CFA Quantitative Methods study session presents the fundamentals of some quantitative techniques essential in financial analysis. These techniques are used throughout the CFA Program curriculum. This session introduces two main tools of quantitative analysis: the time value of money and probability and descriptive statistics. For more information on this video, and to sign-up for our 10-day Free CFA Course click here - http://www.edupristine.com/10-day-cfa/cfa-quantitative-methods/ To know more about these trainings, do contact us at -M: +91 80800 05533

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Quantitative Analysis
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2. Measurement Scales
Nominal: Ordinal :
– Only classifies according to
– Ranks them according to some
types and does not say which
one is better or worse scale.
– Classification of different types
– For example: Bond Ratings like
of hedge funds based on
hedging strategy comes under AAA, AA rank the bonds in their
Nominal Scale.
order of creditworthiness
Interval :
– It classifies elements in an
Ratio :
interval and tells us by how much
– This is the strongest level of
is something more or less than
measurement.
another thing.
– Absolute Zero is defined.
– The Celsius temperature scale is
Having zero money is having
the best example.
nothing.
– Absolute Zero point is not
– For. e.g. length, returns on
defined. Zero temperature does
stocks
not mean absence of
temperature
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3. Concept Checker
Fill in the table with the corresponding scales
Parameter Type of Scale
Your Names: Mark, Alex, Brandon, Dennis
Weight of CFA Level-I candidates
Average Temperature of Chicago in January
Interest Rates on Corporate Bonds
Heavy Trucks, Medium Trucks, and Light
Trucks
Height of office buildings in Manhattan area
Average Speed of Sports Utility Vehicles
(SUVs)
3
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4. Answer
Fill in the table with the corresponding scales
Parameter Type of Scale
Your Names: Mark, Alex, Brandon, Dennis Nominal
Weight of CFA Level-I candidates Ratio
Average Temperature of Chicago in January Interval
Interest Rates on Corporate Bonds Ratio
Heavy Trucks, Medium Trucks, and Light Ordinal
Trucks
Height of office buildings in Manhattan area Ratio
Average Speed of Sports Utility Vehicles Ratio
(SUVs)
4
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