Taking the CFA Level I exam when you’ve got no financial background can be a daunting task. In fact, it can seem downright impossible to pass when you have nothing to go on.
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In contrast to the externally imposed regulatory standards in the insurance and banking industries, investment risk management requirements for investment companies had been largely self-imposed until last October, when the SEC voted to adopt rules to modernize reporting and disclosure of information. This move is meant to enhance liquidity risk management of open-end funds.
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Benjamin Graham made the call for a special professional rating for security analysts in a now-famous piece written in January 1945. The purpose of such a designation was to reassure investors that those giving advice regarding security transactions were qualified, knowledgeable professionals with high ethical standards.
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The new 2022 CFA curriculum has been released for all 3 levels. This article will summarize all of the important changes to the curriculum and how it affects your preparation.
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Risk management is an important feature of the CFA® exams. Since many candidates work for or aspire to work for banks, an understanding of credit risk is critical, simply because credit risk is the main risk-exposure element of the vast majority of banks in any country.
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After the announcement of Panera’s deal to be taken private by JAB Holdings in April 2017, the company was quick to tout the benefits of exiting the public markets.
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During the Great Recession, a handful of major banking institutions put national economies at risk. To avoid economic collapse, governments stepped in, which cost taxpayers dearly. To prevent a reoccurrence, Basel III was developed to force banks to manage their risks more prudently.
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Now that this decade has come to an end, it is almost unimaginable to look back to its beginning—in a world directly post-GFC—and believe the incredible run seen from practically every asset class since. Most investors who have participated in any market besides cash have done quite well since those 2009 lows.
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If you are involved in the banking industry or in the CFA® Program, you have probably heard of the London Interbank Offered Rate (Libor). Libor has long been the gold standard benchmark rate in the markets, which is why it is estimated that $200 trillion in US securities are tied to that rate.
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It is important for CFA® charterholders and candidates to understand the foundations of global banking regulation, currently within the framework of Basel III. This third iteration of the framework has built upon Basel I and II by mandating reinforced and stronger capital ratios and higher-quality capital, and supplementing capital requirements with leverage ratio and minimum liquidity requirements.
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There are a number of threats facing the international banking system; however, the greatest risk is the amount of debt that has been accumulated around the globe.
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Active fixed-income management may be more relevant than ever in the current environment.
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As an investor, I’ve always fancied myself as a contrarian who goes against the crowd, someone who can detect patterns and notice minutiae where others can’t. Perhaps that’s why at the age of 27, while my friends and peers were content with gifting one of their two monthly paychecks to their landlord, I became a first-time homebuyer.
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I certainly had more questions than answers when beginning my journey, but after going through it, I figured out what was truly important and what isn’t. I hope to shed some light on what you need to know before embarking on the path to becoming a CFA charterholder and I will also highlight some common misconceptions.
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Financial operations do not lend themselves to innovation. What is recurrently so described and celebrated is, without exception, a small variation of an established design…” Yet, financial bubbles keep occurring due to “...the brevity of the financial memory.
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It may help to know that the skills you learn while preparing for the CFA exams will be useful later in your financial career. While the CFA material has changed over the years and will continue to be updated after your final exam, your analytical skills will endure. Don’t be afraid to use them to question the status quo.
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Since the last recession which was crystallized by financial crisis in 2008, the US and global economies have experienced sustained growth. Major market indicators such as S&P 500, NASDAQ, and Dow Jones have gained in excess of 280%, 400%, and 250% respectively. The number of stock market analysts predicting recession is increasing by the day.
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Could holding too much cash lead to misestimating the firm’s value? Yes, it could.
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Women remain significantly underrepresented in the finance community, and there are challenges to advancement. In my opinion, the main challenges include getting in the door at top firms and gaining the respect of our male colleagues. Holding the CFA designation helps provide knowledge and personal conviction from having accomplished such a difficult goal, as well as many other important skills and success criteria.
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“Hmm…probably during my CFA Level II studying.” That is my response when my boss asks me how I became familiar with the swaps market.
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