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This approximate formula is for moderate to large sample sizes; the reference gives the exact formulas for any sample size, and can be applied to heavily autocorrelated time series like Wall Street stock quotes. Moreover, this formula works for positive and negative ρ alike. [12] See also unbiased estimation of standard deviation for more ...
In probability theory, the Kelly criterion (or Kelly strategy or Kelly bet) is a formula for sizing a sequence of bets by maximizing the long-term expected value of the logarithm of wealth, which is equivalent to maximizing the long-term expected geometric growth rate. John Larry Kelly Jr., a researcher at Bell Labs, described the criterion in ...
When retention equals 1, the customer is always retained, and the firm receives the margin in perpetuity. The present value of the margin in perpetuity turns out to be the Margin divided by the Discount Rate. For retention values in between, the CLV formula tells us the appropriate multiplier. [2]
In a more complex example, if an item costs $204 to produce and is sold for a price of $340, the price includes a 67% markup ($136) which represents a 40% gross margin. This means that 40% of the $340 is profit. Again, gross margin is just the direct percentage of profit in the sale price. In accounting, the gross margin refers to sales minus ...
In statistics, the score test assesses constraints on statistical parameters based on the gradient of the likelihood function —known as the score —evaluated at the hypothesized parameter value under the null hypothesis. Intuitively, if the restricted estimator is near the maximum of the likelihood function, the score should not differ from ...
Comparative statics is a tool of analysis in microeconomics (including general equilibrium analysis) and macroeconomics. Comparative statics was formalized by John R. Hicks (1939) and Paul A. Samuelson (1947) (Kehoe, 1987, p. 517) but was presented graphically from at least the 1870s. [ 2]
Business portal. v. t. e. In macroeconomics, a multiplier is a factor of proportionality that measures how much an endogenous variable changes in response to a change in some exogenous variable . For example, suppose variable x changes by k units, which causes another variable y to change by M × k units. Then the multiplier is M .
Margin (finance) In finance, margin is the collateral that a holder of a financial instrument has to deposit with a counterparty (most often their broker or an exchange) to cover some or all of the credit risk the holder poses for the counterparty. This risk can arise if the holder has done any of the following: