Quant 2: Describing Returns

An exam-week special for Level I candidates: the whole ten-episode Ethics season, compressed into one rapid review you can run in your head on the way in. No new rules, only what the season already built. In a two host format, one host explains the material while the other plays a fictional exam candidate.Three pieces. First, the map: the seven Standards of Professional Conduct as seven rooms, and a four-step framework for walking through any of them. Second, the rooms one at a time: the rule in a sentence, the trap, and the one cue that tells you which room you are in, plus a short stop on the firm-wide performance presentation standards and five pairs of neighboring Standards that are easy to confuse. Third, an 18-item drill of short invented vignettes at exam pace, including three where nothing was violated.It closes with a five-step routine for any Ethics question, worked through once on a longer vignette: read the question's last line first, list every person and every action, name the Standard by number and letter before reading the choices, check whether the action is the allowed version, then match and confirm.The vignettes are simplified for exam practice and are not compliance advice. All people and firms in them are fictional.Free practice exam, 90 questions (free account): tottenprep.comTotten Prep is independent educational content for exam preparation only. It is not investment advice, and nothing in it guarantees any exam result or score. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute. Totten Prep is not affiliated with, endorsed by, or sponsored by CFA Institute.

Part two of the Quantitative Methods arc for Level I candidates: once you have a set of returns, how do you describe them honestly? No formula walls, just the intuition, small round numbers, and the calculator doing the heavy lifting. In a two host format, one host explains the material while the other plays a fictional exam candidate.The episode asks three questions about any set of returns. Where is the middle: arithmetic, geometric and harmonic means and how they rank, the median and outliers, trimmed and winsorized means, and why a fund's time-weighted return and an investor's money-weighted return can tell different stories. How spread out are they: range, mean absolute deviation, sample versus population variance, standard deviation, the coefficient of variation and target downside deviation, plus why volatility lowers the rate at which money compounds. And what shape are they: skewness, named by its tail, and kurtosis, or fat tails.Each section names its trap, and three exam-style practice questions at the end show how the traps turn into wrong answer choices.All people, funds and numbers in the examples are fictional, and the examples are simplified for exam practice. Comparisons between invented funds are a test-taking skill, not a recommendation or evaluation of any investment.Free practice exam, 90 questions (free account): tottenprep.comTotten Prep is independent educational content for exam preparation only. It is not investment advice, and nothing in it guarantees any exam result or score. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute. Totten Prep is not affiliated with, endorsed by, or sponsored by CFA Institute.

A new arc starts here: Quantitative Methods for the CFA® Level 1 exam, taught by ear. No formula read-aloud, just the intuition, small round numbers, and a clear note on where the calculator does the work. In a two host format, one host explains the material while the other plays a fictional exam candidate.This episode covers the foundation the rest of the arc builds on. What an interest rate is made of: the real risk-free rate plus premiums for inflation, default risk, liquidity and maturity. How to measure a return honestly, including the income, and why returns across several periods are multiplied rather than added. Why a stated annual rate and an effective annual rate are not the same number. And the time value of money: present and future value, ordinary annuities versus annuities due, a level loan payment, and why a perpetuity's value sits one period before its first payment.Every section names its trap, and two exam-style practice questions at the end show how the traps turn into wrong answer choices. It closes with four calculator habits: opposite signs for money in and money out, cleared registers, timing words read first, and the rate matched to the number of periods.All people, companies and banks in the examples are fictional, and the examples are simplified for exam practice.Free practice exam, 90 questions (free account): tottenprep.comTotten Prep is independent educational content for exam preparation only. It is not investment advice, and nothing in it guarantees any exam result or score. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute. Totten Prep is not affiliated with, endorsed by, or sponsored by CFA Institute.

The Ethics season ends with two halves. The first is an introduction to the Global Investment Performance Standards (GIPS®) at the conceptual level the Level 1 exam works at: why the standards exist, why compliance is voluntary, why composites have to include the accounts that did badly as well as the ones that did well, why only a firm can claim compliance and only for the whole firm, and why verification is optional and covers the firm's processes rather than any single performance number. In a two host format, one host explains the material while the other plays a fictional exam candidate.The second half is the gauntlet: 25 short, fully fictional vignettes drawn from all seven Standards of Professional Conduct in the CFA Institute Code of Ethics and Standards of Professional Conduct, read at exam pace. Some are violations and some are the allowed version that a distractor dresses up as one, such as a mosaic built from public and non-material information, a lawful client instruction, or an analyst who holds her rating under pressure. The episode closes with a three-step habit for reading any Ethics vignette: identify the actor and the duty, find the gap, then check whether the situation is actually allowed.The vignettes are simplified for exam practice and are not compliance advice.Part of a ten-part Ethics season walking through the Standards of Professional Conduct one at a time.Free practice exam, 90 questions: tottenprep.comTotten Prep is independent educational content for exam preparation only. It is not investment advice, and nothing in it guarantees any exam result or score. CFA®, Chartered Financial Analyst® and GIPS® are registered trademarks owned by CFA Institute. Totten Prep is not affiliated with, endorsed by, or sponsored by CFA Institute, and CFA Institute does not endorse, promote, or warrant the accuracy or quality of Totten Prep products or services.

Standard VII of the CFA Institute Code of Ethics and Standards of Professional Conduct is the one aimed at you as a candidate rather than at a client. In a two host format, one host explains the material while the other plays a fictional exam candidate, and together they reason out loud through the two pieces the exam tests: your conduct as a participant in the program, including following the exam rules and keeping exam content confidential down to the topics tested (VII-A), and referencing CFA Institute, the designation, and the program accurately, with no partial designation and no implied superior performance (VII-B). Using fully fictional scenarios, they work the traps the exam is built around, from the friendly post exam text to the shortened title in an email signature to a flip case where honest criticism of a policy turns out not to be a violation, so you learn to reason through a vignette instead of guessing at it.Part of a ten-part Ethics season walking through the Standards of Professional Conduct one at a time.Free practice exam, 90 questions: tottenprep.comTotten Prep is independent educational content for exam preparation only. It is not investment advice, and nothing in it guarantees any exam result or score. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute. Totten Prep is not affiliated with, endorsed by, or sponsored by CFA Institute, and CFA Institute does not endorse, promote, or warrant the accuracy or quality of Totten Prep products or services.

