Q.2.112 - Elementary Statistics

Question

Days to Maturity for Short-Term Investments. Refer to the days-to-maturity data in Table 2.6 on page 53 . Note that there are $40$ observations, the smallest and largest of which are $36$ and $99$ , respectively. Apply the preceding procedure to choose classes for limit grouping. Use approximately seven classes. Note: If in Step $2$ you decide on $10$ for the class width and in Step $3$ you choose $30$ for the lower limit of the first class, then you will get the same classes as used in Example 2.13; otherwise, you will get different classes (which is fine).

Step-by-Step Solution

Answer

The frequency class is 

$\begin{array}{cc}\text{ Class limits }& \text{ Frequency }\\ 36-45& 3\\ 46-55& 7\\ 56-65& 8\\ 66-75& 9\\ 76-85& 6\\ 86-95& 4\\ 96-105& 3\end{array}$

Step 1: Given Information

Step 2: Explanation

Step 1: The number of class is $7$.

Step 2: The class width is,

$\frac{99-36}{7}=\frac{63}{7}$

               $=9$

               $<10$

Step 3: Choose lower class limit as the minimum of $36$.

Step 4: The cut points are lower class limit increased by class width of $10$.

Cut points $=36,46,56,66,76,86,96$.

Step 5: The frequency of each class is,

$\begin{array}{cc}\text{ Class limits }& \text{ Frequency }\\ 36-45& 3\\ 46-55& 7\\ 56-65& 8\\ 66-75& 9\\ 76-85& 6\\ 86-95& 4\\ 96-105& 3\end{array}$