₦airaland Forum

Nice one guys . This is really encouraging. Looking at going into commercial plantain farming on about 200 acres of land in Ogun state. I have been doing research for almost two months now but my major challenge as been the target market. You don't just produce without having a target market and am not too comfortable with all these mile 12, Idi-oro market, ikorodu n co. Please does export market exist for plantain ? Also , can Cameroonian plantain do well in Nigeria and is there market for it ? It's always advisable to know all these before venturing into this kind of business. I will really appreciate a candid response/advise from anyone. Thanks

Hi everyone, pls i need reading partners for Energy Risk Professional exams( Exam date-Nov 19TH) Free materials are available. Contact me via princesedorf@yahoo.com. Tokunbo Bakare. Thanks

@Tolu .lol. God will answer ur prayers. Just do all you could do and have confidence in God.

For those that i have offended,am so sorry.e.g Dr tolu,WYT,Luice,Alex,Kazee,Wale,Mayowa,Paul, etc. Pls once again am sorry.

Sorry,i have been away for a while. However, I tried sending the softcopy to Schweser 2010 to some people but to no avail. The only option i have now is to copy it to ur system or to ur external drive. If you u dont mind please contact me via princesedorf@yahoo.com or bbm 21CDB5F2.For,i find it difficult to pick calls these days due to the nature of my work. However,u can send sms to me also on 08059805727. Wish u all best of luck. Cheers

WHAT YOU MUST KNOW(LEVEL 1)

Ethics
1) Make sure you know all Standards of Professional Standards, but focus on Independence and Objectivity, Misrepresentation, Material Nonpublic Information, Preservation of Confidentiality, Loyalty, Suitability, Responsibilities of Supervisors, Disclosure of Conflicts, Priority of transactions, and Fair Dealing.
2) Know compliance procedures (at least two) to deter violations
3) Know GIPS required/mandatory standards inside and out (do not focus as much on recommended or suggested items) especially for the eight sections – LOTS of memorization.

Quantitative Methods
1) Know how to calculate the different measures of central tendency (arithmetic mean, geometric mean, median, mode) – be on guard for a harmonic mean question, possibly –not often asked but maybe this’ll be the year.
2) Know the different measures of dispersion and how to calculate them- Variance, standard deviation, mean absolute deviation, range etc.
3) Know the difference for variance and std. deviation calculation for a population vs sample.
4) Make sure you know the coefficient of variation and Sharpe ratio from a qualitative and quantitative standpoint.
5) Know how to calculate expected return for a set of data and weights and know how to calculate HPR.
6) Know how to calculate correlation coefficient and covariance by the formula r = Covx,y / (std dev x) (std dev y) and make sure you understand both concepts from a qualitative standpoint too.
7) Know how to calculate a computed t and z value. That is: (sample mean – pop mean) / std dev. Know what a z-score or t-score means.
Know the rule of thumb (1 std dev = 68%, 2 std dev = 95%…)
9) Know the characteristics of a normal distribution.
10) Know how to calculate the standard error of a population or sample.
11) Know how to calculate a confidence interval : x +/- ts
12) Know the difference between null and alternate hypotheses.
13) Know how to do a one-tailed and two-tailed tests (but focus on two tailed tests)
14) Know Type I and Type II errors
15) Know the different variables of a simple regression equation, b0, b1, X1, Y and what they represent.
16) Focus on simple linear regression -- know SST=SSR+SSE, also know SEE = square root of SSE / n-k-1 and of course that R squared = SSR/SST or 1 - SSE/SST. Don’t forget: relationship between R squared and correlation coefficient.
17) Know how to calculate the t-score (t calc = point estimate - hypoth value / standard error and how to calculate the standard error given the t calc, hypoth value and point estimate
18) Know how to calculate y, given x's in a regression equation
19) Know the difference between F and t-tests, when to use each
20) Know how to compare t calc and t critical and whether to accept or reject H0.
21) Know Roy’s Safety First Criterion from a qualitative and quantitative standpoint.

Corp. Fin.
1) Know the formula for the WACC
2) Know the formula for NPV, AAR, Profitability Index and IRR and how to calculate each.
3) Know how to calculate DOL, DFL and DTL (degree of operating leverage, )
4) Know what is the Dividend Signaling Hypothesis and the signaling effects of a change in a firm’s dividends.
5) Know the different ways to calculate the cost of equity (ks)
6) Know how to calculate the cost of new equity (ke)
7) Know how to calculate the EPS after a share repurchase
Know how to calculate, and the effects of, BV per share after a share repurchase
9) Know the advantages and disadvantages of share repurchases vs cash dividends
10) Know how to calculate the after-tax cost of debt and the cost of preferred shares used in the WACC formula.


Equity/Securities Markets
1) Know the n-firm concentration ratio and the Herfindahl index COLD including how to calculate each and the differences between the two.
2) Know how to calculate margin call trigger prices for a margin purchase and a short sale.
3) Know the different types of indices and how to calculate each (price-weighted, market cap-weighted, equally-weighted, etc.)
4) Know the 3 forms of market efficiency COLD and the anomalies associated with each.
5) Know technical analysis contrarian and follow-the-smart-money strategies COLD (do not mix up the credit and debit balances)
6) Know Porter's 5 forces COLD
7) Know how to decompose ROE using the traditional DuPont and the extended DuPont – be able to calculate each component and know what each ratio is.
Know how to calculate growth rate of a firm (g= rr x ROE) – COLD!!!
9) Know the factors that influence the required rate of return
10) Know Gordon Growth model COLD
11) Know 2 stage DDM COLD
12) Know when to use Gordon and 2 stage DDMs
13) Know the strengths and weaknesses of multistage growth models (at least two)
14) Know how to calculate P/E and how to get P/E ratio from constant growth DDM formula
15) Know the industry life cycle stages COLD
16) Know that for margin transactions, the leverage factor is calculated as 1/margin percentage and that the levered return is calculated as HPR x leverage factor.


Debt Investments

1) Know the key aspects of all the debt instruments discussed in Study Session 15 and 16 such as asset backed debt, municipal bonds, sovereign debt, high-yield debt, bullet bonds, serial bonds, floating rate bonds, CMOs, MBSs, mortgage pass-throughs, etc.
2) Know all the concepts we went over in class regarding price-yield curve, duration, convexity, callable bond and non-callable bond.
3) Know how to calculate effective duration
4) Know the market segmentation, pure expectations and liquidity preference theories and how they explain different shapes of the yield curve.
5) Know how to explain YTM, spot rates, static spread (zero volatility spread) and OAS.
6) Know that option value = zvs - OAS
7) Know the two forms of prepayment risk - extension and contraction risk as we discussed in class for CMOs.
Know external credit enhancements for ABS.
9) Make sure you can understand and can explain the difference between a cash arbitrage CDO and synthetic CDO and the different tranches (senior, mezzanine, equity) that I went over in class.
10) Know the different forms of credit risk (default, credit spread and downgrade risks).
11) Know the difference between par bond, premium bond and discount bond and the relationship between YTM, coupon yield and current yield for each (which is greater, less, etc.).
12) Know repayment provisions on bonds such as call provisions, put provisions, sinking fund provisions, and refunding provisions.
13) Know the difference between amortizing and non-amortizing securities.
14) Know which types of bonds have more interest rate risk (higher/lower coupon, short/long term to maturity).
15) Know how to calculate the yields I went over in class (current, YTM, etc.)
16) Know what is accrued interest, clean price, full price of a bond.
17) Know how to calculate bond equivalent yield and annual equivalent yield and how to tell which bond is better on a BEY or AEY basis.
18) Know spot rates and how to calculate the price of a bond given a series of spot rates.
19) Know how to calculate and explain absolute yield spread, relative yield spread and yield ratio.
20) Know how to calculate a forward rate given a series of spot rates and how to calculate a spot rate given forward rates.


