Sf

[tau281290]

Can anybody explain what is sf in quant Los 9i. And do we need to calculate that in the exam? Thank you.

 

[tau281290]

I guess no one knows about this at all. So we should just ignore it.

 

[Harrogath]

I think it is really unlikely that formula being tested. However the concept involved is important.
Have you gotten clear the concept of confidence interval? It is used for independent variables right?
CI = bi +/- standard error of coefficient x critical value
However, sometimes we want to make a CI for the DEPENDENT variable of the model. What’s that ?!
That formula you asking is used to build the CI of the dependent variable. Sf is the standard error of the model (SEE) adjusted by some wierd things. Statisticians know the derivation.
So your CI for the dependent variable is
CI = Y estimated +/- Sf x critical value.
Nothing more, nothing less.
Hope this helps!

 

[MrSmart]

Shortfall or Safety First ratio?

 

[tau281290]

So sf is confidence interval for the dependent variable?! as simple as that? So if in the exam a calculation question on this you’d just need to plug and chug sf into a confidence interval formula and that’s it?

 

[S2000magician]

MrSmart wrote:Shortfall or Safety First ratio?

Neither.
Standard error of the forecast.