Business 5000 Exam key terms

Estimate

A value calculated from a sample that is used to approximate a population parameter

CEF

Conditional expectation function, tells you what the average value a dependent variable would be if you knew the exact value of the independent variable

Variance

The range of X values and how much the points vary from the mean

Covariance

How two variables move together, it tells us whether an increase in one variable tends to be associated with an increase or decrease in another variable.

Correlation

With correlation you get strength not just direction, is standardized because it is bound between -1 and 1

Central limit theorem

If we take a significantly large number of random samples from any population, the sampling distribution of the sample mean will approach a normal distribution as the sample size increases

MCAR

Missing completely at random, a missing piece of data is not related to any variable in the data

MAR

Missing at random, mechanism where the probability of a value being missing is related to some of the observed data, but not the missing data itself

Exogenous variables

variables that are independent of other variables in the system

Endogenous variables

variables that are affected by or influenced by other variables in the systems