CFA (Chartered Financial Analyst) Exam

1. Ethical and Professional Standards • Code of Ethics and Standards of Professional Conduct o Overview of CFA Institute's Code of Ethics o Ethical responsibilities in relation to clients, employers, and the profession o Conflicts of interest and their resolution o Professionalism and integrity in financial markets o Case studies and examples of ethical decision-making in finance • GIPS (Global Investment Performance Standards) o Understanding GIPS and its importance in the investment industry o The requirements for GIPS-compliant performance presentation o Benefits and challenges of implementing GIPS standards o Performance reporting and calculations for investment firms 2. Quantitative Methods • Time Value of Money o Future value and present value concepts o Compounding and discounting techniques o Annuities and perpetuities o Net present value (NPV) and internal rate of return (IRR) calculations • Probability and Statistics o Basic probability theory and rules o Descriptive statistics: mean, median, mode, variance, standard deviation o Probability distributions: normal, binomial, and others o Statistical inference, hypothesis testing, and confidence intervals • Sampling and Estimation o Sampling methods and biases o Point estimates and confidence intervals o Hypothesis testing and p-values o Sample size determination and margin of error • Regression Analysis o Simple and multiple linear regression models o Hypothesis testing in regression models o Correlation and causality o Multicollinearity and heteroskedasticity 3. Economics • Microeconomics o Supply and demand analysis o Elasticity of demand and supply o Market structures: perfect competition, monopoly, oligopoly, monopolistic competition o Consumer theory and producer theory • Macroeconomics o National income accounting and GDP o Business cycle and economic indicators o Inflation, unemployment, and fiscal policies o Monetary policies and central bank tools o Exchange rates and trade policies • International Economics o Balance of payments and currency exchange markets o Trade theories: absolute advantage, comparative advantage, and protectionism o Impact of globalization on financial markets and economies o Exchange rate determination and hedging 4. Financial Reporting and Analysis • Financial Statement Analysis o Income statement, balance sheet, and cash flow statement o Ratio analysis: liquidity, profitability, efficiency, and solvency ratios o DuPont analysis o Financial reporting quality and earnings management • Revenue Recognition and Expense Matching o Principles of revenue recognition o Expense matching and accrual accounting o IFRS vs. GAAP in financial reporting o Non-GAAP financial metrics • Accounting for Investments o Equity investments, debt investments, and derivative instruments o Impairment of assets o Fair value vs. amortized cost o Lease accounting and pension liabilities 5. Corporate Finance • Capital Budgeting o Net present value (NPV) and internal rate of return (IRR) o Payback period, discounted payback period o Profitability index and real options valuation o Project evaluation and risk assessment • Capital Structure o Debt vs. equity financing o Trade-off theory and pecking order theory o Cost of capital (WACC) o Modigliani-Miller theorem and its implications • Dividend Policy o Types of dividends: cash dividends, stock dividends, and share repurchases o Theories of dividend policy: residual theory, signaling theory, and life-cycle theory o Impact of dividend policy on firm value o Dividend discount models 6. Equity Investments • Equity Valuation Techniques o Dividend discount model (DDM) o Price-to-earnings (P/E) ratio and other multiples o Discounted cash flow (DCF) models o Free cash flow models • Market Efficiency o Efficient market hypothesis (EMH) and its forms: weak, semi-strong, strong o Behavioral finance and market anomalies o Technical analysis and fundamental analysis o Active vs. passive investment strategies • Equity Markets and Instruments o Stock exchanges, trading mechanisms, and order types o Types of equity securities: common stock, preferred stock o Stock splits and rights offerings o Market indices and their composition 7. Fixed Income • Bond Valuation o Bond pricing and yield to maturity (YTM) o Duration and convexity o Yield curve analysis and spread measures o Credit ratings and their impact on bond pricing • Fixed Income Risk and Return o Interest rate risk, reinvestment risk, and credit risk o Convexity and its impact on bond price changes o Yield spreads and their interpretation o Strategies for managing fixed income portfolios • Fixed Income Markets and Instruments o Government and corporate bonds o Mortgage-backed securities (MBS) and asset-backed securities (ABS) o Municipal bonds o Convertible bonds and callable bonds 8. Derivatives • Forward and Futures Contracts o Definition and uses of forwards and futures o Pricing forward and futures contracts o Hedging strategies using futures o Margin requirements and settlement mechanisms • Options and Swaps o Basic concepts of options: calls, puts, intrinsic value, time value o Option pricing models: Black-Scholes and binomial models o Uses of options in hedging and speculation o Interest rate swaps, currency swaps, and commodity swaps 9. Alternative Investments • Real Estate o Real estate valuation techniques o Real estate investment trusts (REITs) o Risk and return characteristics of real estate investments o Direct vs. indirect real estate investment • Private Equity and Venture Capital o Investment strategies in private equity and venture capital o Risk and return profiles of private equity funds o Due diligence in private equity investment o Exit strategies for private equity investments • Commodities and Hedge Funds o Commodity markets and their role in investment portfolios o Hedge fund strategies: long/short, event-driven, and market-neutral o Risk and return characteristics of commodities o Derivatives in commodities trading 10. Portfolio Management and Wealth Planning • Portfolio Theory o Modern portfolio theory (MPT) o Efficient frontier and the capital market line (CML) o Asset allocation strategies o Risk-adjusted performance measures: Sharpe ratio, alpha, beta, etc. • Portfolio Management Strategies o Active vs. passive portfolio management o Tactical asset allocation o Risk management in portfolio construction o Rebalancing portfolios and adjusting for risk tolerance • Behavioral Finance in Portfolio Management o Psychological factors affecting investment decisions o Herd behavior and overconfidence bias o Market timing and its challenges o Long-term wealth management strategies • Wealth Planning and Taxation o Tax-efficient investment strategies o Estate planning and wealth transfer o Retirement planning and asset accumulation strategies o Risk management in personal financial planning