STT205

COURSE
GUIDE
STT 205
STATISTICS FOR MANAGEMENT SCIENCES 1
Course Team Dr. Chigozie Kelechi Acha (Course Developer)-

NOUN
Michael Okpara (Course Writer)-University of
Agriculture, Umudike, Abia State
Prof. Peter A. Osannaiye (Content Editor)-
University of Ilorin, Ilorin
Instructional Designer:
Learning Technologists:
Copy Editor
NATIONAL OPEN UNIVERSITY OF NIGERIA

STT 205 COURSE GUIDE
© 2024 by NOUN Press

National Open University of Nigeria
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University Village
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e-mail: centralinfo@nou.edu.ng
URL: www.nou.edu.ng
All rights reserved. No part of this book may be reproduced, in any

form or by any means, without permission in writing from the publisher.
First Printed 2023, Printed 2024
ISBN: 978-978-786-034-2
ii
CONTENTS
Introduction ……………………………………………………… iv
Course Competencies ………………………………………….... iv
Course Objectives ……………………………………………….. v
Working through this Course ……………………………………. v
Course Materials …………………………………………………. vi
Course Guide …………………………………………………….. vi
Modules and Units ……………………………………………….. vii
References and Further Readings ……………………………….. vii
Presentation Schedule ……………………………………………. viii
Course Overview ……………………………………………….... viii
Assessment ………………………………………………………. ix
Portfolio ………………………………………………………….. ix
Application of Knowledge Gained ………………………………. ix
Mini Projects with Presentation …………………………………. ix
Assignment File ………………………………………………….. x
Tutor-Marked Assignments (TMAS) ……………………………. x
Final Examination and Grading …………………………………. xi
How to Get the Most from the Course …………………………… xi
Tutors and Tutorials ……………………………………………… xiii
iii
INTRODUCTION
Statistics for Management Sciences 1 (STT 205) is a core course in first

semester and 3 credit units second year level course in the School of
Management Sciences at the National Open University, Nigeria. STT
205 is on with Theories and Practicals of Statistics in general. The
course consists of twenty-two units that involves basic concepts and
principles of statistic and decision-making process, forms of data,
summarizing data, graphical presentation of data, measures of both
locations and dispersion, methods of data estimation, some elements of
hypothesis testing, probabilities and statistical distributions of both
discrete and continuous random variables. It also contains progressive
statistical methods, introduction to parametric methods and test based on
runs, and fundamentals of index numbers. It serves as a fundamental
guide in statistics to students as it presents almost all major aspects of
statistics in a simplified manner.
The course is designed to introduce students to statistics which is why it

focuses on the fundamental principles of statistics with the intention of
building a solid foundation. It requires that students study the course
materials carefully, supplement the materials with other resources from
statistics textbooks that treat the contents.
COURSE COMPETENCIES
The overall goal of STT 205 Statistics for Management Sciences I is to

open the vista of the introductory aspects of statistics to students, where
estimation, prediction, and decision making comes from analysis of
properly collected data. It also, presents statistical data collection as an
operation of statistical data processing aimed at gathering of statistical
data and producing the input object data of a statistical survey. In
addition, different sources and methods of data collection are included.
Besides, it covers the descriptive handling of statistical data and looks at
diagrammatic representation - diagrams, charts and graphs. Furthermore,
it provides the process of deducing properties of
underlying distributions by analysis of data, known as statistical
inference. It also has in it measures of central tendency (location)
without leaving the measures of dispersion (spread) which is a lack of
uniformity in the sizes or quantities of the items of a group or series.
Elementary probability (special probability distributions) and Statistical
(probability) distributions are discussed. An x-ray of the basic estimates
(point and interval) and principle of hypothesis testing details are
considered. Other statistical methods covered include nonparametric
statistical methods and index numbers.
iv
The modes of presentation of the topics makes for good understanding

of the techniques involved. In addition, exercises are provided at the end
of the units to assist readers test their understanding of the topics
covered.
COURSE OBJECTIVES
On completing this course, the student is expected to be able to:

1. Understand the usefulness and applicability of Statistics in his/her
area of study;
2. Showcase adequate skills in problem solving involving various
descriptive and inferential statistics and probability;
3. Adequately describe any given data using the measures of
location, partition and dispersion;
4. Understand how to estimate a population parameter under
different conditions
5. State and test a hypothesis and arrive at a statistical conclusion
about populations, especially those from his/her area of study;
6. Develop the skill of describing real life situations in his/her area
in probabilistic form
7. Identify and apply basic probability distributions governing
different experimental research
8. Arrange and carry out statistical tests on data in a contingency
table
9. Adequately handle regression and correlation problems
10. Develop basic statistical skills for handling Design and Analysis
of Experiment data and Analysis of variance.
The course major aim is to give the students a detailed and simplified
yet standard approach to the understanding of statistical techniques
useful in presentation, description and analysis of statistical data. It will
also expose the students to decision making techniques in statistical
inference. It will as well help the students to become adequately
conversant with statistical techniques required to successfully prosecute
their academic programmes, especially skills needed to carry out their
final year research project and those required in future research works
and development.
WORKING THROUGH THIS COURSE
The course is divided into modules and units. The modules are derived
from the course competencies and objectives. The competencies will
guide you on the skills you will gain at the end of this course. So, as you
work through the course, reflect on the competencies to ensure mastery.
The units are components of the modules. Each unit is sub-divided into
ii introduction, intended learning outcome(s), main content, self-
v
assessment exercise(s), conclusion, summary, and further readings. The

introduction introduces you to the unit topic. The intended learning
outcome(s) is the central point which help to measure your achievement
or success in the course. Therefore, study the intended learning
outcome(s) before going to the main content and at the end of the unit,
revisit the intended learning outcome(s) to check if you have achieved
the learning outcomes. Work through the unit again if you have not
attained the stated learning outcomes. The main content is the body of
knowledge in the unit. Self-assessment exercises are embedded in the
content which helps you to evaluate your mastery of the competencies.
The conclusion gives you the takeaway while the summary is a brief of
the knowledge presented in the unit. The final part is the further
readings. This takes you to where you can read more on the knowledge
or topic presented in the unit.
You are required to read the study units, textbooks and other materials
on the course.
Each unit contains self-assessment exercises called Student Assessment

Exercises, (SAE). At some points in the course, you are required to write
Tutor-Marked Assignments (TMA), Computer Based Test (CBT) and
submit on NOUN TMA PORTAL for assessment. At the end of the
course there is a final Examination. This course should take about 15
weeks to complete. Some listed components of the course, what you
have to do and how you should allocate your time to each unit in order
to complete the course successfully on time, are given below.
COURSE MATERIALS
Major components of the STT 205 are:

(1) Course Guide
(2) Study Units
(3) Textbooks
(4) Assignment File
(5) Presentation Schedule.
COURSE GUIDE
This Course Guide tells you what the course is about, what course
materials you will be using and how you can work your way through
these materials. It suggests some general guidelines for the amount of
time you are likely to spend on each unit of the course in order to
complete it successfully. It also gives you some guidance on your tutor--
marked assignments. Detailed information on tutor-marked assignment
is found in the separate file.
vi
There would be regular tutorial classes linked to the course. It is advised

that you should attend these sessions. Details of the time and locations
of tutorials will be communicated to you by National Open University
of Nigeria (NOUN).
STUDY UNITS
Modules and Units

The first three units in Module 1 are on the nature of statistics and basic
concepts in statistics. Units 4, 5, 6 and 7 in Module 2, constitute
different presentations of statistical data. The subsequent three units in
Module 3 are focused on computation of measures of central tendency
and dispersion from samples and populations. Units 11 to 14 in Module
4 are on basic concepts and principles of probability (set theory and
special probability distributions). Furthermore, units 15, 16 and 17under
Module 5 are on statistical distributions, Module 6 is on Estimation and
Test of Hypothesis while the last two units, Module 7, teaches the
progressive statistical methods.
Each unit consists of the week direction for study, reading material,
other resources and summaries of key issues and ideas. The units direct
you to work on exercises related to the required readings
Each unit contains a number of self-tests. In general, these self-tests

question you on the material you have just covered or required you to
apply it in some way and thereby help you to assess your progress and to
reinforce your understating of the material. These exercises together
with tutor-marked assignments will assist at achieving the stated
learning objectives of the individual units and of the course. It is
pertinent to note that the course is in seven modules and twenty-two
study units as shown under study contents;
REFERENCES/FURTHER READING/WEB RESOURCES
Recommended Textbooks
It is advisable you have some of the following books;
Acha C. K. (2018). Fundamentals of Statistics. ISBN: 978-2832-50-2.

Daves Publishers, Uyo.
Berenson, M.L., Levine, D.M., and Krehbiel, T.C. (2006). Basic

Business Statistics, 10th edition, Pearson, Prentice Hall, New
Jersey, ISBN 0-13-196869-6.
Bhattacharyya, G. K., and R. A. Johnson, (1997). Statistical Concepts

and Methods, John Wiley and Sons, New York.
vii
Buglear, J. (2002). Stats Means Business: A Guide to Business

Statistics, Butterworth-Heinemann, Oxford, ISBN 0-7506-5364-
7.
Dodge, Y. (2008). The Concise Encyclopedia of Statistics. Springer.

Everitt, B. S.; Skrondal, A. (2010). The Cambridge Dictionary of
Statistics, Cambridge University Press.
Gonick, L. (1993). The Cartoon Guide to Statistics. Harpe rPerennial.
Moore, David S., "The Basic Practice of Statistics." Third edition. W.H.
Freeman and Company. New York. 2003.
Omekara, C. O. and Acha C. K. (2017). Nonparametric Statistics. ISBN:

978-54309-6-7 Prisat Nigeria Limited: Aba.
PRESENTATION SCHEDULE
There are twenty-two units in this course. Each unit represent particular
area to be covered in the study. Also, the weekly activities are presented
in Table 1 while the required hours of study and the activities are
presented in Table 2. This will guide your study time. You may spend
more time in completing each module or unit.
COURSE OVERVIEW
This table 1 displays the units, the number of weeks you should take to
complete them and the assignment as follows;
The activities in Table I include facilitation hours (synchronous and

asynchronous), assignments, mini projects, and laboratory practical.
How do you know the hours to spend on each? A guide is presented in
Table 2;
viii
ASSESSMENT
There are two types of the assessment of the course. The first is the
tutor-marked assignments and the second is written examination.
In tackling the assignments, you are expected to apply information,

knowledge and techniques gathered during the course. The assignments
must be submitted to your tutor for formal assessment in accordance
with the deadlines stated in the Presentation Schedule and the
Assignments File. The work you submit to your tutor for assessment
will account for 30 % of your total course mark.
At the end of the course, you will need to sit for a written examination
of three hours’ duration. This examination will also account for 70% of
your total course mark.
PORTFOLIO
A portfolio has been created for you tagged ―My Portfolio‖. With the
use of Microsoft Word, state the knowledge you gained in every Module
and in not more than three sentences explain how you were able to apply
the knowledge to solve problems or challenges in your context or how
you intend to apply the knowledge. Use this Table format:
APPLICATION OF KNOWLEDGE GAINED
Module Topic Knowledge Application of

Gained Knowledge Gained
You may be required to present your portfolio to a constituted panel.
MINI PROJECTS WITH PRESENTATION
You are to work on the project according to specification. You may be

required to defend your project. You will receive feedback on your
project defence or after scoring. This project is different from your
thesis.
ix
ASSIGNMENT FILE
In this file, you will find the details of the work you must submit to your
tutor for marking. The marks you obtain for these assignments will
count towards the final mark you obtain for this course. Further
information on assignments will be found in the Assignment File itself
and later in this Course Guide in the section on Assessment.
There are seven assignments in this course which cover:

Assignment 1 - All TMAs’ question in Units 1 - 3
Assignment 2- All TMAs' question in Units 4 - 7
Assignment 3 - All TMAs' question in Units 8 - 10
Assignment 4 - All TMAs' question in Unit 11 -14
Assignment 5 - All TMAs' question in Unit 15 -18
Assignment 6 - All TMAs' question in Unit 19-20
Assignment 7- All TMAs' question in Units 21 – 22
Take the assignment and click on the submission button to submit. The
assignment will be scored, and you will receive a feedback.
TUTOR-MARKED ASSIGNMENTS (TMAS)
There are seven tutor-marked assignments for this course, all of which
you are expected to submit. You are encouraged to work all the
questions thoroughly. Each assignment accounts for 8.333% of your
total course mark.
Assignment questions for the units in this course are contained in the
Assignment File. You will be able to complete your assignments from
the information and materials contained in your course material,
textbooks and further readings. However, it is desirable in all degree
level of education to demonstrate that you have read and researched
more widely than the required minimum. You should use other
references to have a broad viewpoint of the subject and also have deeper
understanding of the subject.
On completion of each of your assignment, send it, together with a TMA

form, to your tutor. Make sure that each assignment reaches your tutor
on or before the deadline given in the presentation file. If for any reason,
you cannot complete your work on time, contact your tutor before the
assignment is due, to discuss the possibility of an extension. Extensions
will not be granted after the due date except for exceptional
circumstances.
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FINAL EXAMINATION AND GRADING
The final examination will be of three hours' duration and have a value
of 70% of the total course grade. The examination will consist of
questions which reflect the types of self-testing, practice exercises and
tutor-marked problems you have previously encountered. All areas of
the course will be assessed.
You are advised to use the time between finishing the last unit and
sitting the examination to revise the entire course. You might find it
useful to review your self-tests, tutor-marked assignments and
comments on them before the examination as the final examination
covers information from all parts of the course.
Finally, the examination will help to test the cognitive domain. The test
items will be mostly application, and evaluation test items that will lead
to creation of new knowledge/idea.
HOW TO GET THE MOST FROM THE COURSE
Distance learning is designed for intellectually mature students who

have the capacity for independent study. They are expected to read and
work through specially designed study materials at their own pace and at
a time and place that suits them. This material serves as a reading
material for private study and even goes further to guide students on
when to read their books or other materials, and when to undertake
tutorials and practical work. Just as a lecturer might give an in-class
exercise, the study units provide exercises to be carried out at
appropriate points.
Each of the study units adopts a common format. It starts with an

introduction to the subject matter and subsequently shows how a
particular unit is linked to other units and the course as a whole. Next is
a set of learning objectives. These objectives highlight what a student
should be capable of doing after working through the study unit.
xi
Students are advised to use these objectives as standards against which

to check their appreciation of any unit. Adverse variation between
student’s knowledge and the specified objectives should be carefully and
adequately addressed before moving onto the next study unit. This may
make the difference between a lackluster average performance and an
excellent result.
The main body of the unit serves as a guide through the required reading
from other sources. This will usually be from either the recommended
text books or from a Readings section. Some units require the
undertaking of computer practical work. The purpose of the computing
work is twofold. Firstly, it will enhance the student’s understanding of
the material in the unit and secondly, it will endow students with
practical experience of using programs, which they could well encounter
in their work life.
Self-tests are interspersed throughout the units. Working through these

tests will help the attainment of the objectives of the unit and prepare
students for the assignments and the examination. It is advisable that
students practice the self-tests in each study unit. Numerous examples
are given in the study units and working through them will be a smart
move that acquaints users with the necessary rubrics of the study unit.
The following is a practical strategy for working through the course. If

you run into any trouble, contact your tutor. Remember that your tutor's
job is to help you. When you need help, don't hesitate to call and ask
your tutor.
IMPORTANT INFORMATION;
1. Read this Course Guide thoroughly;

2. Organize a study schedule;
3. Always refer to the `Course overview for more details;
4. Be conscious of the time you are expected to spend on each unit
and how the assignments relate to the units;
5. Details of your tutorials and the date of the semester is available
at the study centre.;
6. You need to gather all this information in one place, such as your
dairy or a wall calendar. Whatever method you choose to use,
you should write down your dates for working on each unit;
7. Once you have created your own study schedule, do everything
you can to stick to it. The major reason that students fail is that
they get behind with their course work. If you get into difficulties
with your schedule, please let your tutor know before it is too
late;
xii
8. Assemble the study materials. The information about what you

need for a unit is given in the `Overview' at the beginning of each
unit. You will also need both the study unit you are working on
and one of your text books on your desk at the same time;
9. Work through the unit. The content of the unit itself has been
arranged to provide a sequence for you to follow. As you work
through the unit you will be instructed to read sections from your
text books or other articles. Use the unit to guide your reading;
10. Up-to-date course information will be continuously delivered to
you at the study centre;
11. It will be good to get the Assignment File for the next required
assignment before the relevant due date (about 4 weeks before
due dates). Keep in mind that you will learn a lot by doing the
assignments carefully. They have been designed to help you meet
the objectives of the course and, therefore, will help you pass the
exam. Submit all assignments no later than the due date;
12. Review the objectives for each study unit to confirm that you
have achieved them. If you feel unsure about any of the
objectives, review the study material or consult your tutor;
13. Study and understand a unit before going to the next unit; when
you are confident that you have achieved a unit's objectives, you
can then proceed to the next. Proceed unit by unit through the
course and try to pace your study so that you keep to schedule.
For example, if you should start with unit 1, read and understand
the following: Introduction, objective(s), main content,
conclusion, summary, tutor marked assignment, references,
further readings and other resources before moving on to unit 2;
14. When you have submitted an assignment to your tutor for
marking do not wait for it return `before starting on the next
units. Keep to your schedule. When the assignment is returned,
pay particular attention to your tutor's comments, both on the
tutor-marked assignment form and also written on the
assignment. Consult your tutor as soon as possible if you have
any questions or problems;
15. After completing the last unit, review the course and prepare
yourself for the final examination. Check that you have achieved
the unit objectives (listed at the beginning of each unit) and the
course objectives (listed in this Course Guide).
TUTORS AND TUTORIALS
There are some hours of tutorials provided in support of this course. You
will be notified of the dates, times and location of these tutorials
together with the name and phone number of your tutor, as soon as you
are allocated a tutorial group.
xiii
Your tutor will mark and comment on your assignments, keep a close
watch on your progress and on any difficulties, you might encounter,
and provide assistance to you during the course. You must mail your
tutor-marked assignments to your tutor before the due date (at least two
working days are required). They will be marked by your tutor and
returned to you as soon as possible.
Do not hesitate to contact your tutor by telephone, e-mail, or discussion

board if you need help. The following might be circumstances in which
you would find help necessary. Contact your tutor if.
• You do not understand any part of the study units or the assigned
readings
• You have difficulty with the self-tests or exercises
• You have a question or problem with an assignment, with your
tutor's comments on an assignment or with the grading of an
assignment.
You should try your best to attend the tutorials. This is the only chance
to have face to face contact with your tutor and to ask questions which
are answered instantly. You can raise any problem encountered in the
course of your study. To gain the maximum benefit from course
tutorials, prepare a question list before attending them. You will learn a
lot from participating in discussions actively.
ONLINE FACILITATION
There will be two forms of facilitation – synchronous and asynchronous.

The synchronous will be held through video conferencing according to
weekly schedule. During the synchronous facilitation:
 There will be two hours of online real time contact per week
making a total of 26 hours for thirteen weeks of study time.
 At the end of each video conferencing, the video will be
uploaded for view at your pace.
 You are to read the course material and do other assignments as
may be given before video conferencing time.
 The facilitator will concentrate on main themes.
 The facilitator will take you through the course guide in the first
lecture at the start date of facilitation
For the asynchronous facilitation, your facilitator will:

 Present the theme for the week.
 Direct and summarise forum discussions.
 Coordinate activities in the platform.
 Score and grade activities when need be.
xiv
 Support you to learn. In this regard personal mails may be sent.

 Send you videos and audio lectures, and podcasts if need be.
Read all the comments and notes of your facilitator especially on your
assignments, participate in forum discussions. This will give you
opportunity to socialise with others in the course and build your skill for
teamwork. You can raise any challenge encountered during your study.
To gain the maximum benefit from course facilitation, prepare a list of
questions before the synchronous session. You will learn a lot from
participating actively in the discussions.
Table 4 is the presentation of the online facilitation of STT 205

Course Plan
TABLE 4: PRESENTATION OF STT 205 COURSE PLAN

MODULES WEEKS UNITS
1 1 Unit 1 Unit 2 Unit 3 -
2 2 Unit 1 Unit 2 Unit 3 Unit 4
4 4 Unit 1 Unit 2 Unit 3 Unit 4
7 7 Unit 1 Unit 2
8 Revision
Finally, respond to the questionnaire. This will help NOUN to know

your areas of challenges and how to improve on them for the review of
the course materials and lectures.
LEARNER SUPPORT
You will receive the following support:

 Technical Support: There will be contact number(s), email
address and chatbot on the Learning Management System where
you can chat or send message to get assistance and guidance any
time during the course.
 24/7 communication: You can send personal mail to your
facilitator and the centre at any time of the day. You will receive
answer to you mails within 24 hours. There is also opportunity
for personal or group chats at any time of the day with those that
are online.
 You will receive guidance and feedback on your assessments,
academic progress, and receive help to resolve challenges facing
your studies.
xv
COURSE BLUB
This course presents statistical data collection as an operation of

statistical data processing aimed at gathering of statistical data and
producing the input object data of a statistical survey. In addition,
different sources and methods of data collection are included. Besides,
it covers the descriptive handling of statistical data and looks at
diagrammatic representation - diagrams, charts and graphs. Furthermore,
it provides the process of deducing properties of
underlying distributions by analysis of data, known as statistical
inference. It also has in it measures of central tendency (location)
without leaving the measures of dispersion (spread) which is a lack of
uniformity in the sizes or quantities of the items of a group or series.
Elementary probability (special probability distributions) and Statistical
(probability) distributions are discussed. An x-ray of the basic estimates
(point and interval) and principle of hypothesis testing details are
considered
xvi
MAIN
COURSE
CONTENTS
Module 1 Nature of Statistics, Statistical Inquiries,

Forms and Design ……………………………… 1
Unit 1 Introduction to Statistics ………………………… 1

Unit 2 Sources and Methods of Statistical Data ……….. 7
Unit 3 Statistical Inquiries, Forms and
Design: Questionnaire …………………………… 13
Module 2 Presentation of Statistical Data ……………….. 18
Unit 1 Descriptive Handling of Statistical Data ………… 18

Unit 2 Frequency ………………………………………… 23
Unit 3 Diagrammatic Representation ……………………. 31
Unit 4 Ratios, Percentages and Random Numbers ……… 44
Module 3 Measures of Central Tendency, Location

and Dispersion ………………………………….. 48
Unit 1 Measure of Central Tendency/ Location ………… 48

Unit 2 Fractiles - Measures of Partition
and Dispersion ……………………………………. 57
Unit 3 Measures of Dispersion/Spread …………………... 61
Module 4 Statistical Probability (Set Theory

and Basic Concepts of Probability) ……………. 69
Unit 1 Set theory …………………………………………. 69

Unit 2 Bayes's Theorem and Counting Techniques …….... 78
Unit 3 Permutations and Combinations …………………... 92
Unit 4 Basic Concepts of Probability ……………………... 98
Module 5 Statistical Distributions ………………………….. 103
Unit 1 Normal Distribution and Students

(T) Distribution …………………………………….. 103
Unit 2 Binomial Distribution ………………………………. 120
Unit 3 Poisson, Geometric and Hyper-geometric
distributions ………………………………………… 128
Module 6 Estimation and Hypothesis
Testing ……………………………………… 137
Unit 1 Estimation ………………………………….. 137

Unit 2 Principle of Hypothesis Testing ……………. 144
Unit 3 Statistical Hypotheses’ Dimensions ………… 150
Module 7 Progressive Statistical Methods ………….. 158
Unit 1 Introduction to nonparametric

(Methods and test based on Runs) ………….. 158
Unit 2 Fundamentals of Index Number …………….. 165
STT 205 MODULE 1
MODULE 1 NATURE OF STATISTICS, STATISTICAL

INQUIRIES, FORMS AND DESIGN
In this module, you will be introduced to the Nature of Statistics,

Statistical Inquiries, Forms and Design. This module is made up of the
following units:
Unit 1 Introduction to Statistics

Unit 2 Sources and Methods of Statistical Data
Unit 3 Statistical Inquiries, Forms and Design: Questionnaire
UNIT 1 INTRODUCTION TO STATISTICS
Unit Structure
1.1 Introduction
1.2 Intended Learning Outcomes (ILOs)
1.3 Main Content
1.3.1 Definition of Statistical Terms
1.3.2 Event
1.3.3 Classes of Event
1.3.4 Elementary Event
1.3.5 Composite Event
1.3.6 Branches of Statistics
1.3.6.1Descriptive Statistics
1.3.6.2 Inferential Statistics
1.3.7 Statistical Variable
1.3.7.1 discrete variables
1.3.7.2 continuous variable
1.3.8 Types of Variables:
1.3.8.1 Discrete Variable
1.3.8.2 Continuous Variable
1.3.9 The Importance of Statistics
1.4 Summary
1.5 References/Further Reading/Web Resources
1.1 Introduction
The word Statistics has several uses and meanings; it can be used to
denote numerical data sets, information from experimental units, and so
on. It is also defined differently in various fields like Management
Science Statistics, Biostatistics, Agriculture Statistics, Industrial
1
STT 205 STATISTICS FOR MANAGEMENT SCIENCES I
Statistics, Medical Statistics and Educational Statistics etcetera. As a

course of study, however, the word Statistics is used to indicate the
proper method of collecting, organizing, analysing, interpreting and
drawing conclusion from numerical data sets which may vary from time
to time, place to place, trial to trial, person to person, and material to
material.
By the end of this unit, you will be able to know the three main
objectives of statistics which are:
 Estimation,
 Prediction, and
 Decision making from analysis of properly collected data.
1.3 Introduction to Statistics
1.3.1 Definition of Statistical Terms:
Statistic is a number resulting from the manipulation of raw data

according to certain specified procedures. A statistic is a random
variable, which is a function of another random variable(s).
Examples:
∑n Xi
Sample mean 𝑋̅ = i=1 1.1
n
∑n ̅ 2
i=1(Xi −X)
Sample variance = S 2 = 1.2
n−1
Sample is a subset of a population or universal set.
Population is a complete set of individuals, item or object having some

common observable characteristics.
Data is array of numbers or measurements which are collected as a

result of observations.
Variable is a characteristic or phenomenon which may take a different

value.
Parameter is any characteristics of a population which is measurable.

This is a function of population values describing a population sample.
An example of parameter is a population value e.g. population mean µ.
2
STT 205 MODULE 1
Variance is a function that measures the spread between numbers in a

data set.
Experiment is any operation carried out and followed by a result.
Random Experiment is an experiment whose outcome may not be the

same even though the condition of the experiment may be the same.
The experiment can be conducted repeatedly under the same conditions
at different times. Example: Student’s score in an examination.
Sample Space is the set of all possible outcomes of a random

experiment. It can be finite, countable finite or countable infinite.
A sample space is said to be discrete if it contains finite or countably

infinite sample point.
1.3.2 Event
An event is a collection of sample space. It can also be defined as an

outcome of a random experiment. Example: number of students that sat
for an examination, so the event result would be success or failure.
1.4 Classes of Event
1.4.1 Elementary Event: this is an event consisting of one point.

