What Every Level 1 Candidate Should Know[font=Lucida Sans Unicode][/font]!
Free Introduction to the CFA® Level 1 Exam
Schweser Level 1 Manager and Professor, Dr. Doug Van Eaton CFA, has prepared a video of just over an hour describing the Level 1 CFA Exam in detail and offers valuable information on how to prepare for it. Questions answered in the free video presentation include:
• How can you tell what will be on the exam?
• Where can I get copies of old exams?
• What topics are covered?
• What are the topic weights for the exam?
• How much studying will I need to do?
• How do I get started?
• What are past pass rates?
• What type of questions (how many) should I expect?
• How important are calculations and formulas?
• What is a passing score?
• How does Kaplan Schweser help candidates prepare for the exam?
• What can I take to the exam?
Dr. Van Eaton was a broker for Dean Witter for 6 years and taught in the Business Schools of the University of Washington, University of North Texas, and Texas Christian University. He has been the Level 1 Professor at Kaplan Schweser for 4 years and has 15 years of experience teaching CFA Candidates at all levels. His insights and knowledge of the Level 1 curriculum and exam are unparallele

Pls open the attached file for the introduction.

BROS, U SEEM TO BE AN AUTHORITY AS FAR AS CFA GOES, HOOK A YUNG BLOOD UP, AM GUNNIN FOR DEC 09, TANKS A BUNCH IN ADVANCE

u r wellcome

CFA Institute Announces John D. Rogers, CFA, Past INVESCO Institutional CEO, As New President and CEO

Charlottesville, Va., January 5, 2009 – The CFA Institute Board of Governors announced today that John D. Rogers, CFA will be the global association’s new president and CEO. Rogers’ term begins immediately. He succeeds Jeff Diermeier, CFA who served since January 2005.



CFA Institute is the global association of investment professionals, with 100,000 members in 133 countries. It administers the gold-standard credentialing program for the investment industry and the Chartered Financial Analyst (CFA) Program, and with its CFA Institute Centre for Financial Market Integrity, the organization promotes high ethical standards and investor protection through professional codes of conduct, guidance, and outreach.



“On behalf of the entire Board, I thank Jeff Diermeier for his enormous contribution and for his years of service to CFA Institute and the industry,” said Brian Singer, CFA, chairman of the CFA Institute Board of Governors. “After conducting an extensive global search, the Board of Governors believes it has chosen an excellent leader in John Rogers, who will guide CFA Institute during a period of growth and globalization. I am excited and look forward to working with an individual of John’s global reach to advance the CFA Institute mission in the coming years.”



Rogers brings to CFA Institute more than two decades of global experience as an investment practitioner and executive in the Asia Pacific region. Most recently, he capped a successful career by returning to the United States as president and CEO of INVESCO Institutional, with worldwide responsibilities for this part of the firm’s business.



“As I traveled around the world during my 23-year career, I saw visible signs of growing awareness and appreciation for the CFA designation and the professional development and advocacy work of CFA Institute,” said Rogers. “This, coupled with tremendous industry globalization and technology advancement, has presented CFA Institute with many opportunities and challenges. I look forward to working with the Board of Governors, my new colleagues, our 136 societies, and our members.”



"Given the current challenging state of affairs in the capital markets, this is a particularly important time for CFA Institute to continue its strong stand for a professional ethic,” said past president and CEO Jeffrey Diermeier, CFA. “John's belief in that ethic and his considerable practitioner and executive experience will provide a wonderful complement to an already strong executive team."



Rogers began his career in investment management at Citibank, N.A. in 1985. Starting as a portfolio manager, John held positions of increasing responsibility at CIGNA, before moving to INVESCO in 1997 where among other positions, he served as president and chief investment officer of INVESCO Asset Management Ltd., Japan and CEO and co-CIO of INVESCO Global Asset Management (N.A.), ultimately leading divisions of up to 2,500 individuals. After leaving INVESCO in 2007, Rogers founded Jade River Capital Management.



Rogers is on the advisory board of Goizueta Business School at Emory University, serves on the finance and endowment committees of the Woodruff Arts Center in Atlanta and is chairman of the finance committee of the Atlanta Symphony. He is a trustee of International Student Conferences, an organization that runs student conferences in Japan and Korea, is a trustee of the Medici Foundation which is working to create a community in Atlanta’s former Municipal Building, and is active in the Rotary Club. Rogers earned a BA in history from Yale University and an MA in East Asian Studies at Stanford. He earned his CFA charter in 1992.



