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Postby mayankmundhra30 » Fri Jul 15, 2016 11:12 am

This is Mayank. i took the FRM part 1 Package. I have some doubts which are:

1) Why multicollinearity result in type 2 error? could you give a practical example of multicollinearity?
2) why the critical value for two tail F test has alpha/2 instead of just alpha?
3) What do you mean by statistically significant?
4) Is there any relation between type 1 error value and type 2 error value?
5)Could you please explain Gauss Markov Theorem and GARCH Model in simple words?
6) please also explain EMWA model in simple words?

I request you to resolve my queries.

Thanking you


Finance Junkie
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Postby edupristine » Sat Jul 30, 2016 5:03 am

Hi Mayank

Statistical Significant- statistical significance is attained when a p-value is less than the significance level (denoted α, alpha) In Statistical Hypothesis Testing.

Good Student
Posts: 23
Joined: Sat Jun 25, 2016 8:13 am


Postby mayankmundhra30 » Sat Aug 20, 2016 10:04 am

I have a doubt in a question already solved in the FRM part lecture handouts.The question is on joint probability and conditional probability.
Could you please explain the final part in that example? The question goes like this calculating the conditional probability of market being good when ibm stock is down.

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