum}\left| \mathbf{X -}\widehat{\mathbf{X}} \right|}{\mathbf{n}}\mathbf{=}\frac{\mathbf{245}}{\mathbf{10}}\mathbf{= 24.5}\ \]

\[ \mathbf{Coefficient\ of\ Mean\ Deviation\ through\ Mode =}\frac{\mathbf{Mean\ Deviation\ through\ Mode}}{\mathbf{Mode}}\ \]

\[ \mathbf{Coefficient\ of\ Mean\ Deviation\ through\ Mode =}\frac{\mathbf{24.5}}{\mathbf{80}}\mathbf{= 0.3062}\ \]

Standard Deviation

\[ \mathbf{S.D =}\sqrt{\left( \frac{\mathbf{\sum}\mathbf{X}^{\mathbf{2}}}{\mathbf{n}} \right)\mathbf{-}\left( \frac{\mathbf{\sum X}}{\mathbf{n}} \right)^{\mathbf{2}}}\ \]

\[ \mathbf{S.D =}\sqrt{\left( \frac{\mathbf{37675}}{\mathbf{10}} \right)\mathbf{-}\left( \frac{\mathbf{575}}{\mathbf{10}} \right)^{\mathbf{2}}}\ \]

\[ \mathbf{S.D =}\sqrt{\left( \frac{\mathbf{37675}}{\mathbf{10}} \right)\mathbf{-}\left( \frac{\mathbf{575}}{\mathbf{10}} \right)^{\mathbf{2}}}\ \]

\[ \mathbf{S.D =}\sqrt{\left( \mathbf{3767.5} \right)\mathbf{- (3306.25)}}\ \]

\[ \mathbf{S.D = 21.476}\ \]

\[ \mathbf{Coefficient\ of\ Standard\ Deviation =}\frac{\mathbf{S.D}}{\mathbf{Mean}}\mathbf{=}\frac{\mathbf{21.476}}{\mathbf{57.5}}\mathbf{= 0.3734}\ \]

Variance

\[ \mathbf{Variance\ }\mathbf{S}^{\mathbf{2}}\mathbf{=}\left( \frac{\mathbf{\sum}\mathbf{X}^{\mathbf{2}}}{\mathbf{n}} \right)\mathbf{-}\left( \frac{\mathbf{\sum X}}{\mathbf{n}} \right)^{\mathbf{2}}\ \]

\[ \mathbf{Variance\ }\mathbf{S}^{\mathbf{2}}\mathbf{=}\left( \frac{\mathbf{37675}}{\mathbf{10}} \right)\mathbf{-}\left( \frac{\mathbf{575}}{\mathbf{10}} \right)^{\mathbf{2}}\ \]

\[ \mathbf{Variance\ }\mathbf{S}^{\mathbf{2}}\mathbf{= 21.476}\ \]

\[ \mathbf{Coefficient\ of\ Variation =}\frac{\mathbf{S.D}}{\mathbf{Mean}}\mathbf{\times 100}\ \]

\[ \mathbf{Coefficient\ of\ Variation =}\frac{\mathbf{21.476}}{\mathbf{57.5}}\mathbf{\times 100 = 37.34}\ \]

Example Solved Question for grouped Data

Data of wages and No of Workers are given below:

Wages Rs.No of Workers(f)
0—406
40—8015
80—12022
120—16030
160—20045
200—24027
240—28013
280—3206

Required: Calculate all measure of dispersion both absolute and relative.

Solution:

First calculate necessary calculations of Arithmetic Mean, Median, Mode, Q3 and Q1

\[ \mathbf{Wages\ Rs.}\ \]\[ \mathbf{No\ of\ Workers(f)}\ \]X\[ \mathbf{fx}\ \]\[ \mathbf{f}\mathbf{x}^{\mathbf{2}}\ \]\[ \mathbf{C.F}\ \]
0—4062012024006
40—8015609005400021
80—12022100220022000043
120—16030140420058800073
160—2004518081001458000118
200—2402722059401306800145
240—280132603380878800158
280—32063001800540000164
164266405048000
\[ \mathbf{\sum f =}\textbf{n} \]\[ \mathbf{\sum fx =}\ \]\[ \mathbf{\sum f}\mathbf{x}^{\mathbf{2}}\mathbf{=}\ \]