Financial Statement Analysis

1. Know the difference between LIFO and FIFO effects on B/S and I/S and Statement of Cash Flows and ratios. Remember that COGS=BI + P -EI
2. Know the effects of changing from straight line to accel. dep or vice versa on ROA, ROE, D/E ratio, net income, future depreciation, current depreciation, etc.
3. Be able to adjust financial ratios for off-balance sheet financing such as sales of accounts receivable with recourse, take-or-pay contracts, cap. leases, etc.
4. Know leases primarily from lessee perspective but be ready for 1 or 2 questions from lessor perspective. Know the sales type lease reports profits and has higher assets at inception; earlier profits, same total CF, and less CFO during lease term,
5. Know the different revenue recognition methods (there are 5 of them).
6. Know the differences between the percentage of completion and the completed contract methods for LT contracts and their impact on the financial ratios and the financial statements.
7. Know the DEC items (above or below the NICO) – discontinued operations, extraordinary items, etc., what they are and their effect on NICO and Net Income.
8. Know the construction of the Statement of Cash Flows under the direct and the indirect method and how to classify an activity as part of CFO, CFI, CFF.
9. Know a premium, par and discount bond and whether CFO, CFF will be overstated or understated for each bond.
10. Know the terminology for deferred taxes and how a DTL and DTA arises (is Income Tax expense greater than / less than income taxes paid?). Also know the ways an analyst can treat DTLs.
11. Know the difference between capitalizing vs expensing an expense and what is the impact on I/S and B/S as well as Statement of Cash Flows and financial ratios.
12. Know the 3 and 5-components of duPont, be ready to calculate and analyze
13. Know how to calculate growth rate (g = RR X ROE).
14.Go over ratios -- current, quick, A/R turnover, average collection period, a/p turnover, inventory turnover, payables payment period, TAT, Fixed asset turnover, gross profit margin, net and operating profit margins, ROA, ROE and D/E, LTD/Total capital, D/A and interest coverage ratios.
15. Go over EPS calculations (basic and diluted) and know impact on numerator and denominator of options/warrants, convertible debt and convertible preferred shares.
16. Know what an impaired asset is and its impact on financial statements and financial ratios.
17. Know the different depreciation methods and their impact on the financial statements and ratios.
18. Know and understand the LIFO reserve and how to calculate it and its impact on the financial statements.
19. Know what is Free Cash Flow and how it differs from CFO on the Statement of Cash Flows.

Economics

1) Know what inflation is and how to calculate the inflation rate.
2) Know the three types of unemployment.
3) Know the different schools of macroeconomic thought (Keynesian, Classical, and Monetarists) – know what each theory says and where they agree and where they disagree.
4) Know the time lags of fiscal policy and the different automatic stabilizers.
5) Know PPP -- law of one price, absolute PPP, relative PPP and formulae
6) Know the three ways that the Fed can control the money supply and how to calculate the deposit expansion multiplier and the difference between the actual and potential deposit expansion multiplier.
7) Know that a currency will appreciate/depreciate based on relative income growth rates, relative rates of inflation and changes in real interest rates.
Know interest rate parity which says that countries with high nominal interest rates will have their currencies sell at a forward or discount to prevent arbitrage
9) Know how to calculate the forward premium or discount on a currency vis-à-vis another currency (focus on the currency in the denominator).
10) Know the difference between a direct and indirect quote and whether a currency is appreciating or depreciating.
11) Know elasticity of demand and supply COLD and how to calculate them. Know whether it is a highly elastic, inelastic or unitary elasticity.
12) Know the difference between accounting and economic profits.
13) Know the law of diminishing returns and what it is.
14) Know the different competitive models (pure competition, monopolistic competition, monopoly, and oligopoly) and their characteristics as well as what they say about economic profits in short and long run.
15) Know the Marginal Revenue Product for inputs and how it relates to price.
16) Review the reading on the Supply of and Demand for Productive Resources mostly for terminology and concepts.
17) Make sure you know ATC, AVC, AFC, curves well and how they relate to MC curve.
18) Know the constant returns to scale, diseconomies of scale and economies of scale in the long-run.

Portfolio Management

1) Know how to calculate E(R), std dev and variance for two asset portfolio COLD!!!
2) Know the efficient frontier and how to select the optimal portfolio
3) Know how to explain systematic and unsytematic risk, beta, the CML, CAL and SML
4) Know two differences between SML and CML
5) Know how to determine if security is undervalued/overvalued relative to SML
6) Know the assumptions behind the CAPM
****7) BE READY FOR AN IPS (Investment Policy Statement) for an individual investor—review the 2 objectives and 5 constraints well…


Derivatives

1) Know future and forwards – advantages and disadvantages of each and the characteristics of each contract.
2) Know FRAs, qualitative and quantitative and who made/lost money and how much. Know how to calculate the gain/loss and when it will be paid.
3) Know the law of one price and what it is.
4) Know put-call parity COLD and how to manipulate it and determine whether the put, call, stock, bond are overpriced, underpriced or properly valued and what strategy you would undertake and to calculate the arbitrage profit.
5) Know the difference between American and European options.
6) Know the upper and lower bounds for European puts and calls and American puts and calls.
7) For FRA know that the long position in FRA is the party that would borrow. If LIBOR ends up above forward rate in FRA, long side has right to borrow at below market rates and receives a payment.
Know caps and floors and when to use them and how.
9) Know the effect of each variable on a call option (asset price, volatility, time, etc.)
10) Know interest rate, currency and equity swaps as we did in class – Remember: LIBOR is paid in arrears…
11) Know swaptions COLD!!!


Alternative Investments

1) Know ETFs – what they are and their advantages and disadvantages
2) Know the three approaches to valuing real estate and how to calculate the value of the property under all 3 approaches (cost, sales comparison and income method).
3) Know how to calculate NOI.
4) Know risks of hedge funds and different types of hedge funds
5) Know the aspects of open-end and closed-end funds and what are 12 b-1 fees.
6) Review collateralized commodities futures position material – just in case.

WHAT YOU MUST KNOW(LEVEL 1 )

Ethics
1) Make sure you know all Standards of Professional Standards, but focus on Independence and Objectivity, Misrepresentation, Material Nonpublic Information, Preservation of Confidentiality, Loyalty, Suitability, Responsibilities of Supervisors, Disclosure of Conflicts, Priority of transactions, and Fair Dealing.
2) Know compliance procedures (at least two) to deter violations
3) Know GIPS required/mandatory standards inside and out (do not focus as much on recommended or suggested items) especially for the eight sections – LOTS of memorization.

