Formulae IT0209

Terminology
̅ = 𝑺𝒂𝒎𝒑𝒍𝒆 𝑴𝒆𝒂𝒏
𝑿 𝝁 = 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 𝑴𝒆𝒂𝒏
𝑵 = 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 𝑺𝒊𝒛𝒆 𝒏 = 𝒔𝒂𝒎𝒑𝒍𝒆 𝒔𝒊𝒛𝒆
𝝈 = 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 𝑺𝒕𝒂𝒏𝒅𝒂𝒓𝒅 𝑫𝒆𝒗𝒊𝒂𝒕𝒊𝒐𝒏 𝒔 = 𝒔𝒂𝒎𝒑𝒍𝒆 𝒔𝒕𝒂𝒏𝒅𝒂𝒓𝒅 𝒅𝒆𝒗𝒊𝒂𝒕𝒊𝒐𝒏
𝝅 = 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 𝒑𝒓𝒐𝒑𝒐𝒓𝒕𝒊𝒐𝒏 𝒑 = 𝑺𝒂𝒎𝒑𝒍𝒆 𝒑𝒓𝒑𝒐𝒓𝒕𝒊𝒐𝒏
𝑹 = 𝒄𝒐𝒓𝒓𝒆𝒍𝒂𝒕𝒊𝒐𝒏 𝒄𝒐𝒆𝒇𝒇𝒊𝒄𝒊𝒆𝒏𝒕 𝑹 𝟐 = 𝑪𝒐𝒆𝒇𝒇𝒊𝒄𝒊𝒆𝒏𝒕 𝒐𝒇 𝑫𝒆𝒕𝒆𝒓𝒎𝒊𝒏𝒂𝒕𝒊𝒐𝒏

Numerical Descriptive measures

∑𝒙 ∑𝒙
̅=
𝑴𝒆𝒂𝒏 ∶ 𝑿 𝝁 =
𝒏 𝑵
𝒏+𝟏
Median: 𝑴 𝒅 /𝑸𝟐 = 𝒓𝒂𝒏𝒌𝒆𝒅 𝒗𝒂𝒍𝒖𝒆
𝟐

Mode: Most frequently occurred or most repeated

Inter Quartile = 𝑸𝟑 − 𝑸𝟏

𝟑(𝒏 + 𝟏) 𝒏+𝟏
𝑸𝟑 = 𝒓𝒂𝒏𝒌𝒆𝒅 𝒗𝒂𝒍𝒖𝒆 𝑸𝟏 = 𝒓𝒂𝒏𝒌𝒆𝒅 𝒗𝒂𝒍𝒖𝒆
𝟒 𝟒

Range = largest value – smallest value (XMax -XMin)

∑(𝒙− 𝝁)𝟐
Standard Deviation(σ) = √ 𝒏
Variance = (Standard Deviation)2

Probability Formula
𝒏(𝑨)
P(A) =
𝒏(𝑺)
Where n(S)= number of Sample space

P(A’) = 1- P(A)

P(A or B) = P(A U B) = P(A) + P(B) – P(A ∩ B) General Addition rule

P(A or B) = P(A U B) = P(A) + P(B) Special Addition rule (A & B are mutually exclusive)
𝐏(𝐀 ∩ 𝐁)
P(A/B) = Conditional Probability
𝑷(𝑩)
Mean and Variance By using probability
Mean = ∑ 𝒙. 𝒑(𝒙)
Variance = ∑(𝒙 − 𝝁)𝟐 . 𝒑(𝒙)
Normal Probability Formulae
𝐗− 𝛍
Z=
𝝈
x = 𝛍 + 𝐙𝛔

Confidence Limit & Test Statistics for Hypothesis testing for Single mean
Assumptions Hypothesis/Sampling Confidence Interval
Distribution

 known, X normal or 𝑿̄ − 𝝁 
n ≥ 30 CLT 𝒁≈ x  z / 2
𝝈/√𝒏 n
 unknown, n ≥ 30 CLT 𝑿̄ − 𝝁 s
𝒁≈ x  z / 2
𝒔/√𝒏 n
 unknown, X normal or 𝑿̄ − 𝝁 s
n ≤ 30 and X not too 𝒕≈ x  t / 2,df
skewed
𝒔/√𝒏 n