Example: examination outcome – success or failure; tossing a die
once – with scores 1- 6; tossing a coin – with outcome head or
tail
1.4.2 Composite Event: this is an event consisting of more than one

point. Example: throwing a die more than once and scoring
different numbers from 1 to 6.
1.5 Branches of Statistics
The two main branches of statistics are descriptive

statistics and inferential statistics.
1.5.1 Descriptive Statistics uses the data to provide descriptions of the

population, either through numerical calculations, graphs or
tables.
1.5.2 Inferential Statistics makes inferences and predictions about a

population based on a sample of data taken from the population
in question.
3
Both of these are employed in scientific analysis of data and both are
equally important students of statistics.
1.6 Variable: a variable is that characteristics of a population or

sample which assumes different values from individuals to
individuals within the groups.
Examples of variables are:
- Age of students of final year,
- Weight of animals,
- Height of staff in statistics department.
1.7 Types of variables:
- discrete variables
- continuous variable
1.7.2 Discrete Variable: discrete variable is one whose numerical

value can have only distinct numbers at a time. Its numbers are
usually integer, no measurement.
Examples of discrete variables are:
- Number of rooms in a house,
- Number of people in a city,
- Number of fishes in a pond,
- Fingers of a bananas in a bunch,
- Number of footballers in a field.
Continuous Variable: continuous variable is one whose numerical

evaluation at any time can assume a range of values; it depends on
accuracy of a measurement.
Example of continuous variables are:
Height said to be 6.15inch could be 5.1866inch with sensitivity balance

or 5.778inch on another scale. So between 5 and 6 there is uncountable
numbers of values which an element can assume. This type of variable
in question determines how some treatments are chosen from
experiment and how their effects are graphed.
1.8 The Importance of Statistics
Some basic benefits derivable from statistics are that it:

 Leads to better decision-making across all sectors within an
economy; The better the data, the more accurate and trustworthy
the decisions that will emanate there from;
 Helps in collecting appropriate quantitative, qualitative and
relevant data;
4
STT 205 MODULE 1
 Decreases risk and results in consistent improvements in results;

 Helps in providing a better understanding and exact description
of a phenomenon of nature;
 Enhances quality of formulated policies;
 Teaches people to use a limited sample to make intelligent and
accurate conclusions about a greater population;
 Helps in the proper and efficient planning of a statistical inquiry
in any field of study;
 Provides tools like tables, graphs, and charts which play a
vital role in presenting data used to draw conclusions;
 Many outputs and results are based on statistical models build on
statistical concepts like forecasting and prediction;
 To collect the relevant data. Otherwise, it results in a loss of
money, time and data using statistical skills;
 It is the pivot of successful trading and investment by
businessmen;
 Leads to good recommendations on the way forward.
Self-Assessment Exercise(s)
1. What is the difference between the following, include three

examples of each;
a. Statistics and Statistic
b. Elementary Event and Composite Event
c. Discrete Variables and Continuous Variable
2. Mathematically illustrate the difference between the sample mean
and sample variance.
3. Define data, sample, population, data, variable, parameter,
experiment, random experiment, sample space, event.
4. List four examples of each type event.
5. Mention and define two main branches of statistics.
1.9 Summary
Unit 1 Introduces basic terms and definitions and discusses how and
when statistics are used in research and in real-life.
The importance of statistics cannot be overemphasized because it is very

crucial in all parts of our life. Statistics also plays crucial roles in world
development and is applicable everywhere and in everything we do.
5


Jersey, ISBN 0-13-196869-6.

6
STT 205 MODULE 1
UNIT 2 SOURCES AND METHODS OF STATISTICAL

DATA
Unit Structure
2.1 Introduction
2.3 Sources and Methods of Statistical
Data
2.3.1 Overview of Statistical data
2.3.1.1 Definition of Data Sets
2.3.1.2 Definition of terms in Data Sets
2.3.2 Types of Data and Variables
2.3.2.1 Numerical and Non-Numerical Data
2.3.2.2 Deductive and Inductive Statistics
2.3.2.3 Quantitative and Qualitative Data
2.3.3 Sources of Statistical Data
2.3.3.1 Primary Sources
2.3.3.2 Secondary Sources
2.3.4 Method of Collecting Data
2.3.4.1 Direct Observation
2.3.4.3 Mail Questionnaire
2.3.4.3 Personal Interviews
2.4 Summary
2.1 Introduction
Statistics is the study of data collection and analysis. It is mostly used to

keep records, calculate probabilities, and provide knowledge. Basically,
it helps us understand the world through numbers and other quantitative
information.
By the end of unit 2, you will be able to

 to effectively conduct research;
 to read and evaluate data sets
 to further develop critical thinking and analytic skills.
7
2.3 Sources and Methods of Statistical Data
2.3.1 Definition of Data Set
Statistical data are characteristics or information, usually numerical, that

are collected through observation. Statistical data processing on the
other hand is aimed at gathering statistical data and producing the input
object data of a statistical survey. It can also be defined as a data set,
which is a piece of information collected from population or sample.
The singular form of data is datum.
2.3.1.1 Definition of Terms in Data Sets
Array: An array is an ordered arrangement.
Raw Data: raw data is data that has not been processed for use.
It is important to note that information is end product
of data processing.
2.3.2 Types of Statistical Data
i. numerical data
ii. non-numerical data
iii. Nominal data
2.3.2.1 Numerical and Non-Numerical Data
Numerical Data: these are data reduced to numbers which are purely
quantitative depending on the type of variable.
Non-Numerical Data: these cannot be expressed in term of numbers.

Examples non-numerical data are:
Gender: male and female;
Size: small, medium, large;
Colours: white, blue, purple and so on.
Nominal data: They are strictly connected with names and cannot be
reduced to numbers.
Examples of nominal data are:

Fishes: cat fish, tilapia, etc.
8
STT 205 MODULE 1
2.3.2.2 Deductive and Inductive Statistics.
Another way to make a piece of information collected from a sample of

a population is to communicate the ideas embedded in numbers through
deductive or inductive statistics
 Deductive Statistics
If on the other hand the sample data are only analysed,
summarized, and presented without making any reference about
the population. We call such phase of statistics deductive
statistics.
 Inductive Statistics
If statistical data, obtained on the basis of a sample selected from
a population of units of enquiry, are used to make valid
conclusion about the entire population we call such phase
inductive statistics or statistical inference.
2.3.2.3 Quantitative and Qualitative Data
Statistical data can also be divided into two: quantitative and qualitative
data.
 Quantitative Data: Is any set of data that can be expressed

numerically.
Examples of quantitative data are: age, shoe size, weight, height
and so on.
 Qualitative Data: Is any set of data that cannot be expressed

numerically but as a quality. Examples of qualitative data are:
sex, occupation, colour, marital status and so on.
After data collection, it is important that data is presented in a way that

conveys the information it contains in a clear term. When summarizing
large masses of raw data, it is often useful to distribute the data into
classes or category and to determine the number of individuals
belonging to each class called frequency.
2.3.3 Sources of Statistical Data:
We have two sources:

 Primary Data and
 Secondary Data.
2.3.3.1 Primary Sources: Data that have been collected by the

investigator or his agent directly from the experimental unit. The data
9
may or may not have been published. Such sources of data are called
primary sources.
2.3.3.2 Secondary Sources: Data for which the investigator is not the
originator/ initiator but which was collected from other published
records, gazettes, books, journals, registers etc. are classified as
secondary sources.
2.3.4 Methods of Collecting Data.
For primary data, collection can be done by using any of the following
methods;
- Direct observation
- Mail questionnaire
- Personal interviews
2.3.4.1 Direct Observation: This is a method of data collection

whereby information is obtained from the units of enquiry by observing
them in their natural environment. The investigator observes either the
entire population or a sample. This method is usually used in scientific
experiment and studies of human health. It is usually applied in
collection of data in human and non-human populations.
The participant observer obtains the required information directly by

sharing in the activities of the community rather than by relying on the
report of the informant or even those of the units of enquiry. Direct
observation becomes very necessary when the informants are not able to
supply the required information or are likely to give inaccurate answers.
2.3.4.2 Mail Questionnaire: A carefully formulated set of questions

may be sent to the respondents by post or carried by field workers or
enumerators for their responses.
2.3.4.3 Personal Interviews

This is usually the method of collection of data in social surveys. Here a
set of question is prepared and administered on the respondent
personally by the interviewers.
Other methods of data collection:

Population census
Experiment: It can be seen as a direct observation. Here events are
observed and characteristics of interest are recorded. In performing a
particular experiment and recording the observation obtained from such
experiments that could be collected in the process. This is a major means
of data collection in sciences.
10
STT 205 MODULE 1
Focus groups: A small discussion group with a group moderator present

to keep the discussion focused.
Simulation of data.
Existing data: It can also be seen as a Secondary data since the data are
originally collected and then archived or any other kind of “data” that
was simply left behind at an earlier time for some other purpose.
Tests: This includes standardized tests such as information on reliability,

validity, and norms as well as tests constructed by researchers for
specific purposes, skills tests, and so on.
Sample Survey: This is a special survey, it can be a pilot survey or full

survey using questionnaires, interviews and other methods.
1. Give two similarities and two differences between;

i. Numerical and Non-Numerical Data.
ii. Quantitative and Qualitative Data.
iii. Deductive and Inductive Statistics.
2. Explain statistical data, array, raw data, cooked data.
3. A single form of data is what?
4. List any ten importance of statistics.
5. Define Statistical data
2.4 Summary
Unit 2 teaches that sample data can be analysed, summarized, and

presented without making any reference about the population.
The sources and methods of data collection whereby information is

obtained from the units of enquiry were discussed in details.

Alreck, P.L. and Settle, R. (2002). Survey Research Handbook, 2rd

edition, McGraw Hill, New York.
11
Barnes, S. (Ed.) (2005). News of the World, Football Annual 2005–

2006, Invincible Press, London, ISBN 0-00-720582-1.

Jersey, ISBN 0-12-196869-6.

7.
12
STT 205 MODULE 1
UNIT 3 STATISTICAL INQUIRIES, FORMS AND

DESIGN: QUESTIONNAIRE
Unit Structure
3.1 Introduction
3.3 Main Content
3.3.1 Definition of a Questionnaire:
3.3.2 Qualities of a Good Questionnaire
3.3.3 Types of Questionnaire
3.3.4 Parties to a Questionnaire
3.3.4.1 Enumerator
3.3.4.2 Respondent
3.3.4.3 Enumeration (Observation Unit)
3.4 Design of Questionnaire
3.5 Forms of Questionnaire
3.6 Component of a Good Questionnaire
3.7 Advantages and Disadvantages of the Use of Questionnaires
3.8 Summary
3.1 Introduction
Questionnaire was invented by Sir Francis Galton. A questionnaire can

be said to mean a written or electronic survey instrument comprising of
a series of questions designed to measure a specific item or set of items.
It plays a central role in the data collection process. A well-designed
questionnaire efficiently collects the required data with a minimum
number of errors. It facilitates the coding and capturing of data. It leads
to an overall reduction in the cost and time associated with data
collection and processing.
To draw up a good questionnaire, the following questions should be

addressed;
1. Why is this survey being conducted?
2. What do I need to know?
3. How will the information be used?
4. How accurate and timely does the information have to be?
Before designing the questionnaire, many decisions have to be made

which affect the questionnaire and should be part of the draft plan for
the survey.
13
By the end of unit 3, you will be able to translate the objectives of the
data collection process into a well conceptualized and methodologically
comprehensive study.
3.3 Main Content
3.3.1 Definition of a Questionnaire
A questionnaire can be defined as a type of survey instrument handed

out in paper form or electronically, normally to a specific demographic
population to gather information for a specific purpose. A questionnaire
can also be defined as a concise pre-planned set of questions designed to
yield specific information to meet a particular need for research
information about a pertinent topic. Questionnaire is normally used in
study involving human beings and the social environment.
3.3.2 Qualities of a Good Questionnaire
The design of a questionnaire will depend on whether the researcher

wishes to collect exploratory (qualitative) information for the purpose of
better understanding or the generating of hypothesis on the subject or
quantitative information (to test specific hypothesis that have previously
been generated). The following are some qualities of a good
questionnaire:
1. A well-designed questionnaire should meet the research
objectives.
2. It should obtain the most complete and accurate information
possible.
3. A well-designed questionnaire should make it easy for
respondents to give necessary information and for the interviewer
to record the answer. It should also be arranged so that sound
analysis and interpretation are possible.
4. It would keep the interviewer brief and straight to the point and
be arranged to make the respondent(s) give good responses
throughout the interview.
3.3.3 Types of Questionnaires
 Exploratory Questionnaire: If the data to be collected is

qualitative or is not to be statistically evaluated, it may be that no
formal questionnaire is needed.
14
STT 205 MODULE 1
 Formal Standardized Questionnaire: If the researcher wants to

test and quantify hypothesis then the data is to be analysed
statistically. Here a formal standardized questionnaire is
designed and such questionnaire is generally characterized by:
- Precise wording and order of questions, to ensure that each
respondent receives the same stimuli
- Prescribed definition or explanation for each question
consistently and can answer respondents’ requests for
clarification if they occur.
- Prescribed response format to ensure rapid completion of the
questionnaire during the interviewing process.
- Concise set of questions.
3.3.4 Parties to a Questionnaire
In a questionnaire, three people are involved.

- Enumerator
- Respondent
- Enumeration/Observation Unit
3.3.5 Enumerator: This is a name sometimes given to an investigator.

An investigator is the person at head of the whole research effort. It may
be government, group or organization.
3.3.6 Respondent: This is the person that answers the questions in the
questionnaire.
3.3.7 Enumeration /Observation Unit: This is the act of mentioning a

number of things one by one.
3.4 Design of Questionnaire
The use of questionnaire is the most satisfactory method of collecting

primary data. There are no hard-and fact rules on how to design a
questionnaire but there a number of points that can be kept in mind. The
following guidelines are necessary for the design of a good
questionnaire.
 Number of Questions should be as few as possible and direct on
the topic being investigated, that is, avoid too many questions and
repetition where possible.
 Order of Questions should follow a logical sequence and should
be well arranged and ordered.
 A well designed questionnaire should meet the objectives.
 Questions should be simple, clear and unambiguous for more
meaningful responses particularly for complicated & ambiguous
questions.
15
 Questions which demand definite answers (close ended), should

be used rather than those which demand various answers (open
ended).
 Leading questions should be avoided.
 Confidential questions which pry into private or personal affairs
should be avoided.
 Foot notes where necessary as a guide to respondent should be
incorporated.
 Questions that provoke strong feelings & probe into respondent
privacy should be avoided and when such questions are
unavoidable, explanatory notes should be used to facilitate the
respondent response.
3.5 Forms of Questionnaire
 Dichotomous: This refers to questions that have only two

answers. Example: Yes or No, Male and Female, etc.
 Multiple Choices: This involves more than two options. The
respondent is expected to choose only one of these options.
Example:
1. Through which source did you hear about bank consolidation?
A. Radio
B. Television
C. Newspaper
D. Internet
E. Friends.
 Open ended: Here a questionnaire is designed in such a way that
the respondent has to express his or her view on a particular issue
at hand.
3.6 Components of a Good Questionnaire
- Letter of Introduction: Here you first introduce yourself to the

target recipients of your questionnaire.
- Question on the respondent’s, religion, background place of
residence, age, sex, marital status, educational attainment, etc.
- The complementary close; At this point, you are expected to
express praise or admiration.
3.7 Advantages and Disadvantages of Use of Questionnaire

Advantages of Use of Questionnaires
i. The respondent can fill the questionnaires without pressure from
the interviewers.
ii. Respondent may likely respond more to confidential questions.
16
STT 205 MODULE 1
iii. It is less expensive

iv. Respondent can be reminded of any delay through letter or
telephone
Disadvantages of Use of Questionnaire
i. Low rate of response
ii. Gross irregularities in filling the questionnaires
iii. Bias may follow a number of responses
1. Define of a questionnaire and write three qualities of a good

questionnaire.
2. State the eight steps involved in designing a questionnaire.
3. Distinguish between dichotomous, multiple choice and Open
ended questionnaire.
4. List the components of a good questionnaire.
5. Write three advantages and three disadvantages of questionnaire.
3.8 Summary
Unit 3, discusses in the details of how to translate the objectives of the
data collection process into a well conceptualized and methodologically
comprehensive study using questionnaires.
In this unit, you have learnt to translate the objectives of the data
collection process into a well conceptualized and methodologically
comprehensive study.

Berenson M.L. and Levine D.M. (1996) Basic Business

Statistics, Prentice-Hall, Englewood Cliffs, New Jersey.

7.
17
MODULE 2 PRESENTATION OF STATISTICAL

DATA
Module 2 covers the presentation of statistical data: descriptive handling

of statistical data frequency, diagrammatic representation, ratios,
percentages and numbers from unit 1 to unit 4.
Unit 1 Descriptive Handling of Statistical Data

Unit 2 Frequency
Unit 3 Diagrammatic Representation
Unit 4 Ratios, Percentages and Random Numbers
UNIT 1 DESCRIPTIVE HANDLING OF STATISTICAL

DATA
Unit Structure
1.1 Introduction
1.3 Main Content
1.3.1 Statistical Tabulation
1.3.2 Kinds of Tabulation
1.3.3 Types of Tables
1.3.4 Characteristics of a Tables
1.3.5 Preparation of a Tables
1.3.6 Advantages and Disadvantages of Use of Tables
1.4 Summary
1.1 Introduction
We shall in general, discuss how to make tables, charts and diagrams

from data which are observed over time and space, while grouping of
data from experiment and surveys into frequencies will be discussed
later. In both cases, the way it is done will depend on the scale (level of
measurement). Most elementary things we are expected to know about
collection of numerical data will be expatiated on.
18
STT 205 MODULE 2
The major objective of this unit is reducing or simplifying the details

given in a mass of data into such form that the main features may be
brought out to make the assembled data easily understood.
1.3 Main Content
1.3.1 Statistical Tabulation
Statistical tabulation is a systematic and logical presentation of numeric

data in rows and columns to facilitate comparison
and statistical analysis. In other words, the method of placing organised
data into a tabular form is called tabulation. In tabulation, classification,
forms the basis of reducing and simplifying the details given in a mass
of data into such form that the main features may be brought out to
make the assembled data easily understood. This is done on a statistical
table where the data may be arranged in columns and/or rows. The
purpose of tabulation is to condense and thereby facilitate comparison of
data. Tabulation is the first kind of element any summary work in
statistical investigations can take. Most published data usually come in
this form and is one of the most popular methods of making data more
comprehensible.
1.3.2 Kinds of Tabulations
Broadly, there are two kinds of tabulations

 Tables, presented as the values are recorded in particular
overtime and space. If overtime, they are called time series and if
over space, they are called cross sectional data.
 Tables, presented such that the values have been categorized with
their frequencies and each category recorded. The resulting tables
are called frequency table.
1.3.3 Types of Tables
Basically, there are three types of tables use in presenting statistical

work. They are:
 Source or reference table
 Working table
 Summary or text table
The source table is one on which further analysis is based.
19
The working table as the name suggests is a sheet on which initial

calculations are drawn before the final tables are arrived at summary or
text tables. This is usually found in books either to support the argument
presented or to have easy reference.
A summary table is usually a derived table that is modified to suit a

particular purpose.
1.3.4 Characteristics of Tables
A statistical table has some general features no matter the purpose for
which the table is constructed. Some of these are:
- A general title which is a brief explanation of what the table is

about;
- Column title or caption to show order of classification along the
columns;
- A row title or stub to show order of classification along the row;
- A source note at the bottom which gives the source of
information contain in the table and possibly a short note on the
data;
- An indication of the units in which the data in the table is given.
All these characteristics are presented in table I is an example of how a

table is to be presented. The basic rule is to avoid a complicated table or
give too much information in any one table.
1.3.5 Preparation of a Table
- Sketch the skeleton of the table in blank.

- Arrange of data according to some basis classification or some
customary order, that is, in order of magnitude or alphabetical
order.
- Units should be carefully and completely stated.
- The layout of the table is essential. The spacing, type and ruling
can be varied with advantage.
Table 3.1 below is provided as an example to illustrate these

characteristics.
Table 3.1: The GDP of Export and Import (2007-2014)

YEAR GDP(N) Import(N) Export(N)
2007 47619.66 12839.60 11023.3

2008 49069.28 10770.40 8206.40
20
STT 205 MODULE 2
2009 43107.38 8903.70 7402.40

2010 49621.43 7178.30 9088.00
2011 67908.44 7062.60 11720.80
2012 69146.99 4983.60 8920.60
2011 104212.84 17861.70 30360.60
2014 119084.30 21444.70 31192.80
Source: Central Bank of Nigeria Statistical Bulletin, 2014.
1.3.6 Advantages and Disadvantages of Use of Tables
Advantages of Use of Tables

- The result is likely to be more comprehensible, when a mass at
data is tabulated.
- Formerly obscure relationships become easier to see.
- A table explains more, in a very little time, than pages of an
explanatory essay.
Disadvantages of Use of Tables

- Individual values become unimportant, when data are tabulated.
SELF-ASSESSMENT EXERCISE(S)
1. What are the two kinds of tabulations?

2. Explain the three types of tables.
3. What are the five Characteristics of Tables?
4. Write steps used to preparation of a Table.
5. List three advantages and one disadvantages of a Table.
1.4 Summary
When data are collected and put into numerical form, they do not seem
to be meaningful until they are summarized, presented in tables, grouped
into categories or frequencies, or prepared as charts and diagrams and
summary calculations made which is what we achieved in unit 5.
They main focus of this unit is to simplifying the details given in a mass
of data into such form that the main features may be brought out to
make the assembled data easily understood.
21

Berenson M.L. and Levine D.M. (1996) Basic Business

Statistics, Prentice-Hall, Englewood Cliffs, New Jersey.

7.
22
STT 205 MODULE 2
UNIT 2 FREQUENCY
Unit Structure
2.1 Introduction
2.3 Main Content
2.3.1 Frequency Distribution
2.3.2 Group Frequency Distribution
2.3.2.1 Class Interval and Class Limits
2.3.2.2 Class Boundary (True Class Limit)
2.3.2.3 Class Size (Class Width) of a Class Interval
2.3.2.4 The Class Mark
2.3.3 Relative Frequency
2.3.3.1 Cumulative Frequency
2.3.3.2 Cumulative Frequency Distribution
2.4 Histogram
2.5 Frequency Polygon
2.6 Cumulative Frequency Polygon (Ogive Curve)
2.7 Summary
2.1 Introduction
In a set of data, the number of times a particular value occurs is called

frequency of that value.
The major outcome is to covers one of the basic uses of statistics, which
is organizing raw data into simpler, more useful and understandable
form by creating a frequency distribution. This chapter
also introduces how to graph statistical information.
2.3 Main Content
2.3.1 Frequency Distribution
For large mass of data, the frequency distribution of frequency table is a

tabular arrangement of data by classes together with its corresponding
class frequencies.
23
Example: The following are the ages of children in Christ the King
Choir: 12, 8, 9, 12, 15, 10, 9, 12, 10, and 12.
Table 3.1: Ages of Children in Christ the King Choir

Age Tally Frequency
8 I 1
15 I 1
9 II 2
10 II 2
12 IIII 4
Table 3.1 is generally called a frequency distribution or frequency table.

Therefore, frequency distribution can be defined as a table of collection
of data in a particular order with frequency attached to its value or group
of values.
2.3.2 Group Frequency Distribution
Sometimes, data are too much and becomes practically impossible to put
them in a normal table as in the example above. They are then put into
specified groups known as class interval. The frequency can
conveniently be known through group arrangement, that is, some set of
numbers belonging to a particular group of class. Class size is the
Number of values in a class interval.
Table 3.2: Frequency Distribution between 21 to 100

Class Tally Frequency
interval
21-30 IIII IIII 9
31-40 IIII III 8
41-50 IIIIIIII IIII 14
51-60 IIIIIIIIIIII III 18
51-70 IIIIIIIIIIIIIIII I 21
71-80 IIIIIIIIIIII 15
81-90 IIIIIIII 10
91-100 IIII 5
Total 100
2.3.2.1 Class Interval and Class Limits
Any symbol defining a class such as 21-30, 31- 40 and so on, as in table
2.2 is called the class interval. In the first class interval, the value 21 is
the lower class limit while 30 is the upper class limit. A class interval
which has either lower or upper class limit is said to be an open class
interval.
24
STT 205 MODULE 2
2.3.2.2 Class Boundary/True Class Limit
They are chosen such that no observation of value in the raw data being
grouped takes its value. Class boundaries are obtained in practice by
taking the average of upper limit of a class and the lower class limit of
the next class, and also the average of the upper limit of the first class
and lower class limit of the second class. Once a class boundary value is
obtained, class boundaries of other class can easily be obtained by
adding or subtracting ±0.5 from the class size as shown in table 3.3.
Table 3.3: Class Boundaries of a Data set

Class Class Frequency
interval Boundaries
44-48 43.5-48.5 8
49-53 48.5-53.5 19
54-58 53.5-58.5 10
59-63 58.5-63.5 7
64-68 63.5-68.5 5
2.3.2.3 Class Size or Class Width of a Class Interval
A class size or class width of a given class interval, C, is the number of

element contained in the class. It is obtained by taking the difference
between the lower (upper) limit of a class and the lower (upper) limit of
the next higher class.
Example:𝐶 = 53.5 − 48.5 = 5 𝑜𝑟 𝐶 = 63 − 58 = 5
2.3.2.4 The Class Mark
The class mark X or class midpoint is obtained as the average of the

lower and upper class limit (or boundaries). For unequal class intervals
or open classes we still obtain the class mark.
Example: for the Class mark;
44 + 48
𝑐𝑙𝑎𝑠𝑠 𝑚𝑎𝑟𝑘 = = 46
2
2.3.3 Relative Frequency
The relative frequency is obtained as a ratio of the class frequency of all

the classes. It can also be expressed as a percentage. A table showing the
class and relative frequency is known as the relative frequency
distribution.
25
2.3.3.1 Cumulative Frequency
The cumulative frequency of a given class is obtained by the addition of

all class frequencies up to that particular class starting from the lowest
class.
2.3.3.2 Cumulative Frequency Distribution
This is the tabular arrangement of data which shows the number of

observations less than a given upper class boundary or less than or equal
to a given upper class limit.
Using the data in table 3.3, we can generate the cumulative frequency
table.
Table 3.4: Table showing less than cumulative frequency distribution of

Students Ages.
Less than 12.5 8
Less than 17.5 27
Less than 21.5 37
Less than 27.5 44
Less than 32.5 50
2.4 Histogram
Histogram is a graphical representation of frequency distribution. It has

no gap between the bars. To plot the histogram, you plot the frequencies
against the class boundaries.
It is constructed by erecting bars on class boundaries of any given class

interval of a grouped frequency distribution. The height of each bar is
proportional to the frequency of that class and the centre of each bar is
the class mark interval. The width of each bar corresponds to the size of
the class interval.
In a histogram the vertical axis is the frequency axis, while the

horizontal axis n is the class boundary. The reason for using class
boundary is to ensure continuity of the graph and eliminate gaps
between bars.
2.5 Frequency Polygon
This is a line graph of frequency plotted against class mark. It can be

obtained by connecting or joining t he midpoint of the tops of the bars in
the histogram. It is customary that both ends of the frequency polygon
26
STT 205 MODULE 2
be closed to the horizontal axis by considering the next lower and higher
class mark by having zero frequencies.
2.6 Cumulative Frequency Polygon (Ogive Curve)
This polygon is obtained by plotting the cumulative frequency less than

any upper class boundary against the upper class boundary. It is a very
important graph use to locate the quantities, deciles and percentiles.
Example: Suppose a researcher is interested in the number of kilometres
that the employees of a large department store travelled to work each
day. The researcher may first have to collect the data by taking a sample
of 50 employees and the approximate distance of the store from their
homes. After doing that the researcher organizes the data in a frequency
distribution as follows in table 3.5:
Table 3.5: The number of kilometres that the employees travelled to

work each day
Class limits (in miles) No of employees
1–3 10
4–5 14
7–9 10
10 – 12 5
11 – 15 5
15 – 18 5
For this frequency distribution to be useful the class limits will have to
be changed to class boundaries and we make columns for the midpoints,
COMMUTING DISTANCE OF EMPLOYEES

15
NUMBER OF EMPLOYEES
10
0
0.5-3.5 3.5-6.5 6.5-9.5 9.5-12.5 12.5-15.5 15.5-18.5
DISTANCE
lower boundaries and cumulative frequencies will have to be added.
Figure 3.1: frequency distribution plot for the number of kilometres that
the employees travelled to work each day.
27
Table 3.5: The cumulative frequency of the employees travelled to work

each day
MID LOW FREQUENC CUM.

