Quantitative Methods

CFA Level I — Exam Weight: 6-9%

Modules

Concepts

Formulas

Quiz Questions

Modules in Quantitative Methods

11 learning modules covering 6-9% of the CFA Level I exam.

Key Formulas

14 essential formulas for Quantitative Methods.

Future Value

FV = PV × (1 + r)ⁿ

Single lump sum compounding

Present Value

PV = FV / (1 + r)ⁿ

Discounting future cash flows

Annuity PV

PV = PMT × [1 - (1+r)^-n] / r

Equal periodic payments

Effective Annual Rate

EAR = (1 + r/m)^m - 1

m = compounding periods per year

Holding Period Return

HPR = (P₁ - P₀ + D) / P₀

Total return including income

Population Variance

σ² = Σ(Xᵢ - μ)² / N

Divide by N for population

Sample Variance

s² = Σ(Xᵢ - X̄)² / (n-1)

Divide by n-1 for sample (Bessel's correction)

Coefficient of Variation

CV = σ / μ

Risk per unit of return

Sharpe Ratio

Sharpe = (R̄ₚ - Rᶠ) / σₚ

Excess return per unit of total risk

Bayes' Formula

P(A|B) = P(B|A) × P(A) / P(B)

Updating probabilities with new info

Correlation

ρ = Cov(X,Y) / (σₓ × σᵧ)

Standardized covariance, -1 to +1

Linear Regression

Y = b₀ + b₁X + ε

b₁ = Cov(X,Y)/Var(X)

Confidence Interval

X̄ ± z(α/2) × (σ/√n)

z = 1.96 for 95% CI

Test Statistic

t = (X̄ - μ₀) / (s/√n)

Compare to critical value

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Quantitative Methods

Modules in Quantitative Methods

Rates and Returns

Time Value of Money in Finance

Statistical Measures of Asset Returns

Probability Trees and Conditional Expectations

Portfolio Mathematics

Simulation Methods

Estimation and Inference

Hypothesis Testing

Parametric and Non-Parametric Tests of Independence

Simple Linear Regression

Introduction to Big Data Techniques