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Statistics: Uncertainty, Decision and Judgement

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Statistics: Uncertainty, Decision and Judgement
UDJ | FINANCE | Use/Name | Formula | Use/Name | Formula | Variance (2) (For Poisson, equal to mean) | or n*p*(1-p) | NPV (Costs up front) | | Standard Deviation () | | Discount Factor | _1_ (1+r)n | Exp. Val E(W) of combined linear function | a + bμx + cμx Where b&c are weights | Annuity Discount Factor | 1-DF or 1-_1_ k ( 1+r)n k | Variance (2) of combined lin funct (X,Y) | b2V(x)+c2V(y)+2bc•Cov(x,y) Where b&c are weights | Annuity Present Value | CF X ADF or | Covariance | x y COR(X,Y) | Annuity Future Value | | Correlation (ρ) | | Annuity Payment | | Mean | fixi | Growing Annuity Present Value | | Variance Of a Sample (s2) | sqrt to get std dev (s) | Perpetuity Present Value | CF K | Standard Error (Then to Margin of Error & Confidence Interval) | s/√n where s= √x̄(1- x̄)[* (Zɑ/2) for MoE] [ ↳ ± x̄ for CI] | Bond Duration | | Required Sample Size (rework of above) | or | Variance (2) of a portfolio (X,Y) | b2E(x) 2+c2E(y) 2+2bc•Cov(x,y) Where b&c are weights | Confidence Interval For a proportion | | Sharpe Ratio | | Zobs | | Exp. Return of a portfolio | | Test Statistic Z values Proportions Take this to the table for “P Value” | | β of a portfolio | or | X critical proportions | Evaluation criteria: | CML Equation | | | | Cost of Levered Equity | | | | WACC | | | | Levered vs. Unlevered Beta | | μ = x̄ = E(x) Mean | n = number | CF = P = Cashflow or Payment | fi = rel. freq | = Sum of a series | T = time | xi = middle point | ρ = Correlation | k = r = interest rate | W = combined linear func | = Standard Deviation | g = growth | 2 = Variation | ɑ = E = Margin of Error | rp = Risk of Portfolio | p0 = proportion of hypothesis | β = Beta coeffic. of portfolio | rf = Risk Free Rate

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