Questions

5 июля 2021 г. 0:13

TVM 1. What is more valuable - $100 now or $100 after 3 years?

2. What is required rate of return?
3. What is discount rate?
4. What is opportunity cost?
5. What interest rate can be called also?
6. What are the components of interest rate?
7. What is real risk-free rate?
8. What is inflation premium?
9. What is default risk premium?
10. What is liquidity premium?
11. What is maturity premium?
12. What is nominal risk-free rate? What "risk-free rate" will mean on the exam?
13. What is the formula for FV?
14. What format is right for BA II Plus? How to set it?
15. How to use TVM functions on BA II Plus?
16. What is periodic interest rate? How to solve problems with different periods of
compounding?
17. What is the formula for continuous compounding? How to solve it on BA II Plus?
18. What happens to interest rate with increase in compounding period?
19. What is the formula for effective interest rate? How to solve it on BA II Plus?
20. What if continuous period? What is the formula for EFF? How to solve it on BA II
Plus? Do I use whole number 12% or decimal 0.12 in formula?
21. What is annuity?
22. What is ordinary annuity? How to solve for it using BA II Plus?
23. What is annuity due? How to solve it using BA II Plus?
24. What is perpetuity?
25. How to use timeline for TVM problems? How to solve annuity problems on BA II
Plus?
26. What if there are unequal cash flows and you need to find FV?
27. What is the formula for PV?
28. How not to make a mistake when using timeline for combined problems with
annuities and single sum?
29. How to set BA II Plus for annuity due problems?
30. What is the formula for perpetuity? What is a solution for finding PV of unequal
cash flows?
31. How to use NPV function of BA II Plus for finding PV of unequal cash flows?
32. What is a growth rate? How to calculate it? Using BA II Plus?
33. How to solve for period, interest rate, payments using BA II Plus?
34. What is the idea behind cash flow additivity principle? How to use it?
Statistics 1. How can we use statistics to understand market returns?
2. What main properties we search for when trying to analyze return distributions?
3. What is descriptive statistics and what is inferential statistics?
4. What is population and parameter?
5. What is sample and sample statistic?
6. What are types of measurement scales? How are they different? What is the best
one?
7. What is frequency distribution? How do you create one?
8. What is absolute frequency?

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 8. What is absolute frequency?
9. What is cumulative frequency?
10. What is relative frequency?
11. What is cumulative relative frequency?
12. What is histogram?
13. What is frequency polygon? How can you graph cumulative frequency
distribution?
14. What is arithmetic mean? What is the sign for population mean? What is the sign
for sample mean?
15. What is median? How is it different from mean? How to calculate it when there
are even observations and odd observations?
16. What is mode? How many modes can distribution have? What is it called when
there is one mode, two modes, three modes?
17. What is weighted mean? How to calculate it?
18. How to calculate geometric mean? When to use it?
19. How to calculate harmonic mean? When to use it?
20. How arithmetic mean compares to geometric mean and harmonic mean?
21. What are other measures of location in frequency distribution?
22. How to calculate location of percentile? What if it is not the whole number?
23. What is range?
24. How to calculate mean absolute deviation (MAD)?
25. How to calculate population variance and population standard deviation? Using
BA II Plus?
26. How formula for sample variance and sample standard deviation is different from
population variance and st.dev?
27. What is semivariance and semideviation?
28. What is Chebyshev's inequality formula? How to use it and to what distributions
it applies?
29. How to calculate coefficient of variation? How to compare different coefficients
of variation?
30. What is symmetrical distribution? How mean, median and mode are located in
symmetrical distribution?
31. How positively skewed distribution looks like? How mean, median and mode are
located and affected in positively skewed distribution?
32. How negatively skewed distribution looks like? What about its mean, median and
mode locations?
33. What is excess kurtosis?
34. How leptokurtic, platykurtic and mesokurtic distributions look like? What about
their excess kurtosis?
Probabilit 1. Example of random variable?
y 2. Example of outcome?
3. Example of event?
4. Example of mutually exclusive events?
5. Example of exhaustive events?
6. What are 2 defining properties of probability?
7. What kind of methods of estimating probabilities there are?
8. How can you state probabilities in terms of odds for and against? And how to
calculate probabilities based on given odds?
9. What is unconditional probability and what is it also called like?
10. How do you express conditional probability?
11. How to denote joint probability? How to calculate it for conditional probabilities?
12. How to calculate conditional probability given joint probability?
13. When addition rule is used? How to denote and calculate it?
14. How in formulas can you express independent events?

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 14. How in formulas can you express independent events?
15. What is multiplication rule for independent events?
16. What is addition rule for independent events?
17. When total probability rule is used? How to calculate it using multiplication rule?
18. How to calculate expected value of random variable given possible outcomes and
their probabilities?
19. How to calculate variance of random variable using BA II Plus?
20. When and how to use total probability rule for expected value?
21. How to calculate expected return of portfolio? How to use weights of stocks in
portfolio and given joint probabilities of returns?
22. What expected return means compared to actual return? What do we need to
calculate first to get variance of portfolio return?
23. What covariance tells us? What variance tells us?
24. Difference between population covariance and sample covariance? What is the
difference in their formulas?
25. How to calculate population covariance for 2 stock returns?
26. What problem with covariance are we addressing by using correlation?
27. What are the types of correlation?
28. How to calculate correlation for 2 stock returns? Do we use forward-looking or
historical correlation? How 2 formulas differ?
29. What are 4 limitations of using correlation in analysis?
30. Given correlation limitations - how do we test if 2 variables are independent
using probabilities?
31. What is multiplication rule for expected value of uncorrelated random variables?
Example of uncorrelated financial variables?
32. How to calculate variance of 2 stock returns in portfolio given their covariance?
33. When to use Bayes' formula? How to calculate it?
34. What is the first step to do in Bayes' formula problems?
35. What is multiplication rule of counting?
36. When to use factorial? How to calculate it using BA II Plus?
37. When to use labeling? How to calculate it?
38. When to use combination? How to calculate it using BA II Plus?
39. When to use permutation? How to calculate it using BA II Plus?
Distributio 1. What types of probability distributions there are? What does uniform mean?
ns 2. What is discrete random variable?
3. What is continuous random variable?
4. What probability distribution specifies?
5. What is probability function?
6. For what variables is probability density used?
7. Example of discrete uniform distribution?
8. How probability function is labeled? How cumulative distribution function is
labeled? How to calculate them for discrete uniform distribution?
9. Example of Bernoulli trial?
10. What is random variable X in binomial distribution?
11. How to calculate probability formula for number of successes in n trials in
binomial distribution?
12. Is order of success matter in binomial distribution? Are the events independent?
13. How to calculate mean or expected value of binomial variable?
14. How to calculate variance of binomial variable?
15. When binomial tree diagram can be used?
16. How to calculate each scenario possible stock prices and their probabilities and
overall expected stock price using binomial tree?
17. How to calculate probability that given random variable range will be between
given total range using continuous uniform distribution formula?

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 given total range using continuous uniform distribution formula?
18. What is the probability of any fixed point under continuous uniform distribution?
19. How continuous uniform distribution looks like?
20. What shape is normal distribution?
21. What are confidence intervals for 90%, 95% and 99% of all observations in
normal distribution?
22. What are two main parameters to describe normal distribution?
23. What skewness and kurtosis normal distribution has?
24. What does mean and standard deviation equal in standard normal distribution?
25. What Z-table is used for? How do we calculate standardized variable with Z
formula? Why do we need to know mean and standard deviation of random
variable for that?
26. How probabilities for X ~ N (mean, st. dev) is the same for Z ~ N (0,1)?
27. How to calculate values from Z table when we get negative standardized P(Z)
number - probability that is bigger than x?
28. Example of univariate distribution?
29. Example of multivariate distribution?
30. Which are 3 defined parameters for multivariate normal distribution?
31. What is shortfall risk?
32. How to calculate safety first ratio? How to use it? Which ratio is better?
33. What does Roy's safety first criteria says in connection to SF-Ratio?
34. How to create lognormal distribution using random variable that is normally
distributed?
35. What are properties of lognormal distribution? How does it look?
36. For what financial variables normal distribution is more suitable?
37. For what fin variables lognormal distribution is more suitable? Why?
38. How to calculate continuously compounded rate of return given EFF rate or HPR?
39. How Monte Carlo simulation works and example for what? What inputs it uses?
What is the result?
40. What are some of applications of Monte Carlo simulation? What are its
limitations?
41. How historical simulation is different from Monte Carlo simulation?
42. What are the limitations of historical simulation?
Sampling 1. What samples are used for in general?
2. What are two reasons why sampling is used?
3. What is simple random sampling?
4. What is sampling distribution? Will sample statistic be different each time you
draw take samples?
5. How to calculate sampling error?
6. How do you do stratified random sampling? How to count subgroups when
categorizing population?
7. What is time-series data?
8. What is cross-sectional data?
9. What is longitudinal or panel data?
10. What is statistic's sampling distribution?
11. How sampling distribution of sample mean is explained with central limit
theorem? How sampling distribution of sample mean will be distributed? What
will be its mean and variance?
12. What is standard error of the sample mean? How to calculate it?
13. What standard deviation to use when we don’t have population standard
deviation for calculating standard error?
14. What are two branches of statistical inference? What questions each of them are
asking about parameter?
15. What is point estimate?

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 15. What is point estimate?
16. What is interval estimates or confidence intervals?
17. What is estimator?
18. What is estimate? Example of point estimate?
19. What are 3 desirable properties of estimator?
20. How to calculate confidence interval? What is reliability factor?
21. How confidence formula is different for known/unknown variance?
22. Which z-statistic or t-statistic to choose depending on given distribution type
(normal/non-normal), known/unknown variance and sample size <30 or >30?
23. What is degree of confidence and level of significance? How they are denoted?
24. What is the amount of z-statistic reliability factor for 90%, 95% and 99% degree
of confidence? How to use z-table and how correctly choose level of significance
to use in two-tailed test or in one-tailed test?
25. What are 3 properties of Student's t-distribution? What is degree of freedom?
How to calculate it?
26. How t-distribution will look like for large and small values of degree of freedom?
27. How to use t-table to find reliability factor based on given degree of freedom and
degree of confidence?
28. What distribution is used in conservative approach to confidence intervals that
will increase their reliability?
29. How sample size influence value of confidence interval and standard error?
30. What issues can arise when taking larger sample size?
31. What is data-mining bias?
32. What are signs of data-mining bias and how to avoid it?
33. Example of sample selection bias?
34. Example of survivorship bias?
35. Example of look-ahead bias?
36. What is time-period bias?
Hypothesi 1. What is hypothesis testing? Example?
s 2. What is hypothesis?
3. What are 7 steps of hypothesis testing? What is short 4 steps?
4. How do you state hypothesis? What is null hypothesis and alternative
hypothesis? What is easy way to spot null hypothesis?
5. What do you do with test statistic? How to calculate it?
6. What is critical value also called? How to calculate it based on significance level?
7. What is rejection region and acceptance region?
8. How to decide if you reject or not null hypothesis?
9. What are hypothesis of right tailed test and left tailed test?
10. When to use two-tailed test? When to reject null hypothesis?
11. How many critical values in two-tailed test? When we fail to reject null
hypothesis?
12. How confidence interval relates to rejection or not rejection of null hypothesis in
two-tailed test?
13. What is p-value? When to use it and how for hypothesis testing?
14. How test-statistic and p-value are related?
15. What 4 possible outcomes of hypothesis test?
16. What is Type I error? What is its probability?
17. What is Type II error?
18. What is power of a test? How to calculate it?
19. How statistical result is different from economically meaningful result?
20. How do we decide which test-statistic to use? Is it the same table for confidence
interval?
21. What are two assumptions about population to make when testing difference
between means with independent population and normal distributions?

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 between means with independent population and normal distributions?
22. How to calculate test statistic for unknown but equal variance? What is pooled
estimator of common variance? What null hypothesis will be equal to?
23. How to calculate pooled estimator of common variance?
24. How to calculate degrees of freedom when unknown but equal variance?
25. How to calculate modified degrees of freedom when unknown and not equal
variance?
26. Example of dependent samples for testing?
27. How stated hypothesis looks like for test of mean difference with dependent
samples? How population mean difference and hypothesized value for
population mean difference is denoted?
28. How to calculate test statistic for test of mean difference with dependent
samples? How to calculate degrees of freedom for t-table?
29. How 3 types of stated hypothesis look like for test of mean difference? How are
they denoted?
30. What test statistic we use for test of single variance? How is it denoted?
31. How 3 types of hypothesis look like for test of single variance? How chi-square
distribution looks like? What its minimum value? How are they denoted?
32. What degrees of freedom we use and where find critical value?
33. How to calculate chi-square statistic?
34. What test statistic to use to test equality or inequality of 2 variances? What is this
test statistic essentially?
35. What are F-test assumptions about samples and population distributions?
36. How F-distribution looks like?
37. How 3 types of hypothesis look like for test of equality/inequality of variances?
How are they denoted?
38. How to calculate F-test statistic? Which sample variance should be numerator
and which should be denominator? How to calculate and how many there are
related degrees of freedom?
39. How hypothesis looks like for test of correlation?
40. How to calculate t-test for test of correlation? Where in the formula is degrees of
freedom?
41. What happens to correlation value as sample size n increases and why? What
happens to Type II error when n increases?
42. Which either one out 2 characteristics must parametric test have?
43. What are 3 situations to use nonparametric test?
44. What is popular nonparametric test? How it is calculated?
FIS 1. What are 3 differences of fixed-income security from equities?
2. What are 3 elements to know when investing in fixed-income securities?
3. What are 5 different types of issuer of bond? How quasi-government bonds also
called?
4. What is credit risk? What are 2 types of bond creditworthiness categories?
5. What is maturity date? What bond is called if maturity less than 1 year or more
than 1 year? What is tenor of the bond?
6. What is par value? Synonyms? When bond is trading at premium, discount, at
par?
7. What is coupon rate? What are coupon rate frequencies?
8. What is plain vanilla bond?
9. What is floating-rate bond, note or floaters? How coupon rate is determined?
10. What is zero-coupon bond or pure discount bond?
11. What currency features can be in bonds?
12. How to calculate current yield of bond?
13. How to calculate yield to maturity? Using BA II Plus? How bond's price is related
to yield of maturity?

