The Business School

BUSINESS DATA ANALYSIS

ASSIGNMENT 1

FTSE 100 STATISTICS

NOBLE DANI GEORGE : 0920628

Date of Submission : 26.03.2010

 TABLE OF CONTENTS

1 - CALCULATION OF MONTHLY RETURNS AND ITS

INTERPRETATION

2 - DESCRIPTION OF VARIABLES AND ITS GROUPING

3 - GRAPHICAL REPRESENTATION OF CLOSE AND RETURN

VALUES

4 - CALCULATION OF PERCENTILES

5 - CALCULATION OF POSITIONS AND ITS COMMENTS

6 - NORMAL DISTRIBUTION OF DATA SET

7 - THEORITICAL EVALUATION OF DISTRIBUTION

THE FTSE 100 SHARE INDEX VALUES FROM 1ST SEPTEMBER
1989 TO 1ST DECEMBER 1993 IS AS FOLLOWS

DATE CLOSE
01/09/1989 2407.5
02/10/1989 2289.2
01/11/1989 2160.1
01/12/1989 2311.1
02/01/1990 2434.1
01/02/1990 2345.8
01/03/1990 2238.4
02/04/1990 2221.6
01/05/1990 2117.9
01/06/1990 2371.4
02/07/1990 2372.0
01/08/1990 2339.0
03/09/1990 2166.6
01/10/1990 2030.9
01/11/1990 2028.0
03/12/1990 2162.7
02/01/1991 2128.3
01/02/1991 2165.7
01/03/1991 2386.9
02/04/1991 2488.3
01/05/1991 2508.4
03/06/1991 2515.8
01/07/1991 2443.6
01/08/1991 2591.7
02/09/1991 2679.6
01/10/1991 2645.6
01/11/1991 2549.5
02/12/1991 2414.9
02/01/1992 2492.8
03/02/1992 2560.2
02/03/1992 2554.3
01/04/1992 2408.6
01/05/1992 2659.8
01/06/1992 2697.6
01/07/1992 2493.9
03/08/1992 2420.2
01/09/1992 2298.4
01/10/1992 2572.3
02/11/1992 2687.8
01/12/1992 2792.0
04/01/1993 2861.5
01/02/1993 2851.6
01/03/1993 2882.6
01/04/1993 2878.4
04/05/1993 2812.6
01/06/1993 2849.2
01/07/1993 2888.8
02/08/1993 2941.7
01/09/1993 3085.1
01/10/1993 3039.3
01/11/1993 3164.4
01/12/1993 3233.2
1–
CALCULATION OF RETURN VALUES

DATE CLOSE RETURNS PERCENTAGE

01/09/1989 2407.5 0 0.00%
02/10/1989 2289.2 -0.04913811 -4.91%
01/11/1989 2160.1 -0.056395247 -5.64%
01/12/1989 2311.1 0.069904171 6.99%
02/01/1990 2434.1 0.05322141 5.32%
01/02/1990 2345.8 -0.036276242 -3.63%
01/03/1990 2238.4 -0.045783954 -4.58%
02/04/1990 2221.6 -0.007505361 -0.75%
01/05/1990 2117.9 -0.04667807 -4.67%
01/06/1990 2371.4 0.119694037 11.97%
02/07/1990 2372.0 0.000253015 0.03%
01/08/1990 2339.0 -0.01391231 -1.39%
03/09/1990 2166.6 -0.073706712 -7.37%
01/10/1990 2030.9 -0.062632696 -6.26%
01/11/1990 2028.0 -0.001427938 -0.14%
03/12/1990 2162.7 0.066420118 6.64%
02/01/1991 2128.3 -0.015906043 -1.59%
01/02/1991 2165.7 0.017572711 1.76%
01/03/1991 2386.9 0.102137877 10.21%
02/04/1991 2488.3 0.04248188 4.25%
01/05/1991 2508.4 0.008077804 0.81%
03/06/1991 2515.8 0.002950088 0.30%
01/07/1991 2443.6 -0.028698625 -2.87%
01/08/1991 2591.7 0.060607301 6.06%
02/09/1991 2679.6 0.033915962 3.39%
01/10/1991 2645.6 -0.012688461 -1.27%
01/11/1991 2549.5 -0.036324463 -3.63%
02/12/1991 2414.9 -0.052794666 -5.28%
02/01/1992 2492.8 0.032258065 3.23%
03/02/1992 2560.2 0.027037869 2.70%
02/03/1992 2554.3 -0.002304507 -0.23%
01/04/1992 2408.6 -0.057041068 -5.70%
01/05/1992 2659.8 0.10429295 10.43%
01/06/1992 2697.6 0.014211595 1.42%
01/07/1992 2493.9 -0.075511566 -7.55%
03/08/1992 2420.2 -0.029552107 -2.96%
01/09/1992 2298.4 -0.050326419 -5.03%
01/10/1992 2572.3 0.119169857 11.92%
02/11/1992 2687.8 0.04490145 4.49%
01/12/1992 2792.0 0.038767765 3.88%
04/01/1993 2861.5 0.02489255 2.49%
01/02/1993 2851.6 -0.003459724 -0.35%
01/03/1993 2882.6 0.01087109 1.09%
01/04/1993 2878.4 -0.001457018 -0.15%
04/05/1993 2812.6 -0.022859922 -2.29%
01/06/1993 2849.2 0.013012871 1.30%
01/07/1993 2888.8 0.013898638 1.39%
02/08/1993 2941.7 0.018312102 1.83%
01/09/1993 3085.1 0.048747323 4.87%
01/10/1993 3039.3 -0.014845548 -1.48%
01/11/1993 3164.4 0.041160794 4.12%
01/12/1993 3233.2 0.021741878 2.17%
Interpretation.

