Tutorial lessons
MODULE 02 — Quantitative Methods
Browse the lessons available in this tutorial category.
Lessons
Tutorial lessons
QM 1 Returns of Financial Assets and Instruments
How to measure and compare investment returns, and how required returns are built from a risk-free rate and risk premia. Check-yourself items are study aids. Total Return and Its Components A financia
QM 2 Types of Financial Returns
How price changes and capital distributions combine into total return across assets, instruments, and indicators, and how those returns relate to risk. Check-yourself items are study aids. Sources of
QM 3 Benchmarking Returns
How the timing of cash flows shapes a measured return, and how market indexes are weighted, valued, and maintained. Check-yourself items are study aids. Money-Weighted and Time-Weighted Returns The si
QM 4 The Time Value of Money in Finance
The Time Value of Money in Finance Discounting cash flows to value bonds and stocks, and pricing forwards and options by no arbitrage. Check-yourself items are study aids. Discounting: the foundation
QM 5 Statistical Characteristics of Asset Returns
Describing asset returns through their central tendency, spread, shape, and co-movement. Check-yourself items are study aids. Central Tendency and Location Summarizing a series of returns begins with
QM 6 Statistical Distributions for Financial Asset Prices and Returns
Describing prices and returns with probability distributions, then updating expectations as new information arrives. Check-yourself items are study aids. Random variables and their distribution functi
QM 7 Estimation and Hypothesis Testing
Estimating population parameters from samples, then testing claims about them with confidence intervals and formal hypothesis tests. Check-yourself items are study aids. The Central Limit Theorem and
QM 8 The Return and Risk of a Financial Portfolio
Measuring the expected return and risk of a portfolio, tracing the efficient frontier, and pricing risk with the CAPM. Check-yourself items are study aids. Portfolio Return A portfolio return is a wei
QM 9 Simulation of Financial Asset Prices and Returns
Three ways to model uncertain prices and returns: historical simulation, bootstrapping, and Monte Carlo. Check-yourself items are study aids. Simulation in Finance: Process and Approaches Simulation p
QM 10 Applications of Simple Linear Regression in Finance
Fitting a line by least squares, measuring its fit, testing its coefficients, forecasting, and estimating beta. Check-yourself items are study aids. Linear Regression and Least Squares Estimation Simp
QM 11 Introduction to Financial Data Science
How big data, machine learning, and artificial intelligence reshape investment analysis. Check-yourself items are study aids. Financial Data and Data Science Foundations Every investment decision rest
QM 12 Statistical Tables (Appendices A-E)
Reference tables for standardized statistical distributions, for use across the Quantitative Methods readings. Cumulative Distribution for the Standard Normal This table gives the cumulative probabili