Quantitative Methods

The whole Quantitative Methods reading in short lessons: the idea, the formula, one worked example with calculator keys, the exam traps and a quick check.

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  1. 01

    Rates and ReturnsLocked: included in All Access

    8 lessons · ~106 min3 videos 45 cards

    What an interest rate is made of, and every way the curriculum measures a return: holding period, arithmetic, geometric, harmonic, trimmed and winsorized means, money- vs time-weighted, annualised, continuously compounded, and gross, net, after-tax, real and leveraged returns.

  2. 02

    Time Value of Money in FinanceLocked: included in All Access

    8 lessons · ~108 min1 video 45 cards

    How to price bonds, loans and shares as the present value of their cash flows, how to read implied returns and growth rates back out of market prices, and how cash flow additivity and no arbitrage set forward interest rates, forward exchange rates and option values.

  3. 03

    Statistical Measures of Asset ReturnsLocked: included in All Access

    7 lessons · ~96 min2 videos 45 cards

    How to summarise a return series and judge what the summary is worth: where the data are centred and located, how widely they spread, what shape they have, and how two series move together, plus the pitfalls of each measure.

  4. 04

    Probability Trees and Conditional ExpectationsLocked: included in All Access

    5 lessons · ~72 min3 videos 45 cards

    Probability tools for investment decisions under uncertainty: expected value and dispersion of a random outcome, probability trees with conditional expectations, and Bayes' formula for updating a probability when new information arrives.

  5. 05

    Portfolio MathematicsLocked: included in All Access

    7 lessons · ~90 min1 video 45 cards

    How a portfolio's expected return and risk follow from its holdings: weights, covariance and correlation, the covariance matrix, diversification, covariance from a joint probability function, and Roy's safety-first rule for limiting the chance of falling below a minimum return.

  6. 06

    Simulation MethodsLocked: included in All Access

    6 lessons · ~78 min1 video 45 cards

    Why asset prices are modelled as lognormal when continuously compounded returns are normal, how returns and volatility scale with time, and how Monte Carlo simulation and bootstrap resampling generate thousands of scenarios to measure risk and value complex securities.

  7. 07

    Estimation and InferenceLocked: included in All Access

    8 lessons · ~106 min1 video 45 cards

    How to learn about a population from a sample: the five main sampling methods and what they mean for sampling error, why sample size and a single population matter, the central limit theorem and the standard error of the sample mean, confidence intervals for the mean (z vs t), and bootstrap and jackknife resampling.

  8. 08

    Hypothesis TestingLocked: included in All Access

    7 lessons · ~91 min4 videos 45 cards

    How to use a sample to judge a claim about a population: the six-step process, Type I and Type II errors, power, critical values and p-values, tests of one mean, two means (independent and paired) and variances (chi-square and F), and when a nonparametric test is the better choice.

  9. 09

    Parametric and Non-Parametric Tests of IndependenceLocked: included in All Access

    6 lessons · ~78 min2 videos 45 cards

    How to test whether two variables are related: the parametric t-test on a Pearson correlation, the non-parametric Spearman rank correlation when normality is doubtful or the data are ranks, and the chi-square test of independence for categorical data in a contingency table, including how to read standardized residuals.

  10. 10

    Simple Linear RegressionLocked: included in All Access

    8 lessons · ~107 min4 videos 45 cards

    Simple linear regression explains the variation in one variable using one other variable. You learn how least squares fits the line, how to read the coefficients, which assumptions must hold, how to judge the fit with ANOVA, \(R^2\), the F-test and the standard error of the estimate, how to test coefficients, how to build a prediction interval, and how log transformations handle curved relationships.

  11. 11

    Introduction to Big Data TechniquesLocked: included in All Access

    7 lessons · ~86 min 45 cards

    How fintech is changing investment analysis: what makes data 'Big', where alternative data come from and what can go wrong with them, how machine learning learns (and overfits), the main types of ML, how data scientists process and display data, and how text analytics and NLP turn words into investment signals.

Quantitative Methods in short lessons · Academy · CheapMocks