\[ \left( \mathbf{i} \right)\mathbf{Mean\ }\overline{\mathbf{X}}\mathbf{=}\frac{\sum fx}{\mathbf{\sum f}}\mathbf{=}\frac{\mathbf{26640}}{\mathbf{164}}\mathbf{= 162.43}\ \]

\[ \left( \mathbf{ii} \right)\mathbf{Median\ }\widetilde{\mathbf{X}}\mathbf{\ = L +}\frac{\mathbf{h}}{\mathbf{f}}\mathbf{\ \times}\left( \frac{\mathbf{n}}{\mathbf{2}}\mathbf{- C} \right)\ \]

\[ \frac{\mathbf{n}}{\mathbf{2}}\mathbf{=}\frac{\mathbf{164}}{\mathbf{2}}\mathbf{= 82\ falls\ in\ C.F\ of\ 118\ so\ L = 160,\ h = 40,\ f = 45\ \&\ C = \ 73}\ \]

\[ \mathbf{Median\ = L +}\frac{\mathbf{h}}{\mathbf{f}}\mathbf{\ \times}\left( \frac{\mathbf{n}}{\mathbf{2}}\mathbf{- C} \right)\mathbf{= 160 +}\frac{\mathbf{40}}{\mathbf{45}}\mathbf{\times (82 – 73)}\ \]

\[ \mathbf{Median\ = 160 +}\frac{\mathbf{360}}{\mathbf{45}}\mathbf{= 168}\ \]

\[ \left( \mathbf{iii} \right)\widehat{\mathbf{X}}\mathbf{\ Mode = L + \ }\frac{\mathbf{fm – f}\mathbf{1}}{\left( \mathbf{fm – f}\mathbf{1} \right)\mathbf{+ (fm – f}\mathbf{2)}}\mathbf{\times h}\ \]

\[ \mathbf{Here\ fm\ = 45,\ f}\mathbf{1 = 30,\ f}\mathbf{2 = 27,\ L = 160\ \&\ h = 40\ \ }\ \]

\[ \widehat{\mathbf{X}}\mathbf{\ Mode = L + \ }\frac{\mathbf{fm – f}\mathbf{1}}{\left( \mathbf{fm – f}\mathbf{1} \right)\mathbf{+ (fm – f}\mathbf{2)}}\mathbf{\times h}\ \]

\[ \widehat{\mathbf{X}}\mathbf{\ Mode = 160 + \ }\frac{\mathbf{45 – 30}}{\left( \mathbf{45 – 30} \right)\mathbf{+ (45 – 27)}}\mathbf{\times 40}\ \]

\[ \widehat{\mathbf{X}}\mathbf{\ Mode = 160 + \ }\frac{\mathbf{15}}{\mathbf{15 + 18}}\mathbf{\times 40}\ \]

\[ \widehat{\mathbf{X}}\mathbf{\ Mode = 160 + \ }\frac{\mathbf{600}}{\mathbf{33}}\ \]

\[ \widehat{\mathbf{X}}\mathbf{\ Mode = 178.18}\ \]

\[ \left( \mathbf{iv} \right)\mathbf{\ Q}\mathbf{3\ = L +}\frac{\mathbf{h}}{\mathbf{f}}\mathbf{\ \times}\left( \frac{\mathbf{3}\mathbf{n}}{\mathbf{4}}\mathbf{- C} \right)\ \]

\[ \frac{\mathbf{3}\mathbf{n}}{\mathbf{4}}\mathbf{=}\frac{\mathbf{3 \times 164}}{\mathbf{4}}\mathbf{= 123\ falls\ in\ C.F\ of\ 145\ so\ L = 200,\ h = 40,\ f = 27\ \&\ C = \ 118}\ \]

\[ \mathbf{Q}\mathbf{3\ = L +}\frac{\mathbf{h}}{\mathbf{f}}\mathbf{\ \times}\left( \frac{\mathbf{3}\mathbf{n}}{\mathbf{4}}\mathbf{- C} \right)\mathbf{\ }\ \]

\[ \mathbf{Q}\mathbf{3\ = 200 +}\frac{\mathbf{40}}{\mathbf{27}}\mathbf{\times (123 – 118)}\ \]

