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28 Cards in this Set

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  • Back
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 Portfolio-Risk 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/days-1
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: (Rp-Rf/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)n-x,
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 non-negative values.
Bond Equivilant Yield
((1000-purchase price)/purchase price)*(365/days to maturity)