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The Chartered Financial Analyst (CFA) designation is a mark of distinction that is globally recognized by employers, investment professionals, and investors as the definitive standard by which to measure serious investment professionals. The CFA Program reflects a broad Candidate Body of Knowledge™ (CBOK) developed and continuously updated by active practitioners in countries around the world to ensure that charterholders possess knowledge grounded in the real world of today’s global investment industry.
Candidate Body of Knowledge Topical Outline
I. Ethical and Professional Standards A. Professional Standards of Practice B. Ethical Practices II. Quantitative Methods A. Time Value of Money B. Probability C. Probability Distributions and Descriptive Statistics D. Sampling and Estimation E. Hypothesis Testing F. Correlation Analysis and Regression G. Time Series Analysis H. Simulation Analysis I. Technical Analysis III. Economics A. Market Forces of Supply and Demand B. The Firm and Industry Organization C. Measuring National Income and Growth D. Business Cycles E. The Monetary System F. Inflation G. International Trade and Capital Flows H. Currency Exchange Rates I. Monetary and Fiscal Policy
Industry. Ratio and Financial Analysis V. Financial Reporting Quality D. Financial Reporting System (IFRS and GAAP) B. Company) and the Valuation of Individual Equity Securities . Stock Compensation. and Benchmarks C. Analysis of Inventories E. Dividend Policy C. Equity Investments A. Corporate Governance B. Economic Growth and Development K. Corporate Finance A. Analysis of Taxes G. Business and Financial Risk E. Types of Equity Securities and Their Characteristics B. Analysis of Inter-Corporate Investments K. Analysis of Global Operations M. Mergers and Acquisitions and Corporate Restructuring VI.J. Fundamental Analysis (Sector. Equity Markets: Characteristics. Capital Investment Decisions D. Analysis of Debt H. Effects of Government Regulation L. Impact of Economic Factors on Investment Markets IV. Analysis of Off-Balance-Sheet Assets and Liabilities I. Short-Term Financial Policy G. Long-Term Financial Policy F. and Other Employee Benefits J. Analysis of Business Combinations L. Institutions. Principal Financial Statements C. Analysis of Pensions. Analysis of Long-Lived Assets F. Financial Reporting and Analysis A.
Equity of Hybrid Investment Vehicles VII. Term Structure Determination and Yield Spreads E. Distressed Securities/Bankruptcies G. Company) and Return Analysis D. Credit Derivatives Markets and Instruments IX. Private Equity/Venture Capital D.D. Fixed-Income Valuation (Sector. Forward Markets and Instruments C. Analysis of Interest Rate Risk F. Industry. Structured Products VIII. Tangible Assets with Low Liquidity . Equity Market Valuation and Return Analysis E. Fixed-Income Markets: Characteristics. Futures Markets and Instruments D. Alternative Investments A. Valuing Bonds with Embedded Options H. Fixed Income A. Derivatives A. and Benchmarks C. Special Applications of Fundamental Analysis (Residual Earnings) F. Hedge Funds E. Types of Derivative Instruments and Their Characteristics B. Real Estate C. Types of Fixed-Income Securities and Their Characteristics B. Analysis of Credit Risk G. Closely Held Companies and Inactively Traded Securities F. Options Markets and Instruments E. Commodities H. Types of Alternative Investments and Their Characteristics B. Institutions. Swaps Markets and Instruments F.
Portfolio Construction and Revision L. Management of Institutional Investor Portfolios D. Execution of Portfolio Decisions (Trading) Q. Fixed-Income Portfolio Management Strategies N. Alternative Investments Management Strategies O. Economic Analysis and Setting Capital Market Expectations I. Pooled Funds. Asset Allocation (including Currency Overlay) K. Performance Evaluation R. Risk Management P. Management of Individual/Family Investor Portfolios C. Presentation of Performance Results View topic areas weights for each exam level CFA Exam Topic Area Weights . Portfolio Concepts B. Pension Plans and Employee Benefit Funds E. Investment Manager Selection F. Other Institutional Investors G. and ETFs H. Equity Portfolio Management Strategies M. Tax Efficiency J. Mutual Funds. Portfolio Management and Wealth Planning A.X.