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 to yield of maturity?
14. What is trust deed or bond indenture? What info it contains?
15. What is collateral?
16. What is credit enhancement?
17. What is covenant?
18. Who is trustee when company issues bonds? What trustee does?
19. Who is sponsor?
20. What are different sources of repayment of the issuer for supranational,
sovereign, non-sovereign, corporate, securitized bonds?
21. What does it mean that securitized bonds are amortized?
22. What is collateral trust bonds?
23. What are equipment trust certificates?
24. What are mortgage-backed securities? What are covered bonds?
25. What are 3 types of internal credit enhancement?
26. What are 2 types of external credit enhancement?
27. Examples of affirmative covenants?
28. Examples of negative covenants?
29. Example of domestic bonds?
30. Example of foreign bonds?
31. What are Eurobonds?
32. What is bearer bonds? What is registered bonds?
33. What is global bonds?
34. What and how is taxed in bonds?
35. What principal repayment structure bullet bonds have?
36. What principal repayment structure fully amortized bonds have?
37. What principal repayment structure partially amortized bonds have?
38. What is standard sinking fund arrangement? Accelerated sinking fund
arrangement? Call provision sinking fund arrangement?
39. What are happens to credit risk and reinvestment risks with sinking fund
arrangements have?
40. What is fixed periodic coupons?
41. What is floating-rate notes (FRN)? What is floors, caps, collars in FRNs? What is
inverse FRN?
42. What is step-up coupons? Bonds with credit-linked coupons? Bonds with
payment-in-kind coupons? Bonds with deferred coupons? Index-linked bonds?
43. What are zero-coupon-indexed bonds? Interest-indexed bonds? Capital-indexed
bonds? Indexed-annuity bonds?
44. What is contingency provisions (embedded option)?
45. What is callable bonds? What is the risk for bondholders? Why companies issue
them?
46. What is call price? Call premium? Call schedule? Call protection period (lockout,
deferment, cushion period)? Call date?
47. What are 3 types of callable bonds?
48. What is putable bonds? When they are beneficial for bondholders?
49. What details are included in bond indenture for putable bonds? What is one-time
put? Multiple put?
50. What are 3 types of putable bonds?
51. What is convertible bonds?
52. What are advantages of convertible bonds from investor's perspective and from
issuer's perspective?
53. What is conversion price? How to calculate conversion ratio (parity value)? What
does conversion condition above parity mean?
54. How to calculate conversion value? How to calculate conversion premium?
55. What is warrant? What is contingent convertible (CoCo) bonds?

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 55. What is warrant? What is contingent convertible (CoCo) bonds?
FIM 1. What are 4 types of bond markets based on type of issuer?
2. Below what rating bonds are considered junk bonds?
3. What is money market securities? Capital market securities?
4. Bond's price and cash flows are affected by interest rates of what country?
5. What are 2 types of coupon?
6. What is reference rate in floating-rate coupon bond? When does it reset?
7. What is interbank offered rates?
8. What is spread in floating-rate coupon bonds? What it depends on?
9. Example of tax-exempt bonds?
10. What is inflation-linked bonds?
11. What are 2 purposes for fixed-income indices? Examples of fixed-income
indices?
12. Why central banks buy bonds? Why and how institutional investors usually buy
bonds? Why and how retail investors usually buy bonds?
13. How underwritten offering (firm commitment offering) works?
14. How best effort offering works?
15. How shelf registration works?
16. When auctions are used to sell bonds?
17. What are characteristics of private placement? Who is typical investors?
18. Who are typical participants on secondary bond markets?
19. What is organized exchange? What is over-the-counter (OTC) market?
20. What is liquidity measure for bond market? What is bid-ask, bid-offer spread?
Who supplies most of liquidity on international bond market?
21. What is T+1 and T+3 settlement? What is cash settlement?
22. What is on-the-run and off-the-run sovereign bonds? What coupon rates they
can have?
23. What are credit rating, credit risk, source of revenue, purpose for non-sovereign
bonds?
24. What credit risk, source of revenue for quasi-government bonds? Examples of
quasi-government bonds?
25. What type of bonds are supranational bonds usually?
26. What is bilateral bank loan? What is syndicated bank loan? What type of rate
they usually have?
27. What is commercial paper? Why companies issue them?
28. What yield commercial paper have? What rate of default historically they have?
How rolling over the paper works? What is rollover risk? What is backup lines of
credit?
29. What are the differences between USCP and ECP?
30. What is common classification of maturities for corporate notes/bonds?
31. What is medium-term notes?
32. What is serial maturity structure? What is term maturity structure? What is
sinking fund arrangement?
33. Who sells new bond issues? How issues are settled?
34. Who trades bonds on OTC? What is usual settlement period? How bond prices
are quoted?
35. What is characteristic of structure financial instruments?
36. Example of capital protected instrument?
37. Example of yield enhancement instrument?
38. How credit-linked note (CLN) works?
39. Example of participation instrument?
40. Example of leveraged instrument?
41. How inverse floater works? How to calculate it? What is deleveraged inverse
floater? What is leveraged inverse floater?

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 floater? What is leveraged inverse floater?
42. What are types of retail deposits?
43. How central bank funds are created? What are they used for? What rate is used
for them? What periods? What is overnight funds? What is term funds?
44. How interbank funds work? What terms, rates are used?
45. How certificates of deposit works? What is non-negotiable certificates of
deposits? What are types of negotiable certificates of deposit?
46. How repurchase agreement works?
47. What is reverse repo? What is repurchase price? What is repo rate? What is
overnight repo, term repo, repo to maturity?
48. What factors influence repo rate?
49. What happens if dealer defaults on repo? What if investor defaults?
50. What is repo margin (haircut)? What repo margin amount depends on?
FI Val 1. How to calculate bond price? Using BA II Plus?
2. What is premium bond? What is discount bond? What is par bond?
3. What are 3 assumptions for yield to maturity?
4. How to calculate yield to maturity? Using BA II Plus? Is the resulting yield is
annual or for period?
5. What is inverse effect?
6. What is convexity effect?
7. What is coupon effect?
8. What is maturity effect?
9. What types of bonds are more sensitive to changes in discount rate?
10. What is pull to par when talking about bond price?
11. What it spot rates? How to calculate bond's price using spot rates?
12. What is no-arbitrage value? When arbitrage opportunity exists?
13. What are 2 ways to calculate full price of bond? How to calculate flat price? How
to calculate accrued interest? Using BA II Plus?
14. What are 2 conventions for calculating number of days for bonds?
15. Why the reported accrued interest is little "too high" and flat price is a little "too
low"?
16. When use matrix pricing for bond price?
17. Example of calculation of bond price using matrix pricing? How to use linear
interpolation?
18. Why matrix pricing is used when underwriting new bonds? What is usual
benchmark rate?
19. What is required yield spread? What is basis point?
20. What is periodicity? What happens to yield-to-maturity with increase of
periodicity?
21. How to calculate annual yield to maturity? How to convert annual yield to
maturity to another annual yield with different periodicity? Using ICONV on BA II
Plus?
22. How to calculate semi-annual bond equivalent (bond equivalent) yield given
semi-annual period yield?
23. What is street convention?
24. What is true yield?
25. What is government equivalent yield?
26. How to calculate current yield?
27. How to calculate yield-to-call?
28. How to calculate is yield-to-first call (YTFC)? How to calculate yield-to-second
call? What is yield-to-worst?
29. What is quoted margin in floating-rate notes (FRN)? Does it change?
30. What is required margin (discount margin)?
31. How amount of required margin at reset date affects floater's price?

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 31. How amount of required margin at reset date affects floater's price?
32. How to calculate price of floating-rate note? Using BA II Plus?
33. How money market yields differ from bond market yields?
34. Examples of discount instruments?
35. How to calculate price of money market instrument quoted on discount basis?
How to calculate discount rate stated as annual percentage rate? What
convention is usual?
36. Examples of money market instruments quoted on add-on basis?
37. How to calculate add-on rate? Using BA II Plus? What is the difference of discount
rate and add-on rate?
38. How to compare discount basis yield and add-on yield using first approach?
39. How to compare discount basis yield and add-on yield using relationship formula
of AOR and DR?
40. What is spot rate curve (zero, strip curve)? What is the difference between spot
rate curve and yield curve? What is par curve?
41. Example of forward rate? What is implied forward rate?
42. How to calculate implied forward rate using spot rates? Spot rates using implied
forward rate? How to read 1y1y, 2y1y, 0y1y, etc?
43. What is G-spread? How to calculate it?
44. What is I-spread?
45. What is Z-spread (zero-volatility spread, static spread)? What is option-adjusted
spread (OAS)? How to calculate OAS for callable or putable bond?
ABS 1. What is securitization? What would be collateral?
2. What is special purpose vehicle / entity (SPV, SPE)? What is securitized assets?
3. What is mortgage-backed security (MBS)?
4. What are benefits of securitization to investors?
5. What are benefits to bank or loan originator? What is disintermediation?
6. What are benefits for the borrowers of loan?
7. Example of securitization? Why create separate SPV? Who is seller of pool of
securities? Who is SPV/trust/issuer? Who is servicer?
8. Who are other participants in securitization?
9. What is motivation to create different types of bond structures when issue?
10. What is prepayment risk? Can it be eliminated?
11. Example of time tranching?
12. Example of subordination or credit tranching? Which bondholders will have
higher expected return?
13. Why funding cost for securitization scenario is lower that for corporate bond
scenario? What is absolute priority rule?
14. What is mortgage loan? What 3 components of mortgage loan cash flows?
15. Why amount of mortgage loan is lower than property's purchase price? What is
loan-to-value (LTV) ratio?
16. What is usual term of mortgage/maturity in US?
17. What is mortgage rate called also?
18. What is fixed rate?
19. What is adjustable-rate mortgage (ARM)/variable rate?)
20. What is initial period fixed rate? What is rollover or renegotiable mortgage rate?
What is hybrid mortgage?
21. What is convertible mortgage?
22. How to calculate amortization payments?
23. What is fully amortizing loan? What is partially amortizing loan? What does
balloon payment equal to?
24. What is interest-only mortgage? What is bullet mortgage?
25. What is part prepayment?
26. What is recourse loan? What is non-recourse loan?

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26. What is recourse loan? What is non-recourse loan?
27. What are 3 categories of residential mortgage-backed securities? What is
government-sponsored enterprise (GSE)?
28. Examples of agency RMBS? What is non-agency RMBS? What is 2 difference
between non-agency RMBS and GSE RMBS?
29. What is mortgage pass-through securities?
30. How cash flows of mortgage pass-through securities work?
31. How to calculate pass-through coupon rate?
32. What is weighted average coupon (WAC)? What is weighted average maturity
(WAM)?
33. What is conforming loan? What are some underwriting standards?
34. Example of contraction risk? Example of extension risk?
35. How to calculate single month mortality (SMM) rate? What does result mean?
36. How to calculate conditional prepayment (CPR) rate? What does result mean?
37. What is 100 PSA prepayment benchmark? What PSA assumption greater than
100 PSA means?
38. What is weighted average life?
39. What is collateralized mortgage obligation (CMO)? What is structuring? What is
collateral in CMO?
40. What are advantages of CMO?
41. What are 4 common CMO tranches?
42. How sequential-pay CMO structure works for disbursement of coupon payment?
For principal payment?
43. Example how tranches have different contraction and extension risk? How
tranches protect each other against contraction and extension risk?
44. How planned amortization class (PAC) provides predictability for average life?
45. What is initial PAC collar (initial PAC bond)?
46. How support tranches reduce contraction risk of PAC tranches?
47. Why both credit and prepayment risk are concern for non-agency RMBS?
48. What is prime loans? What is subprime loans?
49. What is waterfall distribution of cash flows?
50. What are 2 factors when forecasting cash flows of non-agency RMBS?
51. What are possible credit enhancement for non-agency RMBS and non-mortgage
ABS for protection against losses in the pool?
52. What are commercial mortgage-backed securities (CMBS)? Their important
features?
53. How to calculate debt-to-service coverage ratio? What DSC value is sufficient?
What is another key indicator for assessing credit performance of CMBS?
54. What is role of credit-rating agency in CMBS market?
55. What is the structure of interest and principal repayments in CMBS? What is first-
loss piece (residual tranche, equity tranche)?
56. What is call protection at the structural level in CMBS?
57. What are 4 mechanisms of call protection at loan level? What is defeasance?
58. What is balloon risk?
59. What are popular non-mortgage ABS?
60. Example of amortizing ABS? Example of non-amortizing ABS?
61. Examples of prepayments for auto loan ABS?
62. What are possible credit enhancement for auto loan ABS?
63. What are cash flows of pool of credit card receivables in credit card receivable
ABS?
64. What is payment structure of credit card receivables ABS? What happens during
lockout period?
65. What is early amortization (rapid amortization) in credit card receivables ABS?
66. What are 2 differences for credit card and auto loan ABS?

