Master this deck with 12 terms through effective study methods.
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It reflects the principle that money available now is worth more than the same amount in the future due to its potential earning capacity.
Arithmetic Mean is the simple average, while Geometric Mean accounts for compounding over time.
The present value of future cash flows decreases, leading to lower bond prices.
It measures the total return on an investment over a specific period.
Money-Weighted considers the timing and amount of cash flows, while Time-Weighted measures performance independent of cash flows.
They provide a more accurate measure of investment growth over time compared to discrete compounding.
It adjusts nominal returns for inflation, reflecting the true increase in purchasing power.
It states that the distribution of sample means approaches a normal distribution as sample size increases.
It measures the relative variability of a data set compared to its mean, useful for comparing risk across different investments.
It helps determine if there is enough evidence to support a specific claim about a population parameter.
Parametric tests assume a specific distribution, while non-parametric tests do not rely on distribution assumptions.
It models the probability of different outcomes in processes that are difficult to predict due to the intervention of random variables.