Quantitative Flashcards
The power of a test is the probability of
correctly rejecting the null, when it’s false
Data on some characteristics of companies at a single point in time are
cross-sectional data.
The Mann-Whitney U-test is most appropriate for tests of differences in means for
nonparametric data such as analysts’ rankings.
one divides the population into subpopulations and randomly samples from within the subpopulations
stratified random sampling
An increase in _________ increases the width of the confidence interval.
the reliability factor (the degree of confidence)
P-values _________ strongly suggest that the null hypothesis should be rejected.
close to zero
The arithmetic sum of the deviations around the mean will always
equal zero
What to maximize? Sharpe or Safety-first
Depends on what is higher. Risk free (Rf) or minimum acceptable return (Rtarget)
If median is higher than mean, then
Distribution is negatively skewed
If mean is higher than median, then
Distribution is positively skewed
simple random sample
equal chance of being selected
stratified random sample
population is split into mutually exclusive groups or strata, and simple random samples are extracted from each strata
Compounded time-weighted rate of return, for N holding periods
[(1 + HPR1)(1 + HPR2)… *(1 + HPRN)] - 1.
Annualized rate of return =
(1 + compounded rate)^1/Y - 1
where Y= number of periods
nominal scale
places data in groups with no meaningful ranking content.
