You will need a calculator for this exam
I. Introduction
A. Using statistics
1. meaning, context, definition
2. methodology
3. descriptive statistics, uncertainty, estimation
B. Samples and Populations
1. Sampling methods
a. random
b. representative
2. Sample bias
a. good samples are representative of population
b. biased samples-- meaningless results
C. Regression and correlation
1. positive and negative correlation
2. correlation does not imply causality
II. Uncertainty and Probability
A. Knowledge, risk, and decision making
1. lack of information vs. random outcomes
2. classical, relative frequency, subjective probabilities
3. hypothesis testng and critical region
B. Expected value
1. fair bet
2. rational crime
3. decision making under uncertainty
4. insurance
a. expected value
b. asymetric information
c. risk
C. Risk
1. measuring risk
a. variance
b. standard deviation
2. risk issues
a. risk aversion
b. risk premium
3. risk and diversification
a. covariance
b. correlation
c. beta
d. portfolio theory
e. returns on a risky asset
C. Working with probability
1. complement (not)
2. addition rule (union)
3. multiplication rule (intersection)
4. conditional probability
5. independence
6. mutually exclusive
7. Bayes' theorum
III. Descriptive Statistics
A. Measures of central tendency
1. mean
2. median
3. mode
B. Measures of dispersion
1. variance
2. standard deviation
3. range
4. quartiles, quintiles, percentiles
C. Descriptive Statistics and probability
1. Chebyshev's theorem
2. The Empirical Rule
a. normal distribution
D. Samples and Populations
1. sample statistics estimate population parameters
2. sample mean
3. sample variance
4. sample standard deviation