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Astronomy

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Celestial Coordinates
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Celestial Navigation
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Distance Units
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Location of North and South Celestial Poles

Chemistry

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Avogadro's Number
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Balancing Chemical Equations
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Stochiometry
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The Periodic Table

Classical Physics

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Archimedes Principle
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Bernoulli Principle
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Blackbody (Cavity) Radiation and Planck's Hypothesis
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Center of Mass Frame
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Comparison Between Gravitation and Electrostatics
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Compton Effect
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Coriolis Effect
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Cyclotron Resonance
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Dispersion
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Doppler Effect
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Double Slit Experiment
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Elastic and Inelastic Collisions
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Electric Fields
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Error Analysis
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Fick's Law
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Fluid Pressure
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Gauss's Law of Universal Gravity
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Gravity - Force and Acceleration
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Hooke's law
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Ideal and Non-Ideal Gas Laws (van der Waal)
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Impulse Force
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Inclined Plane
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Inertia
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Kepler's Laws
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Kinematics
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Kinetic Theory of Gases
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Kirchoff's Laws
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Laplace's and Poisson's Equations
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Lorentz Force Law
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Maxwell's Equations
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Moments and Torque
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Nuclear Spin
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One Dimensional Wave Equation
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Pascal's Principle
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Phase and Group Velocity
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Planck Radiation Law
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Poiseuille's Law
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Radioactive Decay
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Refractive Index
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Rotational Dynamics
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Simple Harmonic Motion
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Specific Heat, Latent Heat and Calorimetry
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Stefan-Boltzmann Law
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The Gas Laws
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The Laws of Thermodynamics
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The Zeeman Effect
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Wien's Displacement Law
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Young's Modulus

Climate Change

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Keeling Curve

Cosmology

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Penrose Diagrams
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Baryogenesis
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Cosmic Background Radiation and Decoupling
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CPT Symmetries
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Dark Matter
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Friedmann-Robertson-Walker Equations
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Geometries of the Universe
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Hubble's Law
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Inflation Theory
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Introduction to Black Holes
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Olbers' Paradox
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Planck Units
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Stephen Hawking's Last Paper
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Stephen Hawking's PhD Thesis
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The Big Bang Model

Finance and Accounting

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Amortization
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Annuities
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Brownian Model of Financial Markets
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Capital Structure
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Dividend Discount Formula
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Lecture Notes on International Financial Management
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NPV and IRR
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Periodically and Continuously Compounded Interest
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Repurchase versus Dividend Analysis

General Relativity

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Accelerated Reference Frames - Rindler Coordinates
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Catalog of Spacetimes
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Curvature and Parallel Transport
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Dirac Equation in Curved Spacetime
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Einstein's Field Equations
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Geodesics
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Gravitational Time Dilation
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Gravitational Waves
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One-forms
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Quantum Gravity
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Relativistic, Cosmological and Gravitational Redshift
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Ricci Decomposition
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Ricci Flow
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Stress-Energy Tensor
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Stress-Energy-Momentum Tensor
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Tensors
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The Area Metric
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The Equivalence Principal
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The Essential Mathematics of General Relativity
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The Induced Metric
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The Metric Tensor
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Vierbein (Frame) Fields
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World Lines Refresher

Lagrangian and Hamiltonian Mechanics

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Classical Field Theory
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Euler-Lagrange Equation
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Ex: Newtonian, Lagrangian and Hamiltonian Mechanics
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Hamiltonian Formulation
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Liouville's Theorem
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Symmetry and Conservation Laws - Noether's Theorem

Macroeconomics

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Lecture Notes on International Economics
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Lecture Notes on Macroeconomics
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Macroeconomic Policy

Mathematics

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Amplitude, Period and Phase
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Arithmetic and Geometric Sequences and Series
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Asymptotes
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Augmented Matrices and Cramer's Rule
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Basic Group Theory
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Basic Representation Theory
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Binomial Theorem (Pascal's Triangle)
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Building Groups From Other Groups
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Completing the Square
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Complex Numbers
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Composite Functions
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Conformal Transformations
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Conjugate Pair Theorem
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Contravariant and Covariant Components of a Vector
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Derivatives of Inverse Functions
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Double Angle Formulas
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Eigenvectors and Eigenvalues
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Euler Formula for Polyhedrons
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Factoring of a3 +/- b3
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Fourier Series and Transforms
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Fractals
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Gauss's Divergence Theorem
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Grassmann and Clifford Algebras
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Heron's Formula
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Index Notation (Tensors and Matrices)
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Inequalities
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Integration By Parts
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Introduction to Conformal Field Theory
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Inverse of a Function
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Law of Sines and Cosines
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Line Integrals, ∮
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Logarithms and Logarithmic Equations
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Matrices and Determinants
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Matrix Exponential
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Mean Value and Rolle's Theorem
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Modulus Equations
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Orthogonal Curvilinear Coordinates
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Parabolas, Ellipses and Hyperbolas
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Piecewise Functions
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Polar Coordinates
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Polynomial Division
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Quaternions 1
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Quaternions 2
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Regular Polygons
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Related Rates
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Sets, Groups, Modules, Rings and Vector Spaces
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Similar Matrices and Diagonalization
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Spherical Trigonometry
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Stirling's Approximation
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Sum and Differences of Squares and Cubes
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Symbolic Logic
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Symmetric Groups
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Tangent and Normal Line
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Taylor and Maclaurin Series
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The Essential Mathematics of Lie Groups
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The Integers Modulo n Under + and x
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The Limit Definition of the Exponential Function
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Tic-Tac-Toe Factoring
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Trapezoidal Rule
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Unit Vectors
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Vector Calculus
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Volume Integrals

