Central limit theorem and Contractual gap: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Administrator
(CSV import)
 
imported>Doug Williamson
(Add heading.)
 
Line 1: Line 1:
It states formally that the average of a large number of independent identically distributed random variables will have a normal distribution.
''Banking''.


The central limit theorem is important in sampling theory.  It explains that sample means follow a normal distribution - regardless of the actual distribution of the parent population - and that the sample mean is an unbiased estimate of the parent population mean.
A mismatch in the timing at which interest rate assets and liabilities will reprice under their contractual terms, ignoring any effects of customers' behaviour.


The central limit theorem also explains why larger samples will - on average - produce better estimates of the parent population mean.
The central limit theorem is sometimes known as the '' law of large numbers''. 


== See also ==
== See also ==
* [[Sample]]
* [[Behavioural gap]]
* [[Sampling]]
* [[Gap report]]
* [[Interest gap report]]
 
* [[Interest gap]]
* [[Liquidity gap]]

Revision as of 11:51, 29 October 2016

Banking.

A mismatch in the timing at which interest rate assets and liabilities will reprice under their contractual terms, ignoring any effects of customers' behaviour.


See also

Retrieved from ‘https://wiki.treasurers.org/w/index.php?title=Central_limit_theorem&oldid=11360’