CFA® L1 — Quantitative Methods
Time-value of money, statistics, probability, hypothesis testing, regression. The mathematical scaffolding under everything else in the curriculum.
Quick info
- Layer
- Professional Certifications
- Track
- CFA® Level 1
- Estimated hours
- 35 hrs
- Chapters
- 8
- Exam body
- CFA Institute
- Cost on Trustner
- Free
Every chapter below has Foundation, Deep Dive, and Advanced material — read in any order, expand each chapter to see the full content.
About this course
Quantitative Methods is the mathematical scaffolding under everything else in the CFA Level 1 curriculum. Time-value of money shows up in bond pricing, equity valuation, and pension liabilities. Probability and statistics show up in performance measurement, hypothesis testing of alpha, and risk modelling. Get this reading right, and the rest of the curriculum becomes manageable. Skim it, and you fight every other topic.
Who this is for
- CFA Level 1 candidates beginning the program — Quant is typically attempted first.
- Engineering and CA backgrounds adding investment finance.
- Working analysts who want a structured statistics-for-finance refresher.
- NISM 10A/10B candidates wanting deeper quantitative grounding.
What you'll learn
- TVM applications — present value, future value, annuities, perpetuities — solving real Indian household and institutional problems
- Probability theory — distributions, expected values, conditional probability, and Bayes' theorem applied to financial decisions
- Sampling, estimation, and the Central Limit Theorem — the foundation of all statistical inference
- Hypothesis testing — testing for fund-manager alpha, statistical significance of returns, with worked examples
- Linear regression and its application to investment problems — beta estimation, factor models
- Time-series basics — stationarity, AR(1), and why stock prices are non-stationary while returns are
Course material — 8 chapters
Each chapter offers three tiers — Foundation for the core concept, Deep Dive for worked examples and practitioner depth, and Advanced for edge cases and exam tips. Click any chapter to expand.
- 1Reading 1
Time value of money in finance
- Discount factors, present and future values
- Annuities, perpetuities, growing perpetuities
- Continuous compounding and effective rates
✓ Full chapter — read, examples, FAQ, MCQs - 2Reading 2
Organising and visualising data
- Frequency distributions, histograms, box plots
- Heat maps and scatter plots
- Measures of central tendency and dispersion
✓ Full chapter — read, examples, FAQ, MCQs - 3Reading 3
Probability concepts
- Conditional and joint probability
- Bayes' theorem in financial contexts
- Expected value, variance, covariance, correlation
✓ Full chapter — read, examples, FAQ, MCQs - 4Reading 4
Common probability distributions
- Discrete — binomial, Poisson
- Continuous — uniform, normal, lognormal
- Z-scores, confidence intervals
✓ Full chapter — read, examples, FAQ, MCQs - 5Reading 5
Sampling and estimation
- Sample mean and variance
- Central Limit Theorem
- Confidence intervals (known and unknown σ)
✓ Full chapter — read, examples, FAQ, MCQs - 6Reading 6
Hypothesis testing
- Null and alternative hypotheses
- t-tests, z-tests, p-values
- Type I and Type II errors
✓ Full chapter — read, examples, FAQ, MCQs - 7Reading 7
Linear regression
- Single-variable regression
- Coefficient interpretation, R², SSE
- Beta estimation in CAPM
✓ Full chapter — read, examples, FAQ, MCQs - 8Reading 8
Time-series basics
- Trends and seasonality
- AR(1) models and stationarity
- Forecasting from time-series
✓ Full chapter — read, examples, FAQ, MCQs
About the exam
- Provider
- CFA Institute
Note: ~8-12% of CFA Level 1 weight. Quant is foundational — invest the time.
The exam is administered by CFA Institute. Trustner Academy is not affiliated with CFA Institute; we provide independent preparatory educational material. See our disclaimer.
More from CFA® Level 1
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CFA® L1 — Financial Statement Analysis
Reading balance sheets, income statements, and cash flows the way analysts do. The most exam-weighted topic in Level 1.
CFA® L1 — Corporate Issuers
Capital structure, working capital, dividend policy, ESG, and the corporate-finance fundamentals every analyst is expected to know cold.
CFA® L1 — Equity Investments
Markets, indices, equity valuation, industry analysis. The introduction to equity investing that L2 builds heavily on.