Concept explainers
Construct a histogram, frequency

To construct: The histogram, frequency polygon, and ogive for given data.
Answer to Problem 2.2.9RE
The histogram, frequency polygon and Ogive shown below:
Histogram:
Frequency polygon:
Ogive:
Explanation of Solution
Given info: The given data is shown below,
90 | 420 | 300 | 194 |
640 | 68 | 268 | 276 |
620 | 76 | 165 | 833 |
370 | 53 | 132 | 600 |
594 | 70 | 308 | |
574 | 215 | 109 | |
317 | 850 | 212 | |
300 | 256 | 187 |
Calculation:
Step-by-step procedure to construct frequency distribution table is as follows:
The number of classes is 6.
Here the minimum number is 53 and maximum number is 850.
Thus, the range is,
Class width is obtained by dividing the range by the number of classes.
Thus,
Since, we have to make 6 classes for given data we take class width 135 for convenient.
Lower class limits:
The class limits are obtained by taking the minimum value or less than minimum value as lower limit for the first class. For second class, the lower limit is obtained by adding the class width to the previous class lower limit. That is,
Similarly, the lower limits for the remaining classes can be obtained.
Upper class limits:
For the first class, the upper limit is one less than the lower limit of the second class that is,
The other upper limits are obtained by adding the upper limit of the preceding class and the class width.
Thus, the lower class and upper class limits are as follows:
Lower limit | Upper limit |
52.5 |
|
52.5+135=187.5 | 322.5 |
187.5+135=322.5 | 457.5 |
322.5+135=457.5 | 592.5 |
457.5+135=592.5 | 727.5 |
592.5+135=727.7 | 862.5 |
727.5+135=862.5 | 997.5 |
Make a tally mark for each entry in the corresponding class and continue for all number of children in the data.
The number of tally marks in each class represents the frequency, f of that class.
Thus, the frequency distribution table the distribution of declaration of independence is as follows,
Class | Tally | Frequency
|
52.5-187.5 |
|
9 |
187.5-322.5 |
|
10 |
322.5-457.5 |
|
3 |
457.5-592.5 |
|
3 |
592.5-727.5 |
|
1 |
727.5-862.5 |
|
2 |
Relative frequency:
The portion of the data that falls in the corresponding class is relative frequency of that class.
Thus, the relative frequency for each class is tabulated below,
Class | Frequency
|
Relative frequency |
52.5-187.5 | 9 |
|
187.5-322.5 | 10 |
|
322.5-457.5 | 3 |
|
457.5-592.5 | 3 |
|
592.5-727.5 | 1 |
|
727.5-862.5 | 2 |
|
Total | 28 |
From the frequency table it is observed that maximum relative frequency is for class 187.5-322.5 and also frequency is maximum for that class.
Adding the frequency and write in next column.
Determine the mid value of class boundaries as taking average between the lower boundaries and higher boundaries.
Thus grouped frequency table for the given data is,
Class | Frequency
|
Mid value | Cumulative frequency | Cumulative percentage |
52.5-187.5 | 9 | 120 | 9 | 32.14 |
187.5-322.5 | 10 | 255 | 19 | 67.85 |
322.5-457.5 | 3 | 390 | 22 | 78.57 |
457.5-592.5 | 3 | 525 | 25 | 89.28 |
592.5-727.5 | 1 | 660 | 26 |
|
727.5-862.5 | 2 | 795 | 28 |
|
Total | 28 |
Thus, the table shows the frequency distribution table for the given data.
Histogram:
Software procedure:
Step-by-step procedure to construct the histogram by using EXCEL is given below:
- Enter the data in column A of new worksheet, one number per cell.
- Enter the boundaries in column B.
- From the toolbar, select the Data tab, the select data analysis.
- In data analysis, select HISTOGRAM and click ok.
- In HISTOGRAM dialog box, type A1:A6 in the input range.
- Click ok and histogram shown below,
The shape of the distribution is positive skewed.
Frequency polygon:
Software procedure:
Step-by-step procedure to construct the histogram by using EXCEL is given below:
- Enter midpoint and frequency in column A and column B respectively.
