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LM01 Alternative Investment Features, Methods, and Structures
LM01 Categories, Characteristics, and Compensation Structures of Alternative Investments
LM01 Corporate Structures and Ownership
LM01 Derivative Instrument and Derivative Market Features
LM01 Derivative Instrument and Derivative Market Features
LM01 Ethics and Trust in the Investment Profession
LM01 Ethics and Trust in the Investment Profession
LM01 Fixed-Income Instrument Features
LM01 Fixed-Income Securities: Defining Elements
LM01 Introduction to Financial Statement Analysis
LM01 Introduction to Financial Statement Analysis
LM01 Market Organization & Structure
LM01 Market Organization and Structure
LM01 Organizational Forms, Corporate Issuer Features, and Ownership
LM01 Portfolio Management Overview
LM01 Portfolio Management: An Overview
LM01 Rates and Returns
LM01 The Firm & Market Structures
LM01 Time Value of Money
LM01 Topics in Demand and Supply Analysis
LM02 Alternative Investment Performance and Returns
LM02 Analyzing Income Statements
LM02 Code of Ethics and Standards of Professional Conduct
LM02 Code of Ethics and Standards of Professional Conduct Profession
LM02 Financial Reporting Standards
LM02 Fixed Income Markets - Issuance Trading and Funding
LM02 Fixed-Income Cash Flows and Types
LM02 Forward Commitment and Contingent Claim Features and Instruments
LM02 Forward Commitment and Contingent Claim Features and Instruments
LM02 Introduction to Corporate Governance and Other ESG Considerations
LM02 Investors and Other Stakeholders
LM02 Organizing, Visualizing, and Describing Data
LM02 Performance Calculation and Appraisal of Alternative Investments
LM02 Portfolio Risk & Return: Part I
LM02 Portfolio Risk and Return Part I
LM02 Security Market Indexes
LM02 Security Market Indexes
LM02 The Firm and Market Structures
LM02 Time Value of Money in Finance
LM02 Understanding Business Cycles
LM03 Aggregate Output, Prices and Economic Growth
LM03 Analyzing Balance Sheets
LM03 Business Models & Risks
LM03 Corporate Governance: Conflicts, Mechanisms, Risks, and Benefits
LM03 Derivative Benefits, Risks, and Issuer and Investor Uses
LM03 Derivative Benefits, Risks, and Issuer and Investor Uses
LM03 Fiscal Policy
LM03 Fixed-Income Issuance and Trading
LM03 Guidance for Standards I-VII
LM03 Guidance for Standards I–VII
LM03 Introduction to Fixed Income Valuation
LM03 Investments in Private Capital: Equity and Debt
LM03 Market Efficiency
LM03 Market Efficiency
LM03 Portfolio Risk & Return: Part II
LM03 Portfolio Risk and Return Part II
LM03 Private Capital, Real Estate, Infrastructure, Natural Resources, and Hedge Funds
LM03 Probability Concepts
LM03 Statistical Measures of Asset Returns
LM03 Understanding Income Statements
LM04 An Introduction to Asset-Backed Securities
LM04 Analyzing Statements of Cash Flows I
LM04 Arbitrage, Replication, and the Cost of Carry in Pricing Derivatives
LM04 Arbitrage, Replication, and the Cost of Carry in Pricing Derivatives
LM04 Basics of Portfolio Planning & Construction
LM04 Basics of Portfolio Planning and Construction
LM04 Capital Investments
LM04 Common Probability Distributions
LM04 Fixed-Income Markets for Corporate Issuers
LM04 Introduction to the Global Investment Performance Standards (GIPS)
LM04 Introduction to the Global Investment Performance Standards (GIPS)
LM04 Monetary Policy
LM04 Overview of Equity Securities
LM04 Overview of Equity Securities
LM04 Probability Trees and Conditional Expectations
LM04 Real Estate and Infrastructure
LM04 Understanding Balance Sheets
LM04 Understanding Business Cycles
LM04 Working Capital and Liquidity.
LM05 Analyzing Statements of Cash Flows II
LM05 Capital Investments and Capital Allocation
LM05 Company Analysis: Past and Present
LM05 Fixed-Income Markets for Government Issuers
LM05 Introduction to Geopolitics
LM05 Introduction to Industry and Company Analysis
LM05 Monetary and Fiscal Policy
LM05 Natural Resources
LM05 Portfolio Mathematics
LM05 Pricing and Valuation of Forward Contracts and for an Underlying with Varying Maturities
LM05 Pricing and Valuation of Forward Contracts.
LM05 Sampling and Estimation
LM05 The Behavioral Biases of Individuals
LM05 The Behavioral Biases of Individuals
LM05 Understanding Cash Flow Statements
LM05 Understanding Fixed-Income Risk and Return
LM05 Working Capital & Liquidity
LM06 Analysis of Inventories
LM06 Capital Structure
LM06 Cost of Capital-Foundational Topics
LM06 Equity Valuation: Concepts and Basic Tools
LM06 Financial Analysis Techniques
LM06 Fixed-Income Bond Valuation: Prices and Yields
LM06 Fundamentals of Credit Analysis
LM06 Hedge Funds
LM06 Hypothesis Testing
LM06 Industry and Competitive Analysis
LM06 International Trade
LM06 Introduction to Geopolitics
LM06 Introduction to Risk Management
LM06 Introduction to Risk Management
LM06 Pricing and Valuation of Futures Contracts
LM06 Pricing and Valuation of Futures Contracts
LM06 Simulation Methods
LM07 Analysis of Long-Term Assets
LM07 Business Models
LM07 Capital Flows and the FX Market
LM07 Capital Structure
LM07 Company Analysis: Forecasting
LM07 Estimation and Inference
LM07 International Trade and Capital Flows
LM07 Introduction to Digital Assets
LM07 Introduction to Linear Regression
LM07 Inventories
LM07 Pricing and Valuation of Interest Rate and Other Swaps
LM07 Pricing and Valuation of Interest Rates and Other Swaps
LM07 Technical Analysis
LM07 Yield and Yield Spread Measures for Fixed-Rate Bonds.
LM08 Currency Exchange Rates
LM08 Equity Valuation: Concepts and Basic Tools
LM08 Exchange Rate Calculations
LM08 Fintech in Investment Management
LM08 Hypothesis Testing
LM08 Long Lived Assets
LM08 Measures of Leverage
LM08 Pricing and Valuation of Options
LM08 Pricing and Valuation of Options
LM08 Topics in Long-Term Liabilities and Equity
LM08 Yield and Yield Spread Measures for Floating-Rate Instruments
LM09 Analysis of Income Taxes
LM09 Income Taxes
LM09 Option Replication Using Put-Call Parity
LM09 Option Replication Using Put–Call Parity
LM09 Parametric and Non-Parametric Tests of Independence
LM09 The Term Structure of Interest Rates: Spot, Par, and Forward Curves
LM10 Financial Reporting Quality
LM10 Interest Rate Risk and Return
LM10 Non-current (Long-Term) Liabilities
LM10 Simple Linear Regression
LM10 Valuing a Derivative Using a One-Period Binomial Model
LM10 Valuing a Derivative Using a One-Period Binomial Model
LM11 Financial Analysis Techniques
LM11 Financial Reporting Quality
LM11 Introduction to Big Data Techniques
LM11 Yield-Based Bond Duration Measures and Properties
LM12 Applications of Financial Statement Analysis
LM12 Introduction to Financial Statement Modeling
LM12 Yield-Based Bond Convexity and Portfolio Properties
LM13 Curve-Based and Empirical Fixed-Income Risk Measures
LM14 Credit Risk
LM15 Credit Analysis for Government Issuers
LM16 Credit Analysis for Corporate Issuers
LM17 Fixed-Income Securitization
LM18 Asset-Backed Security (ABS) Instrument and Market Features
LM19 Mortgage-Backed Security (MBS) Instrument and Market Features
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Category: 101 Concepts for Level I