Population Proportion 𝒑 −𝝅
𝒁≈ 𝒑(𝟏 − 𝒑)
√𝝅(𝟏 − 𝝅) 𝒑 ± 𝒛𝜶/𝟐 √
𝒏 𝒏
P = x/n
Critical Value
Confidence value Level of significance Z value(Z∝)
(1- ∝) (∝)
80% 20% 1.2816
90% 10% 1.6449
95 5% 1.960
98% 2% 2.3263
99% 1% 2.5758
Hypothesis testing for compare means
Population Proportion Z- two sample Proportion
𝒑𝟏 − 𝒑𝟐
Z=
𝟏 𝟏
̅ (𝟏− 𝒑
√𝒑 ̅)( + )
𝒏𝟏 𝒏𝟐
𝐖𝐡𝐞𝐫𝐞,
𝑿 +𝑿 𝒙 𝒙𝟐
̅ = 𝟏 𝟐 𝒑𝟏 = 𝟏 𝒂𝒏𝒅 𝒑𝟐 =
𝒑
𝒏𝟏 + 𝒏𝟐 𝒏𝟏 𝒏𝟐
 known, X normal or n ≥30 Z – compare mean test
̅𝟏− 𝑿
𝑿 ̅𝟐
samples are independent Z=
𝝈 𝟐
𝝈 𝟐
√ 𝟏+ 𝟐
𝒏𝟏 𝒏𝟐

 unknown, X normal or n ≥30 Pooled t test for compare means

̅𝟏− 𝑿
𝑿 ̅𝟐
samples are independent and equal t=
𝟏 𝟏
variances √𝑺𝟐 ( + )
𝒏𝟏 𝒏𝟐
 unknown, X normal or n ≥30 Separate t – test for compare means
samples are independent and different ̅𝟏− 𝑿
̅𝟐
𝑿
variances t=
𝒔 𝟐𝒔 𝟐
√ 𝟏+ 𝟐
𝒏𝟏 𝒏𝟐

 known or unknown, samples are Paired t – test for compare means

dependent
̅
𝑫
t= 𝑺
𝑫
√𝒏
Where,
D = 𝑋1 − 𝑋2
𝑆𝐷 = Standard deviation from D
Regression
Simple linear Regression
̂ = 𝒃𝟎 + 𝒃𝟏 𝒙
𝒀
Multiple linear Regression
̂ = 𝜷𝟎 + 𝜷𝟏 𝒙𝟏 + 𝜷𝟐 𝒙𝟐 + ⋯ + 𝜺
𝒀 ̂ = 𝜷𝟎 + 𝜷𝟏 𝒙𝟏 + 𝜷𝟐 𝒙𝟐 + ⋯ + 𝜷𝟐 𝒙𝟐
𝒀
𝑺𝒖𝒎 𝒐𝒇 𝒔𝒒𝒖𝒂𝒓𝒆
Mean sum of square (MSS) =
𝑫𝒆𝒈𝒓𝒆𝒆𝒔 𝒐𝒇 𝑭𝒓𝒆𝒆𝒅𝒐𝒎
𝑴𝒆𝒂𝒏 𝑺𝒖𝒎 𝒐𝒇 𝒔𝒒𝒖𝒂𝒓𝒆 𝒓𝒆𝒈𝒓𝒆𝒔𝒔𝒊𝒐𝒏
F Statistic =
𝑴𝒆𝒂𝒏 𝒔𝒖𝒎 𝒐𝒇 𝒔𝒒𝒖𝒂𝒓𝒆 𝒆𝒓𝒓𝒐𝒓
𝑺𝒖𝒎 𝒐𝒇 𝒔𝒒𝒖𝒂𝒓𝒆 𝒓𝒆𝒈𝒓𝒆𝒔𝒔𝒊𝒐𝒏
Coefficient of determination (R2) =
𝒕𝒐𝒕𝒂𝒍 𝒔𝒖𝒎 𝒐𝒇 𝒔𝒒𝒖𝒂𝒓𝒆

