01.

Introduction to Business Statistics Short Answer Questions

[March 2014]
Primary Vs. Secondary data
[Answer]
Primary Data Secondary Data
1 Primary Data is collected by the 1 Secondary data is collected by person
person conducting the statistical agencies other than the one conducting the
enquiry. enquiry.
2 It is raw and original. 2 It is processed and hence, not original.
3 It is most relevant to the study being 3 It may or may not be directly relevant to
conducted. the study.
4 It involves huge costs, time and effort 4 It is relatively less expensive and takes less
of the investigation. time and effort.
5 There is no need for extra precautions 5 It should be used with great care.
in using the data.

[March 2014]
Explain limitations of Statistics.
[Answer]
The following are the Limitations of statistics:
(i) Statistics does no t study qualitative phenomenon: Statistics are numerical statements of facts.
It can be applied only to such problems that can be measured quantitatively. Statistics cannot
be used directly for the study of qualitative features such as honesty, intelligence, culture etc.
(ii) Statistics does not study individual measurements: Statistical methods do not give any
recognition to an object, person or an event in isolation.
For Example: The average income of a group of persons might have remained the same over
two periods, yet some persons in the group might have become poorer than what they were
before. Statistical methods ignore such individual cases.
(iii) Statistical laws are true only on average: Statistical laws are not universally true like laws of
physics etc. They are true only on an average. Statistics deals with such phenomena that are
affected by a multiplicity of causes and it is difficult to study the effects of each of these factors
separately. Due to this limitation, the conclusions arrived at are not perfectly accurate.
(iv) Statistics can be misused: Any person can misuse statistics and draw wrong conclusions.
Statistical methods are dangerous tools in the hands of the non-experts. They can be easily
distorted and manipulated by dishonest or unskilled users for selfish motives.
For Example: In India the percentage of death among sick persons is higher in hospitals than
at home was stated by a person who collected information of deaths in hospitals and at home.
This may lead to the conclusion that more persons die in hospitals than at home lack of
improper treatment and care. But the investigator failed to take into consideration the fact that
in India only seriously ill persons are hospitalised.
(v) Statistics do not reveal the entire story: Statistical analysis may focus on only certain aspects of
the study and may not bring to light the entire story.
(vi) No Cause and Effect relationship: Statistics does not bring out the cause and effect relationship
between various parameters.

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Chapter 1: Introduction to Business Statistics - Previously Asked Annual Examination Short Answer Questions & Solutions
 For Example: If the sales and advertisement expenditure of an organisation is studied, it
does not necessarily tell us that there is a cause and effect relationship between the two.
However the technique of regression can be applied to find out what would be the
advertisement expenditure, for a given figure of sales. This may not be practical, as sales do
not directly cause impact on advertisement.
(vii) Cannot be applied to any situation: Statistics are collected for a defined purpose. The analysis
resulting out of such statistics cannot be indiscriminately applied to any situation.
Indiscriminate use of statistics to any situation can lead to false conclusions.
(viii) Statistics are Contextual: In order to understand a statistical study in its full detail, it is
necessary that we also study its background. A change in definition of a variable, defective
sample, inappropriate tools can all result in a totally different conclusion.

[March 2013]
Explain the parts of table.
[Answer]
The Table Consists of Various Parts:

(i) Table Number written at the top of the table indicates the serial number of the table helps in
easy identification at the table in the future.
(ii) Table Title indicates the subject matter of the table that should be very prominent, in bold and
at the centre just below the table number.
(iii) Captions refer to the headings and sub headings of the columns. Caption should be brief,
concise and self explanatory.
(iv) Stub refers to the headings of the rows and its sub divisions. Stub should be brief, concise and
self explanatory.
(v) Body refers to the numerical information entered into the table.
(vi) Head Note is a brief explanatory statement for understanding the information provided in the
table
(vii) Foot Note provides explanation like exceptions to data, classifications etc.
(viii) Source Data is stated below the foot notes. It states about the original source of data that is
stated in the table.

[March 2012]
What are the functions of Statistics?
[Answer]
The following are the functions of statistics:
(i) Systematic Collection and Presentation of Facts: Statistics ensures that data is collected in a
systematic manner and presented without any subjective bias. Statistics adds a bit of accuracy
and definiteness to general statements, resulting in greater confidence.
(ii) Simplification of Mass Figures: Statistics cuts through the disordered data normally available
and presents the facts effectively. The large mass of data collected is transferred into a few
critical figures, which help in overall analysis and interpretation.
(iii) Facilities Comparison: Statistics enables impartial and fair comparison of data across a wide
range of competing alternatives.

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Chapter 1: Introduction to Business Statistics - Previously Asked Annual Examination Short Answer Questions & Solutions
 For example: Inflation rate compares the current prices with prices of previous year and
indicates the trend of rising prices.
(iv) Helps in formulation and testing of hypothesis: Statistics has developed into a separate
discipline, with its own theories, principles and methodology, which can be used to answer
specific queries.
For Example: If a contractor has to decide between two alternative choices of cement, he has to
check whether the quality of cement is satisfactory. He can take the help of statistics and use
sampling techniques and principles to arrive at a decision.
(v) Helps in prediction: Statistical methods are a very useful tool in attempting to forecast the
future. A person can use correlation and regression to know the extent of impact of some key
factors on the performance of the company and take the decision.
For Example: If an investor wishes to purchase the shares of Reliance Industries Limited, he
can use statistics to find out whether the share price of Reliance is likely to increase or
decrease.
(vi) Helps in Policy formulation and decision-making: Most of the times, Government and
Businessmen takes their decisions spontaneously or on gut feel. These decisions translating into
reality can be revealed by statistics.
For Example: Statistics revealed that none of the previous governments of Andhra Pradesh
could successfully implement total prohibition of liquor in the state.
(vii) Enlarge individual Experience: Statistics makes it easier for man to understand, describe and
measure the impact of any action enlarging human experience and knowledge.
(viii) Study relationships between various events:
For example: There is a strong relationship between unemployment related data and data
related to GDP (Gross Domestic Product).
(ix) Measures Uncertainty: Statistics helps in finding out the chance of happening or not happening
of an event. Thus, it is helping mankind to cope with uncertainty.

[March 2012]
What are the steps in planning statistical investigation?
[Answer]
A statistical survey or investigation has to be conducted very carefully as otherwise the results arrived
at would be of no value. First of all a very careful planning of the survey has to be done and only after
it the survey is executed. In planning a survey a number of preliminaries have to be undergone. The
following are the different stages of statistical investigation.
(i) Nature, object and scope of the enquiry.
(ii) Sources of information
(iii) Types of enquiry to be conducted
(iv) Statistical units and their definition
(v) Degree of accuracy desired.

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Chapter 1: Introduction to Business Statistics - Previously Asked Annual Examination Short Answer Questions & Solutions
 [March 2011]
What is Frequency Distribution?
[Answer]
A classification showing different values of a variable and the corresponding is known as Frequency
Distribution. It can be further explained with the following Examples:
Frequency Distribution Frequency Distribution
(Discrete Series) (Continuous Series)
Years of Experience Frequency Price (Rs) Frequency
0 3 0-100 75
1 1 100-200 28
2 5 200-300 33
3 4 300-400 18
4 2 400-500 15

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Chapter 1: Introduction to Business Statistics - Previously Asked Annual Examination Short Answer Questions & Solutions