Second Derivative
Pries Capital Macroeconomic Framework • 1m 10s
Pries Capital’s Second Derivative
Points of discussion:
• In broadest terms, it tells you “How quickly the change is changing.”
• The second derivative of the equation will give you the acceleration of the object, that is, the rate of change of speed with respect to time.
• The derivative does explain the instantaneous rate of change, but further derivatives can tell the acceleration amongst other things.
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Third Derivative
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• The third derivative, or higher derivatives for that matter, are generally used to “improve the accuracy of an approximation to the function.”
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Sharpe Ratio
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