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 66. What are 2 differences for credit card and auto loan ABS?
67. What is collateralized debt obligation (CDO)? What are the funds necessary to
pay bond classes for CDO?
68. What are 3 structures of bond classes in CDO?
69. How CDO works from raising funds to cash flows to bondholders?
70. Example of CDO transaction?
FI Risk and 1. What is total return on a bond?
Return 2. What is horizon yield (holding period rate of return)?
3. What are 3 sources of return for bond investor?
4. How to calculate coupon reinvestment for bond held to maturity? How to
calculate total return after?
5. What is interest-on-interest gain from compounding part in coupon
reinvestment? How to calculate it?
6. How to calculate total return for bond sold before maturity?
7. When horizon yield equals to original yield-to-maturity at the purchase of bond?
8. What is constant-yield price trajectory?
9. When there will be capital gain? When will be capital loss?
10. What is carrying value of bond?
11. How to calculate realized return (total return) when market interest rates go up?
12. How to calculate capital gain or capital loss?
13. What is coupon reinvestment risk? What is market price risk?
14. What is relationship of reinvestment income to interest rate movements? What
is relationship of bond price to interest rate movements?
15. When coupon reinvestment risk matter? When market price risk matter?
16. What is duration? What duration is expressed in?
17. What is yield duration? What is curve duration?
18. What is Macaulay duration?
19. What is modified duration? How to calculate modified duration using Macaulay
duration? Using BA II Plus? What is r in modified duration formula?
20. How to calculate percentage change in full price? What is AnnModDur? Why is it
negative in formula?
21. How to calculate approximate modified duration using slope of the line tangent
to price-yield curve? What is P-, P+, P0 in the formula? Using BA II plus?
22. How to calculate effective duration? Why we use curve duration instead of yield
duration?
23. When key duration is used?
24. What is relationship between Macaulay duration and fraction of time passed
between coupons? How the graph looks like?
25. What is relationship between Macaulay duration and zero-coupon bond
maturity? Perpetuity time-to-maturity? Premium and discount bond maturity?
How it looks on graph?
26. How higher coupon rate effects duration? How higher yield-to-maturity effect
duration? How longer time-to-maturity effect duration? What is exception?
27. What is relationship of effective duration of callable bond to non-callable bond at
relatively low interest rate?
28. How to calculate bond portfolio duration?
29. How to calculate money duration? How to calculate bond price change using
money duration?
30. How to calculate quickly price value of basis point (PVBP) using money duration?
31. What is convexity? Why do we need it after duration?
32. How to calculate price change in bond's full price with convexity adjustment?
How to calculate it using money duration instead of modified duration?
33. How to calculate approximate convexity? What is convexity adjustment portion
of the formula?

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 of the formula?
34. Why greater bond convexity is better for investor?
35. How to calculate effective convexity? What is the difference with approximate
convexity?
36. What convexity callable bond? What convexity putable bonds have?
37. What formula to use to calculate percentage change in price of bond, given
duration and convexity?
38. Who is concerned when sudden change in yield? Who is concerned when change
in yield on reinvestment income? Who is concerned about reinvestment risk?
39. What happens at Macaulay duration to coupon reinvestment risk and market
price risk?
40. How to calculate duration gap? What type of risk dominates when duration gap is
negative? When positive? How it affects decision of reinvesting or selling the
bond?
41. What are 2 parts of YTM? Why can the spread over benchmark change?
42. Why can benchmark yield change?
Credit 1. What is default risk or default probability?
Analysis 2. What is loss severity or loss given default?
3. How to calculate expected loss?
4. What is recovery rate? How to calculate loss severity using it?
5. Example of spread risk? Why it can happen?
6. What is downgrade risk (credit migration risk)?
7. What is market liquidity risk? What happens to bid-ask spread when high market
liquidity risk? What are 2 factors effecting market liquidity risk?
8. What is capital structure?
9. What is debenture? What is highest possible loss severity on it?
10. What are 6 types of debt by seniority ranking?
11. Why companies issue debt with different ranking?
12. Example of recovery rates in pari passu (on equal footing) ranking?
13. How recovery rates vary by?
14. What are 3 main rating agencies? Why they are dominant? What is controversial
about them?
15. How rating matrix looks like? What is the lowest of investment grade? What
outlook can be?
16. What is issuer rating or corporate family rating (CFR)?
17. What is issue rating or corporate credit rating (CCR)?
18. What is cross-default provision?
19. What is notching?
20. What is primary factor in notching? What is secondary? What is structural
subordination? What is the rating of debt of holding company compared to debt
of subsidiary?
21. What are 4 risks of relying of agency ratings?
22. What are differences between credit analysis and equity analysis in terms of what
each focus on? Management obligation? Analyzed financial statements?
Bondholders and shareholders risk/reward?
23. What are 4 Cs of credit analysis framework?
24. What are 4 steps to determine capacity?
25. How to use Porter's five forces framework for industry structure analysis? What is
additional factor to look for?
26. What are 3 key points of industry fundamentals analysis?
27. What are factors to consider in company fundamentals analysis?
28. What are 3 main types of ratios for credit analysis?
29. What profitability ratios are used in credit analysis?
30. What cash flow measures are used in credit analysis?

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 30. What cash flow measures are used in credit analysis?
31. What leverage ratios are used in credit analysis?
32. What coverage ratios are used in credit analysis?
33. Examples of methods used to determine quality of collateral?
34. What are the parts of yield of corporate bond? What are the parts of yield
spread?
35. What are factors that affect credit spread widening or narrowing?
36. What are 2 factors affecting price and return of a bond?
37. How to calculate return impact (without convexity adjustment) for small changes
in yield?
38. How to calculate return impact (with convexity adjustment) for large changes in
yield?
39. What is effect of narrow spread changes on bond return/price? Of wider spread
changes? Of higher spread sensitivity on modified duration?
40. Examples of 4Cs that companies with junk status have?
41. What are liquidity factors to focus in high-yield bonds credit analysis? Cause of
concern/warning sign? Detailed financial projections? Debt structure? Corporate
structure? Covenant analysis? Equity-like approach to high-yield analysis?
42. What are characteristics of sovereign debt in credit analysis?
43. How framework for evaluation of sovereign credit rating looks like?
44. What are factors considered in credit analysis of non-sovereign government
debt - general obligation bonds and revenue bonds?
DM&I 1. What is derivative? Example of derivative contract? What are they used for?
2. What are 2 parties participating in derivative contract?
3. Examples of exchange-traded derivatives? What is standardized derivative?
4. What are 4 advantages of standardization? What is clearing and settlement?
What is margin (cash deposit/performance bonds)?
5. How OTC derivative market works? Why it has credit risk?
6. How market makers work? On what markets can they work?
7. What are 2 types of derivatives? Examples?
8. What are terms of forward contract? What is risk of forward contract?
9. Example of payoff for long and short?
10. What is futures price? What is mark to market process? What is margin account?
11. What is swap? Example of plain vanilla interest rate swap?
12. What is option?
13. What are 2 types of options based on when they can be exercised?
14. What are 2 types of options?
15. What is strike price (exercise price)?
16. What is option premium?
17. How to calculate call buyer's payoff? Call seller's payoff? How the formula is
denoted?
18. How to calculate call buyer's profit? Call seller's profit?
19. How to calculate put buyer/seller payoff? How to calculate put buyer/seller
profit?
20. What credit derivative?
21. What is credit default swap (CDS)? How it works?
22. How asset-backed securities work?
23. Example of hybrid derivatives?
24. What are common derivatives underlying?
25. What are 4 advantages of derivatives? What is price discovery? What is implied
volatility?
26. What are 3 criticisms and misuses of derivatives?
27. What is the concept behind derivative pricing?
28. How storage affects forward/future price?

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 28. How storage affects forward/future price?
29. Example of arbitrage?
D Pricing 1. How to calculate current price of financial asset (underlying)? How risk premium
and Val is denoted? What is convenience yield?
2. What is cost of carry? How to calculate it? How PV of costs of holding an asset is
denoted? How PV of any benefits of holding an asset is denoted?
3. Example of arbitrage?
4. What is law of one price?
5. What earning return in excess of risk-free rate mean for derivative? Example of
hedging using derivative?
6. What is replication? Why it is needed instead of buying government risk-free
security? What are 3 possible combinations of replication and their results?
7. How risk-aversion changes discount factor when pricing derivative? How pricing
an asset is different?
8. What is risk-neutral pricing?
9. What is arbitrage-free pricing (principle of no arbitrage)? What are 3 limitations
to execute arbitrage transactions?
10. What is hedge portfolio?
11. What is price of stock? What is value of stock? What is price of option? What is
value of option?
12. What is price of futures, forwards, swaps? What is value of forward contracts?
What it equals at initiation?
13. How forward contract works? What are 2 ways to settle it? What are risks?
14. How to calculate forward price? How forward price is denoted? How spot price is
denoted? How risk-free rate is denoted? How the contract beginning and end is
denoted?
15. How to calculate value of forward contract at expiration? How it is denoted?
16. How to calculate value of forward contract during the life of contract?
17. How to calculate forward price with benefits and costs?
18. How to calculate value of forward contract during lifetime with benefits and
costs?
19. How forward rate agreements (FRA) work? What rate is the underlying usually?
20. Example how synthetic FRA is made?
21. Why futures are more desirable than forwards when positively correlated with
interest rates? Less desirable when negatively correlated?
22. How swap is compared to series of off-market forward contracts?
23. Example of interest rate swap? Steps to replicate swap?
24. How to calculate value of European call option and put option at expiration?
What is the relationship between value of option and value of underlying?
25. What is relationship between value of European option and exercise price? For
call option? For put option?
26. What are 3 moneyness for call option? For put option?
27. What is relationship between value of European call option and time to
expiration? Of European put option and time to expiration?
28. What is relationship between value of European call option and risk-free interest
rate? Of European put option and time to expiration?
29. What is relationship between value of both European call option and put option
to volatility?
30. What is relationship between value of European call option and benefits/costs of
underlying? Put option? Who gets benefits and costs?
31. What is the lowest price of calls and puts?
32. What is fiduciary call and protective put? What is put-call parity for European
options? How to calculate it?
33. When arbitrage opportunity happens?

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 33. When arbitrage opportunity happens?
34. How using put-call parity formula to calculate synthetic call? Synthetic bond?
Synthetic stock? Synthetic put?
35. How to create protective put using forward contract?
36. What risk-free bond par value equals to?
37. How to create fiduciary call using forward contract?
38. What is binomial option-pricing model? How it looks like?
39. How to calculate risk-neutral probability (type of synthetic probability)? How it is
denoted?
40. Example of call price c0 calculation using binomial model?
41. Example of put price p0 calculation using binomial model?
42. Why American options are more valuable?
43. When American call prices can differ from European call prices? When not to
exercise American call option?
44. When American put prices can differ from European put prices? When to
exercise American put option?
AI 1. What is traditional investments?
2. What is alternative investments? What are characteristics of alternative
investments?
3. What is hedge funds?
4. What is private equity? How investment can be made in it? What are 2 types of
private equity?
5. What are main instruments for investing in commodities?
6. What is infrastructure investments?
7. What are 2 strategies for generating returns?
8. What are non-typical risks of alternative investments?
9. What is one of primary drivers for investing in alternative investments?
10. What is general partner (GP)? What is limited partner (LP)?
11. What are characteristics of hedge funds?
12. What is fund of funds (FOF)? What are its benefits to smaller investors?
13. What are is event-driven strategy?
14. What is relative value strategy?
15. What is macro strategy?
16. What is equity hedge value?
17. What is merger arbitrage?
18. What is distressed/restructuring?
19. What is activist strategy?
20. What is fixed-income convertible arbitrage?
21. What is fixed-income asset backed?
22. What is fixed-income general?
23. What is volatility strategy?
24. What is multi-strategy?
25. What is market neutral?
26. What is fundamental growth?
27. What is fundamental value strategy?
28. What is quantitative directional?
29. What is short bias?
30. What is sector specific strategy?
31. What implies about hedge funds and stock market performance correlation
during financial crisis?
32. What is usual incentive fee and management fee? What are they in fund of
funds?
33. How to calculate management fee? How to calculate incentive fee? Given hurdle
rate?

