NISM Certifications · NISM-Series-XV: Research Analyst · Fundamentals of Research
A research analyst reviewing a sample of 100 listed Indian companies calculates the average return on equity of the sample and uses it to draw conclusions about all listed companies in India. This is an example of which type of statistics?
Inferential statistics is correct, because the analyst generalises from a sample of 100 companies to the whole population of listed companies. Descriptive statistics would only summarise the sample itself without extending conclusions to the broader population.
- ADescriptive statistics only
- BInferential statisticsCorrect
- CQualitative analysis
- DTime-series decomposition
Explanation
Drawing conclusions about a whole population from a sample is inferential statistics. Descriptive statistics merely summarise the data at hand, such as computing the sample average itself.
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