CFA 2017 Level I - Study Guide Volume 4

288 Pages·2016·59.39 MB·English

Wiley Study Guide for 2017
Level I CFA Exam Review
Complete Set
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Wiley Study Guide for 2017
Level I CFA Exam Review
WILEY
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ISBN 978-1-119-34692-0
Contents
About the Authors xiii
Wiley Study Guide for 2017 Level IC FA Exam
Volume 1: Ethics & Quantitative Methods
Study Session 1: Ethical and Professional Standards
Reading 1: Ethics and Trust in the Investment Profession
Lesson 1: Ethics and Trust in the Investment Profession
Reading 2: Code of Ethics and Standards of Professional Conduct 11
Lesson 1: Code of Ethics and Standards of Professional Conduct 11
Reading 3: Guidance for Standards I-VII 17
Lesson 1: Standard I: Professionalism 17
Lesson 2: Standard II: Integrity of Capital Markets 43
Lesson 3: Standard Ill: Duties to Clients 53
Lesson 4: Standard IV: Duties to Employers 77
Lesson 5: Standard V: Investment Analysis, Recommendations, and Actions 91
Lesson 6: Standard VI: Conflicts of Interest 104
Lesson 7: Standard VII: Responsibilities as a CFA Institute Member or CFA Candidate 114
Reading 4: Introduction to the Global Investment Performance Standards (GIPS) 123
Lesson 1: Introduction to the Global Investment Performance Standards (GIPS) 123
Reading 5: The GIPS Standards 125
Lesson 1: Global Investment Performance Standards (GIPS) 125
Study Session 2: Quantitative Methods: Basic Concepts
Reading 6: The Time Value of Money 131
Lesson 1: Introduction, Interest Rates, Future Value, and Present Value 131
Lesson 2: Stated Annual Interest Rates, Compounding Frequency, Effective
Annual Rates, and Illustrations ofTVM Problems 142
Reading 7: Discounted Cash Flow Applications 151
Lesson 1: Net Present Value and Internal Rate of Return 151
Lesson 2: Portfolio Return Measurement 156
Lesson 3: Money Market Yields 158
©2017Wiley
CONTENTS
Reading 8: Statistical Concepts and Market Returns 165
Lesson 1: Fundamental Concepts, Frequency Distributions, and the Graphical
Presentation ofData 165
Lesson 2: Measures of Central Tendency, Other Measures of Location (Quantiles),
and Measures ofDispersion 169
Lesson 3: Symmetry, Skewness, and Kurtosis in Return Distributions and
Arithmetic versus Geometric Means 181
Reading 9: Probability Concepts 185
Lesson 1: Probability, Expected Value, and Variance 185
Lesson 2: Covariance and Correlation and Calculating Portfolio Expected Return
and Variance 198
Lesson 3:Topics in Probability: Bayes' Formula and Counting Rules 204
Study Session 3: Quantitative Methods: Application
Reading 10: Common Probability Distributions 213
Lesson 1: Discrete Random Variables, the Discrete Uniform Distribution, and
the Binomial Distribution 213
Lesson 2: Continuous Random Variables, the Continuous Uniform Distribution,
the Normal Distribution, and the Lognormal Distribution 221
Lesson 3: Monte Carlo Simulation 236
Reading 11 : Sampling and Estimation 239
Lesson 1: Sampling, Sampling Error, and the Distribution of the Sample Mean 239
Lesson 2: Point and Interval Estimates of the Population Mean, Student's
!-distribution, Sample Size, and Biases 243
Reading 12: Hypothesis Testing 251
Lesson 1: Introduction to Hypothesis Testing 251
Lesson 2: Hypothesis Tests Concerning the Mean 261
Lesson 3: Hypothesis Tests Concerning the Variance and Nonparametric Inference 271
Reading 13: Technical Analysis 279
Lesson 1: Technical Analysis: Definition and Scope 279
Lesson 2: Technical Analysis Tools: Charts, Trend, and Chart Patterns 280
Lesson 3: Technical Analysis Tools: Technical Indicators and Cycles 294
Lesson 4: Elliott Wave Theory and lntermarket Analysis 302
Appendix: Probability Tables 305
Wiley Study Guide for 2017 Level I CFA Exam
Volume 2: Economics
Study Session 4: Microeconomics and Macroeconomics
Reading 14: Topics in Demand and Supply Analysis
Lesson 1: Demand Analysis: The Consumer
Lesson 2: Supply Analysis: The Firm 16