\[ \mathbf{Q}\mathbf{3\ = 207.40}\ \]

\[ \left( \mathbf{v} \right)\mathbf{\ Q}\mathbf{1\ = L +}\frac{\mathbf{h}}{\mathbf{f}}\mathbf{\ \times}\left( \frac{\mathbf{1}\mathbf{n}}{\mathbf{4}}\mathbf{- C} \right)\ \]

\[ \frac{\mathbf{1}\mathbf{n}}{\mathbf{4}}\mathbf{=}\frac{\mathbf{1 \times 164}}{\mathbf{4}}\mathbf{= 41\ falls\ in\ C.F\ of\ 43\ so\ L = 80,\ h = 40,\ f = 22\ \&\ C = \ 21}\ \]

\[ \mathbf{Q}\mathbf{1\ = L +}\frac{\mathbf{h}}{\mathbf{f}}\mathbf{\ \times}\left( \frac{\mathbf{1}\mathbf{n}}{\mathbf{4}}\mathbf{- C} \right)\mathbf{\ }\ \]

\[ \mathbf{Q}\mathbf{1\ = 80 +}\frac{\mathbf{40}}{\mathbf{22}}\mathbf{\times (41 – 21)}\ \]

\[ \mathbf{Q}\mathbf{1\ = 116.36}\ \]

Now we are in a position that we can calculate all the measures of dispersion both an absolute and relative, so let’s start:

Range

\[ \mathbf{Range = \ Xm – Xo}\ \]

\[ \mathbf{Range = \ 300 – 20}\ \]

\[ \mathbf{Range = 280}\ \]

\[ \mathbf{Coefficient\ of\ Range = \ }\frac{\mathbf{Xm – Xo}}{\mathbf{Xm – Xo}}\mathbf{=}\frac{\mathbf{300 – 20}}{\mathbf{300 + 20}}\ \]

\[ \mathbf{Coefficient\ of\ Range = \ }\frac{\mathbf{300 – 20}}{\mathbf{300 + 20}}\ \]

\[ \mathbf{Coefficient\ of\ Range =}\frac{\mathbf{280}}{\mathbf{320}}\ \]

\[ \mathbf{Coefficient\ of\ Range = 0.875}\ \]

Quartile Deviation or Semi Interquartile Range

\[ \mathbf{Quartile\ Deviation\ or\ Semi\ Interquartile\ Range =}\frac{\mathbf{Q}\mathbf{3 – Q}\mathbf{1}}{\mathbf{2}}\ \]

\[ \mathbf{Quartile\ Deviation\ or\ Semi\ Interquartile\ Range =}\frac{\mathbf{207.40 – 116.36}}{\mathbf{2}}\ \]

\[ \mathbf{Quartile\ Deviation\ or\ Semi\ Interquartile\ Range = 45.52}\ \]

\[ \mathbf{Coefficient\ of\ Quartile\ Deviation\ =}\frac{\mathbf{Q}\mathbf{3 – Q}\mathbf{1}}{\mathbf{Q}\mathbf{3 + Q}\mathbf{1}}\ \]

\[ \mathbf{Coefficient\ of\ Quartile\ Deviation\ =}\frac{\mathbf{207.40 – 116.36}}{\mathbf{207.40 + 116.36}}\ \]

\[ \mathbf{Coefficient\ of\ Quartile\ Deviation\ =}\frac{\mathbf{91.04}}{\mathbf{323.76}}\ \]

\[ \mathbf{Coefficient\ of\ Quartile\ Deviation\ = 0.2811}\ \]

We need some calculations before for mean deviation through mean, median and mode:

