Quantitative Methods Flashcards
Numerical Data (e.g. Discrete, Continuous)
Values that can be counted.
We can perform mathematical operations only on numerical data.
Categorical Data (e.g. Nominal, Ordinal)
consist of labels that can be used to classify a set of data into groups. Categorical data may be nominal or ordinal.
Discrete Data
Countable data , such as the months, days, or hours in a year
Continuous Data
Can take any fractional value (e.g., the annual percentage return on an investment).
Nominal Data
Data that cannot be placed in a logical order
Ordinal Data
Can be ranked in logical order
Structured Data
Data that can be organised in a defined way
Time series
A set of observations taken periodically e.g. at equal intervals over time
Cross-sectional data
Refers to a set of comparable observations all taken at one specific point in time.
Panel Data
Time series and cross-sectional data combined
Unstructured Data
A mix of data with no defined structure
One-dimensional array
represents a single variable (e.g. a time series)
Two-dimensional array
Represents two variables (e.g. panel data)
Contingency table
A two-dimensional array that displays the joint frequencies of two variables
Confusion matrix
A contingency table (two variables) that displays predicted and actual occurrences of an event
Relationship between geometric and arithmetic mean
The geometric mean is always less than or equal to the arithmetic mean, and the difference increases as the dispersion of the observations increases
Trimmed mean
Estimate the mean without the effects of a given percentage of outliers.
Winsorized mean
Decrease the effect of outliers on the mean.
Harmonic mean
Calculate the average share cost from periodic purchases in a fixed dollar amount.
Empirical probability
established by analysing past data (outcomes)
Priori probability
determined using reasoning and inspection process (not data) e.g. looking at a coin and deciding there is a 50/50 chance of each outcome.
Subjective probability
Established using personal judgement
Unconditional probability (marginal probability)
the probability of an event regardless of the past or future occurrence of other events.
Conditional probability
where the occurrence of one event affects the probability of the occurrence of another event. e.g. Prob (A I B)