Foundations of Market Statistics

Prerequisites

None — this course assumes no prior coursework.

Learning Objectives

• Explain the tier structure and how to progress from Novice to Graduate.
• Compute simple (arithmetic), gross, and multiperiod returns from a price series, and annualize them.
• Read a histogram of returns as an empirical distribution, and smooth it into a density.
• Compute and interpret the mean (as an expectation), median, variance, and standard deviation of a return series.
• Explain why a pure random walk produces convincing chart structure, and define signal vs noise.
• Distinguish a population parameter from a sample estimate, and describe the sampling distribution.
• Integrate returns, distribution, spread, base rates, and estimation uncertainty into a single five-gate reading of any output.

Module Schedule