Concept 30: Roles and Objectives of Central Banks

Roles of central bank Supply currency: Central banks have the sole authority to supply money. Banker to government and other banks: Central banks provide banking services to the government and other banks in the country. Regulate risk and supervise payment system: Central banks regulate the risk standards in the banking systems and monitor the payment system to ensure smooth transactions. Lender of last resort: Central banks can print money when the need arises. Repository of gold and foreign exchange reserves: Holds a country’s gold and foreign exchange reserves. Conducts monetary policy: Central bank controls the money supply in an economy…. Read More

101 concepts level I

Concept 31: Tools Used to Implement Monetary Policy

The three tools available to central banks to control the money supply are: Policy rates Borrowing from central bank: Banks can borrow from central bank to meet shortfall in reserves at a rate called discount rate or refinancing rate or repo rate. This is facilitated through repurchase agreements. A lower repo rate increases money supply and encourages lending, this lowers interest rates. On the other hand, a higher repo rate decreases money supply and reduces lending, this increases interest rates. Interbank lending: Banks can lend to each other overnight loan reserves at a rate called federal funds rate (for US… Read More

101 concepts level I

Concept 32: Roles and Objectives of Fiscal Policy

Fiscal policy refers to the use of the government expenditures and tax revenues to influence the overall output (GDP), economic growth and employment. Budget deficit is when government expenditures exceed tax revenues and is used to tackle recession. Budget surplus is when tax revenues exceed government expenditures and is used to tackle high inflation in the expansion phase. Budget deficit is decreased in the expansion phase and increased in the recession phase. Policy measures can be either of the two: Discretionary: Measures taken to tackle that particular situation. Automatic: For example: When the economy slows and unemployment rises, government spending… Read More

