Statistics for Management – Two Marks Q&A

1. Define statistics.
The subject concerned with scientific method for collecting, summarising,
presenting, and analysing data as well as drawing conclusions or making
predictions on the basis of such analysis.
2. What is Descriptive statistics?
The branch of statistics, which seeks only to describe and analyse any data is
called descriptive statistics.
3. What is inferential statistics?
The branch of statistics dealing with drawing conclusions about the population
with the help of the analysis of a sample, drawn from it, is known as inferential
statistics.
4. What is meant by Classification and tabulation?
 Classification is the first step in tabulation. Classification implies bringing
together the items which are similar in some respect(s).
 Example: students of a class may be grouped together with respect to
their obtained in an examination, their age or area of specialisation, etc.
 After classification, tabulation is done to condense the data in a compact
form which can be easily comprehended.
5. Mention the different methods of presenting data.
There are several diagrams/graphs used for presentation of data.
 Bar chart
 Pareto chart
 Pie chart
 Histogram
 Ogive
 Line graph
 Lorenz curve.
6. What are variables? What are the types of variables?
A variable in statistics methods stands for any measurable quantity which can
assume a range of numerical values within certain limits. For example, age,
income, height, price etc. A variable can be classified into
 Discrete variable: A discrete variable is characterised by jumps and gaps
between one value and the next. For example, the number of tables in a

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 Statistics for Management – Two Marks Q&A

restaurant or the number of rooms in a lodge cannot assume fractional

values.
 Continuous: These variables which can take all possible values in a given
specified range are termed as continuous variables. For example the age of
students in a school, height (in cm), and weight (in kg) etc.
7. What are the Measures of central tendency?
1) Arithmetic mean
2) Median
3) Mode
4) Geometric mean
5) Harmonic mean
8. What is meant by arithmetic mean?
1) An average is a single value within the range of the data that is
used to represent all of the values in the series.
2) “Arithmetic mean is quotient of sum of the given values and
number of the given values”.
9. What is meant by measures of dispersion?
The degree to which numerical data tend to spread about an average value is
called the variation or dispersion of the data.
10. What is the Significance of measuring variation?
 To determine the reliability of an average.
 To serve as a basis for the control of the variability.
 To compare two or more series with regard to their variability.
 To facilitate the use of other statistical measures.
11. What are the methods of studying variation? Or mention the different measures of
dispersion?
 The range
 The quartile deviation
 The mean deviation
 The standard deviation.

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 Statistics for Management – Two Marks Q&A

12. What is median?

Median is the value of the variable which divides it into two equal parts. (Or)
median is the value of the middle item when the items are arranged in ascending
or descending order of magnitude. It is a positional average.
13. What is mode?
Mode is the value which occurs most frequently in a set of observations. It is the
value of the variable which is predominant in the series.
14. Give the empirical relation between mean, median and mode.
3(mean-median) =mean-mode
15. What is geometric mean?
The nth root of the product of n items is called geometric mean.
16. What is meant by measures of dispersion?
The degree to which numerical data tend to spread about the average value is
called variation or dispersion of the data.
17. What is range?
This is the difference between the greatest and the least of the values of the
distribution.
18. What is mean deviation?
It is the AM of the absolute values of deviations of observations from the mean or
median or mode.
19. What is standard deviation?
SD is the positive square root of the arithmetic mean of the squares of the
deviations of observations from their arithmetic mean. The square of SD is called
variance (𝛔2).
20. What is quartile deviation?
Quartile deviation or semi-interquartile range is defined as
Q.D= (Q3-Q1) / 2
Where Q1 and Q3 being the first and third quartiles.
21. What is coefficient of quartile deviation?
A relative measure of dispersion based on the quartile deviation is called the
coefficient of quartile deviation. It is defined as Coefficient of Quartile Deviation

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 Statistics for Management – Two Marks Q&A

It is pure number free of any units of measurement. It can be used for comparing
the dispersion in two or more than two sets of data.
22. What is Skewness?
Lack of symmetry is called Skewness. If a distribution is not symmetrical then it is
called skewed distribution. So, mean, median and mode are different in values and
one tail becomes longer than other. The skewness may be positive or negative.

