CFA 2019 Schweser - Level 2 SchweserNotes Book 1: ETHICAL AND PROFESSIONAL STANDARDS, QUANTITATIVE METHODS, AND ECONOMICS

Contents......Page 2
List of pages......Page 5
Learning Outcome Statements (LOS)......Page 15
Welcome to the 2019 Level II SchweserNotes™......Page 23
Module 1.1: Introduction to the Code and Standards......Page 25
Module 2.1: Standards I(A) and I(B)......Page 29
Module 2.2: Standards I(C) and I(D)......Page 38
Module 2.3: Standards II(A) and II(B)......Page 44
Module 2.4: Standard III(A)......Page 50
Module 2.5: Standards III(B) and III(C)......Page 53
Module 2.6: Standards III(D) and III(E)......Page 59
Module 2.7: Standards IV(A), IV(B), and IV(C)......Page 63
Module 2.8: Standard V......Page 72
Module 2.9: Standard VI......Page 82
Module 2.10: Standard VII......Page 90
Key Concepts......Page 96
Answer Key for Module Quizzes......Page 97
Module 3.1: Ethics Case Studies......Page 104
Module 4.1: Trade Allocation......Page 114
Module 5.1: Changing Investment Objectives......Page 116
Module 6.1: Fintech in Investment Management......Page 129
Key Concepts......Page 135
Answer Key for Module Quiz......Page 136
Module 7.1: Covariance and Correlation......Page 137
Module 7.2: Linear Regression: Introduction......Page 143
Module 7.3: Hypothesis Tests and Confidence Intervals......Page 149
Module 7.4: Predicting Dependent Variables and Confidence Intervals......Page 153
Module 7.5: ANOVA Tables, R2, and SEE......Page 155
Key Concepts......Page 163
Answer Key for Module Quizzes......Page 166
Exam Focus......Page 169
Module 8.1: Multiple Regression: Introduction......Page 170
Module 8.2: Hypothesis Tests and Confidence Intervals......Page 172
Module 8.3: ANOVA and the F-test......Page 177
Module 8.4: Coefficient of Determination and Adjusted R-Squared......Page 183
Module 8.5: Dummy Variables......Page 186
Module 8.6: Assumptions: Heteroskedasticity......Page 190
Module 8.7: Serial Correlation......Page 195
Module 8.8: Multicollinearity......Page 198
Module 8.9: Model Misspecification, and Qualitative Dependent Variables......Page 200
Module 8.10: Supervised and Unsupervised Machine Learning......Page 207
Module 8.11: Machine Learning Algorithms......Page 209
Key Concepts......Page 213
Answer Key for Module Quizzes......Page 217
Module 9.1: Linear and Log-Linear Trend Models......Page 221
Module 9.2: Autoregressive (AR) Models......Page 228
Module 9.3: Random Walks and Unit Roots......Page 234
Module 9.4: Seasonality......Page 239
Module 9.5: ARCH and Multiple Time Series......Page 243
Key Concepts......Page 249
Answer Key for Module Quizzes......Page 252
Module 10.1: Probabilistic Approaches......Page 255
Key Concepts......Page 262
Answer Key for Module Quiz......Page 263
Topic Assessment: Quantitative Methods......Page 264
Topic Assessment Answers: Quantitative Methods......Page 269
Module 11.1: Forex Quotes, Spreads, and Triangular Arbitrage......Page 271
Module 11.2: Mark-to-Market Value, and Parity Conditions......Page 278
Module 11.3: Exchange Rate Determinants, Carry Trade, and Central Bank Influence......Page 288
Key Concepts......Page 299
Answer Key For Module Quizzes......Page 303
Module 12.1: Growth Factors and Production Function......Page 308
Module 12.2: Growth Accounting and Influencing Factors......Page 312
Module 12.3: Growth and Convergence Theories......Page 318
Key Concepts......Page 325
Answer Key for Module Quizzes......Page 328
Module 13.1: Economics of Regulation......Page 330
Key Concepts......Page 338
Answer Key for Module quiz......Page 340
Topic Assessment: Economics......Page 341
Topic Assessment Answers: Economics......Page 344
Formulas......Page 346
Appendix A: Student’s T-Distribution......Page 350
Appendix B: F-table at 5 Percent (Upper Tail)......Page 351
Appendix C: F-Table At 2.5 Percent (Upper Tail)......Page 352
Appendix D: Chi-Squared Table......Page 353
Appendix E: Critical Values for the Durbin-Watson Statistic......Page 354