- Select the insert tab from the toolbar and line chart option.
- Select 2-D line chart.
- Frequency polygon shown below,
The frequency polygon shows that distribution is positively skewed.
Ogive:
Software procedure:
- Enter upper class boundaries and cumulative frequency in column A and column B respectively.
- Select the insert tab from the toolbar and line chart option.
- Select 2-D line chart.
Therefore, from the ogive it can say that distribution is increasing in trend.
Want to see more full solutions like this?
Chapter 2 Solutions
ELEMENTARY STATS: STEP BY STEP - CONNECT
- Problem 4. Margrabe formula and the Greeks (20 pts) In the homework, we determined the Margrabe formula for the price of an option allowing you to swap an x-stock for a y-stock at time T. For stocks with initial values xo, yo, common volatility σ and correlation p, the formula was given by Fo=yo (d+)-x0Þ(d_), where In (±² Ꭲ d+ õ√T and σ = σ√√√2(1 - p). дго (a) We want to determine a "Greek" for ỡ on the option: find a formula for θα (b) Is дго θα positive or negative? (c) We consider a situation in which the correlation p between the two stocks increases: what can you say about the price Fo? (d) Assume that yo< xo and p = 1. What is the price of the option?arrow_forwardWe consider a 4-dimensional stock price model given (under P) by dẴ₁ = µ· Xt dt + йt · ΣdŴt where (W) is an n-dimensional Brownian motion, π = (0.02, 0.01, -0.02, 0.05), 0.2 0 0 0 0.3 0.4 0 0 Σ= -0.1 -4a За 0 0.2 0.4 -0.1 0.2) and a E R. We assume that ☑0 = (1, 1, 1, 1) and that the interest rate on the market is r = 0.02. (a) Give a condition on a that would make stock #3 be the one with largest volatility. (b) Find the diversification coefficient for this portfolio as a function of a. (c) Determine the maximum diversification coefficient d that you could reach by varying the value of a? 2arrow_forwardQuestion 1. Your manager asks you to explain why the Black-Scholes model may be inappro- priate for pricing options in practice. Give one reason that would substantiate this claim? Question 2. We consider stock #1 and stock #2 in the model of Problem 2. Your manager asks you to pick only one of them to invest in based on the model provided. Which one do you choose and why ? Question 3. Let (St) to be an asset modeled by the Black-Scholes SDE. Let Ft be the price at time t of a European put with maturity T and strike price K. Then, the discounted option price process (ert Ft) t20 is a martingale. True or False? (Explain your answer.) Question 4. You are considering pricing an American put option using a Black-Scholes model for the underlying stock. An explicit formula for the price doesn't exist. In just a few words (no more than 2 sentences), explain how you would proceed to price it. Question 5. We model a short rate with a Ho-Lee model drt = ln(1+t) dt +2dWt. Then the interest rate…arrow_forward
- In this problem, we consider a Brownian motion (W+) t≥0. We consider a stock model (St)t>0 given (under the measure P) by d.St 0.03 St dt + 0.2 St dwt, with So 2. We assume that the interest rate is r = 0.06. The purpose of this problem is to price an option on this stock (which we name cubic put). This option is European-type, with maturity 3 months (i.e. T = 0.25 years), and payoff given by F = (8-5)+ (a) Write the Stochastic Differential Equation satisfied by (St) under the risk-neutral measure Q. (You don't need to prove it, simply give the answer.) (b) Give the price of a regular European put on (St) with maturity 3 months and strike K = 2. (c) Let X = S. Find the Stochastic Differential Equation satisfied by the process (Xt) under the measure Q. (d) Find an explicit expression for X₁ = S3 under measure Q. (e) Using the results above, find the price of the cubic put option mentioned above. (f) Is the price in (e) the same as in question (b)? (Explain why.)arrow_forwardThe managing director of a consulting group has the accompanying monthly data on total overhead costs and professional labor hours to bill to clients. Complete