CLASS POINT BOUND Y FREQ.
0.5-3.5 2 0.5 10 0
3.5-5.5 5 3.5 14 10
5.5-9.5 8 5.5 10 24
9.5-12.5 11 9.5 5 34
12.5-
15.5 14 12.5 5 40
15.5-
18.5 17 15.5 5 45
FREQUENCY POLYGON
Commuting Distance of Employees
16
14
12
Number of Employees
10
0
0 2 4 6 8 10 12 14 16 18
Distance
Figure 3.2: The frequency polygon of the employees of a large

department store travelled to work each day
28
STT 205 MODULE 2
Cumulative Frequency Polygon/Curve (Ogive)

Ogive for Commuting Distance of Employees
60
50
Cumulative Number of Employees
40
30
20
10
0
0 2 4 6 8 10 12 14 16 18 20
Distance
Figure 3.3: The cumulative frequency of the employees of a large

1. What do you understand by each of the following: Frequency,

2. Frequency Distribution, Group Frequency Distribution?
3. Define Class Size, True Class Limit and Class Width of a Class
Interval.
4. Differentiate between Class Interval and Class Limits; Class
Boundary and Class Mark.
5. Distinguish between Relative Frequency, Cumulative Frequency
and Cumulative Frequency Distribution.
6. Suppose a researcher is interested in the number of kilometres
that the employees of a large department store travelled to work
each day. The researcher would first have to collect the data by
asking a sample of about 50 employees the approximate distance
the store is from their homes. After doing that, the researcher
organizes the data in a frequency distribution as follows in table
3.7. Obtain the corresponding Histogram, Frequency Polygon and
Cumulative Frequency Polygon/Curve.
29
Table 3.7: The number of kilometres that the employees of a large

Class limits (in km) No of employees
1–3 5
4–6 14
7–9 5
10 – 12 6
11 – 15 10
16 – 18 10
2.7 Summary
This unit covers one of the basic uses of statistics, which is organizing
raw data into simpler and more useful and understandable by creating
a frequency distribution, Histogram, Frequency Polygon and
Cumulative Frequency Polygon/Curve.
This chapter covers one of the basic uses of statistics, which is

organizing raw data into simpler, more useful and understandable form
by creating a frequency distribution and also introduces how to
graph statistical information


7.
Dodge, Y. (2008). The Concise Encyclopaedia of Statistics. Springer.

Gonick, L. (1993).The Cartoon Guide to Statistics. Harper Perennial.
30
STT 205 MODULE 2
UNIT 3 DIAGRAMMATIC REPRESENTATION

DIAGRAMS, CHARTS AND GRAPHS
Unit Structure
3.1 Introduction
3.3 Main Content
3.3.1 Pictorial Diagram
3.3.2 Pictogram
3.3.1.2 Block Diagram
3.3.1.3 Scattered Diagram
3.3.3 Graph
3.3.2.1 Characteristics of a Graph
3.3.2.2 Line Graph
3.3.2.3 Series Graph
3.3.4 Charts
3.3.4.1 Pie Chart
3.3.4.2 Band Curve Chart
3.3.4.3 Bar Chart
3.3.5 Types of Bar Chart
3.3.6 Simple Bar Chart
3.3.7 Component Bar Chart
3.3.8 Percentage Component Bar Chart
3.3.8.1 Multiple Bar Chart
3.4 Summary
3.1 Introduction
Here, the statistical data or information will be depicted in diagrams,

pictures, charts, graphs of different types. This will make information
simple, clear and unambiguous. It will also help convey the message
from the information faster.
Unit 6 introduces how to graph statistical information to achieve a

desired output.
31
3.3 Main Content
3.3.1 Pictorial Diagram
The simplest and most obvious way of presenting information is by

means of pictorial figures or designs which are directly related to the
item with which the statistical data are collected. There are many forms
of pictorial diagrams.
3.3.2 Pictogram
Pictogram is simply a representation in form of pictures as will be seen

in example below.
Time Population (in millions)
2015/16 30
2016/16 60
If one unit of picture represents 10 million people, 30 million will have
3units pictures and 60 million will have 6 units as shown in figure 6.1
2019/20
2020/21
Figure 3.2: Pictogram: Population of Nig. 2019/20 and 2020/21
Some of the essence of putting data into some pictorial or

diagrammatic form are:
 It aids the understanding of the tabulated data.
 Diagrams like statistical tables are designed not only to catch the
eye but also to convey information. (All diagrams must be
properly scaled so that they do not lose the important objective of
information).
 They convey broad relationships to the eye even though the
intricate details are likely to be blurred.
 Pictorial diagrams are popularly used by journalist in newspapers
and by advertisers to show relationships between variables.
3.3.1.2 Block Diagram
A block broken down into the various sections that make up the data.
The steps involve are as follows;
Step I: Choose a convenient scale that can show clearly the total figure.
Step II: Use the scale chosen in step I to find the size of each section
and the total.
32
STT 205 MODULE 2
Step III: Draw a block of the size of the total figure and mark each
section of it.
................................................................
///////////////////////////////////////////////////////
Figure 3.3 represent block diagram (Scale: 1cm represents N100

million)
3.3.2.1 Scatter Diagram
A scatter diagram is a graph in which each plotted point represents an

observed pair of values for the independent and dependent variables.
The value of the independent variable X is plotted in respect to the
horizontal axis and the value of the dependent variable Y is plotted in
respect to the vertical axis.
If X and Y denote the two variables under consideration, a scatter

diagram shows the location of points (X, Y) on a rectangular coordinate
system. If all points in this scatter diagram seem to lie near a line, the
relationship is linear.
Y Y
X X
X X
X X
X XXX XX
X XXX
X XXXXX
X XXX
X XXX
X X
Figure 3.4: Illustration of a scatter diagram
33
3.3.3 Graph
A graph shows the relationship between two or more variables; usually

the variable of interest is called dependent variable and the factor on
which the variables of interest depends is called independent variable.
3.3.3.1 Characteristics of a Graph
Students are likely to be familiar with the principle underlying the

construction of a graph in mathematics. They should be familiar with the
importance of y-axis which is at the vertical axis along which the
variable of interest is represented and the x-axis (horizontal axis) along
which the independent variable or factor is represented. They are also
familiar with the choice of scale which is used to demonstrate the
important features of the graph. The scale should always start from zero
but where this is not possible there must be some indication to show
this. This is very important to draw all graphs. The position of any point
on a graph is located by the co-ordinate of the point.
A good graph must satisfy the following points
 The layout. The space allocated for the graph must be large
enough and must be fully used. The choice of the scale is
important if more than one curve is presented on a graph, the
curve must be distinguished. The title must be clear and concise.
 State clearly as in the case of a table the following;
- the title
- the scale
- the unit of increase
- the source of the data
The form of diagram to be used depends on the form of data to be
presented.
3.3.3.2 Line Graph:
The graph below depicts simple illustration of a line graph
300
250
200
150
Series1
100
50
0
A B C D
Figure 3.5: illustration of a line graph
34
STT 205 MODULE 2
3.3.3.3 Series Graph
The graph below shows when there are many line graphs in one plot and
this type of graph is called series graph.
Trends of Financial Inclusion Indicators
450
400
350
300
250
200
150
100
50
0
1997
1992
1993
1994
1995
1996
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
-50
-100
% MFBD %MFBC %NMFB
Figure 3.6: illustration of a series graph
3.3.4 Charts
3.3.4.1 Pie Chart: A pie chart is simply a circle divided into sectors.
It is a circular method, where each member of the data is represented in
a circle. In fact, this circle represents the total of the data being
represented and each sector is drawn proportionally to its relative size.
The angles of the sectors are proportional to the frequencies of the
numbers, objects or classes.
Discussion
Steps for Constructing a Pie Chart

Step 1: Calculate the percentage of each type of item of the total.
Step II: The total of all items is represented by 360 0 which is the angle
in a circle.
Step III: Draw a circle of reasonable size and mark the angle obtains in
step II. Mark each section/sector differently to show the various
compositions.
Example on pie chart:

In a survey concerning public education, 400 school administrators were
asked to rate the quality of education in the Nigeria. Their responses are
summarized in Table 3.2. Construct a pie chart for this set of data.
35
Solution:
To construct a pie chart, assign one sector of a circle to each category.
The angle of each sector should be proportional to the proportion of
measurements (or relative frequency) in that category. Since a circle
contains 360°.
Table 3.2: Summary on survey the quality of education in the Nigeria

RATING FREQUENCY RELATIVE FREQ. PERCENT ANGLE
A 35 35/400 = .09 9%
0 0
.09X360 =32.4
B 260 260/400= .65 65%
2340
C 93 93/400=.23 23%
0
82.8
D 12 12/400 =.03 3%
10.80
TOTAL 400 100% 3600
PIE CHART
A B C D
3%
9%
23%
65%
Figure 3.6: Survey on the quality of education in the Nigeria
3.3.4.2 Band Curve Chart
This is a very useful chart which is likely to show much of the

information of a set of data. The chart consists of the line graphs of the
various items of the total but drawn one above the other. The area
between the lines is shaded so that the finished chart will have the
appearance of a series of bands. The chart is very suitable to represent
data in cumulative flows.
36
STT 205 MODULE 2
The following steps are taken
Step I: Cumulate the data

Step II: Plot each column on the same graph sheet and connect the point
as for a line graph.
Step III: Shade each band differently from another band.
The lines forming the bands are also graphed.
Discussion
3.3.4.3 Bar Chart
Bar Chart is a block diagram in which the length of the bars is

proportional to the quantities they represent. The bars must be spaced
equally and the width of the bars must be the same. It can be drawn
vertically or horizontally.
3.3.5 Types of Bar Chart
3.3.5.1 Simple Bar Diagram/Chart
Simple Bar Chart: simple bar chart is a block diagram in which simple
bars are used to denote magnitudes. This is another name for a block
diagram and there is no difference between the two, in the sense that the
same steps are involved in their construction. They are used for
comparison over many years. The diagram is drawn according to scale
that represent each year with the bar separated by gaps. The time is
shown on the horizontal axis and the other variable (quantity or value) is
shown on the vertical axis.
Example on simple bar diagram/ chart:
Table 3.1: Exports of Pakistan (in US $ million)

Year Exports
1948 118
1951 406
1961 368
1961 683
1981 2958
1991 6168
2001 9202
2005 14410
37
Figure 3.7: Simple Bar Chart- Exports Of Pakistan
Example on Bar Chart for Group data using Table 3.6
15.5-18.5
12.5-15.5
DISTANCE
9.5-12.5
6.5-9.5
FREQUENCY
3.5-6.5
0.5-3.5
0 5 10 15
NUMBER OF EMPLOYEES
Figure 3.8: Bar Chart for the number of miles that the employees of a
large department store travelled to work each day
3.3.6 Component Bar Chart
Component bar chart is a chart that shows part of a whole. It is a chart

that is used to represent data in which the total magnitude is divided into
components. The simple bar chart is also called simple bar diagram. In a
simple bar chart the line, bars, or columns are of equal thickness but the
length is varied in proportions to the difference in figure presented. The
bars can be vertical or horizontal but where periods of time are
concerned like fig. 5. It is usually to show such periods along the
horizontal axis. A more complicated type is the component bar chart and
multiple bar chart. They are divided into sections. Each section
corresponding in size to the magnitude of the item it represent.
38
STT 205 MODULE 2
Discussion
Steps for constructing Component Bar Chart
Step I: From the raw data, obtain the highest and the lowest values and
then the range = The highest value – The lowest value.
Step II: Determine the no. of the data range at class width C, for equal
class interval. Number of Class = Range
Step III: Obtain the first class interval or class boundary which contains
the lowest value. Other classes are obtain by adding the class size, C, to
the lower and upper limit of the first class until we get a class which will
absorb the highest value.
Step IV: We then tally the data into the classes they belong to obtain the
corresponding class frequencies.
In addition to the steps, the following must be considered;
 This chart consists of bars which are sub-divided into two or
more parts.
 The length of the bars is proportional to the totals.
 The component bars are shaded or coloured differently.
Example:
(a) Component Bar Chart:
Table 3.3: Current and Development Expenditure – Pakistan (All

figures in Rs. Billion)
Current Development Total
Years
Expenditure Expenditure Expenditure
1988-89 153 48 201
1989-90 166 56 212
1990-91 196 65 261
1991-92 230 91 321
1992-93 262 66 348
1993-94 294 61 365
1994-95 346 82 428
39
Figure 3.9: Current and Development Expenditure – Pakistan
3.3.7 Percentage Component Bar Chart:
 Component bar charts may also be drawn on percentage basis by

expressing the components as percentages of their respective
totals.
 All the bars are of equal length showing the 100%. These bars
are sub-divided into component bars in proportion to the
percentages of their components.
Table 3.4: Areas under Crop Production (1985-90)
Year Wheat Rice Others Total

1985-86 6403 1863 1926 11192
1986-86 6606 2066 1906 11668
1986-88 6308 1963 1612 10883
1988-89 6630 2042 1966 11638
1989-90 6659 2106 1960 11836
Table 3.5: Percentage Areas Under Production (‘000 hectares)

Year Wheat Rice Others Total
1985-86 66.2% 16.6% 16.2% 100%
1986-86 66.0 16.6 16.3 100
1986-88 66.2 18.0 14.8 100
1988-89 65.9 16.4 16.6 100
1989-90 65.6 16.8 16.6 100
40
STT 205 MODULE 2
Figure 3.10: Percentage Areas under Production
3.3.8 Multiple Bar Chart
- Multiple bar chart is an extension of simple bar chart.

- Grouped bars are used to represent related sets of data.
For example, imports and exports of Nigeria are shown in multiple bar
chart.
Each bar in a group is shaded or coloured differently for the sake of

distinction.
Table 3.6: Imports and exports of a Nigeria (1982 -88)

Years Imports Exports
1982-83 68.15 34.44
1983-84 66.61 36.33
1984-85 89.68 36.98
1985-86 90.95 49.59
1986-86 92.43 63.35
1986-88 111.38 68.44
41
Figure 3.11: Imports and exports of Nigeria (1982 -88)
Advantages of Diagrammatic Representation are:

i. It aids the understanding of the tabulated data.
ii. Diagrams like statistical tables are designed not only to catch the
eye but also to convey information. All diagrams must be
properly scaled so that they do not lose the important objective of
information.
iii. They convey broad relationships to the eye even though the
intricate details are likely to be blurred.
iv. Pictorial diagrams are popularly used by journalist in newspapers
and by advertisers to show relationships between variables.
1. What is a Block Diagram and what are the steps for constructing
it?
2. Define the following: Line Graph, series graph, Pie Chart, Band
Curve Chart, Component Bar Chart, Percentage Component Bar
Chart, Multiple Bar Chart and Scattered Diagram.
3. What do you understand by pictorial diagram, Pictogram, Simple
Bar Diagram/Chart, Bar Chart for ungroup data, Bar Chart for
Group data, graph, and charts?
4. What are the Characteristics of a Graph?
5. What the Steps in Constructing a Pie Chart, Band Curve Chart
and Bar Chart?
42
STT 205 MODULE 2
3.4 Summary
The simplest and most obvious way of presenting information is by

means of pictorial figures or designs which are directly related to the
item from which the statistical data are collected.
This unit covers the most obvious way of presenting information by

diagrammatic representation diagrams, charts and graphs.


7.

Gonick, L. (1993). The Cartoon Guide to Statistics. HarperPerennial.
43
UNIT 4 RATIOS, PERCENTAGES AND RANDOM

NUMBERS
Unit Structure
4.1 Introduction
4.3 Main Content
4.3.1 Ratios
4.3.2 Percentages
4.3.3 Random Numbers
4.3.2.1 A Random Number Table
4.3.2.2 Use of Table of Random Numbers
4.3.2.3 Procedure for the Use of Table of Random Numbers
4.3.2.4Advantages and Disadvantages of Random Numbers
4.4 Summary
4.1 Introduction
Unit 4 compares quantities effectively and checks what the values that we
get can tell us about the magnitude of these quantities.
4.2 Learning Outcomes (ILOs)
To give comparative facts on the component parts in relation to the

whole and also relates observations in the same variables at different
time intervals at different places etc.
4.3 Main Content
4.3.1 Ratios: Ratios are fractions which express variation in the data
irrespective of actual or absolute size of the data while percentages are
ratios express with hundred (100) as the denominator; usually not
written.
Example3.1: If the total expenditure is N36 out of which N18 was spent
on food, then the ratio of food to total expenditure is
18 1
 Ratio.  , This kind of ratio is usually referred to as
36 2
proportion.
44
STT 205 MODULE 2
The Three Major forms of ratios are:

 Ratios that give comparative facts on the component parts in
relation to the whole;
 Ratios that relates one observation to another observation, in
most cases, observations in the same variables at different time
intervals at different places etc.
 Ratio that can be used to compare variables which are not
expressed in the same unit.
4.3.2 Percentage
A percentage is a rate, number, or amount in each hundred.

18 100
Percentage: 18 : 36  X %  50%
36 1
The advantage of percentage is that it makes ratios more comprehensive
as it gives a common denominator, 100, to the ratios
4.3.3 Random Numbers
A random number is a number chosen chance from some specified

distribution such that selection of a large set of
these numbers, reproduce the underlying distribution. Almost always,
such numbers are required to be independent, so that there are no
correlations between successive numbers.
4.3.3.1 A Random Number Table: A series of digits (0 to 9)

arranged randomly through the rows and columns.
Recall:
A population is a collection of units with identical properties. The

number of units making up the population size is usually denoted by N.
A Sample is a finite number of elements drawn from the population.

The sample size is denoted by n. Population and Sample are very
important in the use of table of random numbers.
4.3.2.2 Use of Table of Random Numbers
A table of random numbers contain outcomes of independent random

trials from the discrete uniform probability distribution which has
possible outcomes: 0, 1, 2.....9 with equal probabilities. Thus for each
position in the table, every digit from 0-9 has equal probability of
appearing in that position and the outcome for the various positions in
45
the table are independent. A table of random digits can readily be used
to select a simple random sample by the following procedure: Consider
the frame of lawyers who are members of state Bar Association as of
last month, all together they are also in the frame, we assign numbers to
the lawyers for convenience from 001,......950. Since the frame contains
950 elements, we select 3 digits numbers and starting from the left most
column, suppose we use the 1st 3 digits in each line as a 3 digits number,
the procedure is then as in the next section.
4.3.2.3 Procedure for the use of Table of Random Numbers:
Draw a sample number of size n=20 from a population of 950. Since the
population is of 3 digits, 001, 002. 003............950, Lawyer number 231
is the 1st element for the sample.
 A number over 950 would be disregarded, thus each of the 950
lawyers have equal probability of being a sample element.
Lawyer 005 is of second element for the sample.
 Also number 231 would be disregarded since that lawyer is
already in the sample, thus each of the 947 has an equal
probability of being of 3rd sample element.
 The above procedure is repeated until the required number of
lawyers for the sample is selected.
The 20 lawyers are:
231,055,455,070,003,949,555,647,777,090,047,777,701,694,256,901,16
2,295,007,706.
4.3.3.4 Advantages and Disadvantages of the use of Random

Numbers
It is easier to obtain a table of random numbers from a given population
but could be time wasting.
1. If the total expenditure is as given in Table 3.2 and N17 was

spent on food, write the ratio of food to total expenditure. Also
calculate the ratios and percentages of each of the items in Table
7.2;
Table 3.2: Breakdown of items and cost of each
Item Expenditure N
Dress 12.00
Shoe 10.00
Watch 9.00
Others 5.00
2. What are three major forms of ratios?
3. Explain how to use the Table of Random Numbers.
46
STT 205 MODULE 2
4. Describe the Procedure for the use of Table of Random Numbers.

5. What are the advantages and disadvantage of the use of Random
Numbers?
4.4 Summary
Some calculations that can be carried out after tabulations of data are
usually division of a component of the table by another component of
the total. Some other commonly used comparative facts include ratios
and percentages.
This unit gives a comparative fact on the component parts in relation to

the whole and also relates observations in the same variables at different
time intervals at different places etc.


7.

Gonick, L. (1993). The Cartoon Guide to Statistics. HarperPerennial.
47
MODULE 3 MEASURES OF CENTRAL TENDENCY,

LOCATION AND DISPERSION
Here, location and spread of a distribution of data in units 1, 2 and 3 are

discussed.
Unit 1 Measure of Central Tendency/ Location

Unit 2 Fractiles - Measures of Partition and Dispersion
Unit 3 Measures of Dispersion/Spread
UNIT 1 MEASURE OF CENTRAL TENDENCY/

LOCATION
Unit Structure
1.1 Introduction
1.3 Main Content
1.3.1 Measures of Location
1.3.2 Arithmetic Mean
1.3.3 Basic Arithmetic Mean
1.3.4 Mean of Group Data
1.3.5 Computation of Mean Using Change of Origin
1.4 Mode
1.5 Median
1.5.1 Median for Grouped Data
1.5.2 Median for Ungrouped Data
1.5.3 Median for a Set of Ungrouped Data
1.5.4 Median for a Set of Grouped Data
1.6 Weighted Mean (Xw)
1.7 Geometric Mean
1.8 Harmonic Mean
1.9 Summary
1.1 Introduction
These are useful in describing statistical data and comparing one group
of data with another. The most commonly known measures of central
tendency are the arithmetic mean, median, mode, quartiles, deciles,
percentiles, harmonic mean, and geometric mean. In all, we estimate the
values of measure of central tendency.
48
STT 205 MODULE 3
To find a typical or central value that best describes the data.
1.3 Main Content
1.3.1 Measures of Location
- Arithmetic Mean:
- Mode
- Median
1.3.2 Arithmetic Mean:
Arithmetic mean may be defined as the sum of all the values of the
items divided by the number of items.
The population mean (theoretical mean) is represented by µ (meu)
which is given by  
 xi 3.1
N
If a sample of size (n) is taken from the population then the sample

mean is represented by X 
 xi 3.2
n
1.3.3 Basic Arithmetic Mean
Three basic Arithmetic Mean are as follows;
Definition I: Given a set of numbers. X1, X2........XN, then the mean is

given by:
N
 X i
X  i 1
3.3
N
The mean of the numbers: 1, 2, 3, 4, and 5. = 15  3
5
Definition II: If the numbers. X1, X2.......Xk occur with associated
k
 f X i i
frequencies f1, f2......fk then X  i 1
k
3.4
f i 1
i
49
Definition III: If Xi is the ith class mark having frequency fi and k

classes, then the mean is obtained by using 3.4.
However, if A is the assumed mean and C the class size of frequency
distribution then the mean using the coding methods is given by:
k
 fU i i
XA
X  A i 1
k
XC where  i  3.5
f
C
i
i 1
1.3.4 Mean of Group Data
Suppose that a given set of data are grouped such that each item x i
(where i  1, 2, 3, ...n) occurs with frequency f i (where i  1, 2, ..., k ) then
the mean

X
f x i i
3.6
f i
1.3.5 Computation of Mean Using Change of Origin
i. Assumed Mean: A lot of effort in computation can be saved by

reducing each number if they are very large. This is done by
selecting a reference number called the assumed mean and then
subtract it from other number in the distribution for ungrouped
data;
If A=assumed mean, and V=Deviation of each value from the assumed

mean
i.e. Vi  xi  A then

X  A
 (x i  A)
3.7
n

X  A
V i
3.8
n
For a set of grouped data, the procedure for computing the mean is:
1. Choose the assumed mean (A) which may be one of the class
marks
2. Find the deviation xi  A of each class mark Xi from the assumed
mean.
3. Find the product (fiVi) and the sum ( f iV )
50
STT 205 MODULE 3
4. Obtain the correction factor

  f i Vi 
  3.9
 f 
 i 
5. Add the correction factor to the mean in order to obtain the exact
mean for the distribution using the formula:
A
 f ( x  A)
i i
3.10
f i

X  A
fV i i
3.11
f i
ii. Coding Method: If the figures are persistently large, after

applying the assumed mean techniques, the computation can
further be reduced by dividing each (Vi) by the class width or by
the multiples of it. In such a case, we will be using the
transformation such that:
xi  A
i 
w
3.12

x  A 3.13
and the mean will be defined as

X  A
fU w i i
3.14
f i
where U i =0, +1or-1,+2 or-2, if the middle class mark is taken as the
assumed mean
1.3.6 Mode
The mode for an ungrouped set of numbers is that value which occurs
with the highest frequency. The mode when it exists may always be
unique.
For a set of grouped data, the modal class (which is the class with the
highest mode) can be clearly ascertained, but the value of mode is not so
obvious, but can be calculated by:
i. Interpolation within the modal class.
ii. Graphic interpolation from the histogram
1.3.5 Interpolation within the Modal Class
The mode is located within the modal class by considering the frequency
for the two out joining classes to the modal class
1
X 0 L  xw 3.16
1   2
51
Where L = Lower boundary of the modal class.

1 = Absolute diff. of the freq. of the modal class and the previous class.
 2 = Diff. between the frequencies of the modal class and that of the
lower class.
w = Width of the modal class.
1.4 Median
1.4.1 Median for Grouped Data
The median of a set of numbers arranged in order of magnitude (in

array) is the central value (if the set is odd) or the two middle values (if
the set is even). The location is at the ( N  1) item after arrangement.
2
1.4.2 Median for Ungrouped Data
For a set of ungrouped data, the median is the value in the middle or the
mean of the two middle values (depending whether the number of values
is odd or even) when the values are arranged in their order of magnitude.
In other words, median is that value which divides the distribution into
two equal parts.
Symbolically, when the sample size (n) is an odd numbers
n 1
Xm  3.15
2
When the sample size (n) is an even numbers
1 Xn Xn
Xn  (   1) , when n is even 3.16
2 2 2
1.4.3 For a set of ungrouped data, the median can be obtained

by the following techniques:
i. Approximation from the frequency distribution.

ii. Interpolation from the Ogive
i. Approximation from the Frequency Distribution

The median being the value of N th term has to be in a particular class
2
called the median class with which it can be estimated using the
formulae:
N
 C XW
Xm  L  2
3.17
f
where L= Lower boundary of the median class
52
STT 205 MODULE 3
N
= median term
2
C = Cumulative frequency of the class proceeding the median
class
F = Freq. of the median class
W = Width of the median class
F = frequency of the median class
ii. Interpolation from the Ogive

When estimating the median from the ogive, the following steps
should be followed:
i. Prepare or construct the ogive.
ii. Calculate or locate the N , the median term on the vertical axis.
2
iii. Starting from and locate in (ii) draw a horizontal line to intercept
the ogive.
iv. Draw a line from the point of intersection to the horizontal and
read up the value of the median at the point.
1.4.4 For grouped data the median is obtained by using

N
 Fm1
2
Median = Lm  XC 3.18
Fm
The following formula
N 
 2  ( f m 1 )1 
X  L1   C
|||
3.19
fm
L1 = lower class boundary of the median class
N = Total frequency
Fm = frequency of the median class
N
=Location of the median class
2
C = Size of the median class
( f i )1 = Sum of frequencies of all classes below the median class.
Fm-1 = The cumulative frequency of the pre-median class
1.5 Weighted Mean (Xw)
When each value in a given set of data is assigned a weight according to

its relative importance in the group, the computed mean is its weighted
mean.
An example of a weighted mean is the grade point average of the
semester exam or cumulative.
53
Grade point A of the students (G.P.A). Mean score


XW 
W X i i
W i
3.20
X GPA 
X G i i
3.21
W i
1.6 Geometric Mean
The geometric mean of a set of ungrouped data x1 , x2 ,....., xn is nth root


of the product of n value involved: X 9  n x 1 x x 2 x x3 ……..x xn  (x1 x
1
x 2 ……. x n ) n
3.22
When log is used in computation, the formula below is used.

Log X 9  1  log xi 3.23
n

1 
X G Anti log   log X i  3.24
n 
 n   fi 3.25
For a set of grouped data the geometric mean is defined as


Log X G 
 f log x i i
3.26
f i
   f i log xi 
X G Anti log   3.27
  f i 
1.6.1 Harmonic Mean
For a set of ungrouped data x1 , x2 , x3 .........xn of a random variable X1 the

harmonic mean is given as:
𝑛
𝑋𝐻 = 1 1 1 3.28
+ ............+
𝑥1 𝑥2 𝑥𝑛
 XH 
f i
3.29
1
( x )
i
For a set of grouped data, the harmonic mean formula becomes:
XH=
 fi 3.30
 fi 
  x 
 i
54
STT 205 MODULE 3
1. What is the difference between mean, mode and median?

2. What are the three basic arithmetic means?
3. When do we use assumed mean and coding method?
4. Write the median formula for grouped data and explain the
parameters.
5. Differentiate between the geometric mean, harmonic mean and
weighted mean.
1.7 Summary
It summarizes a list of numbers by a "typical" value. A fundamental task

in many statistical analyses is to estimate location of parameter for the
distribution. The three most common measures of location are the
mean, the median, and the mode.
In this unit, useful in describing statistical data and comparing one group
of data with another were discussed, such as the arithmetic mean,
median, mode, quartiles, deciles, percentiles, harmonic mean, and
geometric mean.


7.