Standard VI of the CFA Institute Code of Ethics and Standards of Professional Conduct, Conflicts of Interest, is about what happens when your own interests quietly pull against your client's. In a two host format, one host explains the material while the other plays a fictional exam candidate, and together they reason out loud through the three pieces the exam tests: disclose the conflict in plain language (VI-A), put client transactions ahead of your own (VI-B), and disclose any fee you receive for a referral before the client acts (VI-C). Using fully fictional scenarios, they work the traps the exam is built around, from the front-running trap to the family-account nuance to the undisclosed referral fee, so you learn to reason through a vignette instead of guessing at it.Part of a ten-part Ethics season walking through the Standards of Professional Conduct one at a time.Free practice exam, 90 questions: tottenprep.comTotten Prep is independent educational content for exam preparation only. It is not investment advice, and nothing in it guarantees any exam result or score. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute. Totten Prep is not affiliated with, endorsed by, or sponsored by CFA Institute, and CFA Institute does not endorse, promote, or warrant the accuracy or quality of Totten Prep products or services.

Standard V of the CFA Institute Code of Ethics and Standards of Professional Conduct, Investment Analysis, Recommendations, and Actions, is about the work behind a recommendation, not the outcome. In a two host format, one host explains the material while the other plays a fictional exam candidate, and together they reason out loud through the three pieces the exam tests: do the work, tell the truth, and keep the proof. That means a reasonable and adequate basis before you recommend or act (V-A), communicating honestly and separating fact from opinion (V-B), and keeping the records that show your work (V-C). Using fully fictional scenarios, they work the traps the exam is built around, so you learn to reason through a vignette instead of guessing at it.Part of a ten-part Ethics season walking through the Standards of Professional Conduct one at a time.Free practice exam, 90 questions: tottenprep.comTotten Prep is independent educational content for exam preparation only. It is not investment advice, and nothing in it guarantees any exam result or score. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute. Totten Prep is not affiliated with, endorsed by, or sponsored by CFA Institute, and CFA Institute does not endorse, promote, or warrant the accuracy or quality of Totten Prep products or services.

Standard IV of the CFA Institute Code of Ethics and Standards of Professional Conduct, Duties to Employers, governs the relationship you live inside every working day: loyalty to the firm that employs you, the extra compensation you are and are not allowed to accept, and what you owe once you are the one supervising. In a two host format, one host explains the material while the other plays a fictional exam candidate, and together they reason out loud through the questions the exam is built around: what you can take with you when you leave a firm and what stays behind, when a side arrangement quietly crosses the line, and why "I did not know" is not a defense for a manager. Using fully fictional scenarios, they work Loyalty (IV-A), Additional Compensation Arrangements (IV-B), and Responsibilities of Supervisors (IV-C), so you learn to reason through a vignette instead of guessing at it.Part of a ten-part Ethics season walking through the Standards of Professional Conduct one at a time.Free practice exam, 90 questions: tottenprep.comTotten Prep is independent educational content for exam preparation only. It is not investment advice, and nothing in it guarantees any exam result or score. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute. Totten Prep is not affiliated with, endorsed by, or sponsored by CFA Institute, and CFA Institute does not endorse, promote, or warrant the accuracy or quality of Totten Prep products or services.

Standard III of the CFA Institute Code of Ethics and Standards of Professional Conduct, Duties to Clients, is one of the most heavily tested areas in Ethics, so this season gives it two episodes. Part two works through Suitability, Performance Presentation, and Preservation of Confidentiality. In a two host format, one host explains the material while the other plays a Level I candidate, and together they reason out loud through the line every advisor has to hold: a great investment is not the same as the right investment for this client. Using fully fictional scenarios, they work the conflicts the exam is built around, so you learn to reason through a vignette instead of guessing at it.Part two of two on Standard III, inside a ten-part Ethics season walking through the Standards of Professional Conduct one at a time.Free practice exam, 90 questions: tottenprep.comTotten Prep is independent educational content for exam preparation only. It is not investment advice, and nothing in it guarantees any exam result or score. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute. Totten Prep is not affiliated with, endorsed by, or sponsored by CFA Institute, and CFA Institute does not endorse, promote, or warrant the accuracy or quality of Totten Prep products or services.

Standard III of the CFA Institute Code of Ethics and Standards of Professional Conduct, Duties to Clients, is one of the most heavily tested areas in Ethics, so this season gives it two episodes. Part one works through Loyalty, Prudence, and Care, and Fair Dealing. In a two host format, one host explains the material while the other plays a Level I candidate, and together they reason out loud through the idea the whole Standard is built on: the client comes first, ahead of your employer and ahead of yourself. Using fully fictional scenarios, they work the conflicts the exam is built around, so you learn to reason through a vignette instead of guessing at it.Part one of two on Standard III, inside a ten-part Ethics season walking through the Standards of Professional Conduct one at a time.Free practice exam, 90 questions: tottenprep.comTotten Prep is independent educational content for exam preparation only. It is not investment advice, and nothing in it guarantees any exam result or score. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute. Totten Prep is not affiliated with, endorsed by, or sponsored by CFA Institute, and CFA Institute does not endorse, promote, or warrant the accuracy or quality of Totten Prep products or services.