CFA® glossary: K

4 terms beginning with K.

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K-means

An unsupervised method splitting observations into a chosen number, k, of clusters by repeatedly assigning each to its nearest centroid and recomputing the centroids.

Key rate duration

Sensitivity to a change in one maturity on the curve, holding the rest still. It shows where the exposure sits, which a single duration figure hides. Where it appears →

Knowledge of the law

Standard I(A): understand and comply with all applicable laws, rules and regulations, follow the stricter of the law and the Code and Standards, and never knowingly take part in a violation. Where it appears →

Kurtosis

A measure of how much weight sits in a distribution's tails compared with the normal. Excess kurtosis above zero means fat tails: extreme outcomes more common than a normal distribution implies. Where it appears →