\[ \mathbf{Wages\ Rs.}\ \]\[ \mathbf{No\ of\ Workers(f)}\ \]X\[ \left| \mathbf{X -}\overline{\mathbf{X}} \right|\ \]\[ \mathbf{f}\left| \mathbf{X -}\overline{\mathbf{X}} \right|\ \]\[ \left| \mathbf{X -}\widetilde{\mathbf{X}} \right|\ \]\[ \mathbf{f}\left| \mathbf{X -}\widetilde{\mathbf{X}} \right|\ \]\[ \left| \mathbf{X -}\widehat{\mathbf{X}} \right|\ \]\[ \mathbf{f}\left| \mathbf{X -}\widehat{\mathbf{X}} \right|\ \]
0—40620142.43854.58148888157.18943.08
40—801560102.431536.451081620118.181772.7
80—1202210062.431373.4668149678.181719.96
120—1603014022.43672.92884038.181145.4
160—2004518017.57790.65125401.8281.9
200—2402722057.571554.3952140441.821129.14
240—2801326097.571268.4192119681.821063.66
280—3206300137.57825.42132792121.82730.92
164 8876.26 8776 8586.76
\[ \mathbf{\sum f =}\textbf{n} \] \[ \mathbf{\sum f}\left| \mathbf{X -}\overline{\mathbf{X}} \right|\ \] \[ \mathbf{\sum f}\left| \mathbf{X -}\widetilde{\mathbf{X}} \right|\ \] \[ \mathbf{\sum f}\left| \mathbf{X -}\widehat{\mathbf{X}} \right|\ \]

Mean Deviation about Mean

\[ \frac{\mathbf{\sum f}\left| \mathbf{X -}\overline{\mathbf{X}} \right|}{\mathbf{\sum f}}\ \]

\[ \mathbf{Mean\ Deviation\ about\ Mean =}\frac{\mathbf{\sum f}\left| \mathbf{X -}\overline{\mathbf{X}} \right|}{\mathbf{\sum f}}\ \]

\[ \mathbf{Mean\ Deviation\ about\ Mean =}\frac{\mathbf{8876.26}}{\mathbf{164}}\mathbf{= 54.123}\ \]

\[ \mathbf{Coefficient\ of\ Mean\ Deviation\ about\ Mean =}\frac{\mathbf{Mean\ Deviation\ about\ Mean}}{\mathbf{Mean}}\ \]

\[ \mathbf{Coefficient\ of\ Mean\ Deviation\ about\ Mean =}\frac{\mathbf{54.123}}{\mathbf{162.43}}\mathbf{= 0.333}\ \]

Mean Deviation about Median

\[ \frac{\mathbf{\sum f}\left| \mathbf{X -}\widetilde{\mathbf{X}} \right|}{\mathbf{\sum f}}\ \]

\[ \mathbf{Mean\ Deviation\ about\ Median =}\frac{\mathbf{\sum f}\left| \mathbf{X -}\widetilde{\mathbf{X}} \right|}{\mathbf{\sum f}}\ \]

\[ \mathbf{Mean\ Deviation\ about\ Median =}\frac{\mathbf{8776}}{\mathbf{164}}\mathbf{= 53.51}\ \]

\[ \mathbf{Coefficient\ of\ Mean\ Deviation\ about\ Median =}\frac{\mathbf{Mean\ Deviation\ about\ Median}}{\mathbf{Median}}\ \]

\[ \mathbf{Coefficient\ of\ Mean\ Deviation\ about\ Median =}\frac{\mathbf{53.51}}{\mathbf{168}}\mathbf{= 0.3185}\ \]

Mean Deviation about Mode

\[ \frac{\mathbf{\sum f}\left| \mathbf{X -}\widehat{\mathbf{X}} \right|}{\mathbf{\sum f}}\ \]

\[ \mathbf{Mean\ Deviation\ about\ Mode = \ }\frac{\mathbf{\sum f}\left| \mathbf{X -}\widehat{\mathbf{X}} \right|}{\mathbf{\sum f}}\ \]

\[ \mathbf{Mean\ Deviation\ about\ Mode = \ }\frac{\mathbf{8586.76}}{\mathbf{164}}\mathbf{= 52.35}\ \]

\[ \mathbf{Coefficient\ of\ Mean\ Deviation\ about\ Mode =}\frac{\mathbf{Mean\ Deviation\ about\ Mode}}{\mathbf{Mode}}\ \]

\[ \mathbf{Coefficient\ of\ Mean\ Deviation\ about\ Mode =}\frac{\mathbf{52.35}}{\mathbf{178.18}}\mathbf{= 0.2938}\ \]

