Level 1 CFA® Exam:
Application of Fintech, Machine Learning, & AI

Last updated: October 28, 2022

CFA Exam: Text Analytics & Natural Language Processing (NLP)

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Natural Language Processing (NLP) combines computer science, AI, and linguistics in order to develop computer programs that can analyze and interpret human language. NLP covers things like translation, speech recognition, sentiment analysis, etc.

CFA Exam: Robo-Advisers

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Robo-advisers provide investment services to a large number of retail investors at a cost lower than the cost offered by traditional investment services advisers. These investment services are provided through internet portals, so there is no need for an intermediary (like a financial adviser). It’s true, especially in the case of fully automated digital wealth managers. There is also a sector of robo-advisers supported by human financial advisors. This sector is called adviser-assisted digital wealth managers.

Robo-advisers mainly offer passive investments with a reasonable risk at a cost suitable even for less affluent clients.

CFA Exam: Risk Analysis

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In relation to risk management, AI, ML, and Big Data are used for:

  • monitoring & analyzing real-time risk, market data, and trading patterns thanks to Big Data,
  • assessing data quality thanks to ML algorithms,
  • backtesting of computation heavy simulations which can be accelerated thanks to AI-based techniques.

Level 1 CFA Exam Takeaways: Application of Fintech, Machine Learning, & AI

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  1. Natural Language Processing (NLP) combines computer science, AI, and linguistics in order to develop computer programs that can analyze and interpret human language.
  2. Robo-advisers provide investment services to a large number of retail investors at a cost lower than the cost offered by traditional investment services advisers.
  3. Algorithm trading is using algorithms to buy and sell assets on exchanges and other trading venues.