Summary
Summary Financial Econometrics Intro
- Course
- Institution
Its an intro to financial econometrics. Contains advanced concepts from statistics applied to economics.
[Show more]
Seller
Follow
princeyork
Content preview
Descriptive Statistics – Numerical MeasuresReview: the relationship between Probability and Statistics are shown in the following
picture:
probability
Population Sample
N=size statistics n=size
Parameters Sample statistics (Estimators)
N = size of population n = size of sample
p = % of students work this summer 𝑝̂ = % of students work this summer
𝜇 = average hourly pay 𝑋̅= average hourly pay
𝜎 2 = variance 𝑠 2 = variance
𝜎 = standard deviation s = standard deviation
, We discussed graphical methods to describe the population or the sample, and now we start
with the numerical description of the population and sample.
1. Measures of Central tendency
(a) Average (Mean)
• Population Mean 𝜇
Let 𝑥1, 𝑥2, … , 𝑥𝑁 be observations on the whole population of size N. The average (mean) is
denoted by 𝜇, and defined by 𝜇
• Sample Mean 𝑋̅
Let 𝑥1, 𝑥2, … , 𝑥𝑛 be observations on the sample of size n. The average (mean) is denoted
∑𝑥
by 𝑋̅, and defined by 𝑋̅ = 𝑖
𝑛
Construct a good prediction of the mean age of all of U of T’s alumni. Is this value 𝑋̅ or 𝜇? Answer with a
quantitative analysis & specify 𝑋̅ or 𝜇.
Solutions:
We must use the last column because the question asks about all U of T alumni (i.e. it asks about the
population).
These are grouped data. Picking the mid-point age for each group (a reasonable approximation) and
80 for the oldest group (this is the hardest to pick: any reasonable estimate of a typical age for the 70+ group
is acceptable).
𝜇 ≈ 0.142 ∗ 24.5 + 0.203 ∗ 34.5 + 0.177 ∗ 44.5 + 0.167 ∗ 54.5 + 0.147 ∗ 64.5 + 0.161 ∗ 80 = 49.8 Hence, the
mean age of all U of T alumni is about 50 years old: this is 𝜇, which is a population parameter.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller princeyork. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $3.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
79373 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now