Review of Basic Statistics
This chapter reviews the basics of statistics. It begins with a discussion of the nature of data, variables, and statistical analysis. Data result from the observation of one or more variables. In the context of statistics, a variable represents a characteristic or property that can be observed or measured. Variables may be observed on a number of occasions, or for a number of individuals. Statistics is the body of methods used to deal with data, by computing and interpreting Statistics (plural) and thus transforming data into information. Variability is inherent in the processes of observation and measurement. Managers and financial analysts need to use statistical analysis because variation is everywhere, important patterns may not be obvious, and conclusions are not certain. Decisions are thus made in an atmosphere of risk. The purpose of Statistical Analysis is the transformation of Data into Information. This transformation is accomplished by means of Statistical Analysis.