I can't do Quant in less than a minute in a half...please help.

CFA Level I
#1

I’ve been doing Schweser’s Q bank, and am having a hard to completing many of the quant questions in a minute and a half. I mean, can something like this realistically be done in a minute and a half? Use the following data to calculate the standard deviation of the return: 50% chance of a 12% return 30% chance of a 10% return 20% chance of a 15% return A) 2.5%. B) 3.0%. C) 1.7%. D) 3.3%.

#2

You’ll get one or two of these on the real exam. Most questions are conceptual and will take less than 30 seconds to answer. Basically, don’t worry too much about time as it is not an issue for most at Level 1.

#3

OK so you can do the problem… E(X) = 0.5*12 + 0.3*10 + 0.2*15 = 12% Var(X) = 0.5*(12 - 12)^2 + 0.3*(10-12)^2 + 0.2*(15-12)^2 = 0.3*4 + 0.2*9 = 3 Std. Dev. = Sqrt(Var) = 1.7% But… I can do the problem in less than 5 seconds using the following - the mean is about 12% in my head (I don’t need exactly) and the biggest deviation is about 3 but most deviations are lots smaller. That means it can’t be D, and pretty much can’t be B. So it’s A or C except A is a standard deviation bigger than all but 20% of the deviations which aren’t much bigger so must be C. Next… Edit: Ditchdigger’s response is of course correct but pedagogically really bad. Learn the first way until you can do the second way…

#4

Nicely done Joey. The reason I responded as I did is because this individual may be panicking that they will not be able to finish the exam since problems like these are difficult to solve in 90 seconds. While there were some questions on the exam that took me 3-4 minutes, many took one read through in order to answer. Albeit these problems required the thought process Joey just demonstrated above. Plenty of people are walking out of the exam center with 30+ minutes remaining.

#5

Thanks for your answers guys. I guess I’m just worried because 8/10 of the problems on the Q-bank have been calculation rather than conceptual based.

#6

With practice you can do this in under 1 minute. Just become quick with your calculator.

#7

Qbank is much more mathematical then conceptual compared to the exam…just remember that…

#8

I know this has been a cliche but I am little curious to know, people say that real exam is much different from all the mock tests we take, is it really true, is it more conceptual as compared to schweser questions?

#9

Use the CFAI Curriculm questions to get a better idea of the exam. Many are from the 2005 Level 1 Exam.

#10

JoeyDVivre Wrote: ------------------------------------------------------- > OK so you can do the problem… > > E(X) = 0.5*12 + 0.3*10 + 0.2*15 = 12% > > Var(X) = 0.5*(12 - 12)^2 + 0.3*(10-12)^2 + > 0.2*(15-12)^2 = 0.3*4 + 0.2*9 = 3 > > Std. Dev. = Sqrt(Var) = 1.7% > > But… > > I can do the problem in less than 5 seconds using > the following - the mean is about 12% in my head > (I don’t need exactly) and the biggest deviation > is about 3 but most deviations are lots smaller. > That means it can’t be D, and pretty much can’t be > B. So it’s A or C except A is a standard > deviation bigger than all but 20% of the > deviations which aren’t much bigger so must be C. > Next… > > Edit: Ditchdigger’s response is of course correct > but pedagogically really bad. Learn the first way > until you can do the second way… Im going to go with the slow clap to the awesome cheer. Very nicely done man. POE at its best.