Statistics entails learning from available data. Good statistical knowledge helps one to utilize proper methods in the collection, analysis of data and presentation of results.
Statistical finance is the implementation of econophysics in financial markets.
Statistics helps in the creation of knowledge from what is already known to the unknown.
Applications of Statistics in Finance
Financial analysts apply statistics to analyze, evaluate and summarize large chunks of data into a more useful form.
Individuals in credit modelling utilize statistical knowledge in logistic regression, correlation, weights of evidence, dimension reduction and so forth.
Portfolio management and pricing requires that one is equipped with good knowledge in the distribution of risks in a portfolio.
The detection of fraud will also require the utilization of several statistical model.
Basic Statistical Areas
From the above, it is evident that financial professionals need to equip themselves with the basics of statistics. The basic areas include:
- The meaning of average
- The meaning of an outlier
- Hypothesis testing
- Paired Sample t-test
- Chi-square statistics
- the meaning of quantitative variables
- standard deviation
- center of a distribution
- 10. variable types
- calculation of the expected mean
- calculation of the mode, median, and quartiles
the basics of statistics lays down a perfect foundation for financial statistics.
Statistics is not easy; students need to commit a lot of their free time to master on the nitty-gritties of statistics. Most of the learning institutions give their students tough assignments where quality expertise is essential. However with the increased use of the internet and globalization, students of the 21st century can get online assistance. With online help, students can get tutored and prepared for their final exams through intensive online learning. Online Statisticians provide you with statistical notes, questions and their solutions as well as solutions to your assignments.