Positively skewed distribution:

            If the frequency curve has longer tail to right the distribution is known as
positively skewed distribution and Mean > Median > Mode.

Positively skewed distribution:

            If the frequency curve has longer tail to left the distribution is known as
negatively skewed distribution and Mean < Median < Mode.

23. What is meant by coefficient of variation?

The ratio of standard deviation to the arithmetic mean is called coefficient of

variation.

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 Statistics for Management – Two Marks Q&A

24. What is continuous probability distribution?

A probability distribution in which a variable is allowed to take any value within
a specified range is called continuous probability distribution.
25. What is normal distribution?
A distribution of a continuous random variable with a single peaked, bell shape
symmetrical curve. The average value of the random variable lies at the centre
of the distribution and the curve is symmetrical around a vertical line drawn at
this average value. The two tails extend indefinitely, never touching the
horizontal line.
26. What is Poisson distribution?
A discrete distribution in which the probability of occurrence of an event within
a very small time period is very small number, the probability that two or more
such events will occur within the same time interval is effectively zero and the
probability of occurrence of the event within one time period is independent of
where that time period is.
27. What is probability distribution?
A list of all outcomes of an experiment with the probabilities expected to be
associated with these outcomes.
28. What do you mean by probability?
The word "probability" that denotes that there is an uncertainty about the
happening of event. It can also be defined as an expression of likelihood or
chance of occurrence of an event. The probability is a number, which ranges
from 0 to 1.
29. Define random experiment.
It is an experiment which can be repeated any number of times under the same
conditions, but does not give unique results. For example: Tossing a coin,
throwing a die.
30. Define Event.
An outcome or a combination of outcomes of a random experiment is called an
event. Events are generally denoted by capital letters A, B, C, etc. For Example: If
a coin is tossed, getting a head or tail is an event.

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 Statistics for Management – Two Marks Q&A

31. Define equally likely events.

Two or more events are equally likely if each of them has an equal chance of
happening. For Example: If an unbiased coin or die is thrown, each face may be
expected to be observed approximately the same number of times in the long
run.
32. Define compound Events.
The joint occurrence of two or more events is called compound events.
33. Define sample space.
The set of all possible outcomes of a given experiment is called its sample space.
Each element of the sample space is called a sample point. For example: When a
die is thrown, the sample space S= 1, 2, 3, 4, 5, 6
34. State the statistical definition of probability?
If the probability of an event can be determined only after the actual happening
of an event, is called statistical probability. Statistical probability is also called
Empirical Probability or A posterior probability. That is

35. Define Independent Events.

Two events are said to be independent if the occurrence of one does not affect
the occurrence or non-occurrence of the other.
For example, if a coin is thrown twice, the result of the second throw is not
affected by the result of the first throw.
36. State the three axioms of probability.
1. The probability of any event ranges from zero to one. That is O≤ P (A) ≤1
2. The probability of the entire space is 1 that is P (S) = 1
3. If A and B are mutually exclusive events, then P (A⋃B) = P (A) + P (B)
37. Define non-independent events or dependent events.
If the occurrence of one event is affected by the occurrence of the other event,
then the two events are said to be non-independent Events.
For example, if we draw 2 cards one after the other in a pack, we draw one card
out of 52 cards in the first case. In the second case we draw one card out of 51
cards. Thus two events are dependent.

