Page 15 - FINAL CFA SLIDES DECEMBER 2018 DAY 3
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Session Unit 2:
8. Statistical Concepts and Market Returns
LOS 8.g: Calculate and interpret 1) a range and a mean absolute deviation and 2)
the variance and standard deviation of a population and of a sample.
Example: Assume the 5-year annualized total returns for the five investment managers used in the earlier example
represent all of the managers at a small investment firm. What is the population variance of returns?
KEY POINT/EXAM TECHNIQUE:
σ > MAD - that holds true in general.
