Figure 14.1 Regression analysis is used in financial decision-making. (credit: modification of “Stock exchange” by Jack Sem/flickr, CC BY 2.0) Chapter Outline 14.1 Correlation Analysis 14.2 Linear Regression Analysis 14.3 Best-Fit Linear Model 14.4 Regression Applications in Finance 14.5 Predictions and Prediction Intervals 14.6 Use of R Statistical…
Measures of Center Several measurements are used to provide the average of a data set, including mean, median, and mode. The terms mean and average are often used interchangeably. To calculate the mean for a set of numbers, add the numbers together and then…
By the end of this section, you will be able to: Commands and Vectors in R R is a statistical analysis tool that is widely used in the finance industry. It is available as a free program and provides an…
By the end of this section, you will be able to: Graphing Univariate Data Data visualization refers to the use of graphical displays to summarize data to help to interpret patterns and trends in the data. Univariate data refers to observations recorded for…
By the end of this section, you will be able to: Calculate Portfolio Weights In many financial analyses, the weightings by asset category in a portfolio are a key index used to assess if the portfolio is meeting allocation metrics. For example, an investor…
By the end of this section, you will be able to: Frequency Distributions A frequency distribution provides a method to organize and summarize a data set. For example, we might be interested in the spread, center, and shape of the data set’s…
By the end of this section, you will be able to: z-Scores A z-score, also called a z-value, is a measure of the position of an entry in a data set. It represents the number of standard deviations by which a data…
By the end of this section, you will be able to: Standard Deviation An important characteristic of any set of data is the variation in the data. In some data sets, the data values are concentrated close to the mean;…
By the end of this section, you will be able to: Arithmetic Mean The average of a data set is a way of describing location. The most widely used measures of the center of a data set are the mean (average), median, and mode.…
Figure 13.1 Graphical displays are used extensively in the finance field. (credit: modification of “Analysing target market” by Marco Verch/flickr CC BY 2.0) Chapter Outline 13.1 Measures of Center 13.2 Measures of Spread 13.3 Measures of Position 13.4 Statistical Distributions 13.5 Probability Distributions 13.6 Data Visualization and Graphical…