Which formulas do we need to know for hypothesis testing?

CFA Level I
#1

I’m reading the Elan guide and it’s saying we do not need to know the formula for two population means just how to interpret them is that correct? If that’s the case I’m not going to bother trying to memorize the pooled variance, paired comparison formulas etc…

#2

This post is deeply offensive.

#3

How deep?

#4

Those formulas are very beautiful. It’s like saying that you are going to Paris but are visiting the dog track instead of the Louvre. Are you going to memorize garbage about liquidity ratios and not study paired comparison tests? Hmmph.

#5

I’m just wondering whether or not it’s required because the LOS is ambiguous and I don’t understand why they would include it if you didn’t have to know them. BTW, I was just in Paris this past summer and I didn’t go to the Louvre. I went to the d’Orsay ;).

#6

d’Orsay is nice… I tried to steal Whistler’s mom last time I was there and bring it back home. Now they don’t let me in anymore.

#7

So apparently you do not need to know the formulas. Guess I won’t be memorizing them then. Sorry Joey!

#8

I think it’s clearly stated in the LOS. Somewhere in the CFAI website there’s some kind of dictionary specifying what exactly each term (calculate, interpret, discuss,…) means. If the LOS says “calculate”, you obviously have to know the formula*. If it says “interpret”, you just have to be able to explain what a certain output of that formula means. *Except for TVM and other stuff for which you can just use your calculator. Anyway, be careful about using the calculator without knowing the formula. If teh LOS just says, calculate, it’s ok. In any other case, you may be asked something like “what would be the effect of a x% increase in A?”, being A one of the factors of some formula. If you don’t even know whether A is in the denominator or in the numerator… good luck guessing.

#9

Hmmm thanks for the clarification. I pretty much know all the formulas except for the more complex hypothesis testing ones and, ironically, the basic annuity formula (since I can just use my calculator for that).