CFA

The Chartered Financial Analyst (CFA) Program is a professional credential offered by the CFA Institute (formerly the Association for Investment Management and Research, or AIMR) to investment and financial professionals. A candidate who successfully completes the program and meets other professional requirements is awarded the "CFA charter" and becomes a "CFA charterholder".

The CFA Charter is a professional credential and is not an academic degree .

As of July 2014, there are approximately 120,000 CFA members in 35 countries. The largest employers of CFA Charterholders are JP Morgan, UBS, Bank of America Merrill Lynch, and RBC.

The CFA exams are widely considered to be very difficult, with pass rates usually below 50% for all three levels. It covers a broad range of topics relating to investment management, financial analysis, stocks, bonds and derivatives, and provides a generalist knowledge of other areas of finance.
 

Requirements

To become a charterholder, a candidate must satisfy the following requirements:

Have four years (48 months) of qualified work experience (or a combination of education and work experience acceptable by the CFA Institute). However, individual level exams may be written prior to satisfying this requirement;
Complete the CFA Program (mastery of the current CFA curriculum and passing three six-hour examinations);
Become a member of the CFA Institute and apply for membership to a local CFA member society;
Adhere to the CFA Institute Code of Ethics and Standards of Professional Conduct.

Independent of any other requirements for becoming a charterholder, the CFA Program takes an average of four years for candidates to complete.

Curriculum

The curriculum for the CFA program is based on a Candidate Body of Knowledge established by the CFA Institute. The curriculum comprises the topic areas below. There are three exams ("levels") that test the academic portion of the CFA program. All three levels emphasize the subject of ethics. The material differences among the exams are:

  • The Level I study program emphasizes tools and inputs, and includes an introduction to asset valuation, financial reporting and analysis, and portfolio management techniques.
  • The Level II study program emphasizes asset valuation, and includes applications of the tools and inputs (including economics, financial reporting and analysis, and quantitative methods) in asset valuation.
  • The Level III study program emphasizes portfolio management, and includes descriptions of strategies for applying the tools, inputs, and asset valuation models in managing equity, fixed income, and derivative investments for individuals and institutions.

Ethiсs

The ethics section is primarily concerned with compliance and reporting rules when managing an investor's money or when issuing research reports. Some rules pertain more generally to professional behavior (such as prohibitions against plagiarism); others specifically relate to the proper use of the designation for charterholders and candidates. These rules are delineated in the "Standards of Professional Conduct", within the context of an overarching "Code of Ethics".

Quantitative methods

This topic area is dominated by statistics: the topics are fairly broad, covering probability theory, hypothesis testing, (multi-variate) regression, and time-series analysis. Other topics include time value of money—incorporating basic valuation and yield and return calculations—portfolio-related calculations, and technical analysis.

Economics

Both micro- and macroeconomics are covered, including international economics (mainly related to currency conversions and how they are affected by international interest rates and inflation). By Level III, the focus is on applying economic analysis to portfolio management and asset allocation.

Corporate finance

The curriculum includes the more fundamental corporate finance topics—capital investment decisions, capital structure policy, and dividend policy—as well as advanced topics such as the analysis of mergers and acquisitions,corporate governance, and business and financial risk.

Financial reporting and analysis

The curriculum includes analyzing financial reporting topics (International Financial Reporting Standards and U.S.Generally Accepted Accounting Principles), and ratio and financial statement analysis. Financial reporting and analysis of accounting information is heavily tested at Levels I and II, but is not a significant part of Level III.

Security analysis

The curriculum includes coverage of global markets, as well as analysis of the various asset types: equity (stocks), fixed income (bonds), derivatives (futures, forwards, options and swaps), and alternative investments (Real Estate, Private Equity, hedge funds and Commodities). The Level I exam requires familiarity with these instruments; the focus of Level II is valuation; Level III studies incorporation of these instruments into portfolios. Level II employs the "tools" studied under the quantitative methods, financial statement analysis, corporate finance and economics curricula.

Portfolio management

This section increases in importance with each of the three levels—it integrates and draws from the other topics, including ethics. It includes: Modern Portfolio Theory (efficient frontier, Capital Asset Pricing Model, etc.); investment practice (defining the investment policy for individual and institutional investors, resultant asset allocation, order execution); and measurement of investment performance.

 

CFA Level 1

Duration  130 hours
Course fee 1800 AZN