Measures of Central Tendency & Dispersion, Skewness, Kurtosis

The arithmetic mean is the sum of all values divided by the number of observations. It is widely used in banking for computing average loan sizes, average interest rates, and portfolio metrics because it accounts for every data point.

Sum of all values divided by number of observations

The weighted mean assigns different weights to each observation based on its relative importance, whereas the simple mean treats all values equally. In banking, it is used to compute the weighted average cost of funds where each liability carries a different weight.

Median is not affected by extreme values

The median is the middle value in an ordered dataset. It is preferred over the mean when data is skewed, such as in income distribution or non-performing asset analysis, because it is not distorted by extreme outliers.

Weighted sum of group means divided by total number of items

Mode is the value that appears most frequently in a dataset. In banking, it helps identify the most common loan tenure, most frequent transaction size, or the most popular deposit category chosen by customers.

From the ogive curve at the N/2 cumulative frequency point