What is Conditional Probability? Conditional probability is the probability of an event occurring given that another event has already occurred. The concept is one of the quintessential concepts in probability theory. Note that conditional probability does not state that there is always a causal relationship between the two events, as well as it does not…
What is the Bayes’ Theorem? In statistics and probability theory, the Bayes’ theorem (also known as the Bayes’ rule) is a mathematical formula used to determine the conditional probability of events. Essentially, the Bayes’ theorem describes the probability of an event based on prior knowledge of the conditions that might be relevant to the event….
What are Spreadsheet Risks? Spreadsheet risks do exist even in large businesses that use such programs. Though spreadsheets are considered among the most important and powerful tools for organizations and businesses over the past several decades, that doesn’t take away the fact that spreadsheets are subject to human errors. In addition, they can be easily…
What is a Bilateral Agreement? A bilateral agreement, also called a clearing trade or side deal, refers to an agreement between parties or states that aims to keep trade deficits to a minimum. It varies depending on the type of agreement, scope, and the countries that are involved in the agreement. Bilateral agreements can take…
What are Nonparametric Tests? In statistics, nonparametric tests are methods of statistical analysis that do not require a distribution to meet the required assumptions to be analyzed (especially if the data is not normally distributed). Due to this reason, they are sometimes referred to as distribution-free tests. Nonparametric tests serve as an alternative to parametric…
What is Nominal Data? In statistics, nominal data (also known as nominal scale) is a type of data that is used to label variables without providing any quantitative value. It is the simplest form of a scale of measure. Unlike ordinal data, nominal data cannot be ordered and cannot be measured. Dissimilar to interval or ratio…
What is Ordinal Data? In statistics, ordinal data are the type of data in which the values follow a natural order. One of the most notable features of ordinal data is that the differences between the data values cannot be determined or are meaningless. Generally, the data categories lack the width representing the equal increments…
What is Mean? Mean is an essential concept in mathematics and statistics. The mean is the average or the most common value in a collection of numbers. In statistics, it is a measure of central tendency of a probability distribution along median and mode. It is also referred to as an expected value. It is…
What is Sample Selection Bias? Sample selection bias is the bias that results from the failure to ensure the proper randomization of a population sample. The flaws of the sample selection process lead to situations where some groups or individuals in the population are less likely to be included in the sample. The presence of…
What is Range? In statistics and mathematics, range is the difference between the largest and smallest values in a dataset. The range is one of the measures of dispersion of data. Range in Finance In finance, the range is defined as a difference between the low and high prices of a security over a certain…