parts a through c. Question content area bottom Part 1 a. Develop a simple linear regression model between billable hours and overhead costs. Overhead Costsequals=212495.2212495.2plus+left parenthesis 42.4857 right parenthesis42.485742.4857times×Billable Hours (Round the constant to one decimal place as needed. Round the coefficient to four decimal places as needed. Do not include the $ symbol in your answers.) Part 2 b. Interpret the coefficients of your regression model. Specifically, what does the fixed component of the model mean to the consulting firm? Interpret the fixed term, b 0b0, if appropriate. Choose the correct answer below. A. The value of b 0b0 is the predicted billable hours for an overhead cost of 0 dollars. B. It is not appropriate to interpret b 0b0, because its value…arrow_forwardUsing the accompanying Home Market Value data and associated regression line, Market ValueMarket Valueequals=$28,416+$37.066×Square Feet, compute the errors associated with each observation using the formula e Subscript ieiequals=Upper Y Subscript iYiminus−ModifyingAbove Upper Y with caret Subscript iYi and construct a frequency distribution and histogram. LOADING... Click the icon to view the Home Market Value data. Question content area bottom Part 1 Construct a frequency distribution of the errors, e Subscript iei. (Type whole numbers.) Error Frequency minus−15 comma 00015,000less than< e Subscript iei less than or equals≤minus−10 comma 00010,000 0 minus−10 comma 00010,000less than< e Subscript iei less than or equals≤minus−50005000 5 minus−50005000less than< e Subscript iei less than or equals≤0 21 0less than< e Subscript iei less than or equals≤50005000 9…arrow_forward
- The managing director of a consulting group has the accompanying monthly data on total overhead costs and professional labor hours to bill to clients. Complete parts a through c Overhead Costs Billable Hours345000 3000385000 4000410000 5000462000 6000530000 7000545000 8000arrow_forwardUsing the accompanying Home Market Value data and associated regression line, Market ValueMarket Valueequals=$28,416plus+$37.066×Square Feet, compute the errors associated with each observation using the formula e Subscript ieiequals=Upper Y Subscript iYiminus−ModifyingAbove Upper Y with caret Subscript iYi and construct a frequency distribution and histogram. Square Feet Market Value1813 911001916 1043001842 934001814 909001836 1020002030 1085001731 877001852 960001793 893001665 884001852 1009001619 967001690 876002370 1139002373 1131001666 875002122 1161001619 946001729 863001667 871001522 833001484 798001589 814001600 871001484 825001483 787001522 877001703 942001485 820001468 881001519 882001518 885001483 765001522 844001668 909001587 810001782 912001483 812001519 1007001522 872001684 966001581 86200arrow_forwarda. Find the value of A.b. Find pX(x) and py(y).c. Find pX|y(x|y) and py|X(y|x)d. Are x and y independent? Why or why not?arrow_forward
- The PDF of an amplitude X of a Gaussian signal x(t) is given by:arrow_forwardThe PDF of a random variable X is given by the equation in the picture.arrow_forwardFor a binary asymmetric channel with Py|X(0|1) = 0.1 and Py|X(1|0) = 0.2; PX(0) = 0.4 isthe probability of a bit of “0” being transmitted. X is the transmitted digit, and Y is the received digit.a. Find the values of Py(0) and Py(1).b. What is the probability that only 0s will be received for a sequence of 10 digits transmitted?c. What is the probability that 8 1s and 2 0s will be received for the same sequence of 10 digits?d. What is the probability that at least 5 0s will be received for the same sequence of 10 digits?arrow_forward
- Holt Mcdougal Larson Pre-algebra: Student Edition...AlgebraISBN:9780547587776Author:HOLT MCDOUGALPublisher:HOLT MCDOUGALGlencoe Algebra 1, Student Edition, 9780079039897...AlgebraISBN:9780079039897Author:CarterPublisher:McGraw HillBig Ideas Math A Bridge To Success Algebra 1: Stu...AlgebraISBN:9781680331141Author:HOUGHTON MIFFLIN HARCOURTPublisher:Houghton Mifflin Harcourt