CFA Program Exam Calendar The calendars below provide approximate timelines for upcoming exams. Candidates may register for only one exam at a time. Actual exam weights may vary slightly from year to year. Review the CFA Program enrollment and exam registration deadlines. Please note that some topics are combined for testing purposes. **Economics is part of Portfolio Management at Level III. view the CFA exam fee schedule. December 2011 Exam Schedule (Level I only) Mid-January 2011 Upon registration December 2011 exam registration opens Sample exams become available at time of registration . and get started.Topic Area Ethical and Professional Standards (total) Level I 15 Level II 10 Level III 10 Investment Tools (total) 50 30-60 0 Corporate Finance 8 5-15 0 Economics** 10 5-10 0 Financial Reporting and Analysis 20 15-25 0 Quantitative Methods 12 5-10 0 Asset Classes (total) 30 35-75 35-45 Alternative Investments 3 5-15 5-15 Derivatives 5 5-15 5-15 Equity Investments 10 20-30 5-15 Fixed Income 12 5-15 10-20 Portfolio Management and Wealth Planning (total) 5 5-15 45-55 Total 100 100 100 *Note: These weights are intended to guide the curriculum and exam development processes. and must wait to receive their exam results before registering for the next exam. Candidates who fail an exam are encouraged to re-take the exam.
and III) Late July 2011 Upon exam registration 21 September 2011 February 2012 15 February 2012 March 2012 14 March 2012 19 March 2012 June 2012 exam registration opens Sample exams become available when candidate registers for the exam First fee schedule deadline for the June 2012 exam Exam scholarship application deadline Second fee schedule deadline for June 2012 exam Mock exams become available Final deadline to register the for June 2012 exam Final deadline for disability and religious alternate date accommodations requests to be received by CFA Institute .Mid-January 2011 December 2011 exam registration opens 16 March 2011 31 August 2011 1 September 2011 6 September 2011 14 September 2011 20 September 2011 First deadline to enroll and register for the December 2011 exam Second deadline to enroll and register for the December 2011 exam Exam scholarship application deadline Mock exams become available (login required) Final deadline to enroll and register for the December 2011 exam Final deadline for disability and religious alternate date accommodations requests to be received by CFA Institute Exam admission tickets available online Test center change request deadline (login required) Exam days Exams graded 27 October 2011 11 November 2011 3–4 December 2011 December 2011– January 2012 January 2012 Exam results available June 2012 Exam Schedule (Levels I. II.
S. CFA Exam Fee Schedule CFA Program applicants pay an initial one-time enrollment fee. The Level II and III exams are offered once a year. register early to take advantage of the fee schedule and to have enough time to study and prepare for the exam. In addition. The enrollment fee and the exam registration fee increase with each deadline June 2012 Exam (Levels I. applicants are required to pay an exam registration fee. but on average.II. . or both. to studying the material. Your preparation time will vary based on your prior education and experience. and III) All fees are in U. Use the final four to six weeks before the exam to review what you've learned and practice with sample and mock exams. dollars. Preparing for the Exams Successful candidates report spending an average of 300 hours preparing for each exam. We offer three options for the CFA Program curriculum: eBook only. it takes about four years to earn a CFA charter. Returning candidates pay only the exam registration fee. there are 18 study sessions. in June and December. Registration usually opens about 11 months before each exam.13 April 2012 May 2012 2–3 June 2012 June–July 2012 July–August Test center change request deadline (login required) Exam admission tickets available online Exam days Exams graded Exam results available Completing the CFA Program Completing the CFA Program exams can take as little as 18 months. in June. for 18 weeks. print only. so a good plan is to devote 15−20 hours per week. For each level of the curriculum. When Should You Take Your Exam? The Level I exam is offered twice a year.
