Introductory Remarks and General Guidelines – See part 1
Week 10 – Equity, Part 2
The fun continues this week with global industry analysis, country analysis, the business cycle, estimating growth, equity metrics and multiples, global risk premiums, and equity valuation models.
If you hit week 10 and are still on pace with your schedule, then that is a very good sign. Do not let up on the practice problems and start to take your game up a level. If you have been studying 12 hours per week, make the jump to 15 hours per week now.
Week 11 – Equity, Part 3; Progress Test 2
Equity, part 3 – Now you are moving into free cash flow (FCF) approaches. Stock analysts love this and CFAI does, too. Make sure you note the different FCF approaches. Look for more on stock multiples and close with the challenges of running comparables analysis for international stocks.
Progress Test 2 – You should do your second progress test in week 11, covering all material to date. Refer to the week 6 notes for approaches to building your own exam using the CFAI official books.
Week 12 – Alternative Investments
This is your CFAI intro to non-stock and non-bond investments, as well as non-traditional strategies.
There may only be one item set, two at the tops. You will see this stuff again on Level 3.
The section should cover real estate, private equity-venture capital, private equity-LBOs, commodities, and hedge funds.
Weeks 13 & 14 – Fixed Income, Parts 1 & 2
This is another middle tier section, grouped in importance with Corporate Finance.
There is a lot of material in this section, so here goes: corporate credit, high yield debt, US municipal bonds, sovereign debt, fixed income security valuation, duration and convexity, yield curve principles, US Treasuries, term structure of interest rates, par-spot-forward rates, yield volatility, bonds with embedded options, convertible securities, residential mortgage backed securities (RMBS), commercial mortgage backed securities (CMBS), asset backed securities (ABS), collateralized debt obligations (CDOs), and applications of different spread metrics.
Given that some of these security types were on center stage for the global economic slowdown, they present timely exam fodder for CFAI. Unfortunately, mastery of this material requires the ability to understand a fair amount of formulas. Flash cards will be very helpful for Fixed Income.