Consignor vs. Consignee
What is Consignment? Before understanding the difference between consignor vs. consignee, it’s important to understand what consignment is. Consignment is the process by which a person gives over something to the care of another party, retaining full ownership until the property is sold. It is often done during auctions, shipping, transferring goods, or any time…
Random Variable
What is a Random Variable? A random variable (stochastic variable) is a type of variable in statistics whose possible values depend on the outcomes of a certain random phenomenon. Since a random variable can take on different values, it is commonly labeled with a letter (e.g., variable “X”). Each variable possesses a specific probability distribution function…
Central Limit Theorem
What is the Central Limit Theorem (CLT)? The Central Limit Theorem (CLT) is a statistical concept that states that the sample mean distribution of a random variable will assume a near-normal or normal distribution if the sample size is large enough. In simple terms, the theorem states that the sampling distribution of the mean approaches…
Statistics
What is Statistics? Statistics is a term derived from the Latin word “status,” which means a group of figures used to represent information about a human interest. It refers to the technique developed to collect, review, analyze, and draw conclusions from quantified data. The data obtained is then used in the decision-making process. Financial analysts…
Kurtosis
What is Kurtosis? Kurtosis is a statistical measure that defines how heavily the tails of a distribution differ from the tails of a normal distribution. In other words, kurtosis identifies whether the tails of a given distribution contain extreme values. Along with skewness, kurtosis is an important descriptive statistic of data distribution. However, the two…
Examples of Black Swan Events
What are Black Swan Events? In this article, we provide examples of black swan events as they relate to the financial industry. The financial markets are the context in which black swan events are most commonly referred to. In the investing world, a black swan event is an extremely negative event or happening that is…
Annuitant
Who is an Annuitant? An annuitant is an entity that is entitled to a series of payments on an interval basis. Annuitants are often investors or retirees receiving their pension payments. Primarily, financial institutions and life insurance companies utilize an annuity payment structure to provide income on a periodic basis. Annuities often begin…
Money Management
What is Money Management? Money management refers to the process of tracking and planning an individual or group’s use of capital. In personal and corporate finance, money management usually includes budgeting, spending, saving, and investing. Private banking financial advisors provide money management services to individual customers. Commercial banking provides money management to corporate clients. In…
Parameter
What is Parameter? A parameter is a useful component of statistical analysis. It refers to the characteristics that are used to define a given population. It is used to describe a specific characteristic of the entire population. When making an inference about the population, the parameter is unknown because it would be impossible to collect…