you can choose from three curriculum options (all fees are in U. dollars): • • • If you select the eBook version of the curriculum only. If you select the printed version of the curriculum only. each culminating in a six-hour exam.m.005 $20 shipping $1. Pledge to adhere to the CFA Institute Code of Ethics and Standards of Professional Conduct. To become a CFA charterholder: • o o Enter the CFA Program Program entrance requirements Course of study . Apply for membership to a local CFA member society.$40 = total cost. ET by 15 February 11:59 p. If you select both the eBook version and the printed version of the curriculum . you do not receive the $40 discount: Enrollment + exam registration + $20 (shipping*) = total cost. you pay the cost of the additional curriculum ($30) plus shipping: Enrollment + exam registration + $30 (+$20 shipping for the printed version*) = total cost. we offer a US$40 discount: Enrollment + exam registration . and Complete the CFA Program. Become a member of CFA Institute. ET Program Enrollment (new Level I only) Exam Registration CurriculumPrint version $420 $420 $505 $650 $20 shipping Past deadline $745 $20 shipping $1.185‡ $1. but you can take as much time as you need.530‡ Total ‡ 2012 curriculum pricing details When you register for the June 2012 exam.m. Become a CFA Charterholder To earn a CFA charter. ET by 14 march 11:59 p.Completing the Program takes most candidates between two and five years (there is no limit to the number of times you can take each exam).by 21 September 11:59 p.S. you must: • • • • • Have four years of qualified investment work experience. The CFA Program is organized into three levels.m.
Why hire a charterholder? Enroll & Register Before you enroll in the CFA Program and register for your first exam: Meet the entrance requirements: . exclusive group of investment professionals through our job board. Completing the program confirms your mastery of the rigorous CFA curriculum and your success in passing all three exam levels. Employers can post jobs and gain access to this highly qualified.o • o o • o o • Program fee schedule Study for and pass the three levels of exams Study session outlines Sample and mock exams Become a regular member of CFA Institute (required to receive your charter) Membership types Work experience requirements Maintain your charterholder status Value for Your Career The CFA Program equips you with the practical and fundamental knowledge you need for a wide variety of career choices in the investment profession. How can the CFA Program benefit your career? Value for Employers Employers cite the extensive knowledge charterholders possess in investment topics outside their own specializations as one of the primary reasons for hiring them.
June 2012 Level I Study Sessions Topic Ethical and Professional Standards Weight 15 Outline and LOS Readings Study Session 1 (PDF) 1-4 (PDF) Quantitative Methods 12 Study Session 2 (PDF) 5-8 Study Session 3 (PDF) 9-12 Economics 10 Study Session 4 (PDF) 13-16 Study Session 5 (PDF) 17-19 Study Session 6 (PDF) 20-21 Financial Reporting and Analysis 20 Study Session 7 (PDF) 22-24 Study Session 8 (PDF) 25-28 .or have a combination of professional work and college experience that totals at least four years.or be in the final year of your bachelor's degree program at the time of registration . . and the four-year total must be accrued prior to enrollment. Parttime positions do not qualify. At the time your degree is awarded.If you initially enroll/register as a final year undergraduate student with a degree in progress. Understand the professional conduct requirements (you will be asked to sign the Professional Conduct Statement and Candidate Responsibility Statement) Be prepared to take the exams in English Effective 1 January 2011: Have a valid international travel passport (required for enrollment and exam registration).Have a bachelor's (or equivalent) degree . you may not register for the Level II exam until you have earned your degree. Read the ID policy. you may update your account education information to certify that your degree has been received.or have four years of professional work experience (does not have to be investment related) . or obtained professional work experience that meets the program’s entrance requirements.
” “formulate. and problem sets. Each LOS includes a command word. such as “demonstrate.” that indicates the degree of understanding required.Topic Weight Outline and LOS Readings Study Session 9 (PDF) 29-32 Study Session 10 (PDF) 33-35 Corporate Finance 8 Study Session 11 (PDF) 36-42 Portfolio Management 5 Study Session 12 (PDF) 43-46 Equity 10 Study Session 13 (PDF) 47-49 Study Session 14 (PDF) 50-52 Fixed Income 12 Study Session 15 (PDF) 53-56 Study Session 16 (PDF) 57-59 Derivatives 5 Study Session 17 (PDF) 60-65 Alternative Investments 3 Study Session 18 (PDF) 66-67 CFA Program Curriculum A committee of practicing CFA charterholders. Learning Outcome Statements Learning Outcome Statements (LOS) . The curriculum for each exam level is organized into 18 study sessions. and abilities (KSAs) that you should be able to apply after completing a curriculum reading and all associated exercises and problems. design the curriculum to deliver the Candidate Body of Knowledge (CBOK) to CFA Program candidates. skills.” or “evaluate. . Reading-specific LOS are listed prior to each reading in the curriculum.What They Are LOS are descriptions of specific knowledge. in conjunction with CFA Institute staff. including assigned readings. learning outcome statements (LOS).