Microeconomics

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Marginal Revenue and Cost

Particle Physics

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Feynman Diagrams and Loops
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Field Dimensions
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Helicity and Chirality
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Klein-Gordon and Dirac Equations
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Regularization and Renormalization
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Scattering - Mandelstam Variables
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Spin 1 Eigenvectors
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The Vacuum Catastrophe

Probability and Statistics

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Box and Whisker Plots
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Categorical Data - Crosstabs
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Chebyshev's Theorem
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Chi Squared Goodness of Fit
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Conditional Probability
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Confidence Intervals
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Data Types
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Expected Value
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Factor Analysis
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Hypothesis Testing
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Linear Regression
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Monte Carlo Methods
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Non Parametric Tests
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One-Way ANOVA
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Pearson Correlation
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Permutations and Combinations
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Pooled Variance and Standard Error
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Probability Distributions
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Probability Rules
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Sample Size Determination
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Sampling Distributions
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Set Theory - Venn Diagrams
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Stacked and Unstacked Data
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Stem Plots, Histograms and Ogives
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Survey Data - Likert Item and Scale
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Tukey's Test
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Two-Way ANOVA

Programming and Computer Science

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Hashing
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How this site works ...
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More Programming Topics
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MVC Architecture
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Open Systems Interconnection (OSI) Standard - TCP/IP Protocol
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Public Key Encryption

Quantum Field Theory

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Creation and Annihilation Operators
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Field Operators for Bosons and Fermions
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Lagrangians in Quantum Field Theory
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Path Integral Formulation
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Relativistic Quantum Field Theory

Quantum Mechanics

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Basic Relationships
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Bell's Theorem
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Bohr Atom
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Clebsch-Gordan Coefficients
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Commutators
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Dyson Series
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Electron Orbital Angular Momentum and Spin
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Entangled States
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Heisenberg Uncertainty Principle
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Ladder Operators
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Multi Electron Wavefunctions
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Pauli Exclusion Principle
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Pauli Spin Matrices
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Photoelectric Effect
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Position and Momentum States
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Probability Current
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Schrodinger Equation for Hydrogen Atom
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Schrodinger Wave Equation
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Schrodinger Wave Equation (continued)
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Spin 1/2 Eigenvectors
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The Differential Operator
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The Essential Mathematics of Quantum Mechanics
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The Observer Effect
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The Qubit
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The Schrodinger, Heisenberg and Dirac Pictures
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The WKB Approximation
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Time Dependent Perturbation Theory
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Time Evolution and Symmetry Operations
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Time Independent Perturbation Theory
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Wavepackets

Semiconductor Reliability

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The Weibull Distribution

Solid State Electronics

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Band Theory of Solids
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Fermi-Dirac Statistics
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Intrinsic and Extrinsic Semiconductors
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The MOSFET
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The P-N Junction

Special Relativity

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4-vectors
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Electromagnetic 4 - Potential
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Energy and Momentum, E = mc2
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Lorentz Invariance
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Lorentz Transform
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Lorentz Transformation of the EM Field
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Newton versus Einstein
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Spinors - Part 1
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Spinors - Part 2
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The Lorentz Group
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Velocity Addition

Statistical Mechanics

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Black Body Radiation
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Entropy and the Partition Function
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The Harmonic Oscillator
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The Ideal Gas

String Theory

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Bosonic Strings
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Extra Dimensions
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Introduction to String Theory
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Kaluza-Klein Compactification of Closed Strings
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Strings in Curved Spacetime
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Toroidal Compactification

Superconductivity

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BCS Theory
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Introduction to Superconductors
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Superconductivity (Lectures 1 - 10)
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Superconductivity (Lectures 11 - 20)

Supersymmetry (SUSY) and Grand Unified Theory (GUT)

