2

Statistics Basics

“For example, we can answer the question, ‘If we want to be 95% confident that the loss will not be greater than X, then what is X?’”

Averages – arithmetic and geometric means, weighted averages, median and mode

Variance, standard deviation and volatility

Correlation and covariance

Histograms, probability density and the normal probability function

Confidence levels and the normal probability table

Exercises

Where you see the WWW icon in the following, this calculation is available already programmed in Microsoft® Excel to be used online or downloaded (or copied and pasted) for your own use. Go to www.markets-international.com and click ‘Calculations’.

AVERAGES – ARITHMETIC & GEOMETRIC MEANS, WEIGHTED AVERAGES, MEDIAN ...

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