In the last post we learnt about the steps followed in hypothesis testing and one tailed and two tailed tests. Today we will learn about type I error and type II error and what they represent. So read on to find out what they are… The test statistic is calculated as the difference between the… Read More

## One tailed test & Two tailed test : Hypothesis Testing – CFA Level 1

In the last two posts we read about sampling and learnt about the various sampling types and sampling distributions. Today we start a new topic – hypothesis testing wherein we will learn about the steps followed in hypothesis testing, one tailed test and two tailed test. In the next part we will look into type I and… Read More

## Student’s t-distribution – CFA Level 1 – Quantitative Methods

In the last post we saw the methods of sampling. In this post we will see sampling distributions. Student’s t-distribution: Student’s t-distribution is a distribution that is symmetrical about the mean and has fatter tails than a normal distribution i.e., it has more observations in the tail. T-distribution is more appropriate to use when the… Read More

## Sampling and Estimation – CFA Level 1 – Quantitative Methods

In the previous post we discussed types of normal distribution. Today we will discuss sampling types and how samples are selected from the data for conversion into formats in which they can be analyzed and conclusions about the data can be drawn from them. In the real world it is thought easier to work with… Read More

## Common Probability Distribution (Part 2) – CFA Level 1 – Quantitative Methods

In the last two posts we read about covariance and correlation and the different types of random variables. In this post we will move forward to discussing the types of probability distribution wherein we will see the various types of normal distribution. Cumulative Distribution Function Cumulative Distribution function is the sum of the probabilities of… Read More

## Common Probability Distributions – CFA Level 1 – Quantitative Methods

In the previous post we covered covariance and correlation. In this post we will look at discrete and continuous random variables. Probability Distribution A probability distribution is a graphical presentation of the probabilities of all possible outcomes of a random variable X. The probabilities of all possible outcomes should sum to 1. Eg. For a… Read More

## Probability concepts (part 2) – CFA Level 1 – Quantitative Methods

Since the last post we started a seires of posts covering probability concepts. In the post we covered conditional and unconditional probabilities. In this post today we take the probability concepts series forward and look into covariance and correlation and the math of permutations and combinations. Covariance and Correlation: Covariance is a measure of quantitative… Read More

## Probability Concepts (Part 1) – CFA level 1 – Quantitative Methods

In the previous posts we have touched upon the concepts of time value of money, NPV and IRR decison rules and basic statistical concepts. From this post we start a series of posts covering probability math and probability distribution. So let’s get started. Probability concepts relates to the chance of an event occurring. An event… Read More

## Basic Statistical Concepts – CFA Level 1

CFA Level 1 Quantitative Methods Statistical Concepts and Market Returns Hi, in the last two posts we covered the time value of money concept and NPV and IRR decision rules. Today we will look into some basic statistical concepts to help you onward in the subject…. Statistics : What is it ? Statistics refer to… Read More

## NPV vs IRR decision rule : Discounted Cash Flow Applications – CFA Level 1

CFA Level 1 Quantitative Methods Discounted Cash Flow Applications In the last post we read about the time value of money concept. In this post we take the concept forward to learn how cash flows discounted over time to the present value are used to reach decisions about viability of projects through the NPV and… Read More

## Time Value of Money: TVM – CFA Level 1 – Quantitative methods

Time Value of Money (TVM) Time value of money (TVM) definition relates to the value of money in time. How much will a rupee owned today be worth 1 year from now, i.e. If Rs 100 affords me to purchase say X amount of goods today, how many goods will I be able to purchase… Read More