Rates and Returns (2025 CFA® Level I Exam – Quantitative Methods – Module 1)
Master the foundation of CFA Level I Quantitative Methods with this lesson on Rates and Returns. Professor James explains key concepts including:
Required rate of return and discount rate
Opportunity cost and risk-free rate
Arithmetic vs geometric returns
Money-weighted and time-weighted returns
Continuous compounding and annualized returns
These concepts are critical for CFA Level I Exam preparation and build the foundation for advanced topics in Level II and III.
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Topic 1 – Quantitative Methods
Learning Module 1 – Rates and Returns
LOS : Interpret interest rates as required rates of return, discount rates, or opportunity costs and explain an interest rate as the sum of a real risk-free rate and premiums that compensate investors for bearing distinct types of risk.
LOS : Calculate and interpret different approaches to return measurement over time and describe their appropriate uses.
LOS : Compare the money-weighted and time-weighted rates of return and evaluate the performance of portfolios based on these measures.
LOS : Calculate and interpret annualized return measures and continuously compounded returns, and describe their appropriate uses.
LOS : Calculate and interpret major return measures and describe their appropriate uses.
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