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CFA Level 1 Questions With Complete Solutions Latest Update
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CFA Level 1 Questions With Complete Solutions Latest Update
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CFA Level 1 Questions With CompleteSolutions Latest Update
What are the 4 types of measurement scales? - correct answers 1. Nominal Scales
2. Ordinal Scales (Assigned to a category)
3. Interval Scales (Relative ranking)
4. Ratio Scales (Equal differences between scale values)
NOIR
When do we use geometric and arithmetic means to analyze investment returns?
- correct answers Arithmetic Mean: To estimate next year's return
Geometric Mean: Measure of past performance
What are the 3 different types of probabilities? - correct answers 1. Empirical
Probability (Past data)
2. Priori Probability (Formal reasoning)
3. Subjective Probability (Use of personal judgement)
What is the difference between time-series data and cross-sectional data? -
correct answers Time-Series: Data taken over a period of time
Cross-Sectional: Data taken at a single point in time
What are the 3 desirable properties of an estimator? - correct answers 1.
Unbiased (Expected value of estimator is equal to the parameter)
2. Efficient (Variance of its sampling distribution is small)
, 3. Consistent (Accuracy of parameter estimate increases as sample size increases)
What are the steps of Hypothesis Testing? - correct answers 1. State the
hypothesis
2. Select the appropriate test statistic
3. Specify the level of significance
4. State the decision rule regarding the hypothesis
5. Collect the sample and calculate the sample statistics
6. Make a decision regarding the hypothesis
7. Make a decision based on the results of the test
What is a Type 1 and Type 2 Error? - correct answers Type I: Rejection of null when
it is actually true
Type II: Failure to reject null when it is actually false
What are the 3 reasons why statistical significance does not imply economic
significance? - correct answers 1. Transaction Costs
2. Taxes
3. Risk
What is the key assumption of technical analysis? - correct answers Market prices
reflect both rational and irrational investor behavior
What are the 4 different types of Oscillators? - correct answers 1. Rate of Change
Oscillator (100x the difference between the latest closing price and the closing
price n periods earlier)
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