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4#
发表于 2013-8-16 11:02
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MAD is exactly what it sounds like–MEAN (meaning average) ABSOLUTE (absolute value being a positive number, by definition) DEVIATION (how much it changes from the “benchmark”–here, the average).
So to find Mean Absolute Deviation, first get a simple average of the data points. (Somebody said it was 6.8. I’ll go with that.)
Then, take the difference between #1 and the average. Write that down. (4-6.8 = 2.8) 2.8 is a positive number, because it is 2.8 units away from the mean. We don’t care if it’s +2.8 or -2.8. The fact is–it’s 2.8 units away from the mean.
Then, take the difference between #2 and the average. Write that number down. (1-6.8 = 5.8) Again, 5.8 is a positive number.
Once you have found the absolute values of the differences between the data points and the mean, simply average them to get the MEAN ABSOLUTE DEVIATION.
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BTW–don’t spend more than about five minutes on this. I’ll be surprised if it shows up on the test. For the exam (and in real life) nobody uses MAD for anything. It’s all about Standard Deviation.
You DO need to spend significant time on Standard Deviation. If you don’t know how to calculate a variance and standard deviation, then don’t waste a precious First Saturday in June, because you’ll never finish the CFA exam. |
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