Friday, June 6, 2008
A failed CFA report card
Tuesday, August 28, 2007
CFA official study materials
This year I ordered the official CFA Institute study material. When it arrived in the country I had to pay a whopping $150 at customs because of the weight! The whole package weighs an astounding 9kg.There are 6 volumes,
Volume1: Ethics and Professional Standards and Quantitative Analysis.
Volume2: Economics
Volume3: Financial Statement Analysis
Volume4: Corporate Finance and Portfolio Management
Volume5: Equity and Fixed Income
Volume6: Derivatives and Alternative Investments.
Volume2: Economics
Volume3: Financial Statement Analysis
Volume4: Corporate Finance and Portfolio Management
Volume5: Equity and Fixed Income
Volume6: Derivatives and Alternative Investments.
Noting the weight of the CFA institute material, obviously you will need to plan the location of your study sessions carefully. I found it quite a restriction to not be able to carry a couple of the topics with me for ad-hoc reading wherever would happen to be throughout the course of the work day. 
Exhibit B - Official CFA Institiute books
Personally I found the official CFA Institute books almost too extensive. There is no getting around it there is allot to study guys, however there are alternatives. At work others before me, having taken the CFA exam, have passed without exception studying solely from the “study notes” that Schweser sells. So my strategy was to use the official CFA institute material as a definitive reference. It was really handy having them on the shelf , and I did use them.
However 98% of my study time was spent studying from the Schweser notes which are, to the point and informative. I was able to quickly get through material, making progress on a daily basis. Physically and in terms of content the Schweser books are thinner and lighter, while still covering all the required learning objectives. Exhibit C shows the official curriculum on the left and the Schweser study notes on the right.
Exhibit B - Official CFA Institiute booksPersonally I found the official CFA Institute books almost too extensive. There is no getting around it there is allot to study guys, however there are alternatives. At work others before me, having taken the CFA exam, have passed without exception studying solely from the “study notes” that Schweser sells. So my strategy was to use the official CFA institute material as a definitive reference. It was really handy having them on the shelf , and I did use them.
However 98% of my study time was spent studying from the Schweser notes which are, to the point and informative. I was able to quickly get through material, making progress on a daily basis. Physically and in terms of content the Schweser books are thinner and lighter, while still covering all the required learning objectives. Exhibit C shows the official curriculum on the left and the Schweser study notes on the right.
Exhibit C - The Institiute and Schweser notes side by side
Saturday, August 25, 2007
CFA vs MBA quick facts
MBA Quick facts ( Wharton )
Duration: 2 Years
Cost: $72 000
Application Deadlines: October, January, February
Entry Requirements: - Fee: $225
- 4 Application essays
- Academic transcripts
- Letters of Recommendation
- GMAT
- TOEFL
- Interview by Invitation Only
Top 5: Wharton , Stanford, Harvard, MITSloan, Kellogg
CFA Quick facts ( CFA Institute : CFA Level I )
Duration: 4 Years
Cost: - $1155 (Enrolment and Exam Registration)
- $949 ( Schweser Premium Solution ) or
- $1490 ( Stalla System )
Key Dates: Dec Level 1 Exam
March, August, September
June Level 1 Exam
September, February, March
Entry Requirements: Fee: - $1155 (Enrolment and Exam Registration)
- Bachelor’s Degree
Top 5: CFA Institute, Stalla, Schweser, 7city , Quartic
What topics does the CFA cover ?
The Chartered Financial Analyst body of knowledge represents a definitive finance body of knowledge. Having mastered all these topics you can be certain that there won’t be much in finance that you will not be able to do.
The CFA Institute publishes on their website the full list of finance topics they are as follows:
Ethical & Professional Standards
Material covers developing and appropriate level of professional and ethical standards. The course material takes you through many examples of situations which would require ethical and professional judgement.
Quantitative Methods
Material covers developing a solid knowledge of quantitative analysis, which will be used in later chapters of the material. Areas of interest include Time Value of Money, Probability, Sampling, Correlation, Time Series Analysis, and Technical Analysis, with an emphasis on application of these principles.
Economics
Material covers Microeconomic, Macroeconomic and Global Economic Analysis.
Financial Statement Analysis
Material covers a framework for financial statement analysis, Accounting income and Assets, Statement of Cash Flows, Analysis of Cash Flows, World wide accounting diversity and International Standards, Analysis of Financial statements, Dilutive securities and Earnings per Share, Analysis of inventories, Long Term Assets Analysis of income taxes, Analysis of Off-Balance sheet debt.
Corporate Finance
Material covers Capital Budgeting, Cost of Capital, Capital structure and leverage, Dividends and Dividend Policy, Governance of Listed Companies,
Analysis of Equity Investments
Material covers the asset allocation decision, an introduction to Portfolio management and asset pricing models, the Functioning of securities markets, market indexes and efficient capital markets.
Portfolio Management
This section details security valuation, Industry Analysis, Equity Concepts and Techniques, Company Analysis and Stock Valuation, technical Analysis and Price Multiples.
For a complete list of learning outcomes please refer to the CFA institute website
The CFA Institute publishes on their website the full list of finance topics they are as follows:
Ethical & Professional Standards
Material covers developing and appropriate level of professional and ethical standards. The course material takes you through many examples of situations which would require ethical and professional judgement.
Quantitative Methods
Material covers developing a solid knowledge of quantitative analysis, which will be used in later chapters of the material. Areas of interest include Time Value of Money, Probability, Sampling, Correlation, Time Series Analysis, and Technical Analysis, with an emphasis on application of these principles.
