Security Analysis
2. Quantitative Methods in Finance – Statistical Concept and Market Returns
Introduction
- Overview of statistical concepts for market analysis.
Populations, Samples, and Statistics
- Definitions of populations, samples, and types of statistics.
Measurement Scales
- Nominal, ordinal, interval, and ratio scales with examples.
Holding Period Returns & Frequency Distributions
- Calculation of returns and construction of frequency tables.
- Graphical representations: histograms and frequency polygons.
Measures of Central Tendency and Dispersion
- Mean, median, mode, and measures of dispersion like variance and standard deviation.
- Focus on downside risk (semivariance).
Risk Metrics
- Beta, Sharpe Ratio, Treynor Ratio, Jensen's Alpha, Sortino Ratio, Information Ratio.
Skewness and Kurtosis
- Analysis of symmetry and tail behavior in distributions.
Conclusion
- Summary of key statistical tools for investment analysis
Ch 3