Time series and index Numbers

𝑷𝒊 = 𝒄𝒖𝒓𝒓𝒆𝒏𝒕 𝒚𝒆𝒂𝒓 𝒑𝒓𝒊𝒄𝒆 𝑷𝑩 = 𝑩𝒂𝒔𝒆 𝒚𝒆𝒂𝒓 𝒑𝒓𝒊𝒄𝒆
𝑸𝒊 = 𝒄𝒖𝒓𝒓𝒆𝒏𝒕 𝒚𝒆𝒂𝒓 𝑸𝒖𝒂𝒏𝒕𝒊𝒕𝒚 𝑸𝑩 = 𝑩𝒂𝒔𝒆 𝒚𝒆𝒂𝒓 𝑸𝒖𝒂𝒏𝒕𝒊𝒕𝒚
𝑷𝒊
𝑰𝑳 = (𝑺𝒊𝒎𝒑𝒍𝒆 𝒑𝒓𝒊𝒄𝒆 𝑰𝒏𝒅𝒆𝒙 )
𝑷𝑩
∑ 𝑷𝒊 𝑸𝑩
𝑰𝑳 = (𝑳𝒂𝒔𝒑𝒆𝒚𝒓𝒆𝒔 𝑷𝒓𝒊𝒄𝒆 𝑰𝒏𝒅𝒆𝒙 )
∑ 𝑷𝒊 𝑸𝑩
∑ 𝑃𝑖 𝑄𝑖
𝐼𝑃 = (𝑷𝒂𝒂𝒔𝒄𝒉𝒆 𝑷𝒓𝒊𝒄𝒆 𝑰𝒏𝒅𝒆𝒙)
∑ 𝑃𝑖 𝑄𝑖
𝑬𝒊 = 𝑾𝒀𝒊 + (𝟏 − 𝑾)𝑬𝒊−𝟏 (𝑬𝒙𝒑𝒐𝒏𝒆𝒏𝒕𝒊𝒂𝒍 𝑺𝒎𝒐𝒐𝒕𝒉𝒊𝒏𝒈)
Standard Normal Cumulative Probability Table

Cumulative probabilities for NEGATIVE z-values are shown in the following table:

z 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09
-3.4 0.0003 0.0003 0.0003 0.0003 0.0003 0.0003 0.0003 0.0003 0.0003 0.0002
-3.3 0.0005 0.0005 0.0005 0.0004 0.0004 0.0004 0.0004 0.0004 0.0004 0.0003
-3.2 0.0007 0.0007 0.0006 0.0006 0.0006 0.0006 0.0006 0.0005 0.0005 0.0005
-3.1 0.0010 0.0009 0.0009 0.0009 0.0008 0.0008 0.0008 0.0008 0.0007 0.0007
-3.0 0.0013 0.0013 0.0013 0.0012 0.0012 0.0011 0.0011 0.0011 0.0010 0.0010

-2.9 0.0019 0.0018 0.0018 0.0017 0.0016 0.0016 0.0015 0.0015 0.0014 0.0014
-2.8 0.0026 0.0025 0.0024 0.0023 0.0023 0.0022 0.0021 0.0021 0.0020 0.0019
-2.7 0.0035 0.0034 0.0033 0.0032 0.0031 0.0030 0.0029 0.0028 0.0027 0.0026
-2.6 0.0047 0.0045 0.0044 0.0043 0.0041 0.0040 0.0039 0.0038 0.0037 0.0036
-2.5 0.0062 0.0060 0.0059 0.0057 0.0055 0.0054 0.0052 0.0051 0.0049 0.0048

-2.4 0.0082 0.0080 0.0078 0.0075 0.0073 0.0071 0.0069 0.0068 0.0066 0.0064
-2.3 0.0107 0.0104 0.0102 0.0099 0.0096 0.0094 0.0091 0.0089 0.0087 0.0084
-2.2 0.0139 0.0136 0.0132 0.0129 0.0125 0.0122 0.0119 0.0116 0.0113 0.0110
-2.1 0.0179 0.0174 0.0170 0.0166 0.0162 0.0158 0.0154 0.0150 0.0146 0.0143
-2.0 0.0228 0.0222 0.0217 0.0212 0.0207 0.0202 0.0197 0.0192 0.0188 0.0183