Gonick, L. (1993). The Cartoon Guide to Statistics. Harper Perennial.
55
UNIT 2 FRACTILES - MEASURES OF PARTITION

AND DISPERSION
Unit Structure
2.1 Introduction
2.3 Main Content
2.3.1 Definition of Fractiles
2.3.2 Quartiles
2.3.3 Percentiles
2.3.4 Deciles
2.3.5 Moments
2.3.6 Skewness
2.3.7 Kurtosis
2.4 Summary
2.1 Introduction
Definition of Fractiles
Fractiles are the measures of partition and the three measures of partition
are the Quartile, Decile and the Percentile.
To examine the different measures of partitions: Quartile, Decile and

Percentile
2.3 Main Content
2.3.1 Fractiles can be divided into different parts as follows;
i. First or lower quartile (Q1) is the value below which 25% of data
can be found.
ii. Second quartile (Q2) is the value below which 50% of the data lie
iii. Third quartile upper quartile (Q3) is the value below which 75%
of the data can be found.
56
STT 205 MODULE 3
2.3.2 Quartiles
These measures are obtained by adjusting the median formula into four
equal parts to locate the appropriate quartile. The quartile is obtained by
dividing the set of data into four equal parts.
Thus, yielding first quartile Q1, 2ndquartile = Q2 , 3rd quartile = Q3 and

4th quartile = Q4.
The component formula for Qi is

 iXN
 4  fQ  
i 1
Qi  LQi    XC 3.1
fQi
Where Qi=The ith quartile
fQi=Freq. of the ith quartile class
C=Size of the ith quartile class
LQi=Lower class boundary of the ith quartile class
iXN
=Location of the cumulative freq. of the ith quartile class
4
 fQ =Sum of all frequencies lower than the ith quartile class.
i
2.3.3 Percentiles
The percentiles divide the data into one hundred parts and we have
P1,P2..........P99.
The percentile class is located where we have the cumulative frequency
of
KXN
, 3.2
100
2.3.4 Deciles
The decile divide the set into ten parts. It then have D1,D2,.........D9.
Location of the ith decile is at the point where the cumulative frequency
is iXN
10
The formula then becomes
 10   fD j 1 
 jXN 
D j  LD j    XC 3.3
fD j
57
 Moments are set of statistical parameters to measure a

distribution. Four moments are commonly used:
i. The first moment as the Mean which is also known as the average
ii. The second moment (about mean?) as the Variance and it is
pertinent to note that Standard deviation is the square root of the
variance: an indication of how closely the values are spread about
the mean. A small standard deviation means the values are all
similar. If the distribution is normal, 63% of the values will be
within 1 standard deviation.
 Skewness measures the asymmetry of a distribution about its

peak; it is a number that describes the shape of the
distribution.
 It is often approximated by Skew = (Mean - Median) / (Std dev).

 If skewness is positive, the mean is bigger than the median and
the distribution has a large tail of high values.
 If skewness is negative, the mean is smaller than the median and
the distribution has a large tail of small values.
 Kurtosis measures the peakedness or flatness of a

distribution.
 Positive kurtosis indicates a thin pointed distribution.

 Negative kurtosis indicates a broad flat distribution.
There are usually three types of kurtosis namely, leptokurtic, platykurtic

and mesokurtic.
1. What is fractiles?
2. Explain the difference between first or lower quartile, Second
quartile, third quartile and upper quartile.
3. What do you understand by quartiles, percentiles, moment
4. Write the difference between skewness, Kurtosis and deciles.
5. Write the formula for quartiles, percentiles, deciles moment,
skewness, Kurtosis and explain their parameters
2.4 Summary
Fractiles are measures of partition for the distribution. The three

furthermost common measures were considered, namely; Quartile,
58
STT 205 MODULE 3
Deciles and the Percentile. We also have the moment, skewness and
Kurtosis that measures the spread in statistical distributions.
In summary,
 Quartile: divides the data into 4 equal parts;
 Deciles: divides the data into 10 equal parts;
 Percentile: divides the data into 100 equal parts.


Jersey, ISBN 0-13-196869-6.

59
UNIT 3 MEASURES OF DISPERSION/SPREAD
Unit Structure
3.1 Introduction
3.3 Main Content
3.3.1 Definition of Dispersion
3.3.2 Properties of a Good Measure of Dispersion
3.3.3 Types of Dispersion
3.3.4 Methods of Dispersion
3.3.5 Mathematical Methods
3.4 Summary
3.1 Introduction
The simplest meaning that can be attached to the word ‘dispersion’ is a

lack of uniformity in the sizes or quantities of the items of a group or
series. According to Reiglemen, “Dispersion is the extent to which the
magnitudes or quantities of the items differ; the degree of diversity.”
The word dispersion may also be used to indicate the spread of the data.
To find the basic property of dispersion as a value that indicates the

extent to which all other values are dispersed about the central value in a
particular distribution.
3.3 Main Content
3.3.1 Definition of Dispersion
Dispersion in statistics is also called variability, scatter, or spread. This

is the extent to which a distribution is stretched or squeezed. Common
examples of measures of statistical dispersion are the variance, standard
deviation, and interquartile range. Dispersion is contrasted with location
or central tendency, and together they are the most used properties of
distributions.
60
STT 205 MODULE 3
3.3.2 Properties of a good measure of Dispersion
The pre-requisites for a good measure of dispersion:
- It should be simple to understand.

- It should be easy to compute.
- It should be rigidly defined.
- It should be based on each individual item of the distribution.
- It should be capable of further algebraic treatment
- .It should have sampling stability.
- It should not be unduly affected by the extreme items.
3.3.3 Types of Dispersion
The measures of dispersion can either be ‘absolute’ or “relative”.
3.3.3.1 Absolute measures
Absolute measures of dispersion are expressed in the same units in

which the original data are expressed.
For example, if the series is expressed as marks of the students in a

particular subject; the absolute dispersion will provide the value in
marks. The only difficulty is that if two or more series are expressed in
different units, the series cannot be compared on the basis of dispersion.
3.3.3.2 Relative
Relative or Coefficient of dispersion is the ratio or the percentage of a

measure of absolute dispersion to an appropriate average. The basic
advantage of this measure is that two or more series can be compared
with each other despite the fact they are expressed in different units.
Theoretically, ‘Absolute measure’ of dispersion is better. But from a
practical point of view, relative or coefficient of dispersion is considered
better as it is used to make comparison between series.
3.3.4 Methods of Dispersion
Methods of studying dispersion are divided into two types:

(i) Mathematical Methods: We can study the ‘degree’ and ‘extent’ of
variation by these methods. In this category, commonly used measures
of dispersion are :
- Range
61
- Quartile Deviation
- Average Deviation
- Standard deviation and coefficient of variation.
(ii) Graphic Methods: Where we want to study only the extent of

variation, whether it is higher or lesser a Lorenz-curve is used.
3.3.5 Mathematical Methods

 Range (Absolute Range):
It is the simplest method of studying dispersion. Range is the
difference between the smallest value and the largest value of a
series. While computing range, we do not take into account
frequencies of different groups.
Formula: Absolute Range = Largest – Smallest = 𝐿 − 𝑆 3.1
 Coefficient of Range:
This is a relative measure of dispersion and is based on the value
of the range. It is also called range coefficient of dispersion. It is
defined as:
𝐿−𝑆
𝐂𝐨𝐞𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐭 𝐨𝐟 𝐑𝐚𝐧𝐠𝐞 = 3.2
𝐿+𝑆
where, L represents largest value in a distribution
S represents smallest value in a distribution
We can understand the computation of range with the help of examples
of different series,
Case Studies on raw data, discrete series and continuous series

Raw Data: Marks out of 50 in a subject of 10 students, in a class are
given as follows: 2,8,2,1,6,4,3,3,8,2,2and 5.
In the example, the maximum or the highest marks is ‘8’ and the lowest
marks is ‘1’. Therefore, we can calculate range;
L = 8 and S = 1
Absolute Range = L – S = 7 marks
Discrete Series
Table 3.1: Marks of the Students in Statistics

Marks of the Students in Statistics (X) No. of students (F)
Smallest 10 4
10 10
18 16
Largest 20 15
Total = 45
Absolute Range = 20 – 10 = 10 marks
62
STT 205 MODULE 3
Continuous Series
Table 3.2: Frequencies
Marks of the Students in Statistics (X) No. of students (F)
Smallest= 10 10-15 4
15-20 10
20-25 26
Largest =30 25-30 8
Absolute Range = L – S = 30 – 10 = 20 marks
Absolute Range = L – S = 30 – 10 = 20 marks
Range is a simplest method of studying dispersion. It takes lesser time to

compute the ‘absolute’ and ‘relative’ ranges. Range does not take into
account all the values of a series, i.e. it considers only the extreme items
and middle items are not given any importance. Therefore, Range
cannot tell us anything about the character of the distribution. Range
cannot be computed in the case of “open ends’ distribution i.e., a
distribution where the lower limit of the first group and upper limit of
the higher group is not given.
The concept of range is useful in the field of quality control and to study
the variations in the prices of the shares etc.
Quartile Deviations (Q.D.)
The concept of ‘Quartile Deviation does take into account only the
values of the ‘Upper quartile (Q3) and the ‘Lower quartile’ (Q1).
Quartile Deviation is also called ‘inter-quartile range’. It is a better
method when we are interested in knowing the range within which
certain proportion of the items fall.
‘Quartile Deviation’ can be obtained as:
- Inter-quartile range = 𝑄3 − 𝑄1 3.3

𝑄3−𝑄1
- Semi-quartile range = 3.4
2
𝑄3−𝑄1
- Coefficient of Quartile Deviation = 3.5
𝑄3+𝑄1
Case Studies
Calculation of Inter-quartile Range, Semi-quartile Range and
Coefficient of Quartile Deviation in case of Raw Data
Suppose the values of X are : 20, 10, 18, 25, 32, 10
In case of quartile-deviation, it is necessary to calculate the values of Q1
63
and Q3 by arranging the given data in ascending of descending order.

Therefore, the arranged data are (in ascending order): X = 10, 10, 18, 20,
25, 32.
Number of items = 6
Q1 = the value of item = 1.75th item

= the value of 1st item + 0.75 (value of 2nd item – value of 1st item)
= 10 + 0.75 (10 – 10) = 10 + 0.75(2) = 10 + 1.50 = 10.50
Q3= the value of item = the value of 3(7/4)th item = the value of 5.25th
item
= 25 + 0.25 (32 – 25) = 25 + 0.25 (7) = 26.075
Therefore,
Inter-quartile range = Q3 – Q1 = 26.75 – 10.50 = 16.25
𝑄3−𝑄1
Semi-quartile range = = 8.125
2
𝑄3−𝑄1
Coefficient of Quartile Deviation =
𝑄3+𝑄1
More examples on Coefficient of Quartile Deviation = (Q3 – Q1) / (Q3 +
Q4 )
Coefficient of Quartile Deviation = (94.5 – 57.25) / (94.5 +57.25)
Coefficient of Quartile Deviation = 0.2454.
Coefficient of Quartile Deviation = (Q3 – Q1) / (Q3 + Q). Coefficient of
Quartile Deviation = (31.25 – 13.50) /(31.25 + 13.50)
Coefficient of Quartile Deviation = 0. 397
Advantages of Quartile Deviation

Some of the important advantages are :
- It is easy to calculate. We are required simply to find the values
of Q1 and Q3 and then apply the formula of absolute and
coefficient of quartile deviation.
- It has better results than range method. While calculating range,
we consider only the extreme values that make dispersion erratic,
in the case of quartile deviation, we take into account middle
50% items.
- The quartile deviation is not affected by the extreme items.
Disadvantages
- It is completely dependent on the central items. If these values
are irregular and abnormal the result is bound to be affected.
- All the items of the frequency distribution are not given equal
importance in finding the values of Q1 and Q3.
- It does not take into account all the items of the series and hence
considered to be inaccurate.
Similarly, sometimes we calculate percentile range, say, 90th and 10th
percentile as it gives slightly better measure of dispersion in certain
64
STT 205 MODULE 3
cases.
- Absolute percentile range = P90 – P10.
- Coefficient of percentile range =
This method of calculating dispersion can be applied generally in case of
open end series where the importance of extreme values are not
considered.
Average Deviation
Average deviation is defined as a value which is obtained by taking the

average of the deviations of various items from a measure of central
tendency Mean or Median or Mode, ignoring negative signs. Generally,
the measure of central tendency from which the deviations arc taken, is
specified in the problem. If nothing is mentioned regarding the measure
of central tendency specified then deviations are taken from median
because the sum of the deviations (after ignoring negative signs) is
minimum.
Advantages of Average Deviations

- Average deviation takes into account all the items of a series and
hence, it provides sufficiently representative results
- It simplifies calculations since all signs of the deviations are
taken as positive.
- Average Deviation may be calculated either by taking deviations
from Mean or Median or Mode.
- Average Deviation is not affected by extreme items
- .It is easy to calculate and understand.
- Average deviation is used to make healthy comparisons.
Disadvantages of Average Deviations

- It is illogical and mathematically unsound to assume all negative
signs as positive signs.
- Because the method is not mathematically sound, the results
obtained by this method are not reliable.
- This method is unsuitable for making comparisons either of the
series or structure of the series.
This method is however more effective during the reports presented to
the general public or to groups who are not familiar with statistical
methods.
65
Standard Deviation
The standard deviation, which is shown by Greek letter s (read as sigma)
is extremely useful in judging the representativeness of the mean. The
concept of standard deviation, which was introduced by Karl Pearson
has a practical significance because it is free from all defects, which
exists in a range, quartile deviation or average deviation.
Standard deviation is calculated as the square root of average of squared
deviations taken from actual mean. It is also called root mean square
deviation. The square of standard deviation i.e., s2 is called ‘variance’.
Calculation of standard deviation in case of raw data
There are four ways of calculating standard deviation for raw data:
- When actual values are considered;
- When deviations are taken from actual mean;
- When deviations are taken from assumed mean; and
- When ‘step deviations’ are taken from assumed mean.
Advantages of Standard Deviation

- Standard deviation is the best measure of dispersion because it
takes into account all the items and is capable of future algebraic
treatment and statistical analysis.
- It is possible to calculate standard deviation for two or more
series.
- This measure is most suitable for making comparisons among
two or more series about variability.
Disadvantages
- It is difficult to compute.
- It assigns more weights to extreme items and less weights to
items that are nearer to mean.
- It is because of this fact that the squares of the deviations which
are large in size would be proportionately greater than the squares
of those deviations which are comparatively small.
Mathematical properties of standard deviation (σ)

- If deviations of given items are taken from arithmetic mean and
squared then the sum of squared deviation should be minimum,
i.e., = Minimum,
- If different values are increased or decreased by a constant, the
standard deviation will remain the same.
- If different values arc multiplied or divided by a constant than the
standard deviation will be multiplied or divided by that constant.
66
STT 205 MODULE 3
- Combined standard deviation can be obtained for two or more

series
1. Write the seven properties of a good measure of Dispersion.

2. Explain the two types of Dispersion.
3. List Methods of Dispersion.
4. Define the following;
a) Dispersion
b) Range
c) Quartile Deviation
d) Average Deviation
e) Standard deviation and coefficient of variation.
5. Write three advantages and two disadvantages of Standard
Deviation
3.4 Summary
The concept of central tendency, which is identifying a single value that
can be used to represent an entire data set, and also where a distribution
of data lies and how the variability or differences among scores in a set
of data influences the shape and spread of the distribution were
considered in unit 4’
This unit handles the basic property of dispersion as a value that
indicates the extent to which all other values are dispersed about the
central value in a particular distribution.


Jersey, ISBN 0-13-196869-6.
67
MODULE 4 STATISTICAL PROBABILITY (SET

THEORY AND BASIC CONCEPTS OF
PROBABILITY)
Unit 1 Set theory

Unit 2 Bayes's Theorem and Counting Techniques
Unit 3 Permutations and Combinations
Unit 4 Basic Concepts of Probability
UNIT 1 SET THEORY
Unit Structure
1.1 Introduction
1.3 Main Content
1.3.1 Set
1.3.2 Method of Representation a Set
1.3.3 Set Theory
1.3.4 Types of set
1.4 Some Laws of Sets of Algebra
1.5 Summary
1.1 Introduction
Probability is the extent to which an event is likely to occur. It is the

study of random or non-deterministic experiment. Example: Toss of a
coin or throw a die in the air.
To measure by the ratio of the favorable cases to the whole number of

cases possible.
68
STT 205 MODULE 4
1.3 Main Content
1.3.1 Set
A set is a collection of well-defined objects. It is an unordered collection

of distinct elements of the same type where type is defined by the writer
of the set. A set can also be defined as any collection of objects with
definite property which makes them to be viewed as a single entity e.g.
students, tribes, teams, electorates. The individual objects in the
collection are called elements or members of the set, and they are said to
belong to or to be contained in the set. The set in turn is said to contain
or be composed of its members. Every element of the set must have the
property of the set.
Generally, a set is denoted by a capital symbol while elements of a set

are represented by small letters. Members of a set are enclosed in a
braced bracket { }. For example, sets are usually denoted by capital
letters A, B, C... elements are designated by lowercase letters a, b, c, ... .
Special notations are used in sets like; x  A to mean "x is an element
of A" or x belongs to A.
A set may be defined by listing the members in brace brackets e.g. the
set of positive even numbers less than 10 is denoted by the symbol {2, 4,
6, 8}. The set of all positive even integers is denoted by {2, 4, 6........}.
1.3.2 Methods of Representing a Set
By Listing: The method of listing the members of a set within braces is

sometimes referred to as the roster notation, example, A= {1,2,3,4,5,
6}.
By Describing: A set can also be defined by describing the members or

the property of the set in brace brackets too;
For example, to write that a set A = {1, 2, 3, 4, 5, 6} in words is A =

{Set of numbers gotten consists of all point when a die is rolled},
another example is A = {set of square numbers from 1 to 20}.
By Builder Notation: Another method of describing set mathematically

is by using a variable followed by a colon followed by the property of
the set, for example, the set of integers between 1 and 10 exclusive is
written as {x : 1< x < 10, x is integer}. This is read as the set of all x
such that x lies between 1 and 10 exclusive. Also the signs of inequality
can be used, example. A= x : 0  x  6
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1.3.3 Types of set
There are many types of set in the set theory:

 Singleton Set or Unit Set
A set containing only one element is called a unit set. It is also
called a singleton set. Hence the set given by {1}, {0}, {a} are all
consisting of only one element and therefore are singleton sets.
 Finite Set (Countable Sets)

A set consisting of a finite number of objects or elements in
which the number element is countable is said to be a finite set. It
can also be a finite set whose members can be countable.
Consider the sets: A = {5, 7, 9, 11} and B = {4, 8, 16, 32, 64,
118}
Obviously, A, B contain a finite number of elements, that is, 4
objects in A and 6 in B. Thus they are finite sets; other examples
are tossing a die, days of the week and so on.
 Countable Infinite Sets

A set that can be countable but has unlimited number of objects
examples odd number, even number, that is, y= 2,4,6,8.......
 Infinite and Uncountable Sets rational numbers

Unlike finite set, it has no limit to counting, if the number of
elements in a set is uncountable, the set is said to be an infinite
set.
Thus the set of all natural number is given by N = { 1, 2, 3, ...} is
an infinite set. Similarly the set of all rational number between 0
and 1 given by
A = {x:x Q, 0 <x<1} is an infinite set. Even, number x: x is
(0  x  0.5).
 Equal set
Equal set can be defined as when two sets A and B are said to be
equal or identical consisting of exactly the same elements
irrespective of how many times elements are repeated, and we
write
A = B. Thus the set A = {2, 4, 6, 8} equals to B = {2, 2, 4, 6, 6, 8}.
Also, A = {a, b, c, d}
B = {a, d, c, a, d, c}, it doesn’t matter if the elements are repeated.
 Null set/ empty set

It is possible for a set to contain no elements whatever. Such a
set is called an Empty or Null set and represented by . We will
consider  to be a subset of every set. At times we may write an
empty set as { } with no element in it. Note that {.} is not an
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STT 205 MODULE 4
empty set. A null set or an empty set is a valid set with no

member. A = { } / phi cardinality of A is 0.There are two
popular representation either empty curly braces { } or a special
symbol  phi.
 Subset
A set A is said to be a subset of set B, whenever every element of
A also belongs to B, that is, A  B. it can also be said that A is
contained in B or that B contains A. A subset A is said to be
subset of B if every elements which belongs to A also part of the
elements in B, example,
A= a, b, c; B= a, b, c, d , e, f (Here, A is a subset and a proper
subset of B). Also,
if A={1, 2, 3, 4} and B={1, 2, 3, 4} then A is a subset of B.
 Super Set
For any two sets, A and B, A is said to be a subset of B written as
A  B or B is a super set of A written as B  A if and only if all
elements of A are also elements of B=   and  =Empty set.
 Proper Subset
A set A is said to be a proper subset of B if A is a subset
of B, A is not equal to B or A is a subset of B but B contains at
least one element which does not belong to A. Assuming, A  B
and there exists at least one element of B which is not contained
in A i.e. B  A then we say A is a proper subset of B and we
write A B.
 Improper Set
Set A is called an improper subset of B if and only if A = B.
Every set is an improper subset of itself. However if we have A 
B and every element in B is also contained in A, that is, B  A,
then A is called an improper set of B and we write: A  B .
We find out that in this case
A = B.
 Universal Set
In all application of set theory, when sets of elements are
discussed we can have a larger encompassing set which contains
all sets under discussion i.e. all the sets will be subsets of this
larger set. An example is i students offering courses A, B, and C ,
a larger set could be the set of students in the school. Such a set is
called the Universal set U and vary from one application to the
other. It can also be defined as a set put in consideration for all
set present. It can also be defined as any set which is a superset of
all sets under consideration.
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Let A={1, 2, 3}; B={4, 5, 6, 7, 8, 9}; C={0, 1}then the universal

set is U={0, 1, 2, 3, 4, 5, 6, 7, 8, 9}
https://www.includehelp.com/basics/set-theory-and-types-of-set-
in-discrete-mathematics.aspx
 Union of Set
Given two or more set A, B, ............, the union of the sets is
defined as the set of elements found in either A or B or ....... i.e.
the set of all elements that can be found in any of the sets and we
write
A  B  ……. = {x : x  A or x  B or x  …….}. Combining
element of given sets effectively without repetition.
 Intersect of Set
Given two or more sets A, B... the intersection of the sets is the
set of all elements found in A, B and ..., that is, the set of
elements belonging to every one of those sets and we write:
A  B  ... = {x : x  A, x  B, x ….}
For example, given that A = {1, 2, 3,4, 5}; B = {2, 4, 6, 8,},
then A  B = {2, 4}.
It involves sorting out common elements in the given sets.
 Compliment:
Given a universal set U, and a set A which is a subset of the
universal set, the complement of the set A with respect to U
written as A’ or Ac is the set of all elements not found in A but
are in the universal set, that is, A’ = {x : x  A, x  U}.
 Disjoint: When the intersection of two or more sets is empty.
 Difference of two Sets:

Given two sets A, B, the difference A - B (also called the
complement of B relative to A) is defined to be the set of all
elements of A which are not in B.
 A – B = {x: x  A, x  B}.
Thus we will see that A - B = A  B’
 Product Set
Show AxB=BxA, where A= 1,2; B= a, b then AxB=(1,a), (1,b),
(2,a), (2,b) and
BxA=(a,1), (b,1), (a,2), (b,2)
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STT 205 MODULE 4
 Partition of Sets
This means separating the set with parenthesis that would contain
all the elements of the set depending on your objective(s)
Example: partition six even numbers as unit sets from set A; A= {1, 2, 3,
4, 5,…, 13}, we have A= {2}, {4}, {6}, {8}, {10}, {12},
1.3.4 Set Theory
Set theory is a branch of mathematics that deals with the properties of

well-defined collections of objects such as numbers or functions. Set
theory is also a well-defined collection of definite objects of perception
or thought and the Georg Cantor is the father of set theory. A set may
also be thought of as grouping together of single objects into a whole.
The objects should be distinct from each other and should be
distinguished from all those objects that do not form the set under
consideration. Hence a set may be a bunch of grapes, a tea set or it may
consist of geometrical points or straight lines;
https://www.includehelp.com/basics/set-theory-and-types-of-set-in-
discrete-mathematics.aspx
Sets are represented in diagrammatic form by what is called the

Venn Diagram
Case Studies
We can demonstrate, the concept of subsets, intersection, union,
complement, disjoint, and difference of set in Venn diagrams as follows:
A
B
B
A
AB AB
73
U
A’
A
AB
B A
AB=
A-B
Number of Elements in a Set:

The number of elements in a set A written n(A) is the number of distinct
elements in the set.
Case Study 1, given a set A

A = {1, 2, 1, 2, 2, 3, 3},
There are three distinct elements 1, 2, 3.
 n(A) = 3.
Maximum no. of Subsets a Set can have:

If we are given a set A = { }, the subset it has is itself only so the
number of subset is 1.
If A= {a}, the subsets are { } and {a}, thus the number of subsets are 2.
Case Study 2
If A = {a, b}, the subsets are { }, {a}, {b}, {a, b}. Therefore the number
of subsets is 4. If A = {a, b, c}.
All the subsets of A are:
{a,}, {b,} {c,}, {a, b} {b, c} {a, c}, {a, b, c} and { }
We thus set up a table as follows
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STT 205 MODULE 4
No of elements No of subsets No of subsets in powers of 2

0 1 20
1 2 21
2 4 22
3 8 23
. . .
. . .
N 2n
Therefore, for any set having n distinct elements, the maximum number
of subsets it can have is 2n, which is called the power set.
Power set of a set is defined as a set of every possible subset. If the

cardinality of A is n then Cardinality of power set is 2n as every element
has two options either to belong to a subset or not.
Laws of Set Algebra
Given three sets, A, B, C.
(i) Commutative Laws

A  B=B  A (Commutatively of set).
A  B=B A
(ii) Associative Laws

(A  B)  C = A  ( B  C ) (Associativity of set)
(A  B)  C = A  (B  C)
(iii) Distributive Laws

A  (B  C) = (A  B)  (A  C) (Distributive laws).
A  (B  C) = (A  B)  (A  C)
(iv) Idempotent Laws

A  A’ = U (Idempotent law)
A  A’ = 
(v) Identity law
A  = A (Identities)
AU=A
AU=U
A  = 
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(vi) Complement Law

A  A’ = U
A  A ’=  (Complement Law)
(A’)’ = A
U’ = 
’ = U
(vii) De Morgan’s Laws

(A  B)’ = A’ B’ (De Morgan’s Laws)
(A  B)’ = A’ B’
1. Define the following;

a) Set
b) Subset
c) Universal Set
d) Union Of Set
e) Intersect of Set
f) Compliment Set
g) Product Set
2. List method of representation a Set and include an example.
3. List and state mathematically the six laws of sets of algebra
4. Distinguish between finite, countable infinite sets and infinite and
uncountable sets
5. What do you understand by partition of sets
1.4 Summary
In unit 1, many aspects of Set were discussed, this includes; combining

elements of given sets effectively without repetition, sorting out
common elements in the given sets, set theory, types of sets and some
laws of sets of algebra.
This unit covers the ratio of the favorable cases to the whole number of
cases possible on set theory, combination of elements of given sets
effectively without repetition, sorting out common elements in the given
sets, set theory, types of sets and some laws of sets of algebra.
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Jersey, ISBN 0-13-196869-6.
77
UNIT 2 BAYES'S THEOREM AND COUNTING

TECHNIQUES
Unit Structure
2.1 Introduction
2.3 Main Content
2.3.1 Fundamental Principles of Counting Techniques
2.3.2 Axioms of Probability
2.3.3 Partition of Sample Space
2.3.4 Bayes Theorem
2.3.5 Probability Density Functions
2.3.6 Cumulative Density Function
2.3.7 Step Function Graph
2.4 Summary
2.1 Introduction
Counting means determining the number of elements in a given set.