LOS command words (PDF) LOS – What They Are Not LOS are not intended to help you browse a reading to find simple facts that may be the subjects of exam questions. While you are taking the Level I multiple choice exam. but LOS do not have easy “answers. and questions may have multiple parts. 120 on the morning session of the exam and 120 on the afternoon session.” Each item set on the CFA exam consists of a vignette (or case statement) and six multiple choice items (questions). Readings may contain one or more paragraphs or pages that most directly relate to each LOS. LOS should not be viewed as direct proxies for exam questions. including time to record your answer on the answer sheet. you should allocate 1. The Level III essay exam is given in the morning session and has a maximum score of 180 points. All questions are equally weighted and there is no penalty for guessing. The Level I exam is composed of multiple choice questions only. Each multiple choice question is free-standing (not dependent on other questions) and has three possible answers: A. A Level I examination consists of 240 questions to be completed in a six-hour time frame. On average. CFA Exam Format CFA Exam Team members are generally asked to write two or three item set or essay questions or approximately 30 multiple choice questions in their assigned topics. The Level III exam morning session is composed of essay questions and the afternoon session is composed of item set questions. remember: • Carefully manage your time. B. Multiple Choice About the Level I Questions The Level I exams include 240 total multiple choice questions. The CFA Exam Team develops more questions than needed so that theCouncil of Examiners (COE) leadership can select the best portfolio of questions to appear on the exams. Item sets are sometimes called “mini-cases. The essay exam typically has 10–15 questions. Level I exams: multiple choice Level I multiple choice questions are crafted with each of the incorrect responses (distracters) carefully constructed to represent common mistakes in either calculation or logic. Learn more about the formatting of CFA exam questions CFA Exam Question Formats The CFA exams include three types of question formats. and the item set format.” Similarly.5 minutes to each multiple choice question. Learn more Level II exams: item set The Level II CFA exam consists of 20 item sets — 10 on the morning session of the exam and 10 on the afternoon session. in the afternoon. Learn more Level III exams: item set and essay The Level III exam uses the essay format in the morning. . The points for each question and each question part are given in the exam. Don’t spend too much time on any one question or topic area. The Level II exam is composed of item set questions only. and C. with 10 item sets.
so review the CFA Institute format presented below. There is no penalty for guessing. your odds of answering the question correctly are much higher. C. Standard setters and the Board of Governors (at all three levels) take account of exam difficulty in setting Minimum Passing Scores. Read each item carefully and eliminate obviously incorrect answers . Stems phrased as questions with three unique choices Example 1 (Stem using sentence completion) An analyst suspects that a particular company’s U. Formatting Conventions Used for Level I Exams Item Construction Each item on the Level I multiple choice exam consists of a stem (question. Example 2 (Stem phrased as question) An analyst suspects that a particular company’s U. • Familiarize yourself with the instructions for filling out your answer sheet (PDF). debt-to-equity ratio.• • Read the questions carefully. and C. interest coverage ratio. • Examination writers use a standard set of formatting conventions on the multiple choice questions. Debt-to-equity ratio. Interest coverage ratio. The most likelyeffect of the appropriate adjustments would be to increase that company’s A. • Mark your answers on the answer sheet as you complete each question. There is a great deal of material to master and exam questions are challenging. B. and incorrect. Many sample exams produced by third parties do not follow these conventions. Instructions are also available at the time of the exam. B. see The CFA Program: Our Fifth Decade (PDF). Some candidates mark their answers in the exam book and wait until the end of the exam to complete the answer sheet. Stems using sentence completion with three unique choices 2. 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. and/or table) and three choices. If you have to guess and you can eliminate one of the responses. GAAP financial statements may require adjustment because the company uses take-or-pay contracts.S. A.S. Return on assets. Two basic formats are used: 1. return on assets. C. Item Stems . For a full description of how the MPS is established. • Expect to encounter questions that you will not be able to answer correctly . answer. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. This is not an advisable strategy. A careless “skimming” of the question may lead you to a completely different. B. statement.
