Frequency distribution

Definition

A frequency distribution is a tabular or graphical representation of data that shows the number of observations within specified intervals. It helps in understanding the distribution and patterns in a dataset.

5 Must Know Facts For Your Next Test

1. The sum of all frequencies in a frequency distribution must equal the total number of observations.
2. Frequency distributions can be displayed using histograms, bar charts, or frequency polygons.
3. In finance, frequency distributions are used to analyze and visualize return distributions, risk assessments, and portfolio performance.
4. Class intervals should be mutually exclusive and collectively exhaustive to ensure accurate representation.
5. Cumulative frequency distributions show the accumulation of frequencies up to each class interval.

Review Questions

• What is the purpose of using a frequency distribution in data analysis?
• How does a cumulative frequency distribution differ from a regular frequency distribution?
• In what ways can frequency distributions be visualized?

Related terms

Histogram: A graphical representation of the frequency distribution using bars to show the number of observations within each interval.

Cumulative Frequency Distribution: A type of frequency distribution that shows the cumulative total of observations up to and including each category or class interval.

Class Interval: A specific range within which data points are grouped in a frequency distribution.