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Any student who wants to learn about business finance, and even those who don’t, need to have an understanding of statistics. At its most basic form, statistics help people get information from data. Sounds simple, right?
The complexity of the topic comes from the sheer number of possible statics a person can calculate. Students need to learn the different types of data they can use, as well as the formulas they can use to convert the data into usable information.
Students may need to learn about population, sampling, and statistical inference, and discover how these pertain to a business. This level of mathematics is seen in honors classrooms as well as in more sat prep courses. The complexity of mathematics is far more complicated than the multiple choice test. A population isn’t a group of people, it’s a set of items used in a statistical calculation. For example, a population may be the number of soft drinks a group of students drinks on a daily basis.
Once students have a basic understanding of what a population is, you can teach them the relationship that a sample has to a population. The sample is data pulled from the population. From the soda drink population, a sample may include how many drinks students consumed in a week.
When students know how to organize data, they can then begin to make statistical inferences from the information. An inference can be a prediction or an estimate based on the data. Usually, it is not a guaranteed outcome because it is trying to use current or past information to predict a future result.
To help your students understand these three components of statistics, you need to plan activities and allow for discussion of each part. By starting with population, you establish a foundation upon which your students can build up their knowledge. It’s impossible for students to grasp the concept of inferring information if they don’t understand the premise of the information.
With careful planning, you can teach your students to understand principles used in business finance.