Return values can be calculated by the change in price of

yesterdays close values divided by yesterdays close values. It can be expressed in a
formula as

Return =
Change in price from yesterday’s close values
Yesterday’s close values
(Dave Elliman)
(Ref- www.cs.nott.ac.uk/~dge/G54QMF/WS02_PresentAndFutureValues.pdf )

Here returns means the gain or loss earned in

FTSE100 Shares during the period 1st September 1989 to 1st December 1993. In
statistical terms this variable ratio is quantitative and discrete and its scale of
measurement is RATIO. The lowest return percentage here is -7.55 on 2nd October 1989
.the value on this day is 2493.9. The previous day value is 2697.60.the difference in share
value indices is -203.70.Usually the stock market values are named as indices (measure
of large group of stocks used to forecast price movements in securities).the scale of
indices for 1% = 22 units (little variations due to rounding)
The higher return percentage in the given period is 11.97%
on 1st June 1990 at an indices value of 2371.40.the first row of the return variable in the
data set is 0 values because no data is available in the population for the preceding day.
 2 –

The element of this case is the stock values of FTSE 100 .the observation is from
1st September 89 to 1st December 1993.The number of elements is 52.the number of
variables considered here is 6,but the variable ‘Avg Vol’ has 0 value in all elements.

VARIABLES IN THE ORIGINAL DATA ARE AS FOLLOW :( EXAMPLE)

Adj
Open High Low Close Avg Vol Close*
3,197.00 3,250.10 3,190.30 3,233.20 0 3,233.20

But for calculations and analysis, only one variable is taken

into account from the above data set, which is ‘CLOSE’ value. Another variable
considered is the ‘RETURN’ value, which is derived from the ‘CLOSE’ values.
The ‘CLOSE’ values here are quantitative and discrete in
nature, and the scale of measurement is ‘ratio’. All the variables such as ‘OPEN’,
‘HIGH’ , ‘LOW’ , ‘AVG VOL’ , and‘ADJ CLOSE’. Are quantitative and discrete in
nature
3–
A- GROUP DISTRIBUTION OF CLOSE VALUES
Count of Close
Close Total
2028.-2128 3
2128-2228 6
2228-2328 4
2328-2428 9
2428-2528 7
2528-2628 5
2628-2728 5
2728-2828 2
2828-2928 6
2928-3028 1
3028-3128 2
3128-3228 1
3228-3328 1
Grand Total 52

DISTRIBUTION OF CLOSE VALUES GROUPED BY 100

Count of Close
10

8
COUNT OF VALUES

5 Total
4

0
2028.- 2128- 2228- 2328- 2428- 2528- 2628- 2728- 2828- 2928- 3028- 3128- 3228-
2128 2228 2328 2428 2528 2628 2728 2828 2928 3028 3128 3228 3328
GROUPED VALUES

Close
INTERPRETATION OF GROUPED DISTRIBUTION OF CLOSE VALUES.

