Final Study Guide - Quizzes Flashcards
What does the word ‘nominal’ mean?
It means ‘the name of’ or ‘referring to a name’
In Excel, what does vlookup do?
It matches a value you provide on the first (leftmost) column and then returns values from a column of your choice
Probability of A given B is the same as
The probability of A and B divided by the probability of B
What is the inverse CDF (Text Section 2.11)?
The CDF tells you the probability that a random variable is LESS than some value; the inverse CDF tells you the value that corresponds to the probability.
What is the probability that a continuous random variable is equal to an exact value?
0
What is the formula for the Expectation of X?
Sum(p{X} * X)
What is population skew?
E[((x-mu)/sigma)^3]
Why do insurance annuities have payments at time 0 instead of at period 1?
People would just buy insurance and then drop it before the first payment.
The PDF values for a normal distribution results in the area …
under the distribution equal to 1
Covariance can be from what range?
negative infinity to infinity
What is the variance of a Bernoulli random variable, where p is the probability of an event, and q is the probability the event does not happen (i.e., q=1-p)?
pq
What’s the variance of a random variable X where E(X) = 0 ?
E(X^2)
If y is distributed lognormally, then what is the distribution of log(y)?
normal
If a distribution is extremely skewed to the right, where will the median appear in relation to the mean?
To the left of the mean
What distribution is used to model the difference between a sample mean of a normally distributed random variable and an expected value when the population variance is unknown?
t-test
