Day 12 - Hypothesis Testing and Confidence Interval, Big Data - Review and Practice - CFA Level 1 Prep

 Goal: Today's goal  is to turn Day 10–11 concepts into automatic exam‑style problem solving across all the testing aspects covered so far, like mean, variance, CI, p‑value/critical value, Type I/II, etc.

Make it a day for mixed concept drill

Make a single sheet that forces you to recall definitions and decision rules

• From Day 10: null vs alternative, one‑ vs two‑tailed, significance level, Type I and II errors, decision rule, test statistic idea.

• From Day 11: CI construction, when to use z vs t, single mean test, single variance test, p‑value vs critical value, power

• Understand the Big Data concepts, the various aspects of Fintech that are relevant for gathering financial data, be able to describe Big Data, Machine Learning and AI and their application in investm,ent decisions. These are relatively newer topics and are relevant in today's context

Questions

Do a set of 20–30 questions that mix:

• Constructing CIs (mostly 95%, with a few 90%/99%).
• Testing hypotheses about a single mean (both one‑ and two‑tailed).
• Using both critical value and p‑value approaches.
• Big Data

For each question, explicitly answer:

1. What are H₀ and H₁?
2. What distribution (z or t) and why?
3. Test statistic value.
4. Decision by p‑value, decision by critical value.
5. If applicable, check: does the CI include the hypothesized value?

Variance Tests + Power Interpretation

Do 5–8 questions on tests of a single variance using chi‑square. Focus on:

1. Correct df, correct tail(s), and reading chi‑square critical values.

Then add 3–5 conceptual questions (or create them for yourself) on:

1. How increasing sample size affects power.
2. How changing α changes Type I vs Type II trade‑off.

End Day 12 Quant session with a mini Quant block (20–25 questions) just on testing/CI:

• Time yourself at ~1.5 min/question.
• Then review and mark each as: “Concept error”, “Formula error”, or “Careless”.
• Anything that is a concept or formula error becomes priority for Day 13.

Daily Ethics block: 30–45 min

Try this pattern each day:

1. 10–15 min reading / notes
• Pick one small chunk: one Standard (e.g., Standard II(A)–Material Nonpublic Information) or a short section of GIPS.
• Make 2–3 bullet notes in your own words: “What is prohibited? What is allowed?”
2. 15–20 min questions
• Do 8–12 vignette‑style or stand‑alone Ethics questions from your Q‑bank or CFAI practice.
• Aim for careful reading, not speed. Ethics is about nuance and wording.