A frequency distribution shows the number of observations falling into

each of several ranges of values. Frequency distributions are portrayed as frequency
tables. Histograms or polygons. Grouped frequency distribution is made to cluster the
wide distributed data set and scattered data variables. This enables in co-ordination of
sprinkled data .Grouped frequency distribution is very useful in the graphical
representation of data .When a grouping according the frequency values are made , the
data becomes too short so that we can easily understand the information and facts at a
glance. Frequency distributions can show either the actual number of observations falling
in each range or the percentage of observations. In the latter instance, the distribution is
called a relative frequency distribution (Ref: davidmlane.com/hyperstat/A26308.html).

FREQUENCY DISTRIBUTION OF DESCRETE DATA

Discrete data is generated by counting: each and every observation is exact when
an observation is repeated; it is counted the number of which the observation is repeated
is called frequency of that observation. There are no class boundaries in discrete data.
Here the CLOSE distribution data of 52 values are changed to 13 frequency groups
grouped by 100.the highest frequency is 9 and the lowest is 1.
 B - FREQUENCY DISTRIBUTION OF RETURN VALUES

Row Labels Count of Compound Return

(blank)
-0.0785--0.0685 2
-0.0685--0.0585 2
-0.0585--0.0485 4
-0.0485--0.0385 2
-0.0385--0.0285 4
-0.0285--0.0185 1
-0.0185--0.0085 4
-0.0085-0.0014 6
0.0014-0.0114 3
0.0114-0.0214 5
0.0214-0.0314 3
0.0314-0.0414 4
0.0414-0.0514 3
0.0514-0.0614 2
0.0614-0.0714 2
0.0914-0.1014 2
0.1114-0.1214 2
Grand Total 51
INTERPRETATION:

This is the graphical representation for the monthly returns of FTSE100 close
values .There are 51 variables in this data set .When it is grouped, we got a group
frequency for each group .The group having the highest frequency is -0.0085 to 0.0014 .
its frequency is 6 .This means that , the values in this frequency are traded most
frequently . This is not similar to mode .mode is a single indices but this is a group of
frequencies.7 groups has the same frequency level of 2.this graphical representation is
very useful for getting the knowledge about the overall return based performance of the
FTSE market during the particular period.
4- A estimation of percentiles of close values

25 TH PERCENTILE = 2322.025

50 TH PERCENTILE = 2882.6

75 TH PERCENTILE = 2721.2

I ) – VALUES WITHIN WHICH 75 %,89% AND 94% OF THIS DATA SET

VALUES WITHIN 75 PERCENT , 75TH PERCENT VALUE IS 2721.2

 DATE CLOSE DATE CLOSE
01/11/1990 2028.00 01/04/1992 2408.60
01/10/1990 2030.90 02/12/1991 2414.90
01/05/1990 2117.90 03/08/1992 2420.20
02/01/1991 2128.30 02/01/1990 2434.10
01/11/1989 2160.10 01/07/1991 2443.60
03/12/1990 2162.70 02/04/1991 2488.30
01/02/1991 2165.70 02/01/1992 2492.80
03/09/1990 2166.60 01/07/1992 2493.90
02/04/1990 2221.60 01/05/1991 2508.40
01/03/1990 2238.40 03/06/1991 2515.80
02/10/1989 2289.20 01/11/1991 2549.50
01/09/1992 2298.40 02/03/1992 2554.30
01/12/1989 2311.10 03/02/1992 2560.20
01/08/1990 2339.00 01/10/1992 2572.30
01/02/1990 2345.80 01/08/1991 2591.70
01/06/1990 2371.40 01/10/1991 2645.60
02/07/1990 2372.00 01/05/1992 2659.80
01/03/1991 2386.90 02/09/1991 2679.60
01/09/1989 2407.50 02/11/1992 2687.80
01/06/1992 2697.60

