Unformatted text preview: data that lies within k standard deviations of the mean is at least 1-1 k 2 (lecture 4). 6. Linear transformations of a dataset: take a dataset X , multiply each point by b and add a to it, and you have the dataset a + bX . V ar ( a + bX ) = b 2 V ar ( X ) Mean ( a + bX ) = a + b × Mean ( X ) 7. Regression Fit a line to the data that minimizes squared errors. For stocks, the slope of this line is the β . Stata commands 1. Make a two-stock, 50-50 portfolio: generate portf = 0.5*stock1 + 0.5*stock2 2. Scatterplot: twoway (scatter y variable x variable)(lfit y variable x variable) 3. Regression: regress dependent variable independent variable1 followed by any num-ber of additional independent variables...
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- Fall '11
- Standard Deviation, Sample standard deviation, science center, additional independent variables, Josh Zagorsky, log transforms