Bocconi Graduate Test key terms

A unit for comparing two percentages: the arithmetic difference between them. A change from 20% to 25% is five percentage points but a 25% relative increase.

The difference between a new and an old value divided by the old value, expressed as a percent. Always divide by the starting value, not the final one.

The denominator or reference value from which a percentage is calculated. Confusing the base with the compared value is a common source of error in data questions.

A value rescaled so that a chosen reference period equals 100. It allows comparison of series measured in different units or of growth across time.

An average in which each value is multiplied by a weight reflecting its relative importance, then divided by the sum of the weights. Used for combined group means.

The sum of all values divided by how many values there are. Sensitive to extreme values, unlike the median.

The middle value of a data set ordered from smallest to largest; with an even count, the average of the two central values. Resistant to outliers.

The difference between the largest and smallest values in a data set. A crude measure of spread that depends on only two observations.

A measure of how far values typically lie from their mean, equal to the square root of the variance. Larger values indicate more dispersed data.

The average of the squared deviations of values from their mean. Squaring makes it sensitive to outliers and gives units that are squared.

A comparison of two quantities by division, written as a fraction or with a colon. It expresses relative size, not absolute size.

A statement that two ratios are equal, or a part expressed as a fraction of the whole. Enables solving for an unknown quantity by cross-multiplication.

A ratio that compares quantities with different units, such as kilometres per hour or cost per item. Units must be handled consistently when rates are combined.

Total distance divided by total time for a journey, not the mean of the separate speeds. Equal-distance legs at different speeds require harmonic averaging.

Growth applied repeatedly to an already increased amount, so the base expands each period. Modelled by multiplying by (1 + r) once per period.

Interest computed only on the original principal, never on accumulated interest. Grows linearly: principal times rate times time.

Growth in which a quantity is multiplied by a constant factor in each equal time step, producing a rapidly steepening curve rather than a straight line.

A list of numbers in which each term after the first is obtained by adding a fixed constant. The nth term equals the first term plus (n-1) times the difference.

A list of numbers in which each term after the first is obtained by multiplying by a fixed ratio. The nth term equals the first term times the ratio to the power n-1.

The total obtained by adding the terms of a sequence. For an arithmetic sequence, the count times the average of the first and last terms.

A number between 0 and 1 expressing how likely an event is, computed as favourable outcomes divided by all equally likely outcomes.

Two events whose joint probability equals the product of their separate probabilities, because the occurrence of one gives no information about the other.

The probability that an event occurs given that another event is known to have occurred, equal to the joint probability divided by the probability of the condition.

An arrangement of items in which order matters. The number of orderings of n distinct items is n factorial; choosing r of n ordered gives n! divided by (n-r)!.

A selection of items in which order does not matter. Choosing r items from n distinct items gives n! divided by r!(n-r)!.

The product of all positive integers up to a given whole number, written with an exclamation mark. By convention the factorial of zero equals one.

A circumstance that must hold for an outcome to occur, though it may not be enough on its own. Formally, if the outcome holds then the condition holds.

A circumstance whose presence guarantees the outcome, though the outcome might also arise otherwise. Formally, if the condition holds then the outcome holds.

The logically equivalent form of a conditional statement obtained by negating and swapping its parts: from 'if A then B' follows 'if not B then not A'.

The invalid inference that, because 'if A then B' is true, 'if B then A' must also be true. Confusing a sufficient condition with a necessary one.

A deductive argument with two premises sharing a middle term and a conclusion linking the remaining terms. Validity depends on form, not on the truth of the premises.

A word such as all, some, none, or most that specifies how many members of a class a statement covers. Its scope determines which inferences are legitimate.

The property of an argument whose conclusion must be true whenever its premises are true. A valid argument can still have false premises and a false conclusion.

An unstated premise that an argument relies on to reach its conclusion. Spotting a required assumption is central to evaluating or strengthening reasoning.

To show that the conclusion does not follow from the stated evidence, typically by offering an alternative explanation or a case where the evidence holds but the conclusion fails.

The distinction between two variables moving together and one actually producing the other. A hidden third factor or reverse direction can explain a correlation.

A distortion arising when the group studied is not representative of the population the conclusion is about, for example because of self-selection or non-response.

A conclusion that extends a finding from a sample or specific cases to a wider population. Its strength depends on how representative the evidence is.

The claim an argument is trying to establish, as opposed to the supporting statements offered as evidence. Often signalled by words such as therefore or thus.

A conclusion drawn from stated evidence rather than stated outright. Reading questions often ask what can be reliably inferred, meaning what must be true if the passage is true.

The author's attitude towards the subject, conveyed through word choice and emphasis, such as critical, neutral, cautious, or approving. Distinct from the topic itself.