Which term is defined as standard class width divided by current class width?

Which term is defined as standard class width divided by current class width?

• A. Present value
• B. Compounding (interest)
• C. Adjustment factor
• D. Discounting (interest)

Answer: (C)

When comparing grouped data that use different class widths, you adjust the frequencies to a common scale so the comparison is fair. The adjustment factor does this by taking the standard class width and dividing it by the width of each current class. You multiply the observed frequency in each class by this factor (or equivalently multiply the frequency density by the standard width). This converts all counts to what they would be if every class had the same width. Example: if the standard width is 5 units and a class has width 2, the adjustment factor is 5/2 = 2.5. A class with 8 observations becomes 8 × 2.5 = 20 standardized observations (or density 8/2 = 4 per unit, times 5 gives 20). This term is about scaling frequencies for fair comparison; present value, compounding, and discounting are finance concepts related to time value of money, not class-width adjustments.

When comparing grouped data that use different class widths, you adjust the frequencies to a common scale so the comparison is fair. The adjustment factor does this by taking the standard class width and dividing it by the width of each current class. You multiply the observed frequency in each class by this factor (or equivalently multiply the frequency density by the standard width). This converts all counts to what they would be if every class had the same width.

Example: if the standard width is 5 units and a class has width 2, the adjustment factor is 5/2 = 2.5. A class with 8 observations becomes 8 × 2.5 = 20 standardized observations (or density 8/2 = 4 per unit, times 5 gives 20).

This term is about scaling frequencies for fair comparison; present value, compounding, and discounting are finance concepts related to time value of money, not class-width adjustments.