Appendix A. Basic Statistics

This appendix was written by Richard J. Bauer, Jr., Ph.D., CFA, Professor of Finance, Bill Greehey School of Business, St. Mary’s University, San Antonio, TX.

Appendix Objectives

By the end of this appendix, you should be familiar with

  • The difference between descriptive and inferential statistics

  • How to calculate common measures of central tendency and dispersion

  • The process of regression

  • The basic premises and statistics related to MPT

Because financial asset prices are numbers that often change with high frequency, it is not surprising that statistical techniques, which primarily concern the analysis of numerical data, have been applied to investing in a variety of ways. According to Lind, Marchal, and Wathen (2002), statistics ...

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