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This blog is an extension of our blog on CFA Webinar on Fixed Income and Equity.

Round five of the CFA Webinar Question Answer sessions! This will aid your CFA prep in more ways than one. Find below a recording of the discussion on CFA Quants.

The answers to the questions are given right here as well.

Find here a brief summary of some of the most important points of CFA Quants:

#CFA Webinar

What is the difference between Z- score and Z-test statistic? I came across a z-score formula: x-u/std deviation z test statistic: x-u/std error.”

Answer 1:

“Z score – It tells us whether a particular score is equal to the mean or below the mean or above the mean. It also tells us how the particular score is away from the mean.

Z test – This is used to comparing the means of two population whether you know sample standard deviation or not but its size must be greater than 30.

If we have n assets and we have to calculate the variance of portfolio,
how do we go about it? Since we have a lesser number of equations, the summation of weight = 1.

Answer 2:

“Sure, it will if you are providing the weights to the assets in proportion to 1. And For finding out the variance of portfolio, you always need to follow this one E(R) = w1R1 + w2Rq + …+ wnRn……. “

The Bayes Formula is very confusing. Will the tree diagram work for all types of problems?”

Answer 3:

“Yes. To solve the Baye’s Theorem you can make a tree diagram to make it easy. “

When do we use p-value in hypothesis testing?”

Answer 4:

“P value is a way to reject or accept hypotheses. This is of smallest level significance.”

Please tell me about Sample Error, Standard Error.

Answer 5:

“Sample Error – It is just the difference between sample statistic and population statistics. For example Sample variance – Population variance.

Standard Error – Through Standard Error, we can estimate how much Sample Means will vary from the Standard Deviation of this sampling distribution, which we call the Standard Error (SE) of the estimate of the mean.”

There will be subsequent blogs on more questions and discussions that will take place on the following days. So stay tuned for more!

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