Day 11: CFA Level I Quantitative Methods Study Plan - Hypothesis Testing, Correlation, Regression | CFA Level 1 90 Days Prep

This is a study plan, not official CFA Institute curriculum material. Use it to guide your preparation, then rely on your CFA notes, curriculum, or question bank for the actual readings and practice questions.

Day 11 builds on yesterday's hypothesis testing foundations by connecting test statistics to confidence intervals and working through full hypothesis test examples. Today you'll move from understanding the theory to applying the decision framework across different test types.

Prep Checklist

10-15 minutes :

• Workspace: Open a new notebook page titled "Confidence Intervals & Hypothesis Test Applications"
• Formula sheet: Add formulas for confidence interval construction, critical values for t-tests and z-tests, and the relationship between confidence level and significance level
• Calculator: Clear memory and review how to find t-statistics and z-statistics using your calculator's distribution functions
• Question bank setup: Create or filter a set called "Day 11 CI and Hypothesis Applications"
• Flash Cards: Filled or ready to be filled up
• Log Book: To log concepts, errors as we have been doing

Today's goal is connecting yesterday's concepts to real applications. You should be able to construct a confidence interval, perform a complete hypothesis test, and explain what both tell you about the population parameter.

Daily Ethics reading and prep

Spend 10-15 minutes on Ethics before the Quant block.

Today's Ethics focus: selective reporting and cherry-picking results.

Read or create one short scenario where an analyst reports only statistically significant findings while hiding non-significant tests. Then ask:

• Did the analyst disclose all tests performed?
• Were negative or null findings suppressed?
• Does the presentation create false confidence?
• Are limitations and uncertainty clearly stated?
• Could this selective disclosure mislead stakeholders?

Then complete 5 Ethics warm-up questions focusing on misrepresentation, disclosure obligations, and fair dealing. For any missed Ethics question, classify it as Concept gap or Reading error.

Main study block

Today's Quantitative Methods focus is confidence intervals and hypothesis testing applications.

Study these subtopics:

• Confidence interval construction: Using sample statistics to create a range estimate for the population parameter
• Relationship between CI and hypothesis tests: A two-tailed test at α = 0.05 corresponds to a 95% confidence interval
• t-test versus z-test: When to use t-distribution (small sample, unknown population variance) versus z-distribution (large sample or known variance)
• Test of a single mean: Performing a complete hypothesis test for a population mean
• Test of a single variance: Testing claims about population variance using chi-square distribution
• Interpreting confidence intervals: What it means when a hypothesized value falls inside or outside the interval
• Critical value approach: Comparing test statistic to critical value
• p-value approach: Comparing p-value to significance level
• Power of a test: The probability of correctly rejecting a false null (1 - Type II error probability)

Key insight for today: A confidence interval gives you a range of plausible values, while a hypothesis test gives you a yes/no decision about a specific claim. Both use the same underlying statistics but answer different questions.

25-question practice target

Complete 25 questions today using this breakdown:

• 5 questions: Confidence interval construction and interpretation
• 4 questions: Relationship between confidence intervals and hypothesis tests
• 3 questions: Choosing between t-test and z-test
• 4 questions: Complete hypothesis test of a mean (all steps)
• 3 questions: Critical value approach versus p-value approach
• 2 questions: Test of variance or other parameters
• 4 questions: Mixed review from Days 9-10 (sampling, hypothesis foundations)
• 5 questions: Ethics warm-up on selective reporting and disclosure

For every complete hypothesis test question, write out all five steps in order: (1) state hypotheses, (2) identify test statistic and distribution, (3) state decision rule, (4) calculate test statistic, (5) make decision and interpret in context.

Mistake-log prompt

Log every missed or guessed question using exactly one of these labels:

• Concept gap: I did not understand when to use t versus z, or how CI relates to hypothesis tests
• Formula gap: I understood the concept but used the wrong formula or forgot degrees of freedom
• Calculator error: I made an arithmetic error, used wrong distribution function, or misread a table
• Reading error: I misunderstood the question stem, mixed up one-tailed and two-tailed, or misinterpreted the confidence level

For Ethics mistakes, use mainly Concept gap or Reading error.

Five-question review checkpoint

Answer these without notes at the end of the session:

1. How do you construct a 95% confidence interval for a population mean when population variance is unknown?
2. What is the relationship between a 95% confidence interval and a two-tailed test at α = 0.05?
3. When should you use a t-test instead of a z-test?
4. What are the five steps of a complete hypothesis test?
5. If a 90% confidence interval for the mean is [12.5, 18.3], would you reject H₀: μ = 20 at α = 0.10 using a two-tailed test? Why?

This completes your Day 11 study plan. Tomorrow you'll likely move into comparing two populations or advance to other hypothesis test applications, building on the confidence interval and testing framework you've solidified today.

Can you comment on how many LOS you have covered so far and if this study plan has been helpful?