CFA Level I - Quantitative Methods Practice
Questions
Mastering CFA Quantitative Methods Essential
Questions to Build Your Professional Reputation
1. What type of data is best represented by bar charts or pie charts? Answer:
Categorical (nominal or ordinal) data.
2. What is the difference between a parameter and a statistic? Answer: A
parameter describes a characteristic of a population, while a statistic describes a
characteristic of a sample.
3. Calculate the arithmetic mean of the following dataset: 7, 12, 9, 15, 11.
Answer: (7 + 12 + 9 + 15 + 11) / 5 = = 10.8
4. What is the median of the following dataset: 3, 8, 5, 10, 2, 9, 6? Answer: First,
order the data: 2, 3, 5, 6, 8, 9, 10. The median is the middle value, which is 6.
5. Define mode in a dataset. Answer: The mode is the value that appears most
frequently in a dataset.
, 6. Which measure of central tendency is most affected by outliers? Answer: The
arithmetic mean.
7. Calculate the range of the following dataset: 25, 15, 30, 20, 40. Answer: Range
= Maximum value - Minimum value = 40 - 15 = 25.
8. What is the formula for population variance? Answer: σ2=N∑i=1N(Xi−μ)2,
where N is the population size, Xi are the individual observations, and μ is the
population mean.
9. What is the formula for sample standard deviation? Answer: s=n−1∑i=1n(Xi
−Xˉ)2, where n is the sample size, Xi are the individual observations, and Xˉ is the
sample mean.
10. Explain the concept of Chebyshev's inequality. Answer: Chebyshev's
inequality states that for any distribution, regardless of its shape, at least 1−(1/k2)
of the observations will lie within k standard deviations of the mean (for k>1).
11. What are the key characteristics of a normal distribution? Answer: Bell-
shaped, symmetrical around the mean, mean = median = mode, and its spread is
defined by the standard deviation.
12. Approximately what percentage of observations fall within one standard
deviation of the mean in a normal distribution? Answer: Approximately 68%.
Questions
Mastering CFA Quantitative Methods Essential
Questions to Build Your Professional Reputation
1. What type of data is best represented by bar charts or pie charts? Answer:
Categorical (nominal or ordinal) data.
2. What is the difference between a parameter and a statistic? Answer: A
parameter describes a characteristic of a population, while a statistic describes a
characteristic of a sample.
3. Calculate the arithmetic mean of the following dataset: 7, 12, 9, 15, 11.
Answer: (7 + 12 + 9 + 15 + 11) / 5 = = 10.8
4. What is the median of the following dataset: 3, 8, 5, 10, 2, 9, 6? Answer: First,
order the data: 2, 3, 5, 6, 8, 9, 10. The median is the middle value, which is 6.
5. Define mode in a dataset. Answer: The mode is the value that appears most
frequently in a dataset.
, 6. Which measure of central tendency is most affected by outliers? Answer: The
arithmetic mean.
7. Calculate the range of the following dataset: 25, 15, 30, 20, 40. Answer: Range
= Maximum value - Minimum value = 40 - 15 = 25.
8. What is the formula for population variance? Answer: σ2=N∑i=1N(Xi−μ)2,
where N is the population size, Xi are the individual observations, and μ is the
population mean.
9. What is the formula for sample standard deviation? Answer: s=n−1∑i=1n(Xi
−Xˉ)2, where n is the sample size, Xi are the individual observations, and Xˉ is the
sample mean.
10. Explain the concept of Chebyshev's inequality. Answer: Chebyshev's
inequality states that for any distribution, regardless of its shape, at least 1−(1/k2)
of the observations will lie within k standard deviations of the mean (for k>1).
11. What are the key characteristics of a normal distribution? Answer: Bell-
shaped, symmetrical around the mean, mean = median = mode, and its spread is
defined by the standard deviation.
12. Approximately what percentage of observations fall within one standard
deviation of the mean in a normal distribution? Answer: Approximately 68%.
