Executive Summary
In our summarization for the use of applicable, business oriented chi square and variance we will look at the deployment of these statistical tools for the top investment banks in Slovakia. Erste Bank along with the Banks of Intesa & Raiffeisen were used in our research proposition while based on our study, investment effectiveness and certain evaluation methods for quantifying, investment controlling indicators would be categorically employed.
This research was published under Science Direct for the Procedia Economics and Finance Journal and was termed as ‘The Use of Investment Controlling and its Impact into Business Performance’. The aim of the study was to apply investment controlling mechanism in their upper management practices while using certain investment valuation techniques. All these inferences were made through the quantifying of data that was collected using various questionnaires submitted to the people in charge of portfolio management.
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Association of Statistical Inference
The latter study exemplifies the perfect use of Person’s Chi Squared formula. This statistical measure was used to quantify relationships between managerial practice among senior bank officials and the size of the investment portfolio they might be handling (Merková, 2015). The process was conducted multiple times so as to nullify the use of anomalies that were generated when calculating the variance among these Bank officials.
Problem Summary & Impact of Tools
Portfolio management is intrinsically based on a risk reward mechanism. The successful returns of such strategies directly benefit the bank in making large sums of profit and hence with senior management not able to have accurate actionable data, the associated risk in losing the portfolio to a bad investment call is enormously increased. With the use of variance and Pearson’s Chi Squared expressions we can nullify or minimize the maximum overall risk attached to any given portfolio and hence exponentially increase the returns for both the bank and the client (Merková, 2015).
Usage of Similar Strategies
Many mainstream public limited companies now provide stock valuation and a chance for shareholders to trade portfolios in open market. On a personal level it is a very good opportunity to embark on such projects and at the same time financially benefit from them as well. The use of statistical inference techniques such as the Pearson’s Chi Squared and that of Variance provides a solid foundation to minimize risk under such circumstance and increase overall returns on an investment.
References
Merková, M. (2015). Use of Investment Controlling and its Impact into Business Performance. Procedia Economics and Finance, 34, 608-614.
https://ac.els-cdn.com/S2212567115016755/1-s2.0-S2212567115016755-main.pdf?_tid=dd6d1a69-d988-4c94-8fbd-7db934dc3a44&acdnat=1539563460_ac1e12c3cfdadf80ac82bbb583a49b3a
