Learning Tracks

  • CFA Level I – Study Notes

    The CFA Level I Study Notes cover the entire syllabus spanning the 67 readings suggested by CFA Institute. While developing these notes we have taken great care to ensure that each concept is explained in a simple manner using examples and illustrations.

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  • CFA® Level II Study Notes

    Our study material will be organized as per the 10 broad topic areas and covers the entire syllabus for the CFA Level 2 Exam.

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  • PRM Exam I Study Notes

    Exam I of the PRM certification tests a candidate’s knowledge and understanding of the foundations of finance theory, the financial instruments that provide tools for the mitigation or transfer of risk, and the financial markets in which instruments are traded and capital is raised.

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  • Banking 101

    This short course on banking explains the basic concepts of banking and how the banking system functions.

  • Basics of Options

    This short course on options explains the basic concepts of options, option payoff diagram, and option premium.

  • Information Risk and Data Quality Management

    This course is a part of the Financial Risk Manager (FRM) Part 1 syllabus under the section ‘Foundations of Risk Management’.

  • Quantitative Methods in Finance

    In this course we will learn about the quantitative techniques essential for financial analysis.

Recent Posts

Decision Rule in Hypothesis Testing

A decision rule is the rule based on which the null hypothesis is rejected or not rejected. We first state the hypothesis. Then we determine if it is a one-tailed or a two tailed test. We then specify a significance level, and calculate the test statistic. Now we calculate the critical value. If the test […]

Test Statistic, Type I and type II Errors, and Significance Level

Test Statistic A test statistic is a quantity, calculated based on a sample, whose value is the basis for deciding whether or not to reject the null hypothesis. In our example, the sample statistic is the mean. Therefore, the test statistic will be: Type I and Type II Error When drawing an inference (from a […]

One-tailed and Two-tailed Hypothesis Tests

A hypothesis test can be a one-tailed or a two-tailed test. A one-tailed test means that the hypothesis is one-sided such as the second and third formulation above. The second formulation tests whether the population parameter is less than a certain value (one-sided). The third formulation tests whether the population parameter is greater than a […]

Null and Alternative Hypothesis

When we form a hypothesis to be tested, the hypothesis is called a null hypothesis. The null hypothesis is written as H0. A null hypothesis will be a simple statement about the population parameter. For example, the hypothesis that the mean returns of a mutual fund will be greater than or equal to 8% will […]

Steps in Hypothesis Testing

The hypothesis testing process consists of the following steps: Stating the hypothesis. Identifying the appropriate test statistic and its probability distribution. Specifying the significance level. Stating the decision rule. Collecting the data and calculating the test statistic. Making the statistical decision.