Parametric tests make assumptions that aspects of the data follow some sort of theoretical probability distribution. Non-parametric tests or distribution free methods do not, and are used when the ...

Explain why and when a non-parametric test should be used or may be preferred for simple comparison over a parametric method Explain the general principles and process of performing a non-parametric ...

In statistical inference, or hypothesis testing, the traditional tests are called parametric tests because they depend on the specification of a probability distribution (such as the normal) except ...

Parametric vs. Nonparametric VaR The nonparametric method ... Assuming stock price returns and volatility follow a normal distribution, the maximum loss within the specified confidence level ...

Although nonparametric statistics have the advantage of having to meet few assumptions, they are less powerful than parametric statistics ... follow a normal distribution, the maximum loss ...