Investment Foundations Syllabus PDF
Investment Foundations Syllabus PDF
Investment Foundations Syllabus PDF
1
CONTENTS
MODULE 1: INDUSTRY OVERVIEW 4
CHAPTER 4 Microeconomics
CHAPTER 5 Macroeconomics
CHAPTER 6 Economics of International Trade
CHAPTER 7 Financial Statements
CHAPTER 8 Quantitative Concepts
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MODULE 5: INDUSTRY STRUCTURE 15
EXAM WEIGHTING 22
3
MODULE 1
INDUSTRY OVERVIEW
4
CHAPTER 1
THE INVESTMENT INDUSTRY:
A TOP-DOWN VIEW
After completing this chapter, you should be able to do
the following:
5
MODULE 2
ETHICS AND REGULATION
6
CHAPTER 2 CHAPTER 3
ETHICS AND INVESTMENT PROFESSIONALISM REGULATION
After completing this chapter, you should be able to do After completing this chapter, you should be able to do
the following: the following:
• Describe the need for ethics in the investment industry; • Define regulations;
• Identify obligations that individuals in the investment • Describe objectives of regulation;
industry have to clients, prospective clients, employers, • Describe potential consequences of regulatory failure;
and co-workers; • Describe a regulatory process and the importance of
• Identify elements of the CFA Institute Code of Ethics; each step in the process;
• Explain standards of practice (professional principles) • Identify specific types of regulation and describe the
that are based on the CFA Institute Code of Ethics; reasons for each;
• Describe benefits of ethical conduct; • Describe elements of a company’s policies and
• Describe consequences of conduct that is unethical or procedures to ensure the company complies with
unprofessional; regulation;
• Describe a framework for making ethical decisions. • Describe potential consequences of compliance failure.
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MODULE 3
INPUTS AND TOOLS
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CHAPTER 4 CHAPTER 5
MICROECONOMICS MACROECONOMICS
After completing this chapter, you should be able to do After completing this chapter, you should be able to do the
the following: following:
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CHAPTER 6 CHAPTER 7
ECONOMICS OF INTERNATIONAL TRADE FINANCIAL STATEMENTS
After completing this chapter, you should be able to do After completing this chapter, you should be able to do
the following: the following:
• Define imports and exports and describe the need for • Describe the roles of standard setters, regulators,
and trends in imports and exports; and auditors in financial reporting;
• Describe comparative advantages among countries; • Describe information provided by the balance sheet;
• Describe the balance of payments and explain the • Compare types of assets, liabilities, and equity;
relationship between the current account and the • Describe information provided by the income statement;
capital and financial account; • Distinguish between profit and net cash flow;
• Describe why a country runs a current account deficit • Describe information provided by the cash
and describe the effect of a current account deficit on flow statement;
the country’s currency; • Identify and compare cash flow classifications of
• Describe types of foreign exchange rate systems; operating, investing, and financing activities;
• Describe factors affecting the value of a currency; • Explain links between the income statement, balance
• Describe how to assess the relative strength of sheet, and cash flow statement;
currencies; • Explain the usefulness of ratio analysis for financial
• Describe foreign exchange rate quotes; statements;
• Compare spot and forward markets. • Identify and interpret ratios used to analyse
a company’s liquidity, profitability, financing,
shareholder return, and shareholder value.
