pulation and a sample.
A populationis defined as all members of a specified group. Any descriptive measure of a population characteristic is called a parameter. Populations can have many parameters, but investment analysts are usually only concerned with a few, such as the mean return, or the standard deviation of returns.
A sampleis defined as a portion, or subset of the population of interest. Even if it is possible to observe all members of a population, it is often too expensive or time consuming to do so. Once the population has been defined, we can take a sample of the population with the view of describing the population as a whole.
b: Explain the concept of a parameter.
Any descriptive measure of a population characteristic is called a parameter.
c: Explain the differences among the types of measurement scales.
Nominal scale:this represents the weakest level of measurement. Observations are classified or counted with no particular order. An example would be assigning the number one to a large cap value fund, the number two to a large cap growth fund, etc.
Ordinal scale:this is a higher level of measurement. All observations are placed into separate categories and the categories are placed in order with respect to some characteristic. An example would be ranking 100 large cap growth mutual funds by performance and assigning the number one to be the 10 best performing funds and the number ten to the 10 worst performing funds