-1.9 0.0287 0.0281 0.0274 0.0268 0.0262 0.0256 0.0250 0.0244 0.0239 0.0233
-1.8 0.0359 0.0351 0.0344 0.0336 0.0329 0.0322 0.0314 0.0307 0.0301 0.0294
-1.7 0.0446 0.0436 0.0427 0.0418 0.0409 0.0401 0.0392 0.0384 0.0375 0.0367
-1.6 0.0548 0.0537 0.0526 0.0516 0.0505 0.0495 0.0485 0.0475 0.0465 0.0455
-1.5 0.0668 0.0655 0.0643 0.0630 0.0618 0.0606 0.0594 0.0582 0.0571 0.0559

-1.4 0.0808 0.0793 0.0778 0.0764 0.0749 0.0735 0.0721 0.0708 0.0694 0.0681
-1.3 0.0968 0.0951 0.0934 0.0918 0.0901 0.0885 0.0869 0.0853 0.0838 0.0823
-1.2 0.1151 0.1131 0.1112 0.1093 0.1075 0.1056 0.1038 0.1020 0.1003 0.0985
-1.1 0.1357 0.1335 0.1314 0.1292 0.1271 0.1251 0.1230 0.1210 0.1190 0.1170
-1.0 0.1587 0.1562 0.1539 0.1515 0.1492 0.1469 0.1446 0.1423 0.1401 0.1379

-0.9 0.1841 0.1814 0.1788 0.1762 0.1736 0.1711 0.1685 0.1660 0.1635 0.1611
-0.8 0.2119 0.2090 0.2061 0.2033 0.2005 0.1977 0.1949 0.1922 0.1894 0.1867
-0.7 0.2420 0.2389 0.2358 0.2327 0.2296 0.2266 0.2236 0.2206 0.2177 0.2148
-0.6 0.2743 0.2709 0.2676 0.2643 0.2611 0.2578 0.2546 0.2514 0.2483 0.2451
-0.5 0.3085 0.3050 0.3015 0.2981 0.2946 0.2912 0.2877 0.2843 0.2810 0.2776

-0.4 0.3446 0.3409 0.3372 0.3336 0.3300 0.3264 0.3228 0.3192 0.3156 0.3121
-0.3 0.3821 0.3783 0.3745 0.3707 0.3669 0.3632 0.3594 0.3557 0.3520 0.3483
-0.2 0.4207 0.4168 0.4129 0.4090 0.4052 0.4013 0.3974 0.3936 0.3897 0.3859
-0.1 0.4602 0.4562 0.4522 0.4483 0.4443 0.4404 0.4364 0.4325 0.4286 0.4247
0.0 0.5000 0.4960 0.4920 0.4880 0.4840 0.4801 0.4761 0.4721 0.4681 0.4641
Standard Normal Cumulative Probability Table

Cumulative probabilities for POSITIVE z-values are shown in the following table:

z 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09
0.0 0.5000 0.5040 0.5080 0.5120 0.5160 0.5199 0.5239 0.5279 0.5319 0.5359
0.1 0.5398 0.5438 0.5478 0.5517 0.5557 0.5596 0.5636 0.5675 0.5714 0.5753
0.2 0.5793 0.5832 0.5871 0.5910 0.5948 0.5987 0.6026 0.6064 0.6103 0.6141
0.3 0.6179 0.6217 0.6255 0.6293 0.6331 0.6368 0.6406 0.6443 0.6480 0.6517
0.4 0.6554 0.6591 0.6628 0.6664 0.6700 0.6736 0.6772 0.6808 0.6844 0.6879

0.5 0.6915 0.6950 0.6985 0.7019 0.7054 0.7088 0.7123 0.7157 0.7190 0.7224
0.6 0.7257 0.7291 0.7324 0.7357 0.7389 0.7422 0.7454 0.7486 0.7517 0.7549
0.7 0.7580 0.7611 0.7642 0.7673 0.7704 0.7734 0.7764 0.7794 0.7823 0.7852
0.8 0.7881 0.7910 0.7939 0.7967 0.7995 0.8023 0.8051 0.8078 0.8106 0.8133
0.9 0.8159 0.8186 0.8212 0.8238 0.8264 0.8289 0.8315 0.8340 0.8365 0.8389