Counting techniques can be seen as some approaches for determining
without direct enumeration the number of all possible outcomes of a
conceptual experiment or the number of elements in a given set.
The Fundamental Counting Principle (also called the counting rule) is a

way to figure out the number of outcomes in a probability problem.
Basically, you multiply the events together to get the total number of
outcomes.
Case Study 1
1. Assuming there are two ways of travelling from Nsukka to Enugu
and subsequently three ways of travelling from Enugu to Aba,
then there are total of 6 ways of travelling from Nsukka to Aba.
2. If you have 3 shirts and 4 pants; it results to 3×4=12 different
outfits.
3. If there are 6 flavors of ice-cream, and 3 different cones; there
will then be 6×3=18 different single-scoop ice-creams you could
order
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To ascertain the exact numbers of sub-sets in a given set.
2.3 Main Content
2.3.1 Fundamental Principles of Counting Techniques
 Multiplicative Rules-
If a procedure can be performed in n1 way, and if following this
procedure, a second one can be performed in n2 ways and so on,
then the number of ways the procedure can be performed in the
order indicated is the product.
In combinatorics, the rule of product or multiplication

principle is a basic counting principle (a.k.a. the
fundamental principle of counting). Stated simply, it is the idea
that if there are a ways of doing something and b ways of doing
another thing, then there are a · b ways of performing both
actions. It is denoted by n1xn2xn3x...
Application of Multiplicative rule
The Multiplication Rule of Probability is used to find the intersection

of two different sets of events, called independent and dependent events.
Independent events are when the probability of an event is not affected
by a previous event.
Using the Multiplication Principle
Case Study 2
The Multiplication Principle applies when we are making more than one
selection. Suppose we are choosing an appetizer, an entrée, and a
dessert. If there are 2 appetizer options, 3 entrée options, and 2 dessert
options on a fixed-price dinner menu, there are a total of 12 possible
choices of one each as shown in the tree diagram below;
79
The possible choices are:

1. soup, chicken, cake
2. soup, chicken, pudding
3. soup, fish, cake
4. soup, fish, pudding
5. soup, steak, cake
6. soup, steak, pudding
7. salad, chicken, cake
8. salad, chicken, pudding
9. salad, fish, cake
10. salad, fish, pudding
11. salad, steak, cake
12. salad, steak, pudding
We can also find the total number of possible dinners by multiplying.
We could also conclude that there are 12 possible dinner choices simply
by applying the Multiplication Principle.
Case Study 3: Using the Multiplication Principle
Diane packed 2 skirts, 4 blouses, and a sweater for her business trip. She
will need to choose a skirt and a blouse for each outfit and decide
whether to wear the sweater. Use the Multiplication Principle to find the
total number of possible outfits.
Solution
To find the total number of outfits, find the product of the number of
skirt options, the number of blouse options, and the number of sweater
options.
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STT 205 MODULE 4
There are 16 possible outfits.
 Additive Rule-
The additive principle states that if event A can occur in m ways,
and event B can occur in n disjoint ways, then the event “A or B
” can occur in m+n ways. Also, if a procedure can be done in m1
ways and another done in m2 ways, then the number of ways the
procedure can be done in the other is (m1+m2) ways. It is
important that the events be disjoint : i.e., that there is no way for
A and B to both happen at the same time.
Application of Additive rule
Addition Rule 1: When two events, A and B, are mutually exclusive,

the probability that A or B will occur is the sum of the probability of
each event.
Addition Rule 2: When two events, A and B, are non-mutually

exclusive, there is some overlap between these events.
Case Studies 4: Using the Addition Principle

If there are 2 vegetarian entrée options and 5 meat entrée options on a
dinner menu, what is the total number of entrée options?
SOLUTION
We can add the number of vegetarian options to the number of meat
options to find the total number of entrée options.
There are 7 total options.

https://courses.lumenlearning.com/ivytech-collegealgebra/chapter/using-
the-addition-and-multiplication-principles/
In general, the multiplication principle, similar to the addition

principle, tells us that if we multiply or divide by a number on one side
of an equation, we also need to multiply or divide by that same number
on the other side to keep the equation the same.
81
Subtraction can be an additive relationship because subtracting a

number is the same as adding a negative number (example: 5 - 2 = 5 + (-
2). Multiplicative relationships mean you multiply any x-value times
the SAME number to get the corresponding y-value.
2.3.2 Axioms of Probability
For philosophers, an axiom is a statement like “something can't be true

and not be true at the same time.” An example of a
mathematical axiom is “a number is equal to itself.” In everyday usage,
an axiom is just a common saying, but it's one that pretty much everyone
agrees on.
The axioms of probability are these three conditions on the function P:

 The probability of every event is at least zero.
 The probability of the entire outcome space is 100%.
 If two events are disjoint, the probability that either of the events
happens is the sum of the probabilities that each happens.
Unfortunately you can't prove something using nothing. You need at

least a few building blocks to start with, and these are called Axioms.
Mathematicians assume that axioms are true without being able
to prove them. If there are too few axioms, you can prove very little and
mathematics would not be very interesting.
The axioms of probability can be defined mathematically as;
P(.) - a generalized symbol of probability which can assume any digit

between 0 and 1.
Let P(A) be a real valued function defined on every event 𝐴 ∈ 𝑈..
Then P(A) is called the probability of event A if the following are
satisfied:
i) All probabilities are real values between 0 and 1; 0 ≤ 𝑃(𝐴) ≤ 1

but for ∀ 𝐴 ∈ 𝑈; 𝑃(𝐴) ≥ 0
ii) The Valid propositions have probability 1; 𝑃(𝑈) = 1
iii) The probability of disjunction (mutually exclusive event) is
defined as;𝑃(𝐴 ∪ 𝐵) = 𝑃(𝐴) + 𝑃(𝐵) − 𝑃(𝐴 ∩ 𝐵). If 𝑃(𝐴 ∩
𝐵) = 0, then
𝑃 (𝐴 ∪ 𝐵 ) = 𝑃 (𝐴 ) + 𝑃 (𝐵 )
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STT 205 MODULE 4
2.3.3 Mutually Exclusive
Mutually exclusive is a statistical term describing two or more events

that cannot happen simultaneously. It is commonly used to describe a
situation where the occurrence of one outcome supersedes the other.
Mutually exclusive events are things that can't happen at the same time.
For example, you can't run backwards and forwards at the same time.
The events “running forward” and “running backwards” are mutually
exclusive. Tossing a coin can also give you this type of event.
When a sample space is distributed down into some mutually

exclusive events such that their union forms the sample space itself, then
such events are called exhaustive events. When two or
more events form the sample space collectively then it is known as
collectively exhaustive events.
2.3.4 Mutually Exclusive
First, “mutually exclusive” is a concept from probability theory that says

two events cannot occur at the same time but at least one of the events
must occur. For example, when rolling a six-sided die, the outcomes 1,
2, 3, 4, 5, and 6 One example of an event that is both collectively
exhaustive and mutually exclusive is tossing a coin. The outcome must
be either heads or tails, or p (heads or tails) = 1, so the outcomes
are collectively exhaustive.
When applied to information, mutually exclusive ideas would be

distinctly separate and not overlapping. Secondly,
“collectively exhaustive” means that the set of ideas is inclusive of all
possible options. A collection of events is exhaustive if at least one of
them must occur. A collection of events is non-exhaustive if it is
possible for none of them to occur. Events are mutually exclusive if no
two of them can occur simultaneously.
In probability theory and logic, a set of events is jointly or collectively

exhaustive if at least one of the events must occur. ... The set of all
possible die rolls is both mutually exclusive and collectively
exhaustive (i.e., "MECE"). The events 1 and 6 are mutually
exclusive but not collectively exhaustive.
Case Studies 5:
Assuming that, a bag contains 12 white and 8 black balls.
(a) What is the probability of picking a white excludes picking a black,
when the events are mutually exclusive;
83
(b) What is the probability of picking a black excludes picking a white,

when the events are mutually exclusive.
White Black Total P(A) P(B)
A B
12 8 20 3/5 2/5
Solution;
a) P(A) = 12/20
b) P(B) = 8/20
2.3.5 Bayes' Theorem
Bayes' Theorem, named after 18th-century British mathematician

Thomas Bayes, is a mathematical formula for determining conditional
probability. Conditional probability is the likelihood of an outcome
occurring, based on a previous outcome.
Application of Bayes Theorem

It provides a way to revise existing predictions or theories (update
probabilities) given new or additional evidence. In
finance, Bayes' theorem can be used to rate the risk of lending money
to potential borrowers.
The Bayes theorem describes the probability of an event based on the

prior knowledge of the conditions that might be related to the event. If
we know the conditional probability, we can use the Bayes rule to find
out the reverse probabilities
Definition of Bayes Theorem
3.1
where;
P(A) is the probability of event A
P(B) is the probability of event B
P(A|B) is the probability of observing event A if B is true
P(B|A) is the probability of observing event B if A is true.
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STT 205 MODULE 4
Case Studies 6;
The table 3.1 shows the number of persons who were reported dead in a
certain community during 2020 and were classified by sex and age.
Table 3.1: Dead in a certain community during 2021 COVID 19
pandemic
Age/sex A1 A2 A3 total
<50yrs 50-79 80+
Male 27 79 21 128
Female 18 23 20 61
P i  45 102 42 189
A
 A 

If randomly selected individual from the table is male. Find the

probability that he is aged between 50-79years using Bayes theorem.
Solution
 102   79 
P( Ai ) P A  P  x 
 Ai   Ai   A   189   102 
P  = P i 
A  45 27 102 79
 A   
 P( Ai ) P Ai 
A 42 22
x  x  x
189 45 189 102 189 42
 79 
 
 A   189  79 189 79
= P i
  X 
 A  27 79 22 189 28 28
 
189 189 189
Case Studies 7: Wiggins's explanation can be summarized with

the help of the following table which illustrates the scenario in a
hypothetical population of 10,000 people:
Diseased Not Diseased
Test + 99 99 198
Test - 1 9,801 9,802
100 9,900 10,000
In this scenario P(A) is the unconditional probability of the disease; here

it is 100/10,000 = 0.01.
P(B) is the unconditional probability of a positive test; here it is

198/10,000 = 0.0198..
What we want to know is P (A | B), i.e., the probability of disease (A),

given that the patient has a positive test (B). We know that prevalence of
85
disease (the unconditional probability of disease) is 1% or 0.01; this is

represented by P(A).
Therefore, in a population of 10,000 there will be 100 diseased people

and 9,900 non-diseased people. We also know the sensitivity of the test
is 99%, i.e., P(B | A) = 0.99; therefore, among the 100 diseased people,
99 will test positive. We also know that the specificity is also 99%, or
that there is a 1% error rate in non-diseased people. Therefore, among
the 9,900 non-diseased people, 99 will have a positive test. And from
these numbers, it follows that the unconditional probability of a positive
test is 198/10,000 = 0.0198; this is P(B).
Thus, P(A | B) = (0.99 x 0.01) / 0.0198 = 0.50 = 50%.
From the table above, we can also see that given a positive test (subjects
in the Test + row), the probability of disease is 99/198 = 0.05 = 50%.
https://sphweb.bumc.bu.edu/otlt/mph-
modules/bs/bs704_probability/BS704_Probability6.html
Case Studies 8:
Suppose a patient exhibits symptoms that make her physician concerned
that she may have a particular disease. The disease is relatively rare in
this population, with a prevalence of 0.2% (meaning it affects 2 out of
every 1,000 persons). The physician recommends a screening test that
costs $250 and requires a blood sample. Before agreeing to the
screening test, the patient wants to know what will be learned from the
test, specifically she wants to know the probability of disease, given a
positive test result, i.e., P(Disease | Screen Positive).
The physician reports that the screening test is widely used and has a
reported sensitivity of 85%. In addition, the test comes back positive 8%
of the time and negative 92% of the time.
The information that is available is as follows:

 P(Disease)=0.002, i.e., prevalence = 0.002
 P(Screen Positive | Disease)=0.85, i.e., the probability of
screening positive, given the presence of disease is 85% (the
sensitivity of the test), and
 P(Screen Positive)=0.08, i.e., the probability of screening positive
overall is 8% or 0.08. We can now substitute the values into the
above equation to compute the desired probability,
Based on the available information, we could piece this together using a

hypothetical population of 100,000 people. Given the available
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STT 205 MODULE 4
information this test would produce the results summarized in the table
12.2;
Table 12.2: Summary of Positive and Negative Test Results

Diseased Not diseased
Test + 170 7,830 8,000
Test - 30 91,970 92,000
200 99,800 100,000
The answer to the patient's question also could be computed from

Bayes's Theorem:
We know that P(Disease)=0.002, P(Screen Positive | Disease)=0.85 and

P(Screen Positive)=0.08. We can now substitute the values into the
above equation to compute the desired probability,
P(Disease | Screen Positive) = (0.85)(0.002)/(0.08) = 0.021.
If the patient undergoes the test and it comes back positive, there is a
2.1% chance that he has the disease. Also, note, however, that without
the test, there is a 0.2% chance that he has the disease (the prevalence in
the population). In view of this, do you think the patient have the
screening test?
Another important question that the patient might ask is, what is the
chance of a false positive result? Specifically, what is P(Screen Positive|
No Disease)? We can compute this conditional probability with the
available information using Bayes Theorem.
By substituting the probabilities in this scenario, we get:
Thus, using Bayes Theorem, there is a 7.8% probability that the

screening test will be positive in patients free of disease, which is the
false positive fraction of the test.
Complementary Events
Note that if P(Disease) = 0.002, then P(No Disease)=1-0.002. The
events, Disease and No Disease, are called complementary events. The
"No Disease" group includes all members of the population not in the
"Disease" group. The sum of the probabilities of complementary events
must equal 1 (i.e., P(Disease) + P(No Disease) = 1). Similarly, P(No
Disease | Screen Positive) + P(Disease | Screen Positive) = 1.
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2.3.6 Probability Density Functions
The function f(x) is called the probability density functions of a discrete

random variable x if:
(i) f(x)  0
(ii)  f ( x)  1
x
Let x be random variable of a continuous type, then f(x) is called a
probability density function of the continuous if
(i) f(x)  0

(ii)  f ( x)dx  1

b
(iii)P( a  x  b)   f ( x)dx
a
2.3.7 Cumulative Density Function
As the name implies F(x)-P(X  x)

When discrete, it’s expression would be:
(i) if x is discrete; f(x) =  f (u )
u x
x
(ii) if x is continuous ; f(x)=  f ( x)dx

Case Studies 9:
The entries of a coin tossed twice
X 0 1 2 Total
F 1 2 1 4
f(x) ¼ 2/4 ¼ 1
f(x) ¼ ¾ 4/4 2
 n  2  2!
    1
 x  0  (2  0)!0!
Recall f(x)=P X  x
F(0)=P X  0=1/4
1 2 3
F(1)=P X  1 =P X  0,1 =1/4+2/4  
4 4
F(2) = P X  2=P X  0,1,2 =1/4+2/4+1/4  1  2  1  4  1
4 4
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STT 205 MODULE 4
2.3.8 Step Function Graph
Step function is a non-decreasing function, that is, x1<x2, (x1)<f(x2)

X 0 1 2 3
F 1 3 3 1
f(x) 1/8 3/8 3/8 1/8
f(x) 1/8 4/8 7/8 8/8
3
C0 = 1; 3C1 = 3; 3C3 = 1
Case Study 10:
Consider f(x)=  C ( x 2 ) 0 x  3
O elsewhere
If f(x) is a pdf
i) find c
ii) p(x<0)
iii) p( 0  x  1)
Solution
3 3
i) f(x)=  f ( x)dx =  cx 2 dx
0 0
3
x 3

=  c   1 discrete pdf eq(1)
 3 0
C=1/9
3
x2
0 9
From eq (1) substitute for 1/9= C
 x 3  27
    1 It is a pdf
 3x9  27 ,
ii ) P(0  x  1)
1
x  x    1  0 
3 3 3
1
1 1
0 9 =  3x9  0  27 27   27  0  27
i. P ( 2  x  3)
3
x 2  x 3   33 2 3 
3
 27 8 
2 9   27    27  27      = 1 8 = 27  8 =
2  27 27  27 27
19
27
89
Case Study 11:
Given, f(x) =  3e 3 x , x  0
, check if it is a proper pdf
Solution
To check if the equation above is a proper pdf;
 =  9e 3()   9e 3  , Not a proper pdf

 3e
3 x

  9e  3 x

1
1
Using f(x) =  3e 3 x , x  0
For (i) P Px  3


3 3e 3 x
dx = 3

 1 3 x 
3 e dx  3 3 e  3
3 x

 
  0  e 9 =1.23x10-4
1. What are counting techniques?

2. Discuss the fundamental principles of counting techniques
3. What are the axioms of probability?
4. Two telephones A and B are in use 0.05 and 0.03 of the total time
available respectively. A is old and breaks down with probability
of 0.2 per unit time while B is new and breaks down with
probability of 0.4 per unit if a failure indicator f, shows that one
of the telephone is out of order. Find the probability that it is A.
5. Explain the following;
i. Bayes Theorem
ii. Probability density functions for discrete and continuous
type
iii. Cumulative density function
iv. Step function graph
2.4 Summary
Unit 2 determines without direct enumeration, the number of all possible

outcome of a conceptual experiment or the number of elements in a
given set.
Here the Counting techniques was considered as some approaches for

determining without direct enumeration the number of all possible
outcomes of a conceptual experiment or the number of elements in a
given set.
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91
UNIT 3 PERMUTATIONS AND COMBINATIONS
Unit Structure
3.1 Introduction
3.3 Main Content
3.3.1 Permutation
3.3.2 Combination
3.4 Summary
3.1 Introduction
In drawing with replacement, each drawing is made from the entire

population such that each element can be drawn more than once. The
samples so drawn are those samples in which repetitions are allowed.
In drawing without replacement, an element once drawn is removed

from the population so that the samples drawn do not allow for
repetitions.
By the end of this unit you are excepted:
 To arrange the objects or numbers in order.

 To ascertain the way of selecting the objects or numbers from a
group of objects or collection, in such a way that the order of the
objects does not matter.
3.3 Main Content
3.3.1 Permutation
A permutation is an ordered arrangement of a set of n objects. If

r , (r  n) of these objects are considered it is called an r-permutation or a
permutation of n objects taking r at a time.
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STT 205 MODULE 4
Case Study 1
If you have a set containing 3 elements; a, b, c and you are to arrange
2 objects from the 3 objects, in this case, you do not replace the element
once selected and in an ordered, then you will have the following a, b,
a, c, b, c, b, a, c, a, c, bresults which is equal to 6
permutations. This is called an ordered arrangement without
replacement.
i. It is denoted by n Pr or P(n, r ) and evaluated in drawing without
n!
replacement as Pr   n(n  2)....(n  r  1)
n
(n  r )!
3.1
ii. If arrangement is with replacement then the number of ways is
given by n r
3.2
Case Study 2
Assuming, you have a set containing 3 elements; a, b, c and you are to
arrange 2 objects from the 3 objects, in this case, you will replace the
element that mean, there is possibility of selecting that particular
element more than once and in an ordered, then you will have the
following a, b, a, c, b, c, b, a , c, a, c, b a, a, b, b, c, c
results which is equal to 9 permutations. This is called an ordered
arrangement with replacement.
iii. If we have n objects are arrange taking all n at the same time and
if we observe that n1 are alike, n2 are alike, and so on then
n 1
 n; and the number of arrangements is given by
n!
3.3
n1 !n2 ...nr !
Case Study 3
If an urn contains 10 balls, find the number of ordered arrangements
i. Of size 3 with replacement
ii. Of size 5 without replacement
93
Solution
i. n  10 and r  3; with replacement number of ways is n r .
n r  103  1000
ii. n=10, r=3 without replacement, the required number of ways is
10!
n
Pr  10 P5   10 X 9 X 8 X 7 X 6  30240
5!
Case Study 4
Find the number of permutations that can be formed using the words (i)
queue and (ii) statistics
Solution:
i. Queue: n  5,e  u  2, q  1
Probability
n! 5!
No of ways    30
n1 !n2 !n3 ! 2!2!1!
ii. Statistics n  10, t  s  3, i  2, a  c  1
n! 10!
No of ways:   50400
n1 !n2 !n3 !n4 !n5 ! 3! X 3! X 2! X 1! X 1!
3.3.2 Combination
A combination is an unordered selection of n objects. If r (r  n) of these

objects are selected, we call it an r-combination or a combination of n
objects taking r at a time.
i. It is denoted by
n
Cr or  nr  3.4
ii. In sampling without replacement, the evaluation becomes
 nr   r !(nn! r )! 3.5
iii. In sampling with replacement, the number of unordered selection
becomes
      (rn!(nr1)!1)!
n  r 1
r
n  r 1
n 1 3.6
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STT 205 MODULE 4
Case Study 5
Consider the four letters A,B,C,D. How many unordered selections are
possible taking 3 letters at a time if
i. Replacement is allowed?
ii. Replacement is not allowed?
iii. List samples in (i) and (ii)
Solution
i. With replacement, total number of ordered samples
 n  r 1
r  ,but n  4 and r  3; therefore  n  r 1
r      20
6
3
ii. Without replacement
  4
n
r
4
3
The twenty years of listing (i) are:
AAA AAB AAC AAD ABB
ABC ABD ACC ACD ADD
BBB BBC BBD BCC BCD
BDD CCC CCD CDD DDD
The listing of (ii) is: ABC ABD ACD BCD
Case Study 6:
Repeat example 3.3 using 3 letters A, B and C for both (a) ordered and
(b) unordered selections of 2 letters out of the three.
Solution
a. Ordered selection – permutation

i. With replacement: total number of samples is
n r  32  9.
Without replacement: Pr  P2  3.2  6
n 3
ii.
iii. With replacement the samples are: AB, AC, BC, BA, CA, CB,
AA, BB, CC; without replacement: AB, AC, BC, BA, CA, CB.
b. Unordered selection – combination

i. With replacement: the total number of samples is
 n  r 1
nr   6
4
2
4.3
2.1
ii. Without replacement: total number of sample is
95
   3

r
n
3
2
3.2
2
iii. With replacement: the list is AB, AC, BC, AA, BB, CC.
Without replacement: the list is AB, AC, BC.
Case Study 6
If you have a set containing 3 elements; a, b, c and you are to arrange
2 objects from the 3 objects, in this case, you do not replace the element
once selected and in an ordered, then you will have the following; a, b,
a, c, b, c, results which is equal to 3 combinations. This is called an
ordered arrangement without replacement.
1. State three differences between Permutation and combination.

2. An urn contains 20 balls, find the number of ordered
arrangements
a. Of size 3 with replacement
b. Of size without replacement
3. Find the number of permutations that can be formed using the
words;
a. Queue: n  5,e  u  2, q  1
b. Statistics n  10, t  s  3, i  2, a  c  1
4. Consider the four letters A, B, C, D, E. How many unordered

selections are possible taking 4 letters at a time if
a. Replacement is allowed?
b. Replacement is not allowed?
c. List samples in (a) and (b)
1.4 Summary
Permutations and combinations are the various ways in which objects

from a set may be selected, generally without replacement, to form
subsets. This selection of subsets is called a permutation when the
order of selection is a factor and a combination when order is not a
factor.
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STT 205 MODULE 4
i. In permutation and combination objects being arranged or

selected must be distinguishable.
ii. The distinction between combination and permutation is clarified
from the distinction between ordered and unordered sampling;
arrangements with and without replacement.
iii. The relationship between permutation and combination is that
n
Pr  r ! nCr .




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UNIT 4 BASIC CONCEPTS OF PROBABILITY
Unit Structure
4.1 Introduction
1.3 Main Content
4.3.1 Introduction to probability
4.3.2 Unconditional Probability
4.3.3 Conditional Probability
4.3.4 Types of Probabilities
4.3.5 Probability Model
4.3.6 Reasons for using probability
4.4 Summary
4.1 Introduction
Probabilities can be expressed as proportions that range from 0 to 1, and

they can also be expressed as percentages ranging from 0% to 100%. A
probability of 0 indicates that there is no chance that a particular event
will occur, whereas a probability of 1 indicates that an event is certain to
occur.
To ascertain the number that reflects the chance or likelihood that a

particular event will occur.
4.3 Main Content
A probability of 0.45 (45%) indicates that there are 45 chances out of

100 of the event occurring.
The concept of probability can be illustrated in the context of a study of

obesity in children 5-10 years of age who are seeking medical care at a
particular paediatric practice. The population (sampling frame) includes
all children who were seen in the practice in the past 12 months and is
summarized below, see:
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STT 205 MODULE 4
Age (years)
5 6 7 8 9 10 Total
Boys 432 379 501 410 420 418 2,560
Girls 408 513 412 436 461 500 2,730
Totals 840 892 913 846 881 918 5,290
1.3.1 Unconditional Probability
Case Study 2
If we select a child at random (by simple random sampling), then each
child has the same probability (equal chance) of being selected, and the
probability is 1/N, where N=the population size. Thus, the probability
that any child is selected is 1/5,290 = 0.0002. In most sampling
situations we are generally not concerned with sampling a specific
individual but instead we concern ourselves with the probability of
sampling certain types of individuals. For example, what is the
probability of selecting a boy or a child 7 years of age?
The following formula can be used to compute probabilities of selecting

individuals with specific attributes or characteristics.
P(characteristic) = # persons with characteristic / N
Try to figure these out before looking at the answers:

1. What is the probability of selecting a boy? Answer
2. What is the probability of selecting a 7 year-old? Answer
3. What is the probability of selecting a boy who is 10 years of
age? Answer
4. What is the probability of selecting a child (boy or girl) who is at
least 8 years of age? Answer
4.3.2 Conditional Probability
Case Study 3
Each of the probabilities computed in the previous section (e.g., P(boy),
P(7 years of age)) is an unconditional probability, because the
denominator for each is the total population size (N=5,290) reflecting
the fact that everyone in the entire population is eligible to be selected.
However, sometimes it is of interest to focus on a particular subset of
the population (e.g., a sub-population).
99
For example, suppose we are interested just in the girls and ask the
question, what is the probability of selecting a 9 year old from the sub-
population of girls?
There is a total of NG=2,730 girls (here NG refers to the population of

girls), and the probability of selecting a 9 year old from the sub-
population of girls is written as follows
P(9 year old | girls) = # persons with characteristic / N

where | girls indicates that we are conditioning the question to a specific
subgroup, i.e., the subgroup specified to the right of the vertical line.
The conditional probability is computed using the same approach we

used to compute unconditional probabilities. In this case:
P(9 year old | girls) = 461/2,730 = 0.169.

