Rome and Persia : the seven hundred year rivalry

How to Use the CFA Program Curriculum CFA Institute Learning Ecosystem (LES) Designing Your Personal Study Program Errata Other Feedback Equity Investments Learning Module 1 Market Organization and Structure Introduction The Functions of the Financial System Helping People Achieve Their Purposes in Using the Financial System Determining Rates of Return Capital Allocation Efficiency Assets and Contracts Classifications of Assets and Markets Securities Fixed Income Equities Pooled Investments Currencies, Commodities, and Real Assets Commodities Real Assets Contracts Forward Contracts Futures Contracts Swap Contracts Option Contracts Other Contracts Financial Intermediaries Brokers, Exchanges, and Alternative Trading Systems Dealers Arbitrageurs Securitizers, Depository Institutions and Insurance Companies Depository Institutions and Other Financial Corporations Insurance Companies Settlement and Custodial Services and Summary Summary Positions and Short Positions Short Positions Leveraged Positions Orders and Execution Instructions Execution Instructions Validity Instructions and Clearing Instructions Stop Orders Clearing Instructions Primary Security Markets Public Offerings Private Placements and Other Primary Market Transactions Importance of Secondary Markets to Primary Markets Secondary Security Market and Contract Market Structures Trading Sessions Execution Mechanisms Market Information Systems Well-functioning Financial Systems Market Regulation Summary Practice Problems Solutions Learning Module 2 Security Market Indexes Introduction Index Definition and Calculations of Value and Returns Calculation of Single-Period Returns Calculation of Index Values over Multiple Time Periods Index Construction Target Market and Security Selection Index Weighting Index Management: Rebalancing and Reconstitution Rebalancing Reconstitution Uses of Market Indexes Gauges of Market Sentiment Proxies for Measuring and Modeling Returns, Systematic Risk, and Risk-Adjusted Performance Proxies for Asset Classes in Asset Allocation Models Benchmarks for Actively Managed Portfolios Model Portfolios for Investment Products Equity indexes Broad Market Indexes Multi-Market Indexes Sector Indexes Style Indexes Fixed-income indexes Construction Types of Fixed-Income Indexes Indexes for Alternative Investments Commodity Indexes Real Estate Investment Trust Indexes Hedge Fund Indexes Summary Practice Problems Solutions Learning Module 3 Market Efficiency Introduction The Concept of Market Efficiency The Description of Efficient Markets Market Value versus Intrinsic Value Factors Affecting Market Efficiency Including Trading Costs Market Participants Information Availability and Financial Disclosure Limits to Trading Transaction Costs and Information-Acquisition Costs Forms of Market Efficiency Weak Form Semi-Strong Form Strong Form Implications of the Efficient Market Hypothesis Fundamental Analysis Technical Analysis Portfolio Management Market Pricing Anomalies - Time Series and Cross-Sectional Time-Series Anomalies Cross-Sectional Anomalies Other Anomalies, Implications of Market Pricing Anomalies Closed-End Investment Fund Discounts Earnings Surprise Initial Public Offerings (IPOs) Predictability of Returns Based on Prior Information Implications for Investment Strategies Behavioral Finance Loss Aversion Herding Overconfidence Information Cascades Other Behavioral Biases Behavioral Finance and Investors Behavioral Finance and Efficient Markets Summary References Practice Problems Solutions Learning Module 4 Overview of Equity Securities Importance of Equity Securities Equity Securities in Global Financial Markets Characteristics of Equity Securities Common Shares Preference Shares Private Versus Public Equity Securities Non-Domestic Equity Securities Direct Investing Depository Receipts Risk and Return Characteristics Return Characteristics of Equity Securities Risk of Equity Securities Equity and Company Value Accounting Return on Equity The Cost of Equity and Investors’ Required Rates of Return Summary References Practice Problems Solutions Learning Module 5 Company Analysis: Past and Present Introduction Company Research Reports Determining the Business Model Revenue Analysis Revenue Drivers Pricing Power Top-Down Revenue Analysis Operating Profitability and Working Capital Analysis Operating Costs and Their Classification Behavior with Output: Fixed and Variable Costs Natural and Functional Operating Cost Classifications and Measures of Operating Profitability Working Capital Capital Investments and Capital Structure Sources and Uses of Capital Evaluating Capital Investments and Capital Structure Practice Problems Solutions Learning Module 6 Industry and Competitive Analysis Introduction Uses of Industry Analysis Why Analyze an Industry? Improve Forecasts Identify Investment Opportunities Industry and Competitive Analysis Steps Industry Classification Third-Party Industry Classification Schemes Limitations of Third-Party Industry Classification Schemes Alternative Methods of Grouping Companies Industry Survey Industry Size and Historical Growth Rate Characterizing Industry Growth Industry Profitability Measures Market Share Trends and Major Players Industry Structure and External Influences Assessing the Five Forces: A Checklist Approach External Influences on Industry Growth Competitive Positioning References Practice Problems Solutions Learning Module 7 Company Analysis: Forecasting Introduction Forecast Objects, Principles, and Approaches What to Forecast? Focus on Objects That Are Regularly Disclosed Forecast Approaches Selecting a Forecast Horizon Forecasting Revenues Forecast Objects for Revenues Forecast Approaches for Revenues Forecasting Operating Expenses and Working Capital Cost of Sales and Gross Margins SG&A Expenses Working Capital Forecasts Forecasting Capital Investments and Capital Structure Scenario Analysis References Practice Problems Solutions Learning Module 8 Equity Valuation: Concepts and Basic Tools Introduction Estimated Value and Market Price Categories of Equity Valuation Models Background for the Dividend Discount Model Dividends: Background for the Dividend Discount Model Dividend Discount Model (DDM) and Free-Cash-Flow-to-Equity Model (FCFE) Preferred Stock Valuation The Gordon Growth Model Multistage Dividend Discount Models Multipler Models and Relationship Among Price Multiples, Present Value Models, and Fundamentals Relationships among Price Multiples, Present Value Models, and Fundamentals Method of Comparables and Valuation Based on Price Multiples Illustration of a Valuation Based on Price Multiples Enterprise Value Asset-Based Valuation Summary References Practice Problems Solutions Glossary