Interest is basically a reward paid by a borrower for the use of an asset, usually capital, belonging to a lender. It’s the compensation paid for the loss of use of the asset. We could also describe it as the…

Time value of money is a concept that refers to the greater benefit of receiving a given amount of money at present rather than in the future due to its earning potential. For example, money could be invested in a…

Inter-market analysis is a method of determining the strength or weakness of an asset class or financial market relative to other related asset classes or financial markets. These asset classes may include stocks, bonds, commodities, or even loan facilities. The…

Technical analysis indicators are measures used to predict changes in the price of a security price based on price, market sentiment, or flow of funds. In essence, they try to establish how potential changes in market forces (supply and demand)…

Cycles are trends or patterns that may be exhibited by the securities market. The trends or patterns directly affect prices, leading to seasonal or periodical fluctuations that may recur over and over again. Cycles may also lead to some securities…

A chart pattern is a distinct trading formation appearing repeatedly and which can be used to predict future price movements of a given stock. The formations appear on price charts and create unique, recognizable shapes. Analysts study these formations when…

Sampling considerations refer to the desirable characteristics that should always be taken into account when selecting a sample so as to increase chances of accurate estimation of population parameters. In general, larger samples are preferred to smaller ones because the…

A hypothesis is an assumptive statement about a problem, idea, or some other characteristic of a population. It can also be considered an opinion or claim about a given issue. Therefore, a statistical test has to be performed to establish…

Testing the Variances of a Normally Distributed Population using the Chi-square Test A chi-square test is used to establish whether a hypothesized value of variance is equal to, less than, or greater than the true population variance. Unlike most distributions…

A one-tailed test (one-sided test) is a statistical test that considers a change in only one direction. In such a test, the alternative hypothesis either has a < (less than sign) or > (greater than sign), i.e., we consider either…