ARCH: detected by estimating: εˆ 2t = a 0 + a1εˆ 2t−1 + µ t Variance of ARCH series: σˆ 2t +1 = aˆ 0 + aˆ1εˆ 2t Risk Types: Appropriate methodĭistribution Accommodates Sequential? of risk Correlated Variables?ĮCONOMICS bid-ask spread = ask quote – bid quote Cross rates with bid-ask spreads:  A        =  A  ×  B   C   B   C  bid bid bid  A   A   B    =   ×    C   B offer  C offer offer Currency arbitrage: “Up the bid and down the ask.” Forward premium = (forward price) – (spot price) Value of fwd currency contract prior to expiration: Vt = Seasonality: indicated by statistically significant lagged err. Test statistical significance of regression: F = MSR / MSE with k and n – k – 1 df (1-tail).

Confidence Interval: b j ± t c × sb j.Detect with Durbin-Watson test positive autocorrelation if DW critical t or p-value < a.

Correct with White-corrected standard errors. QUANTITATIVE METHODS Simple Linear Regression Correlation: cov XY rXY = (s X )(s Y ) t-test for r (n – 2 df ): t = LEVEL II SCHWESER’S QuickSheet Critical Concepts for the 2017 CFA® ExamĮTHICAL AND PROFESSIONAL STANDARDS I Professionalism I (A) Knowledge of the Law I (B) Independence and Objectivity I (C) Misrepresentation I (D) Misconduct II Integrity of Capital Markets II (A) Material Nonpublic Information II (B) Market Manipulation III Duties to Clients III (A) Loyalty, Prudence, and Care III (B) Fair Dealing III (C) Suitability III (D) Performance Presentation III (E) Preservation of Confidentiality IV Duties to Employers IV (A) Loyalty IV (B) Additional Compensation Arrangements IV (C) Responsibilities of Supervisors V Investment Analysis, Recommendations, and Action V (A) Diligence and Reasonable Basis V (B) Communication with Clients and Prospective Clients V (C) Record Retention VI Conflicts of Interest VI (A) Disclosure of Conflicts VI (B) Priority of Transactions VI (C) Referral Fees VII Responsibilities as a CFA Institute Member or CFA Candidate VII (A) Conduct in the CFA Program VII (B) Reference to CFA Institute, CFA Designation, and CFA Program

Schweser quicksheet level 1 pdf