Lecture Data ans statistics Applications in Business and Economics

1.2 Data
Data are the facts and figures collected, analyzed, and summarized for presentation and interpretation.
All the data collected in a particular study are referred to as the data set for the
study. Table 1.1 shows a data set containing information for 25 mutual funds that are part
of the Morningstar Funds500 for 2008. Morningstar is a company that tracks over 7000
mutual funds and prepares in-depth analyses of 2000 of these. Their recommendations are
followed closely by financial analysts and individual investors.
Elements, Variables, and Observations
Elements are the entities on which data are collected. For the data set in Table 1.1 each individual
mutual fund is an element: the element names appear in the first column. With 25
mutual funds, the data set contains 25 elements.
A variable is a characteristic of interest for the elements. The data set in Table 1.1 includes
the following five variables:
• Fund Type: The type of mutual fund, labeled DE (Domestic Equity), IE (International
Equity), and FI (Fixed Income)
• Net Asset Value ($): The closing price per share on December 31, 2007
5-Year Average Return (%): The average annual return for the fund over the past
5 years
• Expense Ratio: The percentage of assets deducted each fiscal year for fund expenses
• Morningstar Rank: The overall risk-adjusted star rating for each fund; Morningstar
ranks go from a low of 1-Star to a high of 5-Stars
Measurements collected on each variable for every element in a study provide the data. The
set of measurements obtained for a particular element is called an observation. Referring
to Table 1.1 we see that the set of measurements for the first observation (American Century
Intl. Disc) is IE, 14.37, 30.53, 1.41, and 3-Star. The set of measurements for the second
observation (American Century Tax-Free Bond) is FI, 10.73, 3.34, 0.49, and 4-Star, and
so on. A data set with 25 elements contains 25 observations.