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11 Cards in this Set
- Front
- Back
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Nos of ways to chose n items from a group of N items
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N-P-n ways
when to chose just 1 from 8 8-P-1 = 8!/(8-1)! = 8 ways |
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What is the Nos of Ways selection n Items from a group of N items When the sequence of Cards don't matter ?
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N-C-n
N! / (n! * (N-n)!) example : 3 team A B and C Playing toether AB, BC CA Hints : To get the Positive return exact 8 times in 12 Months. 12-C-8 = 12! / 8! * 4! = 495 12345678 12345679 123456710 etc.. |
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Problen : (Stock price Tree)
You own a stock worth $100 today. The Probabily that the stock price increases by 10% in next year is 60%, otherwies it will drop by 10%. The same things happens in the following year. What is the expected stock price after 2 years ? |
$104.04
Ref. Page 15 Handout(Common Probability Distribution) |
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Binominal Function of Probability ?
Picture from Iphone |
Binaminal Tree
Ref. Page 13 from Handout (Common Probability Distribution) |
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Discrete randon variable ?
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When number of outcome can be counted.
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Continuous randon variable ?
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When number of outcome can NOT be counted.
Exp. Time taken by a person to buy a new pair of shoes. Time is continus |
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Problem
The Probability to have positive return when investing in hedge fund is 80%. You invest for next 7 years. How Many years you expect to have negative returns ? What is the uncertainty (standerd deviation) around the expected value ? |
1.4 Years
Samall sigma = 1.06 Page 11 from handout (Common Probibility distribution) |
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Binominal Randon variable
mue ?, small sigma ? |
Expected value (mue) = Np
Variance (small sigma) = Np(1-p) Ref. Page 11 CPD |
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What is a Median ?
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In probability theory and statistics, a median is described as the numeric value separating the higher half of a sample, a population, or a probability distribution, from the lower half.
-- The median of a finite list of numbers can be found by arranging all the observations from lowest value to highest value and picking the middle one --If there is an even number of observations, then there is no single middle value, so one often takes the mean of the two middle values |
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What is a Mode ?
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In statistics, the mode is the value that occurs the most frequently in a data set or a probability distribution. In some fields, notably education, sample data are often called scores, and the sample mode is known as the modal score.
-- Example : The mode of a data sample is the element that occurs most often in the collection. For example, the mode of the sample [1, 3, 6, 6, 6, 6, 7, 7, 12, 12, 17] is 6 |
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skewness ?
Positive and Nagative skewness ? Picture from Iphone |
Negative skew: The left tail is longer; the mass of the distribution is concentrated on the right of the figure. It has relatively few low values. The distribution is said to be left-skewed. Example (observations): 1,1000,1001,1002,1003
Positive skew: The right tail is longer; the mass of the distribution is concentrated on the left of the figure. It has relatively few high values. The distribution is said to be right-skewed. Example (observations): 1,2,3,4,100 |
