KEY FORMULAS

Chapter 3 and 4: Numerical Descriptive Measures

Topic Formula

 xi
Sample Mean x
n
 xi
Population Mean 
N

Weighted Mean x   wi xi

p
Percentile Location L p   n  1
100

Range Range = Max – Min

 xi  x
Sample MAD Sample MAD 
n
 xi  
Population MAD Population MAD 
N
  xi  x 
2
Sample Variance s2 
n 1

Sample Standard Deviation s  s2

  xi   
2
Population Variance 2 
N

Population Standard Deviation   2

s
Sample Coefficient of Variation Sample CV 
x

Population Coefficient of Variation Population CV 

xI  R f
Sharpe Ratio Sharpe Ratio 
sI
xx
z-Score z
s
 mi fi
Sample Mean for Grouped Data x
n
  mi  x  f i
2
Sample Variance for Grouped Data s2 
n 1
 mi fi
Population Mean for Grouped Data 
N
  mi    fi
2
Population Variance for Grouped 2
Data  
N

1
KEY FORMULAS

  xi  x   yi  y 
Sample Covariance s xy 
n 1

Population Covariance  xy 

  xi   x  yi   y 
N
s xy
Sample Correlation Coefficient rxy 
sx s y
 xy
Population Correlation Coefficient  xy 
 x y

Chapter 5: Introduction to Probability

Topic Formula

Complement Rule  
P Ac  1  P  A 

Addition Rule P  A  B   P  A  P  B   P  A  B 

Addition Rule for Mutually P  A  B   P  A  P  B 

Exclusive Events
P  A B 
Conditional Probability P  A | B 
P  B

Multiplication Rule P  A B   P  A | B  P  B 

Total Probability Rule 

P  A  P  A | B  P  B   P A | B c P B c   
P  A | B P  B
P  B | A 
Bayes’ Theorem
or

P  A | B  P  B   P A | Bc P Bc  

Chapter 6: Discrete Probability Distributions

Topic Formula

Expected Value of a Discrete E  X      xi P  X  xi 

Random Variable
Variance of a Discrete Random
Var  X    2    xi    P  X  xi 
2
Variable
Standard Deviation of a Discrete
SD  X      2
Random Variable
n! nx
Binomial Distribution P  X  x  px  1 p
x ! n  x  !

2
KEY FORMULAS

Expected Value of a Binomial E  X     np

Random Variable
Variance of a Binomial Random
Var  X    2  np  1  p 
Variable

SD  X     np  1  p 
Standard Deviation of a Binomial
Random Variable
e   x
Poisson Distribution P  X  x 
x!
Expected Value of a Poisson E X   
Random Variable
Variance of a Poisson Random
Var  X    2  
Variable
Standard Deviation of a Poisson
SD  X     
Random Variable
 S  N  S 
  
 x  n  x 
Hypergeometric Distribution P  X  x 
N
 
n
S 
Expected Value of a E X     n 
Hypergeometric Random Variable N
 S  S  N  n 
Variance of a Hypergeometric Var  X    2  n   1   
Random Variable  N  N   N  1 

Standard Deviation of a  S  S  N  n 
SD  X     n   1    
Hypergeometric Random Variable N
  N   N 1 

Chapter 7: Continuous Probability Distributions

Topic Formula

Cumulative Distribution Function F  x  P  X  x

 1
 for a  x  b, and
Continuous Uniform Distribution f  x  b  a
0 for x  a or x  b

Expected Value of a Uniform ab
E X    
Distribution 2
Standard Deviation of a Uniform
Distribution SD  X      b  a 2 12

Standard Transformation of the X 

Z
Normal Random Variable 
Inverse Transformation of the X    Z
Normal Random Variable

3
KEY FORMULAS

Mean of an Exponential 1
E X  
Distribution 
Standard Deviation of an 1
SD  X   E ( X ) 
Exponential Distribution 
Exponential Cumulative
P  X  x   1  e  x
Distribution Function

Chapter 8: Sampling and Sampling Distributions

Topic Formula

Expected Value of the Sample

Mean
 
E X 


Standard Error of the Sample
Mean
 
se X 
n
Standard Transformation of the X 
Z
Sample Mean  n
Expected Value of the Sample
Proportion
 
E P p

p  1 p
Standard Error of the Sample
Proportion  
se P 
n
P p
Standard Transformation of the Z
p  1 p
Sample Proportion
n
  N n 
Finite Population Correction
Factor for the Sample Mean
 
se X   
n  N  1 
p 1 p  N  n 
Finite Population Correction
 
se P   
 N 1 
Factor for the Sample Proportion n

Confidence Interval for  when  x  z


2
is Known n
Confidence Interval for  when  x  t 2,df
s
is Unknown n ; df  n  1
p 1 p
Confidence Interval for p p  z 2
n
2
Required Sample Size when  z 2ˆ 
n   
Estimating the Population Mean
 E 
Required Sample Size when 2
 z 2 
Estimating the Population n    pˆ  1  pˆ 
Proportion  E 