Quantitative Methods
1) Know how to calculate the different measures of central tendency (arithmetic mean, geometric mean, median, mode) – be on guard for a harmonic mean question, possibly –not often asked but maybe this’ll be the year.
2) Know the different measures of dispersion and how to calculate them- Variance, standard deviation, mean absolute deviation, range etc.
3) Know the difference for variance and std. deviation calculation for a population vs sample.
4) Make sure you know the coefficient of variation and Sharpe ratio from a qualitative and quantitative standpoint.
5) Know how to calculate expected return for a set of data and weights and know how to calculate HPR.
6) Know how to calculate correlation coefficient and covariance by the formula r = Covx,y / (std dev x) (std dev y) and make sure you understand both concepts from a qualitative standpoint too.
7) Know how to calculate a computed t and z value. That is: (sample mean – pop mean) / std dev. Know what a z-score or t-score means.
Know the rule of thumb (1 std dev = 68%, 2 std dev = 95%…)
9) Know the characteristics of a normal distribution.
10) Know how to calculate the standard error of a population or sample.
11) Know how to calculate a confidence interval : x +/- ts
12) Know the difference between null and alternate hypotheses.
13) Know how to do a one-tailed and two-tailed tests (but focus on two tailed tests)
14) Know Type I and Type II errors
15) Know the different variables of a simple regression equation, b0, b1, X1, Y and what they represent.
16) Focus on simple linear regression -- know SST=SSR+SSE, also know SEE = square root of SSE / n-k-1 and of course that R squared = SSR/SST or 1 - SSE/SST. Don’t forget: relationship between R squared and correlation coefficient.
17) Know how to calculate the t-score (t calc = point estimate - hypoth value / standard error and how to calculate the standard error given the t calc, hypoth value and point estimate
18) Know how to calculate y, given x's in a regression equation
19) Know the difference between F and t-tests, when to use each
20) Know how to compare t calc and t critical and whether to accept or reject H0.
21) Know Roy’s Safety First Criterion from a qualitative and quantitative standpoint.

Corp. Fin.
1) Know the formula for the WACC
2) Know the formula for NPV, AAR, Profitability Index and IRR and how to calculate each.
3) Know how to calculate DOL, DFL and DTL (degree of operating leverage, )
4) Know what is the Dividend Signaling Hypothesis and the signaling effects of a change in a firm’s dividends.
5) Know the different ways to calculate the cost of equity (ks)
6) Know how to calculate the cost of new equity (ke)
7) Know how to calculate the EPS after a share repurchase
Know how to calculate, and the effects of, BV per share after a share repurchase
9) Know the advantages and disadvantages of share repurchases vs cash dividends
10) Know how to calculate the after-tax cost of debt and the cost of preferred shares used in the WACC formula.


Equity/Securities Markets
1) Know the n-firm concentration ratio and the Herfindahl index COLD including how to calculate each and the differences between the two.
2) Know how to calculate margin call trigger prices for a margin purchase and a short sale.
3) Know the different types of indices and how to calculate each (price-weighted, market cap-weighted, equally-weighted, etc.)
4) Know the 3 forms of market efficiency COLD and the anomalies associated with each.
5) Know technical analysis contrarian and follow-the-smart-money strategies COLD (do not mix up the credit and debit balances)
6) Know Porter's 5 forces COLD
7) Know how to decompose ROE using the traditional DuPont and the extended DuPont – be able to calculate each component and know what each ratio is.
Know how to calculate growth rate of a firm (g= rr x ROE) – COLD!!!
9) Know the factors that influence the required rate of return
10) Know Gordon Growth model COLD
11) Know 2 stage DDM COLD
12) Know when to use Gordon and 2 stage DDMs
13) Know the strengths and weaknesses of multistage growth models (at least two)
14) Know how to calculate P/E and how to get P/E ratio from constant growth DDM formula
15) Know the industry life cycle stages COLD
16) Know that for margin transactions, the leverage factor is calculated as 1/margin percentage and that the levered return is calculated as HPR x leverage factor.


Debt Investments

1) Know the key aspects of all the debt instruments discussed in Study Session 15 and 16 such as asset backed debt, municipal bonds, sovereign debt, high-yield debt, bullet bonds, serial bonds, floating rate bonds, CMOs, MBSs, mortgage pass-throughs, etc.
2) Know all the concepts we went over in class regarding price-yield curve, duration, convexity, callable bond and non-callable bond.
3) Know how to calculate effective duration
4) Know the market segmentation, pure expectations and liquidity preference theories and how they explain different shapes of the yield curve.
5) Know how to explain YTM, spot rates, static spread (zero volatility spread) and OAS.
6) Know that option value = zvs - OAS
7) Know the two forms of prepayment risk - extension and contraction risk as we discussed in class for CMOs.
Know external credit enhancements for ABS.
9) Make sure you can understand and can explain the difference between a cash arbitrage CDO and synthetic CDO and the different tranches (senior, mezzanine, equity) that I went over in class.
10) Know the different forms of credit risk (default, credit spread and downgrade risks).
11) Know the difference between par bond, premium bond and discount bond and the relationship between YTM, coupon yield and current yield for each (which is greater, less, etc.).
12) Know repayment provisions on bonds such as call provisions, put provisions, sinking fund provisions, and refunding provisions.
13) Know the difference between amortizing and non-amortizing securities.
14) Know which types of bonds have more interest rate risk (higher/lower coupon, short/long term to maturity).
15) Know how to calculate the yields I went over in class (current, YTM, etc.)
16) Know what is accrued interest, clean price, full price of a bond.
17) Know how to calculate bond equivalent yield and annual equivalent yield and how to tell which bond is better on a BEY or AEY basis.
18) Know spot rates and how to calculate the price of a bond given a series of spot rates.
19) Know how to calculate and explain absolute yield spread, relative yield spread and yield ratio.
20) Know how to calculate a forward rate given a series of spot rates and how to calculate a spot rate given forward rates.


Financial Statement Analysis

1. Know the difference between LIFO and FIFO effects on B/S and I/S and Statement of Cash Flows and ratios. Remember that COGS=BI + P -EI
2. Know the effects of changing from straight line to accel. dep or vice versa on ROA, ROE, D/E ratio, net income, future depreciation, current depreciation, etc.
3. Be able to adjust financial ratios for off-balance sheet financing such as sales of accounts receivable with recourse, take-or-pay contracts, cap. leases, etc.
4. Know leases primarily from lessee perspective but be ready for 1 or 2 questions from lessor perspective. Know the sales type lease reports profits and has higher assets at inception; earlier profits, same total CF, and less CFO during lease term,
5. Know the different revenue recognition methods (there are 5 of them).
6. Know the differences between the percentage of completion and the completed contract methods for LT contracts and their impact on the financial ratios and the financial statements.
7. Know the DEC items (above or below the NICO) – discontinued operations, extraordinary items, etc., what they are and their effect on NICO and Net Income.
8. Know the construction of the Statement of Cash Flows under the direct and the indirect method and how to classify an activity as part of CFO, CFI, CFF.
9. Know a premium, par and discount bond and whether CFO, CFF will be overstated or understated for each bond.
10. Know the terminology for deferred taxes and how a DTL and DTA arises (is Income Tax expense greater than / less than income taxes paid?). Also know the ways an analyst can treat DTLs.
11. Know the difference between capitalizing vs expensing an expense and what is the impact on I/S and B/S as well as Statement of Cash Flows and financial ratios.
12. Know the 3 and 5-components of duPont, be ready to calculate and analyze
13. Know how to calculate growth rate (g = RR X ROE).
14.Go over ratios -- current, quick, A/R turnover, average collection period, a/p turnover, inventory turnover, payables payment period, TAT, Fixed asset turnover, gross profit margin, net and operating profit margins, ROA, ROE and D/E, LTD/Total capital, D/A and interest coverage ratios.
15. Go over EPS calculations (basic and diluted) and know impact on numerator and denominator of options/warrants, convertible debt and convertible preferred shares.
16. Know what an impaired asset is and its impact on financial statements and financial ratios.
17. Know the different depreciation methods and their impact on the financial statements and ratios.
18. Know and understand the LIFO reserve and how to calculate it and its impact on the financial statements.
19. Know what is Free Cash Flow and how it differs from CFO on the Statement of Cash Flows.