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 rate?
34. What is high water mark?
35. How leverage works in hedge funds?
36. What are risks with redemptions?
37. How to calculate management fees and incentive fees for FOF when it invests in
HF?
38. How hedge funds are valued when market prices available for underlying liquid
positions? What is conservative approach?
39. How hedge funds are valued when market prices are not available for underlying
liquid positions?
40. How hedge funds are valued when market prices are available for illiquid
positions? What are 2 NAV reported?
41. What are points to consider in hedge fund's quantitative due diligence? In
qualitative due diligence?
42. What are leveraged buyouts PE?
43. What are venture capital PE?
44. What are development capital PE?
45. What are distressed investing PE?
46. What is committed capital?
47. How much is PE management fee? What it is based on? What is incentive fee?
48. Example of leveraged buyout (LBO)? What are 3 changes to company after LBO?
Why LBO?
49. What is management buyouts (MBO)? What is management buy-ins (MBI)?
50. What are characteristics of target companies for LBO?
51. What is venture capital? What is portfolio companies?
52. What is formative stage? What is later stage financing? What is mezzanine stage?
53. What is average holding years for target companies?
54. What is are common exit strategies of PE?
55. What are 3 approaches to portfolio company valuation?
56. What are considerations for PE investments and due diligence?
57. What are private and public forms of real estate investments?
58. Example of leveraged ownership of real estate investment?
59. How REITs work?
60. What are 3 categories of real estate investments?
61. What are 3 indexes to measure real estate returns?
62. What does appraising the property means?
63. What is comparable sales approach?
64. What is income approach? What is direct capitalization method? What is
capitalization rate? What is net operating income (NOI)?
65. What is cost approach?
66. What is REIT income-based approach? How to calculate funds from operations
(FFO)? Adjusted funds from operations (AFFO)?
67. What is REIT asset-based approach? How to calculate REIT's NAV?
68. What are real estate investments risks?
69. Why commodities are attractive to investors? What is correlation with traditional
investments?
70. How to calculate futures price? Why add storage costs? Why subtract
convenience yield?
71. What is contango? What is backwardation?
72. What are 3 sources of return for commodity futures contract?
73. Why investors invest in infrastructure assets?
74. What is economic infrastructure investments?
75. What is social infrastructure investments?
76. What is brownfield investments?

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 76. What is brownfield investments?
77. What is greenfield investments?
78. What are some forms of indirect infrastructure investments?
79. What are some risks for infrastructure investments?
80. What is collectibles investments? What are their risks?
81. Why traditional risk measures as Sharpe ratio are not appropriate for alternative
investments?
82. Why fund manager due diligence is important?
FSA 1. What is net assets?
2. What is critical audit matters US?
3. What are other information sources for analyst about companies?
4. What are CFA suggested 6 steps of financial statements analysis framework?
FRS 1. What is IFRS objective of financial reporting?
2. What is standard-setting bodies? What is FASB? What is IASB?
3. What is regulatory authority? What is SEC? What is FSA UK?
4. What is IOSCO?
5. What are IFRS framework qualitative characteristics of reporting?
6. What are IFRS framework reporting elements?
7. What are IFRS framework constraints and assumptions?
8. What are IFRS required financial statements? What are general features for
preparing financial statements?
9. What are differences between IFRS and US GAAP? What they are based on?
Inventory? Extraordinary items? Development costs? Reversal of inventory?
IS 1. What is gains and losses?
2. What is single-step format? What is multi-step format?
3. Examples of different revenue recognition? What are 5 steps of revenue
recognition of 2014 IASB and FASB converged standards? What should be
disclosed by company?
4. What is expenses matching principle?
5. What is periodic costs?
6. What is FIFO, LIFO, weighted average cost, specific identification?
7. What is doubtful accounts? What is direct write-off method? Which method
matching principle requires?
8. What are 2 methods of recognizing warranty expense?
9. What are 2 methods of recognizing depreciation?
10. How intangible assets with useful lives are amortized? How to amortize
intangible assets with indefinite lives?
11. What are 2 models to value PPE under IFRS? Which one it not permitted under
US GAAP?
12. What is conservative approach in expenses recognition? What is aggressive
approach?
13. What is discontinued operations?
14. Examples of unusual or infrequent items (exceptional items)?
15. What is retrospective application of changes in accounting policies? What is
modified retrospective approach? What is prospective approach? What is
correction of error for prior period?
16. What are operating activities under US GAAP? Under IFRS?
17. Examples of potentially dilutive securities?
18. What is simple capital structure? What is complex capital structure?
19. What is dilutive securities? What is antidilutive securities?
20. How to calculate basis EPS? How to calculate weighted average number of shares
outstanding?
21. How to calculate diluted EPS given convertible preferred shares? Given

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 21. How to calculate diluted EPS given convertible preferred shares? Given
convertible bonds with coupon rate?
22. How treasury stock method works? How to calculate diluted EPS using treasury
stock method?
23. What is common-size income statement?
24. What 4 types of other comprehensive income are not included in net income?
25. Is reclassification from OCI to P&L allowed under IFRS?
26. What is comprehensive income? How to calculate comprehensive income? What
transactions it does not include?
BS 1. What are some limitations of balance sheet in financial analysis?
2. What is classified balance sheet format? What is liquidity-based format?
3. Examples of current assets? How inventories are measured under IFRS? Under US
GAAP?
4. Examples of current liabilities?
5. How PPE and intangible assets are measured under IFRS and US GAAP?
6. Example of how goodwill is created? How is it amortized?
7. What is financial assets measured at FBTPL under IFRS and held-for-trading under
US GAAP?
8. What is financial assets measured at FBTOCI under IFRS and available-for-sale
under US GAAP?
9. What is financial assets measured at cost or amortized cost (held-to-maturity)?
10. Where realized gain for financial assets are shown? What is mark-to-market?
11. Example of different reporting of financial asset and unrealized gain?
12. How deferred tax assets are created? Deferred tax liabilities?
13. How long-term financial liabilities are reported usually?
14. What is contributed capital?
15. What is treasury shares?
16. What is retained earnings?
17. What is accumulated other comprehensive income?
18. How to calculate non-controlling interest (minority interest)?
19. What information is in statement of changes in equity under IFRS?
20. What balance sheet analysis helps to evaluate? What is common-size balance
sheet?
21. Examples of liquidity ratios? Example of solvency ratios?
CFS 1. Examples of operating, investing, financing activities?
2. Is gains/losses cash flow item? Example of non-cash transaction?
3. How interest paid/received and dividends paid/received are treated under IFRS
and under US GAAP?
4. How bank overdrafts are treated under IFRS and under US GAAP? Taxed paid?
5. What is the format of CFS under IFRS and under US GAAP?
6. Which CFS method is encouraged? What activities are the same under both direct
and indirect methods?
7. Example of link between CFS, BS, IS?
8. How to calculate operating cash using direct method?
9. What are uses and sources of cash for assets and liabilities?
10. How to calculate operating cash using indirect method? What to do with any
gains resulted from financing or investing cash flows?
11. How to calculate investing cash from sale of equipment? How to calculate
historical cost of equipment sold? How to calculate accumulated depreciation?
12. How to calculate financing cash? How to calculate net CF from creditors? How to
calculate net CF from shareholders?
13. What are 3 steps of conversion of cash flows from indirect method to direct
method?

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 method?
14. What are 2 common-size cash flow statement approaches?
15. How to calculate free cash flow to firm (FCFF)? How to calculate free cash flow to
equity (FCFE)?
16. Examples of profitability cash flow ratios? Examples of coverage cash flow ratios?
FA 1. What are 6 steps of financial analysis framework and their outputs?
Technique 2. What are some limitations of ratio analysis?
s 3. What is vertical common-size balance sheet analysis?
4. What is time-series analysis?
5. What is cross-sectional analysis (relative analysis)?
6. What is horizontal common size balance sheet analysis?
7. What are single statement ratios? What are mixed ratios?
8. What are activity ratios (asset utilization, operating efficiency ratios)?
9. How to calculate inventory turnover? Days of inventory on hand?
10. How to calculate receivables turnover? Days of sales outstanding?
11. How to calculate payables turnover? How to calculate purchases? Number of
days of payables?
12. How to calculate working capital turnover? How to calculate working capital?
13. How to calculate fixed asset turnover?
14. How to calculate total asset turnover? What higher ratio means?
15. What is liquidity ratios?
16. How to calculate current ratio?
17. How to calculate quick ratio?
18. How to calculate cash ratio?
19. How to calculate defensive interval ratio?
20. How to calculate cash conversion cycle (net operating cycle)? Which number
means high liquidity?
21. What is solvency ratios?
22. How to calculate debt to assets ratio?
23. How to calculate debt to capital ratio?
24. How to calculate debt to equity ratio?
25. How to calculate financial leverage ratio?
26. How to calculate interest coverage ratio (times interest earned)?
27. How to calculate fixed charge coverage ratio?
28. What is profitability ratios?
29. How to calculate gross profit margin? Operating profit margin? Pretax margin?
Net profit margin?
30. How to calculate operating ROA? Return on assets ROA?
31. How to calculate return on total capital? Return on equity ROE? Return on
common equity?
32. How to use DuPont analysis to find other ratios? What is traditional DuPont
equation? What is extended DuPont equation?
33. What are steps of equity valuation process?
34. How to calculate P/E ratio? P/CF ratio? P/S ratio? P/BV ratio?
35. What is valuation ratios?
36. How to calculate basic EPS? Diluted EPS? Cash flow per share? EBITDA per share?
Dividends per share?
37. How to calculate dividend payout ratio? Retention rate? Sustainable growth rate?
38. How to calculate EBITDA interest coverage? Fund from operations (FFO) to debt?
Free operating cash flow to debt? EBIT margin? EBITDA margin? Debt to EBITDA?
Return on capital?
39. What is business or geographic segment?
40. How to calculate segment margin? Segment turnover? Segment ROA? Segment
debt ratio?

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 debt ratio?
Inventorie 1. What is capitalizing?
s 2. What inventory costs are capitalized?
3. What inventory costs are expensed?
4. When specific identification is used?
5. How first in first out (FIFO) valuation method works? What are its advantages?
6. How weighted cost average (WAC) method works?
7. How last in first out (LIFO) method works? Where is it allowed? Why companies
use it?
8. Under which method COGS is the lowest and ending inventory is highest when
increasing prices?
9. What is periodic inventory system? How to calculate COGS, ending inventory?
10. What is perpetual inventory system? For what valuation methods perpetual and
periodic systems can be different?
11. When prices increase and inventory is stable - how LIFO and FIFO different for
COGS, taxes, EBT, ending inventory, cash flow after tax?
12. How to calculate LIFO reserve?
13. How to make adjustments of COGS, inventory and net income from LIFO to FIFO
using LIFO reserve?
14. What methods reflects better COGS? Better inventory value?
15. What happens to LIFO reserve when inventory is liquidated?
16. What is LIFO liquidation? What are warning signs of manipulation of earnings?
17. What are consequences of LIFO liquidation? What adjustments need to make
when LIFO liquidation?
18. How to calculate net realizable value (NRV)?
19. What are upper and lower limits of market value?
20. How inventory is measures and written down under IFRS? Under US GAAP?
21. How inventory write-downs affect current ratio? Inventory turnover and days of
inventory? Net profit and gross profit margin?
22. What disclosures IFRS require concerning inventory? US GAAP?
23. What inventory ratios are important?
24. How inventory ratios are higher/lower under LIFO or FIFO?
LLA 1. When long-lived assets' expenditures are capitalized? When expensed?
2. How purchase of machine affects BS, IS and CFS?
3. How intangible assets are recorded when identifiable? Not identifiable? When
acquired in business combination? Developed internally?
4. How research costs are accounted? How development costs are accounted?
Under IFRS? Under US GAAP?
5. How capitalization affects BS, IS and CFS? In the beginning? In subsequent
periods over asset's useful life?
6. How expensing asset's expenditures affects BS, IS and CFS?
7. What is effects of capitalizing vs expensing on financial statements items?
8. How capitalization of interest works? How it affects financial statements?
9. How to calculate straight line method?
10. How to calculate double declining balance (DDB) method?
11. How to calculate units of production
12. How to calculate carrying amount? Depreciable cost?
13. How straight line method and DDB affect financial statements and ratios?
14. What is revaluation model? Under what standard it is allowed?
15. How downward revaluation is recorded? Upward revaluation?
16. When asset is impaired? Under IFRS? Under US GAAP? How to record the
impairment of asset?
17. Can impairment loss be reversed?

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 17. Can impairment loss be reversed?
18. How impairment of intangible assets with indefinite lives work? Impairment of
LLA held for sale?
19. What are 4 ways of asset derecognition? How are they accounted for?
20. How disclosure of LLA is different under IFRS and US GAAP? For impairment
losses?
21. Which models are used for measuring investment property under IFRS and US
GAAP?
Income 1. What is accounting profit (pretax income, EBT)?
taxes 2. What is income tax expense?
3. What is carrying value?
4. What is taxable income?
5. What is income tax payable?
6. What is tax base of asset?
7. When accounting profit and taxable income differ?
8. How deferred tax liability (DTL) created? How deferred tax asset (DTA) is created?
9. How deferred tax assets and liabilities are classified under IFRS?
10. How to calculate deferred tax liability using tax base?
11. What tax rate should be used for both DTL and DTA?
12. How to calculate income tax expense using change in DTL and change in DTA?
13. Example of calculation of tax base of asset and liability and arising temporary
differences?
14. How to calculate change in tax rate for DTL and DTA?
15. What happens to DTL and DTA with increase in tax rate? With decrease in tax
rate?
16. What is permanent differences? Is any DTL or DTA created? What permanent
differences affect?
17. How to calculate reported effective tax rate?
18. What is temporary differences? What is created when temporary differences
happen?
19. What is created when carrying amount of asset is bigger than tax base? When
carrying amount < tax base? When carrying amount of liability is < or > tax base?
Examples?
20. How to calculate tax loss carry forward?
21. What is tax credit?
22. When it is useless to recognize tax loss carry forward?
23. What tax rate should be used for DTL or DTA?
24. How DTL is treated if it will not be reversed?
25. How DTA is treated if it will not be used in future under US GAAP? What is
valuation allowance?
26. How DTA and DTL are presented under IFRS and US GAAP?
Non- 1. What is the effect of bond issuance in BS, IS, CFS?
Current 2. How to calculate carrying amount of bond? Interest expense? Interest payment?
Liabilities Amortization of discount/premium? Carrying amount at the end of period?
3. How amortization of discount bond is recorded on BS, IS, CFS?
4. How amortization of premium bond is recorded on BS, IS, CFS? At par bond?
5. How zero-coupon bond is amortized on BS, IS?
6. How bond issuance costs are treated under IFRS? Under US GAAP?
7. What happens to effective interest rate that was when the bond was issued?
8. What happens to book value of discount bond through time? To book value of
premium bond?
9. What is effective interest method of amortizing bonds? What is straight-line
method?

