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28 Cards in this Set
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In a positively skewed distribution, what is the order (from lowest value to highest) for the distribution’s mode, mean, and median values?

Mode, median, mean.

Mode

most frequently occuring number

median

middle number

mean

average

Sharpe Ratio

(Return PortfolioRisk Free Return)/Standard Deviation

Bank Discount Yield

(Discount/face)x( 360/days to maturity)

Holding Period Yeild

(End value/ Beginnning Value)1

Effective annual Yield

(1+HPY)^365/days1

Money Market Yield

HPYx(360/days to maturity)

geometric mean

(1.01*1.05*.95)^(1/3)

Harmonic Mean

Average Cost per share over time in constant dollar amounts.
2/ (1/20+1/25)=22.22 
varience

average of squared deviations from the mean

standard deviation

Square root of varience

chebyyshev's inequality

what % of oberservations must lie withing k standard deviations of the mean?
min%= 1(1/k^2) 
coefficient of variation

measure of risk per unit of return. lower the better
CV=standard deviation/mean 
Sharpe Ratio

Excess return per unit of risk...more the better.
Sharpe: (RpRf/Std. dev) 
leptokurtik

more peaked with more extreme outliers (kurtosis>3)

covarience

measure of how two variables move togehter

Correlation

measur of the linear relationship between two variables
Correlation= CovA, B/( Std Dev A, Std Dev B) 
central limit theorem

According to the central limit theorem, the mean of the distribution of sample means will be equal to the population mean. n > 30 is only required for distributions of sample means to approach normal distribution.

parameter

parameter is any descriptive measure of a population characteristic.

Bank Discount Yield Formula

he bank discount yield is computed by the following formula, r = (dollar discount / face value) × (360 / number of days until maturity)

formula for a binomial random variable

Use the formula for a binomial random variable to calculate the answer to this question. We will define "success" as the team winning a game. The formula is:
p(x) = P(X = x) = [number of ways to choose x from n] × px × (1  p)nx, where [number of ways to choose x from n] = n! / [(n  x)! × x!]. 
number of ways to choose x from n]

number of ways to choose x from n] = n! / [(n  x)! × x!].

Stratified random sampling.

In stratified random sampling, we first divide the population into subgroups based on some relevant characteristic(s) and then make random draws from each group.

Effective Annual Yeild Formula

(1 + HPY)365/t) − 1

probability distribution

The probability distribution may or may not reflect reality. But the probability distribution must list all possible outcomes, and probabilities can only have nonnegative values.

Bond Equivilant Yield

((1000purchase price)/purchase price)*(365/days to maturity)