VALUES WITHIN 89 PERCENT , VALUE AT 89TH PERCENT IS =2885.02

 DATE CLOSE DATE CLOSE
01/11/1990 2028.00 02/12/1991 2414.90
01/10/1990 2030.90 03/08/1992 2420.20
01/05/1990 2117.90 02/01/1990 2434.10
02/01/1991 2128.30 01/07/1991 2443.60
01/11/1989 2160.10 02/04/1991 2488.30
03/12/1990 2162.70 02/01/1992 2492.80
01/02/1991 2165.70 01/07/1992 2493.90
03/09/1990 2166.60 01/05/1991 2508.40
02/04/1990 2221.60 03/06/1991 2515.80
01/03/1990 2238.40 01/11/1991 2549.50
02/10/1989 2289.20 02/03/1992 2554.30
01/09/1992 2298.40 03/02/1992 2560.20
01/12/1989 2311.10 01/10/1992 2572.30
01/08/1990 2339.00 01/08/1991 2591.70
01/02/1990 2345.80 01/10/1991 2645.60
01/06/1990 2371.40 01/05/1992 2659.80
02/07/1990 2372.00 02/09/1991 2679.60
01/03/1991 2386.90 02/11/1992 2687.80
01/09/1989 2407.50 01/06/1992 2697.60
01/04/1992 2408.60 01/12/1992 2792.00
04/05/1993 2812.60
01/06/1993 2849.20
01/02/1993 2851.60
04/01/1993 2861.50
01/04/1993 2878.40
01/03/1993 2882.60

VALUES WITHIN 94 PERCENT- 94TH PERCENT VALUE IS= 3096.25

 DATE CLOSE DATE CLOSE
01/11/1990 2028.00 01/07/1991 2443.60
01/10/1990 2030.90 02/04/1991 2488.30
01/05/1990 2117.90 02/01/1992 2492.80
02/01/1991 2128.30 01/07/1992 2493.90
01/11/1989 2160.10 01/05/1991 2508.40
03/12/1990 2162.70 03/06/1991 2515.80
01/02/1991 2165.70 01/11/1991 2549.50
03/09/1990 2166.60 02/03/1992 2554.30
02/04/1990 2221.60 03/02/1992 2560.20
01/03/1990 2238.40 01/10/1992 2572.30
02/10/1989 2289.20 01/08/1991 2591.70
01/09/1992 2298.40 01/10/1991 2645.60
01/12/1989 2311.10 01/05/1992 2659.80
01/08/1990 2339.00 02/09/1991 2679.60
01/02/1990 2345.80 02/11/1992 2687.80
01/06/1990 2371.40 01/06/1992 2697.60
02/07/1990 2372.00 01/12/1992 2792.00
01/03/1991 2386.90 04/05/1993 2812.60
01/09/1989 2407.50 01/06/1993 2849.20
01/04/1992 2408.60 01/02/1993 2851.60
02/12/1991 2414.90 04/01/1993 2861.50
03/08/1992 2420.20 01/04/1993 2878.40
02/01/1990 2434.10 01/03/1993 2882.60
01/07/1993 2888.80
02/08/1993 2941.70

B- ESTIMATION OF PERCENTILES FOR RETURN VALUES.

…………………………………………………………………………………................................................................

25 TH PERCENTILE = -.02915

50 TH PERCENTILE = .003

75 TH PERCENTILE = .03635

ii)- values lies in 75th,89th & 94th percent

VALUES LIES IN 75TH PERCENT (value at 75th percent = 0.0365)

DATE RETURN DATE RETURN

01/07/1992 -0.0755 01/11/1990 -0.0014
03/09/1990 -0.0737 02/07/1990 0.0003
01/10/1990 -0.0626 03/06/1991 0.0030
01/04/1992 -0.0570 01/05/1991 0.0081
01/11/1989 -0.0546 01/03/1993 0.0109
02/12/1991 -0.0528 01/06/1993 0.0130
01/09/1992 -0.0503 01/07/1993 0.0139
02/10/1989 -0.0491 01/06/1992 0.0142
01/05/1990 -0.0467 01/02/1991 0.0176
01/03/1990 -0.0458 02/08/1993 0.0183
01/02/1990 -0.0363 01/12/1993 0.0217
01/11/1991 -0.0363 04/01/1993 0.0249
03/08/1992 -0.0296 03/02/1992 0.0270
01/07/1991 -0.0287 02/01/1992 0.0323
04/05/1993 -0.0229 02/09/1991 0.0339
02/01/1991 -0.0159
01/10/1993 -0.0148
01/08/1990 -0.0139
01/10/1991 -0.0127
02/04/1990 -0.0075
01/02/1993 -0.0035
02/03/1992 -0.0023
01/04/1993 -0.0015
 B- VALUES LIES IN 89 TH PERCENT, value at 89th percent = 0.0635

