Distribution Tables

[[email protected]]

Hi,

I received an email from GARP today showing me general things I should know about the FRM exam in November, plus FAQ's.

One of the pointers was about "distribution tables" it said the following:

"In quantitative methods the z-table, t-table, and f-tables are often referred to. Will these tables be provided during the Exam?

Yes. GARP will provide distribution tables with the Exam. If a question requires information from a specific distribution table, that information will be provided. Candidates are expected to understand risk management concepts and approaches and their application to a risk manager’s day-to-day activities. With respect to “Quantitative Analysis” topics outlined in the 2010 Study Guide, candidates are not expected to memorize formulas of distributions, but should understand when it is appropriate to use a particular type of distribution. The best thing for any candidate to do is to go through the practice Exams to get a good sense of the types of questions they will face. The two approved calculators are capable of performing any required present value and future value calculations."


Its just that I thought that you said that we were not given tables in the exam...and we should just know the 5% and 1% significance values...?

Simon

 

[David Harper CFA FRM]

Hi Simon,

GARP's note is consistent with my advice. I definitely say memorize one-tailed 5% and 1% Z-scores (1.645 and 2.33); but i think it's nearly impossible to avoid memorizing those as they so often appear in practice questions. And, I do recommend memorizing two-tailed 5% and 1% (1.96 and 2.58), b/c while the one-tail apply to VaR the two-tail is default significance test (eg. regress coefficient).

But for:
* other normal (Z) values,
* student' t and F, which have many values due to many d.f.

... memorization cannot be expected ("and we should just know the 5% and 1% significance values") so if GARP utilizes a student't or F variate, they will have to provide (in the question or in the table).

so i'm not clear on how this is different from my advice to memorize only the 1%/5% normal deviates?
(setting aside, some have asked for a larger set of occasionally asked, so i have given a list of 2 + 4 or so that could appear)

David

 

[[email protected]]

Sorry it was my missunderstanding, for some reason I got the idea that no tables would be given, so there would be low testability for questions involving f-tests, and chi square tests.

Nevermind, I am comfortable in using distribution tables so hopefully I will be ok in the exam.

Thanks again

Simon