About This Chapter
Quantitative Methods in Finance - Chapter Summary
Fun lessons in this short chapter provide a comprehensive overview of quantitative methods used in financial data tracking and calculations. Use these lessons to ensure you have a complete understanding of topics like probability distribution, hypothesis testing, regression analysis and descriptive statistics. By the end of this chapter, you will be able to:
- Understand present and future value and calculate the time value of money
- Describe net present value, discounted cash flow and the time value of money
- Use the formulas for basic probability theory
- List types of probability sampling methods
- Define point estimate in statistics and remember the definition of correlation
- Discuss the purpose of time series analysis and recall its applications
- Share the steps involved in simulation analysis in finance
- Provide the definition and uses of stock market technical analysis
Don't let a busy schedule deter you from studying the quantitative methods covered in this chapter. Our lessons are available around-the-clock and can be accessed using any computer or mobile device with an Internet connection. Study whenever and wherever your schedule permits to bolster your knowledge of this subject. Test your comprehension by taking multiple-choice quizzes and a chapter exam.
1. Present and Future Value: Calculating the Time Value of Money
A central concept in business and finance is the time value of money. We will use easy to follow examples and calculate the present and future value of both sums of money and annuities.
2. Discounted Cash Flow, Net Present Value & Time Value of Money
Explore the concept of time value of money and learn about ways to determine the profitability of different investment options using the net present value of the future cash flows, discount rates, and a project profitability index.
3. Basic Probability Theory: Rules & Formulas
This lesson contains probability basics and rules, as well as the fundamental law of total probability and Bayes' theorem. Explore these important concepts and then see if you can answer the questions in the follow-up quiz.
4. Probability Distribution: Definition, Formula & Example
Probability distribution is a way of mapping out the likelihood of all the possible results of a statistical event. In this lesson, we'll look at how that is done and how to make practical applications of this concept.
5. What Is Descriptive Statistics? - Examples & Concept
Descriptive statistics are used to summarize data. Learn about the different kinds of descriptive statistics, the ways in which they differ from inferential statistics, how they are calculated, and more.
6. Probability Sampling Methods: Definition & Types
Choosing a sample is one of the most important steps in research. But how should you choose? In this lesson, we'll look at three types of probability sampling: simple random, systematic, and stratified sampling.
7. Point Estimate in Statistics: Definition, Formula & Example
In this lesson, you will be introduced to the point estimates used to estimate population parameters, the formula to calculate each, and how to reduce error and increase accuracy.
8. What is Hypothesis Testing? - Definition, Steps & Examples
A proper hypothesis test consists of four steps. After watching this video lesson, you'll understand how to create a hypothesis test to help you confirm or disprove an assumption.
9. Correlation: Definition, Analysis & Examples
Correlation describes the relationship between two sets of data. In this lesson, we'll delve into what correlation is and the different types of correlation that can be encountered.
10. Regression Analysis: Definition & Examples
Watch this video lesson to learn about regression analysis and how you can use it to help you analyze and better understand data that you receive from surveys or observations. Learn what is involved in regression analysis and what to look out for.
11. Time Series Analysis & Its Applications
In this lesson, we will explain time series analysis, its purpose and uses. We will define trend, cyclical and seasonal variances. We will solve a real-world business problem using time series analysis.
12. What is Stock Market Technical Analysis?
Technical analysis is a method for predicting security prices based on the volume and price of the security. While there are other ways to analyze securities, technical analysis is common.
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Other chapters within the Chartered Financial Analyst (CFA): Exam Prep & Study Guide course
- About the CFA Exam
- Ethical & Professional Standards in Finance
- Overview of Economics in the Financial Market
- Domestic Economic Concepts
- International Trade & Currency Exchange
- Overview of Financial Reporting & Analysis
- Types of Financial Reporting & Analysis
- Understanding Corporate Finance
- Equity Investments
- Fixed-Income Securities
- Derivatives in Finance
- Alternative Investments
- Overview of Portfolios
- Portfolio Management Strategies
- Portfolio Performance Analysis