Non-parametric Tests

In parametric tests we make assumptions about the distribution of the population and each parametric test is specific to a population parameter such as mean or variance, for example, a z-test.

A nonparametric test is not concerned with a parameter or makes minimal assumptions about the population being sampled.

A nonparametric test is primarily used in three situations:

  • when data does not meet distributional assumptions
  •  when data are given in ranks
  • when the hypothesis we are addressing does not concern a parameter

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Related Quizzes

Hypothesis Testing

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Data Science in Finance: 9-Book Bundle

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Master R and Python for financial data science with our comprehensive bundle of 9 ebooks.

What's Included:

  • Getting Started with R
  • R Programming for Data Science
  • Data Visualization with R
  • Financial Time Series Analysis with R
  • Quantitative Trading Strategies with R
  • Derivatives with R
  • Credit Risk Modelling With R
  • Python for Data Science
  • Machine Learning in Finance using Python

Each book comes with PDFs, detailed explanations, step-by-step instructions, data files, and complete downloadable R code for all examples.