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CMA Intermediate · Financial Management and Business Data Analytics · Data Presentation: Visualisation and Graphical Presentation

Monthly returns (in %) of a mutual fund are grouped in classes 0-10, 10-20, 20-30 and 30-40 with frequencies 4, 10, 14 and 2. To draw a frequency polygon, the plotted points (mid-point, frequency) include which of the following?

A frequency polygon plots each class mid-point against its frequency. For the 20-30 class the mid-point is 25 and the frequency is 14, so the point is (25, 14). Using class limits or cumulative frequencies instead of the mid-point and simple frequency would be incorrect.

  1. A(25, 14)Correct
  2. B(20, 14)
  3. C(30, 14)
  4. D(25, 24)

Explanation

The class 20-30 has mid-point (20+30)/2 = 25 and frequency 14, so the point is (25, 14). Using the lower limit 20 or upper limit 30 is the mistake of not taking the mid-point. (25, 24) wrongly adds cumulative frequency 4+10+14 = 28 or mixes figures; the polygon uses simple frequency.

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