Answered: You decide to invest in stock in a…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question

You decide to invest in stock in a particular type of company and set the guideline that you will only buy stock in companies that are ranked in the 80^th percentile or above in term of dividends paid in the previous year. You are looking at a company that ranked 24 of 89 companies that paid dividends in 2019.

If you had data on the total dividends paid by each of the 89 companies, which measure of average would be the most meaningful – mean, median, midrange, or mode? Explain

Definition Definition Measure of central tendency that is the value that occurs most frequently in a data set. A data set may have more than one mode if multiple categories repeat an equal number of times. For example, in a data set with five item—3, 5, 5, 29, 473—the mode is 5 because it occurs twice and no other value occurs more than once. On a histogram or bar chart, the element with the highest bar represents the mode. Therefore, the mode is sometimes considered the most popular option. The mode is useful for nominal or categorical data (e.g., the most common color car that users purchase), but it is problematic for continuous data because it is more likely not to have any value that is more frequent than the other.

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