Question

Descriptive statistics for the closing stock prices of two companies for several trading periods are shown below.

	Baba, Inc	Maman, Inc
Mean	4	15.91
Median	3.92	16.59
Mode	4.19	15.58
Standard deviation	1.12	3.21
Skewness	0.08	-2.09
Count	109	124

Which company s stock price has a more dispersed distribution?

	A.	Maman, Inc.
	B.	Baba, Inc.
	C.	both

Answer 1

Here, standard deviation of Baba Inc is 1.12 and Maman Inc is 3.21. if the standard deviation is small, then this tells us that the results are close to the mean, whereas if the standard deviationis large, then the results are more spread out. Maman Inc stock price is more dispersed.

Less dispersed data gives better result and it is reliable and less dispersed data gives less reliable result.

By observing skewness, Baba Inc stock price is positively skewed and it is moderately skewed and Maman Inc stock price is negatively skewed and it highly skewed because its value is high.