“We believe John's global practitioner perspective on the investment management industry and his exceptional leadership abilities afford the potential to leverage CFA Institute resources for the benefit of our organization and the investment community worldwide,” added Singer.



About CFA Institute
CFA Institute is the global association for investment professionals. It administers the CFA and CIPM curriculum and exam programs worldwide; publishes research; conducts professional development programs; and sets voluntary, ethics-based professional and performance-reporting standards for the investment industry. CFA Institute has 100,000 members, who include the world’s 86,700 CFA charterholders, in 133 countries and territories, as well as 136 affiliated professional societies in 57 countries and territories

DISCIPLINARY STATISTICS
2000-2008
Professional Conduct Cases Involving “Industry Conduct

Exam-Related Disciplinary Actions

 

The following disciplinary notices relate to improper conduct by candidates while taking the CFA examination. In each case, the sanction, voiding of examination results, and publication of the notice were administered in accordance with the CFA Institute Rules of Procedure for Proceedings Related to Professional Conduct ("Rules of Procedure".

 

By signing the Candidate Pledge, every candidate acknowledges that a violation of the rules and regulations of the CFA Program will result in CFA Institute voiding examination results and may lead to suspension or termination of candidacy in the CFA Program.

 

Writing Past Time Called

Use of Scratch Paper

Unauthorized Calculator

Opening Question Booklet before Start of Exam

 
Possession of Study Materials

Use of Electronic Devices

Assistance during Examination

Failure to Cooperate


 

Writing Past Time Called 
 

By signing the Candidate Pledge, every candidate certifies they will follow all rules of the CFA Program. Candidates were advised through several communications, including the examination admission ticket, CFA Institute website, and the oral statement read prior to the commencement of the exam, of the requirement to stop writing immediately when instructed to do so.

 

Notwithstanding this requirement, sixty-three Level I candidates, eight Level II candidates, and five Level III candidates continued to write their examinations after time was called. The CFA Institute Professional Conduct Program investigated these cases and found that each candidate engaged in the conduct and thereby violated the CFA Program Examination Rules and Regulations and Standards of Professional Conduct. Seventy-one of the candidates accepted the sanction of Private Censure and Voiding of Examination Results. Five of the Level I candidates requested a Hearing Panel. After consideration of the evidence in each respective case, the Hearing Panel imposed the sanction of Private Censure and Voiding of Examination Results on four candidates. A Hearing Panel imposed the sanction of Public Censure and Voiding of Examination Results on Jean-Francois Mercier. 

 

Use of Scratch Paper
Top of page 

Candidates may not use scratch paper during the examination. Scratch paper includes writing paper, the examination ticket, calculator keystroke card, desk top, or any other surface.


Despite this requirement, three Level I candidates used their examination ticket as scratch paper during the examination. The CFA Institute Professional Conduct Program investigated these matters and found that the candidates engaged in the conduct, thereby violating the CFA Program Examination Rules and Regulations. One candidate accepted the sanction of Private Censure and Voiding of Examination Results. One candidate, Jokei Ban, accepted the sanction of One Year Suspension from Participation in the CFA Program and Voiding of Examination Results; and one candidate, Daniel Otter, accepted the sanction of Two Year Suspension from Participation in the CFA Program (the candidate did not have examination results to void).     


Unauthorized Calculator
Top of page 
 

Only the following two calculator models are approved for use on the CFA examinations:

Hewlett Packard 12C (including the Hewlett Packard 12C Platinum)
Texas Instruments BAII Plus
 

Despite this policy requirement, thirteen Level I candidates and one Level III candidate presented to the examination and used an unauthorized calculator.  The Professional Conduct Program investigated these matters and found that the candidates' calculators were unauthorized and thereby violated the CFA Program Examination Rules and Regulations. Twelve candidates accepted the sanction of Private Censure and Voiding of Examination Results. Two candidates requested a Hearing Panel. After consideration of the evidence in each respective case, the Hearing Panel imposed the sanction of Private Censure and Voiding of Examination Results on both candidates.

 

Opening Question Booklet before Start of Exam
Top of page 
 

Six Level I candidates and One Level II candidate opened the examination book prior to commencement of the examination. The CFA Institute Professional Conduct Program investigated these matters and found that the candidates engaged in the conduct and thereby violated the CFA Program Rules and Regulations and Standards of Professional Conduct. The seven candidates accepted the disciplinary sanction of Private Censure and Voiding of Examination Results.     

 

Possession of Study Materials  Top of page 
 

All candidates were advised that possession of any information related to the Candidate Body of Knowledge was prohibited at the test center.

