CFA^® Coaching Program

The capital budgeting process is the process of identifying and evaluating capital projects, that is, projects where the cash flow to the firm will be received over a period

Cost of capital signifies what is the weighted average return expectation of all investors.

Leverage refers to the burden of fixed cost a firm has. Here we define and calculate various measures of leverage and the firm characteristics that affect the levels of operating and financial leverage.

Working capital means the amount required by the firm to run its day-to-day operations. Here we learn how a firm manages its working capital, its short-term financing policy, and its sources of short-term financing for liquidity needs.

Candidates should understand the idea of a firm’s stakeholders, how conflicts can arise between stakeholders, and how effective corporate governance can mitigate problems arising from these conflicts.

The chapter discusses the different inventory cost flow methods: FIFO, LIFO, and weighted average cost.

Understand the accounting treatment with respect to long-lived assets.

Understand the accounting treatment with respect to non-current liabilities.

Understand what is deferred taxes, and accounting treatment with respect to differed tax asset and differed tax liabilities.

Basic format of Income Statement

Basic format of Balance Sheet

How to prepare a firm's cash flow statement using direct and indirect approach.

The chapter covers various financial ratios.

Brief introduction about financial statement

The chapter covers accounting standards: why they exist, who issues them, and who enforces them.

Here we cover the quality of a firm’s financial statements, which, together with the quality of reported earnings, determines what is defined as the overall quality of the firm’s financial reports.

In this chapter, we will apply the analytic methods detailed in the topic review of Financial Analysis Techniques.

What are the various financial asset, where we invest are money in.

Security market indexes are used to measure the performance of markets and investment managers. Understand the construction, calculation, and weaknesses of price-weighted, market capitalization-weighted, and equal-weighted indexes.

We learn the three forms of market efficiency and know the evidence from tests of each form of market efficiency.

We learn the three forms of market efficiency and know the evidence from tests of each form of market efficiency.

Understand the effects of business cycles and the stage of an industry’s life cycle. Porter’s five forces and two competitive strategies are very important to know.

Understanding of various valuation techniques, know when the various models are appropriate, how to apply them, and their advantages and disadvantages.

“Alternative investments” collectively refers to the many asset classes that fall outside the traditional definitions of stocks and bonds. This category includes hedge funds, private equity, real estate, commodities, infrastructure, and other alternative investments, primarily collectibles. Each of these alternative investments has unique characteristics that require a different approach by the analyst.

Candidates should be familiar with the basic concepts that underlie derivatives and the general arbitrage framework.

Here the focus is on the pricing and valuation of derivatives based on a no-arbitrage condition.

Here the focus should be on learning the basic characteristics of debt securities.

Focus on different types of issuers, features of the various debt security structures, and why different sources of funds have different interest costs.

Here we learn how to value fixed income securities.

Our primary focus is residential mortgage-backed securities (RMBS). Candidates should understand the characteristics of mortgage passthrough securities and how and why collateralized mortgage obligations are created from them. Be prepared to compare and contrast agency RMBS, nonagency RMBS, and commercial MBS. Finally, candidates should know why collateralized debt obligations are created and how they differ from the other securitized debt securities covered.

“Risk” refers primarily to risk arising from uncertainty about future interest rates. Calculations required by the learning outcomes include the sources of bond returns, three duration measures, money duration, the price value of a basis point, and approximate convexity.

Here we understand what is credit risk and how to perform credit underwriting.

We understand time value of money concepts and applications. Procedures are presented for calculating the future value and present value of a single cash flow, an annuity, and a series of uneven cash flows. The impact of different compounding periods is examined, along with the procedures for solving for other variables in time value of money problems.

Understand how to evaluate capital budgeting projects.

This chapter is about the uses of descriptive statistics to summarize and portray important characteristics of large sets of data.

The chapter covers important terms and concepts associated with probability theory.

We will learn bout uniform and binominal distributions.

The chapter covers random samples and inferences about population means from sample data.

This chapter covers common hypothesis testing procedures

The chapter covers how with the help of charts, we predict stock prices.

Portfolio management is the art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance.

This topic review makes use of many of the statistical and returns measures we covered in Quantitative Methods.

Here, we learn how through diversification, we can reduce unsystematic risk and we will only be compensated for systematic risk only.

Here, we understand why investment policy statements are created and what their major components are.

Here, we understand that organizations should estimate the various risks they face and then reduce some risks and accept or increase other risks. The result should be a bundle of risks that simultaneously matches the risk tolerance of the organization and provides the greatest benefits in terms of reaching the organization’s goals.

As terms like Big Data, blockchain, and algorithmic trading come into common use, CFA^® candidates are expected to be familiar with them and how they relate to investment management.

Candidates should learn the definitions of ethics and ethical behaviour presented by the authors and the arguments presented for having a code of ethics and following ethical principles.

Understand and comply with the Standards of Professional Conduct.

The Standards of Professional Conduct comprise seven Standards (I–VII) and a total of22 subsections. These Standards and their application are covered here.

Introduction to the Global Investment Performance Standards (GIPS®).

Key features of the GIPS standards.

Understand supply and demand, utility-maximizing consumers, and the product and cost curves of firms.

It covers four market structures: perfect competition, monopolistic competition, oligopoly, and monopoly.

The chapter introduces macroeconomics and the measurement of aggregate economic output.

Candidates need to know how to interpret the many economic indicators that are available and why various indicators tend to lead, coincide with, or lag behind changes in economic activity.

The chapter covers supply and demand for money, as well as fiscal and monetary policy.

Learn how comparative advantage results in a welfare gain from international trade and the two models of the sources of comparative advantage.

Candidates must understand spot exchange rates, forward exchange rates, and all the calculations having to do with currency appreciation and depreciation.