The six items in each item set can only be answered based on the information in the vignette. to application and analysis (Level II). choices that are quantitative are ordered from the smallest number to largest number. or not enough information to determine. least likely. Item sets are sometimes called “mini-cases. . On the Level II exam. such as for a financial statement analysis. best described. Choices The Level I CFA exam does not use any of the following choices: all of the above. from knowledge and comprehension (Level I).5 pages. the items are not free-standing (as in Level I). The Level II and III exams are graded for 360 points. When appropriate. or fixedincome item set. A and B only. and the topic focus on Level III is on portfolio management. The learning focus also changes.The Level I CFA exam does not use except. 3 points each. The exam formats (including the essays at Level III) adapt to the changing topic focus and learning focus at each level. in the afternoon. to synthesis and evaluation (Level III). only your final answers recorded on the answer sheets are graded. and you will need to refer back to the vignette for information. corresponding to the number of minutes on the exam. Each stem supports only one item on the exam. However. You are answering 50 percent fewer questions. Choices consisting of words or sentences are typically ordered from shortest to longest. but spending twice as much time thinking about each one (including time for reading and analyzing the vignettes). The choices agree grammatically with the stem. Expect to go slower on the Level II exam than on Level I. You will need to read the vignette before answering the items. the morning essay exam is 180 points and the afternoon item set exam is 180 points. stems will include one of the following qualifiers: most likely. At Level III. The 120 Level II items are equally weighted. you will have a total of 120 items (20 vignettes with 6 items each) compared to 240 multiple choice items on the Level I exam. with 10 item sets. Hence. or least accurate. and the item set format. true. most appropriate. language common to all choices is placed in the stem. The longer vignettes are those that include several tables of information. the topic focus on Level II is on asset valuation. least appropriate. • You may mark up your exam book. The six items can be answered independently of each other. These same “best practices” are followed for item sets questions at Levels II and III. While you are taking the Level I multiple choice exam. or false in item stems and avoids the use of not in item stems whenever possible. remember: • • Read the formatting conventions for writing multiple choice questions at Level I. cannot determine. with no penalty for guessing. The average length of the vignettes on the exam is about 1. B and C only. but they do require information in the vignette. The length of a vignette ranges from about 1 page to 2. but are drawn from the vignette.5 pages. The Level III exam uses the essay format in the morning. statistics.” Each item set on the CFA exam consists of a vignette (or case statement) and six multiple choice items (questions). Item Sets About the Level II and Level III Item Sets The Level II CFA exam consists of 20 item sets — 10 on the morning session of the exam and 10 on the afternoon session. most accurate. none of the above. Circle or underline important information in the vignette and write down your equations or logic. cannot calculate. The topic focus on Level I is on investment tools.