1.0 0.8413 0.8438 0.8461 0.8485 0.8508 0.8531 0.8554 0.8577 0.8599 0.8621
1.1 0.8643 0.8665 0.8686 0.8708 0.8729 0.8749 0.8770 0.8790 0.8810 0.8830
1.2 0.8849 0.8869 0.8888 0.8907 0.8925 0.8944 0.8962 0.8980 0.8997 0.9015
1.3 0.9032 0.9049 0.9066 0.9082 0.9099 0.9115 0.9131 0.9147 0.9162 0.9177
1.4 0.9192 0.9207 0.9222 0.9236 0.9251 0.9265 0.9279 0.9292 0.9306 0.9319

1.5 0.9332 0.9345 0.9357 0.9370 0.9382 0.9394 0.9406 0.9418 0.9429 0.9441
1.6 0.9452 0.9463 0.9474 0.9484 0.9495 0.9505 0.9515 0.9525 0.9535 0.9545
1.7 0.9554 0.9564 0.9573 0.9582 0.9591 0.9599 0.9608 0.9616 0.9625 0.9633
1.8 0.9641 0.9649 0.9656 0.9664 0.9671 0.9678 0.9686 0.9693 0.9699 0.9706
1.9 0.9713 0.9719 0.9726 0.9732 0.9738 0.9744 0.9750 0.9756 0.9761 0.9767

2.0 0.9772 0.9778 0.9783 0.9788 0.9793 0.9798 0.9803 0.9808 0.9812 0.9817
2.1 0.9821 0.9826 0.9830 0.9834 0.9838 0.9842 0.9846 0.9850 0.9854 0.9857
2.2 0.9861 0.9864 0.9868 0.9871 0.9875 0.9878 0.9881 0.9884 0.9887 0.9890
2.3 0.9893 0.9896 0.9898 0.9901 0.9904 0.9906 0.9909 0.9911 0.9913 0.9916
2.4 0.9918 0.9920 0.9922 0.9925 0.9927 0.9929 0.9931 0.9932 0.9934 0.9936

2.5 0.9938 0.9940 0.9941 0.9943 0.9945 0.9946 0.9948 0.9949 0.9951 0.9952
2.6 0.9953 0.9955 0.9956 0.9957 0.9959 0.9960 0.9961 0.9962 0.9963 0.9964
2.7 0.9965 0.9966 0.9967 0.9968 0.9969 0.9970 0.9971 0.9972 0.9973 0.9974
2.8 0.9974 0.9975 0.9976 0.9977 0.9977 0.9978 0.9979 0.9979 0.9980 0.9981
2.9 0.9981 0.9982 0.9982 0.9983 0.9984 0.9984 0.9985 0.9985 0.9986 0.9986

