systematics

Examples of systematics in the following topics:

• Bias

  • All measurements are prone to systematic errors, often of several different types.
  • Accuracy (or validity) is a measure of the systematic error.
  • If an experiment is accurate or valid, then the systematic error is very small.
  • In this case, there is more systematic error than random error.
  • In this case, there is more random error than systematic error.

• Summary

  • Matrices and graphs are compact and systematic: They summarize and present a lot of information quickly and easily; and they force us to be systematic and complete in describing patterns of social relations.
  • Matrices and graphs allow us to apply computers to analyzing data: This is helpful because doing systematic analysis of social network data can be extremely tedious if the number of actors or number of types of relationships among the actors is large.

• The Capital Asset Pricing Model

  • It determines what the rate of return of an asset will be, assuming it is to be added to an already well-diversified portfolio, given that asset's systematic risk.
  • Systematic risk - also called market risk or non-diversifiable risk - represents the risk present in a security in relation to the economy as a whole.
  • CAPM states that in market equilibrium, investors are only rewarded for bearing systematic risk - the type of risk that cannot be diversified away.
  • However, it is impossible to remove systematic risk, as it concerns the economy in general.

• The Relationship Between Risk and Return and the Security Market Line

  • Investment assets are typically characterized as having two performance risks: systematic (or market risk) and non-systematic risk.
  • Systematic risk arises from market structure or dynamics, which produce shocks or uncertainty faced by all agents in the market.
  • Non-systematic risk is unique to a specific company and can be reduced through diversification.
  • In finance, the capital asset pricing model (CAPM) is used to determine the required rate of return of an asset, taking into account an asset's sensitivity to non-diversifiable or systematic risk.
  • For individual securities, the security market line (SML) and its relation to expected return and systematic risk (beta) depicts an individual security in relation to their security risk class .

• Lab 2: Sampling Experiment

  • The student will demonstrate the simple random, systematic, stratified, and cluster sampling techniques.

• Impact of Measurement Error

  • Measurement error leads to systematic errors in replenishment and inaccurate financial statements.
  • The two main types of error are random errors and systematic errors.
  • In sum, systematic measurement error can lead to errors in replenishment.

• The Sociological Approach

  • The sociological approach goes beyond everyday common sense by using systematic methods of empirical observation and theorization.
  • Many people believe they understand the world and the events taking place within it, often justifying their understandings by calling it "common sense. " However, they have not actually engaged in a systematic attempt to understand the social world.
  • Thus, to obtain sociological knowledge, sociologists must study their world methodically and systematically.

• Efficiency

  • One reason for using mathematical and graphical techniques in social network analysis is to represent the descriptions of networks compactly and systematically.
  • Formal representations ensure that all the necessary information is systematically represented, and provides rules for doing so in ways that are much more efficient than lists.

• Chance Error

  • While conducting measurements in experiments, there are generally two different types of errors: random (or chance) errors and systematic (or biased) errors.
  • To better understand the outcome of experimental data, an estimate of the size of the systematic errors compared to the random errors should be considered.
  • Random errors are due to the precision of the equipment , and systematic errors are due to how well the equipment was used or how well the experiment was controlled .
  • In this case, there is more systematic error than random error.
  • In this case, there is more random error than systematic error.

• Impact of Diversification on Risk and Return: Systematic Risk

  • Systematic risk is intrinsic to the market, and thusly diversification has no effect on its presence in investments.
  • This type of risk cannot be diversified away, and is referred to as systematic risk.