4
KEY FORMULAS

Chapter 9: Hypothesis Testing

Topic Formula

Test Statistic for  when  is z

x  0
Known  n
x  0
Test Statistic for  when  is tdf 
; df  n  1
Unknown s n
p  p0
Test Statistic for p z
p0  1  p0  n

Chapter 10: Comparisons Involving Means

Topic Formula

Confidence Interval for 1   2 if 12  22

 12 and  22 are known
 x1  x2   z 2 
n1 n2

1 1 
Confidence Interval for 1   2 if
 x1  x2   t 2,df s 2p   
 n1 n2  ;
 12 and  22 are unknown but
(n  1) s12  (n2  1) s22
assumed equal s 2p  1
n1  n2  2 ; df  n1  n2  2
s12 s22
Confidence Interval for 1   2 if
 x1  x2   t 2,df 
n1 n2
;
 12 and  22 are unknown and
s / n1  s22 / n2 
2 2
1
cannot be assumed equal df 
( s12 / n1 )2 /( n1  1)  ( s22 / n2 ) 2 /(n2  1)

 12 and
 x1  x2   d0
Test Statistic for 1   2 if z
 12  22
 22 are known 
n1 n2

tdf 
 x1  x2   d0
2 1 1 
Test Statistic for 1   2 if 1 and s 2p   
 22 are unknown but assumed  n1 n2  ;

equal (n1  1) s12  (n2  1) s22

s 2p 
n1  n2  2 ; df  n1  n2  2
 x1  x2   d0
tdf 
2 s12 s22
Test Statistic for 1   2 if 1 and 
n1 n2
 22 are unknown and cannot be ;
s / n1  s22 / n2 
2 2
assumed equal 1
df 
( s12 / n1 )2 /( n1  1)  ( s22 / n2 ) 2 /(n2  1)

5
KEY FORMULAS

Confidence Interval for  D

d  t sD n
2,df
; df  n  1
d  d0
tdf 
Test Statistic for  D
; df  n  1
sD n

p1  1  p1  p2  1  p2 
Confidence Interval for p1  p2  p1  p2   z 2 
n1 n2
p1  p2
z
Test Statistic for Testing p1  p2 if
1 1 
d 0 is zero p 1 p   
n
 1 n2 

 p1  p2   d0
Test Statistic for Testing p1  p2 if z
p1  1  p1  p2  1  p2 
d 0 is not zero 
n1 n2

Chapter 11: Comparisons Involving Proportions

Topic Formula
c ni

Grand Mean for ANOVA

 x
i 1 j 1
ij

x
nT
c

n  x  x
Sum of Squares Due to Treatments 2
SSTR  i i
SSTR i 1

SSTR
Mean Square for Treatments MSTR MSTR 
c 1
c
Error Sum of Squares SSE   (ni  1) si2
i 1

SSE
Mean Square Error MSE 
nT  c
Test Statistic for a One-way MSTR
F df , df  
ANOVA Test 1 2
MSE ; df1  c  1 and df 2  nT  c

Chapter 12: Basics of Regression Analysis

Topic Formula

Simple Linear Regression Model y   0  1 x  

Sample Regression Equation for

the Simple Linear Regression ŷ  b0  b1 x
Model

6
KEY FORMULAS

∑ ( x i− x́ ) ( y i− ý )
Slope b1 of the Sample Regression b 1= 2
Equation ∑ ( x i− x́ )
Intercept b0 of the Sample b0  y  b1 x
Regression Equation

se  se2  MSE 
SSE

e
2
i
Standard Error of the Estimate n  k 1
n  k 1 ;
k = number of independent variables

Total Sum of Squares SST   ( yi  y ) 2

Sum of Squares due to Regression SSR   ( yˆi  y ) 2

Sum of Squares due to Error SSE   ( yi  yˆ i )2

SSR SSE
Coefficient of Determinant R
2 R2   1
SST SST

Adjusted R
2

 n 1 
Adjusted R 2  1  1  R 2  
 n  k 1 

Test Statistics for the Test of b j−β j 0
t cal= ; df =n−k−1
Individual Significance se ( b j )
j b j ±t α / 2 ,df se ( b j ); df =n−k−1
Confidence Interval for
Confidence Interval for the
Expected Value of y
yˆ 0  t 2, df   ; df =n−−k −1
se yˆ 0

 se  yˆ  
2
Prediction Interval for an
yˆ 0  t 2, df
0
 se2 df =n−k−1
Individual Value of y ;

Residuals for the Regression Model e  y  yˆ