Standard V(C) – Record Retention
Standard V(C) – Record Retention indicates that CFA members must develop a method for maintaining records for analysis, recommendations, and actions.
Standard VI(A) – Disclosure of Conflicts
Standard VI – Conflicts of Interest There are bound to be conflicts of interest and loyalty within any business organization, leading to an ethical dilemma. Standard VI specifies that CFA members and candidates must disclose any potential conflicts between clients and…
Standard VI(B) – Priority of Transactions
Standard VI(B) – Priority of Transactions specifies that investment transactions for clients or employers must take precedence over investment transactions for a CFA member. Compliance Reinforcing loyalty to clients, Standard VI(B) – Priority of Transactions clearly indicates that the order…
Standard VI(C) – Referral Fees
Standard VI(C) – Referral Fees requires CFA members to report to employers and clients any sums received from or paid to recommendations of products or services. Compliance Appropriate disclosure means communicating before an investment professional enters into a contract with a…
Standard VII(A) – Responsibilities as a CFA Institute Member or CFA Candidate
Standard VII – Responsibilities as a CFA Institute Member or CFA Candidate Standard VII outlines the responsibilities of CFA members or Candidates regarding their profession and the CFA Institute. Standard VII(A) – Guidance Standard VII(A) – Guidance designates that members…
Calculating Probabilities Given the Discrete Uniform and the Binomial Distribution Functions
We can calculate and interpret probabilities of random variables that assume either the uniform distribution or the binomial distribution.
The Cumulative Distribution Function: Interpretation and Determination of Probabilities
A cumulative distribution offers a convenient tool for determining probabilities for a given random variable. As you have already learnt in a previous learning outcome statement, a cumulative distribution function, F(x), gives the probability that the random variable X is…
Discrete Uniform Random Variables, a Bernoulli Random Variables, and Binomial Random Variables
Probability distributions have different shapes and characteristics. As such, we describe a random variable based on the shape of the underlying distribution.
Binomial Stock Price Tree
A binomial tree is used to predict stock price movements assuming there are two possible outcomes, each of which has a known probability of occurrence.
Tracking Error
Tracking error refers to the difference in returns between a portfolio (index fund) and a benchmark (target index) against which its performance is evaluated. In other words, it is the difference between the returns on an index fund and the…