 

Notwithstanding this prohibition, one Level II candidate maintained information related to the Candidate Body of Knowledge during the examination. The Professional Conduct Program investigated the matter and found that while there was no evidence the candidate used the information, possession of the material/information violated the CFA Program Examination Rules and Regulations and Standards of Professional Conduct. The candidate accepted a Private Censure and Voiding of Examination Results. 

 

Use of Electronic Devices  Top of page 
 

All candidates were advised that possession and/or use of electronic devices, such as cell phones, pagers, and cameras were prohibited in the examination room.

 

Notwithstanding this prohibition, two Level II candidates possessed and used a cellular telephone during the examination. The Professional Conduct Program investigated the matters and found that the candidates engaged in the conduct and thereby violated the CFA Program Rules and Regulations and Standards of Professional Conduct. Both candidates accepted the sanction of Private Censure and Voiding of Examination Results.

 

Assistance during Examination  Top of page 
 

Each candidate in the CFA Program attests through the Candidate Pledge that during the examination they will neither give nor receive assistance in taking the examination. Looking or glancing at another candidate's answer sheet or giving the appearance of looking or glancing at another candidate's answer sheet violates the CFA Program Examination Rules, the Code of Ethics, and the CFA Institute Standards of Professional Conduct.

 

Despite these requirements, twenty-two Level I candidates, one Level II candidate, and one Level III candidate were either observed looking and/or giving the appearance of looking at other candidates' examinations/answer sheets during the examination. The CFA Institute Professional Conduct Program investigated these matters and found that the candidates engaged in the conduct, thereby violating the CFA Program Examination Rules and Regulations, Code of Ethics, and the Standards of Professional Conduct. Eleven candidates, Ankit Agrawal, Daniel Bezhanski, Man Shun Sze, Salem Tamini, Nikolay Zhukovsky, Haosen Liang, Hao Ning Huo, Sung Hei Chiu, Wai Hang Mak, Yechang Fang, and Wei Cheng accepted the public sanction of Five Year Suspension from Participation in the CFA Program and Voiding of Examination Results and one candidate, Jiali Jin, accepted the sanction of Permanent Suspension from Participation in the CFA Program and Voiding of Examination Results. 

 

Ross Tuttelman, Ludmila Fedorchenko, Kien Kit Ho, Xiaoqiong Zhang, Evy Susanti, Rachmat Susanto, Dinesh Modi, and five Level I candidates requested a Hearing Panel. After consideration of the evidence in each respective case, the Hearing Panel imposed the sanction of a Private Censure and Voiding of Examination Results on one candidate; a One Year Suspension from Participation in the CFA Program and Voiding of Examination Results on one candidate; a Two Year Suspension from Participation in the CFA Program and Voiding of Examination Results on three candidates; a Four Year Suspension from Participation in the CFA Program and Voiding of Examination Results on Mr. Tuttelman; a Five Year Suspension from Participation in the CFA Program and Voiding of Examination Results on Ms. Fedorchenko, Mr. Ho, Ms. Zhang, Ms. Susanti, and Mr. Susanto; and a Permanent Prohibition from Participation in the CFA Program and Voiding of Examination Results on Mr. Modi.

 

Failure to Cooperate  Top of page 
 

Three Level I candidates, Gintare Kavaliauskaite, Yi Zhang, Shi Zhou, and two Level II candidates, Xiao Liu, Lun Siu Ching, received a Summary Suspension from further participation in the CFA Program. The candidates violated the CFA Institute Bylaws which require candidates to submit information requested relating to professional conduct and activities.

FOR INFO ON DISCIPLINARY STATISTICS
Professional Conduct Cases Involving the CFA Exam Administration Process
2001 – June 2008.CLICK BELOW

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


Find out who hires charterholders


Who Hires CFA Charterholders?

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

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.

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.

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 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.

Hi,
I have learnt about CFA some times back but I have not been able to locate where their lectures centres are in Lagos. I want to do the exam but I don't know anything or have any handouts to read. Kindly enligthen me on how to start and where. Will be expecting your sooner reply.

Thanks,

Olaatanda:

Hi,
I have learnt about CFA some times back but I have not been able to locate where their lectures centres are in Lagos. I want to do the exam but I don't know anything or have any handouts to read. Kindly enligthen me on how to start and where. Will be expecting your sooner reply.

Thanks,

Just finished my CFA L1 training and exams. The exam was so simple and by God's grace expecting an excellent result because I attended the IPRO(Investment Professionals) preparatory class. Mind you my background is physics and no prior finance experience.

Call IPRO on 07034076570. They have the best CFA training centre in Nigeria.

