Statistical Concepts and Market Returns
CFA level I
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Quantitative Methods: Basic Concepts
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Statistical Concepts and Market Returns
Learning Outcome Statements |
1. Descriptive statistics,Inferential statistics, and types of scales
a. distinguish between descriptive statistics and inferential statistics, between a population and a sample, and among the types of measurement scales; |
2. Parameter, sample statistic, and frequency distribution
b. define a parameter, a sample statistic, and a frequency distribution; |
3. Relative frequencies and cumulative relative frequencies
c. calculate and interpret relative frequencies and cumulative relative frequencies, given a frequency distribution; |
4. Histogram and frequency polygon
d. describe the properties of a data set presented as a histogram or a frequency polygon; |
5. Measures of central tendency
e. calculate and interpret measures of central tendency, including the population mean, sample mean, arithmetic mean, weighted average or mean, geometric mean, harmonic mean, median, and mode; |
6. Quartiles, quintiles, deciles, and percentiles
f. calculate and interpret quartiles, quintiles, deciles, and percentiles; |
7. Range, mean absolute deviation, standard deviation, and variance
g. calculate and interpret 1) a range and a mean absolute deviation and 2) the variance and standard deviation of a population and of a sample; |
8. Chebyshev's inequality
h. calculate and interpret the proportion of observations falling within a specified number of standard deviations of the mean using Chebyshev’s inequality; |
9. Coefficient of variation and Sharpe ratio
i. calculate and interpret the coefficient of variation and the Sharpe ratio; |
10. Skewness
j. explain skewness and the meaning of a positively or negatively skewed return distribution; k. describe the relative locations of the mean, median, and mode for a unimodal, nonsymmetrical distribution; |
11. Measures of sample skewness and kurtosis
l. explain measures of sample skewness and kurtosis; |
12. Comparison of arithmetic mean and geometric mean
m. compare the use of arithmetic and geometric means when analyzing investment returns. |
Statistical Concepts and Market Returns: Chapter Test
12 Questions, 18 Minutes |