The Pitfalls of Forecasting, Part 4

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  • August 18, 2014
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Scatter Plots and Behavior of the Data Series (continued) As noted in “The Pitfalls of Forecasting, Part 3,” other than being good modeling practice to create scatter plots prior to … Continue Reading →

Logit, Probit, and Tobit: Limited Dependent Variables

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  • August 18, 2014
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Theory The term limited dependent variables describes the situation where the dependent variable contains data that are limited in scope and range, such as binary responses (0 or 1) and … Continue Reading →

Understanding the Forecast Statistics and Four Moments

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  • July 7, 2014
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The Four Moments Most distributions can be defined up to four moments. The first moment describes its location or central tendency (expected values); the second moment describes its width or … Continue Reading →

Understanding and Interpreting S-Curves and CDF Curves

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  • July 7, 2014
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The Four Moments, PDF, and CDF The S-Curve, or Cumulative Distribution Function (CDF), is a very powerful and often-used visual representation of a distribution of data points. This section briefly … Continue Reading →

Tips on Interpreting PDF, CDF, and ICDF

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  • July 7, 2014
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The Basics of PDF, CDF, and ICDF This paper briefly explains the probability density function (PDF) for continuous distributions, which is also called the probability mass function (PMF) for discrete … Continue Reading →

QUICK OVERVIEW OF PROBABILITY DISTRIBUTIONS

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  • June 16, 2014
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QUICK OVERVIEW OF PROBABILITY DISTRIBUTIONS The following is a quick synopsis of the probability distributions available in Real Options Valuation, Inc.’s various software applications such as Risk Simulator, Real Options … Continue Reading →

ROV ANALYTICS: QUICK OVERVIEW

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  • June 16, 2014
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ANOVA: One-Way Single Factor with Multiple Treatments. An extension of the two-variable t-test, looking at multiple variables simultaneously and when the sampling distribution is assumed to be approximately normal. A … Continue Reading →

QUICK OVERVIEW OF RISK SIMULATOR

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  • June 16, 2014
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After installing Risk Simulator, start Excel and the Risk Simulator menu will appear in Excel. Risk Simulator comes in 11 languages (English, Chinese Simplified, Chinese Traditional, French, German, Italian, Japanese, … Continue Reading →

THE BASICS OF REAL OPTIONS

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  • June 15, 2014
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THE BASICS OF REAL OPTIONS Real-life conditions are fraught with uncertainty and risks. Understanding the knowledge inherent in and accounting for the effects of these uncertainties is crucial to successful … Continue Reading →