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CHAPTER 8
QUANTITATIVE CONCEPTS
After completing this chapter, you should be able to do
the following:
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MODULE 4
INVESTMENT INSTRUMENTS
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CHAPTER 9 CHAPTER 10
DEBT SECURITIES EQUITY SECURITIES
After completing this chapter, you should be able to do After completing this chapter, you should be able to do
the following: the following:
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CHAPTER 11 CHAPTER 12
DERIVATIVES ALTERNATIVE INVESTMENTS
After completing this chapter, you should be able to do After completing this chapter, you should be able to do
the following: the following:
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MODULE 5
INDUSTRY STRUCTURE
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CHAPTER 13 CHAPTER 14
STRUCTURE OF THE INVESTMENT INDUSTRY INVESTMENT VEHICLES
After completing this chapter, you should be able to do After completing this chapter, you should be able to do
the following: the following:
• Describe needs served by the investment industry; • Compare direct and indirect investing in securities
• Describe financial planning services; and assets;
• Describe investment management services; • Distinguish between pooled investments, including
• Describe investment information services; open-end mutual funds, closed-end funds, and
• Describe trading services; exchange-traded funds;
• Compare the roles of brokers and dealers; • Describe security market indices including their
• Distinguish between buy-side and sell-side firms in construction and valuation, and identify types of indices;
the investment industry; • Describe index funds, including their purposes and
• Distinguish between front-, middle-, and back-office construction;
functions in the investment industry; • Describe hedge funds;
• Identify positions and responsibilities within firms in • Describe funds of funds;
the investment industry. • Describe managed accounts;
• Describe tax-advantaged accounts and describe the
use of taxable accounts to manage tax liabilities.
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CHAPTER 15
THE FUNCTIONING OF FINANCIAL MARKETS
After completing this chapter, you should be able to do
the following:
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MODULE 6
SERVING CLIENT NEEDS
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CHAPTER 16 CHAPTER 17
INVESTORS AND THEIR NEEDS INVESTMENT MANAGEMENT
After completing this chapter, you should be able to do After completing this chapter, you should be able to do
the following: the following:
• Describe the importance of identifying investor needs • Describe systematic risk and specific risk;
to the investment process; • Describe how diversification affects the risk
• Identify, describe, and compare types of individual of a portfolio;
and institutional investors; • Describe how portfolios are constructed to address
• Compare defined benefit pension plans and defined client investment objectives and constraints;
contribution pension plans; • Describe strategic and tactical asset allocation;
• Explain factors that affect investor needs; • Compare passive and active investment management;
• Describe the rationale for and structure of investment • Explain factors necessary for successful active
policy statements in serving client needs. management;
• Describe how active managers attempt to identify and
capture market inefficiencies.
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MODULE 7
INDUSTRY CONTROLS
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CHAPTER 18 • Compare use of arithmetic and geometric mean rates
of returns in performance evaluation;
RISK MANAGEMENT
• Describe measures of risk, including standard
After completing this chapter, you should be able to do deviation and downside deviation;
the following: • Describe reward-to-risk ratios, including the Sharpe
and Treynor ratios;
• Define risk and identify types of risk; • Describe uses of benchmarks and explain the
• Define risk management; selection of a benchmark;
• Describe a risk management process; • Explain measures of relative performance, including
• Describe risk management functions; tracking error and the information ratio;
• Describe benefits and costs of risk management; • Explain the concept of alpha;
• Define operational risk and explain how it is managed; • Explain uses of performance attribution.
• Define compliance risk and explain how it is managed;
• Define investment risk and explain how it is managed;
• Define value at risk and describe its advantages and
CHAPTER 20
weaknesses. INVESTMENT INDUSTRY DOCUMENTATION
After completing this chapter, you should be able to do
CHAPTER 19 the following:
PERFORMANCE EVALUATION
• Define a document;
After completing this chapter, you should be able to do • Describe objectives of documentation;
the following: • Describe document classification systems;
• Describe types of internal documentation;
• Describe a performance evaluation process; • Describe types of external documentation;
• Describe measures of return, including holding-period • Describe document management.
returns and time-weighted rates of return;
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EXAM WEIGHTING
Questions in the examination will be allocated approximately as follows:
Module 1 5%
Module 2 10%
Module 3 20%
Module 4 20%
Module 5 20%
Module 6 5%
Module 7 20%
Note: These weightings may be subject to slight variation to allow for effective question
trialing and to achieve an equal balance of difficulty for all candidates.
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NOTES
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