FinAcademy › Risk Track I › Distributions

Module R2 · QTA 3–4

The distributions you will meet

The discrete and continuous families the exam draws from, then joint distributions, covariance, correlation and the bivariate normal.

4 lessons · 11 interactive figures · 26 exercises

Module progress
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  1. 1Discrete families: Bernoulli, binomial, Poisson
    Default or not is Bernoulli. Defaults in a pool are binomial. Operational-loss counts are Poisson.    6 exercises
  2. 2Continuous families: uniform, normal, lognormal, t, chi-square, F
    Prices are lognormal, returns are nearly normal, test statistics are t, chi-square or F. You need to recognise each by its job.    7 exercises
  3. 3Joint, marginal and conditional distributions
    Two assets, two random variables, one joint law. Conditional expectation is the tool that turns a joint table into a forecast.    6 exercises
  4. 4Covariance, correlation and the bivariate normal
    Portfolio variance is a double sum. Everything about diversification is inside the cross terms.    7 exercises
Module test

20 questions drawn at random from the 26 exercises of this module, 48 minutes on the clock, marked instantly with the worked solution and a link back to the lesson for every miss.

Take the module testFinal mock exam