Sample

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DEFINITION of 'Sample'

A subset containing the characteristics of a larger population. Samples are used in statistical testing when population sizes are too large for the test to include all possible members or observations. A sample should represent the whole population and not reflect bias toward a specific attribute.

BREAKING DOWN 'Sample'

A sample is a smaller, manageable version of a larger group. For example, if you wanted to test an investment strategy on past stock data, you would have an enormous number of stocks to test. Instead of testing the strategy on every stock, you would use a sample, which allows you to draw statistical insights from a smaller group of stocks. The sample should not contain any bias, such as the survivorship bias, where you might only use stocks that have survived the entire length of time you wish to test. Choosing a sample randomly should eliminate the possibilities of bias.

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RELATED FAQS
  1. What is the criteria for a simple random sample?

    Simple random sampling is the most basic form of sampling and can be a component of more precise, more complex sampling methods. ... Read Full Answer >>
  2. What are the best selection methods for creating a simple random sample?

    The best selection methods for selecting a simple random sample are the lottery method, using a random number table or having ... Read Full Answer >>
  3. What are some examples of stratified random sampling?

    Simple random sampling is a sample of individuals that exist in a population; the individuals are randomly selected from ... Read Full Answer >>
  4. What assumptions are made when conducting a t-test?

    The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>
  5. What are some of the more common types of regressions investors can use?

    The most common types of regression an investor can use are linear regressions and multiple linear regressions. Regressions ... Read Full Answer >>
  6. What types of assets lower portfolio variance?

    Assets that have a negative correlation with each other reduce portfolio variance. Variance is one measure of the volatility ... Read Full Answer >>

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