Almost all the lecturers are CFA charterholders and have years of Financial Industry Experience.

you can email me on durobukola@gmail.com for further info about them.

From my little experience,,,

START EARLY,

You can make use of the Schweser videos, Schweser Q bank and Schweser notes.

From my experience, those are the best materials you can use.

Mind you I read the curriculum for all the subject areas and used the Schweser materials.

Reading the curriculum that will be shipped to you wont make much difference if you can make use of the Schweser materials VERY WELL.

send me an email to durobukola@gmail.com and I can give you the materials for free.

All the best,

^^^

Thanks for the info. I sent you email now.

responded,

Thanks bro

That's a good job you are doing.

I was considering taking the CIS-CIIA route to investment banking. But i think i will have to reconsider my stance.

What's your opinion on the CIIA? Though CFA is more popular and prestigious, but the curriculum is almost the same.

bukkytroni:

Just finished my CFA L1 training and exams. The exam was so simple and by God's grace expecting an excellent result because I attended the IPRO(Investment Professionals) preparatory class. Mind you my background is physics and no prior finance experience.

Call IPRO on 07034076570. They have the best CFA training centre in Nigeria.

Almost all the lecturers are CFA charterholders and have years of Financial Industry Experience.

you can email me on durobukola@gmail.com for further info about them.

Please, I have a small question. Please, tell me, is the CFA thingy still an edge in Lagos? I mean, I know of people with CFA L1 plus UK Master's who are roaming the streets of Lagos. Are these people just stupid?

Thanks.

bukkytroni:

Just finished my CFA L1 training and exams. The exam was so simple and by God's grace expecting an excellent result because I attended the IPRO(Investment Professionals) preparatory class. Mind you my background is physics and no prior finance experience.

Call IPRO on 07034076570. They have the best CFA training centre in Nigeria.

Almost all the lecturers are CFA charterholders and have years of Financial Industry Experience.

you can email me on durobukola@gmail.com for further info about them.

Please, I have a small question. Please, tell me, is the CFA thingy still an edge in Lagos? I mean, I know of people with CFA L1 plus UK Master's who are roaming the streets of Lagos. Are these people just stupid?

Thanks.

^^^
Hmmm, Nna this your statement get as e be oh. CFA L1 + UK Masters and yet no job.

Odikwa serious oh.

But the stated statement is true. I got really disheartened when I learnt of it. I was even regretting that I had not registered for and passed L1 until I got to know the ugly fact.

I don't even know whether it is worth it again sef. That is why I am asking.

tanimola22:

Please, I have a small question. Please, tell me, is the CFA thingy still an edge in Lagos? I mean, I know of people with CFA L1 plus UK Master's who are roaming the streets of Lagos. Are these people just silly?

Thanks.

What do you mean by 'roaming the streets of Lagos'.

I assume you mean they are looking for job.

I will advise that they proceed with the next stage L2 and L3, while awaiting their time for a great job to happen.

When you become a CFA charterholder, your story changes.

tanimola22:

But the stated statement is true. I got really disheartened when I learnt of it. I was even regretting that I had not registered for and passed L1 until I got to know the ugly fact.

I don't even know whether it is worth it again sef. That is why I am asking.

Most people hate doing the old fashioned job hunt strategy--hit the street. I trekked round every corner of VI and broad street when i was looking for job. It was a strenuous experience but i thank God i did. That was when i discovered that most jobs are not advertised.

But, CFA L1 + UK master is more than enough to get a good job.

This thing is becoming serious oh

bukkytroni:

What do you mean by 'roaming the streets of Lagos'.

I assume you mean they are looking for job.

I will advise that they proceed with the next stage L2 and L3, while awaiting their time for a great job to happen.

When you become a CFA charterholder, your story changes.

I was supposed to have started my CFA stuff before now but got discouraged along the line. I decided i would go the CIS-CIIA route. However, there are mixed stories regarding this CFA thingy and i am unsure if it's worth the investment and time.

bukkytroni:

What do you mean by 'roaming the streets of Lagos'.

I assume you mean they are looking for job.

I will advise that they proceed with the next stage L2 and L3, while awaiting their time for a great job to happen.

When you become a CFA charterholder, your story changes.

Thanks. So all those people peddling the theory of 'just pass CFA L1 and a great job will come` should not be listened to. Great, I think your opinion is honest. People used to make me believe that passing CFA L1 alone is sufficient to land me that big job.

At least, from your response, I know better now. Passing CFA L1 guarantees nothing.

Thanks.

