To generate a line graph of frequencies in excel, you will need a frequency distribution table with the column headings in one column and the frequency counts in the other. To generate the graph, simply highlight both columns. Then, under the Insert tab, find Charts then choose Line. For the most traditional-looking line graph, choose the first two-dimensional style under the available options.
Don’t get stuck in a rut of thinking that line graphs always measure frequency. This is extremely common in the social and behavioral sciences and will be the most common use in this text. In business, however, the most common line graphs are those that show changes in price over time. For “stock charts” and other types of price information, the height of the line will tell you the price, and the placement of the “dot” on the horizontal axis shows the time at which the security was trading at that price. As every stock trader knows, it is critical to understand what is being measured and how it is being measured when interpreting a line graph. Stock traders can view price changes by the minute, in 5-minute increments, in day-long increments, week-long increments, month-long increments, and quarterly increments. Using the wrong interpretation of a stock chart can lead to a financial disaster, just as making practice decisions on a faulty interpretation of a graph can lead to disaster for the social scientist.
The reason the financial world likes this type of chart so much is that it allows one to easily spot trends. With a line graph, it is easy to see patterns in a data set. For example, a Wall Streeter can tell with a glance at a price chart that the price of Microsoft stock rose steadily throughout April into mid-May before falling back in late May and then recovering somewhat by the end of the month. With the stock in an “uptrend,” the trader may decide that Microsoft is likely to go higher in the coming weeks. In other words, these types of graphs may be used by investors to identify which assets are likely to rise in the future based on their past performance—or at least a lot of investors think it works that way.
Key Terms
Frequency, f, n, Outlier, Skewness, Line Graph
Last Modified: 06/03/2021