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Population Parameter is a statistical term referring to the descriptive measure about a population that is being studied. Examples for stocks may include: median sales, standard deviation of net income per share or the mean debt-to-equity ratio. The population parameter is to a population as a sample statistic is to a sample.
Synonym: statistical parameter
For context, and as an example, the percentage of voters who select a candidate in the voting population can be sampled in polls to get an idea for candidates leading the polls prior to an election.
Here the population paramter is the percent of the voting population selecting a specific candidate. Rather than collecting survey from millions of voters in some cases, a sample statistic, or average for a smaller sample often provides enough information to make an assertion about the population, with some level of estimation error.
Bud: How is the population parameter
defined? Which measure? What timeframe?
Pam: Have you been hanging out with Guy lately?
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Still unclear on the concept of a Population Parameter? Check out the Quant 101 Series of free financial modeling tutorials.
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