# Reading 7 (basic stat concepts)

## 40 terms · Statistical Concepts and Market Returns

### What is descriptive statistics?

The study of how data can be summarized effectiverly to describe the important aspects of large data sets, i.e. turning data into information.

### What is inferential statistics?

Involves making forecasts, estimates, or judgements aout a larger group from the smaller group actually observed.

### What constitutes a statistical population?

Defined as ALL members of a specified group.

### What constitutes a statistical sample?

Defined as a SUBSET of a population.

### List the four types of statistical measurement scales?

Nominal, Ordinal, Interval, and Ratio.

### What is a statistical parameter?

Any descriptive measure of a poplation characteristic, e.g. population mean, variance, and standard deviation.

### What constitutes a sample statistic?

A quantity computed from or used to describe a sample.

### What is a frequency distribution?

A tabular display od data summarized into a relatively small number of intervals.

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### What is a nominal scale?

Represents the weakest of the four measurment scales. It catagorizes data but it does not rank them.

### What is an ordinal scale?

Stronger than nominal. Sorts data into categories that are ordered with respect to some characteristic.

### What is an interval scale?

Stronger than ordinal. Provides not only ranking but also assurance that the differences between scale values are equal.

### What is a ratio scale?

Represents the strongest of the four measurement scales. Provides a standardized ranking system with a true zero point as the origin.

### How is the holding period return calculated?

Rt = [P1 - P(t-1) + Dt] / P(t-1)