This also means that 16.9% of the girls are 9 years of age. Note that this
is not the same as the probability of selecting a 9-year old girl from the
overall population, which is P(girl who is 9 years of age) = 461/5,290 =
0.087.
What is the probability of selecting a boy from among the 6 year olds?
4.3.3 Types of Probabilities
There are three major types of probabilities:

 Theoretical Probability.
 Experimental Probability.
 Axiomatic Probability.
Probabilities can also be classified under two types of probability

distribution which are used for different purposes and various types of
the data generation process.
1. Normal or Continuous Probability Distribution.
2. Binomial or Discrete Probability Distribution
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STT 205 MODULE 4
4.3.4 Probability Model
A probability model is a mathematical representation of a random

phenomenon. It is defined by its sample space, events within the sample
space, and probabilities associated with each event. The sample space S
for a probability model is the set of all possible outcomes.
4.3.5 Reasons for using Probability
Probability provides information about the likelihood that something

will happen. Statisticians, for instance, use National Bureau of Statistics
data patterns to predict the probability of the state of economy. In
management, probability theory is used to understand the relationship
between exposures and the risk management, returns and risks, price and
demand and so on.
1. Explain the word probability

2. Differentiate between conditional and unconditional probability
3. What are the 3 types of probability?
4. What are probability models?
5. What are the types of probability distributions?
4.4 Summary
In common usage, the word "probability" is used to mean the chance

that a particular event (or set of events) will occur expressed on a linear
scale from 0 (impossibility) to 1 (certainty), also expressed as a
percentage between 0 and 100%. The analysis of events governed
by probability is called statistics.
Probabilities and probability theories were considered in cognizant that

the number that reflects the chance or likelihood that a particular event
will occur.
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STT 205 MODULE 5
MODULE 5 STATISTICAL DISTRIBUTIONS
Unit 1 Normal Distribution and Students (T) Distribution

Unit 2 Binomial distribution
Unit 3 Poisson, Geometric and Hyper-geometric distributions
UNIT 1 NORMAL DISTRIBUTION AND STUDENTS (T)

DISTRIBUTION
Unit Structure
1.1 Introduction
1.3 Main Content
1.3.1 Normal Distribution
1.3.2 Skewed Distributions
1.3.3 Characteristics of Normal Distributions
1.3.4 Z Scores are Standardized Scores
1.3.5 The Standard Normal Distribution
1.3.6 Probabilities of the Standard Normal Distribution Z
1.3.7 Distribution of BMI and Standard Normal Distribution
1.3.8 Computing Percentiles
1.3.9 Evaluation of Probabilities for a Normal Distribution
1.3.10 Students t- Distribution
1.3.11 Fitting a Normal Curve to a Data
1.3.12 Difference between z test and t test
1.3.13 Difference between the t- distribution and the normal
distribution?
1.3.14 Application of t-distribution
1.4 Summary
1.1 Introduction
A statistical distribution is a parameterized mathematical function that

gives the probabilities of different outcomes for a random variable.
There are discrete and continuous distributions depending on the random
value it models.
103
To establish the probabilities of different outcomes for a random

variable.
1.3 Main Content
1.3.1 Normal Distribution
1.3.1.1 The Normal Distribution: A Probability Model for a

Continuous Outcome
Normal (Gaussian) Distributions
Suppose we were interested in characterizing the variability in

body weights among adults in a population. We could measure each
subject's weight and then summarize our findings with a graph that
displays different body weights on the horizontal axis (the x-axis) and
the frequency (% of subjects) of each weight on the vertical axis (the y-
axis) as shown in the illustration above.
There are several noteworthy characteristics of this graph. It is bell-

shaped with a single peak in the center, and it is symmetrical. If the
distribution is perfectly symmetrical with a single peak in the center,
then the mean value, the mode, and the median will be all the same.
Many variables have similar characteristics, which are characteristic of
so-called normal or Gaussian distributions.
Note that the horizontal or x-axis displays the scale of the characteristic
being analyzed (in this case weight), while the height of the curve
reflects the probability of observing each value. The fact that the curve
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STT 205 MODULE 5
is highest in the middle suggests that the middle values have higher
probability or are more likely to occur, and the curve tails off above and
below the middle suggesting that values at either extreme are much less
likely to occur. There are different probability models for continuous
outcomes, and the appropriate model depends on the distribution of the
outcome of interest.
The normal probability model applies when the distribution of the

continuous outcome conforms reasonably well to a normal or Gaussian
distribution, which resembles a bell shaped curve. Also note that normal
probability model can be used even if the distribution of the continuous
outcome is not perfectly symmetrical; it just has to be reasonably close
to a normal or Gaussian distribution.
1.3.2 Skewed Distributions
There are however other distributions which do not follow the

symmetrical patterns shown above. For example, if we were to study
hospital admissions and the number of days that patients are admitted in
the hospital, we would find that the distribution may not be symmetrical,
but skewed.
Note that the distribution to the distribution below is not symmetrical,

and the mean value is not the same as the mode or the median.
1.3.3 Characteristics of Normal Distributions
Distributions that are normal or Gaussian have the following

characteristics:
 Approximately 68% of the values fall between the mean and one
standard deviation (in either direction)
 Approximately 95% of the values fall between the mean and two
standard deviations (in either direction)
 Approximately 99.9% of the values fall between the mean and
three standard deviations (in either direction)
105
If we have a normally distributed variable and know the population

mean, μ and the standard deviation (σ), then we can compute the
probability of particular values based on this equation for the normal
probability model:
where μ is the population mean and σ is the population standard

deviation. (π is a constant = 3.15159, and e is a constant = 2.71828.)
Normal probabilities can be calculated using calculus or from an Excel
spreadsheet. There are also very useful tables that list the probabilities.
Case Study 1 Example of Body Mass Index (BMI) in Males

Consider body mass index (BMI) in a population of 60 year old males in
whom BMI is normally distributed and has a mean value = 29 and a
standard deviation = 6. The standard deviation gives us a measure of
how spread the observations are.
The mean (μ = 29) is in the center of the distribution, and the horizontal
axis is scaled in increments of the standard deviation (σ = 6) and the
distribution essentially ranges from μ - 3 σ to μ + 3σ. It is possible to
have BMI values below 11 or above 47, but extreme values occur very
infrequently.
To compute probabilities from normal distributions, we will compute

areas under the curve which for any probability distribution is 1. For the
normal distribution, we know that the mean is equal to median, so half
(50%) of the area under the curve is above the mean and half is below,
so P(BMI < 29) = 0.50. Consequently, if we select a man at random
from this population and ask of the probability that his BMI is less than
29, his answer will be 0.50 or 50%, since 50% of the area under the
curve is below the value BMI = 29.
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STT 205 MODULE 5
Note that with the normal distribution the probability of having any
exact value is 0 because there is no area at an exact BMI value, so in this
case, the probability that his BMI = 29 is 0, but the probability that his
BMI is <29 or the probability that his BMI is < 29 is 50%.
What is the probability that a 60 year old man has BMI less than 35?
The probability is displayed graphically and represented by the area
under the curve to the left of the value 35 in the figure below.
Note that BMI = 35 is 1 standard deviation above the mean. For the
normal distribution we know that approximately 68% of the area under
the curve lies between the mean plus or minus one standard deviation.
Therefore, 68% of the area under the curve lies between 23 and 35. We
also know that the normal distribution is symmetric about the mean,
therefore P (29 < X < 35) = P (23 < X < 29) = 0.34. Consequently, P(X
< 35) = 0.5 + 0.34 = 0.84. In other words, 68% of the area is between 23
and 35, so 34% of the area is between 29 and 35, and 50% is below 29.
If the total area under the curve is 1, then the area below 35 is therefore,
0.50 + 0.34 = 0.84 or 84%.
Case Study 2
What is the probability that a 60 year old man has BMI less than 41?
[Hint: A BMI of 41 is 2 standard deviations above the mean.] Try to
figure this out on your own before looking at the answer.
Solution
It is easy to figure out the probabilities for values that are increments of
the standard deviation above or below the mean, but what if the value
isn't an exact multiple of the standard deviation? For example, suppose
we want to compute the probability that a randomly selected man has a
BMI less than 30 (which is the threshold for classifying someone as
obese).
107
Because 30 is neither the mean nor a multiple of standard deviations

above or below the mean, we cannot simply use the probabilities known
to be associated with 1, 2, or 3 standard deviations from the mean. In a
sense, we need to know how far a given value is from the mean and the
probability of having values less than this. And, of course, we would
want to have a way of figuring this out not only for BMI values in a
population of males with a mean of 29 and a standard deviation of 6, but
for any normally distributed variable. So, what we need is a standardized
way of evaluating any normally distributed data so that we can compute
the probability of observing the results obtained from samples that we
take. We can do all of this by using a "standard normal distribution.
1.3.4 Z Scores are Standardized Scores
Case Study 3
Assuming that the body mass index (BMI) in a population of 60 year old
man’s BMI is normally distributed with mean value = 29 and a standard
deviation = 6.
What is the probability that a randomly selected man from this

population would have a BMI less than 30?
While a value of 30 doesn't fall on one of the increments of standard

deviation, we can calculate how many standard deviations it is away
from the mean.
It is 30-29=1 BMI unit above the means. The standard deviation is 6, so

1 BMI unit above the mean is1/6 = 0.156667 standard deviations above
the mean. This shows the distance a given observation is from the mean
for any normal distribution, regardless of its mean or standard deviation.
The next step is to find a way of solving the probabilities associated
various Z-scores. This can be done by using the standard normal
distribution.
1.3.5 The Standard Normal Distribution
The standard normal distribution is a normal distribution with a mean of

zero and standard deviation of 1. The standard normal distribution is
centred at zero and the degree to which a given measurement deviates
from the mean is given by the standard deviation.
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1.3.6 Basics for the standard normal distribution;
68% of the observations lie within 1 standard deviation of the

mean; 95% lie within two standard deviations of the mean; and
99.9% lie within 3 standard deviations of the mean.
To this point, we have been using "X" to denote the variable of interest
(e.g., X=BMI, X=height, X=weight). However, when using a standard
normal distribution, "Z" is used to denote a variable in the context of a
standard normal distribution. After standardization, the BMI=30
discussed on the previous page is shown below lying 0.15667 units
above the mean of 0 on the standard normal distribution on the right.
Since the area under the standard curve = 1, is easy to obtain the
probabilities of specific observation. For any given Z-score we can
compute the area under the curve to the left of that Z-score.it is pertinent
to note that a "Z" score of 0.0 tilts a probability of 0.50 or 50%, and a
"Z" score of 1, meaning one standard deviation above the mean, lists a
probability of 0.8413 or 84%. That is because one standard
deviation above and below the mean encompasses about 68% of the
area, so one standard deviation above the mean represents half of that of
34%. So, the 50% below the mean plus the 34% above the mean gives
us 84%.
1.3.6 Probabilities of the Standard Normal Distribution, Z
The statistical normal table is organized to provide the area under the
curve to the left of or less of a specified value or "Z value". In this case,
because the mean is zero and the standard deviation is 1, the Z value is
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the number of standard deviation units away from the mean, and the area
is the probability of observing a value less than that particular Z value.
Note also that the normal table shows probabilities to two decimal
places of Z. The units place and the first decimal place are shown in the
left hand column, and the second decimal place is displayed across the
top row.
But let's get back to the question about the probability that the BMI is
less than 30, that is, P(X<30). We can answer this question using the
standard normal distribution. The figures below show the distributions
of BMI for men aged 60 and the standard normal distribution side-by-
side.
1.3.7 Distribution of BMI and Standard Normal Distribution
====
The area under each curve is one but the scaling of the X axis is
different. Note, however, that the areas to the left of the dashed line are
the same. The BMI distribution ranges from 11 to 47, while the
standardized normal distribution, Z, ranges from -3 to 3. We want to
compute P(X < 30). To do this we can determine the Z value that
corresponds to X = 30 and then use the standard normal distribution
table above to find the probability or area under the curve. The
following formula converts an X value into a Z score, also called
a standardized score:
; where μ is the mean and σ is the standard deviation of the

variable X.
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STT 205 MODULE 5
Case Study 4
In order to compute P(X < 30) we convert the X=30 to its corresponding
Z score (this is called standardizing):
Thus, P(X < 30) = P(Z < 0.17). We can then look up the corresponding
probability for this Z score from the standard normal distribution table,
which shows that P(X < 30) = P(Z < 0.17) = 0.5675. Thus, the
probability that a male aged 60 has BMI less than 30 is 56.75%.
Case Study 5
Using the same distribution for BMI, what is the probability that a male
aged 60 has BMI exceeding 35? In other words, what is P(X > 35)?
Again we standardize:
We now go to the standard normal distribution table to look up P(Z>1)

and for Z=1.00 we find that P(Z<1.00) = 0.8413. Note, however, that the
table always gives the probability that Z is less than the specified value,
that is, it gives us P(Z<1)=0.8413.
Therefore, P(Z>1)=1-0.8413=0.1587. Interpretation: Almost 15% of

men aged 60 have BMI over 35.
1.3.8 Computing Percentiles
The standard normal distribution can also be useful for

computing percentiles. For example, the median is the 50th percentile,
the first quartile is the 25th percentile, and the third quartile is the
75th percentile. In some instances it may be of interest to compute other
percentiles, for example the 5th or 95th. The formula below is used to
compute percentiles of a normal distribution.
111
where μ is the mean and σ is the standard deviation of the variable X,

and Z is the value from the standard normal distribution for the desired
percentile.
Case Study 6
 The mean BMI for men aged 60 is 29 with a standard deviation
of 6.
 The mean BMI for women aged 60 the mean is 28 with a
standard deviation of 7.
What is the 90th percentile of BMI for men?

The 90th percentile is the BMI that holds 90% of the BMIs below it and
10% above it, as illustrated in the figure below.
To compute the 90th percentile, given the formula X=μ + Zσ, and
standard normal distribution table, unlike the previous example on BMI,
computation will be done in the opposite direction. Previously we
started with a particular "X" and used the table to find the probability.
However, in this case we want to start with a 90% probability and find
the value of "X" that represents it.
So we begin by going into the interior of the standard normal

distribution table to find the area under the curve closest to 0.90, and
from this we can determine the corresponding Z score. Once we have
this we can use the equation X=μ + Zσ, because we already know that
the mean and standard deviation are 29 and 6, respectively.
When we go to the table, we find that the value 0.90 is not there exactly,
however, the values 0.8997 and 0.9015 are there and correspond to Z
values of 1.28 and 1.29, respectively (i.e., 89.97% of the area under the
standard normal curve is below 1.28). The exact Z value holding 90% of
the values below it, is 1.282 which was determined from a table of
standard normal probabilities with more precision.
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STT 205 MODULE 5
Using Z=1.282 the 90th percentile of BMI for men is: X = 29 + 1.282(6)
= 36.69.
Interpretation: Ninety percent of the BMIs in men aged 60 are below

36.69. Ten percent of the BMIs in men aged 60 are above 36.69.
Case Study 7
What is the 90th percentile of BMI among women aged 60? Recall that
the mean BMI for women aged 60 the mean is 28 with a standard
deviation of 7.
Solution
The table below shows Z values for commonly used percentiles.
Percentile Z
st
1 -2.326
th
2.5 -1.960
th
5 -1.645
th
10 -1.282
th
25 -0.675
th
50 0
th
75 0.675
th
90 1.282
th
95 1.645
th
97.5 1.960
th
99 2.326
Percentiles of height and weight are used by pediatricians in order to

evaluate development relative to children of the same sex and age.
Case Study 8
If a child's weight for age is extremely low it might be an indication of
malnutrition.
1. For infant girls, the mean body length at 10 months is 72
centimeters with a standard deviation of 3 centimeters. Suppose a
girl of 10 months has a measured length of 67 centimeters. How
does her length compare to other girls of 10 months?
2. A complete blood count (CBC) is a commonly performed test.
One component of the CBC is the white blood cell (WBC) count,
which may be indicative of infection if the count is high. WBC
counts are approximately normally distributed in healthy people
113
with a mean of 7550 WBC per mm3 (i.e., per microliter) and a
standard deviation of 1085. What proportion of subjects have
WBC counts exceeding 9000?
3. Using the mean and standard deviation in the previous question,
what proportion of patients have WBC counts between 5000 and
7000?
The table of areas under the normal curve shows the area between the
mean and a given number of standard deviation. Recall that if X is a
continuous random variable, X is said to be normally distributed with
parameter  and  2 ( X ~ N ( ,  2 ) with pdf given as;
1 x 2
1  ( )
f ( x)   e 2 
2A
Where  = population mean,  = standard deviation,  = pie (3.152),
 = the base of natural logarithm.
The total area bounded by the normal curve and X is 1. Hence, the area
under the curve between two coordinate X=A and X=B is denoted by
Pr(a<X<b) .When the variable X is to be expressed standardized form
X 
as; Z  .

1
1 2Z2
The equation above is replaced by f ( x)  e .
2
In such a case, we say that Z is normally distributed with  as zero and
 as 1 (0,1), that is, Z~N(0,1), where Z is the
standardize form of X. Since the pdf of the standard normal distribution
is symmetric with respect to point Z=0 (zero). It follows that
p( Z  Z )  p( Z   Z ) .
For any real number Z (  Z  ) .The mean to the right of Z is equal
to zero (o) and the area to the left of Z=0 is 0.5.
1.3.9 Evaluation of Probabilities for a Normal Distribution
Case Study 9:
i. p ( t  Z  S )
p (t  Z  S )  A(t )  A( S ) is shaded area.
ii. p( Z  S )
iii. p( Z  S )
p( Z  S )  0.5  A( S )
If Z follows normal (0,1) find

i. P(Z>-0.5)
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STT 205 MODULE 5
Solution
i. P(Z>-0.5)
P(Z>-0.5)=0.5+0.1915=0.6915
Case Study 10;

Suppose that the birth weight of a baby is normally distributed with 
=3500g,  =500g . What is the probability that a baby born has weight
less that 3100.
Solution
The probability that a baby born has weight less that 3100 P(X<3100)
X 
Z 

 X  3500 3100  3500 
P  
 500 500 
  400 
P Z 
 500 
PZ  0.8
p( Z  0.8)  0.5  0.2881 = 0.2119
1.3.10 Students (t) Distribution
The T distribution, also known as the Student's t-distribution, is a type of

probability distribution that is similar to the normal distribution with its
bell shape but has heavier tails. T distributions have a greater chance for
extreme values than normal distributions, hence the fatter tails.
The Student's t-distribution) is a probability distribution that is used

to estimate population parameters when the sample size is small and/or
when the population variance is unknown.
The t - distribution can be regarded as distribution of function of random

variables.
Level of significance is the maximum probability with which we will be

willing to risk a type 1 error (error of rejecting a hypothesis that should
be accepted).
Degree of freedom is the number of observations (or values) that are

independent of each other i.e that can’t be deducted from each other.
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1.3.11 Fitting a Normal Curve to a Data
Case Study 11
The table below is a frequency distribution of height recorded to the
nearest inch of 100 male students at XYZ University
    
Height No. of X f X ( X X (X  X f (X  X )2
student ) )2
60-62 5 61 305 -6.45 41.603 208.02
63-65 18 64 1152 -3.45 11.903 215.25
66-68 42 67 2815 -0.45 0.203 8.53
69-71 27 70 1890 2.55 6.503 175.58
72-74 8 73 584 5.55 30.803 246.44
100 6745 -2.25 852.82
a. Fit a normal curve to the data

b. Determine the goodness of fit of the data

Recall  Z  X  X
S

Where X is the mean
& s is the S deviation

S
 f ( X  X )2
f

X 
 fX
f

X 
 fx  67.45  67.45
 f 100
852.82
S = 8.5282
100
S=2.92
Height C.B(X) Z Area Area for Expected Observed

for under each frequencies frequencies
C.B normal class
curve 0
to Z
60-62 59.5- - 0.4967 0.0411 4.11 5
62.5 2.72
63-65 62.5- - 0.4554 0.2068 20.68 18
65.5 1.70
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66-68 65.5- - 0.2486 0.3892 38.92 42

68.5 0.67
69-71 68.5- 0.36 0.1506 0.2771 27.71 27
71.5
72-74 71.5- 1.39 0.4177 0.0743 7.43 8
74.5
2.41 0.4920
Hint;
a. Expected frequencies = Area for each class x 100.
b. Use Chi-Square goodness of test to determine the goodness of fit
n
 (O i  ei ) 2
X2  i
of the data; ei
c. Hypothesis;
Null Hypothesis Ho – the fit is good for the data.
Alternative Hypothesis H1 – the fit is not good for the data.
d. If Chi-Square calculated is lesser than chi-square tabulated, we
accept the Ho.
If chi-square calculated is greater than chi-square tabulated, we
accept the H1
(5  4.13) 2 (18  20.68) 2 (42  38.92) 2 (27  27.71) 2 (8  7.43) 2
X2     
4.13 20.68 38.92 27.71 7.43
=0.183+0.347+0.244+0.018+0.044 =0.836; X cal  0.836
2
Test using 95%=0.95 and 5%=0.05
Recall; V=K-1-M, where V=degree of freedom, K-number of

observations, M-number of parameter used to estimate K=5, M=2 (mean
2
and standard); then V=5-1-2=2 X tab  X 22,0.95 ( X V2,level of significance ) = 5.99 at
95% level of significance. Since X cal2
 X tab
2
we do not reject the null
hypothesis (Ho) – meaning the fit is good for the data.
Test again using 0.05 as level of significance; X 22, 0.05  0.103
2
At 5% level of significance, the X cal  X tab
2
therefore we accept the
alternative hypothesis (H1) and reject the null, meaning the fit is not
good for the data.
1.3.12 Difference between z test and t test
Z-tests are statistical calculations that can be used

to compare population means to a sample's. T-tests are calculations used
to test a hypothesis, but they are most useful when we need to determine
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if there is a statistically significant difference between two independent

sample groups.
1.3.13 Difference between the t- distribution and the normal

distribution
The normal distribution is used when the population distribution of data

is assumed normal. A sample of the population is used to estimate the
mean and standard deviation. The t statistic is an estimate of the
standard error of the mean of the population or how well known is the
mean based on the sample size.
1.3.14 Application of t-distribution
The t‐distribution is used as an alternative to the normal

distribution when sample sizes are small in order to estimate confidence
or determine critical values that an observation is a given distance from
the mean. As the sample size increases, so do degrees of freedom. When
degrees of freedom are infinite, the t-distribution is identical to the
normal distribution. As sample size increases, the sample more closely
approximates the population.
1. What do you understand by the following;

a. normal distribution
b. students (t) distribution
2. If Z follows normal (0,1) find
a. P(Z>0.92)
b. P(Z<-0.76)
c. P(-0.64<Z<0.43)
3. Suppose that the birth weight of a baby is normally distributed
with  =3500g,
 =500g. What is the probability that a baby born has weight less
than 3100?
4. Why does T distribution depend on sample size?
What is the difference between the T distribution and the normal
distribution?
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STT 205 MODULE 5
1.4 Summary
Apart from unit 1 establishing the probabilities of different outcomes for

a random variable in distributions, it also ascertains the goodness of the
test.
This unit have been able to establish the probabilities of different

outcomes for a random variable.




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UNIT 2 BINOMIAL DISTRIBUTION
Unit Structure
2.1 Introduction
2.3 Main Content
2.3.1 Definition of Binomial distribution
2.3.2 The four requirements
2.3.3 Properties of a binomial experiment
2.3.4 Difference between binomial distribution and Poisson
distribution
2.3.4 Use of the binomial distribution requires three
assumptions
2.3.6 Computing the Probability of a Range of Outcomes
2.3.7 Mean and Standard Deviation of a Binomial Population
2.4 Summary
2.1 Introduction
The binomial distribution model allows us to compute the probability of

observing a specified number of "successes" when the process is
repeated a specific number of times, for example, in a set of patients and
the outcome for a given patient is either a success or a failure. We must
first introduce some notation which is necessary for the binomial
distribution model.
First, we let "n" denote the number of observations or the number

of times the process is repeated, and "x" denotes the number of
"successes" or events of interest occurring during "n" observations. The
probability of "success" or occurrence of the outcome of interest is
indicated by "p".
The binomial equation also uses factorials. In mathematics, the factorial

of a non-negative integer k is denoted by k!, which is the product of all
positive integers less than or equal to k.
For example,
 4! = 4 x 3 x 2 x 1 = 24,
 2! = 2 x 1 = 2,
 1!=1.
 There is one special case, 0! = 1.
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STT 205 MODULE 5
With this notation in mind, the binomial distribution model is defined

as:
The Binomial Distribution Model
To compute the probability of a range of outcomes
2.3 Main Content
2.3.1 Definition of Binomial distribution
Binomial distribution summarizes the number of trials, or observations

when each trial has the same probability of attaining one particular
value. The binomial distribution determines the probability of
observing a specified number of successful outcomes in a specified
number of trials.
2.3.2 The four requirements are:
 each observation falls into one of two categories called a success

or failure.
 there is a fixed number of observations.
 the observations are all independent.
 the probability of success (p) for each observation is the same -
equally likely.
2.3.3 Properties of a binomial experiment
A binomial experiment has four properties: 1) it consists of a sequence

of n identical trials; 2) two outcomes, success or failure, are possible on
each trial; 3) the probability of success on any trial, denoted p, does
not.
121
2.3.4 Difference between binomial distribution and

Poisson distribution
Binomial distribution describes the distribution of binary data from a

finite sample. Poisson distribution describes the distribution of binary
data from an infinite sample. Thus it gives the probability of getting r
events in a population.
modules/bs/bs704_probability/bs704_probability7.html
A multinomial probability model might be appropriate, but here we
focus on the situation in which the outcome is dichotomous.
Case Study 1
Adults with allergies might report relief with medication or not, children
with a bacterial infection might respond to antibiotic therapy or not,
adults who suffer a myocardial infarction might survive the heart attack
or not, a medical device such as a coronary stent might be successfully
implanted or not. These are just a few examples of applications or
processes in which the outcome of interest has two possible values (i.e.,
it is dichotomous). The two outcomes are often labelled "success" and
"failure" with success indicating the presence of the outcome of interest.
Note, however, that for many medical and public health questions the
outcome or event of interest is the occurrence of disease, which is
obviously not really a success. Nevertheless, this terminology is
typically used when discussing the binomial distribution model. As a
result, whenever using the binomial distribution, we must clearly specify
which outcome is the "success" and which is the "failure".
2.3.5 Use of the binomial distribution requires three

assumptions:
1. Each replication of the process results in one of two possible

outcomes (success or failure),
2. The probability of success is the same for each replication, and
3. The replications are independent, meaning here that a success in
one patient does not influence the probability of success in
another.
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STT 205 MODULE 5
Examples of Use of the Binomial Model
Case Study 2 Relief of Allergies
Suppose that 80% of adults with allergies report symptomatic relief with
a specific medication. If the medication is given to 10 new patients with
allergies, what is the probability that it is effective in exactly seven
patients?
First, do we satisfy the three assumptions of the binomial distribution
model?
 The outcome is relief from symptoms (yes or no), and here we
will call a reported relief from symptoms a 'success.'
 The probability of success for each person is 0.8.
 The final assumption is that the replications are independent, and
it is reasonable to assume that this is true.
We know that:
 number observation is n=10
 number successes or events of interest is x=7
 P = 0.80
The probability of 7 successes is:
This is equivalent to:
But many of the terms in the numerator and denominator cancel each
other out,
Interpretation: There is a 20.13% probability that exactly 7 of 10

patients will report relief from symptoms when the probability that any
one reports relief is 80%.
:
Binomial probabilities like this can also be computed in an Excel
spreadsheet using the BINOMDIST function. Place the cursor into an
empty cell and enter the following formula:
BINOMDIST(x, n, p, FALSE)
where x= # of 'successes', n = # of replications or observations, and p =
probability of success on a single observation.What is the probability
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that none report relief? We can again use the binomial distribution
model with n=10, x=0 and p=0.80.
This is equivalent to
Which simplifies to
Interpretation: There is practically no chance that none of the 10 will

report relief from symptoms when the probability of reporting relief for
any individual patient is 80%.
What is the most likely number of patients who will report relief out of
10? If 80% report relief and we consider 10 patients, we would expect
that 8 report relief. What is the probability that exactly 8 of 10 report
relief? We can use the same method that was used above to demonstrate
that there is a 30.30% probability that exactly 8 of 10 patients will report
relief from symptoms when the probability that any one reports relief is
80%. The probability that exactly 8 report relief will be the highest
probability of all possible outcomes (0 through 10).
Case Study 3: The Probability of Dying after a Heart Attack
The likelihood that a patient with a heart attack dies of the attack is 0.04
(i.e., 4 of 100 die of the attack). Suppose we have 5 patients who suffer a
heart attack, what is the probability that all will survive? For this
example, we will call a success a fatal attack (p = 0.04). We have n=5
patients and want to know the probability that all survive or, in other
words, that none are fatal (0 successes).
We again need to assess the assumptions. Each attack is fatal or non-

fatal, the probability of a fatal attack is 4% for all patients and the
outcome of individual patients are independent. It should be noted that
the assumption that the probability of success applies to all patients must
be evaluated carefully. The probability that a patient dies from a heart
attack depends on many factors including age, the severity of the attack,
and other comorbid conditions. To apply the 4% probability we must be
convinced that all patients are at the same risk of a fatal attack. The
assumption of independence of events must also be evaluated carefully.
As long as the patients are unrelated, the assumption is usually
appropriate. Prognosis of disease could be related or correlated in
members of the same family or in individuals who are cohabiting. In this
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STT 205 MODULE 5
example, suppose that the 5 patients being analyzed are unrelated, of

similar age and free of comorbid conditions.
There is an 81.54% probability that all patients will survive the attack
when the probability that any one dies is 4%. In this example, the
possible outcomes are 0, 1, 2, 3, 4 or 5 successes (fatalities). Because the
probability of fatality is so low, the most likely response is 0 (all patients
survive). The binomial formula generates the probability of observing
exactly x successes out of n.
16.6 Computing the Probability of a Range of Outcomes

If we want to compute the probability of a range of outcomes we need to
apply the formula more than once. Suppose in the heart attack example
we wanted to compute the probability that no more than 1 person dies of
the heart attack. In other words, 0 or 1, but not more than 1. Specifically
we want P(no more than 1 success) = P(0 or 1 successes) = P(0
successes) + P(1 success). To solve this probability we apply the
binomial formula twice.
We already computed P(0 successes), we now compute P(1 success):
P(no more than 1 'success') = P(0 or 1 successes) = P(0 successes) + P(1

success)
= 0.8154 + 0.1697 = 0.9851.
The probability that no more than 1 of 5 (or equivalently that at most 1
of 5) die from the attack is 98.51%.
What is the probability that 2 or more of 5 die from the attack? Here we
want to compute P(2 or more successes). The possible outcomes are 0,
1, 2, 3, 4 or 5, and the sum of the probabilities of each of these outcomes
is 1 (i.e., we are certain to observe either 0, 1, 2, 3, 4 or 5 successes). We
just computed P(0 or 1 successes) = 0.9851, so P(2, 3, 4 or 5 successes)
= 1 - P(0 or 1 successes) = 0.0149. There is a 1.49% probability that 2 or
more of 5 will die from the attack.
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2.3.3 Mean and Standard Deviation of a Binomial Population
Case Study 4
Mean number of successes:

Standard Deviation:
For the previous example on the probability of relief from allergies with
n-10 trials and p=0.80 probability of success on each trial:
modules/bs/bs704_probability/bs704_probability7.htm
1. What is Binomial distribution?

