Quantitative Investment Analysis Workbook, 3rd Edition
The Quantitative Investment Analysis Workbook provides a key component of effective learning: practice. As the companion piece to Quantitative Investment Analysis, this workbook aligns with the text chapter-by-chapter to give you the focused, targeted exercises you need to fully understand each topic. Each chapter explicitly lays out the learning objectives so you understand the 'why' of each problem, and brief chapter summaries help refresh your memory on key points before you begin working. The practice problems themselves reinforce the practitioner-oriented text, and are designed to mirror the real-world problems encountered every day in the field. Solutions are provided to all of the problems for those who self-study, and an optional online Instructor's manual brings this book into the classroom with ease.
Quantitative analysis is essential to the investment process, but hypothetical 'pie-in-the-sky' type practice scenarios only waste your time. You need a globally relevant application guide with roots in the real-world industry, so you can spend your time preparing for scenarios that you'll actually encounter. This workbook is your answer, with practice problems covering the complete range of quantitative methods.
- Refresh your memory with succinct chapter summaries
- Enhance your understanding with topic-specific practice problems
- Work toward explicit chapter objectives to internalize key information
- Practice important techniques with real-world applications
Consistent mathematical notation, topic coverage continuity, and evenness of subject matter treatment are critical to the learning process. This workbook lives up to its reputation of clarity, and provides investment-oriented practice based on actual changes taking place in the global investment community. For those who want a practical route to mastering quantitative methods, the Quantitative Investment Analysis Workbook is your real-world solution.
Chapter 1 The Time Value of Money 3
Learning Outcomes 3
Summary Overview 3
Chapter 2 Discounted Cash Flow Applications 7
Learning Outcomes 7
Summary Overview 7
Chapter 3 Statistical Concepts and Market Returns 13
Learning Outcomes 13
Summary Overview 14
Chapter 4 Probability Concepts 23
Learning Outcomes 23
Summary Overview 24
Chapter 5 Common Probability Distributions 31
Learning Outcomes 31
Summary Overview 32
Chapter 6 Sampling and Estimation 39
Learning Outcomes 39
Summary Overview 39
Chapter 7 Hypothesis Testing 45
Learning Outcomes 45
Summary Overview 46
Chapter 8 Correlation and Regression 53
Learning Outcomes 53
Summary Overview 53
Chapter 9 Multiple Regression and Issues in Regression Analysis 67
Learning Outcomes 67
Summary Overview 68
Chapter 10 Time-Series Analysis 87
Learning Outcomes 87
Summary Overview 88
Chapter 11 An Introduction to Multifactor Models 99
Learning Outcomes 99
Summary Overview 99
Part II Solutions
Chapter 1 The Time Value of Money 105
Chapter 2 Discounted Cash Flow Applications 121
Chapter 3 Statistical Concepts and Market Returns 127
Chapter 4 Probability Concepts 143
Chapter 5 Common Probability Distributions 151
Chapter 6 Sampling and Estimation 157
Chapter 7 Hypothesis Testing 163
Chapter 8 Correlation and Regression 171
Chapter 9 Multiple Regression and Issues in Regression Analysis 181
Chapter 10 Time-Series Analysis 191
Chapter 11 An Introduction to Multifactor Models 197
About the CFA Program 199
RICHARD A. DEFUSCO, CFA, is a Professor of Finance at the University of Nebraska-Lincoln. He earned his CFA charter in 1999 and started CFA grading in 2000.
DENNIS W. McLEAVEY, CFA, is Faculty Advisor to the Ram Fund and Professor Emeritus of Finance and OR/MS at the University of Rhode Island. He obtained his CFA charter in 1990 and began CFA grading in 1995.
JERALD E. PINTO, PhD, CFA, has been at CFA Institute since 2002 as Visiting Scholar, Vice President, and now Director, Curriculum Projects in the Credentialing Division for the CFA and CIPM Programs.
DAVID E. RUNKLE, CFA, is Director of Quantitative Research for Trilogy Global Advisors, LP. He joined Trilogy in 2007 from Piper Jaffray, where he was an Investment Research Manager.