101 Concepts for the Level I Exam

Concept 72: Weak-Form, Semi-Strong-Form, and Strong-Form Market Efficiency

Forms of Market Efficiency	Past Market Data	Public Information	Private Information
Weak form	Yes	No	No
Semi-strong form	Yes	Yes	No
Strong form	Yes	Yes	Yes

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Introduction

Concept 1: Calculating PV and FV of Different Cash Flows

Concept 2: Net Present Value (NPV) & Internal Rate of Return (IRR)

Concept 3: Money-Weighted & Time Weighted Rate of Return

Concept 4: Yield Measures for Money Market Instruments

Concept 5: Measures of Central Tendency

Concept 6: Quartiles, Quintiles, Deciles, & Percentiles

Concept 7: Measures of Dispersion

Concept 8: Symmetry and Skewness in Return Distributions

Concept 9: Covariance & Correlation

Concept 10: Safety First Ratio

Concept 11: Central Limit Theorem

Concept 12: Calculating Confidence Intervals

Concept 13: Selection of Sample Size & Sampling Biases

Concept 14: Steps of Hypothesis Testing

Concept 15: Hypothesis Tests Concerning a Single Mean

Concept 16: Common Chart Patterns

Concept 17: Price, Income and Cross-Price Elasticities of Demand

Concept 18: Substitution and Income Effects

Concept 19: Economies and Diseconomies of Scale

Concept 20: Perfect Competition, Monopolistic Competition, Oligopoly & Monopoly

Concept 21: Concentration Measures

Concept 22: Gross Domestic Product (GDP)

Concept 23: Aggregate Supply Curve

Concept 24: Business Cycle

Concept 25: Theories of The Business Cycle

Concept 26: Unemployment

Concept 27: Inflation, Hyperinflation, Disinflation & Deflation

Concept 28: Inflation Measures

Concept 29: Monetary v/s Fiscal Policy

Concept 30: Roles and Objectives of Central Banks

Concept 31: Tools Used to Implement Monetary Policy

Concept 32: Roles and Objectives of Fiscal Policy

Concept 33: Fiscal Policy Tools

Concept 34: Types of Trading Blocs and Regional Trading Agreements

Concept 35: Currency Cross-Rates

Concept 36: Exchange Rate Regimes

Concept 37: Role of Financial Statements

Concept 38: Financial Statement Analysis Framework

Concept 39: Accounting Equation - Basic and Expanded Forms

Concept 40: Accruals and Valuation Adjustments

Concept 41: International Accounting Standards Board’s (IASB) Conceptual Framework

Concept 42: Revenue Recognition

Concept 43: Expense Recognition

Concept 44: Non-Recurring Items & Changes in Accounting Policies

Concept 45: Earnings Per Share (EPS)

Concept 46: Measurement Bases for Different Types of Assets and Liabilities

Concept 47: Components of Shareholders’ Equity

Concept 48: Liquidity and Solvency Ratios

Concept 49: Steps in the Preparation of Direct and Indirect Cash Flow Statements

Concept 50: DuPont Analysis

Concept 51: Inventory Valuation Methods

Concept 52: LIFO Reserve and LIFO Liquidation

Concept 53: Depreciation Methods

Concept 54: Finance and Operating Leases

Concept 55: Deferred Tax Liabilities and Assets

Concept 56: Effective Interest Rate Method and Amortization of Bond Discounts/Premiums

Concept 57: Leverage and Coverage Ratios

Concept 58: Company’s Board of Directors & Committees

Concept 59: Basic Principles of Capital Budgeting

Concept 60: NPV Profile

Concept 61: Weighted Average Cost of Capital (WACC)

Concept 62: Beta of a Project

Concept 63: Calculating Degree of Operating Leverage, Financial Leverage, and Total Leverage

Concept 64: Pooled Investment Products

Concept 65: Minimum-Variance and Efficient Frontiers

Concept 66: Applications of the CAPM and the SML

Concept 67: Principles of Portfolio Construction

Concept 68: Types of Securities

Concept 69: Types of Financial Intermediaries

Concept 70: Execution, Validity and Clearing Instructions

Concept 71: Different Weighting Methods used in Index Construction

Concept 72: Weak-Form, Semi-Strong-Form, and Strong-Form Market Efficiency

Concept 73: Types of Equity Securities

Concept 74: Peer Groups

Concept 75: Industry Life-Cycle Model

Concept 76: Dividend Discount and Free-Cash-Flow-to-Equity Models

Concept 77: Gordon (Constant) Growth Model and Multistage Dividend Discount Models

Concept 78: Basic Features of a Fixed-Income Security

Concept 79: Cash Flows of Fixed-Income Securities

Concept 80: Mechanisms Available for Issuing Bonds in Primary Markets

Concept 81: Repurchase Agreements (Repos)

Concept 82: Relationships among a Bond’s Price, Coupon Rate, Maturity, and Market Discount Rate (Yield-to-Maturity)

Concept 83: Credit Tranching and Time Tranching

Concept 84: Sources of Return From Investing in a Fixed-Rate Bond

Concept 85: Macaulay, Modified, and Effective Ddurations

Concept 86: Four Cs (Capacity, Collateral, Covenants, and Character) of Traditional Credit Analysis

Concept 87: Factors that Influence the Level and Volatility of Yield Spreads

Concept 88: Forward Contracts, Futures Contracts, Options (Calls and Puts), Swaps, and Credit Derivatives

Concept 89: Purposes of and Controversies Related to Derivative Markets

Concept 90: Use of Arbitrage, Replication, and Risk Neutrality in Pricing Derivatives

Concept 91: Difference in Forward and Futures Prices

Concept 92: Exercise Value, Time Value, and Moneyness of an Option

Concept 93: Factors that Determine the Value of an Option

Concept 94: Put–Call Parity for European Options

Concept 95: Alternative Investments v/s Traditional Investments

Concept 96: Types of Alternative Investments

Concept 97: Hedge Fund Fees

Concept 98: Framework for Ethical Decision Making

Concept 99: Ethical Responsibilities Required by the Code and Standards

Concept 100: Overview of GIPS

Concept 101: Construction and Purpose of Composites