The essay exam typically has 10–15 questions. ii. The points for each question and each question part are given in the exam. There is a great deal of material to master and exam questions are challenging. and use the amount of time allotted.) • If you use all of the designated lined pages. C. Use reasoning and logic. B. label each part of your answer clearly (A. Use short phrases and bullet points to save time. extra lined pages are provided at the back of the book. No points are awarded for general knowledge that is not responsive to the question. Formulate a direct response to the command words. Handwriting is rarely so poor that the answer cannot be graded. Do not spend too much time writing an answer. C. To use these pages. The concepts that you know on one topic often apply to another topic. Points are awarded for direct answers to a question. B. • o o If you do not know the answer to a question: You might be able to eliminate one or more choices based on what you know about the topic. Some parts will direct you to write your answer in a template. place a check mark in the box at the bottom of the last page designated for that answer and label the extra pages with the appropriate question number The following are some general tips for Level III candidates on the essay exam: • • • • • • • • The published guideline answers on past essay exams are more complete and better written than actual exam answers that receive full credit. They are not graded for language and style. • Expect to encounter questions that you will not be able to answer correctly . For these questions.). • Each essay question consists of one or more parts (A. see The CFA Program: Our Fifth Decade (PDF). Answers are graded only on content. Some candidates mark their answers in the exam book and wait until the end of the exam to complete the answer sheet. . Standard setters and the Board of Governors (at all three levels) take account of exam difficulty in setting Minimum Passing Scores. The published guideline answers may not reflect all alternative approachesto the question that received full or partial credit. All other questions should be answered on the lined page(s) following the question. etc. This is not an advisable strategy. but be sure your meaning is clear. There is no penalty for guessing. iii. This is particularly tempting when you know the topic well. For a full description of how the MPS is established. etc. Instructions in bold print immediately following the question will direct you to the page number of each template. Essay About the Level III Essay Questions The Level III essay exam is given in the morning session and has a maximum score of 180 points. or i.• Mark your answers on the answer sheet as you complete each question. and questions may have multiple parts.
you will not be permitted to sit for the afternoon session. Hedged on questions that asked for a recommendation and justification (e. CFA Exam ResultsJune 2011 CFA Exam Pass Rates • • • Level I: 39% Level II: 43% Level III: 51% December 2010 CFA Exam Pass Rate • Level I: 36% Exam Results Availability Exam results are reported to candidates as "pass" or "fail" within 90 days (60 days for Level I and Level II) of the exam date. • View the June exam results timeline (PDF) . Standard setters and the Board of Governors (at all three levels) take account of exam difficulty in setting Minimum Passing Scores. There is a great deal of material to master and exam questions are challenging. Note that you can still answer part E. however.) Answered a question they wish they had been asked instead of the question that was asked. No work shown on a calculation question and the answer is incorrect. even if you do not know the answer to part D. Results will be available for approximately one year after the exam date. Subsequently. You must attend both sessions or your exam will not be graded and you will not receive results. recommended A.. Print a copy of your results as a permanent record. For a full description of how the MPS is established. see The CFA Program: Our Fifth Decade (PDF).• You should expect to encounter questions that you will not be able to answer correctly. If you do not sit for the morning session. Content area experts spent too much time on their area of expertise. the analysis grid will not be available. Review the essay question format details The following are common reasons that graders give for poor candidate performance on the essay portion of the Level III: • • • • • • • Not responsive to command word list (list. lists of passing candidates are provided to societies for membership purposes. Providing more items or responses than requested.g. Individual candidate results are only released to the candidate and are never released to a third party. define. an official letter can be provided indicating only a pass or fail result. Neglected to answer part of the question (especially if a several part question). leaving too little time for weak areas. only the first three that you list will be graded. If a question asks for three factors. but justified B). etc.
“>70%” is considered average to above average. The “<=50%” range is considered poor. The cost is US$100. your request form and payment must be received within 30 days after results are released. including answers. are the property of CFA Institute and will not be returned to you in either original or copied form. • • Guiding Principles for Setting the CFA Examination Minimum Passing Score (PDF) Learn more about the minimum passing score (MPS) and how exams are graded (PDF) Exam Score Retabulation If you are not satisfied with your exam results. candidate login required).• View the December exam results timeline (PDF) Exam Scores The minimum passing score (MPS) for each level of the exam is determined by the CFA Institute Board of Governors each year after the administration of the exams. “51%–70%” is considered poor to average. especially across time. . Learn more and download the form (form is only available for 30 days after results are released. The score matrix provided on the exam results is an indicator of overall performance and cannot be used to determine approximate scores or pass/fail status. Neither the MPS nor individual candidate scores have ever been released. this could potentially be very unfair to candidates. you may request that your exam score be manually retabulated. To set the MPS before the administration of the exams would require that an absolute standard be applied without regard to the difficulty of the exams. Should you choose to request a retabulation. All exam materials.
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