Business_Statistics_Concept

Business Statistics Concept September 19, 2010 Business Statistics Concept The stock market plays a significant role in the health of the economy and is one of the most important sources for companies to raise money. Experience has shown that the price of shares and other assets is an important part of the dynamics of economic growth. Rising share prices, for instance, tend to be associated with increased business investment and vice versa. Share prices also affect determines the stability of the company. For instance, every company has to monitor its inflations and deflations periods to prevent more possible losses. The purpose of this paper is to apply the different concepts of business statistics in the given data of Citigroup stock prices. The data below reflects the open and close share prices of the Citigroup stocks.  Open Close OpenCloseCount252 252 1st quartile3.0675 3.0400 Mean3.7042 3.6572 Median3.6700 3.6500 Sample variance1.0129 1.0006 3rd quartile4.2425 4.2000 Sample standard deviation1.0064 1.0003 interquartile range1.1750 1.1600 minimum1.02 1.02 Mode4.1900 4.0600 maximum7.29 7.46 Range6.27 6.44 low extremes0 0 low outliers5 6 population variance1.0089 0.9967 high outliers7 6 population standard deviation1.0044 0.9983 high extremes0 0 confidence interval 95.% lower3.5793 3.5331 confidence interval 95.% upper3.8291 3.7813  half-width0.1249 0.1241 skewness0.5064 0.5150 kurtosis2.4495 2.5989 coefficient of variation (CV)27.17%27.35% The total population data of the company available is from 1882-2010; that totals to 128 years and exactly 32,256 populations. In this study only the year 2009 has been chosen with a total count of 252 as the sample. The mean has been computed as[pic]; where the mean represents the sum of the values divided by the number of the values. These stock price values are known to be the average prices for each stock regardless of every season. Most companies based the mean price as the central location of every data. On the other hand, variance describes how far values lie from the mean. With the formula as stated,[pic], variance defines the parameter describing a theoretical probability distribution. Standard deviation, measures the spread of the data about the mean value or as known to be the square root of variance. One of the most important equations that every investor considers is the coefficient of variation: [pic]  Coefficient of variation is represents the ratio of the standard deviation to the mean, and it is a useful statistic for comparing the degree of variation from one data series to another. In this study, investors or internal reviews use the coefficient of variation to allow room in determining on how much volatility (risk) they are assuming in comparison to the amount of return they can expect from the investment. Basically, the lower the ratio of standard deviation to the mean return is the better of risk-return tradeoff. Range, on the other hand, needs to show the difference between the higher value and the lower value; Mode represents the value that occurs often. This will give an idea to the investor on what is the expected price of each share. Basically, understanding of the statistical concept will help every investor to see the possible financial standing of the company. This would give a better insight on what is the risk waiting for a possible turnout. The application of the concept is not only for the Citigroup Company but it is applicable to every company in the stock market. References Blalock, H. M. (1979). Social Statistics. New York, NY: Mc Graw Hill. Neter, J., & Wasserman, W. (1989). Applied Statistics (4th ed.). Boston, MA: Allyn and Bacon. www.google.finance.com. (July, 2010). Stock prices. Retrieved from http://google.com