CFA Level 1 - Quant Focus Area
1. Time value of money – You should be able to solve annuity problems, make sure to draw timelines
2. Holding period return, Effective annual yield, bank discount yield, bond equivalent yield, money market yield – make sure you remember the formula
3. Money weighted, time weighted return
4. Mean absolute deviation, standard deviation
5. Chebysev’s inequality – VERY IMPORTANT & easy
6. Coeffecient of variation, Sharpe ratio, Roy’s safety first rule – make sure you are able to analyse a set of portfolios on these measures
7. Make sure you know the location of mean, median, mode in skewed distribution
8. Know what kurtosis mean and implication in peaked distribution
9. Understand the probability concepts – important ones are joint probability and bayes therorem.. should be able to solve the problems which would come
10. You should solve problems to find out the standard deviation of portfolio where probability of the various return scenario is mentioned
11. You should be able to find the probability for a continuous probability distribution, using the concept of area under the curve
12. Properties of continuous and discrete probability function
13. sampling error and interpretation of sampling error
14. standard error of sample mean
15. properties of estimator (read this -> theoretical but can expect one question)
16. Should be able to construct confidence intervals
17. Remember which distribution to use (Z/T) depending on sample size and distribution (normal/non-normal) with known/unknown variance
18. Understand the process of hypothesis testing -> remember the 7 steps -> can get 1 question here
19. Remember to get alternative and null hypothesis from word problem statement -> one question to be asked here
20. Significance level
21. Type I and type II error -> very important -> especially how to reduce them
22. You would be asked to find the test statistics for Chi test/F test and population mean of normally distributed pop with known and unknown variance-> no formula will be given here -> so remember the formula
23. Formula will be given for the testing equality of the population means of two normally distributed populations equal or unequal variances, and mean difference of two normally distributed populations (paired comparisons test
24. Technical analysis – don’t expect much -> no need of calculation here -> understand the bullish and bearish sentiments, contrarian view.

Knowledge Varisty