Economics

1) Know what inflation is and how to calculate the inflation rate.
2) Know the three types of unemployment.
3) Know the different schools of macroeconomic thought (Keynesian, Classical, and Monetarists) – know what each theory says and where they agree and where they disagree.
4) Know the time lags of fiscal policy and the different automatic stabilizers.
5) Know PPP -- law of one price, absolute PPP, relative PPP and formulae
6) Know the three ways that the Fed can control the money supply and how to calculate the deposit expansion multiplier and the difference between the actual and potential deposit expansion multiplier.
7) Know that a currency will appreciate/depreciate based on relative income growth rates, relative rates of inflation and changes in real interest rates.
Know interest rate parity which says that countries with high nominal interest rates will have their currencies sell at a forward or discount to prevent arbitrage
9) Know how to calculate the forward premium or discount on a currency vis-à-vis another currency (focus on the currency in the denominator).
10) Know the difference between a direct and indirect quote and whether a currency is appreciating or depreciating.
11) Know elasticity of demand and supply COLD and how to calculate them. Know whether it is a highly elastic, inelastic or unitary elasticity.
12) Know the difference between accounting and economic profits.
13) Know the law of diminishing returns and what it is.
14) Know the different competitive models (pure competition, monopolistic competition, monopoly, and oligopoly) and their characteristics as well as what they say about economic profits in short and long run.
15) Know the Marginal Revenue Product for inputs and how it relates to price.
16) Review the reading on the Supply of and Demand for Productive Resources mostly for terminology and concepts.
17) Make sure you know ATC, AVC, AFC, curves well and how they relate to MC curve.
18) Know the constant returns to scale, diseconomies of scale and economies of scale in the long-run.

Portfolio Management

1) Know how to calculate E(R), std dev and variance for two asset portfolio COLD!!!
2) Know the efficient frontier and how to select the optimal portfolio
3) Know how to explain systematic and unsytematic risk, beta, the CML, CAL and SML
4) Know two differences between SML and CML
5) Know how to determine if security is undervalued/overvalued relative to SML
6) Know the assumptions behind the CAPM
****7) BE READY FOR AN IPS (Investment Policy Statement) for an individual investor—review the 2 objectives and 5 constraints well…


Derivatives

1) Know future and forwards – advantages and disadvantages of each and the characteristics of each contract.
2) Know FRAs, qualitative and quantitative and who made/lost money and how much. Know how to calculate the gain/loss and when it will be paid.
3) Know the law of one price and what it is.
4) Know put-call parity COLD and how to manipulate it and determine whether the put, call, stock, bond are overpriced, underpriced or properly valued and what strategy you would undertake and to calculate the arbitrage profit.
5) Know the difference between American and European options.
6) Know the upper and lower bounds for European puts and calls and American puts and calls.
7) For FRA know that the long position in FRA is the party that would borrow. If LIBOR ends up above forward rate in FRA, long side has right to borrow at below market rates and receives a payment.
Know caps and floors and when to use them and how.
9) Know the effect of each variable on a call option (asset price, volatility, time, etc.)
10) Know interest rate, currency and equity swaps as we did in class – Remember: LIBOR is paid in arrears…
11) Know swaptions COLD!!!


Alternative Investments

1) Know ETFs – what they are and their advantages and disadvantages
2) Know the three approaches to valuing real estate and how to calculate the value of the property under all 3 approaches (cost, sales comparison and income method).
3) Know how to calculate NOI.
4) Know risks of hedge funds and different types of hedge funds
5) Know the aspects of open-end and closed-end funds and what are 12 b-1 fees.
6) Review collateralized commodities futures position material – just in case.

Stalla 2010 is available for level I.II & III.

@Ugoeagle
Please send ur email to princesedorf@yahoo.com or 08039307507 and get the study notes for 2010 free

Hi Dr Tolu,
Please,send ur email to my phone to get the latest materials.Sorry,i dont have ur number on ma phone again,for i changed my phone the last time i traveled.

Cheers

The materials are free except calculator,video and practising question volume 1.Get free 5 study notes(2010),mock exam(2009),practising question volume 2(2009),quicksheet(2010)

Hi everyone
Get all the materials needed for CFA level 1,2 and 3(softcopy) .FRM is also available. call on 08039307507 or princesedorf@yahoo.com

Hi guys
I have 18 TI BA II PLUS calculator to give away plus free study notes lecture for L1,L2 & L3 and aslo free registration b4 February 2010.Cheers

@Manny4life
Go ahead with ur question. We are always willing to assist with any question in this forum. It is for matured mind. Cheers

Lowee
         I never knew u haven't gotn the level 3 pack. However,if u dont mind,i will be coming to Niger on Friday.I can get one for u.U can ring ma phone,is on roaming.

CFA Salary

Average CFA Salary | Starting Ranges

A Chartered Financial Analyst’s (CFA) salary will obviously vary based upon job type, years of experience, employer type, and various other factors. The best way to get a feel for a chartered financial analyst’s salary is to use averages within those broad fields not taking into account company size, experience, skills, degree, or location.

Using information gathered from payscale .com, the range of median salaries based upon job type is from $61,209 for a corporate financial analyst to $145,820 for a chief financial officer. The other positions were financial securities/investment analyst ($73,085), financial analyst ($62,457), senior financial analyst ($79,242), and vice president of finance ($131,700).

Now when examining a chartered financial analyst salary based upon years on experience, the scale is much more linear. A Chartered Financial Analyst with less than one year of experience reported a median salary of $51,046. A CFA with 1-4 years of experience had a salary of $63,898. CFA with 5-9 years of experience reported a median salary of $93,452. More senior CFA with 10-19 years of experience had a median salary of $119,309. The most experienced CFA with 20 years or more of experience had a median salary of $147,260.

Taking a look at the median salary by employer type allows a little more distinction. The range of salaries was $50,400 for someone working with a team employer to $100,000 for other organizations, non-profit organizations, or a school/school district employee. Within that range there were quite a few other examples of what a CFA can expect for a median salary based upon employer type. A Chartered Financial Analyst working for a private company had a median salary of $91,932. One working for a private practice/firm reported a median salary of $83,253. A CFA employed by a foundation or trust can expect a salary of $96,110. The median salary for a CFA employed by either state or local government is $83,000. A self-employed CFA reported a median salary of $80,000 as well as one employed by a hospital. A CFA working for the federal government had a median salary of $76,650. A Chartered financial analyst employed by a franchise can expect a median salary of $90,000. Lastly, the median salary for a CFA employed by a college/university was $86,500.

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CFA Salary

Average CFA Salary | Starting Ranges

A Chartered Financial Analyst’s (CFA) salary will obviously vary based upon job type, years of experience, employer type, and various other factors. The best way to get a feel for a chartered financial analyst’s salary is to use averages within those broad fields not taking into account company size, experience, skills, degree, or location.

Using information gathered from payscale .com, the range of median salaries based upon job type is from $61,209 for a corporate financial analyst to $145,820 for a chief financial officer. The other positions were financial securities/investment analyst ($73,085), financial analyst ($62,457), senior financial analyst ($79,242), and vice president of finance ($131,700).