DATE RETURN DATE RETURN

01/07/1992 -0.0755 01/11/1990 -0.0014
03/09/1990 -0.0737 02/07/1990 0.0003
01/10/1990 -0.0626 03/06/1991 0.0030
01/04/1992 -0.0570 01/05/1991 0.0081
01/11/1989 -0.0546 01/03/1993 0.0109
02/12/1991 -0.0528 01/06/1993 0.0130
01/09/1992 -0.0503 01/07/1993 0.0139
02/10/1989 -0.0491 01/06/1992 0.0142
01/05/1990 -0.0467 01/02/1991 0.0176
01/03/1990 -0.0458 02/08/1993 0.0183
01/02/1990 -0.0363 01/12/1993 0.0217
01/11/1991 -0.0363 04/01/1993 0.0249
03/08/1992 -0.0296 03/02/1992 0.0270
01/07/1991 -0.0287 02/01/1992 0.0323
04/05/1993 -0.0229 02/09/1991 0.0339
02/01/1991 -0.0159 01/12/1992 0.0388
01/10/1993 -0.0148 01/11/1993 0.0412
01/08/1990 -0.0139 02/04/1991 0.0425
01/10/1991 -0.0127 02/11/1992 0.0449
02/04/1990 -0.0075 01/09/1993 0.0487
01/02/1993 -0.0035 02/01/1990 0.0532
02/03/1992 -0.0023 01/08/1991 0.0606
01/04/1993 -0.0015

C- VALUES LIES IN 94TH PERCENT (value at 94th percent = 0.1021)

 DATE RETURN DATE RETURN
01/07/1992 -0.0755 01/11/1990 -0.0014
03/09/1990 -0.0737 02/07/1990 0.0003
01/10/1990 -0.0626 03/06/1991 0.0030
01/04/1992 -0.0570 01/05/1991 0.0081
01/11/1989 -0.0546 01/03/1993 0.0109
02/12/1991 -0.0528 01/06/1993 0.0130
01/09/1992 -0.0503 01/07/1993 0.0139
02/10/1989 -0.0491 01/06/1992 0.0142
01/05/1990 -0.0467 01/02/1991 0.0176
01/03/1990 -0.0458 02/08/1993 0.0183
01/02/1990 -0.0363 01/12/1993 0.0217
01/11/1991 -0.0363 04/01/1993 0.0249
03/08/1992 -0.0296 03/02/1992 0.0270
01/07/1991 -0.0287 02/01/1992 0.0323
04/05/1993 -0.0229 02/09/1991 0.0339
02/01/1991 -0.0159 01/12/1992 0.0388
01/10/1993 -0.0148 01/11/1993 0.0412
01/08/1990 -0.0139 02/04/1991 0.0425
01/10/1991 -0.0127 02/11/1992 0.0449
02/04/1990 -0.0075 01/09/1993 0.0487
01/02/1993 -0.0035 02/01/1990 0.0532
02/03/1992 -0.0023 01/08/1991 0.0606
01/04/1993 -0.0015 03/12/1990 0.0664
01/12/1989 0.0699

Percentiles:
A percentile is a measure that identifies dataset values that are not necessarily
middle positions. A percentile provides information regarding how the data items are
distributed over the data frequency. The pth percentile separates the data into two
parts with the data set that do not have numerous recurrent values. usually p
percent of the items have less value than the pth percentile; approximately (100-p)
percent of the items have values greater than the pth percentile.(Ref-
.(Ref-Statistics For
Business And Economics,Anderson,Sweeney,Williams-
Economics,Anderson,Sweeney,Williams-5th Edition)
 For finding p th percentile
1 - Arrange the data in ascending order
2 - Compute an index i
i = (p/100)n
where p is the percentile of interest
n is the number of items.