2. What are the four requirements of Binomial distribution?
3. What are the properties of a binomial experiment?
4. What are the differences between binomial and Poisson
distributions?
5. When do we apply binomial distribution?
2.4 Summary
In binomial process each replication of the process results in one of two

possible outcomes, that is, success or failure and the probability of
success is the same for each replication. The replications of binomial
distributions are independent.
Unit 2 computed the probability of a range of outcomes
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127
UNIT 3 POISSON, GEOMETRIC AND HYPER-

GEOMETRIC DISTRIBUTIONS
Unit Structure
3.1 Introduction
3.3 Main Content
3.3.1 Definition of Poisson
3.3.1 Probability of events for a Poisson distribution
3.3.2 Characteristics of a Poisson distribution
3.3.3 The difference between Poisson and binomial distribution
3.3.4 Application of Poisson
3.3.5 How do you know if a distribution is Poisson
3.4 Geometric distribution
3.4.1 The criteria for a distribution to be geometric are
3.4.2 Difference between binomial and geometric distribution
3.4.3 Geometric probability formula
3.5 Hypergeometric distribution
3.5.1 Uses of hyper-geometric distribution
3.5.2 Conditions for use of hyper-geometric distribution
3.5.3 Fundamental difference between hyper-geometric and
Geometric distributions
3.6 Summary
3.1 Introduction
In probability theory and statistics, the Poisson distribution was named

after French mathematician Simeon Denis Poisson. Poisson distribution
is a discrete probability distribution that expresses the probability of a
given number of events occurring in a fixed interval of time or space, if
these events occur with a known constant mean rate
and independently of the time since the last event. The Poisson
distribution can also be used for the number of events in other specified
intervals such as distance, area or volume.
To establish that the discrete probability distribution of the number of

events occurring in a given time period, given the average number of
times the event occurs over that time period.
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3.3 Main Content
3.3.1 Definition of Poisson distribution
The Poisson distribution is a discrete distribution that measures the

probability of a given number of events happening in a specified time
period. It is also the number of events occurring in a given time period,
given the average number of times the event occurs over that time
period.
In finance, the Poisson distribution could be used to model the arrival of

new buy or sell orders entered into the market or the expected arrival of
orders at specified trading venues or dark pools. In these cases, the
Poisson distribution is used to provide expectations surrounding
confidence bounds around the expected order arrival rate. Poisson
distributions are very useful for smart order routers and algorithmic
trading.
The Poisson distribution describes the probability to find

exactly x events in a given length of time if the events occur
independently at a constant rate. In addition, the Poisson distribution can
be obtained as an approximation of a binomial distribution when the
number of trials n of the latter distribution is large, success
probability p is small, and np is a finite number.
3.3.2 Probability of events for a Poisson distribution
A event can occurs 0,1,2,…times in an interval. The average number of

events in an interval is denoted, λ. Λ is the events rate, also called the
rate parameter. The probability of observing k events in an interval (the
PMF of the Poisson distribution) is given by the equation.
λ𝑘
𝑃(𝑘, λ) = 𝑒 −λ ; For x= 0, 1, 2, …
𝑘!
3.1
where λ is a positive number or the average number of events per

interval.
𝑒 is the number 2.71728 (the base of the natural logarithms)
K takes value 0,1,2,….
𝑘! − 𝑘 × (𝑘 − 1) × (𝑘 − 2) … × 2 × 1 𝑖𝑠 𝑡ℎ𝑒 𝑓𝑎𝑐𝑡𝑜𝑟𝑖𝑎𝑙 𝑜𝑓 𝑘
3.2
Both the mean and variance of the Poisson distribution are equal to λ.
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3.3.3 Characteristics of a Poisson distribution
The experiment consists of counting the number of events that will

occur during a specific interval of time or in a specific distance, area, or
volume.
The difference between Poisson and binomial distribution

The Binomial and Poisson distributions are similar, but they are
different. The difference between the two is that while both measure the
number of certain random events (or "successes") within a certain frame,
the Binomial is based on discrete events, while the Poisson is based on
continuous events.
3.3.3.1 Application of Poisson
The Poisson distribution is used to describe the distribution of rare

events in a large population. For example, at any particular time, there is
a certain probability that a particular cell within a large population of
cells will acquire a mutation. Mutation acquisition is a rare event.
3.3.3.2 How do you know if a distribution is Poison?
If a mean or average probability of an event happening per unit

time/per page/per mile cycled etc., is given, and you are asked to
calculate a probability of n events happening in a given time/number of
pages/number of miles cycled, then the Poisson Distribution is used.
Case Study 1
Given that 5% of a population are left handed. Use the Poisson

distribution to estimate the probability that a random sample of 100
people contains 2 or more left-handed people
X – number of left-handed people in a sample of 100
𝑋~𝐵𝑖𝑛(100, 0,05)
Poisson approximation 𝑋~𝑝(λ) 𝑤𝑖𝑡ℎ λ = 100 × 0.05 = 5
we want P(X ≥ 2) = 1 − P(X < 2)
1 − 𝑃 ( 𝑋 = 0) + (𝑋 = 1)
0
5 51
1 − (𝑒 −5 + 𝑒 −5 ) = 1 − 0.040428 = 0.959572
0! 1!
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STT 205 MODULE 5
Case Study 2
What is the probability of selecting four accidents randomly within a

week?
𝑒 −λ × 24 0.1353 × 17
(
𝑃 𝑋=4 = ) =
4! 4×3×2
Case Study 3
X = exactly 50 unique visitors/1hour

E = 2.71728
X= 2.9unique visitor/4 minutes.
First step is to get the units of time to match.

x = exactly 50 unique visitors/1hour
X = 43.5 unique visitors/1hour
(Multiply both numerator and denominator by 15) substitute the Poisson
probability equation;
𝑒 −43.5 ×43.550
𝑃 (𝑋 ) = = 0.035
50!
3.3.4 Geometric Distribution
The geometric distribution represents the number of failures before you

get a success in a series of Bernoulli trials. This discrete
probability distribution is represented by the probability density
function:
f(x) = (1 − p)x − 1p
It is a special case of the negative binomial distribution. It deals with the

number of trials required for a single success. Thus, the geometric
distribution is a negative binomial distribution where the number of
successes (r) is equal to 1.
3.3.4.2 Criteria for a distribution to be geometric
(1) The chance experiment must only have two outcomes

(success/failure) per trial,
(2) the trials must be independent,
(3) there must be a fixed probability of success for each trial, and
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(4) the variable of interest is the number of trials needed to obtain a

"success
3.3.5 Difference between binomial and geometric

distribution
The basic difference between binomial and geometric distribution is that

Binomial: has a FIXED number of trials before the experiment begins
and X counts the number of successes obtained in that fixed
number. Geometric: has a fixed number of successes (ONE...the FIRST)
and counts the number of trials needed to obtain that first success.
3.3.6 Geometric probability formula
If X has a geometric with probability P of success and (1-p) of failure on

each observation, the possible value of X are 1, 2, 3, …
If n is any one of these values, the probability that the first success
occurs on the nth trial is
𝑃(𝑋 = 𝑛) = 𝑃(1 − 𝑃)𝑛−1 3.4
The probability that it takes more than n trials is
𝑃 (𝑋 > 𝑛 ) = (1 − 𝑃 )𝑛 3.5
Case Study 4
A certain basket player has a 65% chance of making a free throw.
Assume all free throws are independent. What is the probability that he
makes the first free throws on the 3rd try?
Solution
a. 𝑃(𝑃 = 3) = (352 )65 = 0.79325 ; 𝑃 = 65 𝑎𝑛𝑑 𝑞 = 35
Case Study 5
How many tossed of a pair of fair die are necessary to be 99% certain
that a double size will appear? Find c ∋ 𝑃(𝑥 ≤ 𝑐 ) ≥ 0.99 𝑤ℎ𝑒𝑟𝑒 𝑥 =
1, 2,3, …
1 35 𝑥−1 ′
( )
𝑓 𝑥 =( × )
36 36
𝑐 1 35 𝑥−1
∑
= 𝑥−1( )( ⁄36) ≥ 0.99
36
1
=1-∑𝑐𝑥−1( )(35⁄36)𝑥−1 ≥ 0.99
36
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STT 205 MODULE 5
Case Study 6
A fast food chain puts a winning game piece on every fifth package of
French fries. Find the probability that you will win a price
a. with your third purchase of French fries
b. with your third or fourth purchase of French fries.
Solutions;
a. 𝑥=3
𝑃 3 = (0.2)(0.8)3−1 = 0.128
( )
b. 𝑥 = 3,4; 𝑃(3𝑜𝑟4) = 𝑃(3) − 𝑃(4) = 0.128 + 0.102 = 0,230
3.3.7 Hypergeometric Distribution
Definition of Hypergeometric Distribution
In probability theory and statistics, the hypergeometric distribution is

a discrete probability distribution that describes the probability
of k successes (random draws for which the object drawn has a specified
feature) in n draws, without replacement, from a finite population of
size N that contains exactly K objects with that feature, wherein each
draw is either a success or a failure.
In contrast, the binomial distribution describes the probability

of k successes in n draws with replacement.
FORMULA
A random variable x follows the hypergeometric distribution if its
probability mass function (pmf) is given by
𝐶𝑘𝐾 × 𝐶𝑛−𝑘
𝑁−𝐾
𝑃 (𝑥 ) = 3.6
𝐶𝑛𝑁
where
 K is the population size,
 K is the number of success samples in the population,
 n is the number of draws (i.e. quantity drawn in each trial),
 N is the number of observed successes,
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3.3.8 What is the hyper-geometric distribution used for?
The hyper-geometric distribution is used when population is so

small, so that the outcome of a trial has a large effect on the probability
of the next outcome.
The hyper-geometric distribution is used under these conditions:
Total number of items (population) is fixed.

Sample size (number of trials) is a portion of the population.
Probability of success changes after each trial.
The fundamental difference between hyper-geometric distribution

and geometric distribution
The difference between hyper-geometric distribution and

geometric distribution is in contrast to the Bernoulli, binomial,
and hyper-geometric distributions, where the number of possible values
is finite. Whereas, in the geometric and negative binomial distributions,
the number of "successes" is fixed, and we count the number of trials
needed to obtain the desired number of "successes".
In such a sequence of trials, the geometric distribution is useful to model

the number of failures before the first success. The distribution gives the
probability that there are zero failures before the first success, one
failure before the first success, two failures before the first success, and
so on.
Case Study 7
A group of 6 female managers and 19 male managers applies for an

assignment. A random sample of 5 people is draw from a hat without
replacement. What is the probability that 4 of the chosen manages will
be a female and 1 will be a male?
6 19
( )( )
𝑃 (𝑋 = 𝑘 ) = 4 1
25
5
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STT 205 MODULE 5
Case Study 8
Suppose that a shipment contains 5 defective items and 10 non-defective

items. If 7 items are selected at random without replacement. What is
the probability that at least 3 defective items will be obtained?
N=15 (5 defective, 10 non defective)
N=7
5 10
( )( )
𝑃(0) = 0 7 = 0.0176
15
7
5 10
( )( )
𝑃(1) = 1 6 = 0.1731
15
7
5 10
( )( )
𝑃(2) = 2 5 = 0.3917
15
7
𝑃(𝑋 = 3) = 1 − 𝑃 (𝑥 ≤ 2) = 1 − [𝑃(𝑜) + 𝑃(1) + 𝑃(2)] = 0.4267
Case Study 9
A hat contain 5 green marbles and 9 blue marbles. 4 marbles are drawn
randomly without replacement. Calculate each probabilities;
a. The probability of getting 3 green marbles;
𝑎 = 5; 𝑛 = 14 𝑎𝑛𝑑 𝑟 = 4
𝐶35 × 𝐶19 (10)(9)
𝑃 (𝑋 = 3) = 14 = = 0.00991008
𝐶4 (1001)
1. What is a Geometric Distribution?

2. What is the difference between hyper-geometric distribution and
geometric distribution?
3. What are the requirements of a hyper-geometric distribution?
4. What are the four conditions of a geometric distribution?
5. What is the difference between binomial and geometric
distribution?
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3.4 Summary
The Poisson distribution describes the probability to find

exactly x events in a given length of time if the events occur
independently at a constant rate while the geometric distribution
is a special case of the negative binomial distribution. It deals with the
number of trials required for a single success. Thus, the geometric
distribution is a negative binomial distribution where the number of
successes (r) is equal to 1. Finally, the hypergeometric distribution is
a discrete probability distribution that describes the probability
of k successes (random draws for which the object drawn has a specified
feature) in n draws, without replacement, from a finite population of
size N that contains exactly K objects with that feature, wherein each
draw is either a success or a failure.
Unit 3 establishes that the discrete probability distribution of the number

of events occurring in a given time period, given the average number of
times the event occurs over that time period.
Robert K. and Jim Poserina, (2017),Optimal Sports Math, Statistics,

and Fantasy.
Sinharay S. (2010), International Encyclopedia of Education (Third

Edition).
Yates, R. D. and Goodman, D. J. (2014), Probability and Stochastic

Processes: A Friendly Introduction for Electrical and Computer
Engineers (2nd ed.), Hoboken, USA: Wiley, ISBN
978-0-471-45259-1
https://en.wikipedia.org/wiki/Hypergeometric_distribution#:~:text=In%
20probability%20theory%20and%20statistics,that%20contains%
20exactly%20objects%20with
https://en.wikipedia.org/wiki/Poisson_distribution#:~:text=In%20probab
ility%20theory%20and%20statistics,time%20or%20space%20if
%20these
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STT 205 MODULE 6
MODULE 6 ESTIMATION AND HYPOTHESIS

TESTING
The details of estimating population parameters and hypothesis testing

from samples were explicated in units: 1, 2 and 3.
Unit 1 Estimation
Unit 2 Principle of Hypothesis Testing
Unit 3 Statistical Hypotheses’ Dimensions
UNIT 1 ESTIMATION
Unit Structure
1.1 Introduction
1.3 Main Content
1.3.1 Definition of Terms in Estimation:
1.3.2 Types of Estimation
1.3.2.1 Point Estimation
1.3.2.2 Interval Estimation:
1.3.2.3 Confidence Intervals
1.3.3 Method of Estimation
1.3.3.1 Least Square Estimation
1.3.3.2 Method of Moment
1.3.3.3 Maximum Likelihood Estimate
1.3.4 Criteria of Estimation
1.3.4.1 Consistency
1.3.4.2 Unbiasedness
1.3.4.3 Efficiency
1.3.4.4 Minimum Variance
1.3.4.5 Completeness
1.3.4.6 Sufficiency
1.4 Summary
1.1 Introduction
Estimation is any of numerous procedures used to calculate the value of

some parameters of a population from observations of a sample drawn
from it.
137
By the end of this unit, you will be able to learn different

procedures used to calculate the value of some property of a population
from observations of a sample drawn from the population.
1.3 Main Content
1.3.1 Definition of terms in Estimation:
Estimator- This a rule, often expressed as a formula that tells

how to calculate the value of an estimate based on the measurement
obtained in a sample. Estimator is the formula or rule used in getting the
unknown parameter. An estimator is particular example of a statistic,
which becomes an estimate when the formula is replaced with actual
observed sample values. An estimator is a statistic e.g. X̅ is an estimator
of the population mean µ and S2is an estimator of the population
variance σ2 .
Estimate- An estimate is the actual value obtained from an estimator

when sample is taken or the sample realization of an estimator. It can be
a particular value (point estimation) or an interval value (interval
estimation). This is the actual value of the estimator.
Case Study 1
̅
If X = 55, the sample mean, then 55 is the estimate.
Estimation- Estimation involves using the sample data to get a value for
the unknown parameter. This implies that in estimation we use part of
the entire population to draw conclusion. It represents ways or a process
of learning and determining the population parameter based on the
model fitted to the data. Estimation involves approximating the value of
an unknown parameter
1.3.2 Types of Estimation
Point estimation and interval estimation, and hypothesis testing are three
main ways of learning about the population parameter from the sample
statistic.
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STT 205 MODULE 6
1.3.2.1. Point Estimation
When the estimate gotten from sample observation is used as an

estimate of a population parameter is a single value then it is called point
estimation. Point estimates are single values calculated from the sample.
This is the process of obtaining a single numerical value from a random
sample to estimate the unknown population parameter.
Case Study 2
21 years is the mean age of students in this class.
Interval Estimation
This is the process of obtaining an estimate of the population parameter
as being within an interval L and U, which are functions of the observed
random variable. The probability that the parameter lie between the
interval L and U i.e. ρ [L≤ θ ≤ U ] where θ is the parameter, is
expressed in terms of predetermined number, 1 – α, called the
confidence coefficient and α is the level of significance. L is called the
lower limit and U the upper limit. The interval (L,U) is called 100 (1-
α)% confidence interval.
In statistics, interval estimation is the use of sample data to calculate

an interval of possible (or probable) values of an unknown population
parameter, in contrast to point estimate.
1.3.2.3 Confidence Intervals gives a range of values for the parameter

interval estimates are intervals within which the parameter is expected to
fall, with a certain degree of confidence.
Hypothesis tests = tests for a specific value(s) of the parameter.
1.3.3 Method of Estimation
1.3.3.1 Least Square Estimation
The method of least squares is a standard approach in regression

analysis to the approximate solution of over determined system, i.e., sets
of equations in which there are more equations than unknowns. "Least
squares" means that the overall solution minimizes the sum of the
squares of the residuals made in the results of every single equation.
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1.3.3.2 Method of Moment
Here, it involves equating the kth sample moment to the population

moment.
For instance,
n
 x i
Sample moment is given as X  i 1

3.1
n
In other words, method of moment involves equating the kth sample
moment to the corresponding population moment and solve the resultant
equation for the estimate of the parameter.
1.3.3.3 Maximum Likelihood Estimate
In Statistics, maximum likelihood estimation (MLE) is a method of

estimating the parameters of a statistical model with given observations,
by finding the parameter values that maximize the likelihood function.
MLE can be seen as a special case of the maximum a posteriori
estimation (MAE) that assumes a uniform prior distribution of the
parameters, or as a variant of the MAE that ignores the prior and which
therefore is un-regularized.
The method of maximum likelihood corresponds to many well-known

estimation methods in statistics. For example, one may be interested in
the heights of adult female penguins, but be unable to measure the
height of every single penguin in a population due to cost or time
constraints.
1.3.4 Criteria of Estimation
1.3.3.1: Consistency
In Statistics, consistency of procedures, such as computing confidence

intervals or conducting hypothesis tests, is a desired property of their
behaviour as the number of items in the data set to which they are
applied increases indefinitely.
Definition of Consistency: An estimator is consistent if the probability

that it equals the parameter being estimated approaches 1 as n ⟹ ∞
i.e Limn→∞ ρ[/θ̂ − μ/αɛ] → 1
Limn→∞ Var (θ̂) → 0 3.2
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1.3.4.2 Unbiasedness
In Statistics, the bias (or bias function) of an estimator is the difference

between this estimator's expected value and the true value of the
parameter being estimated. An estimator or decision rule with zero bias
is called unbiased. Otherwise the estimator is said to be biased.
Definition of Unbiasedness: An estimator is said to be unbiased if its

expectation is equal to the parameter estimated.
Case Study 3:
E(X̅ ) = μ ⟹ X̅ is unbiased for µ, where X̅ is an estimator of µ.
1.3.4.3 Efficiency
In the comparison of various statistical procedures, efficiency is a

measure of quality of an estimator, of an experimental design, or of a
hypothesis testing procedure. Essentially, a more efficient estimator,
experiment, or test needs fewer observations than a less efficient one to
achieve a given performance.
Definition of Efficiency: If X̅ 1 and X̅ 2 two unbiased estimators of the

population mean µ, we say the X̅ 1 is more efficient that X̅ 2 if Var (X̅ 1 )
< var (X̅ 2 ).
1.3.4.4: Minimum Variance
In Statistics a minimum-variance unbiased estimator (MVUE) or

uniformly minimum-variance unbiased estimator (UMVUE) is an
unbiased estimator that has lower variance than any other unbiased
estimator for all possible values of the parameter.
1.3.4.5: Completeness
In Statistics, completeness is a property of a statistic in relation to a

model for a set of observed data set. It is closely related to the idea of
identifiability, but in statistical theory it is often found as a condition
imposed on a sufficient statistic from which certain optimality results
are derived.
141
1.3.4.6 Sufficiency: Definition of Sufficiency
An estimator is said to be sufficient if it gives all the necessary

information, which no other estimator can provide.
1. Define the following terms;

a. Estimation
b. Estimator
c. Estimate
d. Estimation
2. List and explain types of estimation
3. What is confidence intervals?
4. Define the method of estimation
5. Explain the following criteria of estimation
a. Consistency
b. Unbiasedness
c. Efficiency
d. Minimum Variance
e. Completeness
f. Sufficiency
1.4 Summary
Unit 1 captures different procedures used to calculate the value of

some property of a population from observations of a sample drawn
from the population.
This unit covers estimation, which is any of numerous procedures used

to calculate the value of some parameters of a population from
observations of a sample drawn from it.


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Jersey, ISBN 0-13-196869-6.
143
UNIT 2 PRINCIPLE OF HYPOTHESIS TESTING
Unit Structure
2.1 Introduction
2.3 Main Content
2.3.1 Test of Significance
2.3.2 Statistical Hypothesis
2.3.3 Level of Significance
2.4 Interpretation of a Test
2.5 The Power of a Test
2.6 Critical and Acceptance Regions
2.7 Procedure for Testing Hypothesis
2.8 Summary
2.1 Introduction
The theory, methods, and practice of testing a hypothesis by comparing

it with the null hypothesis. The null hypothesis is only rejected if its
probability falls below a predetermined significance level, in which case
the hypothesis being tested is said to have that level of significance.
2.2 Learning Outcomes (ILOs)
To establish that a statements or assumptions about the parameters of

known distribution
2.3 Main Content
2.3.1 Test of Significance
2.3.2 Statistical hypotheses: These are statements or assumptions about

the parameters of known distribution which may or may not be true.
Case Study 1
The mean age of students offering STA 312 is 21 years.
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STT 205 MODULE 6
2.3.2.1 Types of hypotheses
(i) Null hypothesis: This is the hypothesis being tested and it is

formulated for the sole purpose of being rejected it is denoted by
Ho.
Example: Ho: mean age of students offering STA 312 is 21
years.
(ii) Alternative hypothesis: This is any other hypothesis contradicting
the null hypothesis and it is denoted by H1. Example: H1: the
mean age of students offering STA 312 is more than 21years or
not equal to 21years as the case may be.
Whether null or alternative hypothesis it can either be simple or

composite. A simple hypothesis is one, which specifies all be values of
the parameter.
Case Study 2:. Ho: π1= πo

Ho: π = πo;
Ho: π = π1 , π0 and π1 are specified values of the population proportion
and mean respectively. However, when all the values of the parameter
are not specified completely by the hypothesis, we have a composite
hypothesis.
Case Study 4:
H1: π ≠ πo or H1: π > πo. In each case the parameter µ or π can assume
an infinite number of values different from µo and πo.
2.3.3 Level of significance:
Generally in testing hypothesis we make a decision to accept or reject a

null hypothesis. Since the decision is based on sample information, we
realize that whatever decision we make, we stand the chance of
committing two distinct types of error. These errors are
(1) Type 1 error: We commit type 1 error when we reject the null
hypothesis when it is correct. The probability of committing
type 1 error is denoted by α and this error is usually reduced to
barest minimum. The maximum probability with which we would
be willing to risk a type I error is called the level of significance
or simply the level of significance of a test. It is the maximum
probability of committing type I error usually the level of
significance is denoted by α.
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(2) Type II error. This is the acceptance of a null hypothesis when it

is false. The probability of committing type II error also referred
to as the size of the type II error is denoted by β.
2.3.4 Interpretation of α
If in test of hypothesis α =0.05, this means that 5 out of every 100 cases
we shall be rejecting a true null hypothesis which implies that we are 95
percent confident that we have made the correct decision.
Decision state of Ho is true H1 is true

nature
Reject Ho Type 1 error Correct Decision
Accept Ho Correct Decision Type II error
2.3.5 The Power of a Test
The power of a test is the probability of rejecting the null hypothesis

when it is actually false. When testing hypothesis about a parameter µ,
the probability of accepting H0 is a function of µ denoted by c(µ) and is
called the operating characteristic 0C curve of the test. The 0C curve
describes how the probability of type II error varies with µ…
The power function of a test of statistical hypothesis is a function which

yields the probability of rejecting the null hypothesis under
consideration. The value of the power function at a parameter point is
called the power of the test at that point.
2.3.5.1 Types of Test
Generally the null hypothesis is stated in a specified form
Case Study 4: Ho: µ = µo and the Alternative is stated in such a

non-specified form such as
Hi: µ <µo or Hi: µ > µo or Hi: µ ≠ µo
1. One tailed test: When the alternative hypothesis is stated as Hi:

µ > µo, we have a one tailed test or one-sided test to the right.
When the alternative hypothesis is stated as Hi: µ <µo, we have a
one tailed or one-sided test to the left. In each case we are
interested only in extreme values to one side of the distribution.
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STT 205 MODULE 6
The critical region is such test is a region to one side of the

distribution with the area equal to the level of significance
2. Two tailed or two sided test: when the alternative hypothesis is
stated as Hi: µ ≠µo we have a two tailed test. In this test we are
interested in extreme values of the test statistic or its
corresponding Z-score on both sides or tails of the distribution.
In this case there are two critical regions, one to the right extreme
and the other to the left extreme of the distribution. The combine
areas of these two regions are α. The two regions are equal with
each equal to half of α.
2.3.6 Critical and Acceptance Regions
a. Critical Region: The critical region of a test is the region of the

test that leads to the rejection of the null hypothesis. It is also
called the rejection region or region of significance. If the value
of the test statistic falls into this region, the null hypothesis is
rejected.
b. Critical value: This is the value, which separates the critical
region from the acceptance region, and it depends on the level of
significance and in some cases on the degree of freedom of the
test.
c. Acceptance Region: This is the region of the distribution that
leads to the acceptance of the null hypothesis. It is also called
region of non-significance.
One sided test to the right
One sided test to the left
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Critical acceptance Critical

region region region
The shaded regions are the critical regions
2.3.7 Procedure for Testing Hypothesis
The procedure for testing hypothesis consists of the following steps:

(a) Formulate the null and appropriate alternative hypotheses
(b) Choose the level of significance if it is not given
(c) State the basic assumption. These are statement about the
population parameters from which the samples are drawn.
(d) Choose the test statistic which should not contain any unknown
parameter and whose distribution under the null hypothesis is
known.
(e) Construct the decision rule by fixing the critical region depending
on the alternative hypothesis and the level of significance this
involves the partitioning of the sampling distribution of the test
into the rejection and the acceptance regions.
(f) Using the sample data, calculate the test statistic.
(g) Make decision to reject or accept the null hypothesis depending
on whether the calculated value of the test statistic falls into the
critical or acceptance region.
1. What is the difference between statistical hypothesis and level of

significance
2. Discuss types of hypothesis, types of error, types of test
3. What do you understand by the following: power of a test,
interpretation of α, critical and acceptance regions
4. Identify the difference between critical region, critical value,
acceptance region including their diagrams
5. Itemize the procedure for testing hypothesis
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STT 205 MODULE 6
2.4 Summary
Unit 2 handles the basic principles of hypothesis testing. It also teaches

us on how to make decisions whether to reject or accept the null
hypothesis depending on the calculated value of the test statistic.
This unit establishes statements or assumptions about the parameters of

known distribution
2.5 References/Further Readings/Web Resources

Agresti, A. and Coull, B. A. (1998). Approximate is better than "exact"

for interval estimation of binomial proportions", The American
Statistician, 52(2), 119-126.



