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McKissock, Statistics Modeling & Finance, 2025 > Final Study Guide > Flashcards

Final Study Guide Flashcards

(80 cards)

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1
Q

What is a parameter?

A

“A number that describes a characteristic of a population.”

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2
Q

Central tendency is part of what type of statistics?

A

Descriptive statistics.

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3
Q

Which is MOST similar to a common average?

A

Mean.

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4
Q

What do fractiles represent?

A

Intervals that total 100% of the distribution.

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5
Q

What does the symbol Sigma (Σ) stand for?

A

“The sum of.”

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6
Q

What does the median describe?

A

The central position in an array.

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7
Q

What is the definition of central tendency?

A

“The central point, or representative value, around which items cluster in a frequency distribution.”

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8
Q

What is the prime measure of central tendency?

A

Mean.

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9
Q

A decile divides the data into how many equal parts?

A

10 equal parts.

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10
Q

What is the universe in statistics?

A

“In statistics, a population or entire body of data.”

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11
Q

What is a sample?

A

A subset of the population.

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12
Q

What constitutes a large sample in statistics?

A

30 or more observations; a small sample consists of fewer than 30 observations.

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13
Q

What is a stratified random sample?

A

A sample from selected subgroups, or strata, with random samples drawn from each subgroup.

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14
Q

What is a nonprobability sample?

A

A sample produced by an unscientific, non-random selection process.

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15
Q

What is deviation in statistics?

A

The amount a variable’s value differs from the mean or some other benchmark.

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16
Q

What is the Average Absolute Deviation?

A

The sum of the absolute deviations divided by the number of observations.

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17
Q

What is the standard deviation?

A

The square root of the variance.

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18
Q

What are degrees of freedom in statistics?

A

The number of values in a calculation of a statistic that are free to vary.

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19
Q

What is a normal distribution?

A

A theoretical distribution often approximated in real-world situations. It is symmetrical and bell-shaped.

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20
Q

What is average deviation?

A

An appraiser calculates the mean of a set of numbers, subtracts the mean from each number, adds up these differences without regard to sign, and divides this sum by the number of items.

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21
Q

What is bias in statistics?

A

“A systematic error.”

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22
Q

In a normal distribution, approximately what percentage of observations fall within two standard deviations from the mean?

A

95%.

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23
Q

In a normal distribution, approximately what percentage of observations fall within three standard deviations from the mean?

A

99%.

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24
Q

How is deviation measured on a chart?

A

By the difference from the observation to the mean measured by a line that runs perpendicular to the line of the mean.

