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Day: August 3, 2020
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Basics of Statistics
There are a number of statistical terms defined in the Level I CFA curriculum, so I decided that it would be a good idea to consolidate them into one place: here. Descriptive Statistics vs. Inferential Statistics Descriptive statistics summarizes the characteristics of a data set. For example, suppose that you acquire a sample of 500…
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Money-Weighted Rate of Return (MWRR) vs. Time-Weighted Rate of Return (TWRR)
Suppose that you manage an investment portfolio to which cash is added periodically, and from which cash is removed periodically. A reasonable question to ask is this: How should you determine the correct overall return on the portfolio over a period of time, the one that you should report to clients and prospective clients? In…