Jersey, ISBN 0-13-196869-6.

149
UNIT 3 STATISTICAL HYPOTHESES’ DIMENSIONS
Unit Structure
3.1 Introduction
3.3 Main Content
3.3.1 Branches of Hypotheses
3.3.1.1 Simple Test of Hypotheses
3.3.1.2 Composite Test of Hypotheses
3.3.2 Test of Hypotheses for Small and Large Samples
3.3.2.1 Large Sample Test for One Population Mean
3.3.2.2 Large Sample for Two Populations Mean
3.3.3 Population Proportion
3.3.3.1 Large Sample Test for One Proportion
3.3.3.2 Large Sample Test between Two Population
Proportions
3.4 Hypothesis Testing in Small Sample
3.5 Summary
3.1 Introduction
Statistical hypothesis testing in statistics is a way for you to test the

results of a survey or experiment to see if you have meaningful results.
It is an act in statistics whereby an analyst tests an assumption regarding
a population parameter.
To examine two opposing hypotheses about a population whether there

is enough evidence to infer that a convinced condition is true for the
entire population.
3.3 Main Content
3.3.1 Branches of Hypotheses
i. Simple Test of Hypothesis

ii. Composite Test of Hypothesis
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STT 205 MODULE 6
3.3.1.1 Simple Test of Hypothesis
A hypothesis test is a statistical test that is used to determine whether

there is enough evidence in a sample of data to infer that a certain
condition is true for the entire population.
It examines two opposing hypotheses about a population: the null

hypothesis and the alternative hypothesis.
 The null hypothesis is the statement being tested. Usually the
null hypothesis is a statement of "no effect" or "no difference".
 The alternative hypothesis is the statement you want to be able
to conclude is true.
Based on the sample data, the test determines whether to reject the null
hypothesis. You use a p-value, to make the determination. If the p-
value is less than or equal to the level of significance, which is a cut-off
point that you define, then you can reject the null hypothesis.
3.3.1.2 Composite Test of Hypothesis
When a set contains more than one parameter value, then the hypothesis
is called a composite hypothesis, because it involves more than one
model.
3.3.2 Test of Hypotheses for Small and Large Samples
3.3.2.1 Large Sample Test for one Population Mean
a) One tailed (right tailed)

H0: µ  µ0
H1: µ>µ0

x  0
Z  the test statistic

n
Decision rule: For a specified α, reject H0 if the computed test
value Zcal>+Ztab.
b) One tailed (left tailed)

H0: µ  µ0
H1: µ<µ0

x  0

n
value Zcal<-Ztab
151
c) Two tailed (right tailed)

H0: µ  µ0
H1: µ  µ0

x  0

n
value Zcal<-Ztab
Case Study 1:
The teachers union will like to establish that the average salary of a high
school teachers in a particular state is less than $32,500. A random
sample of 100 public school teachers in a particular state has a mean
salary of $31.578. it is known from past history that standard deviation
of the salary for the teachers in the state is $4,415. Test the union’s
claim at 5% level of significant.
Solution
H0: µ  32,500
H1: µ<32,500

n=100, x =31,578,   4415
α=5%=0.05

x  0

n
31578  32500  922
=   2.0883
4415 441.5
100
Decision rule: For a specified value of α =0.05, reject H0 if the test value
Zcal<-Ztab ie if -2.0883 <-1.645
Conclusion: Since Zcal =-2.0883 <-Ztab=-1.645, we reject the null
hypothesis at α=0.05. Therefore, there is a sufficient evidence to reject
the union’s claim.
3.3.2.2 Large Sample for two Populations Mean
a) One tailed (Right tailed)
H0: µ1  µ2
H1: µ1  2
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STT 205 MODULE 6
 
x1  x2
Test statistic, Z =
 12  22

n1 n 2
Decision rule: For a specified value of α, reject H0 if the computed test
value, Zcal>+Ztab

H0: µ0  µ2
H1: µ1  2
 
x1  x2
Test statistic, Z =
 12  22

n1 n2
Decision rule: For a specified value of α, reject H0 if the
computed test value, Zcal<-Ztab
c) Two tailed
H0: µ0=µ2
H1: µ1  2
 
x1  x2
Test statistic, Z =
 12  22

n1 n2
value, Zcal>+Ztab or Zcal<-Ztab where; Ztab =Zα/2
3.3.3 Population Proportion
3.3.3.1 Large Sample Test for One Proportion
a) One tailed (right tailed)

H0 : p  p 0
H1 : p  p 0
x  np 0
The test statistic: Z 
np 0 (1  p 0 )
Decision rule for right tail
For a specified α, reject the null hypothesis if the computed
statistic value Z is greater than Z (Z tabulated ) ie. Z cal  Z tab
H0 : p  p 0
H1 : p  p 0
153
x  np 0
np 0 (1  p 0 )
Decision rule for left tail
statistic value Z is less than Z (Z tabulated ) ie. Z cal  Z tab
c) Two tailed
H0 : p  p 0
H1 : p  p 0
x  np 0
np 0 (1  p 0 )
Decision rule
statistic value Z is less than Z  ie Z cal   Z tab or if it is greater
2
than Z  ie Z cal  Z 
2 2
Case Study 2
Your teacher claim that 60% of the Nigerian males are married. You fill
that the proportion is higher. In a random sample of 100 Nigerian males,
65 of them are married. Test your teacher’s claim at 5% level of
significant.
Solution
Here:
P0 =60% =0.06, x=65
H0= p  0.6 n=100
H1: p>0.6
α=5%=5/100=0.05
x  np 0 65  100(0.6)
Z =
np 0 (1  p 0 ) 100(0.6)(1  0.6)
65  60 5

60(0.4) 24
5
 1.0206
4.8990
Z tab  Z  0.5  0.05  0.45
From the table; Z  Z 0.45  1.65
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STT 205 MODULE 6
Decision rule: For a specified value of α =0.05, we reject the H0 if the

Zcal =1.0206 <Ztab=1.65, we do reject the null hypothesis at α=0.05,
showing that there is significant claim to reject your teacher’s claim.
3.3.3.2 Large Sample Test between Two Population

Proportions
1) One tailed (left tailed)

H0: P1  P2
H1: P1  P2
Test statistic,


P1  P2
Z 


 1 1 
P(1 P)
n  

 1 n2  ???

value,-Zcal<-Ztab
2) Two tailed
H0: P1  P2
H1: P1  P2
Test statistic,


P1  P2
Z 


 1 1 
P(1 P)
n  

 1 n2 
value, Zcal>+Z=tab  Z tab   Z  or Z cal   Z tab  Z cal   Z  / 2
2
where
 x1  x2
P 
n1  n2
155
3.4 Hypothesis Testing in Small Sample
a) One-Tailed (Right Tailed)

H0: µ1  µ0
H1: µ1   0
Test statistic,

x  0
t 
s
n
value,
tcal > t α (n-1)tab.
1. Define the hypothesis test and explain the two types of

hypothesis testing.
2. What is the difference between the null hypothesis and the
alternative hypothesis?
3. The Dean of students of a community college claims that the
average distance that community students travelled to the campus
is 32 km. the community students feel otherwise. The sample of
64 students were randomly collected and yielded the mean 33km
and standard deviation of 5km. test the Dean’s claim at 5% level
of significant.
4. A random sample of size n1=36 is selected from a normal

population distributed with  1 =4, x  75. A second random
sample of size n2 =25 is also selected from a different normal

distribution with  2  6 and x =25. Is there any significant
2
difference between the population mean at 5% level of

significance?
5. A preacher will like to establish that of people who pray less than
80% prayed for world peace. In a random sample of 110 persons.
77 of them said that when they pray, that they prayed for world
peace. Test at 10% level of significance.
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STT 205 MODULE 6
3.5 Summary
Unit 3 observes two opposing hypotheses about a population whether

there is enough evidence to infer that a convinced condition is true for
the entire population or not.
This unit examines two opposing hypotheses about a population whether

there is enough evidence to infer that a convinced condition is true for
the entire population.

Agresti, A. and Coull, B. A. (1998). Approximate is better than "exact"

for interval estimation of binomial proportions", The American
Statistician, 52(2), 119-126.



Jersey, ISBN 0-13-196869-6.

157
MODULE 7 PROGRESSIVE STATISTICAL

METHODS
Module 7 looks in progressive statistical methods in units: 1 and 2.
Unit 1 Introduction to nonparametric (Methods and test based on

Runs)
Unit 2 Fundamentals of Index Number
UNIT 1 INTRODUCTION TO NONPARAMETRIC

METHODS AND TEST BASED ON RUNS
Unit Structure
1.1 Introduction
1.3 Main Content
1.3.1 Introduction to Parametric Methods
1.3.2 A flow chart for Parametric Methods
1.3.3 Test Based on Runs
1.3.4 Distribution of Runs
1.3.5 Importance of Runs
1.4 Summary
1.1 Introduction
Nonparametric statistics are not the solution to every data analysis

problem. Some distributional assumptions are required for
nonparametric procedures, and data that fail to meet parametric
assumptions may also fail to meet nonparametric assumptions. Many
nonparametric tests have less power than the corresponding parametric
tests. Because power should never be given up unless absolutely
necessary, nonparametric methods should not be used when parametric
methods are appropriate. Like many parametric procedures, many
nonparametric procedures, cannot be used to test hypotheses about
population that consists of nominal data. But most of the nonparametric
procedures we will be discussing are based on ranks. Because nominal
data have no true numerical meaning, it does not make sense to rank
them. Nonparametric procedures based on ranks can be used to test
hypotheses about populations that consist of ordinal, interval or ratio
data.
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STT 205 MODULE 7
To use nonparametric statistical methods when data do not satisfy the

distributional assumptions required by parametric procedures.
1.3 Main Content
1.3.1 Introduction to Parametric Methods
Nonparametric statistics refer to a statistical method wherein the data is

not required to fit a normal distribution. Nonparametric statistics uses
data that is often ordinal, meaning it does not rely on numbers, but rather
a ranking or order of sorts.
In other words, nonparametric tests are statistical procedures that can be

used to test hypotheses when no assumptions regarding parameters or
population distribution are possible. The distributional assumptions
required for nonparametric procedures are usually less specific than
those required for parametric procedures; (Omekara and Acha, 2017).
The Wilcoxon signed rank test and the sign test are used to test
hypothesis about population median and population median differences.
The Mann-Whitney test is used to test the hypothesis that two
populations are identical, and the Kruskal-Wallis test is used to test the
hypothesis that three or more populations are identical. When samples of
repeated measurements are obtained, the Friedman test can be used to
test the hypothesis that all possible rankings of the observations from
any subject are equally likely.
159
1.3.2 A Flow Chart for Non-Parametric Methods
A flow chart showing which of the nonparametric tests might be

appropriate for particular data sets are shown below.
ONE SAMPLE TWO SAMPLES THREE OR MORE SAMPLES
Symmetric/Approximately
Independent or Paired Independent Samples
Samples or Repeated
Symmetric Population
Measurements
Paired Samples
Extremely Non-Symmetric
Population
Advantages and Disadvantages of using Parametric rather than

Nonparametric Model
A parametric model is, typically based on very specific assumption
about the form of the underlying probability distribution. If these
assumption are correct, then it is possible to use the data in a high
efficient manner, and also possible to assess the accuracy of the
inference procedure.
However, as mentioned earlier, the danger is that, if the assumptions are

wrong, the conclusions may be completely irrelevant to the real
problem.
Nonparametric models based on weaker, more general assumptions are

applicable to a much larger class of problems than the narrow parametric
models, but their very generality means that methods based on them are
less sharp, and often less efficient.
1.3.3 Test Based on Runs
Definition: A run is a sequence of observations bounded by

observations of different type. The number of the observations in the run
is called the Length of the run.
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STT 205 MODULE 7
Case Study 1
Consider the local and international calls: TTTLL TTTT LLLL TT LLL
Solution 1
We have six runs.
Case Study 2
Given binary digits to denote the number of males and females
respectively;
00011111 0001111 000011001011
Solution 2
We have ten runs (10).
In a sequence of two types of observations, like the one we have above,
the total number of runs can be used as a measure of the randomness of
the sequence; too many runs may indicate that each observation tend to
follow and be followed by an observation of the other type.
The total number of runs may be used to test the null hypothesis Ho that
two independent random samples came from population with identical
distribution functions.
1.3.4 Distribution of Runs (Under the hypothesis of

Randomness)
Consider ‘’runs’’ of two types of events zeros and ones.

Let r0 and r1 be respectively, the number of runs of zeros and ones.
Then R = r0 + r1 is the total number of runs in the sequence.
We also have n0 zeros and n1 ones in the sequence. We want to obtain
the joint pdf of r0 and r1 .
2 if r0 = r1
Define C(r0 , r1 ) = {
1 if r0 ≠ r1
The total number of ways of arranging a set of
n0 zeros and n1 ones into r0 − 1 runs of zeros and r1 −
1 runs of ones is (nr 0−1
−1
) (nr 1−1
−1
) C(r0 r1 )
0 1
If the observations are random, we can think of the total number of ways
of partitioning n = n0 + n1 observation into no and n1 which is
n n
( ) = ( ) Therefore, the joint pdf of r0 and r1 is f(r0 r1 )
n0 n1
(nr 0−1
−1
) (nr 1−1
−1
)
0 1
= C(r0 r1 )
n
(n )
o
161
(n 0 −1 n1 −1
r −1 )( r −1 )
0 1
If r0 = r1 the joint pdf is f(r0 r1 ) = 2
(nn )
o
If the modules of r0 , r1 that is if [r0 −r1 ] =1
(nr 0−1
−1
) (nr 1−1
−1
)
0 1
f(r0 r1 ) =
(nn )
o
Find out if it can easily be shown that the marginal pdf of r0 is
(n 0 −1 n1 −1
r0 −1 )( r1 −1 )
f( r 0 ) = , where r0 = 1, 2, … . n0
(nn )
o
Recall that R = # number of runs in the sequence.
R = r0 + r 1
If r0 = r1= r, then R =2r. So the probability of the 2r runs is
(n 0 −1 n1−1
r −1 )( r −1 )
0 1
f (r, r) = P(R =2r) = 2
(nn )
o
We want to find the probability of R=2r + 1. R will be equal to 2r +1 if
r0 = r and r1= r +1 or r0 =r +1 and r1= r. This is so because if we consider
some sequence of zeros and ones we may observe in some sequence that
r0 = r1 and in some that r0 =r0+1.
Case Study 4;
r0 = 3, r1 = 3 → r0 = rn i. e r0 = 3 r1 = 4
(nr−1
o −1
)(nr−1
1 −1
) + (n0r−1)(nr−1
1 −1
)
∴ p[R = 2r + 1] =
(n0n+n1)
0
The distribution of R can also be calculated using t μ and σ2 . If the
critical region approximated with large samples n0 and n1, by normal
distribution with mean;
2nn1 (μ−1)(μ−2)
μ = E(R) = + 1 and variance, σ2 =
n0 +1 n0 +n1 −1
Case Study 5:
The following given pattern of incoming trunk (T) and local (L) calls
coming into a switchboard, TTT LLLL TT LLLLL TTTL. Use the
information to test whether the pattern of incoming calls are random and
was (T) the type trunk or local (L) of call.
Solution 5
We want to test the hypothesis.
Ho : The pattern of incoming calls is random
H1 : The pattern of incoming calls is not random
R = 6, nT = 8, nL = 10
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STT 205 MODULE 7
From Wolf4wiz table we obtain;
W0 . 025 = 6, W0 . 975 = 14 → α = 0.05 and it is a two tailed test
Conclusion
Since 6 ≤ R ≤ 14, we accept Ho at 5% level of significance.
1.3.5 Importance of Runs Test
Test for Randomness:

A test for randomness is a non-parametric test that has wide area of
application in the field of Statistics. In Statistics, the behaviour of certain
distribution may be expected to assume randomness in order not to
violate some basic fundamental principles defining the distributions
under study. This randomness in a distribution can be detected based on
the number of runs in a sequence of distribution. In a sequence of As and
Bs, a run is defined as maximum sequence of like elements.
Case Study 6;
Given the sequence A B B A B B A A A then number of runs r=5.
nA (n1) =5 and nB (nB) =4
The number r of runs in a sequence of n1 and n2 can be used as a test
statistic to test for randomness and non-randomness. The null and
alternative hypotheses for the test are;
H0: the sequence of As and Bs have been generated by a random process.
H1: the sequence of As and Bs have not been generated by a random
process.
Rejection region: one tailed test. r  r1 or r  r2

Two tailed test r<r1 and r>r2 – rejection region
r  r1 and r  r2 - acceptance region
When n1 and n2 are both large i.e, n1> 10, n2>10, then we conduct the
run test by using the formula for the standard normal test statistic
r  r 2n1n2 2n1n2 (2n1n2  n1  n2 )
z r  1 r 
r ;
n1  n2 ;
(n1  n2 ) 2 (n1  n2  1)
163
1. State the differences between parametric or nonparametric

statistical methods
2. Use a flow chart to show which of the nonparametric tests might
be appropriate for particular data sets.
3. What are the advantages, or disadvantages of using a parametric
rather than a nonparametric model?
4. Define a run and how many do we have in the local and
international calls pattern?
TTTLTTTLLTTLLLTTTLLTTTT LLLTTTLLLLTL TTLLL
5. Given binary digits to denote the number of males and females
respectively, how many runs do we have:
1110001111101100011110010011001011
1.4 Summary
Apart from establishing whether a particular dataset is discrete or

continuous distribution, it is pertinent to know whether to apply
parametric or nonparametric statistical methods on a particular data set.
Many statistical procedures are based on specific assumptions about the
distribution of the population. Statistical methods that require specific
distributional assumptions are called parametric statistics.
This unit discussed nonparametric statistical methods when data do not
satisfy the distributional assumptions required by parametric procedures.

Applied linear Regression Weisberg 2005, 3rd Wiley.
Jersey, ISBN 0-13-196869-6.
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STT 205 MODULE 7
UNIT 2 FUNDAMENTALS OF INDEX NUMBER
Unit Structure
2.1 Introduction
2.3 Main Content
2.3.1 Introduction and definition of index number
2.3.2 Types of Index
2.3.3 Construction of Index Numbers
2.3.4 Construction of Simple Price Indexes/ Price Relative
2.3.5 Construction of Simple Price Indexes/ Quantity Relative
2.3.6 Construction of Simple Price Indexes/ Value Relative
2.4 Summary
2.1 Introduction
Index number is a technique of measuring changes in a variable or group

of variables with respect to time, geographical location or other
characteristics.
To measure changes in a variable or group of variables.
2.3 Main Content
The consumer price index (CPI) prepared by the Nigeria Bureau of

Statistics is an example of a price index while industrial production is an
example of a quantity index.
2.3.1 Types of Index
When the index no. represents a comparison for an individual product or

commodity, it is called simple index number. In contrast, when the
index number has been constructed for a group of items or commodity,
it is an aggregate index number or composite index number.
165
2.3.2 Construction of Index Numbers
- Price index number

- Quantity index number
- Value index number
2.3.3 Construction of Simple Price Indexes/Price Relatives
The general formula for a simple price index or price relative is

P 100
Ip  n X 3.1
Po 1
where,
Pn indicates price in given period and Po indicates the price in the base
year.
Case Study1
Referring to table 3.1 determine the simple price indexes for 1976, for
the commodity, Milk using 1970 as the base year.
Table 3.1 Price and consumption of three commodities in a particular
Area, 1970 and 1976.
Commodity Unit Average Prices Per
capita
Per
month
Quotation 1970 Po 1976 Pn 1970 qo 1976, qn
Milk Quart 0.30 0.38 30 35
Bread 1 1b loaf 0.25 0.35 3.8 3.7
Eggs Dozen 0.60 0.90 1.5 1.0
Solution 1:
For milk = 0.38 X 100  126.67,
0.30
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STT 205 MODULE 7
2.3.4 Construction of Simple Quantity Indexes/Quantity

Relative
The general formula for simple price index or quantity relative is

q n 100
X 3.2
qo 1
where qn indicates the quantity of an item produced or sold in the given
period and qo indicates the quantity in the base year.
Case Study 2:
Referring for table 3.1. Determine simple quantity indexes for the three
commodities for 1976, using 1970 as the base year.
Solution 2:
For Milk = 35 X 100  116.7
30
For Bread = 3.7 X 100  97.37
3 .8
1.0
For Eggs = X 100  66.67
1.5
Finally, the value of a commodity in a designated period is equal to the
price of the commodity multiplied by the quantity produced (or sold).
2.3.5 Construction of Simple Price Indexes/ Value Relative
Therefore Pn qn indicates the value of a commodity in the given

period and the Po qo indicates the value of the commodity in the base
period. The general formula for a simple price index or value relative is
Pq 100
I n n X 3.3
Po qo 1
Case Study 3:
Compute the simple value relative for 1976 for the commodity - Milk in
table 22.1 using 1970 as the base year.
Solution 3:
Pn qn 100 0.38 X 3.5 100
For milk = I  X  X  147.8
Po q0 1 0.30 X 30 1
167
Aggregate Price Index:
To obtain an aggregate price index, the prices of the several items or

commodities could easily be summed for the given period and for the
base year and then compared. Such an index would be an un-weighted
aggregate price index.
Construction of an Un-weighted Aggregate Price

Index
An un-weighted index is generally very useful because the implicit

weight of each item in the index depends on the unit upon which the
prices are based.
Example: If the price of milk is reported per gallon as contrasted to then

the price will make a much greater contribution to an un-weight price
index for a group of commodities.
Weighted Aggregate
Because of the difficulty described above, aggregate price indexes are
generally weighted according to the quantities q of the commodities.
The question at which period of quantities should be used which serves
as the basis for different aggregate price relatives.
Two Method of Constructing the Weighted Aggregate Price Index

(WAPI)
One of the more popular aggregate price indexes:
1. Laspeyres Index: In which the prices are weighted by the quantities

associated with the base year before being summed.
I ( L) 
P q
n o
X
100
3.4
P q
o o 1
Case Study 4
Compute Laspeyres aggregate price index for 1976 for three
commodities in table 3.1 using 1970 as the base year.
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STT 205 MODULE 7
Table 3.2 Worksheet for the calculations of Laspeyres index for the data
in table 3.1
Commodity Pnqo Poqn
Milk 11.40 9.00
Bread 1.33 0.95
Egg 1.35 0.90
Total  Pn qo  &14.08  Po qo  &10.85
Solution 4:
Referring to table 3.2 the index is determined as follows
Paasche’s Index
From 3.3, we can calculate the Paasches index as follows
I ( P) 
 P q X 100
n n
 P qn 1
3.5
o
Case Study 5
Compute Paasches aggregate price indexes for 1976 for Milk in table
3.1 using 1970 as the base year.
Table 3.3 Worksheet for the calculate of Paasches’ index for the
data in table 3.1
Commodity Pnqn Poqo
Milk 13.5 10.50
Bread 1.30 0.93
Egg 0.90 0.60
Total  Pn qn  15.50  Po qn  12.03
Solution .5
For Milk = 13.5 X 100  128.6
12.03 1
Case Study 6
Compute the price index by the weighted average of price relatives
method for the 3 commodities from table 21.1. Using 1970 as the base
year.
Ip 
 P q ( P / P X 100
o o n o
3.6
P q o o
169
With reference to Table 3.4: Worksheet for the computation of the

weighted average of price relatives for the data in Table 3.1.
Solution.6:
Table 3.4: The weighted average of price relatives for the data in Table
3.1.
Commodity Price relative Value Weighted relative
Pn/PoX100 weighted (Poqo)(Pn/PoX100)
Poqo
Mil 126.67 9 1140.03
Bread 140 0.95 133
Eggs 150 0.9 135
Total 416.67 10.85 1408.03
Uses of Index Number

 It can be used to measure one’s real income. The quantities of
goods and services that can be purchased by a fixed amount of
money changes as the price decreases.
 It is used in measuring the inflation rate.
 Price comparison below locations can also be measured using
index numbers.
 It is used in measuring changes in quantity.
Limitations of Index Numbers
 Selection of base period which has to be updated from time to
time.
 Collection of data: Here a survey needs to be carried out which
involve time and money.
 Choice of representative class (items): It may be practically
difficult to consider all possible outcomes of an event. To achieve
this, a list of all possible items are compiled, grouped into
sections as representative items
 Changes due to time. For e.g. 1950 to 1980 are to be compared.
Some items available in 1980 were not available in 1950 which
make the comparison very difficult.
 Choice of weight: Here to assign the appropriate weight to the
item to the items are difficult.
1. What is index number
2. List and explain types of indexes
3. Discuss the three major ways of constructing index numbers
4. Define aggregate price index:
5. Differentiate between an un-weighted aggregate price index and
weighted aggregate
170
STT 205 MODULE 7
2.4 Summary
This unit estimates the percentage relative number by which a

measurement in a given period is expressed as a ratio to the
measurements which involves the quantity, price and value.
In summary, an index number is a percentage relative by which a

measurement in a given period is expressed as a ratio to the
measurements which involves the quantity, price and value.

Applied linear Regression Weisberg 2005, 3rd Wiley.

Jersey, ISBN 0-13-196869-6.

Freeman and Company. New York. 2003
171

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COURSE

Course Team Dr. Chigozie Kelechi Acha (Course Developer)-

NATIONAL OPEN UNIVERSITY OF NIGERIA

© 2024 by NOUN Press

All rights reserved. No part of this book may be reproduced, in any

First Printed 2023, Printed 2024

Statistics for Management Sciences 1 (STT 205) is a core course in first

The course is designed to introduce students to statistics which is why it

The overall goal of STT 205 Statistics for Management Sciences I is to

The modes of presentation of the topics makes for good understanding

On completing this course, the student is expected to be able to:

WORKING THROUGH THIS COURSE

assessment exercise(s), conclusion, summary, and further readings. The

Each unit contains self-assessment exercises called Student Assessment

Major components of the STT 205 are:

There would be regular tutorial classes linked to the course. It is advised

Modules and Units

Each unit contains a number of self-tests. In general, these self-tests

REFERENCES/FURTHER READING/WEB RESOURCES

Acha C. K. (2018). Fundamentals of Statistics. ISBN: 978-2832-50-2.

Berenson, M.L., Levine, D.M., and Krehbiel, T.C. (2006). Basic

Bhattacharyya, G. K., and R. A. Johnson, (1997). Statistical Concepts

Buglear, J. (2002). Stats Means Business: A Guide to Business

Dodge, Y. (2008). The Concise Encyclopedia of Statistics. Springer.

Gonick, L. (1993). The Cartoon Guide to Statistics. Harpe rPerennial.

Omekara, C. O. and Acha C. K. (2017). Nonparametric Statistics. ISBN:

The activities in Table I include facilitation hours (synchronous and

In tackling the assignments, you are expected to apply information,

APPLICATION OF KNOWLEDGE GAINED

Module Topic Knowledge Application of

You may be required to present your portfolio to a constituted panel.

MINI PROJECTS WITH PRESENTATION

You are to work on the project according to specification. You may be

There are seven assignments in this course which cover:

TUTOR-MARKED ASSIGNMENTS (TMAS)

On completion of each of your assignment, send it, together with a TMA

FINAL EXAMINATION AND GRADING

HOW TO GET THE MOST FROM THE COURSE

Distance learning is designed for intellectually mature students who

Each of the study units adopts a common format. It starts with an

Students are advised to use these objectives as standards against which

Self-tests are interspersed throughout the units. Working through these

The following is a practical strategy for working through the course. If

1. Read this Course Guide thoroughly;

8. Assemble the study materials. The information about what you

TUTORS AND TUTORIALS

Do not hesitate to contact your tutor by telephone, e-mail, or discussion

There will be two forms of facilitation – synchronous and asynchronous.

For the asynchronous facilitation, your facilitator will:

 Support you to learn. In this regard personal mails may be sent.

Table 4 is the presentation of the online facilitation of STT 205

TABLE 4: PRESENTATION OF STT 205 COURSE PLAN

Finally, respond to the questionnaire. This will help NOUN to know

You will receive the following support:

This course presents statistical data collection as an operation of

Module 1 Nature of Statistics, Statistical Inquiries,

Unit 1 Introduction to Statistics ………………………… 1

Module 2 Presentation of Statistical Data ……………….. 18

Unit 1 Descriptive Handling of Statistical Data ………… 18

Module 3 Measures of Central Tendency, Location