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.

Day 8: CFA Level I Probability Basics Study Plan (Quantitative Methods)

Today is a study plan (not official CFA Institute curriculum material) to help you learn probability basics in a practical, test-ready way.

Checklist

• Workspace: Clear your desk; keep only your notes, formula sheet/flashcards, and calculator.
• Materials: 1 notebook page titled “Probability – Rules + Common Traps.”
• Calculator: Set your standard defaults (keep this consistent every day). Practice entering fractions/decimals cleanly.
• Question bank setup: Create a mini-quiz set called “Day 7 Probability” with tags:
• Probability rules
• Conditional probability
• Independence
• Bayes (basic)

Daily Ethics block (15–20 minutes)

Ethics warm-up: Conflicts of interest in everyday life

Restate: Put client/employer interests first; disclose conflicts early and clearly.
Write a 4-line scenario: “A friend asks for ‘sure-shot’ stock tips.” What do you say to avoid misleading them?
Do 5 quick Ethics questions (or 5 short scenario checks). Keep answers in one sentence each.

Main study block (70–90 minutes): Probability fundamentals

Focus on understanding the rules and spotting the keywords that show up in CFA-style questions.

A) Probability language (foundation)

• Random variable vs outcome vs event
• Complement rule: 
• Mutually exclusive events (cannot both happen)

B) Addition and multiplication rules

• Addition rule (general): 
• Mutually exclusive special case: 
• Multiplication rule: 

C) Conditional probability and independence

• 
• Independence test:  (or )
• Common trap: “Independent” is not the same as “mutually exclusive.”

D) Total probability + Bayes (basic intuition)

• Think in “paths” (e.g., different groups that could produce an outcome)
• Bayes’ idea: update your belief when you receive new information
• “Given that…” usually signals conditional probability.

25-question practice target (45–60 minutes)

Timed: aim for ~90 seconds per question.

12 questions: addition/multiplication rules (union/intersection)
6 questions: conditional probability 
2 questions: independence vs mutually exclusive (identify which is which)
5 questions: Ethics warm-up set (or 5 mini scenarios)

After each set of 5 questions: pause for 60 seconds and write the one rule you forgot or misread.

5) Mistake-log prompt (write 1–2 lines per miss)

Use exactly one label per mistake:

• Concept gap
• Formula gap
• Calculator error
• Reading error

(If Ethics errors happen, classify them mainly as Concept gap or Reading error.)

6) Five-question review checkpoint (10 minutes)

Answer without notes:

1. If , what is ?
2. If events are mutually exclusive, what is ?
3. Write the general addition rule for .
4. Write the multiplication rule for .
5. In one sentence: what does “independent” mean in probability?

Tomorrow preview (Day 9) Tomorrow, we move into probability distributions (what mean/variance are telling you, and how to recognize common distribution setups fast).

Day 7: CFA Level I Quant Study Plan: Probability Foundations - 90 days Plan

 Day 7 continues the Quantitative Methods block. After working on descriptive statistics, today’s focus is probability: how to think about uncertainty, possible outcomes, and expected results.

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

Checklist

Spend 10-15 minutes preparing your study setup as usual.

• Workspace: Open one clean page titled “Probability Foundations.”
• Materials: Keep your formula sheet, calculator, question bank, and notebook ready.
• Formula focus: Mark formulas for probability rules, conditional probability, expected value, variance, and standard deviation.
• Flash Cards: Keep them at hand or ready to be filled up
• Visual setup: Keep space for probability trees, two-way tables, and simple outcome grids.
• Question bank filter: Select Quant questions tagged probability, expected value, conditional probability, and joint probability.
• Time block: Plan 45 minutes for study, 35 minutes for practice, and 15 minutes for review, at least. 2.5-3 hrs is a better block

Today’s goal is to understand how probabilities combine, not just memorize formulas.

Daily Ethics reading and prep

Spend 10 minutes on Ethics before the Quant block.

Today’s Ethics focus: reasonable basis and probability-based claims.

Read one short scenario where an analyst makes a forecast or probability-based recommendation. Ask yourself:

• Is the forecast supported by reasonable analysis?
• Are assumptions clearly explained?
• Is the analyst overstating certainty?
• Are risks disclosed?
• Could the client misunderstand the probability statement?

Then complete 5 quick Ethics questions or flashcards. If you miss one, classify it mainly as a Concept gap or Reading error.

Main study block

Today’s Quantitative Methods focus is probability foundations.