101 concepts level I

Concept 33: Fiscal Policy Tools

Fiscal policy tools include:: Spending tools: Current expenditure: On-going spending on goods and services by government. For e.g. salaries of government personnel, national defense expenditure etc. Transfer payments: Primarily aimed at redistributing wealth. For e.g. unemployment insurance benefits, social security etc. Capital expenditure: Government spending on infrastructure projects to boost economic productivity. For e.g. bridges, road networks etc. Revenue tools: Direct taxes: Taxes levied on wealth and income. Includes income taxes, corporate taxes, wealth taxes capital gains taxes etc. Indirect taxes: Taxes levied on goods and services. Includes sales taxes, value-added taxes, excise taxes etc.   Advantages and disadvantages of… Read More

101 concepts level I

Concept 34: Types of Trading Blocs and Regional Trading Agreements

Free-Trade Area: All barriers to import and export of goods and services among member countries are removed. For e.g. North American Free Trade Agreement (NAFTA). Customs Union: Free-trade area + all member countries adopt a common set of trade restrictions with non-members. Common Market: Customs union + all barriers to the movement of labor and capital goods among member countries are removed. Economic Union: Common market + member countries establish common institutions and economic policy. For e.g. European Union (EU). Monetary Union: Economic union + member countries adopt a single currency. For e.g. European Zone.

101 concepts level I

Concept 35: Currency Cross-Rates

Cross rate is the exchange rate between two currencies derived from their exchange rate with a common third currency. Consider the following exchange rates: Spot rate Expected spot rate USD/EUR 1.3690 1.3457 CHF/USD 0.9164 0.9020 USD/GBP 1.5160 1.5100 Determine the following: CHF/EUR cross rates. GBP/EUR cross rates. CHF/GBP cross rates. Does EUR appreciate/depreciate against CHF and by how much. The strongest currency over the next year.   Solution: 1.Spot rate: CHF/EUR=CHF/USD*USD/EUR=0.9164*1.3690=1.2546 Expected spot rate: CHF/EUR=CHF/USD*USD/EUR=0.9020*1.3457=1.2138 2.Spot rate: GBP/EUR=GBP/USD*USD/EUR=(1/1.5160)1.3690=0.9030 Expected spot rate: GBP/EUR=GBP/USDUSD/EUR=(1/1.5100)1.3457=0.8912 3.Spot rate: CHF/GBP=CHF/USDUSD/GBP=0.9164*1.5160=1.3893 Expected spot rate: CHF/GBP=CHF/USD*USD/GBP=0.9020*1.5100=1.3620 As the quoted rate for CHF/EUR drops from 1.2546 to 1.2138,… Read More

101 concepts level I

Concept 36: Exchange Rate Regimes

Exchange rate regimes for countries that do not have their own currency: Formal dollarization: A country uses the currency of another currency, typically the US dollar. Monetary Union: Several countries use a common currency. Exchange rate regimes for countries that have their own currency: Currency board system: An explicit commitment to exchange domestic currency for a specified foreign currency at a fixed exchange rate. Fixed parity: A country pegs its currency within margins of 1% vs. another currency. Target zone: Like fixed parity but with wider bands (+/- 2%); gives monetary authority more flexibility. Crawling peg: Exchange rate is adjusted… Read More

101 concepts level I

Concept 37: Role of Financial Statements

Financial reporting: The role of financial reporting is to provide information about a firm’s performance and financial position. Financial reports include: balance sheet, income statement, cash flow statement, statement of changes in equity. Financial statement analysis: The role of financial statement analysis is to use the financial reports in combination with other sources of information to decide whether to invest in a firm.

101 concepts level I

Concept 38: Financial Statement Analysis Framework

The financial statement analysis framework consists of the following six steps: Define the purpose and context of the analysis. Define the context of the analysis based on your function, client inputs and organizational guidelines. Determine the time frame and the resources available for the task. Collect data. Collect data from financial statements and other information sources. Process the data. Make adjustments to financial statements. Create graphs, ratios, common-sizes statements, etc. Analyze and interpret the processed data. Develop and communicate conclusions. Follow up. Conduct periodic reviews to check if previous conclusions are still valid.

101 concepts level I

Concept 39: Accounting Equation – Basic and Expanded Forms

Basic accounting equation Assets = liabilities + owner’s equity   You are given the following information about company ABC. Assets                                     $100 million Liabilities                                $80 million Calculate owner’s equity. Solution: Owner’s equity          = assets – liabilities = $100 – $80 = $20 million Expanded version of the accounting equation Assets = liabilities + contributed capital + beginning retained earnings + revenue – expenses – dividends   You are given the following information about company XYZ. (in millions) Liabilities                                             … Read More

101 concepts level I
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