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 method?
10. How to calculate gain or loss when derecognition of debt (redemption, retire of
bonds)? How it affects BS, IS?
11. How bond issuance costs are treated when derecognition happens under IFRS?
Under US GAAP?
12. What is technical default?
13. How long-term debt is presented in BS?
14. How lease works?
15. How lease is treated from lessee accounting perspective at inception? After
inception? How finance lease is different from operating lease?
16. What are 4 criteria of lease under US GAAP? How short-term and low value lease
is treated under IFRS?
17. How lease is treated in BS, IS, CFS under IFRS? Under US GAAP for operating
lease?
18. When payments are made in case of lease?
19. How to calculate lease interest expense?
20. How to calculate amortization schedule of lease asset?
21. How to calculate amortization schedule of lease liability?
22. Which has higher initial expense between operating and finance lease? At the
end? Higher assets and debt? Higher net income?
23. How finance lease and operating lease affect assets? Liabilities? Net income early
year and later? Total net income? EBIT? CFO? CFF? Total cash flow?
24. How accounting works for lessor for finance lease? Operating lease? What are
difference under US GAAP?
25. How operating lease, sales-type lease, direct financing lease is treated in BS, IS,
CFS under IFRS? Under US GAAP?
26. How defined contribution plan works? What is plan assets?
27. How defined benefit plan works?
28. What is overfunded plan? Net pension asset?
29. What is underfunded plan? Net pension liability?
30. How net pension liability/asset is treated in financial statements under IFRS?
31. What is employee service costs and past service costs? How it is recognized?
32. How to calculate net interest expense (income accrued)? How change in value of
net defined benefit pension asset or liability is recognized?
33. How to calculate remeasurements? How remeasurements are recognized?
34. What are 5 components of net pension asset/liability under US GAAP?
FR Quality 1. What is financial reporting quality?
2. What is earnings quality?
3. What are combinations of financial reporting and earnings quality inside quality
spectrum?
4. What is aggressive accounting?
5. What is conservative accounting?
6. What are managers' motivations for issuing low quality reports?
7. What are 3 conditions for issuing low quality reports?
8. What are mechanisms for discipline in financial reporting quality?
9. What are drawbacks of audited opinion?
10. What are some ways to increase performance and financial position in reporting
period? In later period?
11. What is cookie jar reserve accounting?
12. What are some warning signs of presentation choices?
13. Examples of cash flow statement manipulation?
14. How revenue recognition can be manipulated?
15. How to check depreciation policies? Inventory costing methods?
16. How to check capitalization policies? Goodwill?

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 16. How to check capitalization policies? Goodwill?
17. How to check allowance for doubtful accounts? Related-party transactions? Tax-
asset valuation accounts?
18. What are 2 main ways to manipulate financial reports?
19. What are 2 possible biases?
20. What to pay attention to when analyzing revenue? Inventories? Capitalization
and deferred costs? Cash flow and net income?
21. What is fourth-quarter surprise?
Applicatio 1. What are some key questions when evaluating past financial performance?
ns of FS 2. Example of change in company's strategy is reflected in its performance?
3. Example of difference in accounting standards can affect financial statements?
4. What 2 ways to project future income?
5. What are some steps in forecasting sales? Expenses? Cash flows?
6. What kind of evaluations credit analysis can have? What is business risk? What is
financial risk?
7. How groups of qualitative factor Moody's use for assigning rating?
8. Example of financial ratios and their criterion for stock screen?
9. What are 3 types of investors who use stock screen?
10. What is back-testing? What are 3 limitations (biases) of back-testing?
11. What are 4 factors to consider when adjusting reported financials?
12. Example of analyst adjustment related to investments?
13. Example of analyst adjustment related to inventory?
14. What to look for when making adjustments related to PPE?
15. Example of analyst adjustments related to goodwill?
Market 1. What are 6 purposes people use financial system for?
Organizati 2. What are 3 main functions of financial system?
on + 3. What is equilibrium interest rate?
Structure 4. What is primary capital markets?
5. What is financial assets? Real assets?
6. What is debt securities? Equity securities?
7. What is publicly traded securities? Privately traded?
8. What is spot market? Forward market?
9. What is financial derivative contract? Physical derivative contract?
10. What is primary market? Secondary market?
11. What is money market? Capital market?
12. What is traditional investment markets? Alternative investment markets?
13. What are types of fixed income? Equity? What is pooled investments?
14. What is reserve currencies?
15. What is physical contract? Financial contract? Contract for difference (CFD)?
Forward contract? Futures contract?
16. What is interest rate swap? Currency swap? Equity swap? Call options? Put
options? Credit default swaps?
17. What is commodities? Real assets?
18. What is brokers? Block brokers? Investment banks? Exchanges? Alternative
trading systems (ATS)? Dark pools? Dealers? Securitization?
19. What is depository institutions and other financial corporations? Insurance
companies? Arbitrageurs? Replication?
20. What is clearinghouse? Depositories and custodians? Escrow agents?
21. What is long position? Example of short position? What is potential reward and
risk for short position? What is short rebate rates?
22. What is leveraged positions? How to calculate leverage ratio?
23. What is initial margin requirement? What is maintenance margin requirement?
24. How to calculate margin call price?

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 24. How to calculate margin call price?
25. How to calculate total return of equity investment in a levered position?
26. What is execution instructions for order? Validity instructions? Clearing
instructions?
27. What is bid and ask price? Bid and ask size? Market bid-ask spread?
28. What is market order? Limit order? All-or-nothing order? Hidden order? Iceberg
order? What are advantages/disadvantages of market vs limit orders?
29. What is day order? Good-till-cancelled order? Immediate or cancel (fill or kill)
order? Good-on-close (market-on-close) order? Stop (stop-loss) order?
30. What is book building? Accelerated book build?
31. What is underwritten offering? Best efforts offering?
32. What is oversubscribed/undersubscribed initial public offering (IPO)? What is
seasoned or secondary offering?
33. What is private placement? Shelf registration? Rights offering?
34. What is call markets? Continuous markets?
35. What is quote-driven (OTC, price-driven, dealer) markets? What is order-driven
markets? What is brokered markets?
36. What is pre-trade transparent market? Post-trade transparent market?
37. Why do we need well-functioning financial system?
38. What are objective of market regulation?
SMI 1. What is price return index?
2. What is total return index?
3. How to calculate single period price return of index?
4. How to calculate single period total return of index?
5. How to calculate index value over multiple time periods?
6. What are 4 factors when constructing security index?
7. How to calculate price weighted index? How to calculate dividend return? How to
calculate total return using price return and dividend return?
8. How to calculate divisor to adjust for stock split?
9. What are advantages and limitations of price weighted index?
10. How to calculate equal weighted index?
11. What are advantage and limitations of equal weighted index?
12. How to calculate weight of security in market capitalization weighted index? How
to calculate market capitalization index? What divisor is used in future values of
market capitalization index?
13. How to calculate price return of index in market capitalization index? Dividend
return? Total return of index?
14. How to calculate price return and total returns of float-adjusted market
capitalization index? What are advantages and limitations of market
capitalization index?
15. What is fundamental weighted index? What is value tilt?
16. What is rebalancing? For which index weighting methods rebalancing is not
necessary?
17. What is reconstitution?
18. What are some uses of market indexes?
19. What is broad market index? Multi-market index? Sector index?
20. What is market capitalization style index? Value/growth style index? Examples of
combination of market capitalization and value/growth style index?
21. What are challenges of construction of fixed-income indexes?
22. What are classifications of fixed-income indexes by market? By type? By
maturity? By credit quality?
23. What is commodity indexes? Important points to consider?
24. What is real estate index? Examples of real estate indexes?
25. What is hedge fund indexes? Important points to consider?

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 25. What is hedge fund indexes? Important points to consider?
Market 1. What is informationally efficient market? What does "quickly" reflect information
Efficiency means?
2. What investment strategy should be used in perfectly efficient market?
3. What is market value? Intrinsic value? How do they compare in highly efficient
market?
4. What 3 factors affect market's efficiency?
5. What 2 types of costs should be considered when evaluating market efficiency?
6. What is weak form of market efficiency? How to check if market is not weak-form
efficient?
7. What is semi-strong form of market efficiency? How to check if market is semi-
strong?
8. What is strong-form? How to check if market is strong-form? Why market are not
strong-form?
9. Examples of calendar anomalies? Example of momentum and overreaction
anomalies?
10. Example of size effect anomalies? Example of value effect anomalies?
11. What is closed-end investments fund discount anomaly? What is earnings
surprise anomaly? What is IPO anomaly? What is predictability of returns based
on prior information anomaly?
12. What is loss aversion? Herding? Overconfidence? Information cascades?
Representativeness? Mental accounts? Conservatism? Narrow framing?
ES 1. Example of statutory voting of common shares? Example of cumulative voting?
Example of different equity shares classes?
2. What is cumulative preference shares? Non-cumulative preference shares?
3. What is participating preference shares? Non-participating?
4. What is convertible preference shares?
5. What are types of private capital?
6. What is market integrated with global market? What are reasons capital flows
between countries might be restricted?
7. What is direct investing? What are potential issues with direct investing?
8. How depository receipts (DR) are created?
9. What is sponsored depository receipts? Unsponsored depository receipts?
10. What is global depository receipts (GDR)? American depository receipts (ADR)?
Global registered shares (GRS) ? Basket of listed depository receipts (BLDR)?
11. What is level I, level II, level II and rule 144A American depository receipts?
12. What are 2 sources of return for equities? What is additional source of return for
foreign securities or depository receipts?
13. What statistic measures risk of equity security?
14. Why preference shares are less risky than common shares? Why cumulative
preference shares are less risky than non-cumulative?
15. What are reasons companies issue equity?
16. What are goals of company's management? What is can/cannot influence?
17. What is ROE? Why ROE can increase over time?
18. What is cost of equity for investors? How it affect share price?
19. How cost of equity can be estimated?
Industry 1. How industry analysis is used in understanding business?
and 2. How industry analysis is used in active equity investment? What is sector rotation
Company strategy?
Analysis 3. How industry analysis is used for portfolio performance attribution?
4. Example of products/services classification of industries?
5. What is cyclical companies? Non-cyclical? Growth cyclical?
6. What is defensive non-cyclical industries? Growth non-cyclical industries?

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 6. What is defensive non-cyclical industries? Growth non-cyclical industries?
7. What are limitations of business-cycle sensitivities classification?
8. What are limitations of statistical similarities classification?
9. What are 4 levels of commercial global industry classification standard (GICS)?
10. Examples of governmental classification system?
11. How commercial classification system is better than governmental? What a
limitations of both classification systems?
12. What is peer group? What are steps to construct a preliminary list of peer
companies?
13. What is strategic group?
14. What Porter's five forces framework is used for?
15. What is threat of substitute products?
16. What is bargaining power of customers?
17. What is bargaining power of suppliers?
18. What is threat of new entrants?
19. What is intensity of rivalry among existing competitors?
20. What is barriers to entry? When high barriers to entry does not mean high pricing
power?
21. How industry concentration affects pricing power and competition? What is
concentrated industry? What is segmented (fragmented) industry?
22. How industry capacity affects pricing power and competition?
23. How market share stability affects competition? How barriers to entry affect
market share stability?
24. Example of high price competition?
25. What is embryonic industry life-cycle?
26. What is growth life-cycle?
27. What is shakeout life-cycle?
28. What is mature life-cycle?
29. What is decline life-cycle?
30. What are limitations of industry life-cycle model?
31. What are 5 external influences affecting industry's growth?
32. What is low-cost strategy (price leadership) in company analysis?
33. What is differentiation strategy?
34. What points should be covered in research report for a company?
35. What are limitations of spreadsheet modeling?
Equity Val 1. When security is overvalued? Fairly valued? Undervalued?
2. How to check calculated with model intrinsic value for correctness?
3. What is present value models (discounted cash flows models)?
4. What is multiplier models (market multiples models)?
5. What is asset-based valuation models?
6. What is regular cash dividends? Special cash dividends? Liquidating cash
dividends?
7. Why stock dividends? Stock split? Reverse stock split? Why they are not relevant
for valuation purposes?
8. What is share repurchase? What are some reasons for share repurchases?
9. What is declaration date? Ex-dividend rate? Holder-of-record date? Payment
date?
10. How to calculate intrinsic value under dividend discount model (DDM)? Using 2nd
CF and NPV on BA II Plus?
11. How to calculate free cash flow to equity (FCFE)? Why it is often used in practice
than DDM?
12. How to calculate required rate of return using capital asset pricing model
(CAPM)?
13. How to calculate intrinsic value of non-convertible, non-callable perpetual share?

