The Central Limit Theorem (CLT) states that the distribution of sample means approaches a normal distribution as the sample size increases, regardless of the distribution of the population.
Sample sizes equal to or greater than 30 are often considered sufficient to perform CLT.
A key aspect of CLT is that the mean of the sample means and standard deviations will be equal to the population mean and standard deviation.
A sufficiently large sample size can more accurately predict the characteristics of the population.
CLT is useful in finance when analyzing a large set of securities to evaluate portfolio distribution and characteristics of return, risk and correlation.
Performance Based Management (ABM) is a means of analyzing a company’s profitability by looking at every aspect of its business to determine its strengths and weaknesses.
A ballpark figure is a rough estimate of what something might mean in numerical terms when a more precise number is estimated, such as the cost of a product.
The binomial distribution is a probability distribution that generalizes the probability that a value will take on one of two independent values given a set of parameters or assumptions.
Share capital is the number of ordinary and preferred shares that the company has the right to issue and which are accounted for on the balance sheet as part of share capital.