Now when examining a chartered financial analyst salary based upon years on experience, the scale is much more linear. A Chartered Financial Analyst with less than one year of experience reported a median salary of $51,046. A CFA with 1-4 years of experience had a salary of $63,898. CFA with 5-9 years of experience reported a median salary of $93,452. More senior CFA with 10-19 years of experience had a median salary of $119,309. The most experienced CFA with 20 years or more of experience had a median salary of $147,260.

Taking a look at the median salary by employer type allows a little more distinction. The range of salaries was $50,400 for someone working with a team employer to $100,000 for other organizations, non-profit organizations, or a school/school district employee. Within that range there were quite a few other examples of what a CFA can expect for a median salary based upon employer type. A Chartered Financial Analyst working for a private company had a median salary of $91,932. One working for a private practice/firm reported a median salary of $83,253. A CFA employed by a foundation or trust can expect a salary of $96,110. The median salary for a CFA employed by either state or local government is $83,000. A self-employed CFA reported a median salary of $80,000 as well as one employed by a hospital. A CFA working for the federal government had a median salary of $76,650. A Chartered financial analyst employed by a franchise can expect a median salary of $90,000. Lastly, the median salary for a CFA employed by a college/university was $86,500.

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Tips for Taking the Level I Multiple Choice Exams

About the Level I Questions

The Level I exams will include 240 total multiple choice questions, 120 on the morning session of the exam and 120 on the afternoon session. Each multiple choice question is free-standing (not dependent on other questions) and has three possible answers: A, B, and C. All questions are equally weighted and there is no penalty for guessing. Here are some ideas that may help you while you are taking the Level I multiple choice exam:

Carefully manage your time. Don’t spend too much time on any one question or topic area. On average, you should allocate 1.5 minutes to each multiple choice question, including time to record your answer on the answer sheet.
Read the questions carefully. A careless “skimming” of the question may lead you to a completely different, and incorrect, answer.
Read each item carefully and eliminate obviously incorrect answers. If you have to guess and you can eliminate one of the responses, your odds of answering the question correctly are much higher. There is no penalty for guessing.
No individual has ever received a perfect score on any level of the CFA exam. Even though it is not by design, you should expect to encounter questions that you will not be able to answer correctly. There is a great deal of material to master and exam questions are challenging. Standard setters (at Levels I and II) and the Board of Governors (at all three levels) take account of exam difficulty in setting Minimum Passing Scores. For a full description of how the MPS is established, see Into our 5th decade (PDF).
Examination writers use a standard set of formatting conventions on the selected response questions (multiple choice items on Level I and item set items on Levels II and III). Many sample exams produced by third parties do not follow these conventions, so you should review the CFA Institute format presented here:

Formatting Conventions Used for Level I Exams

Item Construction

Each item on the Level I multiple choice and Levels II and III item sets consists of a stem (question, statement, and/or table) and three choices, A, B, and C. There are two basic formats used:

1. Stems using sentence completion with three unique choices

2. Stems phrased as questions with three unique choices

Example 1 (Stem using sentence completion)

An analyst suspects that a particular company’s U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. The most likely effect of the appropriate adjustments would be to increase that company’s

A. return on assets.

B. debt-to-equity ratio.

C. interest coverage ratio.

Example 2 (Stem phrased as question)

An analyst suspects that a particular company’s U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. Which of the following is most likely to increase as a result of the appropriate adjustments being made to that company’s financial statements?

A. Return on assets.

B. Debt-to-equity ratio.

C. Interest coverage ratio.

Item Stems

The Level I CFA exam does not use EXCEPT, TRUE, or FALSE in item stems and avoids the use of NOT in item stems whenever possible. When appropriate, stems will include one of the following qualifiers: most likely, least likely, best described, most appropriate, most accurate, least appropriate, or least accurate. Each stem supports only one item on the exam.

Choices

The Level I CFA exam does not use any of the following choices: all of the above, none of the above, I and II only, II and III only, cannot determine, cannot calculate, or not enough information to determine.

Choices consisting of words or sentences are typically ordered from shortest to longest; choices that are quantitative are ordered from the smallest number to largest number. The choices agree grammatically with the stem; language common to all choices is placed in the stem

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CFA Institute announced that of the 49,797 worldwide candidates that sat for the Chartered Financial Analyst (CFA) Program Level I exam which took place in December, 35 percent passed.

The CFA Program is widely regarded as the most arduous qualification in the investment profession. In order to earn the gold standard CFA designation, candidates must pass all three levels of exams (for which successful candidates report that they study a minimum of 250 hours per level); meet the work experience requirements of four years in the investment industry; sign a commitment to abide by the CFA Institute Code of Ethics and Standards of Professional Conduct; apply to a CFA Institute society; and become a member of CFA Institute.

The number of candidates tested in December 2008 increased by 25 percent from December 2007 when 37,573 sat for the exam. Since the December administration of Level I was first offered in 2003, the number of candidates sitting for the December exam has increased by 45 percent. There are currently 86,968 charterholders globally.

John Rogers, CFA, president and CEO of CFA Institute, said, “The CFA designation is regarded worldwide by employers as the mark of excellence and is an important tool for those who want to get ahead in the investment industry. I am delighted at the number of candidates willing to invest in their own future and professional standards. There has never been a more important time for individuals and employers in the investment industry to enhance their professionalism and the numbers embarking on the CFA Program help show commitment to this cause.”

The exams cover ethical and professional standards, securities analysis and valuation, international financial statement analysis, quantitative methods, economics, corporate finance, portfolio management, and performance measurement. There is no limit to the number of times permitted to take each exam: Level I exams are held in June and December, and Levels II and III are held in June. On average, successful CFA candidates take four years to pass the three required exams. (More information about the CFA Program)

By country/region, the December pass rates for the Level I exam are:

United States: 36 percent of the 12,955 total exam candidates
Canada: 35 percent of the 3,555 total exam candidates
Europe: 38 percent of the 8,158 total exam candidates
Asia and Pacific Asia: 35 percent of the 21,971 total exam candidates
Central and South America: 33 percent of the 424 total exam candidates
Africa/Middle East: 27 percent of the 2,734 total exam candidates

The December exam was offered at 52 test centers in 29 countries worldwide.

Commenting on the CFA Program, Bob Johnson, CFA, deputy CEO of CFA Institute, said, "To reflect the continually developing nature and growing complexity of the global investment profession, the curriculum of the CFA Program evolves every year. This means that charterholders and prospective charterholders are well prepared in all aspects of the industry, which is especially attractive to potential employers in a tough employment market."

For those that are preparing for June 2009,start the preparation nowwwwwwwww,

CFA Institute announced that of the 49,797 worldwide candidates that sat for the Chartered Financial Analyst (CFA) Program Level I exam which took place in December, 35 percent passed.

The CFA Program is widely regarded as the most arduous qualification in the investment profession. In order to earn the gold standard CFA designation, candidates must pass all three levels of exams (for which successful candidates report that they study a minimum of 250 hours per level); meet the work experience requirements of four years in the investment industry; sign a commitment to abide by the CFA Institute Code of Ethics and Standards of Professional Conduct; apply to a CFA Institute society; and become a member of CFA Institute.

The number of candidates tested in December 2008 increased by 25 percent from December 2007 when 37,573 sat for the exam. Since the December administration of Level I was first offered in 2003, the number of candidates sitting for the December exam has increased by 45 percent. There are currently 86,968 charterholders globally.

