selection bias

when people have chosen the group they want to be apart of i.e: political offiliation

correlation

lies between -1 and 1

what does a negative correlation suggest

x goes up, y goes down

what does a positive correlation suggest

x goes up, x goes up

no correlation

= to 0

likert scale

1-10 scale to map qualitative feelings into quantitative

inferential stats

making conclusions about a population from a sample

explanatory stats

using what you learn to explain what you have observed

Law of large numbers and the central limit theorem

what happens to accuracy as your sample size increases, it gets better! as n goes up variability goes down.

variance

1-100 large 1-10 small

probability coin flips 4 flips

4 flips- 1/2 x 1/2= 1/4 multiply the individual probabilities when they are independent probabilities to begin with

Compliment

not- what is not in the set

Union

U means or

Intersection

N means and

trimmed mean

taking out % of outliers then calculating the mean

what is sensitive to outliers

mean and mode, median and trimmed mean are not.

normal dist v

skewed distribution

skewed distribution

mean = median

mean /= median

mean /= median

calculation for o

(sum of (x-u)/n)^.5 population

using z scores

reject Ho if your observed z > than critical

single v multivariable regression

=a+B1+e

=a+B2+B3+e

=a+B2+B3+e

Independent v dependent variable

dependent left hand side of equation (can only have one)

independent on right hand side (can be more than one)

independent on right hand side (can be more than one)

GAP

generally accepted accounting principles

cash accounting

when theres exchanges of cash

accrual accounting

only method allowed by GAP

events that change a company’s financial statements are recognized in the period they occur rather than in the period in which cash is paid or received

events that change a company’s financial statements are recognized in the period they occur rather than in the period in which cash is paid or received

historical cost principle

recording something on your books for what you paid for

revenue recognition

realized or realizable

revenue is not realized until it is earned

revenue is not realized until it is earned

Matching principle

matchs expenses with revenues

assets=

L+SE

balance sheet

assets, liabilities, equity

Income statement

revenues, expenses

statement of cash flows

changes in cash holdings

calculating assets from a trial balance

cash+ ar- AFDA+inventory+ equipment- Acc Dep

ending retained earnings

=beginning retained earnings+common stock+ Net income (revenues-expenses)- dividends… Stockholders equity would be the ending retained earnings+Paid in capital

find future value, compounding

x 1+IR IE: 1+10%ir= 1.1

find present value, compounding

/ 1+ IR

Earnings per share

% return or profit obtained by investors= Net income/ equity

Return on Equity

% return or profit obtained by investors per share of common stock.

=net income/common stock out standing

=net income/common stock out standing

Price Earnings Ratio

market price of stock/ earning per share

used to reflect whether investors think earnings per share will increase or decrease on average 8 to 1

used to reflect whether investors think earnings per share will increase or decrease on average 8 to 1

The Payout Ratio

Total cash dividends paid on common stock/ net income

measures the % of earnings distributed in form of cash dividends to common stockholders

measures the % of earnings distributed in form of cash dividends to common stockholders

in an experiment to determine whether more rain causes umbrellas Ho=

Ho= rain has no effect on umbrellas

Ha=rain has an effect on umbrellas

Ha=rain has an effect on umbrellas

what does a journal entry have to have

one debit and one credit

formula for depreciation

Original purchase price- Salvage value/ useful life