T22.

chamber2:

Most people hate doing the old fashioned job hunt strategy--hit the street. I trekked round every corner of VI and broad street when i was looking for job. It was a strenuous experience but i thank God i did. That was when i discovered that most jobs are not advertised.

But, CFA L1 + UK master is more than enough to get a good job.

This thing is becoming serious oh


I was supposed to have started my CFA stuff before now but got discouraged along the line. I decided i would go the CIS-CIIA route. However, there are mixed stories regarding this CFA thingy and i am unsure if is worth the investment and time.

Quixotically speaking or in theory, yes! In practice, I am very afraid .  Many CFA L1 holders were rejected by Standard Chartered Bank for the IGP. The same SCB is ready to pay for its IGs willing to take the CFA L1. Ironic, if you ask me.

^^^

I passed their test last yr but was not called for the interview. I can't tell what their reason was. I can now see why people spend millions to attend a redbrick uni.

SCB is not the main point of reference. I just spoke about the bank in passing.

Meanwhile, I guess you passed their tests after other applicants had long passed them and been interviewed. If not, they would have invited you for a first round phone interview. I know this because I know many 2:2 grads whose applications were progressed to the next stage after they successfully passed the online tests.

One CFA L1+ UK MSc guy I know has been job hunting for close to a year now in Niaija. Nothing guarantees anything these days, not even redbrick. Only God can help us!

T22

^^^

Most likely.

Only God guarantees a job these days, i agree completely. My classmates who are working in good organisations now never worked hard like most of us did in school.

Only God guarantees a good good.

“I will study and prepare, and someday my opportunity will come.”

– Abraham Lincoln, 16th President of the United States

As much as we can, we can prepare for a greater tomorrow while we endure the pains/deprivations of today.


What happens if opportunity comes and you’re not prepared? Opportunities are around us all the time. The problem is that most of us spend so little time preparing for those opportunities that we don’t have the confidence to take advantage of them, or even worse, we never even recognize them. The time to prepare for opportunity is now. Decide what you want, then prepare for your shot. That way when your opportunity come you will have the confidence and knowledge needed to take full advantage of it!

I will study and continue to add value to myself and THEN the opportunity that I expect will come and meet me prepared,

^^^^^

You are several miles from being wrong; your ideas are well thought out and very well said. And as @chamber remarked, God will settle us. This, I very much know.

T22

bukkytroni:

“I will study and prepare, and someday my opportunity will come.”

– Abraham Lincoln, 16th President of the United States

As much as we can, we can prepare for a greater tomorrow while we endure the pains/deprivations of today.


What happens if opportunity comes and you’re not prepared? Opportunities are around us all the time. The problem is that most of us spend so little time preparing for those opportunities that we don’t have the confidence to take advantage of them, or even worse, we never even recognize them. The time to prepare for opportunity is now. Decide what you want, then prepare for your shot. That way when your opportunity come you will have the confidence and knowledge needed to take full advantage of it!

I will study and continue to add value to myself and THEN the opportunity that I expect will come and meet me prepared,

Put in other words, it is better to have a gun and not need it than need a gun and not have it.

The other truth is that the financial market is down hence most of the CFA oriented firms are not recruiting now. In fact, they are barely managing to maintain their present staff strength. Once things start picking up, opportunities will sure abound.

There is this Level 3 candidate and a first class graduate of investment management from the UK who has no job, he graduated in 2009 and passed his Level1 before coming to Nigeria. He has motivated himself to keep the CFA dream on despite the odds. Is all hope lost for him, no, its just a matter of time.

If you really want a qualification that gives the 'i can do all things" spirit in finance , a designation that sets you apart, and one that make people seek your opinion before taking a decision, then go for CFA. My boss respects me because of CFA and what I always bring to the table. And come to think of it, you can never remain the same with CFA in terms of the knowledge or value you add to yourself.

^^

I applaud the level of enthusiasm in your post, but sadly, reality may be far different. I honestly feel the CFA is starting to lose its appeal and in a few years, may be seen as a nice extracurricular activity than[i] "the designation that sets you apart"[/i].

Ivy league MBAs and core quantitative skills are likely to surpass CFAs as an employer's favorite.  Even in the toughest market conditions, you are unlikely to find LBS graduates or individuals with sharp C++ skills going out of jobs.

I also feel that most people are ignoring other areas of finance such as compliance & corporate governance, performance analysis etc. These fields have been long ignored by several people who had the M&A/trading dreams. I have two friends who got laid off from their compliance jobs after the MF global bankruptcy. Both of them got jobs with bigger banks within three weeks!!! . . . . .It's a lot easier for two camels to go through the eye of the needle at once than to pull this off with M&A / trading jobs