John Rogers, CFA, president and CEO of CFA Institute, said, “The CFA designation is regarded worldwide by employers as the mark of excellence and is an important tool for those who want to get ahead in the investment industry. I am delighted at the number of candidates willing to invest in their own future and professional standards. There has never been a more important time for individuals and employers in the investment industry to enhance their professionalism and the numbers embarking on the CFA Program help show commitment to this cause.”

The exams cover ethical and professional standards, securities analysis and valuation, international financial statement analysis, quantitative methods, economics, corporate finance, portfolio management, and performance measurement. There is no limit to the number of times permitted to take each exam: Level I exams are held in June and December, and Levels II and III are held in June. On average, successful CFA candidates take four years to pass the three required exams. (More information about the CFA Program)

By country/region, the December pass rates for the Level I exam are:

United States: 36 percent of the 12,955 total exam candidates
Canada: 35 percent of the 3,555 total exam candidates
Europe: 38 percent of the 8,158 total exam candidates
Asia and Pacific Asia: 35 percent of the 21,971 total exam candidates
Central and South America: 33 percent of the 424 total exam candidates
Africa/Middle East: 27 percent of the 2,734 total exam candidates

The December exam was offered at 52 test centers in 29 countries worldwide.

Commenting on the CFA Program, Bob Johnson, CFA, deputy CEO of CFA Institute, said, "To reflect the continually developing nature and growing complexity of the global investment profession, the curriculum of the CFA Program evolves every year. This means that charterholders and prospective charterholders are well prepared in all aspects of the industry, which is especially attractive to potential employers in a tough employment market."

For those that are preparing for June 2009,start the preparation nowwwwwwwww,

CFA Institute announced that of the 49,797 worldwide candidates that sat for the Chartered Financial Analyst (CFA) Program Level I exam which took place in December, 35 percent passed.

The CFA Program is widely regarded as the most arduous qualification in the investment profession. In order to earn the gold standard CFA designation, candidates must pass all three levels of exams (for which successful candidates report that they study a minimum of 250 hours per level); meet the work experience requirements of four years in the investment industry; sign a commitment to abide by the CFA Institute Code of Ethics and Standards of Professional Conduct; apply to a CFA Institute society; and become a member of CFA Institute.

The number of candidates tested in December 2008 increased by 25 percent from December 2007 when 37,573 sat for the exam. Since the December administration of Level I was first offered in 2003, the number of candidates sitting for the December exam has increased by 45 percent. There are currently 86,968 charterholders globally.

John Rogers, CFA, president and CEO of CFA Institute, said, “The CFA designation is regarded worldwide by employers as the mark of excellence and is an important tool for those who want to get ahead in the investment industry. I am delighted at the number of candidates willing to invest in their own future and professional standards. There has never been a more important time for individuals and employers in the investment industry to enhance their professionalism and the numbers embarking on the CFA Program help show commitment to this cause.”

The exams cover ethical and professional standards, securities analysis and valuation, international financial statement analysis, quantitative methods, economics, corporate finance, portfolio management, and performance measurement. There is no limit to the number of times permitted to take each exam: Level I exams are held in June and December, and Levels II and III are held in June. On average, successful CFA candidates take four years to pass the three required exams. (More information about the CFA Program)

By country/region, the December pass rates for the Level I exam are:

United States: 36 percent of the 12,955 total exam candidates
Canada: 35 percent of the 3,555 total exam candidates
Europe: 38 percent of the 8,158 total exam candidates
Asia and Pacific Asia: 35 percent of the 21,971 total exam candidates
Central and South America: 33 percent of the 424 total exam candidates
Africa/Middle East: 27 percent of the 2,734 total exam candidates

The December exam was offered at 52 test centers in 29 countries worldwide.

Commenting on the CFA Program, Bob Johnson, CFA, deputy CEO of CFA Institute, said, "To reflect the continually developing nature and growing complexity of the global investment profession, the curriculum of the CFA Program evolves every year. This means that charterholders and prospective charterholders are well prepared in all aspects of the industry, which is especially attractive to potential employers in a tough employment market."

For those that are preparing for June 2009,start the preparation nowwwwwwwww,

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Tips for Taking the Level I Multiple Choice Exams

About the Level I Questions

The Level I exams will include 240 total multiple choice questions, 120 on the morning session of the exam and 120 on the afternoon session. Each multiple choice question is free-standing (not dependent on other questions) and has three possible answers: A, B, and C. All questions are equally weighted and there is no penalty for guessing. Here are some ideas that may help you while you are taking the Level I multiple choice exam:

Carefully manage your time. Don’t spend too much time on any one question or topic area. On average, you should allocate 1.5 minutes to each multiple choice question, including time to record your answer on the answer sheet.
Read the questions carefully. A careless “skimming” of the question may lead you to a completely different, and incorrect, answer.
Read each item carefully and eliminate obviously incorrect answers. If you have to guess and you can eliminate one of the responses, your odds of answering the question correctly are much higher. There is no penalty for guessing.
No individual has ever received a perfect score on any level of the CFA exam. Even though it is not by design, you should expect to encounter questions that you will not be able to answer correctly. There is a great deal of material to master and exam questions are challenging. Standard setters (at Levels I and II) and the Board of Governors (at all three levels) take account of exam difficulty in setting Minimum Passing Scores. For a full description of how the MPS is established, see Into our 5th decade (PDF).
Examination writers use a standard set of formatting conventions on the selected response questions (multiple choice items on Level I and item set items on Levels II and III). Many sample exams produced by third parties do not follow these conventions, so you should review the CFA Institute format presented here:

Formatting Conventions Used for Level I Exams

Item Construction

Each item on the Level I multiple choice and Levels II and III item sets consists of a stem (question, statement, and/or table) and three choices, A, B, and C. There are two basic formats used:

1. Stems using sentence completion with three unique choices

2. Stems phrased as questions with three unique choices

Example 1 (Stem using sentence completion)

An analyst suspects that a particular company’s U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. The most likely effect of the appropriate adjustments would be to increase that company’s

A. return on assets.

B. debt-to-equity ratio.

C. interest coverage ratio.

Example 2 (Stem phrased as question)

An analyst suspects that a particular company’s U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. Which of the following is most likely to increase as a result of the appropriate adjustments being made to that company’s financial statements?

A. Return on assets.

B. Debt-to-equity ratio.

C. Interest coverage ratio.

Item Stems

The Level I CFA exam does not use EXCEPT, TRUE, or FALSE in item stems and avoids the use of NOT in item stems whenever possible. When appropriate, stems will include one of the following qualifiers: most likely, least likely, best described, most appropriate, most accurate, least appropriate, or least accurate. Each stem supports only one item on the exam.

Choices

The Level I CFA exam does not use any of the following choices: all of the above, none of the above, I and II only, II and III only, cannot determine, cannot calculate, or not enough information to determine.

Choices consisting of words or sentences are typically ordered from shortest to longest; choices that are quantitative are ordered from the smallest number to largest number. The choices agree grammatically with the stem; language common to all choices is placed in the stem.

Investment Tools (Level I) − Topic Overviews
Review all the eighteen sections

Study Session 1

Ethical and Professional Standards

The readings in this study session present a framework for ethical conduct in the investment profession by focusing on the CFA Institute Code of Ethics and Standards of Professional Conduct as well as the Global Investment Performance Standards (GIPS).

The principles and guidance presented in the CFA Institute Standards of Practice Handbook (SOPH) form the basis for the CFA Institute self-regulatory program to maintain the highest professional standards among investment practitioners. “Guidance” in the SOPH addresses the practical application of the Code of Ethics and Standards of Professional Conduct. The guidance reviews the purpose and scope of each standard, presents recommended procedures for compliance, and provides examples of the standard in practice.

