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1 CFA > Quantitative Methods 1 > Flashcards

Quantitative Methods 1 Flashcards

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CFA flashcards
1
Q

Required rate of return/interest rate

A
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2
Q

Future Value

A
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3
Q

Calculating stated (nominal) and effective rates from periodic

A
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4
Q

Computing effective rates from periodic rate

A
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5
Q

Future value formula with more than one compounding period

A
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6
Q

FV/PV based on continuous compounding

A
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7
Q

PV of a perpetuity

A
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8
Q

Annuity Due

A

Payments paid at the beginning of period

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9
Q

Ordinary annuity

A

Cash flows made at the end of each period

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10
Q

Nominal Scale (4th strongest)

A

Data is only categorized

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11
Q

Ordinal Scale (3rd Strongest)

A

Data is categorized and ranked

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12
Q

Interval Scales (2nd Strongest)

A

Data is categorised, ranked, and evenly spaced

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13
Q

Ratio scales (1st Strongest)

A

Strongest level of measurement. Categorized, ranked, evenly spaced, natural zero

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14
Q

Steps to producing frequnecy distribution

A
  1. Sort data into ascending order
  2. Calculate range of data
  3. Decide on number of intervals (k) and interval width (Range/k)
  4. Determine intervals by successively adding width to minimum value
  5. Count number observations falling in each interval
  6. Construct a table showing number of observations falling into each interval
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15
Q

Cumulative frequency

A

Absoluted frequencies added up as we move from first to last interval

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16
Q

Relative frequency

A

Absolute frequency of each interval divided by total number of observations

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17
Q

Cumulative relative frequency

A

Adds up relative frequencies as we move from first to last interval. Fraction of observations that are less than upper limit of each interval

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18
Q

Histogram

A

Graphical presentation of absolute frequency distribution

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19
Q

Frequency Polygon

A

Graph midpoint of each interval on horizontal axis and absolute frequency on vertical; draw a line graph

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20
Q

Geometric mean

A
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21
Q

Mean absolute deviation

A

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22
Q

Variance

A
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23
Q

Standard deviation/Varaince calculator

A
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24
Q

Quartile calculation

A

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25
Q

Harmonic mean (same as money weight)

A
26
Q

Coefficient of variation

A
27
Q

Negatively skewed

A
28
Q

Positively skewed

A
29
Q

Semivariance

A

Measure of dispersion below the mean. Average of squared differences between observations below the mean and mean value. Important as investors are concerned with deviations below the expected value. If symmetrical distribution semivariance = variance

30
Q

Target semivariance

A

Calculated dispersion below a specified target instead of mean

31
Q

Chebyshev’s Inequality

A
32
Q

Coefficient of variation

A
33
Q

1 s.d. coverage

A

68%

34
Q

95% of observations

A

95%

35
Q

99% of observations

A

2.575 s.d.

36
Q

Skewness formula

A
37
Q

Kurtosis charts

A
38
Q

Kurtosis interpretation

A

Only data values that are outside the region of the peak contribute to kurtosis. High values are obtained where the probablility mass is concentrated around the mean.

39
Q

Calculating combinations and permutations

A

Can be done on calculator

40
Q

Variance and S.D. with probablilities

A
41
Q

Calculator probability, expected return, and variance of return

A
42
Q

Covariance

A
43
Q

Correlation

A
44
Q

Binomial distribution

A
45
Q

Standard deviation of a two-stock portfolio

A
46
Q

Coefficient of determination

A
47
Q

Degrees of freedom for F statistic

A

n - 2

48
Q

F Statistic for Linear Regression

A
49
Q

Analysis of Variance Table

A
50
Q

Standard Error of Estimate

A
51
Q

Standard error of slope

A

Where Se is the standard of the estimate

52
Q

One sided test for slope/correlation

A
53
Q

Standard Error of Intercept

A
54
Q

Steps in Testing Intercept

A
55
Q

Standard Error Forecast

A
56
Q

Multinomial Formula

A
57
Q

Contingency/Confusion Matrixes

A

To find expected number

(Total Row i x Total Column j)/Total Overall

58
Q

A priori Probability

A

Probability based on objective proabilities, using deduction and reasoning

Example with a coin flip, using the binomial proability function to calculate find the odds of getting heads 3 times

59
Q

Calculating quartiles/percentiles

A
  1. Think as percentile
  2. Ly = (n. observations + 1)*percentile/100
60
Q

Second method for quartiles (generalised)

A

(n. observations + 1)* (% of population below this)

If it is the 80th percentile, 80% of population below this

LINEAR INTERPOLATION

1 CFA (26 decks)

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