Objective: Evaluate the concepts of mean and median and the importance of the difference.
Analysis can involve the use of both the mean and the median. While these are similar concepts, the calculation of a mean versus a median can arrive at very different results. This assignment provides the opportunity to calculate the mean and median and evaluate the results.
Evaluating the mean and median can provide different information. Mean can be interchanged with the concept of average: take a set of numbers and determine the average amount; that would be the same as the mean. The median however, requires ordering a set of numbers from lowest to highest and finding the number that is in the middle of that set of numbers. While often thought to be similar to mean, the answers can be quite different.
Analysis can involve the use of both the mean and the median. While these are similar concepts, the calculation of a mean versus a median can arrive at very different results. This assignment provides the opportunity to calculate the mean and median and evaluate the results.
Evaluating the mean and median can provide different information. Mean can be interchanged with the concept of average: take a set of numbers and determine the average amount; that would be the same as the mean. The median however, requires ordering a set of numbers from lowest to highest and finding the number that is in the middle of that set of numbers. While often thought to be similar to mean, the answers can be quite different.
- Review this website: Yahoo! Finance located at http://finance.yahoo.com/quote/YHOO/history?ltr=1
- Select two publicly traded companies. Using the historical stock values located at Yahoo! Finance to find the stock values for the past 31 days.
- For each company:
- Find the mean
- Find the median
- Create a graph of information
- Write a one-page analysis of the information that you have compiled.
- In that analysis, determine the stock that you would buy based on the information.
- Which method of analysis was more important to you in your decision: mean or median?