The Global Investment Performance Standards (GIPS) facilitate efficient comparison of investment performance across investment managers and country borders by prescribing methodology and standards that are consistent with a clear and honest presentation of returns. Having a global standard for reporting investment performance minimizes the potential for ambiguous or misleading presentations.

The readings in this study session present a framework for ethical conduct in the investment profession by focusing on the CFA Institute Code of Ethics and Standards of Professional Conduct as well as the Global Investment Performance Standards (GIPS).

The principles and guidance presented in the CFA Institute Standards of Practice Handbook (SOPH) form the basis for the CFA Institute self-regulatory program to maintain the highest professional standards among investment practitioners. “Guidance” in the SOPH addresses the practical application of the Code of Ethics and Standards of Professional Conduct. The guidance reviews the purpose and scope of each standard, presents recommended procedures for compliance, and provides examples of the standard in practice.

The Global Investment Performance Standards (GIPS) facilitate efficient comparison of investment performance across investment managers and country borders by prescribing methodology and standards that are consistent with a clear and honest presentation of returns. Having a global standard for reporting investment performance minimizes the potential for ambiguous or misleading presentations.

Study Session 2

Quantitative Methods: Basic Concepts

This introductory study session presents the fundamentals of those quantitative techniques that are essential in almost any type of financial analysis, and which will be used throughout the remainder of the CFA curriculum. This session introduces two main building blocks of the quantitative analytical tool kit: (1) the time value of money and (2) statistics and probability theory.

The time value of money concept is one of the main principles of financial valuation. The calculations based on this principle (e.g., present value, future value, and internal rate of return) are the basic tools used to support corporate finance decisions and estimate the fair value of fixed income, equity, or any other type of security or investment.

Similarly, the basic concepts of statistics and probability theory constitute the essential tools used in describing the main statistical properties of a population and understanding and applying various probability concepts in practice.

Study Session 3

Quantitative Methods: Application

This study session introduces the discrete and continuous probability distributions that are most commonly used to describe the behavior of random variables. Probability theory and calculations are widely applied in finance, for example, in the field of investment and project valuation and in financial risk management.

Furthermore, this session teaches how to estimate different parameters (e.g., mean and standard deviation) of a population if only a sample, rather than the whole population, can be observed. Hypothesis testing is a closely related topic. This session presents the techniques that can be applied to accept or reject the assumed hypothesis (null hypothesis) about various parameters of the population. Finally, you will also learn about the fundamentals of technical analysis. It is important that analysts properly understand the assumptions and limitations when applying these tools as mis-specified models or improperly used tools can result in misleading conclusions.

Study Session 4

Microeconomic Analysis

This study session focuses on microeconomic concepts and how firms are affected by these concepts. One of the main concepts related to the equilibrium between demand and supply is elasticity, which measures the dependency between demand and supply and the impact of changes in either on the equilibrium price level. A second key concept is efficiency, which is measure of the firm's "optimal" output given its cost and revenue functions. Understanding these concepts enables analysts to differentiate among various companies on an individual level, and to determine their attractiveness for an investor.

Study Session 5

Market Structure and Macroeconomic Analysis

This study session first compares and contrasts the different market structures in which firms operate. The market environment influences the price a firm can demand for its goods or services. Among the most important of these market forms are monopoly and perfect competition, although monopolistic competition and oligopoly are also covered.

The study session then introduces the macroeconomic concepts that have an impact on all firms in the same environment, be it a country, a group of related countries, or a particular industry. The readings explain the business cycle, and how to forecast changes in the business cycle and the impact on, among other things, price levels and profitability. The study session concludes by describing how an economy’s aggregate supply and aggregate demand are determined.

Study Session 6

Monetary and Fiscal Economics

This study session focuses on the monetary sector of an economy. It examines the functions of money and how it is created, highlighting the special role of the central bank within an economy. Supply and demand for resources, such as labor and capital, and goods are strongly interrelated, and this study session describes circumstances when this may lead to inflation and the transmission mechanisms between the monetary sector and the real part of the economy. Finally, the goals and implications of fiscal and monetary policy are explored by examining some of the main models of macroeconomic theory (Keynesian, classical, and monetarist).

Study Session 7

Financial Statement Analysis: An Introduction

The readings in this study session discuss the general principles of the financial reporting system, underscoring the critical role of the analysis of financial reports in investment decision making.

The first reading introduces the range of information that an analyst may use in analyzing the financial performance of a company, including the principal financial statements (the income statement, balance sheet, cash flow statement, and statement of changes in owners’ equity), notes to those statements, and management discussion and analysis of results. A general framework for addressing most financial statement analysis tasks is also presented.

A company’s financial statements are the end-products of a process for recording the business transactions of the company. The second reading illustrates this process, introducing such basic concepts as the accounting equation and accounting accruals.

The presentation of financial information to the public by a company must conform to the governing set of financial reporting standards applying in the jurisdiction in which the information is released. The final reading in this study explores the role of financial reporting standard-setting bodies worldwide and the International Financial Reporting Standards framework promulgated by one key body, the International Accounting Standards Board. The movement towards worldwide convergence of financial reporting standards is also introduced.

Study Session 8

Financial Statement Analysis: The Income Statement, Balance Sheet, and Cash Flow Statement

Each reading in this study session focuses on one of the three major financial statements: the balance sheet, the income statement, and the statement of cash flows. For each financial statement, the chapter details its purpose, construction, pertinent ratios, and common-size analysis. Understanding these concepts allows a financial analyst to evaluate trends in performance over several measurement periods and to compare the performance of different companies over the same period(s). Additional analyst tools such as the earnings per share calculation are also described.

The readings in this study session discuss and illustrate the earnings analysis of financial statements and the critical role that financial ratio analysis plays in making investment or credit decisions through the measurement of financial performance and risk.

Financial ratios may be used to compare the risk and return of a company with that of other companies of different sizes. A significant hurdle in applying ratio analysis is the difficulty of comparing companies that use alternative accounting policies and estimates. To achieve appropriate comparability, the accounting differences must be identified and then the financial statement balances adjusted for those differences.

Basic and diluted earnings per share are important and widely used performance statistics for publicly traded companies. Unlike other ratios presented in this study session, the measurement and calculation of the earnings per share ratio is strictly determined by the regulatory requirements of U.S. GAAP.

Study Session 9

Financial Statement Analysis: Inventories, Long-Term Assets, Deferred Taxes, and On- and Off-Balance-Sheet Debt
The readings in this study session examine specific categories of assets and liabilities that are particularly susceptible to the impact of alternative accounting policies and estimates. Analysts must understand the effects of alternative policies on financial statements and ratios, and be able to execute appropriate adjustments to enhance comparability between companies. In addition, analysts must be alert to differences between a company's reported financial statements and economic reality.

The description and measurement of inventories require careful attention because the investment in inventories is frequently the largest current asset for merchandizing and manufacturing companies. For these companies, the measurement of inventory cost (i.e., cost of goods sold) is a critical factor in determining gross profit and other measures of company profitability. Long-term operating assets are often the largest category of assets on a company's balance sheet. The analyst needs to scrutinize management's choices with respect to recognizing expenses associated with the operating assets because of the potentially large impact such choices can have on reported earnings.

A company's accounting policies (such as depreciation choices) can cause differences in taxes reported in financial statements and taxes reported on tax returns. The reading “Analysis of Income Taxes” discusses several issues that arise relating to deferred taxes.

