2023/2024
Practical Finance "CFA-Level 1"
Type:
Optional course (faculty)
Delivered by:
International College of Economics and Finance
When:
1-3 module
Open to:
students of one campus
Instructors:
Dmitriy Alexandrovich Kachalov
Language:
English
ECTS credits:
3
Contact hours:
32
Course Syllabus
Abstract
The Chartered Financial Analyst® (CFA) program is designed for investment professionals: portfolio managers, investment analysts, risk managers, etc. CFA designation is a standard requirement for employees of many investment funds, investment banks, rating agencies, and brokerage companies. The course may be of interest to students who plan to start a career in finance after ICEF graduation. The program has a practical orientation, and is designed to prepare for the CFA exam level 1 at which the candidates need to demonstrate knowledge of financial instruments and techniques of financial analysis. The content of the CFA Institute program is based on the analysis of problems that can be solved by professionals in the investment field. To this end, CFA Institute is holding discussions with the participation of experts, professionals working in the industry, shareholders and managers, to determine the necessary amount of knowledge and skills for an investment specialist - Candidate Body of Knowledge™ (CBOK). CBOK is used as a basis for the development of training program for the CFA exam, which consists of ten sections: - Ethical and Professional Standards - Quantitative Methods - Economics - Financial Reporting and Analysis - Corporate Finance - Equity Investments - Fixed Income - Derivatives - Alternative Investments - Portfolio Management and Wealth Planning The amount of knowledge included in these sections of the program is sufficient to work as a financial analyst in the securities market, a portfolio manager, or close positions in the field of investments. The Practical finance; course includes eight sections of the ten above. ICEF students have sufficient knowledge of economics and quantitative methods. These two sections will be included only to home assignments, followed by a discussion in the class. Course Pre-requisites Principles of Banking and finance.
Learning Objectives
- to apply the Code of Ethics and Standards of Professional Conduct to situations involving issues of professional integrity;
- to explain why the GIPS standards were created, what parties the GIPS standards apply to, and how it should be applied;
- to use concepts of financial reporting standards under IFRS and US generally accepted accounting principles (US GAAP) reporting systems;
- analyse corporate governance and stake-holder management;
- describe the capital budgeting process and distinguish among the various categories of capital projects;
- calculate and interpret the cost of equity capital using the capital asset pricing model approach, the dividend discount model approach, and the bond-yield-plus risk-premium approach;
- define and explain leverage, business risk, sales risk, operating risk, and finan-cial risk and classify a risk;
- explain factors that influence a company’s liquidity position;
- evaluate working capital effectiveness of a company based on its operating and cash conversion cycles and compare the company’s effectiveness with that of peer companies;
- describe the major types of securities, currencies, contracts, commodities, and real assets that trade in organized markets, including their distinguishing char-acteristics and major subtypes;
- compare a company’s cost of equity, its (accounting) return on equity, and investors’ required rates of return.
- apply industry analysis and the relation of industry analysis to company analysis
- describe industry life cycle models, classify an industry as to life cycle stage, and describe limitations of the life-cycle concept in forecasting industry performance
- calculate the intrinsic value of a non- callable, non-convertible preferred stock;
- explain the rationale for using price multiples to value equity, how the price to earnings multiple relates to fundamentals, and the use of multiples based on comparables;
- calculate and interpret yield measures for fixed-rate bonds, floating-rate notes, and money market instruments;
- explain benefits of securitization for economies and financial markets;
- explain how the concepts of arbitrage, replication, and risk neutrality are used in pricing derivatives;
- describe hedge funds, private equity, real estate, commodities, infrastructure, and other alternative investments, including, as applicable, strategies, sub-categories, potential benefits and risks, fee structures, and due diligence;edescribe, calculate, and interpret management and incentive fees and net-of-fees returns to hedge funds
Expected Learning Outcomes
- - use multiples to value equity;
- - analyse corporate governance, the capital budgeting process, calculate and interpret the cost of equity capital;
- - analysis of potential benefits and risks, fee structures, and due diligence;
- - apply concepts of arbitrage, replication, and risk neutralit in pricing derivatives;
- - apply financial reporting standards under IFRS and US generally accepted accounting principles (US GAAP) reporting systems;
- - apply the Code of Ethics and Standards of Professional Conduct to situations involving issues of professional integrity;
- - define and explain leverage, business risk, sales risk, operating risk, and finan-cial risk and classify a risk;
- - evaluate working capital effectiveness;
- - explain benefits of securitization for economies and financial markets;
- - explain factors that influence a company’s liquidity position;
- - fixed income securities analysis, the intrinsic value of a non-callable, non-convertible preferred stock;
- - perform industry analysis, industry life cycle models, limitations of the life-cycle concept in forecasting industry performance,
- - perform investment portfolio analysis,
- - yield calculation for fixed-rate bonds, floating-rate notes, and money market instruments;
Course Contents
- Equity investments Fixed income
- Fixed income Derivatives
- Derivatives Alternative investments
- Alternative investments
- Financial reporting and analysis Corporate finance
- Corporate finance
- Portfolio management and wealth planning
- Ethical and professional standards
Interim Assessment
- 2023/2024 3rd module0.4 * home assignments + 0.4 * seminar test + 0.2 * attendance
Bibliography
Recommended Core Bibliography
- DeFusco, R. A., McLeavey, D. W., Pinto, J. E., & Runkle, D. E. (2015). Quantitative Investment Analysis (Vol. Third edition). Hoboken, New Jersey: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1082450
- Fabozzi, F. J. (2007). Fixed Income Analysis (Vol. 2nd ed). Hoboken, N.J.: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=188206
- Horan, S. M. (2009). Private Wealth : Wealth Management In Practice. Hoboken, N.J.: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=266207
- Troughton, G. H., Fridson, M. S., & Clayman, M. R. (2012). Corporate Finance : A Practical Approach (Vol. 2nd ed). Hoboken, N.J.: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=433540
Recommended Additional Bibliography
- Cope, A. T., & Robinson, T. R. (2015). International Financial Statement Analysis (Vol. Third edition). Hoboken, New Jersey: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=946119
- Lawton, P., & Jankowski, T. (2009). Investment Performance Measurement : Evaluating and Presenting Results. Hoboken: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=278556
- Maginn, J. L. (2007). Managing Investment Portfolios : A Dynamic Process (Vol. 3rd ed). Hoboken, N.J.: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=188208
- Pinto, J. E. (2010). Equity Asset Valuation (Vol. Second edition). Hoboken, N.J.: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=310269