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 13. How to calculate intrinsic value of non-convertible, non-callable perpetual share?
Value of preferred share which mature on given date?
14. Will prices of callable (redeemable) shares and shares with retraction option
(putable shares) be higher or lower than with shares with mature date?
15. How to calculate value of share using Gordon growth model? What to use in
numerator depending on timing of first dividend payment? How to calculate
dividend growth rate?
16. What are 4 assumption of Gordon growth model? When not to use Gordon
growth model?
17. How to calculate share value using two-stage DDM? How to calculate terminal
value at time n estimated using Gordon growth model? Using 2nd CF and NPV on
BA II Plus?
18. How three-stage models can be calculated?
19. How to calculate P/E ratio? Which P/E value is preferable? Can it be negative?
20. How to calculate P/B ratio? How to calculate book value of equity per share?
How low P/B companies perform compared to high P/B companies?
21. How to calculate P/S ratio? Can it be negative?
22. How to calculate P/CF ratio?
23. What is common criticism of price multiple ratios?
24. How to calculate forward P/E using dividend payout ratio? How forward P/E is
denoted?
25. What principle is method of comparable based on? Which P/E is better for
company when comparing?
26. How to calculate enterprise value? What is major limitation of enterprise value
model?
27. When EV/EBITDA is used?
28. When asset-based valuation is appropriate? Examples when it is not appropriate?
PM 1. How to calculate diversification ratio?
2. What is planning step? What is investment policy statement (IPS)?
3. What is execution step? What is asset allocation? What is security selection?
What is portfolio construction?
4. What is feedback step?
5. What is investment horizon? What is risk tolerance? What is income needs?
What is liquidity needs? For banks, DB pension plans, endowments and
foundations, insurance companies, mutual funds?
6. What active asset manager does? What passive asset manager does?
7. What traditional asset managers focus on? Alternative asset managers focus on?
8. What is usual ownership structure of asset management firms?
9. What are 3 key trends in asset management industry?
10. How investment products rank based on minimum investment?
11. How mutual funds work? What are advantages?
12. How to calculate net asset value (NAV) per share for mutual fund?
13. What is open-end mutual fund (evergreen fund)?
14. What is closed-end mutual fund?
15. What is no-load fund? Load fund (entry and exit load)?
16. What is money market - taxable or non-taxable mutual fund? Bond mutual fund -
taxable or non-taxable? Stock/index mutual funds - domestic or international?
Hybrid/balanced fund?
17. What is separately manage account (SMA) (managed account, wrap account,
individually managed account)?
18. How exchange traded funds (ETFs) work?
Portfolio 1. How to calculate holding period return? Using net returns only?
Risk and 2. How to calculate mean return? Compounded rate of return?

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Risk and 2. How to calculate mean return? Compounded rate of return?
Return 1 3. How to calculate money-weighted return? When it is appropriate to use? Using
2nd CF and IRR in BA II Plus?
4. How to calculate time-weighted return? What are the steps? When it it
appropriate to use?
5. How to calculate annualized return? Using 2nd ICONV?
6. What is gross return? Net return?
7. How to calculate after-tax nominal return?
8. How to calculate real return?
9. What is leveraged return?
10. How to calculate expected return and variance of portfolio?
11. What asset class historically had the highest risk and return in US?
12. What are 2 assumptions for mean and variance of investments?
13. What is risk aversion? What is risk tolerance? What is risk seeking investor? What
is risk neutral? What is risk averse?
14. How to calculate utility of investment? Which utility will investor prefer?
15. What is indifference curve? How it runs?
16. How indifference curve looks like for high risk averse investor? For moderate risk
aversion? For low risk aversion? For risk neutral? For risk lover investor?
17. What is capital allocation line?
18. What is optimal portfolio? Which intersection of indifference curve and capital
allocation line is the best for optimal portfolio?
19. What are 3 components of portfolio risk?
20. How to calculate risk of two-asset portfolio using correlation coefficient? Using
covariance?
21. How to diversification benefit is shown on the graph of two assets weights
combination?
22. How to calculate variance of multi-asset portfolio?
23. Why correlation is important for diversification? What correlation can reduce risk
to zero for two assets?
24. What is investment opportunity set?
25. What is minimum variance frontier? How it looks on graph?
26. What is global minimum variance portfolio?
27. What is efficient frontier? Why portfolio points on it are preferable for investors?
What is constraint of efficient frontier?
28. What is optimal risky portfolio? Which point on graph is it? What is optimal
capital allocation line?
29. What is optimal investor portfolio?
Portfolio 1. What is homogeneity of expectations?
Risk and 2. What is market portfolio? What is point on graph is it?
Return 2 3. What is capital market line (CML)? How does it look on graph?
4. How to calculate portfolio return on capital market line? What is the intersect of
CML and y-axis?
5. What is market?
6. How to calculate and plot 75% on capital market line given risk-free asset and
index fund return and standard deviation?
7. What is lending portfolios? Where on CML is it located?
8. What is borrowing portfolios (leveraged portfolio)? Where on CML is it located?
What happens to the sign of risk-free asset's weight in portfolio?
9. How to calculate slope for risk-free borrowing portfolio?
10. How to calculate slope for borrowing rate which greater than risk-free rate?
11. How to calculate expected risk and return for borrowing portfolio? Using weights
calculation? Using CML equation?
12. What is systematic risk (systematic variance)? Does it earn a return?

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 12. What is systematic risk (systematic variance)? Does it earn a return?
13. What is nonsystematic risk (nonsystematic variance)? Does it earn a return?
14. What is total risk (total variance)?
15. What is pricing of risk? Pricing of asset is equivalent to finding what?
16. What is macroeconomic models? What is fundamental models? Statistical
models?
17. What is single-factor model? What is formula for market model? What is excess
returns on stock? What is beta? What is error term?
18. How to calculate beta? What is beta<0? Beta>0? Beta=0? Beta=1?
19. How to estimate beta using linear regression? What is the intercept of the line
and y-axis? What is the slope called?
20. How to calculate portfolio beta?
21. What is capital asset pricing model (CAPM) is used for?
22. How to calculate expected rate of return using CAPM?
23. What are 6 assumptions of CAPM?
24. What is security market line? What does the slope equal to?
25. What are the differences between CML and SML? To which securities it applies?
What is x-axis? What is the difference in formulas? What is slope for each equal
to? What are similarities?
26. How to calculate expected return for a portfolio with risk-free asset, mutual fund
and high-risk stock?
27. How expected return using CAPM is used in practice?
28. What are 2 theoretical limitations of CAPM?
29. What are 5 practical limitations of CAPM?
30. What is arbitrage pricing theory (APT)? What is Fama-French three-factor or four-
factor model?
31. How to calculate Sharpe ratio? What are advantages of Sharpe ratio? What are
limitations?
32. How to calculate Treynor ratio? What are limitation of Treynor ratio?
33. How to calculate M-Squared ratio (risk adjusted performance measure, RAP)?
What if it is greater than 0? What if it is equal to 0? What is M2alpha? What are
advantage and limitation?
34. What is Jensen's alpha? What is Jensen's alpha>0? =0? <0? How is it denoted?
35. What is security characteristic line (SCL)? What is slope equal to? How to
calculate it?
36. How security selection works using SML graph? Which points are undervalued?
Which points are overvalued?
37. Holding how many stocks is enough to diversify non-systematic risk?
Portfolio 1. What is investment policy statement (IPS)?
Planning 2. What is ability and willingness to take risk?
and 3. How client's risk tolerance is expressed in IPS?
Constructi 4. Example of absolute risk objective? Example of relative risk objective?
on 5. Example of absolute return objective? Example of relative return objective?
6. What is time horizon investment constraint?
7. What is tax concern investment constraint?
8. What is liquidity requirements investment constraint?
9. What is legal and regulatory investment constraint?
10. What is unique circumstances investment constraint?
11. What is sustainable investing?
12. What is negative screening?
13. What is best-in-class approach for ESG investments?
14. What is shareholder engagement/active ownership?
15. What is thematic or impact investing?
16. What is ESG or full integration?

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 16. What is ESG or full integration?
17. What client information can be gathered?
18. What is capital market expectations?
19. What is strategic asset allocation?
20. What is criteria for defining asset class?
21. How to use asset class correlation matrix? When diversification benefit is high?
22. What are 4 steps of portfolio construction? Where active investment steps start?
23. What is passive investing? Active investing? Rebalancing policy? What is core-
satellite approach to investing?
24. Examples of ESG issues? What are possible limitations of ESG approach?
25. What is risk parity investing?
Risk 1. What is risk? What is risk driver? What is risk position? What is risk exposure?
Managem 2. What is risk management? Is it about minimizing risk?
ent 3. What is risk governance?
4. What is risk identification and measurement?
5. What is risk infrastructure?
6. What is defined policies and processes?
7. What is risk monitoring, mitigation and management?
8. Why governing body is important for risk management? What does good risk
governance do?
9. What are 2 risk tolerance analyses?
10. What risk budgeting does? How it can be measured? What are risk budgeting
benefits?
11. What are 2 categories of risks?
12. What is market risk?
13. What is credit risk?
14. What is liquidity risk?
15. What is operational risk?
16. What is solvency risk?
17. What is settlement risk?
18. What is legal risk?
19. What is regulatory, account, tax risk (compliance risk)?
20. What is model risk?
21. What is tail risk?
22. What is sovereign or political risk?
23. What are 4 basic drivers of risk?
24. What are 8 basic metrics to measure market risk?
25. Why standard deviation is not appropriate for non-normal distributions? Does it
measure unsystematic risk?
26. What is delta, gamma, vega, rho for derivative risk?
27. What is value at risk (VaR)?
28. What is conditional Var (Cvar)?
29. What is risk prevention and avoidance?
30. What is risk acceptance approaches to managing risk? Example of self-insurance?
31. Example of risk transfer?
32. What is risk shifting?
Technical 1. What is technical analysis? Why it is chosen by investors in short-term?
Analysis 2. What are principles and assumptions of technical analysis?
3. What are differences between technical and fundamental analysis?
4. What are drawbacks of technical analysis?
5. What is line chart?
6. What is bar chart?
7. What is candlestick chart?

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 7. What is candlestick chart?
8. What is point and figure chart? What is X and O? What is box size? What is
reversal size?
9. What is relative strength analysis?
10. What is uptrend? What is downtrend?
11. What is support? What is resistance? What is change in polarity?
12. What are 2 categories of chart patterns?
13. What is head and shoulders pattern? How to calculate price target for head and
shoulders pattern? What is inverse head and shoulders pattern?
14. What is double tops and bottoms patterns? What is triple tops and bottoms
patterns?
15. What is triangle pattern? What are 3 types of triangle patterns?
16. What is rectangle pattern? What are 2 types of rectangle pattern?
17. What is flag pattern? What is pennants pattern? What time interval they form
over?
18. What is price-based indicators? What is moving average? What is golden cross?
What is dead cross?
19. What is Bollinger band? What is contrarian strategy?
20. What is momentum oscillators? What is rate of change oscillator?
21. What is relative strength index (RSI)? What is its usual period? What value is
overbought? What value is oversold?
22. What is stochastic oscillator? How to calculate %K and %D? When is bullish
signal? What is bearish signal?
23. What is moving-average convergence/divergence oscillator (MACD)? How it
works? What is convergence pattern? What is divergence pattern?
24. What is sentiment indicators? What is opinion polls?
25. What is put/call ratio? What is CBOE volatility index (VIX)? What is margin debt?
What is short interest? How to calculate short interest ratio?
26. What is flow-of-funds indicators?
27. How to calculate Arms index (TRIN)? What does it mean when the value =1,
above 1, below 1?
28. What is mutual funds cash position? What is new equity issuance? What is
secondary offerings?
29. What is Kondratieff wave? What is 18-year cycle?
30. What is decennial pattern? What is presidential cycle?
31. What is Elliot wave theory? What is impulse phase? What is corrective phase?
What is Fibonacci sequence?
Fintech 1. What is fintech?
2. What is big data? What is volume, velocity and variety of big data?
3. What are sources of traditional data? What are 3 sources of alternate data?
4. What are big data challenges?
5. What is artificial intelligence (AI) computer systems?
6. What is machine learning (ML)? What is training dataset? Validation dataset?
Test dataset?
7. What is supervised learning? What is unsupervised learning? What is deep
learning?
8. What is over-fitting the data? What is black box?
9. What is capture? Curation? Storage? Search? Transfer?
10. What is data visualization? What is heat map? Tag cloud?
11. What is text analytics and natural language processing?
12. Examples of robo-advisory services? What is fully automated digital wealth
managers? Adviser-assisted digital wealth managers?
13. Examples of big data and ML techniques in risk analysis?
14. What is algorithmic trading? What are 3 benefits of algorithmic trading? What is