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25
What are inferential statistics?
Procedures used to draw conclusions about larger populations from small samples of data.
26
What is a confidence interval?
The specification of a zone within a population, based on a sample mean and its standard error, within which the true mean most probably lies.
27
What is standard error?
The standard deviation of a regression coefficient estimate.
28
What is forecasting?
To estimate, calculate, or indicate in advance.
29
What is regression analysis?
A statistical method that examines the relationship between one or more independent variables and a dependent variable.
30
What is a dependent variable?
The outcome factor; the variable that may change in response to manipulations of the independent variable.
31
What is linear regression?
A statistical method used to fit a linear model to a given data set.
32
What is a regression coefficient?
An indicator of the importance of an independent variable in predicting a dependent variable.
33
What is a regression line?
The line on a graph that represents the relationship defined by the regression coefficients.
34
What is the coefficient of determination?
A statistic indicating the proportion of the total variance in the dependent variable accounted for by the independent variable in a simple linear regression equation.
35
What is multiple regression analysis?
A technique for analyzing the relationship between one dependent variable and more than one independent variable.
36
What is an ordinal variable?
A categorical variable indicating rank order, such as small, medium, and large.
37
What is a linear model?
A model where an independent variable's marginal contribution to the value of a dependent variable is constant over the entire range of the data.
38
What is a model in statistics?
1. A simplification of reality. 2. A representation describing an underlying logical structure, relationship, or behavior.
39
What is mass appraisal?
A valuation technique sometimes used for tax assessment purposes that applies a standard percentage increase or decrease to all property in a given location.
40
What is a mass appraisal model?
A mathematical model used to develop values for each property within a group or universe of properties.
41
What is paired data analysis?
A quantitative technique used to identify and measure adjustments to sale prices or rents of comparable properties.
42
What is stepwise regression analysis?
A programmed algorithm for systematically building a multiple linear regression model by adding significant variables, deleting insignificant variables, or both.
43
Who first adopted computer-assisted mass appraisals (CAMAs) and when?
Assessors in the 1970s.
44
What is monetary policy?
The efforts by a central bank to influence the level of economic activity in the country by regulating the availability of money and the rate of interest.
45
What tools does the Fed utilize to control monetary policy?
Open market operations, the discount rate, and reserve requirements.
46
Who regulates the supply of money in the U.S.?
The Federal Reserve.
47
What is the Federal Reserve?
Founded in 1913, it consists of 12 regional banks and is accountable to the U.S. Congress.
48
What is a money market?
The interaction of buyers and sellers who trade short-term money instruments.
49
What is a capital market?
The interaction of buyers and sellers who trade long-term or intermediate-term money instruments.
50
What was the purpose of the Federal Housing Administration (FHA)?
To encourage homeownership.
51
What was the purpose of the Federal Home Loan Bank Act?
To provide funds to savings and loan institutions to make mortgages more affordable.
52
What did the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) do?
Abolished the Federal Home Loan Bank Board and transferred oversight of the Federal Home Loan Banks.
53
What is the Federal Deposit Insurance Corporation (FDIC)?
Created in 1933 to insure customer deposits if a bank fails.
54
What is The Appraisal Institute?
Formed in 1932 to promote competent appraisals and a code of ethics.
55
What is the secondary mortgage market?
A market for the purchase and sale of existing mortgages which provides greater liquidity for mortgages.
56
What is the Federal National Mortgage Association (FNMA)?
Commonly known as 'Fannie Mae,' it focuses on FHA/VA loans.
57
What are the sources of capital for banks?
Depositors, sale of stock, repayment of existing mortgages, borrowing from the Federal Reserve.
58
What is Private Mortgage Insurance (PMI)?
Insurance that protects a lender against a loss in the event of foreclosure.
59
What is an adjustable rate mortgage (ARM)?
A debt secured by real estate with an interest rate that may change following a specified schedule.
60
What is disintermediation?
The act of investing directly to enhance investment return rather than placing deposits in financial intermediaries.
61
What are discount points?
A percentage of the loan amount that a lender charges a borrower for making a loan.
62
What is a land contract?
The seller accepts a down payment on a parcel of land, but title does not pass until the total purchase price is received.
63
What is a deed of trust?
The seller transfers the property deed to a trustee, who later transfers it to the buyer when terms are met.
64
What is a wrap-around contract?
A variation of seller financing where the seller keeps the existing mortgage and lends additional money.
65
What are real estate investment trusts?
A corporation or trust that combines the capital of many investors to acquire or finance real property.
66
What are the most common competitors for mortgage funds?
Long term government bonds.
67
What is a mortgage?
A pledge of a described property interest as collateral for the repayment of a loan.
68
What is a mortgage note?
A document in which the borrower accepts responsibility for the repayment of a debt.
69
What are conventional mortgages?
Mortgages that are neither insured nor guaranteed by a government agency.
70
What are guaranteed mortgages?
Mortgages assured by a party other than the borrower in case of default.
71
What is an insured mortgage?
A mortgage assured by a party other than the borrower for payment on default in return for a premium.
72
What is compound interest?
Interest earned on the original investment amount and on previously earned interest.
73
What is discount in finance?
Conversion of future benefits to present value.
74
What is amortization?
The process of retiring a debt through scheduled repayment of the principal.
75
What is a graduated payment mortgage?
A debt secured by real property with payments projected to match increases in the borrower's income.
76
What is the interest rate?
The rate of return or yield rate on debt capital.
77
What is a nominal interest rate?
A stated or contract rate that does not necessarily correspond to the effective interest rate.
78
What is an effective interest rate?
An interest rate that includes the effect of compounding.
79
What symbol represents a variate?
X.
80
What is data in statistics?
Items of information used to draw conclusions about, or to describe, a population.

McKissock, Statistics Modeling & Finance, 2025 (1 decks)

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