The actual number of observations in a given interval is known as the
absolute frequency. Relative frequency is the absolute frequency of each
interval divided by the total number of observations.
the absolute frequency for an interval is calculated as the sum of the
absolute frequencies of all intervals lower than and including that
interval.
Quantitative Methods MCQ - Quantitative Methods Section 1
The cumulative relative frequency is the fraction of the observations that
are less than the upper limit of each interval. A is incorrect as an
observation cannot fall in more than one interval. B is incorrect as the
data is sorted in ascending order for the construction of a frequency
distribution.
In the histogram, the height represents the absolute frequency for each
interval.
For a frequency polygon, the mid points for each interval are plotted on
the x-axis and the absolute frequency for that interval on the y-axis.
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The following table shows the average monthly returns of a portfolio over the past one year:
| Month  | Return(%) | Month | Return(%) |
| January  | 10% | July | 5% |
| February | 15% | August | 6% |
| March  | 14% | September |  7.5% |
| April  | 11% | October | 9% |
| May | 8% | November | 12% |
| June  | 3% | December | 11% |
The following intervals are used for the construction of the frequency polygon:
| Interval |
| 1 < r < 3 |
| 4 < r < 6 |
| 7 < r < 9 |
| 10 < r < 12 |
| 13 < r < 15 |
The cumulative relative frequency for the interval ‘10 ≤ r ≤ 12’ is equal to:
| Interval  | Frequency | RelativeFrequency | Cumulative Relative Frequency |
| 1 < r < 3 | 1 | 8.33% | 8.33% |
| 4 < r < 6Â Â | 2 | 16.67% | 25% |
| 7 < r < 9Â | 3 | 25% | 50% |
| 10 < r < 12Â Â | 4 | 33.33% | 83.33% |
| 13 < r < 15Â | 2 | 16.67% | 100% |
Relative Frequency = Frequency / Total Observations
Cumulative relative frequency is the sum of subsequent relative frequencies. Thus the cumulative relative frequency is 83.33% for the interval 10 < r <12. The cumulative frequency distribution allows us to see how many or what percent of the observations lie below a certain value.
Cumulative relative frequency is the sum of subsequent relative frequencies. Thus the cumulative relative frequency is 83.33% for the interval 10 < r <12. The cumulative frequency distribution allows us to see how many or what percent of the observations lie below a certain value.