Economics
Material covers Microeconomic, Macroeconomic and Global Economic Analysis.
Financial Statement Analysis
Material covers a framework for financial statement analysis, Accounting income and Assets, Statement of Cash Flows, Analysis of Cash Flows, World wide accounting diversity and International Standards, Analysis of Financial statements, Dilutive securities and Earnings per Share, Analysis of inventories, Long Term Assets Analysis of income taxes, Analysis of Off-Balance sheet debt.
Corporate Finance
Material covers Capital Budgeting, Cost of Capital, Capital structure and leverage, Dividends and Dividend Policy, Governance of Listed Companies,
Analysis of Equity Investments
Material covers the asset allocation decision, an introduction to Portfolio management and asset pricing models, the Functioning of securities markets, market indexes and efficient capital markets.
Portfolio Management
This section details security valuation, Industry Analysis, Equity Concepts and Techniques, Company Analysis and Stock Valuation, technical Analysis and Price Multiples.
For a complete list of learning outcomes please refer to the CFA institute website
Friday, August 24, 2007
What is the Chartered Financial Analyst?
The Chartered Financial Analyst ( CFA ) program is a globally recognised professional designation which covers a comprehensive finance body of knowledge that focuses on investment theory, ethics, financial accounting and portfolio management
The CFA program consists of 3 exams, Level I, II, & III and can be taken over 3 years. As a candidate you can register to sit for the exam in June or December of each year. Each exam is 6 hours long and is broken into two parts. Each part can be viewed as an individual 3 hour exam. At level I and II all questions are multiple choice type questions.
Once you have passed all three levels of the exam you will be able to work in investment banking, funds management, private equity and venture capital. Even obtaining level I would be a foot in the door. At level two employers start taking you seriously and you’ll be able to start considering non- junior roles. It is important to note that in order to actually be awarded the CFA charter you will first be required to obtain three years of work experience that can be verifiable by an existing CFA charter holder.
The Official study materials can be purchased from the CFA Institute after you have paid the registration and exam fee.
Alternative study materials can be ordered online from Stalla and Schwesser on their websites. You can choose a combination of Video, Audio and normal study notes. These alternative materials are very comprehensive and can almost replace the official study material from the institute. Additionally utilising a 3-Dimentional approach to your study program, including video and audio can mean the difference between a pass and a fail. Time is of the essence and you’ll need to use whatever methods available to maximise your time and increase your intake and understanding of the required material.
The CFA Institute publishes a CFA Body of knowledge ( CBOK ) which is a listing of all the finance topics a CFA candidate must be proficient in, in order to pass the exam successfully. The CBOK comprises of the following major topics
1. ETHICAL AND PROFESSIONAL STANDARDS
2. QUANTITATIVE METHODS
3. ECONOMICS
4. FINANCIAL REPORTING AND ANALYSIS
5. CORPORATE FINANCE
6. EQUITY INVESTMENTS
7. FIXED INCOME
8. DERIVATIVES
9. ALTERNATIVE INVESTMENTS
10. PORTFOLIO MANAGEMENT AND WEALTH PLANNING
Make no mistake; obtaining the Chartered Financial Analyst designation is not easy. Each exam requires about 250 hours of study at a minimum. The CFA program can be viewed as more comprehensive and rigourous than an MBA major in finance from a top university. In fact, more than 70% of candidates fail the level one exam each year.
The CFA program consists of 3 exams, Level I, II, & III and can be taken over 3 years. As a candidate you can register to sit for the exam in June or December of each year. Each exam is 6 hours long and is broken into two parts. Each part can be viewed as an individual 3 hour exam. At level I and II all questions are multiple choice type questions.
Once you have passed all three levels of the exam you will be able to work in investment banking, funds management, private equity and venture capital. Even obtaining level I would be a foot in the door. At level two employers start taking you seriously and you’ll be able to start considering non- junior roles. It is important to note that in order to actually be awarded the CFA charter you will first be required to obtain three years of work experience that can be verifiable by an existing CFA charter holder.
The Official study materials can be purchased from the CFA Institute after you have paid the registration and exam fee.
Alternative study materials can be ordered online from Stalla and Schwesser on their websites. You can choose a combination of Video, Audio and normal study notes. These alternative materials are very comprehensive and can almost replace the official study material from the institute. Additionally utilising a 3-Dimentional approach to your study program, including video and audio can mean the difference between a pass and a fail. Time is of the essence and you’ll need to use whatever methods available to maximise your time and increase your intake and understanding of the required material.
The CFA Institute publishes a CFA Body of knowledge ( CBOK ) which is a listing of all the finance topics a CFA candidate must be proficient in, in order to pass the exam successfully. The CBOK comprises of the following major topics
1. ETHICAL AND PROFESSIONAL STANDARDS
2. QUANTITATIVE METHODS
3. ECONOMICS
4. FINANCIAL REPORTING AND ANALYSIS
5. CORPORATE FINANCE
6. EQUITY INVESTMENTS
7. FIXED INCOME
8. DERIVATIVES
9. ALTERNATIVE INVESTMENTS
10. PORTFOLIO MANAGEMENT AND WEALTH PLANNING
Make no mistake; obtaining the Chartered Financial Analyst designation is not easy. Each exam requires about 250 hours of study at a minimum. The CFA program can be viewed as more comprehensive and rigourous than an MBA major in finance from a top university. In fact, more than 70% of candidates fail the level one exam each year.
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