Study these subtopics:

• Basic probability: The chance that an event occurs.
• Mutually exclusive events: Events that cannot happen at the same time.
• Independent events: Events where one outcome does not affect the other.
• Conditional probability: The probability of one event given that another event has occurred.
• Joint probability: The probability that two events occur together.
• Addition rule: Used when combining probabilities of events.
• Multiplication rule: Used when finding joint probabilities.
• Expected value: The probability-weighted average outcome.
• Variance and standard deviation of outcomes: Measures of uncertainty around expected value.

A useful habit today: write the event labels clearly. Many probability mistakes happen because A, B, , , and  get mixed up.

25-question practice target

Complete 25 questions today.

Use this breakdown to begin with:

4 questions: Basic probability and event definitions
4 questions: Mutually exclusive versus independent events
4 questions: Conditional probability
3 questions: Joint probability and multiplication rule
3 questions: Addition rule and combined probabilities
2 questions: Expected value and probability-weighted outcomes
5 questions: Ethics warm-up on forecasts, reasonable basis, and disclosure

For each Quant question, write down what is given and what is being asked before solving. Probability is easier when the setup is clean.

Mistake-log prompt

After practice, log every missed or guessed question using these four labels:

• Concept gap: I did not understand the probability rule or event relationship.
• Formula gap: I understood the concept but used the wrong formula or setup.
• Calculator error: I made an arithmetic error or entered probability values incorrectly.
• Reading error: I misunderstood the wording, especially “given,” “and,” “or,” “at least,” or “mutually exclusive.”

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

Five-question review checkpoint

End the session by answering these five questions:

1. Can I explain the difference between mutually exclusive and independent events?
2. What does conditional probability mean in plain language?
3. Did I confuse “and” with “or” in any practice question?
4. What was my accuracy on the 20 Quant questions and 5 Ethics questions?
5. Which probability rule should I review tomorrow before moving forward?

     Day 8 will continue Quantitative Methods with probability distributions, normal distribution intuition, expected value, variance, and interpretation.

Day 4: CFA Level I Quant Study Plan: Annuities and Cash-Flow Timing - 90 Days to CFA Level 1

Day 4 is about learning how money moves across time. Yesterday’s work built the foundation for time value of money. Day 4 of the CFA Level I study plan is focused on annuities and cash-flow timing. This is one of those Quant areas where the math is not always the hardest part. The real challenge is knowing when each cash flow happens. Today, the goal is to make cash-flow timing feel less confusing, especially when questions involve annuities, uneven cash flows, and payment timing

This is a study-plan post, not official CFA curriculum material. This plan is to guide examinees to prepare for CFA Level 1 in 90 days. The best way to finish the exams successfully is to give 300 sincere hours to the curriculum.  Use the plan to guide your evening prep while relying on your CFA materials or question bank for the readings and practice problems.

Checklist and Pre - study prep

• Calculator check: Confirm that your financial calculator is set correctly for payments per year, decimal places, and beginning/end mode.
• Formula page: Open your formula sheet to the time value of money section. Keep flash cards ready, filled or ready to fill
• Notebook setup: Create three headings: Ordinary Annuity, Annuity Due, Uneven Cash Flows.
• Question bank filter: Select Quantitative Methods questions related to annuities, cash-flow timing, and NPV-style calculations.
• Timer:  Set aside 3 study blocks. One main block for the quants, one small block for ethics reading, one review block. 

Today’s focus is not just getting answers right. It is learning to identify when cash flows occur.

Daily Ethics reading and prep

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

Today’s Ethics focus: professional conduct and diligence.

Read or review one short Ethics scenario involving an analyst preparing work for a client or employer. As you read, ask:

• Did the analyst act with reasonable care?
• Did they understand the basis of the recommendation?
• Did they separate facts from opinions?
• Did they keep proper records?
• Did they communicate limitations clearly?

Then answer 5 quick Ethics warm-up questions or review 5 Ethics flashcards. Classify any mistake as either a Concept gap or Reading error.

Main study block

Today’s Quantitative Methods focus is annuities and cash-flow timing.

Study these subtopics:

• Ordinary annuities: Payments occur at the end of each period.
• Annuities due: Payments occur at the beginning of each period.
• Present value of annuities: Discounting repeated payments back to today.
• Future value of annuities: Compounding repeated payments forward.
• Uneven cash flows: Handling different cash-flow amounts across periods.
• Cash-flow timeline drawing: Sketching when each amount occurs before using formulas or calculator keys.
• Calculator mode errors: Recognizing when BEGIN mode and END mode change the answer.

A useful rule for today: if the question feels confusing, draw the timeline first. Most annuity mistakes come from placing the payment in the wrong period.

25-question practice target

Complete 25 questions today.

