Level I CFA Quant: Common Probability Distributions-Lecture 4

This is Reading 9 for the 2021 exam.

This CFA exam prep video lecture covers:
Applications of the normal distribution
Safety first rule
The lognormal distribution
Monte carlo simulation and historical simulation
Practice questions
Summary for Probability Distributions

[srishtijnn]

Thanks for providing such great content and explanation for free!

A small doubt, for the practice question at 7:09, the question under the table is to find "the portfolio which minimizes the probability of investor's portfolio falling BELOW 100K.
So accordingly, the required return should be 0% instead of 4% in my opinion.
If the required return is 4k, shouldn't the question be written in a different way?
Please correct me if I'm wrong, Thanks!

[apareja]

Hello, isn't it possible to consider that by the end of the year, for the practice question of 7:09, the minimum level is to have a -96% return? This would be Return of (4k/100k-1) = 4%-1= -96%, considering that at the end of the 1y investment he would also receive the 100k initial position., therefore the answer would be A as SF_A=10.1= (5%-(-96%))/10% [SF_B=8, SF_C=6.24]. Just curious about the way in which I got it before checking your answer.

[lnrzwie]

Thank you ift team you are really helping me in understanding the lecture not just memorizing!
I'm preparing for CFA Level 1 exam in Feb, it will be enough to study on your channel the lectures to pass the test?
Of course I'll do the exercises of cfainst also

[akmaljanrakhmetov]

Thank you sir, your course on statistics is much better than the explanation of Kaplan

[adityatamhane]

Need help with Schweser Notes- Pg.240 Q.2> For a continuous random variable X, the probability of any single value of X is> a. One b. Zero . c. Determined by the CDF. Although the answer is zero, I didnt understand the rationale behind the solution. Thanks in advance! :)

[reyfad]

Thanks for your well narrated lectures.

[anssmadrid]

Thank you very much for your efforts, I really appreciate you sir

[souissihanaa]

Thank you very much for this great content! That is just what I needed!

[pierrew]

Are log normal distribution and monte carlo simulation important in the Level 1? Thank you

[pushpalathadamodharan]

Thank you so much for the amazing content

[MrLevent]

Hi. Really appreciate your videos. Subscribed earlier. Was wondering if you cover continuously compounded return (CCR) and how to solve natural log with the calculator somewhere?thx

[taewankim]

I want to ask about the difference between the Sharp ratio and Safety-first ratio since these two have a very similar equation. Always thanks for your good lectures!