6 Steps to Score 70%+ in Quants

November 26, 2012
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exam tips


Dear CFA® Program Level I Candidate, with a month left to your exam date, we hope you are practicing questions and mock test keeping the Commandments and Sins in mind.

So far, we have covered topics that have a combined weightage of 55% including Corporate Finance, Economics, Financial Reporting and Analysis, Fixed Income and Portfolio Management.

In this session, we will share with you the Commandments and Sins of Quantitative Methods.

  1. One of the ways to quickly solve some questions on progressions is to remember the rule: AM > GM > HM

  2. Don't forget that sample mean and population mean and sample standard deviation and population standard deviation have different formulas (denominator: sample uses n-1 vs. n of population). In the exam if sample standard deviation is given, it can be used directly to approximate the population standard deviation, there is no need to do extra calculations.

  3. Whenever 'risk' or 'volatility' is mentioned in a question to be 6% it stands for "standard deviation" of the returns and not the Variance.

  4. Please do not make a mistake between Covariance and Correlation. Cov (A, B) should be replaced with Corr (A,B)*σA*σB wherever required. Please note that the formula for standard deviation of a portfolio is given below which has Covariance which can be later converted to Correlation.Quantitative Methods

  5. Whenever you get a problem on normal distribution, draw a rough sketch of it in your paper and shade the relevant area. It will ensure that you will not get it wrong. Do not try to do mental calculations for such problems.

  6. A trick to remember the formula for the Safety First Ratio. It is similar to Sharpe ratio, just that it measures excess returns over a threshold return

We hope that the above points were useful for your preparation. We will send you such useful information before the exam. If you want to know about a particular topic please write to us at help@edupristine.com.

You can buy some recordings for the topic of your choice on our course page

If you want to see what questions others are asking then please visit our forum .

Please feel free to write to us for any help regarding your CFA® exams.


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