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statistical analysis
The use of mathematical techniques to collect, organize, describe, analyze, and interpret large amounts of numerical data in order to help ppl make decisions.

statistics
The numerical data used in statistical analysis.

population
In statistical analysis, a complete set of collected data.

descriptive statistics
Statistics that summarize or describe a complete set of collected data, known as a population, or data set.
contrast with inferential statistics

measure of central tendency
A representative value that describes the values in the middle of a population.

mean
The numerical "average" of a series of values.
aka population mean

outlier
An extremely high or low value that is not representative of the other values in a population.

median
The middle value in a set of values that is arranged in numerical order.
aka population median.

mode
The statistical measure that identifies the value that appears most often in a population.
aka population mode

measure of dispersion
A representative value that describes the distribution of data around specified central values.

range
The difference b/t the highest and lowest values in a particular population.

variance
The avg squared distance b/t the population mean and each individual item in a population.

standard deviation
For a population, the square root of the variance of the population.

probability
The likelihood that a given event, observation, or result will occur.

normal distribution
A type of probability distribution where the number of values that are less than the mean is the same as the number of values greater than the mean.

discrete variable
A variable that includes a finite, or limited, number of values.

random variable
A variable whose values represent all possible outcomes.

Objective: describe the primary benefits descriptive statistics provide to managers.

Objective: Calculate the 3 primary measures of central tendency  the mean, the median, and the mode  and describe the strengths and limitations of each measure.

Objective: Calculate the 3 primary measures of dispersion the range, the variance, and the standard deviation and explain their importance to insurers and other users.

Distinguish b/t normal and nonnormal distributions and identify insurance situations in which they apply.

Identify the characteristics necessary to ensure data quality.

