Key figures for Statisticians
Mean, Median, Mode -> these are measures of central tendency Variance, Standard Deviation, Range, Minimum, Maximum, Kurtosis, Skewness -> these are dispersion measures
Nominal / Ordinal / Interval / Ratio scales
Nominal: A ranking/order of the variables is not possible and ther is no standardized difference between th variables. Eg. colours (blue, red etc.) Ordinal: A ranking/order of the variables is possible, but there is no standardized difference between th variables. Eg. schoolgrades from 1-5. Like the difference between 1 and 2 isnt exactly the same as the difference between 3 […]
Discrete (arithmetic) mean return vs geometrical mean return vs log return
“Discrete” suggests one receives the interest amount at the end of a period. Discrete net and gross returns for one period Discrete net return for several periods: As you can see below, you need to combine discrete net returns by multiplication. Gross return for several periods (discrete) However, this doesn’t seem right in some cases: For example, in the case […]
There are 2 main sections of statistics
1) Descriptive statisticsDescribes, summarizes, and presents data (with graphs, tables, key figures). You only describe the data you actually have. Example: You graph the maximum speed for a set of 4 cars. 2) Analytical / inferential statisticsAnalyzes data samples and tries to make statements about a larger group (population) from which the data samples were chosen. For example, if you […]
Index funds
Index funds hold ( a big part of) the investment products represented in an index. They often charge low fees and are ideal for investors who want to go with the market. However, due to an index fund’s costs (e.g., management costs), its profitability always lacks behind the index it follows.
Indices
They are often used as a proxy for the market. There are broad (non-specific) as well as specific indices. In general, there are four different ways for an index to calculate its price.
The relationship between Mean and Median
The relationship between mean and mode can show you the distribution of the data. If the data is normally distributed (not skewed) the mean and the median are the same.Median: There is an equal number of values on each side of the Median. Mean: There is an equal sum of values on either side of the mean. If the data […]
Mean / Median / Mode
Modeis like the most often occurring value in your set of datai.e. Dataset: 1, 2, 3, 3, 4 -> Mode is 3 There can also be multimodal datasets. Eg. 1,2,2,3,3. Here the mode is 2 and 3. Medianis the value in the middle of your data set. (values have to be ranked from low to high)i.e. Dataset: 1, 2, 3, […]
Quick overview short/long and put/call options
Option Description Long/Call Buyer thinks underlyings price will rise. He has the right (but not the duty) to buy the underlying at the specifed (in the option contract) date and price. Long/Put Buyer thinks underlyings price will fall. He has the right (but not the duty) to sell underlying at the specifed (in the option contract) date and price. Short/Call […]
Characteristics of an option
Options derive their value from an underlying security. Unlike the forward or future, an option is conditional and therefore doesn’t have to take place. Same as a future, also an option depends on a base value. Options are also standardized financial instruments. You can choose your amount, term, and exercise price. Options are sold from a seller (short) to a […]