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The Returns and Risk Measures in This Chapter Are Calculated

question 63

Essay

The returns and risk measures in this chapter are calculated from historical data. Are such measures good predictors of the future? What are some circumstances that could change to impact future return and risk? How can an investor use these return and risk measures to help construct a portfolio?


Definitions:

Denoted

Denoted refers to the act of symbolically representing something - for example, variables in mathematical equations or formulas are often denoted by letters or symbols.

Null Hypothesis

A statement or hypothesis set for statistical testing, suggesting no significant effect or relationship between variables.

Population Parameter

A characteristic or measure that describes an aspect of an entire population, such as its mean or variance.

Value

The importance, worth, or usefulness of something or a numerical quantity assigned to a variable.

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