Statistics Flashcards
1
Q
Chebyshev’s inequality
A
Proportions of observations within k standard deviations of the arithmetic mean is at least
1 - ( 1 / k^2)
2
Q
correlations in multivariate normal distribution
A
= n * (n - 1) / 2
for n random variables
3
Q
standard error of the mean
A
= standard deviation / square root of n
4
Q
variance
A
average of the squared deviations from the mean
5
Q
sharpe ratio
A
excess return per unit of risk
= (return on portfolio - risk free rate) / s.d. of portfolio
6
Q
right-skewed distribution
A
positive skewness (hump to the left)
mean > median > mode
7
Q
left-skewed distribution
A
negative skewness (hump to the right)
mean < median < mode
8
Q
positive excess kurtosis
A
more peaked than normal distribution kurtosis > 3 fatter tails more returns clustered around the mean more returns with large deviations from the mean greater risk