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Chiral Superfields
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Generators of a Supergroup
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Grassmann Numbers
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Introduction to Supersymmetry
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The Gauge Hierarchy Problem

test

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test

The Standard Model

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Electroweak Unification (Glashow-Weinberg-Salam)
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Gauge Theories (Yang-Mills)
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Gravitational Force and the Planck Scale
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Introduction to the Standard Model
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Isospin, Hypercharge, Weak Isospin and Weak Hypercharge
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Quantum Flavordynamics and Quantum Chromodynamics
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Special Unitary Groups and the Standard Model - Part 1
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Special Unitary Groups and the Standard Model - Part 2
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Special Unitary Groups and the Standard Model - Part 3
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Standard Model Lagrangian
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The Higgs Mechanism
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The Nature of the Weak Interaction

Topology

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Units, Constants and Useful Formulas

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Constants
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Formulas
Last modified: January 26, 2018

Capital Structure ----------------- Cost of Equity -------------- Equity investors incur an opportunity cost in owning the equity of the company and they therefore demand a rate of return comparable to what they could earn by investing in securities of comparable risk. The cost of equity is the rate of return required to persuade an investor to make a given equity investment. The COE can be determined using the Capital Asset Pricing Model (CAPM). Security Market Line: rE = rRF + β(rM - rRF) Where rRF = Risk free interest rate (for example the YTM for a 10 yr Treasury bond). β = The stock's volatility. rM = The market's expected rate of return. The β quoted is normally the levered β. βL. Levered means debt + equity financing. Unlevered means equity only. To get the unlevered β we can use the HAMADA Equation: βU = βL/{1 + (1 - T)(D/E)} The COE can also be calculated from the Discounted Cash Flow (Dividend Discount Formula) method as: P(0) = Curent stock price D(1) = Next year's dividend G = Projected growth rE = (D(1)/P(0)) + G The DCF and SML should produce similar results. Generally, the average of the two is used. Modigliani and Miller --------------------- Proposition 1: The market value of a firm is determined by its earning power and the risk of its underlying assets, and is independent of the way it chooses to finance its investments or distribute dividends. The basic idea is that, under certain assumptions, it makes no difference whether a firm finances itself with debt or equity. Thus, VL = VU + TD where, D = Value of debt. T = Tax rate. Proposition 2: Relationship between Leveraged and Unleveraged Cost of Equity: rL = rU + (D/E)(rU - rD)(1 - T) where, rL = Leveraged cost of Equity rU = Unleveraged cost of Equity rD = cost of debt (see next section). D/E = Debt to Equity ratio. Therefore, a higher debt-to-equity ratio leads to a higher required return on equity, because of the higher risk involved for equity holders in a company with debt. Both of these propositions hold if the no transaction costs exist, individuals and corporations borrow at the same rates and corporations are taxed at the rate on earnings after interest In reality these situations do not exist. The implication is that the capital structure does matter and tells us where to look in order to optimize the capital structure of a company. Debt Cost of Capital -------------------- The cost of debt capital is the return demanded by investors in the company's debt. It is not uncommon for firms to use yield on their debt as an approximation for their debt cost of capital rD. For example, the expected yield on a 10 year non-callable bond issue might be used to determine cost of debt. Debt provides valuable tax shields. The after-tax cost of debt is: rDT = rD(1 - T) Alternatively, we can calculate rD from the CAPM as rD = rRF + βD(rM - rRF) To get βD we can refer to published tables that show β's by rating and maturity. Weight Average Cost of Capital ------------------------------ The WACC or simply the company's cost of capital is the rate that a company is expected to pay on average to all its security holders to finance its assets. It is dictated by the external market and not by management. The WACC represents the minimum return that a company must earn on an existing asset base to satisfy its creditors, owners, and other providers of capital, or they will invest elsewhere. Companies raise money from a number of sources. Different sources of finance, are expected to generate different returns. The WACC is calculated taking into account the relative weights of each component of the capital structure. WACC(%) = {E/(E + D)}rE + {D/(E + D)}rD(1 - T) where E = Market Cap (market value of equity). D = Market value of outstanding debt. This can be found by multiplying the amount outstanding for each bond issue by the corresponding price. rD from Debt Cost of Capital calculation. rE from Cost of Equity calculation or Modigliani-Miller Equation. T = Corporate tax rate. Corporate Cost of Capital ------------------------- CCC =[WDrD(1 - T) + [WErE] Where: WD = % of Debt WE = % of Equity rD = Cost of debt (%) rE = Cost of equity (%) T = Marginal tax rate (%) Enterprise Value and Net Debt ----------------------------- EV = E + D - Excess cash Net Debt = Debt - Excess cash and short term investments