Standard Deviation

\[ \mathbf{S.D =}\sqrt{\left( \frac{\mathbf{\sum f}\mathbf{x}^{\mathbf{2}}}{\mathbf{\sum f}} \right)\mathbf{-}\left( \frac{\mathbf{\sum fx}}{\mathbf{\sum f}} \right)^{\mathbf{2}}}\ \]

\[ \mathbf{S.D =}\sqrt{\left( \frac{\mathbf{5048000}}{\mathbf{164}} \right)\mathbf{-}\left( \frac{\mathbf{26640}}{\mathbf{164}} \right)^{\mathbf{2}}}\ \]

\[ \mathbf{S.D =}\sqrt{\left( \mathbf{30780.48} \right)\mathbf{- (26386.43)}}\ \]

\[ \mathbf{S.D =}\sqrt{\mathbf{4394.05}}\ \]

\[ \mathbf{S.D = 66.28}\ \]

\[ \mathbf{Coefficient\ of\ Standard\ Deviation =}\frac{\mathbf{S.D}}{\mathbf{Mean}}\mathbf{=}\frac{\mathbf{66.28}}{\mathbf{162.43}}\mathbf{= 0.4080}\ \]

Variance

\[ \mathbf{Variance\ }\mathbf{S}^{\mathbf{2}}\mathbf{=}\left( \frac{\mathbf{\sum f}\mathbf{x}^{\mathbf{2}}}{\mathbf{\sum f}} \right)\mathbf{-}\left( \frac{\mathbf{\sum fx}}{\mathbf{\sum f}} \right)^{\mathbf{2}}\ \]

\[ \mathbf{Variance\ }\mathbf{S}^{\mathbf{2}}\mathbf{=}\left( \frac{\mathbf{5048000}}{\mathbf{164}} \right)\mathbf{-}\left( \frac{\mathbf{26640}}{\mathbf{164}} \right)^{\mathbf{2}}\ \]

\[ \mathbf{Variance\ }\mathbf{S}^{\mathbf{2}}\mathbf{=}\left( \mathbf{30780.48} \right)\mathbf{- (26386.43)}\ \]

\[ \mathbf{Variance\ }\mathbf{S}^{\mathbf{2}}\mathbf{= 4394.05}\ \]

\[ \mathbf{Coefficient\ of\ Variation = \ }\frac{\mathbf{S.D}}{\mathbf{Mean}}\mathbf{\times 100}\ \]

\[ \mathbf{C.V = \ }\frac{\mathbf{S.D}}{\mathbf{Mean}}\mathbf{\times 100}\mathbf{=}\frac{\mathbf{66.28}}{\mathbf{162.43}}\mathbf{\times 100 = 40.80}\ \]

Introduction to Statistics Basic Important Concepts

1. Measures of Central Tendency, Arithmetic Mean, Median, Mode, Harmonic, Geometric Mean

Correlation Coefficient

Chapter 8: How to calculate Net Present Value and Other Investment Criteria/Capital Budgeting Techniques

Cambridge IGCSE/O Level Accounting: Topic 1: Fundamentals of Accounting & The Accounting Equation

Cambridge IGCSE/O LEVEL Topic: 2 Sources and recording of data, Double Entry Book-keeping

  1. Material Costing, Specific Identification Method, Weighted Average Cost Method, First In, First Out Method(FIFO), Last In, Fist Out Method(LIFO)
  2. Material Costing, Economic Order Quantity EOQ, Reorder Point/Ordering Point, Lead Time, Maximum Level of Inventory, Minimum Level of Inventory, Average Stock Level, Safety Stock, Danger Level, Optimum number of Orders, Order Frequency

1.1 Principles of Accounting, Journal, Ledger, Trial Balance

Depreciation, Reasons of Depreciation, Methods of Depreciation, Straight Line/ Original Cost/Fixed Instalment Method, Diminishing/Declining/Reducing Balance Method.

Consignment Account, Consignor or principal, Consignee or agent, Complete Analysis with Journal Entries, Theoretical Aspect, MCQ’s and Practical Examples

Analysis of Accounting Ratios, Liquidity Ratios, Profitability Ratios, Solvency Ratios, Efficiency Ratios, Market Ratios, Return on Investment Ratios, Different Ratios and their Formulas, Practice Questions for Understanding

Analysis of Accounting Ratios, Exercise Problem Questions & their solutions

4: Company Final Accounts, Trading Profit & Loss Account, Income Statement, Profit & Loss Appropriation Account, Statement of Financial Position or Balance Sheet, with examples for understanding

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