1) Are the following questions true or false? - Seasonality is likely to be part

Question

1) Are the following questions true or false?

- Seasonality is likely to be part of the monthly sales data of Best Buy (retail electronics store). Use of the 12-month percent change would eliminate the seasonality.

- Chebychev’s inequality applies only to normally distributed data and says that at least 99 percent of the data lie within 2 standard deviations of the mean.

- The “Empirical Rule” based on the normal distribution says that 95.44% of the observations will lie within 2 standard deviations of the mean.

- According to Sturges’ rule, doubling the sample size (x 2) should quadruple (x 4) the number of bins used in a histogram.

Explanation / Answer

a) Seasonality is likely to be part of the monthly sales data of Best Buy (retail electronics store). Use of the 12-month percent change would eliminate the seasonality : False

b) Chebychev’s inequality applies only to normally distributed data and says that at least 99 percent of the data lie within 2 standard deviations of the mean. : False

c) The “Empirical Rule” based on the normal distribution says that 95.44% of the observations will lie within 2 standard deviations of the mean. : True

d) According to Sturges’ rule, doubling the sample size (x 2) should quadruple (x 4) the number of bins used in a histogram. : False

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