Uploads from FinQuiz Pro

Currently Playing: Parametric and Non-Parametric Tests of Independence – Module 9 – QM – CFA® Level I 2026

Get our FREE CFA Level 1 summaries: https://www.finquiz.com/cfa/level-1/summary 📉 Quant Methods Got You Spiraling? FinQuiz = Your CFA Lifeline Quant isn’t just plug-and-chug. It’s logic, timing, and not getting trapped on exam day. Whether you're battling z-scores or trying to remember if it's n or n–1, we’ve got your back. 📎 Battle-Ready Summaries – No fluff, no chaos. Just the core Quant ideas, explained clearly 👉 https://www.finquiz.com/cfa/level-1/summary/ 🧷 Stanley Notes – Clean breakdowns of complex concepts (yes, even heteroskedasticity) 👉 https://www.finquiz.com/cfa/level-1/notes/ 📌 Formula Sheet – All the essentials on one page. Screenshot it. Tattoo it. Just don’t forget it. 👉 https://www.finquiz.com/cfa/level-1/formula-sheet/ 🎮 Question Bank – Practice like you mean it. Real CFA-style traps, logic puzzles, and curveballs 👉 https://www.finquiz.com/cfa/level-1/question-bank/ ⏱ Mock Exams – Time pressure. Real feel. Actual anxiety simulator (but also confidence booster) 👉 https://www.finquiz.com/cfa/level-1/mock-exam/ 🧃 Explore All CFA Level 1 Resources 👉 https://www.finquiz.com/cfa/level-1/ 💸 Want the full upgrade? Go Premium = Everything unlocked + guidance to crush Level 1 👉 https://www.finquiz.com/cfa-level-1-study-packages/ 0:00 Introduction: Parametric & Nonparametric Tests of Independence Overview of correlation significance Why these tests matter for CFA Level 1 and real-world finance 0:17 Pearson Correlation Coefficient (Parametric) Definition of Pearson’s r (range: -1 to +1) Relationship between two continuous variables Testing correlation under normality assumptions 1:10 Testing the Correlation Coefficient Decision rule (reject/fail to reject) 2:10 Chi-Square Test of Independence (Nonparametric) When variables are categorical Contingency table (rows & columns) Null hypothesis (no relationship) vs. alternative (relationship exists) 2:37 Calculating the Chi-Square Statistic Significance levels (5%, 1%, etc.) 3:35 Practical Tips & CFA Exam Prep Importance of practice with CFA curriculum examples Using end-of-chapter questions and FinQuiz resources Real-world application in financial analysis 4:10 Conclusion & Next Steps Recap of Pearson vs. Chi-square tests Final encouragement for mastery in both exam and professional contexts Invitation to ask questions and continue learning