M and Probability: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Kmacharla
 
imported>Doug Williamson
(Layout.)
 
Line 1: Line 1:
1. '' Credit rating. ''
The study of chance providing an objective measure of uncertainty.
A suffix added to a credit rating to indicate that it applies to a money market fund (rather than to any other type of entity).


So for example "AAAm" would indicate a rating of AAA in relation to a money market fund.


2.
Probabilities range between 1 (=100%) and 0 (=0%).
One million (1,000,000).


For example EUR 100m = EUR 100,000,000.
A probability of 100% means that an event is considered certain to occur.  


Sometimes written "M".
A probability of 0% means that an event is considered certain not to occur.


==See also==
[[AAA]]


[[Billion]]
For example, flipping an unbiased coin, the probability of getting a head is often modelled as 50%.


[[bn]]


[[k]]
This simple model of a coin flip assumes that the only two possibilities are a head or a tail.  Applying such simple models to financial situations, and treating financial outcomes as simple coin flips, may lead to errors resulting from:


[[mf]]
#The coin landing on its edge 'more often than it's supposed to'.
#The underlying assumption of an unbiased coin not being a valid one. This kind of assumption is usually much too simple.


[[Money market fund]]
 
== See also ==
* [[Black swan]]
* [[Conditional probability]]
* [[Confidence interval]]
* [[Frequency distribution]]
* [[Mutually exclusive]]
* [[Poisson distribution]]

Revision as of 15:19, 8 June 2016

The study of chance providing an objective measure of uncertainty.


Probabilities range between 1 (=100%) and 0 (=0%).

A probability of 100% means that an event is considered certain to occur.

A probability of 0% means that an event is considered certain not to occur.


For example, flipping an unbiased coin, the probability of getting a head is often modelled as 50%.


This simple model of a coin flip assumes that the only two possibilities are a head or a tail. Applying such simple models to financial situations, and treating financial outcomes as simple coin flips, may lead to errors resulting from:

  1. The coin landing on its edge 'more often than it's supposed to'.
  2. The underlying assumption of an unbiased coin not being a valid one. This kind of assumption is usually much too simple.


See also

Retrieved from ‘https://wiki.treasurers.org/w/index.php?title=M&oldid=38532’