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 14. What is algorithmic trading? What are 3 benefits of algorithmic trading? What is
high-frequency trading?
15. What is distributed ledger technology (DTL)? What is cryptography? What is
smart contracts? What are benefits of DTL?
16. How blockchain works?
17. What is permissionless networks? Permissioned networks?
18. What is cryptocurrencies? What is initial coin offering (ICO)?
19. What is tokenization?
20. How DTL can help with post-trade clearing and settlement? With compliance?
21. What are challenges of DTL?
Corporate 1. What is corporate governance? What is shareholder theory? What is stakeholder
Governan theory?
ce and 2. What is controlling shareholders? What is non-controlling shareholders?
ESG 3. What is creditors? What is managers and employees? Customers? Suppliers?
Governments/regulators?
4. Examples of shareholder and managers conflicts of interests?
5. Example of controlling and minority shareholders conflict of interests?
6. Examples of shareholders and creditors conflict of interests?
7. What 4 infrastructures are in stakeholder management framework?
8. What is annual general meetings? What is extraordinary general meetings? How
many votes needed for simple decisions and for material decisions? What is
proxy voting? What is cumulative voting?
9. What is board of director mechanisms? What is audit function? What are 2 types
of audit? What is reporting and transparency to shareholders? What is policies on
related-party transactions? Remuneration policies?
10. What is say on pay? Contractual agreements with creditors? Employee laws and
contracts? Contractual agreements with customers and suppliers? Laws and
regulations?
11. What is one-tier board of directors structure? What is two-tier BoD structure?
What is CEO duality? Staggered board?
12. What is duty of care? Duty of loyalty?
13. What is audit committee? Governance committee? Remuneration or
compensation committee? Nomination committee? Risk committee? Investment
committee?
14. What is market factors affecting stakeholder relationships? What is shareholder
engagement? What is shareholder activism? What is competition and takeovers?
What is proxy contest? Tender offer? Hostile takeover?
15. What is non-market factors affecting stakeholder relationships? What is legal
environment? What is common law system? Civil law system? What is media?
What is corporate governance industry (external services)?
16. What is risks of poor governance? Example of weak control systems? What is
ineffective decision-making? What is information asymmetry? What is outsized
remuneration? What is related-party transactions? What is legal, regulatory,
reputational risks? What is default and bankruptcy risks?
17. What is benefits of effective governance? What is operational efficiency? What is
improved control? What is better operating and financial performance? What is
lower default risk and cost of debt?
18. What is dual-class structure of ownership rights? What is electing board
members mechanism of different stock classes?
19. Why analysts look for board of directors representation?
20. What are some warning signs for analysts in remuneration and company
performance?
21. What is cross-shareholdings? Affiliated stakeholders? Activist shareholders?
22. Why analysts assess shareholders' rights? Why analysts assess management of

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 22. Why analysts assess shareholders' rights? Why analysts assess management of
long-term risks?
23. What is ESG integration? What is sustainable and responsible investing? What is
socially responsible investing? What is impact investing?
24. What are environmental factors of ESG? What are social factors considered in
ESG integration?
25. How ESG can be implemented in investment processes? What is negative
screening? What is positive screening? What is best in class screening? What is
full integration in security and industry analysis? What is overlay/portfolio tilt?
What is risk factor/risk premium investing? What is thematic investing? What is
engagement/active ownership?
Capital 1. What is capital budgeting?
budgeting 2. What is generating ideas step? What is analyzing individual proposals? What is
planning and capital budgeting? What is monitoring and post-audit?
3. What is replacement projects? Expansion projects? New products and services?
Mandatory projects? Other projects?
4. Why decisions should be based on incremental cash flows?
5. How timing of cash flows is important?
6. Why cash flows are based on opportunity cost?
7. Why cash flows are analyzed on after-tax basis?
8. Why financial costs are ignored in capital budgeting?
9. What is independent vs mutually exclusive projects?
10. What is project sequencing?
11. What is unlimited funds vs capital rationing?
12. How to calculate NPV? Using 2nd CF, NPV on BA II Plus? How to choose projects
based on NPV?
13. How to calculate IRR? Using 2nd CF, IRR on BA II Plus? What is hurdle rate? How
to choose projects based on IRR?
14. What is payback period? What are drawbacks of using payback period? How to
calculate using 2nd CF, NPV on BA II Plus?
15. What discounted payback period? What are drawbacks? How to calculate using
2nd CF, NPV on BA II Plus?
16. How to calculate average accounting rate of return?
17. How to calculate profitability index (PI) using NPV? How to choose between two
PI? How can it be different compared to choosing based on NPV?
18. What is NPV profile? What is point crossing y-axis? Point crossing x-axis?
19. What is crossover point of NPV profiles? How choosing projects can change
before/after crossover point?
20. When NPV is conflicting with IRR - which metric should be used for choosing
projects? Why not IRR?
21. How many IRR can different projects have with unconventional cash flows?
22. How to calculate share price increasing given NPV?
Cost of 1. What is cost of capital?
Capital 2. How to calculate weighted average cost of capital (WACC) (marginal cost of
capital)? Why debt is after-tax calculated?
3. When calculating WACC do we use weights based on book value or market value?
Do we use target capital structure or current capital structure? If no info on
target capital structure what can analyst do?
4. How investment opportunity schedule (IOS) and marginal cost of capital (MCC)
looks like on graph? What is optimal capital budget point? What is the area on
the left of it means? The area on the right from optimal capital budget point
means what?
5. How WACC or MCC is used in capital budgeting?

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 5. How WACC or MCC is used in capital budgeting?
6. What is yield to maturity approach for cost of debt? How to calculate before-tax
and after-tax cost of debt? Using 2nd TVM on BA II Plus?
7. What is debt rating approach for cost of debt? How it works? Using matric
pricing?
8. How to calculate cost of preferred stock? Do we care about tax rate?
9. How to calculate cost of equity using CAPM approach?
10. How to calculate cost of equity using DDM approach (Gordon growth model)?
What is the rearranged formula for r to find calculate it faster? If you're given D0
(most recent dividend paid) how to calculate D1? How to calculate growth rate
using retention rate?
11. How to calculate cost of equity using bond yield plus risk premium approach?
12. How to calculate beta using pure-play method? What are the steps?
13. How CAPM formula is modified to account of another country risk? How to
calculate country risk premium?
14. How to calculate break point of marginal cost of capital schedule? Can there be
several breakpoints?
15. What is flotation costs? How to account for flotation costs when calculating cost
of equity using Gordon growth model?
16. How to adjust for flotation costs by increasing initial cash flow without changing
cost of equity?
17. What is method for cost of capital used by US CFO usually?
Leverage 1. What are 2 parts totals costs of company?
2. What is leverage?
3. What is operating leverage? What is financial leverage?
4. How higher leverage (fixed costs) affects net income with increase/decrease in
units sold compared to lower leverage?
5. What are 2 parts of business risk?
6. What is sales risk?
7. What is operating risk?
8. How to calculate degree of operating leverage (DOL)? How to calculate DOL given
price per unit, variable per unit, fixed operating cost and quantity?
9. What is degree of financial leverage (DFL)? How to calculate DFL?
10. How leverage (higher debt) affects net income and ROE? Does it increase ROE
volatility?
11. How to calculate total leverage?
12. What is breakeven point? How to calculate breakeven point?
13. What is operating breakeven point? How to calculate operating breakeven point?
Working 1. What is working capital management?
Capital 2. How company and growth rate impacts working capital needs? How
organizational structure impacts working capital needs? How sophistication of
management impacts? How borrowing and investing positions, capacities
impacts?
3. How banking services impacts working capital needs? How interest rates
impacts? How new technologies and new products impacts? How the economy
impacts? How competitors impacts?
4. What is liquidity management?
5. What is primary source of liquidity? What is secondary sources of liquidity? How
each affects operations, financial position?
6. Example of drags on liquidity? Example of pulls on liquidity?
7. How to calculate current ratio?
8. How to calculate quick ratio?
9. How to calculate receivable turnover?

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 9. How to calculate receivable turnover?
10. How to calculate number of days of receivables?
11. How to calculate inventory turnover?
12. How to calculate number of days of inventory?
13. How to calculate payables turnover?
14. How to calculate number of days of payables?
15. How to calculate operating cycle?
16. How to calculate net operating cycle?
17. Examples of cash inflows? Example of cash outflows?
18. What is short-term funds?
19. How to calculate discount-basis yield? How to calculate money market yield?
How to calculate bond-equivalent yield?
20. What is mismatching strategy regarding investing short-term funds? What is
mismatching strategy? What is laddering strategy?
21. What is establishing credit terms in accounts receivable management?
Monitoring credit balances? Measuring performance of credit function?
22. Example of ordinary customer credit terms? What is 2/10 net 45?
23. What is cash before delivery?
24. What is cash on delivery?
25. What is bill-to-bill?
26. What is monthly billing?
27. What is electronic funds transfer? What is lockbox? What is float factor?
28. What is aging schedule? How it works?
29. How economic order quantity works for inventory management?
30. How just-in-time inventory management works?
31. What high inventory turnover means?
32. What is cost of trade credit? How to calculate cost of trade credit? What is n?
When company should pay supplier on discount terms?
33. How to calculate cost of borrowing for line of credit? For banker's acceptance
(when loan amount includes interest)? For commercial paper amount that
includes dealer's fee and backup fee? Do we need to calculate periodic rates first
and then make them annual?
Demand 1. What is the law of demand?
and 2. How demand function looks like? How income and complementary goods are
supply related to quantity demanded? How inverse demand function looks like?
3. How to calculate slope of demand curve?
4. What is movement along the demand curve?
5. What is shift in the demand curve? Changes in what affects this shift?
6. How to calculate own-price elasticity of demand?
7. What is inelastic demand? What is unit elastic? What is elastic demand? On the
graph?
8. What elasticity has steeper curve? Flatter curve?
9. Example of perfectly elastic good? Example of perfectly inelastic good?
10. If there are substitutes - demand is elastic?
11. If portion of budget spent on a good is large - demand is elastic?
12. How time horizon helps determine elasticity?
13. What elasticity of demand has discretionary (not necessary) goods and
nondiscretionary (necessary) goods?
14. How to calculate total expenditure?
15. When elasticity of demand is >1 (elastic demand) - how price and total
expenditure move compared to each other? When elasticity =1? When <1?
16. How to calculate income elasticity of demand?
17. What is normal goods? What income elasticity they have?
18. What is inferior goods? What income elasticity they have?

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 18. What is inferior goods? What income elasticity they have?
19. How to calculate cross-price elasticity of demand?
20. What is the sign (relationship) of cross-price elasticity for substitute goods?
21. What is complements? What is the sign (relationship) of cross-price elasticity for
complements?
22. Example of substitution effect? Example of income effect?
23. Example of Giffen goods?
24. Example of Veblen goods?
25. What 2 two factors of production?
26. What is marginal product of labor?
27. What is marginal product of capital?
28. What is productivity?
29. What is increasing marginal returns?
30. What is law of diminishing marginal returns?
31. How to calculate total cost of production? What are 2 factors that lower cost of
production when output level stays the same?
32. What is total product?
33. How to calculate average product?
34. How to calculate marginal product?
35. How to calculate economic profit (abnormal profit)? How to calculate accounting
profit?
36. How to calculate economic profit using accounting profit? How to calculate
accounting profit using economic profit? What is normal profit?
37. How to calculate marginal revenue?
38. How marginal revenue behaves in perfect competition? Is price constant? How
total revenue increase by when quantity increases by 1 unit?
39. In imperfect competition where marginal revenue crosses total revenue? What
slope has marginal revenue and demand curve in imperfect competition?
40. How to calculate marginal cost? How to calculate short-run marginal cost?
41. What is total cost? What is fixed cost? What is variable cost? How to calculate
average variable cost?
42. When firm's profit is maximized in terms of marginal revenue and marginal cost?
43. In the short run how many factors are fixed? What factor is it usually?
44. How MC, ATC, AVC are related on the graph?
45. When breakeven point happens in terms of total revenue and total cost? In terms
of price (average revenue) and average total cost? What is economic profit at
breakeven? What accounting profit is called at breakeven?
46. What firm should do (operate, shutdown or exit) in short run, long run when TR>
TC? When TR<TC? When TR<TVC?
47. What is economies of scale? What is diseconomies of scale? How it looks
graphically with short-term average total cost (SRATC) and long-run (LRATC)?
What is minimum efficient scale?
Firm and 1. What are 4 types of market structures?
Market 2. What are 5 factors that determine market structure?
Structures 3. Example of perfect competition? Example of monopolistic competition? Example
of oligopoly? Example of monopoly? What different 5 factor each of them have?
4. How demand curve looks like for perfect competition?
5. What 3 factors affect price elasticity of demand? What is elasticity =1? >1? <1?
Example of perfectly elastic good? Example of perfectly inelastic good?
6. What is income elasticity for normal goods? For inferior goods?
7. Example of positive cross-price elasticity goods? Example of negative cross-price
elasticity goods?
8. How to calculate economic profit?
9. How to calculate equilibrium price and quantity given demand and supply

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 9. How to calculate equilibrium price and quantity given demand and supply
functions? How it looks on graph?
10. Why cost curves are U-shaped? What is optimal quantity on graph?
11. Where is profit-maximizing point of graph?
12. What happens to demand curve in perfectly competitive market with more firms
entering?
13. What factor is key in monopolistic competition? Example of firms? What are
characteristics of monopolistic competition?
14. What is optimal output for monopolistic competition?
15. Where is equilibrium quantity and price on graph for monopolistic competition?
16. What are 2 similarities of perfect competition and monopolistic competition?
What are differences?
17. Example of oligopoly firms? What are characteristics of oligopoly?
18. Example of pricing interdependence - kink demand curve in oligopoly? What is
effect of price increase? What is effect of price decrease?
19. What is Cournot assumption? When decision-making of companies happen?
Where price and quantity located on graph compared to monopoly and perfect
competition?
20. Example of Nash equilibrium? Should companies collude in the end or no? When
cartel is formed?
21. How Stackelberg model works?
22. What is dominant or leader firm in oligopoly?
23. Why there is no single optimum price and output for oligopoly? What are optimal
price for kinked demand curve? For dominant firm? For Cournot assumption? For
Nash equilibrium?
24. What are characteristics of monopoly? Example of monopoly? What is natural
monopoly?
25. Example of demand function? And then price function from demand function?
And then total revenue in terms of price function? And then marginal revenue
formula and average revenue formula?
26. How to calculate profit-maximizing output given total cost formula?
27. How to calculate profit-maximizing price using marginal cost and own-price
elasticity of demand?
28. Where on graph is output and price for natural monopoly with no regulation?
With perfect competition? With regulated monopoly?
29. Example of price discrimination and consumer surplus in monopoly?
30. Example of first degree price discrimination? Example of second degree price
discrimination? Example of third degree price discrimination?
31. How to calculate X and Y intercepts on graph given demand function?
32. What is econometric approach to identifying market structure?
33. How to calculate n-firm concentration ratio? What does it equal for perfect
competition? For monopoly? What are disadvantages?
34. How to calculate Hefindahl-Hirschman Index (HHI)? What are disadvantages?
Aggregate 1. What is aggregate output of economy?
Output, 2. What is aggregate income of economy? What it consists of?
Price, 3. What is operating surplus of company?
Growth 4. What is aggregate expenditure? In terms of aggregate output and aggregate
income?
5. What are 2 definitions of GDP?
6. What is intermediate goods? What goods are included in GDP?
7. What is income approach?
8. What is expenditure approach?
9. What is sum-of-value-added method?
10. What is value-of-final-output method?

