BUSN 6060     Computer Project I  The Central Limit Theorem

 

Objective:  To demonstrate the Central Limit Theorem by drawing random samples from a uniform distribution.

 

Procedures: 

 

  1. First, you will need to produce ten columns of 100 observations each on the interval from a uniform distribution.  This can be done easily in Excel as follows:
    1. In cell a1 type  =rand() 
    2. Copy this across nine more columns (b through j), and then copy a1-j1 down to row 100.
    3. You now have 1000 values; however these are constantly changing as Excel automatically recalculates each time you do ANYTHING.  To stop this recalculation copy a1 – j100 and "paste special/values"  in another worksheet, say sheet 2.
    4. Now produce histograms of the fists three columns.  Use Bins of .1, .2, … .9, 1.

2.   Next you need to calculate averages for the ten observations in each row.  In cell k1 type   = average(a1.j1), and copy down to row 100.

  1. Now you need to create a histogram for the 100 sample means.  These are much closer to the mean of the population than for any column.  Use Bins of .25, .3, … , .7, .75.
  2. What do you observe?!!!  The CLT is alive and well.
  3. Print out the data and the histograms and hand them in within three weeks.

 

To see histograms of three of my columns, click HERE

To see the histogram of my averages column, click HERE