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 Statistics for Management – Two Marks Q&A

38. State the mathematical definition of probability

If there are ‘m’ equally likely, mutually exclusive and exhaustive outcomes and ‘m’
of them are favourable to an event A, then the probability of the happening of A is
m/n. We write,

39. What do you meant by exhaustive events?

All possible outcomes of an experiment are called exhaustive events.
40. What are mutually exclusive events?
Two or more events are independent if the occurrence of one does not affect the
occurrence of the other.
Eg. If a coin is thrown twice, the result of the second throw is not affected by the
result of the first throw.
41. What do you mean by conditional probability?
The conditional probability of an event B assuming that the event A has happened
is defined as
P (A/B) = P (A⋂B)/P (B) or P (B/A) = P (A⋂B)/P (A)
42. Write short notes on Baye's Theorem.
Let A1 , A2 , A3....An be a set of exhaustive and mutually exclusive events and B be
another event associated with Ai , then
P (Ai). P (B/Ai)
P (Ai/B) = ------------------------
∑ P (Ai). P (B/Ai)
43. State total probability theorem.
Let A1 , A2 , A3....An be a set of exhaustive and mutually exclusive events and B be
another event associated with Ai , then
P (B) = ∑P (Ai). P (B/Ai)
44. What is marginal probability?
The probability of single event is called marginal probability.
45. What is joint probability?
The probability of two events, occurring together or in succession is called joint
probability.

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 Statistics for Management – Two Marks Q&A

46. What is meant by prior probability and posterior probability?

Prior:
Probabilities before revision, by Baye's rule, are called prior or simply Priori
because they are determined before the sample information is taken into
account.
Posterior:
A probability, which has been revised in the light of sample information, is called
posterior probability or revised probability.
47. Define Theoretical discrete distribution.
Distributions, which are not obtained by actual observation or experiment but
are mathematically deducted on certain assumptions, are called theoretical
Distribution.
48. What are random variables?
A variable that takes different values as a result of the outcome of a random
experiment is called random variable.
49. What is discrete random variable?
If X is a random variable which can take a finite number or countably infinite
number of values, then X is called a discrete random variable. For example, in
the random experiment of throwing a die, let X be the number shown on top.
Then X is a discrete random variable, which can take values 1, 2, 3, 4, 5, 6.
50. What is continuous random variable?
If X is a random variable which can take all values in an interval, then x is called
a continuous random variable.
51. Explain Binomial distribution.
Binomial distribution is a discrete probability distribution. f 'P' be the
probability of success for an event and 'q' be the probability of its failure in a
single trial, then the probability of exactly 'X' success and (n-x) failures in a
series of 'n' independent trials is
P(X = x) = nCx px qn-x
52. State the assumptions of Binomial Distribution.
i. Trials are repeated under identical conditions for a fixed number of
times.

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ii. There are only two mutually exclusive outcomes (i.e.) successes or
failure.
iii. The probability of success in each trial remains constant and does not
change from trial to trial.
53. Define population.
All items that have been chosen to study are called population. The population
may finite or infinite.
54. Define sample.
A portion of population chosen for the direct examination or measurement is
called sample. Sample is a finite sub set of the population and the number of
items in a sample is called size of a sample. It may be large or small sample.
55. Differentiate parameter and statistic.
 Value describing the characteristics of a population is called parameter.
 Value that describes the characteristics of a sample is called statistic.
56. What is meant by sampling?
The process of selecting the sample is called sampling.
57. What is meant by sampling distribution of the mean?

A probability distribution of all the possible means of sample from a population

is called sampling distribution of the mean

58. Define standard Error.

The standard deviation of sampling distribution of statistic is known as standard
error.
59. List out Utility of standard error:
 It is used to set up the confidence limits within which the population
parameter may lie.
 It is used to test the hypothesis and to draw statistical conclusion from it.
 It is used to measure the variability of the values of a statistic from the
mean.
 It is generally used for the large samples and gives us the idea about the
average amount of error which actually occurs in estimating the values of
a parameter on the basis of a statistic.
60. What is meant by hypothesis?