Use this breakdown:

• 5 questions: Ordinary annuity present value
• 5 questions: Ordinary annuity future value
• 4 questions: Annuity due calculations
• 3 questions: Uneven cash-flow problems
• 3 questions: Cash-flow timing and timeline interpretation
• 5 questions: Ethics warm-up or scenario questions

For the Quant questions, focus on process. Before pressing calculator keys, write down:

• What is the cash flow?
• When does it occur?
• What is the interest rate?
• Are payments at the beginning or end?
• Am I solving for present value, future value, payment, rate, or number of periods?

Mistake-log prompt

After practice, log every missed or guessed question using these four labels as we have been doing the past few days.

• Concept gap: I did not understand the idea behind the question.
• Formula gap: I understood the concept but forgot the correct formula or setup.
• Calculator error: I entered values incorrectly, used the wrong mode, or missed a sign convention.
• Reading error: I misunderstood the wording, timing, or what the question asked.

For Ethics mistakes, use mainly Concept gap or Reading error. Ethics errors usually come from not knowing the rule clearly or missing a key word in the scenario.

Five-question review checkpoint

End the session by answering these five questions:

1. Can I explain the difference between an ordinary annuity and an annuity due?
2. Did I check calculator BEGIN/END mode before solving annuity questions?
3. Which type of problem caused the most mistakes today?
4. What was my accuracy on the 20 Quant questions and the 5 Ethics questions?
5. What one calculator habit should I carry into tomorrow?

Do not skip this checkpoint. The review is what turns practice into progress.

Tomorrow preview

Day 5 will stay within Quantitative Methods and focus on rates, compounding, discounting, and mixed time value of money practice.

Day 3: CFA Level I Time Value of Money (TVM) Study Plan

 You are now 3 days into your CFA Level 1 preparation.

You’re building your August 2026 CFA Level I study rhythm one focused day at a time. This post is a practical study plan (not official CFA Institute curriculum material), designed to help you master Time Value of Money basics with clean calculator work and a practice schedule.

Take 10 minutes to get things together and prepare a checklist for preparation

Checklist

Calculator

Cleared workdesk

Study material, notes, timer

Flash cards - filled out or empty ones

Question bank

Notebook, for logging progress and errors plus any other inputs.

Daily Ethics mini-block (10 minutes)

·       Read the Code of Ethics once, slowly.

·       Then do one reflection prompt: “Where could I be tempted to ‘round’ or ‘massage’ numbers at work, and how would I handle it?”

·       Finish with 5 quick ethics warm-up questions (any ethics Q-bank set).

Main study block: Time Value of Money foundations (55–65 minutes)

Focus on understanding inputs, timing, and how rates behave.

A. Rates and compounding

·       Simple vs compound growth (what changes when compounding is introduced)

·       Nominal rate vs effective annual rate (EAR)

·       Compounding frequency: annual, semiannual, monthly

·       Converting between rates when compounding frequency changes

B. Discounting vs compounding (direction matters)

·       Future value intuition: “move money forward in time”

·       Present value intuition: “bring money back to today”

·       Sign conventions on the calculator (why PV and FV often have opposite signs)

C. Return measures you’ll see often

·       Holding period return (HPR) concept and basic computation

·       Annualizing intuition (don’t overcomplicate today—get the idea right)

4) 25-question practice target (30–40 minutes)

Do these closed-book. After each set, quickly review wrong answers before moving on.

20 Quant (TVM) questions

·       8 × EAR vs nominal rate conversions

·       6 × PV/FV single cash flow (different compounding frequencies)

·       6 × discounting/compounding direction + sign convention

5 Ethics questions

·       2 × integrity/truthfulness scenario checks

·       3 × professional conduct “best action” questions

5) Mistake-log (write 3–5 bullets)

For every missed question, label it as one of:

·       Concept gap

·       Formula gap

·       Calculator error

·       Reading error

If you miss an ethics question, classify it mainly as Concept gap or Reading error.

6) Five-question review checkpoint (5–10 minutes)

Answer these from memory:

1.      What’s the difference between a nominal rate and EAR?

2.     If compounding frequency increases (same nominal rate), does EAR go up or down?

3.     What does “discounting” mean in plain language?

4.     Why do PV and FV often have opposite signs on the calculator?

5.      What is a holding period return measuring?

·       Note: this is a study plan, not official curriculum material

Important to do

·       20 TVM questions breakdown

·       5 Ethics warm-up questions

·       Mistake-log categories

·       Prepare flash cards from today's formulas

Finally

·       Quick recap: rates, direction, calculator discipline

Tomorrow preview

Tomorrow is Day 4, where you’ll push TVM further into annuities and cash-flow timing (PMT problems) and build speed with repeatable calculator steps.

Did you find this useful> Can you please comment?

Were there many mistakes after your readings and QA session. Remember, its important to log your errors for future reference.