Page 7 - FINAL CFA SLIDES DECEMBER 2018 DAY 3
P. 7
Session Unit 2:
8. Statistical Concepts and Market Returns
LOS 8.e: Calculate and interpret measures of central tendency, including the population
mean, sample mean, arithmetic mean, weighted average or mean, geometric mean,
harmonic mean, median, and mode, p.138
Measures of central tendency (MCT) identify the center, or average/mean of a data set
Example: Population mean and sample mean: Assume you and your research assistant are evaluating the stock of
AXZ Corporation. You have calculated the stock returns for AXZ over the last 12 years to develop the following data set.
Your research assistant has decided to conduct his analysis using only the returns for the five most recent years, which are
displayed as the bold numbers in the data set. Given this information, calculate the population mean and the sample
mean. Data set: 12%, 25%, 34%, 15%, 19%, 44%, 54%, 33%, 22%, 28%, 17%, 24%
These are Arithmetic Means (AM) –
Amongst the best MCTs..
