ICAP PRC-2 Quantitative Analysis for Business study guide
ICAP PRC-2 Quantitative Analysis for Business · Work through your exam, one topic at a time.
PRC-2 Quantitative Analysis for Business is one of the professional-stage qualifying papers in the ICAP chartered accountancy route, and it is where the numerical toolkit behind audit, tax, corporate finance and management accounting is built. It suits candidates who have cleared the earlier PRC papers and now need to move from mechanical calculation to interpreting results for a business decision. The ICAP PRC-2 Quantitative Analysis for Business study guide has 10 sections and about 3,199 words.
01Basic Mathematics and Business Applications
This domain tests whether you can turn business wording into arithmetic: percentage change and reverse percentages, ratio sharing, markup versus margin, compounded growth, currency conversion and break-even. ICAP questions usually hide one interpretation step before the calculation.
312 words, about 2 min02Statistical Representation of Data and Measures of Central Tendency and Dispersion
This domain covers how data are organised and summarised: frequency distributions, class boundaries and midpoints, histograms and ogives, and the measures that describe centre and spread. The exam tests both calculation and interpretation, especially the effect of skewness and the choice between population and sample formulas.
339 words, about 2 min03Probability and Probability Distributions
Probability questions test the rules of combination, conditional probability and the standard distributions. You must decide whether events are independent, whether sampling is with or without replacement, and whether a discrete or continuous model fits.
314 words, about 2 min04Index Numbers
This domain tests weighted price and quantity indices, the choice of weights, and the use of index numbers to deflate nominal values. You should know why Laspeyres and Paasche give different answers and how to link or rebase a series.
329 words, about 2 min05Time Series Analysis and Forecasting
This domain tests decomposition of a series into trend, seasonal, cyclical and irregular components, and simple forecasting. The exam favours moving averages, seasonal indices and least-squares trend lines.
296 words, about 1 min06Correlation and Regression
This domain tests the strength and direction of linear association and the use of a fitted line for prediction. You must distinguish correlation from causation, interpret r and r², and keep the explanatory and response variables the right way round.
333 words, about 2 min07Financial Mathematics
This domain tests time value of money: compounding and discounting, effective rates, annuities, perpetuities, loan instalments and project appraisal by NPV and IRR. Cash-flow timing is the main source of error.
316 words, about 2 min08Decision Theory and Expected Value
This domain tests choice under uncertainty using payoff tables, expected monetary value, decision trees and the value of information. You must separate the decision criterion from the probabilities.
292 words, about 1 min09Linear Programming and Optimization
This domain tests formulation and solution of constrained optimisation problems. You must translate words into an objective and inequalities, then solve graphically or interpret slack and shadow prices.
329 words, about 2 min10Sampling, Estimation and Hypothesis Testing
This domain tests how samples support inferences: sampling methods, standard error, confidence intervals and hypothesis tests. You must choose the correct distribution and state conclusions in the language of the test.
339 words, about 2 min