0 © 2017Wiley
CONTENTS
Reading 15:The Firm and Market Structures 37
Lesson 1: Market Structure 1: Perfect Competition 37
Lesson 2: Market Structure 2: Monopoly 43
Lesson 3: Market Structure 3: Monopolistic Competition 49
Lesson 4: Market Structure 4: Oligopoly 52
Lesson 5: Identification of Market Structure 57
Reading 16: Aggregate Output, Prices, and Economic Growth 61
Lesson 1: Aggregate Output and Income 61
Lesson 2: Aggregate Demand, Aggregate Supply, and Equilibrium:
Part 1 (Fundamental Relationships) 70
Lesson 3: Aggregate Demand, Aggregate Supply, and Equilibrium:
Part 2 (IS-LM Analysis and the AD Curve) 72
Lesson 4: Aggregate Demand, Aggregate Supply, and Equilibrium:
Part 3 (Macroeconomic Changes and Equilibrium) 84
Lesson 5: Economic Growth and Sustainability 94
Reading 17: Understanding Business Cycles 99
Lesson 1: The Business Cycle 99
Lesson 2: Unemployment, Inflation, and Economic Indicators 108
Study Session 5: Economics: Monetary and Fiscal Policy, International Trade, and
Currency Exchange Rates
Reading 18: Monetary and Fiscal Policy 123
Lesson 1: Monetary Policy (Part I) 123
Lesson 2: Monetary Policy (Part II) 129
Lesson 3: Fiscal Policy 134
Reading 19: International Trade and Capital Flows 143
Lesson 1: Basic Terminology: Absolute and Comparative Advantage 143
Lesson 2: Trade and Capital Flows: Restrictions and Agreements 149
Lesson 3: The Balance of Payments and Trade Organizations 156
Reading 20: Currency Exchange Rates 161
Lesson 1: The Foreign Exchange Market 161
Lesson 2: Currency Exchange Rate Calculations: Part 1 166
Lesson 3: Currency Exchange Rate Calculations: Part 2 171
Lesson 4: Exchange Rate Regimes and the Impact of Exchange Rates on Trade
and Capital Flows 176
Wiley Study Guide for 2017 Level I CFA Exam
Volume 3: Financial Reporting & Analysis
Study Session 6: Financial Reporting and Analysis: An Introduction
Reading 21: Financial Statement Analysis: An Introduction
Lesson 1: Financial Statement Analysis: An Introduction
©2017Wiley
CONTENTS
Reading 22: Financial Reporting Mechanics
Lesson 1: Classification of Business Activities and Financial Statement
Elements and Accounts
Lesson 2: Accounting Equations 11
Lesson 3: The Accounting Process 13
Lesson 4: Accruals, Valuation Adjustments, Accounting Systems, and
Using Financial Statements in Security Analysis 19
Reading 23 : Financial Reporting Standards 23
Lesson 1: Financial Reporting Standards 23
Study Session 7: Financial Reporting and Analysis: Income Statements,
Balance Sheets, and Cash Flow Statements
Reading 24: Understanding Income Statements 41
Lesson 1: Income Statement: Components and Format 41
Lesson 2: Revenue and Expense Recognition 44
Lesson 3: Non-Recurring Items, Non-Operating Items 60
Lesson 4: Earnings per Share, Analysis of the Income Statement, and
Comprehensive Income 62
Lesson 5: Analysis of the Income Statement and Comprehensive Income 70
Reading 25: Understanding Balance Sheets 75
Lesson 1: Balance Sheet: Components and Format 75
Lesson 2: Assets and Liabilities: Current versus Non-Current 78
Lesson 3: Equity 86
Lesson 4: Analysis of the Balance Sheet 88
Reading 26: Understanding Cash Flow Statements 91
Lesson 1: The Cash Flow Statement: Components and Format 91
Lesson 2: The Cash Flow Statement: Linkages and Preparation 95
Lesson 3: Cash Flow Statement Analysis 104
Reading 27: Financial Analysis Techniques 109
Lesson 1: Analytical Tools and Techniques 109
Lesson 2: Common Ratios Used in Financial Analysis 115
Lesson 3: DuPont Analysis, Equity Analysis, Credit Analysis, and Business and
Geographic Segments 132
Study Session 8: Financial Reporting and Analysis: Inventories, Long-lived
Assets, Income Taxes, and Non-current Liabilities
Reading 28: Inventories 147
Lesson 1: Cost of Inventories and Inventory Valuation Methods 147
Lesson 2: The LIFO Method and Inventory Method Changes 156
Lesson 3: Inventory Adjustments and Evaluation of Inventory Management 165
© 2017Wiley