Both on- and off-balance-sheet debt affect a company's liquidity and solvency, and have consequences for its long-term growth and viability. The notes of the financial statements must be carefully reviewed to ensure that all potential liabilities (e.g., leasing arrangements and other contractual commitments) are appropriately evaluated for their conformity to economic reality. Adjustments to the financial statements may be required to achieve comparability when evaluating several companies, and may also be required to improve credit and investment decision-making.

Study Session 10

Financial Statement Analysis: Techniques, Applications, and International Standards Convergence

The readings in this study session discuss financial analysis techniques, financial statement analysis applications, and the international convergence of accounting standards.


The first reading presents the most frequently used tools and techniques used to evaluate companies, including common size analysis, cross-sectional analysis, trend analysis, and ratio analysis. The second reading then shows the application of financial analysis techniques to major analyst tasks including the evaluation of past and future financial performance, credit risk, and the screening of potential equity investments. The reading also discusses analyst adjustments to reported financials. Such adjustments are often needed to put companies’ reported results on a comparable basis.

This study session concludes with a reading on convergence of international and U.S. accounting standards. Although there has been much progress in harmonizing accounting standards globally, as this reading discusses, there are still significant variations between generally accepted accounting principles from one country to another.

Study Session 11

Corporate Finance

This study session covers the principles that corporations use to make their investing and financing decisions. Capital budgeting is the process of making decisions about which long-term projects the corporation should accept for investment, and which it should reject. Both the expected return of a project and the financing cost should be taken into account. The cost of capital, or the rate of return required for a project, must be developed using economically sound methods.

Corporate managers are concerned with liquidity and solvency, and use financial statements to evaluate performance as well as to develop and communicate future plans. The final reading in this study session is on corporate governance practices, which can expose the firm to a heightened risk of ethical lapses.

Although these practices may not be inherently unethical, they create the potential for conflicts of interest to develop between shareholders and managers, and the extent of that conflict affects the firm’s valuation.

Study Session 12

Portfolio Management

As the first discussion within the CFA curriculum on portfolio management, this study session provides the critical framework and context for subsequent Level I study sessions covering equities, fixed income, derivatives, and alternative investments. Furthermore, this study session provides the underlying theories and tools for portfolio management at Levels II and III.

The first reading discusses the asset allocation decision and the portfolio management process—they are an integrated set of steps undertaken in a consistent manner to create and maintain an appropriate portfolio (combination of assets) to meet clients’ stated goals. The last two readings focus on the design of a portfolio and introduces the capital asset pricing model (CAPM), a centerpiece of modern financial economics that relates the risk of an asset to its expected return.

Study Session 13

Securities Markets

This study session addresses how securities are bought and sold and what constitutes a well-functioning securities market. The reading on market indexes gives an understanding of how indexes are constructed and calculated and the biases inherent in each of the weighting schemes used.

Some of the most interesting and important work in the investment field during the past several decades revolves around the efficient market hypothesis(EMH) and its implications for active versus passive equity portfolio management. The readings on this subject provide an understanding of the EMH and the seemingly persistent anomalies to the theory, an understanding that is necessary to judge the value of fundamental or technical security analysis.

Study Session 14

Industry and Company Analysis

This study session focuses on industry and company analysis and describes the tools used in forming an opinion about investing in a particular stock or group of stocks.

This study session begins with the essential tools of equity valuation: the discounted cash flow technique and the relative valuation approach. These techniques provide the means to estimate reasonable price for a stock. The readings on industry analysis are an important element in the valuation process,providing the top–down context crucial to estimating a company’s potential. Also addressed is estimating a company’s earnings per share by forecasting sales and profit margins.

The last reading in this study session focuses on price multiples, one of the most familiar and widely used tools in estimating the value of a company, and introduces the application of four commonly used price multiples to valuation.

Study Session 15

Fixed Income Investments: Basic Concepts

This study session presents the foundation for fixed income investments, one of the largest and fastest growing segments of global financial markets. It begins with an introduction to the basic features and characteristics of fixed income securities and the associated risks. The session then builds by describing the primary issuers, sectors, and types of bonds. Finally, the study session concludes with an introduction to yields and spreads and the effect of monetary policy on financial markets. These readings combined are the primary building blocks for mastering the analysis, valuation, and management of fixed income securities.

Study Session 16

Fixed Income Investments: Analysis and Evaluation

This study session illustrates the primary tools for valuation and analysis of fixed income securities and markets. It begins with a study of basic valuation theory and techniques for bonds and concludes with a more in-depth explanation of the primary tools for fixed income investment valuation, specifically, interest rate and yield valuation and interest rate risk measurement and analysis.

Study Session 17

Derivative Investments

Derivatives − financial instruments that offer a return based on the return of some underlying asset − have become increasingly important and fundamental in effectively managing financial risk and creating synthetic exposures to asset classes. As in other security markets, arbitrage and market efficiency play a critical role in establishing prices and maintaining parity.

This study session builds the conceptual framework for understanding derivative investments (forwards, futures, options, and swaps), derivative markets, and the use of options in risk management.

Study Session 18

Alternative Investments

Due to diversification benefits and higher expectations of investment returns, investors are increasingly turning to alternative investments. This study session describes the common types of alternative investments, methods for their valuation, unique risks and opportunities associated with them, and the relation between alternative investments and traditional investments.

Although finding a single definition of an “alternative” investment is difficult, certain features (e.g., limited liquidity, infrequent valuations, and unique legal structures) are typically associated with alternative investments. This study session discusses these features and how to evaluate their impact on expected returns and investment decisions in more detail. The reading provides an overview of the major categories of alternative investments, including real estate, private equity, venture capital, hedge funds, closely held companies, distressed securities, and commodities.

Each one of these categories has several unique characteristics, and the readings discuss valuation methods for illiquid assets (such as direct real estate or closely held companies), performance measures for private equity and venture capital investments, differences between various hedge fund strategies, and implementation vehicles for investments in alternative assets.

Benefits

The CFA charter is the designation of excellence in the investment community.
If you’re looking for an educational challenge where you build a fundamental knowledge of investment principles that is relevant in every market around the world, then the CFA Program is right for you and your firm.

Benefits for You

Credibility: Clients and colleagues regard you with a presumption of expertise
Competitive advantage: Employers and clients want the experience that comes with the CFA charter
Connections: You’ll join a global network of more than 78,000 professionals
Recognition: You’ll earn a designation praised by employers and media

Find out about the types of positions that benefit from a CFA charter

Benefits for Your Firm

A cost-effective and efficient way to increase the knowledge and professionalism of your staff
A global program that tracks the needs of the industry and employers like you
A measure of job applicants' competence and integrity

Employers with the Largest Numbers of CFA Charterholders

ABN AMRO
Allianz AG
Bank of America Corporation
Barclays Group
BMO Financial Group
CIBC
Citigroup
Credit Suisse Group
Deutsche Bank
FMR Corporation
The Goldman Sachs Group, Inc.
HSBC
ING Groep N.V.
JPMorgan Chase & Co.
Lehman Brothers, Inc.
Mellon Financial Corporation
Merrill Lynch & Co., Inc.
Morgan Stanley
PricewaterhouseCoopers International Limited
RBC
Scotiabank Group
State Street
TD Bank Financial Group
UBS
Wachovia Corporation,etc

IN NIGERIA,

Stanchart
Schlum
BG
Shell
Chevron
Stanbic Capital
Alliance consulting
Addax
PWC
Mobil .etc