Statistics

(revised for B&H Fundamentals of Financial Management – Concise 6^th edition)

The material for the statistics review is located on another website.  When you visit this other site a new window will open and there will be a menu of links at the far right side of the page.  You will be taking some of these links to the materials for different topics.  Anytime you want to return to this page you can just close the new windows that have opened.

Go to: http://www.statsoft.com/textbook/stathome.html and take a look around.  This is the site for Statistics content. 

From the menu to the right select “Elementary Concepts”.

You should be taken to the following list of topics covered in this discussion of basic concepts.  Read all topics but pay special attention to the topics in bold print identified below. Also note that I have assigned textbook readings from the Brigham & Houston (B&H) text (highlighted in yellow).  These finance text assignments will be discussed in the "applied" statistics discussions we have in class.

• What are variables?                                               (Starting on page 229 in B&H,  read to the bottom middle of page 239)
• Correlational vs. experimental research                     Note: Most financial statistics deal with "correlational" research.
• Measurement scales
• Dependent vs. independent variables
• Relations between variables
• Why relations between variables are important
• Two basic features of every relation between variables
• What is "statistical significance" (p-value)
• How to determine that a result is "really" significant
• Statistical significance and the number of analyses performed
• Strength vs. reliability of a relation between variables
• Why stronger relations between variables are more significant
• Why significance of a relation between variables depends on the size of the sample
• Example: "Baby boys to baby girls ratio"
• Why small relations can be proven significant only in large samples
• Can "no relation" be a significant result?
• How to measure the magnitude (strength) of relations between variables
• Common "general format" of most statistical tests
• How the "level of statistical significance" is calculated
• Why the "Normal distribution" is important       
• Illustration of how the normal distribution is used in statistical reasoning
• Are all test statistics normally distributed?
• How do we know the consequences of violating the normality assumption

            (Source: StatSoft, Inc. (2002). Electronic Statistics Textbook. Tulsa, OK: StatSoft. WEB: http://www.statsoft.com/textbook/stathome.html.)

Continue on to the next Statistics Page.