CFA Level I terms: Q

Qualification summary. Prepare a written summary of your own qualifications and experience, and of the services you can perform.

Standard I(C): Misrepresentation Ethical and Professional Standards

Fairly presented except for a scope limitation or an exception to standards, explained in the report.

Regulatory filings, notes, MD&A and the audit report Financial Statement Analysis

Qualitative data are not: market sentiment, management quality, environmental factors and geopolitical influences.

Big data, the four Vs and alternative data Quantitative Methods

For example, a quality index scores each company on profitability (return on equity), earnings stability and leverage (debt to equity), using a statistical process.

Types of equity indexes Equities

The quality spectrum is a six-rung ladder. At the top, reports are both decision-useful and show sustainable, adequate results.

Reporting quality vs earnings quality, and the quality spectrum Financial Statement Analysis

A quantile is the value at or below which a stated fraction of the data lies. The 30th percentile is the value with 30% of the observations at or below it.

Quartiles, percentiles and box plots Quantitative Methods

Quantitative data are numbers: prices, returns, interest and exchange rates, accounting figures and economic indicators.

Big data, the four Vs and alternative data Quantitative Methods

Quantitative easing (QE) is operationally like open market purchases, but on a much larger scale. The central bank buys government bonds, mortgage bonds or other assets from the private sector and pays with newly created reserves.

The neutral rate and the limits of monetary policy Economics

You do not have to be an expert in every technical detail, but you must understand the quantitative models you use, including their assumptions and limitations, and how their results fed your decision.

Standard V(A): Diligence and Reasonable Basis Ethical and Professional Standards

Quartiles make four groups, quintiles five, deciles ten and percentiles one hundred. The second quartile, the 50th percentile and the median are the same value.

Quartiles, percentiles and box plots Quantitative Methods

government agencies are quasi-government entities set up under national or local law to provide a particular public good or service, or to run infrastructure the law requires.

Agency, municipal and supranational bonds Fixed Income

The current ratio counts all current assets, the quick ratio excludes inventory and prepaid expenses, and the cash ratio counts only cash and marketable securities.

Common-size balance sheets, liquidity and solvency ratios Financial Statement Analysis

Quartiles make four groups, quintiles five, deciles ten and percentiles one hundred. The second quartile, the 50th percentile and the median are the same value.

Quartiles, percentiles and box plots Quantitative Methods

Every area is the same, but the box C now has a different name: quota rent, the extra profit earned because supply is capped and the price is held above the world price.

Tariffs, quotas, export subsidies and their welfare effects Economics

The over-the-counter (OTC) market is a network of broker-dealers that buy and sell among themselves, with no central matching system. It is a quote-driven market: several competing market makers keep posting bid and ask prices, and fill orders from their own inventory or by finding an offsetting order from another dealer or investor.

Where shares trade: exchanges, off-exchange and over the counter Equities

A floating-rate note (FRN, or floater) replaces the fixed coupon with one that follows a short-term rate. Each period it pays a market reference rate (MRR), usually a short money market rate, plus a fixed spread called the quoted margin.

Floating-rate notes: quoted margin and discount margin Fixed Income