this is nominal and NOT ordinal since there is no ordering as bostonkev says…just three broad categories…thus nominal
nominal the example from the curriculum: small-cap value fund , large-cap value fund etc. “The nominal scale categorizes the funds according to their style but doesn’t rank them”. Neither option among buy/sell/hold is better or worse than the others --> it’s not ordinal exhaling…
gogiants Wrote: ------------------------------------------------------- > nominal > the example from the curriculum: small-cap value > fund , large-cap value fund etc. > “The nominal scale categorizes the funds according > to their style but doesn’t rank them”. Neither > option among buy/sell/hold is better or worse than > the others --> it’s not ordinal > > exhaling… Schweser puts ranks, saying a fund ranked 1 is better than a fund ranked 2, in that case, it’s definitely Ordinal!
ryanwtyler Wrote: ------------------------------------------------------- > i chose ordinal but im thinking its nominal > because buy isnt “better” than hold. its just > different my reasoning as well
ryanwtyler Wrote: ------------------------------------------------------- > i chose ordinal but im thinking its nominal > because buy isnt “better” than hold. its just > different So you’re telling me that a stock ranked 3/sell is possibly better than a 1/buy??? That doesn’t make any sense. Based on the readings, Nominal is random and is the weakest form… Ordinal means order with respect to rank. Buy/sell/hold are “considered” rank…
yes. thats what i’m telling you. For a short strategy a “sell” is better. for a market neutral strategy, there is no order. the “buy, hold, sell” is only ordinal in very specific situations.
But the buy/hold/sell still has ORDER, it’s not random, as being NOMINAL would suggest…
I picked ordinal based on the order factor. Hope I’m right.
how about small cap, mid cap and large cap stocks ? what is the scale there ?
Yeah, well, measurement characteristics of data may not be so clear as ryan points out. If you are looking at analyst’s recommendations on a stock, I would say “buy/sell/hold” is ordinal. On the other hand, most of the data analysis I would do with it would call it nominal.
Nominal = observations are classified/counted with NO particular order Ordinal = all observations are placed into separate categories and the categories are placed in order with respect to some characteristic. Small-, mid-, and large-cap are categories, not random.
I dunno, I think small-, mid-, large- are ordinal. In particular, I can put ratio scale cut-offs on those categories and once you can out ratio scale cut-offs you pretty much have at least ordinal data. The answer to the question is surely ordinal, because if they wanted the answer to be nominal they would have put something less ambiguously nominal.
Obviously Nominal, Buy - Hold - Sell Buy - Sell - Hold Hold - Buy - Sell Hold - Sell - Buy Sell - Buy - Hold Sell - Hold - Buy What makes one better than the other? If it were Top, Mid, Bottom, or Small Mid Large, then maybe ordinal. Their all the same. Nominal all the way…
feipar Wrote: ------------------------------------------------------- > Obviously Nominal, > > Buy - Hold - Sell > > Buy - Sell - Hold > > Hold - Buy - Sell > > Hold - Sell - Buy > > Sell - Buy - Hold > > Sell - Hold - Buy > > What makes one better than the other? > > If it were Top, Mid, Bottom, or Small Mid Large, > then maybe ordinal. > > Their all the same. > > Nominal all the way… Here’s the definitions, how can ^^^^^ be nominal??? Nominal = observations are classified/counted with NO particular order. Ordinal = all observations are placed into separate categories and the categories are placed in order with respect to some characteristic. A buy is a specific category, it’s not random, etc.
Ok, 1 wrong so far, bite me.
soxboys21 Wrote: ------------------------------------------------------- > But the buy/hold/sell still has ORDER, it’s not > random, as being NOMINAL would suggest… like i said in previous post, it only has order in specific situations. i would think it would have to be unambiguously ordinal to be ordinal
why is small cap, mid cap and large cap not interval based since small cap is <2 Bil, Mid is 2-10 bil and large cap is >10 bil ?
I’ll clear it up for you. It’s Nominal. NOIR order from weakest to strongest. No order inthese, just three different rec’s.
Scales of Measurement Data comes in various sizes and shapes and it is important to know about these so that the proper analysis can be used on the data. There are usually 4 scales of measurement that must be considered: 1. Nominal Data * classification data, e.g. m/f * no ordering, e.g. it makes no sense to state that M > F * arbitrary labels, e.g., m/f, 0/1, etc 2. Ordinal Data * ordered but differences between values are not important * e.g., political parties on left to right spectrum given labels 0, 1, 2 * e.g., Likert scales, rank on a scale of 1…5 your degree of satisfaction * e.g., restaurant ratings 3. Interval Data * ordered, constant scale, but no natural zero * differences make sense, but ratios do not (e.g., 30°-20°=20°-10°, but 20°/10° is not twice as hot! * e.g., temperature (C,F), dates 4. Ratio Data * ordered, constant scale, natural zero * e.g., height, weight, age, length
NOMINAL DATA AND NOMINAL SCALES As implied by the title, this type of data has been given names or labels (nominal, from the french ÒnomÓ = name). Nominal data can be counted, but no superiority or preference can be implied from the numerical value of the labels, and no arithmetic manipulations can be performed on the labels themselves. The convention within the United States is to designate highways that lead generally in a north-south direction with odd numbers, and those that lead generally east-west with even numbers. This labeling convention is useful for quickly recognizing the general direction of a numbered highway and for easily counting the number of north-south highways going through a state by quickly counting the number of odd numbered routes. This is clearly nominal data. The data (number of north-south highways) can be counted, but no superiority is implied by the numerical designations (route 95 is not better than route 5 nor worse than 101), and no arithmetic can be performed with the labels (route 101 plus route 5 does not equal route 106). Nominal data has no scale in the conventional sense that a higher number is superior to a smaller number. In developing a technology investment strategy to combat the supply of illegal drugs, an analyst decomposed the process into hierarchical schema. The illegal drug problem results from the production, wholesale, retail distribution, and resulting generation of capital. The production process further decomposes into growing, harvesting, and processing. Wholesaling depends on transportation (from the producing country to the United States) and entry into the United States. The act of retailing depends on distribution of the drugs to the street vendors and the actual sale to users. The capital generated can be banked, laundered, or reinvested to continue the drug cycle. This hierarchical decomposition is shown in Figure 1. Figure 1. Hierarchical Decomposition of Drug Supply