5-
ARITHMETIC MEAN, MEDIAN & STANDARD DEVIATION

Mean, median & standard deviation of CLOSE values

MEAN = 2531.556

MEDIAN = 2128.3

STD DEVIATION=297.41
Arithmetic mean
Mean is the most popular measure of central tendency .It is nearly the
average of data .It has several mathematical properties that make it more advantageous to
use than other three measure of central tendency .Here the mean value that traded in
FTSE100 stock market during the period is 2531.556.this is almost same as the average
traded indices of this period.
Simple mean formula is,  = ∑x
N
( ref: introduction to business statistics – fourth edition- ALAN H,STEPHEN
GUYNES, ROBERT PAVUR. Page 63)

Median
The median of a set of data is the value in the centre of the data values when they
are arranged from smallest to largest. Consequently it is in the centre of the ordered array.
if there is an even number of terms in the array, the median is the middle figure. if there
is an even number of terms ,the median is the average of the two middle numbers.eg: if
there are twenty seven terms, the median will be ½ of the (n + 1)th term, ie (27 + 1 ) /
2th term = 14 th figure of the data set. (Ref- Business statistics –an introductory – KEN
BLACK, page 49).median of the
CLOSE variable is 2128.3, means this indices stands at the centre of all the given indices
hen it is in ascending order.

Mode:
Mode is the item which occurs most frequently in a data set. in business arena it is
widely used in finding the size e.g.: shirt size, shoe size etc.If there is an equal chance for
the frequently occurring item, there will be two modes .that is called bimodal. Data set
having more than two modes is called multimodal.(ref :statistics for business- fourth
edition-page 111-DEREK GREGORY,HAROLD WARD & ALLEN BRADSHAW)

Standard deviation
The variation measure which has been devised precisely to do this job of
telling us how near or whole the values in the data are to the mean  is called Standard
deviation .the standard deviation of the given range is 297.41.otherwise it is the square
root of variance. There fore variance is 88446.7.the data range move along the plot area
when the standard deviation is high.

Mean median & standard deviation of RETURN values

MEAN = .007

MEDIAN = .003

MODE = -0.0363

STD DEVIATION = .048379

COMMENTS:
Mean for the return data is .007.it means that the average return earned by
the FTSE100 indices during the given period is 0.7 %.these statistics are very much
useful in the business scenario especially in the share trade market for investors.
Median for the return lies near 0.003 .the other two extremes are -0.0755
and + 11.97 .the central point of return earned in the FTSE100 is .3 %.
The frequently occurred return value is -0.0363 and is occurred two times
in the above time gap. Mode value helps the investors to get the most commonly return or
share price in the market. But this alone can not be taken as criteria for investment.
The standard deviation of the above return value is 0.4837 .this
says that the overall return values are deviated from the arithmetic mean by 0.48.Standard
deviation can be used to compare the dispersion in two distributions as long as the
distributions are of the same kind and and are measured in the same units.
(ref :statistics for business- fourth edition-page 147-DEREK GREGORY,HAROLD
WARD & ALLEN BRADSHAW).

6–
A- Normal distribution

A normal distribution is a continuous distribution usually has a bell

shaped plotting. its distribution of values will be symmetrical. in a normal distribution
mean determines the location and the shape is determined by the standard deviation.
Therefore for any distribution, two values such as mean and standard deviation is
required. Even though it has same mean values, the shape of the curve changes with
change in standard deviation. Definitely the centre of this distribution will be
symmetrical and the area under the curve is equal to the value one.
THE TWO MAIN THEORIES ASSOCIATED WITH NORMAL DISTRIBUTION
ARE
1-EPERICAL RULE
&
2-THE BIENAME – CHEBYSHEV’S THEORY

The empirical rule says that

The distribution will be normal for a bell shaped distribution if
1- 68.26% of the population measurement are within plus or minus one
standard deviation of the mean and thus lie in the interval
2- 95.44% of the population measurements are within plus or minus two
standard deviations of the mean and thus lie in the interval
3- 99.73% of the population measurements are within plus or minus three
standard deviations of the mean and thus lie in the interval
(ref: abstract from breo,business data analysis ,lecture 3)
 A NORMAL DISTRIBUTION CURVE

