Assembly Line.

An assembly line is a production process in which parts (components) are added to a product in a sequential manner to create an end product. Typically, each workstation in an assembly line performs a specific task or set of tasks that are required to build the product. The term “assembly line” can also refer more … Read more

Cash Per Share Definition.

The cash per share definition is a financial ratio that measures a company’s cash flow per share of common stock. It is calculated by dividing a company’s total cash flow for the period by the number of shares of common stock outstanding. The cash per share definition is a useful metric for evaluating a company’s … Read more

What Joint Probability Tells Us.

Joint probability is the likelihood of two events occurring together. It is calculated by multiplying the probability of the first event by the probability of the second event. Joint probability can be used to assess the risk of an investment. For example, if the joint probability of two events is 0.5, then the probability of … Read more

Durbin Watson Test: What It Is and How to Use It.

Durbin Watson Test. How do you use Excel to calculate Durbin-Watson? Durbin-Watson is a statistic that is used to test for autocorrelation in data. It is used in regression analysis to help determine whether or not there is a relationship between the independent and dependent variables. The Durbin-Watson statistic ranges from 0 to 4. A … Read more

The Law of Large Numbers.

. The Law of Large Numbers: What It Is, How It’s Used, Examples What is the strong law of large numbers? The strong law of large numbers is a theorem in probability theory that states that, given a sequence of independent and identically distributed random variables, the sample mean of those variables converges to the … Read more

Marginal Benefit.

Marginal benefit is the additional benefit that a person receives from consuming one more unit of a good or service. In other words, it is the extra satisfaction that a person gets from consuming an additional unit of a good or service. The marginal benefit of a good or service diminishes as a person consumes … Read more

Small Minus Big (SMB).

The SMB (Small Minus Big) factor is a risk factor that captures the return difference between small-cap stocks and large-cap stocks. The SMB factor is often used as a proxy for the market risk premium, as small-cap stocks are generally considered to be more volatile and risky than large-cap stocks. The SMB factor has been … Read more

Learn about Barra Risk Factor Analysis.

Barra risk factor analysis is a statistical technique used to identify and quantify the risks associated with investments. The technique is based on the premise that the prices of securities are determined by a variety of factors, including economic, political, and market conditions. The Barra risk model consists of two components: a factor model and … Read more