Quantitative Methods 1

Question 1

Required rate of return/interest rate

Answer 1

Question 2

Future Value

Answer 2

Question 3

Calculating stated (nominal) and effective rates from periodic

Answer 3

Question 4

Computing effective rates from periodic rate

Answer 4

Question 5

Future value formula with more than one compounding period

Answer 5

Question 6

FV/PV based on continuous compounding

Answer 6

Question 7

PV of a perpetuity

Answer 7

Question 8

Annuity Due

Answer 8

Payments paid at the beginning of period

Question 9

Ordinary annuity

Answer 9

Cash flows made at the end of each period

Question 10

Nominal Scale (4th strongest)

Answer 10

Data is only categorized

Question 11

Ordinal Scale (3rd Strongest)

Answer 11

Data is categorized and ranked

Question 12

Interval Scales (2nd Strongest)

Answer 12

Data is categorised, ranked, and evenly spaced

Question 13

Ratio scales (1st Strongest)

Answer 13

Strongest level of measurement. Categorized, ranked, evenly spaced, natural zero

Question 14

Steps to producing frequnecy distribution

Answer 14

1. Sort data into ascending order
2. Calculate range of data
3. Decide on number of intervals (k) and interval width (Range/k)
4. Determine intervals by successively adding width to minimum value
5. Count number observations falling in each interval
6. Construct a table showing number of observations falling into each interval

Question 15

Cumulative frequency

Answer 15

Absoluted frequencies added up as we move from first to last interval

Question 16

Relative frequency

Answer 16

Absolute frequency of each interval divided by total number of observations

Question 17

Cumulative relative frequency

Answer 17

Adds up relative frequencies as we move from first to last interval. Fraction of observations that are less than upper limit of each interval

Question 18

Histogram

Answer 18

Graphical presentation of absolute frequency distribution

Question 19

Frequency Polygon

Answer 19

Graph midpoint of each interval on horizontal axis and absolute frequency on vertical; draw a line graph

Question 20

Geometric mean

Answer 20

Question 21

Mean absolute deviation

Answer 21

Question 22

Variance

Answer 22

Question 23

Standard deviation/Varaince calculator

Answer 23

Question 24

Quartile calculation

Answer 24

Question 25

Harmonic mean (same as money weight)

Answer 25

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Question 26

Coefficient of variation

Answer 26

Question 27

Negatively skewed

Answer 27

Question 28

Positively skewed

Answer 28

Question 29

Semivariance

Answer 29

Measure of dispersion below the mean. Average of squared differences between observations below the mean and mean value. Important as investors are concerned with deviations below the expected value. If symmetrical distribution semivariance = variance

Question 30

Target semivariance

Answer 30

Calculated dispersion below a specified target instead of mean

Question 31

Chebyshev's Inequality

Answer 31

Question 32

Coefficient of variation

Answer 32

Question 33

1 s.d. coverage

Answer 33

68%

Question 34

95% of observations

Answer 34

95%

Question 35

99% of observations

Answer 35

2.575 s.d.

Question 36

Skewness formula

Answer 36

Question 37

Kurtosis charts

Answer 37

Question 38

Kurtosis interpretation

Answer 38

Only data values that are outside the region of the peak contribute to kurtosis. High values are obtained where the probablility mass is concentrated around the mean.

Question 39

Calculating combinations and permutations

Answer 39

Can be done on calculator

Question 40

Variance and S.D. with probablilities

Answer 40

Question 41

Calculator probability, expected return, and variance of return

Answer 41

Question 42

Covariance

Answer 42

Question 43

Correlation

Answer 43

Question 44

Binomial distribution

Answer 44

Question 45

Standard deviation of a two-stock portfolio

Answer 45

Question 46

Coefficient of determination

Answer 46

Question 47

Degrees of freedom for F statistic

Answer 47

n - 2

Question 48

F Statistic for Linear Regression

Answer 48

Question 49

Analysis of Variance Table

Answer 49

Question 50

Standard Error of Estimate

Answer 50

Question 51

Standard error of slope

Answer 51

Where Se is the standard of the estimate

Question 52

One sided test for slope/correlation

Answer 52

Question 53

Standard Error of Intercept

Answer 53

Question 54

Steps in Testing Intercept

Answer 54

Question 55

Standard Error Forecast

Answer 55

Question 56

Multinomial Formula

Answer 56

Question 57

Contingency/Confusion Matrixes

Answer 57

To find expected number (Total Row i x Total Column j)/Total Overall

Question 58

A priori Probability

Answer 58

Probability based on objective proabilities, using deduction and reasoning Example with a coin flip, using the binomial proability function to calculate find the odds of getting heads 3 times

Question 59

Calculating quartiles/percentiles

Answer 59

1. Think as percentile 2. Ly = (n. observations + 1)\*percentile/100

Question 60

Second method for quartiles (generalised)

Answer 60

(n. observations + 1)\* (% of population below this) If it is the 80th percentile, 80% of population below this LINEAR INTERPOLATION