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 Statistics for Management – Two Marks Q&A

An assumption or speculation we make about a population parameter is

called hypothesis.
61. What is Null hypothesis?
The hypothesis or assumption about a population parameter we wish to test,
usually an assumption of the status quo is called null hypothesis.
62. What is alternative hypothesis?
The conclusion we accept when the data fail to support the null hypothesis is
called alternate hypothesis.
63. Differentiate one tailed and two tailed test.
One tailed:
A hypothesis test in which there is only one rejection region; that is where we
are concerned with whether the observed value deviates from the hypothesized
value in one direction.
Two tailed:
A test involving two rejection regions; that is a hypothesis test in which the null
hypothesis is rejected if the sample value is significantly higher or lower than
the hypothesized value of the population parameter.
64. What is meant by power of the hypothesis test?
The probability of rejecting the null hypothesis when it is false, that is, a measure
of how well the hypothesis test is working.
65. What is level of significance?
The maximum probability of rejecting the null hypothesis when it is true is called
level of significance.
66. What is hypothesis testing?
It is a procedure that helps us to ascertain the likelihood of hypothesized
population parameter being correct by making use of the sample statistic.
67. Define Type I and Type II error
 Rejection of the hypothesis when it should be accepted is known as Type I
error.
 Acceptance of a hypothesis when it should be rejected is known as Type II
error.

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 Statistics for Management – Two Marks Q&A

68. What is critical value?

A value of the standard statistic beyond which we reject the null hypothesis; the
boundary between the acceptance and rejection regions is called critical value.
69. What is critical region?
A region of the standard normal curve corresponding to a test statistic in the
sample space which tends to rejection of null hypothesis is called as critical
region or region of rejection.
70. Define sampling Distribution
The distribution of all possible values which can be assumed by some statistic
computed from samples of same size rand only drawn from the same population
is called the sampling distribution of the statistic.
71. What is census?
The examination or collection of information for every element of the
population is called census.
72. What is cluster sampling?
A method of random sampling in which the population is divided into groups or
clusters and then selecting random samples out of these clusters is called cluster
sampling.
73. What is efficient estimator?
An estimator with a smaller standard error than that for some other estimator of
the population parameter is called efficient estimator.
74. What is estimate?
A specific value of the estimator is called an estimate.
75. What is Estimator?
A sample statistic used to estimate a, population parameter is called estimator.
76. What is a point estimate?
An estimate of a population parameter given by a single number is called a point
estimate of a parameter.
77. What is interval estimate?
A range of values to estimate a population parameter is called interval estimate. .
78. What is sufficient estimator?
An estimator that uses the information available for estimating a particular
parameter is called sufficient estimator.

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 Statistics for Management – Two Marks Q&A

79. What is Consistent estimator?

An estimator that yields values more closely approaching the population
parameter as the sample size increases is called consistent estimator.
80. What is Judgement sampling?
A method of selecting a sample from a population based on personal knowledge or
expertise of a person. Only the indentified elements will be sample out.
81. What is Simple random sampling?
A Method of selecting samples that allow each possible element an equal
opportunity of being chosen and each element in the population has one equal
chance of being included in the sample.
82. What is stratified sampling?
A method of random sampling, in which the population is divided into
homogeneous groups and elements within each groups are selected randomly
according to one of the two rules (a) a specified number of the elements is drawn
from each group or (b) equal number of elements are drawn from each group and
the results are weighted according to the groups proportion of the total population
of the population.
83. What is systematic sampling?
A method sampling in which elements are sampled out from the population in
time, order or space
84. What is sampling error?
Variation among sample statistics due to chance is called sampling error.
85. What is Confidence Interval?
A range of values that have some specified probability of including the true
population parameter value.
86. What is Confidence level?

The probability that is associated with the interval estimate of a population

statistic, including how reliable these are for inclusion in the population parameter.

87. What is Confidence limit?

The upper and lower boundaries of a confidence interval are called confidence
limit.

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