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Population is a statistical term referring to the whole set of data to be studied. In Finance, the population is rarely known so sampling techniques are used to make a best guess about a population.
For context, and as an example, Excel's standard deviation function is one
in which sample and population calculations differ. The function
=STDEV.S() is for samples and
=STDEV.P() is for populations.
The general rule for when to select samples or populations is whether you can measure all values. A census is an example of a survey that attempts to collect all items in a population.
Eve: The distribution of P/E ratios for this
population is skewed, thanks to Amazon's lack of earnings.
Pam: Yeah, everything is a value at Amazon, except its stock.
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False. Dividing by n - 1 has less impact when n is large.
Still unclear on the term Population for investments. Check out the Quant 101 Series of free financial modeling tutorials.
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