Financial Statistics

Statistics is a fundamental tool for finance. Much of finance is concerned withmeasuring and managing financial risk, which is the uncertainty in future returns from an investment. This risk depends on the probability distribution of the return of this investment. Statistics is needed to estimate parameters such as the standard deviation of the return. Finance makes intensive use of probability models, and these models lead to important statistical questions such as: Do financial data support these models, and how are the parameters in these models estimated Financial statistics students will learn how to use these probability models as well as the appropriate statistical methods to test validity using financial data.

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