Normal distribution curve having different standard deviation values

NORMAL DISTRIBUTION PLOT OF RETURN VALUES

 DISTRIBUTION GRAPH FOR RETURN VALUES
Normal
9 Mean 0.006965
StDev 0.04838
8 N 51

6
Density

0
-0.10 -0.05 0.00 0.05 0.10
RETURN

EVALUATION

The variable return is quantitative, discrete and its scale is ratio .The data
set can be predicted as normally distributed because it has all the characteristics of
normal distribution .The mean of the data is .007 and the standard deviation is .048379
When we plot a curve for this values, it shows a symmetric distribution curve .From all
the above theoretical aspects it can be claimed that this is a normal distribution
B–
Normal probability curve frequency from -8 to 12

Probability Plot of RETURNS

Normal - 95% CI
99
Mean 0.007
StDev 0.04838
95 N 52
AD 0.351
90
P-Value >0.250
80
70
Percent

60
50
40
30
20

10

1
- 8 -7 - 6 - 5 - 4 - 3 - 2 - 1 0 1 2 3 4 5 6 7 8 9 10 11 12

RETURNS

Plot using lower frequency values

Probability Plot of RETURNS
Normal
99
Mean 0.006794
StDev 0.04796
95 N 52
AD 0.344
90
P-Value 0.475
80
70
Percent

60
50
40
30
20

10

1
-0.10 -0.05 0.00 0.05 0.10 0.15
RETURNS

Interpretation:
This probability plot shows a normal distribution of return values with the
arithmetic mean value .007 and standard deviation .048379.the frequency table in the y
axis has the value from -8 to + 12.the lowest value of the return indices percentage is -
0.758 and the upper value is 11.97 %..The colored portion shows the probability of the
curve. It has all the essential features of a normal distribution curve. So we can strongly
say that the return data from the close value indices is normally distributed.

7 – The normal distribution of the monthly return values are as follow

This is done on the base of arithmetic mean and standard
Deviation values.
RETURN NORMAL DISTRIBUTION
-0.0755 0.044070609
-0.0737 0.04765001
-0.0626 0.07512617
-0.0570 0.092936308
-0.0546 0.101459399
-0.0528 0.108215622
-0.0503 0.118127738
-0.0491 0.123107065
-0.0467 0.133502586
-0.0458 0.137552277
-0.0363 0.185389152
-0.0363 0.185389152
-0.0296 0.224666768
-0.0287 0.230280475
-0.0229 0.268275556
-0.0159 0.31798322
-0.0148 0.326135785
-0.0139 0.332868663
-0.0127 0.34193001
-0.0075 0.382196584
-0.0035 0.414090021
 -0.0023 0.423780175
-0.0015 0.430266363
-0.0014 0.431078499
0.0003 0.444926649
0.0030 0.467052795
0.0081 0.509070024
0.0109 0.532125331
0.0130 0.549350578
0.0139 0.556706376
0.0142 0.5591541
0.0176 0.586715222
0.0183 0.592341529
0.0217 0.619379236
0.0249 0.644306984
0.0270 0.660344132
0.0323 0.699496928
0.0339 0.710903588
0.0388 0.744509193
0.0412 0.760191372
0.0425 0.768461466
0.0449 0.783303213
0.0487 0.805640896
0.0532 0.830200986
0.0606 0.866051541
0.0664 0.890239996
0.0699 0.903225371
0.1021 0.975335035
0.1043 0.977848001
0.1192 0.98980758
0.1197 0.990084316

TOTAL- 24.89285064

The total of all individual distributions are 24.8928. In a normal distribution,

Mean determines the location and the shape is determined by the standard deviation.
Therefore for any distribution, two values such as mean and standard deviation is
required.
The theory in empirical rule says that
The distribution will be normal for a bell shaped distribution if

1-68.26% of the population measurement are within plus or minus one

standard deviation of the mean and thus lie in the interval
2-95.44% of the population measurements are within plus or minus two
standard deviations of the mean and thus lie in the interval
3-99.73% of the population measurements are within plus or minus three
standard deviations of the mean and thus lie in the interval
(ref: abstract from breo,business data analysis ,lecture 3)

When matching this theory, in the return distribution here, 68.26 % population falls in the
standard deviation 1.so by all these things we can conclude that this data set clearly fit for
normal distribution.

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