3.0 0.9987 0.9987 0.9987 0.9988 0.9988 0.9989 0.9989 0.9989 0.9990 0.9990
3.1 0.9990 0.9991 0.9991 0.9991 0.9992 0.9992 0.9992 0.9992 0.9993 0.9993
3.2 0.9993 0.9993 0.9994 0.9994 0.9994 0.9994 0.9994 0.9995 0.9995 0.9995
3.3 0.9995 0.9995 0.9995 0.9996 0.9996 0.9996 0.9996 0.9996 0.9996 0.9997
3.4 0.9997 0.9997 0.9997 0.9997 0.9997 0.9997 0.9997 0.9997 0.9997 0.9998
t Table
cum. prob t .50 t .75 t .80 t .85 t .90 t .95 t .975 t .99 t .995 t .999 t .9995
one-tail 0.50 0.25 0.20 0.15 0.10 0.05 0.025 0.01 0.005 0.001 0.0005
two-tails 1.00 0.50 0.40 0.30 0.20 0.10 0.05 0.02 0.01 0.002 0.001
df
1 0.000 1.000 1.376 1.963 3.078 6.314 12.71 31.82 63.66 318.31 636.62
2 0.000 0.816 1.061 1.386 1.886 2.920 4.303 6.965 9.925 22.327 31.599
3 0.000 0.765 0.978 1.250 1.638 2.353 3.182 4.541 5.841 10.215 12.924
4 0.000 0.741 0.941 1.190 1.533 2.132 2.776 3.747 4.604 7.173 8.610
5 0.000 0.727 0.920 1.156 1.476 2.015 2.571 3.365 4.032 5.893 6.869
6 0.000 0.718 0.906 1.134 1.440 1.943 2.447 3.143 3.707 5.208 5.959
7 0.000 0.711 0.896 1.119 1.415 1.895 2.365 2.998 3.499 4.785 5.408
8 0.000 0.706 0.889 1.108 1.397 1.860 2.306 2.896 3.355 4.501 5.041
9 0.000 0.703 0.883 1.100 1.383 1.833 2.262 2.821 3.250 4.297 4.781
10 0.000 0.700 0.879 1.093 1.372 1.812 2.228 2.764 3.169 4.144 4.587
11 0.000 0.697 0.876 1.088 1.363 1.796 2.201 2.718 3.106 4.025 4.437
12 0.000 0.695 0.873 1.083 1.356 1.782 2.179 2.681 3.055 3.930 4.318
13 0.000 0.694 0.870 1.079 1.350 1.771 2.160 2.650 3.012 3.852 4.221
14 0.000 0.692 0.868 1.076 1.345 1.761 2.145 2.624 2.977 3.787 4.140
15 0.000 0.691 0.866 1.074 1.341 1.753 2.131 2.602 2.947 3.733 4.073
16 0.000 0.690 0.865 1.071 1.337 1.746 2.120 2.583 2.921 3.686 4.015
17 0.000 0.689 0.863 1.069 1.333 1.740 2.110 2.567 2.898 3.646 3.965
18 0.000 0.688 0.862 1.067 1.330 1.734 2.101 2.552 2.878 3.610 3.922
19 0.000 0.688 0.861 1.066 1.328 1.729 2.093 2.539 2.861 3.579 3.883
20 0.000 0.687 0.860 1.064 1.325 1.725 2.086 2.528 2.845 3.552 3.850
21 0.000 0.686 0.859 1.063 1.323 1.721 2.080 2.518 2.831 3.527 3.819
22 0.000 0.686 0.858 1.061 1.321 1.717 2.074 2.508 2.819 3.505 3.792
23 0.000 0.685 0.858 1.060 1.319 1.714 2.069 2.500 2.807 3.485 3.768
24 0.000 0.685 0.857 1.059 1.318 1.711 2.064 2.492 2.797 3.467 3.745
25 0.000 0.684 0.856 1.058 1.316 1.708 2.060 2.485 2.787 3.450 3.725
26 0.000 0.684 0.856 1.058 1.315 1.706 2.056 2.479 2.779 3.435 3.707
27 0.000 0.684 0.855 1.057 1.314 1.703 2.052 2.473 2.771 3.421 3.690
28 0.000 0.683 0.855 1.056 1.313 1.701 2.048 2.467 2.763 3.408 3.674
29 0.000 0.683 0.854 1.055 1.311 1.699 2.045 2.462 2.756 3.396 3.659
30 0.000 0.683 0.854 1.055 1.310 1.697 2.042 2.457 2.750 3.385 3.646
40 0.000 0.681 0.851 1.050 1.303 1.684 2.021 2.423 2.704 3.307 3.551
60 0.000 0.679 0.848 1.045 1.296 1.671 2.000 2.390 2.660 3.232 3.460
80 0.000 0.678 0.846 1.043 1.292 1.664 1.990 2.374 2.639 3.195 3.416
100 0.000 0.677 0.845 1.042 1.290 1.660 1.984 2.364 2.626 3.174 3.390
1000 0.000 0.675 0.842 1.037 1.282 1.646 1.962 2.330 2.581 3.098 3.300
z 0.000 0.674 0.842 1.036 1.282 1.645 1.960 2.326 2.576 3.090 3.291
0% 50% 60% 70% 80% 90% 95% 98% 99% 99.8% 99.9%
Confidence Level

t-table.xls 7/14/2007