CFA® Level I Quantitative Methods
Study Tips
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Presented by: Arif Irfanullah
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Quantitative Methods – Study Tips
8 readings, 12% of the exam, important and should be covered early in your study schedule
Reading
The Time Value of Money Two of the most important
readings in the curriculum.
Discounted Cash Flow Applications
Basic
Concepts Statistical Concepts and Market Returns Statistics
Probability Concepts This might take a while if you’ve
not studied statistics before.
Common Probability Distributions Important for subsequent levels
Sampling and Estimation and finance-related work.
Application Hypothesis Testing
Technical Analysis Technical Analysis
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Curriculum Examples and Practices Problems
• In general I make my students do the curriculum examples and practice problems,
but with Quantitative Methods I need to qualify my advice to some extent.
• At times the curriculum examples and practice problems tend to be longer and
more complicated than what you might see on the exam
• Sometimes the question is simple but the solution is presented in a long-winded
manner
• While it is always good to do lots of practice from multiple sources, this is
particularly true for Quant
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Reading-Specific Comments
• Reading 5 – Time Value of Money
– Examples are generally good but the solutions use formulas!
– You must solve these problems using the calculator
– Same holds true for the practice problems
• Reading 6 – Discounted Cash Flow Applications
– Some of the examples are relatively long and complicated
– Make sure you understand the underlying concepts
– Use the calculator
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Reading-Specific Comments
• Reading 7 – Statistical Concepts and Market Returns
– Examples might seem a little complicated; you’ll appreciate them once you’ve
studied other topics
– Practice from other sources; do MCQ-type practice problems in the curriculum
– Not necessary to learn the complicated formulas for skewness and kurtosis;
understand the concepts and learn the terminology
• Reading 8 – Probability Concepts
– Examples might seem a little complicated; you’ll appreciate them once you’ve
studied other topics
– Practice from other sources but do the MCQ-type practice problems in the
curriculum
– Covariance and correlation are presented in a complicated manner
– Bayes’ Formula
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Reading-Specific Comments
• Reading 9 – Common Probability Distributions
– Examples might seem a little complicated; you’ll appreciate them once you’ve
studied other topics
– Practice from other sources; do MCQ-type practice problems in the curriculum
– Don’t worry about the calculus references or the complicated formula for the
normal distribution
• Reading 10 – Sampling and Estimation
– Examples might seem a little complicated; you’ll appreciate them once you’ve
studied other topics
– Practice from other sources but do the MCQ-type practice problems in the
curriculum
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Reading-Specific Comments
• Reading 11 – Hypothesis Testing
– Examples might seem a little complicated; you’ll appreciate them once you’ve
studied other topics
– Practice from other sources; do MCQ-type practice problems in the curriculum
– Complicated formulas
• Reading 12 – Technical Analysis
– New reading
– Examples and practice problems are representative of what you might see on
the exam
– Know your graphs and charts
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Understand the core concepts
Make sure core concepts are well understood
before spending too much time on details
Practice as much as possible
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