Hi David, I am working on these two chapters since last one week, and still not through with "Review of Statistics" topic. They are so time consuming and even after going through the readings, your videos and notes; when i start doing the practice questions i cannot answer all of them. It is so confusing and demoralizing, as in even after putting so much effort and still end up with knowing nothing of the material. Can you please suggest some startegies that I can use to get through this section as it is eating my crucial study time and i somewhere feel that i am allocating way too much resources on these two topics. Please advise Thanks, Gary P.S. I feel that AIM statements in these two chapters are really vague and it covers a lot of unrelated stuff, I maybe wrong though.

Hi Gary, The 2nd (of 8) Focus Reviews publish this upcoming week, and I am actually currently (at this moment) working on the P1. Quant focus review (which includes these two chapters), so this week we will publish a focus review tips article, much like i recently did for the the previous T1. Foundations at http://www.bionicturtle.com/forum/threads/p1-focus-review-1st-of-8-foundations.6072/ ...although it won't be a panacea, i don't think a panacea exists I hope it gives some comfort that introductory statistics and probability is fundamental to the rest of the FRM (and quantitative finance). If there is one area worth consuming your "extra time," our assigned econometrics, since it builds the foundation, is arguably worth it. Two additional quick thoughts: Don't necessarily be discouraged by our (my) practice questions: they are a notch (or in some cases) two notches more difficult than the exam and would often require more time to answer. Such is their intent to be used to help comprehend the material (I do have to defend this constantly. Some candidates expect to be able to answer our PQ "as if" they are mock exams ... but they are, on average, more difficult than that. And, in general, this seems to work as, after the exam, we don't the gripes that our questions are too easy). The point here is too not necessarily get frustrated just because it takes longer on these PQ. Clearly you are correct that the AIMs, in total, will "overreach" the exam. (believe it not, they've improved in that regard!). I will put more guidance in this week's focus review tips post (which will appear in the study planner of course). thanks,

Thanks David, and honestly am looking forward to the Focus Review 2 of 8. The first one helped me a great deal in reviewing the "Foundations of Risk Management" Thanks, Gary

Gary, okay great, to be honest, the FR is a new experiment (that is taking many of my hours) and I have/had no idea if it would help, so I really do appreciate positive feedback (it makes it easier to sacrifice my weekend if the FR adds value!) ... but i will say that I feel the AIMs are sort of broken. We need to cover the AIMs (obviously, right?) but I honesty do not think the AIM list is the best way to convey the crucial material

David, I agree with you. As I am going through AIMs for various chapters i personally feel that sometimes they tend to be little overwhelming and specially in my case the past one week has been brutal. At one point i almost gave up on the chapters. And yeah definitely your "weekend sacrifice" has made our life easy. I think its an amazing thing that you have done by introducing FR. Thanks, Gary

Hi David don't know if you'll agree with me but i wanted to tell Gary that those 2 chapters probably constitute 50-60% of the quantitative analysis. So once you're done with those 2, you have 4 regression chapters that can be mastered easily and then you have 2 chapters about continuous and discrete distributions which are basically related to intro to statistics and probabilities and wont take much time as well. Then from the last 3 chapters, i hear the most important one is Chapter 22 Estimating Volatilities and Correlations, the other 2 seem to be more of a qualitative ones. Is that true David can you give us some advices concerning this ?

I wholeheartedly agree with jeff-1984. If history is a guide and the exam is the perspective, then the three most important sub-topics in the quantitative (T2) topic are: Probability, Statistics and Volatility (Hull, not Allen). Then, regression and non-sampling distributions (i.e., distributions other than normal, t, chi^2, F) in Rachev. Finally, superficial MCS See Focus Reviews on P1.FR2 and P1.FR3 for more detail. I've often said I think the switch from last year's Gujarati to this year's S&W was a bad decision, and this is another reason: In S&W, two chapters (ch 2&3) are more important than the other four (S&W Ch 4 - 7), But in Gujarati, probability and stats occupy Chapters 1 thru 5 while only 6 to 8 are regression; i.e., 5 of 8 chapters = prob & stat. So Gujarati's "allocation" more closely matches that exam's testable tendency (the switch to S&W is highly unlikely to change the exam's approximate weighting [it has always been the case that the exam questions w.r.t regression have been shallow and partial relative to the material] , the switch to S&W was done apparently to utilize a more accessible text, but i think even that is debatable).

Honestly David i consider the 4 regression chapters as 1 big chapter. To tell you the truth, back in may i didnt have enough time to study the last 3 QA chapters, i didn't even read them but i ended up in the 3rd quartile (between 50 and 75% right answers) which isnt a bad result at all right ?

Thanks afterworkguinness I regret we didn't have time this year to produce updated focus reviews, but I am so much looking forward to our 2014 plan that will include them!