Notes 1 - Basic Statistics

Notes 1 - Basic Statistics - Calculus y=f(x) y=x is the...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
P=2 - 12 Q P’ = - 12 This is the derivative and it tell us the slope of the line P Slope = - 12 Q 4 2 y f’ = 1x this is the slope of the line (it varies because slope isn’t constant) f’ = 1x 2 this tells us what direct the function is going in x To Optimize a Function: 1. Take the derivative 2. Set it equal to 0 and solve for x 3. Take the second derivative If f’’<0 – we have a maximum If f’’ >0 – we have a minimum If f’’ = 0 – we have an inflection X= 1 4 Expected Return is essentially the mean of the past results, which is the most likely next occurrence riance tells us how far the observed values are from the mean, over all of our observations added together and then divided T. This is in squ andard deviation just gets rid of the squared returns to tell us how the observations varied from the mean on average. OR We subtract 1 to account for errors OR Covariance tells how things move together Positive: move together Negative: don’t move together *If you take the covariance of a security against itself, you get the variance! OR -89.2 = 17.84*6 = -.83 3X2 3X3 2X2 2X1 1X2 1X1 F E D C B A Referred to as an element, categorized by row: this is element 1X2 1 1 2 2 3 3 1 1 2 1 3 1 4 2 1 1 2 3 4 a b a b a Taking the
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 8

Notes 1 - Basic Statistics - Calculus y=f(x) y=x is the...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online