What is a 'PTest'
A statistical method used to test one or more hypotheses within a population or a proportion within a population. When testing a hypothesis about a population proportion (p) within a large population (one in which the sample size, "n", is not greater than 5% of the overall population), the formula is:
x = (m/nP) / SqRt[P(1P)/n]
m= "yes" response
n = random sample size
p = proportion
P = population
This formula is used to test three hypotheses:
 p ≤ P
 p ≥ P
 p = P
The ptest statistic typically follows a standard normal distribution when large sample sizes are used, and researchers use Ztests to determine whether a hypothesis passes based on a specific significance level will be rejected. The larger the pvalue in the ptest, the more likely the hypothesis is true.
BREAKING DOWN 'PTest'
For example, a polling group contacted a group of investors and asked if they felt that the economy would fall into a recession. Of the 1000 people contacted, 700 said that they thought that the economy was heading toward recession. The researchers then applied the PTest to determine if p ≤ 0.60, p ≥ 0.60, or p = 0.60; basically, what percentage of the population believe that the economy will fall into a recession.

Population
Population is the entire pool from which a statistical sample ... 
Sample
A sample is a smaller, manageable version of a larger group. ... 
Hypothesis Testing
A process by which an analyst tests a statistical hypothesis. ... 
Sampling Distribution
A sampling distribution is a probability distribution of a statistic ... 
Alpha Risk
Alpha risk is the risk in a statistical test of rejecting a null ... 
Systematic Sampling
Systematic sampling is a probability sampling method in which ...

Investing
Computing Historical Volatility in Excel
We examine how annualized historical volatility is computed from daily log returns, variance and standard deviation. 
Insights
4 Global Economic Issues of an Aging Population
Discover why dramatic increases in life expectancy is creating significant socioeconomic challenges for many advanced industrialized nations. 
Investing
Traders Are Feeling Bullish on Pandora
Pandora fell another 3% today, but traders are betting that the shares will rise over the next few days. 
Trading
Pandora Earnings Unlikely to End Long Downtrend
Pandora stock is trading below a massive October gap after a mixed quarter, failing to attract the needed buying interest. 
Financial Advisor
Buffett's Annual Shareholder Letter, 2016 Edition
In his annual letter to shareholders, Berkshire Hathway chairman Warren Buffett touched upon a broad array of themes, including BNSF and climate change. 
Investing
Pandora Media: The Stampede Is Back With Vengeance
Pandora Media stock is dropping after a brief rally. 
Investing
Pandora Media: The Herd is Becoming a Stampede
Shares of Pandora Media are falling by 5% again. Will this company ever be fairly valued? 
Investing
Style Matters In Financial Modeling
If you're looking to get a job as an analyst, you'll need to know how to work it. 
Investing
Pandora Stock Surges On Q1 Earnings Beat (P)
Raising its fullyear outlook indicates some level of confidence, but it should be taken with the fact that it's shares have plummeted 46% over the past year.

How can I calculate convexity in Excel?
Learn how to approximate the effective convexity of a bond using Microsoft Excel using a modified and simpler version of ... Read Answer >> 
What is the difference between systematic sampling and cluster sampling?
Learn about the differences between systematic sampling and cluster sampling, including how the samples are created for each ... Read Answer >> 
What percentage of the population do you need in a representative sample?
Learn about representative samples and how they are used in conjunction with other strategies to create useful data with ... Read Answer >> 
What is the difference between a simple random sample and a stratified random sample?
Learn about the differences between simple random sampling and stratified random sampling, and the advantages of each method. Read Answer >> 
What are the advantages and disadvantages of using systematic sampling?
Learn about the primary advantages and disadvantages of using a systematic sampling method when conducting research of a ... Read Answer >> 
What Are Stratified Random Sampling's Pros & Cons?
Stratified random sampling provides a more accurate sampling of a population, but can be disadvantageous when researchers ... Read Answer >>