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10. What is value-of-final-output method?
11. How to calculate nominal GDP? How to calculate real GDP?
12. How to calculate GDP deflator? How to calculate inflation using two GDP
deflators?
13. How to calculate GDP using expenditure approach?
14. What is fiscal deficit?
15. What is trade deficit?
16. How to calculate GDP using income approach? How to calculate gross domestic
income (GDI)? What is consumption of fixed capital (CFC)?
17. How to calculate personal income?
18. How to calculate household disposable income (HDI)?
19. How to calculate household net saving?
20. What aggregate demand curve represents on graph?
21. How to calculate aggregate income? How to calculate savings using investments,
fiscal deficit and trade deficit? What is private saving?
22. How to calculate marginal propensity to save using marginal propensity to
consume?
23. What relationship Investment-Saving (IS) curve shows? What is its slope?
24. What is relationship between interest rate and aggregate income and investment
spending?
25. What is relationship between government spending/taxes and interest rates?
26. What is relationship on graph between income and trade deficit and fiscal
deficit? What slope is for private saving?
27. How interest rate and investment spending are related? And private saving are
related?
28. How investment spending and income are related? How net exports and income
are related?
29. What is the formula for quantity theory of money? What is M? What is P? What
is Y? What is V?
30. How interest rates and demand for money are related? What is slope of LM
curve?
31. What is the point of interception of IS and LM curve?
32. How IS and LM curves can be used to generate AD curve?
33. Which curve is combinations of income and real interest rates at planned
expenditure?
34. What is relationship between investments and real interest rates?
35. What is relationship between investments and aggregate output?
36. Which curve is combinations of income and real interest rates such that supply of
real money = demand for real money?
37. If there is increase in government spending - how it impacts IS, LM, AD curves?
38. If there is increase in nominal money supply - how it impacts IS, LM, AD curves?
39. If price level increased - what is shift in IS, LM, AD curves?
40. If output increased - what is direction of interest rates?
41. When AD curve is flatter?
42. What is aggregate supply curve looks like? For very short run? Short run? Long
run?
43. What is relationship between wages and SRAS curve?
44. How LRAS, SRAS and AD graph looks like?
45. What factors shift AD curve and to what side?
46. What is wealth effect?
47. What factors shift SRAS to left and to right and what factors shift LRAS only?
48. What is potential GDP?
49. What is long-run macroeconomic equilibrium?
50. What is recessionary gap looks like on graph?

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 50. What is recessionary gap looks like on graph?
51. What inflationary gap looks like on graph?
52. What stagflation looks like on graph?
53. How increase/decrease in AS or AD affects real GDP and aggregate price level
(remember different shifts on graph from equilibrium point of AS and AD)?
54. How to calculate per capita GDP?
55. How economic growth is measured?
56. What is sustainable rate of economic growth?
57. What increase is better in real GDP (shift in AD curve) or potential GDP (increase
in productive capacity, shift in LRAS curve)?
58. What 2 reasons potential GDP (productive capacity) increases under Solow
growth model (neo-classical model)?
59. What is the formula of Solow growth model? What is Y? What is A? What is L?
What is K?
60. How growth in potential GDP formula looks like?
61. What are 5 sources of economic growth?
62. How to calculate labor productivity? How to calculate potential GDP using labor
productivity?
Business 1. In which economies business cycles occur? Are they periodic?
Cycles 2. What happens to real GDP in expansion? In peak stage? In contraction/recession?
In trough stage?
3. Where on compared to LRAS line (potential GDP) on the graph is a point when
there is peak stage? Point when there is trough stage?
4. When recession starts in terms of real GDP growth?
5. At what stage labor productivity is the highest?
6. What happens to AD curve when policy-triggered recession?
7. How business cycle affects capital spending?
8. How business cycle affects inventory levels?
9. What are 2 measures of household consumption? Why durable goods are more
sensitive to economic cycle?
10. What is housing sector behavior?
11. What is external trade sector behavior? What happens to imports with increase
in domestic GDP?
12. What is basic principle of neo-classical school?
13. What is Austrian school says about what drives business cycles?
14. What Keynesian school says about government intervention?
15. What Monetarist school says about government intervention?
16. What is new classical school says about expansion and contractions? And what it
recommends doing? What is models without money (Real Business Cycle)
theory? What is models with money?
17. At what stages of business cycles unemployment is highest/lowest? How inflation
changes with business cycles?
18. What is employed? What is working age? What is labor force? What is
unemployed? What is long-term unemployed?
19. What is frictionally unemployed? Structurally unemployed? Underemployed?
Discourage worker? Voluntarily unemployed?
20. How to calculate unemployment rate?
21. Why analyst look at payroll growth?
22. How increase in productivity affects full-time payrolls?
23. What is overheating economy?
24. What is stagflation? Deflation? Hyperinflation? Disinflation?
25. What is price index? How inflation is measured using price index?
26. How to calculate Laspeyres index? Quantity for what year is used? How often
consumption basket is updated? What is substitution bias? Quality bias? New

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 consumption basket is updated? What is substitution bias? Quality bias? New
product bias?
27. How to calculate Paasche index? Quantity of what year is used?
28. How to calculate Fischer index?
29. What is headline inflation?
30. What is core inflation?
31. What is relative price? Sub-index?
32. What is cost-push (wage-push) inflation? Where it shifts SRAS curve?
33. What is demand-pull inflation? Where it shifts AD curve?
34. What is leading economic indicators?
35. What is coincident indicators?
36. What is lagging indicators?
37. What is composite index of indicators?
38. What is diffusion index?
Monetary 1. What is monetary policy?
and Fiscal 2. What is fiscal policy?
Policy 3. What is fractional reserve banking? How it works?
4. How to calculate amount of money created? What is money multiplier in
formula?
5. What is narrow money? What is broad money?
6. What is equation for quantity theory of money? What is money neutrality
principle? How to affects the formula?
7. What is demand for money? What is transaction-related motive for holding
money? Precautionary motive? Speculative motive?
8. How money supply and demand graph looks like?
9. What Fischer effect states?
10. What are different roles of central banks? Regarding lending? Regulation?
Monetary policy? Supervision? Foreign currency and reserves?
11. What is menu costs when high expected inflation? What is shoe leather costs?
Example of wealth transfer between borrowers and lenders when higher
unexpected inflation?
12. What is open market operations? How central banks increase money supply?
Decrease money supply?
13. How changing refinancing rates works? What is official interest rate (policy rate)?
What is repo rates? What is base rates? What is Federal funds rate?
14. How changing reserve requirements works?
15. How increase in official interest rate by central banks affect market rates? Asset
prices? Expectations/confidence? Exchange rates?
16. How increase in official rate impacts individuals/households? Firms? Aggregate
demand? Inflation?
17. What is inflation targeting? What are 3 factors to assess effectiveness and
success of inflation targeting?
18. What is exchange rate targeting? How it works? What is pegged exchange rate?
What happens to monetary policy when exchange rate targeting?
19. Example of contractionary monetary policy? Example of expansionary monetary
policy? Why this is only in the short-run?
20. How to calculate neutral rate? What policy we have when policy rate>neutral
rate? When <neutral rate?
21. What is demand shock source of inflation? What is supply shock?
22. What is limitations of monetary policy? What is quantitative easing?
23. What is primary objective of fiscal policy?
24. Example of expansionary fiscal policy? What is contractionary fiscal policy?
25. What is Keynesian view on fiscal policy? What is Monetarist view?
26. What is budget deficit? What is government revenue? What is government

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 26. What is budget deficit? What is government revenue? What is government
spending?
27. What increase in budget surplus indicates? What increase in budget deficit
indicates?
28. What is government deficit (national debt)?
29. What is Ricardian equivalence? What are 2 schools of thought regarding national
debt?
30. What are advantages of tools of fiscal policy (using indirect taxes, social policies)?
Disadvantages (of capital spending, direct taxes)?
31. How to calculate fiscal multiplier? How to calculate impact of government
spending on total income (output)?
32. What is fiscal policy recognition lag? Action lag? Impact lag?
Internatio 1. What is GDP?
nal Trade 2. What is GNP?
and 3. What is imports?
Capital 4. What is exports?
Flows 5. What is terms of trade?
6. What is net exports? What is trade surplus? Trade deficit? Trade balanced?
7. What is autarky? Closed economy?
8. What is open economy?
9. What is world price?
10. What is free trade?
11. What is trade protection?
12. Example of foreign direct investment (FDI)? Example of foreign portfolio
investment (FPI)?
13. What are some benefits of international trade regarding specialization, product
variety, competition, economies of scale, employment? What are some costs of
international trade regarding income and jobs?
14. Example of absolute advantage?
15. What is comparative advantage?
16. At what terms of trade country gains regarding partner's autarkic prices?
17. What is production possibility frontier (PPF)? Where on the graph is consumption
when countries trade with each other compared to PPF?
18. What is difference between Ricardian model and Heckscher-Ohlin model for
comparative advantage?
19. What determines comparative advantage in Ricardian model?
20. In Heckscher-Ohlin model - which factor benefits more from free trade -
abundant or scarce factor?
21. What is tariffs? Why countries use them?
22. What is small country? What is large country?
23. How welfare effects on tariff graph looks like? Which area is loss in welfare
(deadweight loss)? Which area is tariff earned by government? Which area is
producer surplus before/after tariff? Which point is imports before/after tariff?
Which area is consumer surplus?
24. What is quota? What is import license? What is quota rents?
25. Which area on graph is quota rent? Which area is deadweight loss for quotas
graph? How government revenue can be earned with quotas?
26. What is voluntary export restraint (VER)?
27. What is export subsidies?
28. What happens to national welfare when using tariffs, quotas, export subsidies,
VER?
29. What is regional trading bloc?
30. What are 5 types of regional trading blocs in ascending order?
31. What is balance of payments (BOP)?

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 31. What is balance of payments (BOP)?
32. What is international receipts and international payments - credits or debits?
33. What is credit (+) and debit (-)?
34. What is current account (CA)? Capital account (KA)? Financial account (FA)? What
is basic rule of BOP?
35. What is formula for GDP? How to derive current account (net exports) from it?
What is it when CA>0? When CA<0?
36. How private savings, private investments and government surplus/deficit affects
current account surplus/deficit?
37. What is primary responsibility of international monetary fund (IMF)?
38. What is main objective of World Bank? World trade organization (WTO)?
Currency 1. In exchange rate quote what is price currency? What is base currency?
Exchange 2. What is nominal exchange rate?
Rates 3. How to calculate real exchange rate? How is it related to nominal exchange rate,
base currency CPI, price currency CPI?
4. What is hedging? What is speculating?
5. What is spot exchange rate? What is forward contract?
6. Example of sell side market participants?
7. Example of buy side market participants?
8. What is direct quote? What is indirect quote?
9. How bid-ask quote looks like and what does it mean?
10. How to calculate appreciation/depreciation percent of base currency? Of price
currency?
11. How to calculate third rate using 2 exchange rates (cross-rate calculations)?
12. Example of triangular arbitrage?
13. How to calculate forward rate using forward points? Using 4 decimal convention?
Using 2 decimal convention?
14. How to calculate forward rate of base currency using spot rate of base currency
and risk-free rates of price currency and risk-free rate of base currency? If base
risk-free rate is lower, which currency will appreciate?
15. How to calculate forward rate using risk-free rates and days/360 convention?
16. What is exchange rate regime? What is ideal exchange rate policy?
17. What is formal dollarization?
18. What is monetary union?
19. Example of currency board system?
20. Example of fixed parity regime? Target zone regime?
21. What is crawling peg regime? Crawling bands regime?
22. What is managed float regime? Independently float regime?
23. What is elasticities approach? What is Marshall-Lerner Condition? What value of
equation > 0 says? How to calculate total trade?
24. How to calculate change in exports given currency change, export value and
demand elasticity for export?
25. How to calculate change in imports given currency change, import value and
demand elasticity for import?
26. Under Marshall-Lerner what happens to trade balance (X-M) when domestic
currency appreciates? When domestic currency depreciates? What happens
when Marshall-Lerner doesn’t hold (equation <0)?
27. What is J-curve effect?
28. What is absorption approach? What equation is used? What is balance of trade in
equation? What is national income in equation? What is total expenditure?
Ethics and 1. What is code of conduct?
Trust 2. What is standards of conduct?
3. What is profession? How profession is different from craft guilds, trade bodies?

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 3. What is profession? How profession is different from craft guilds, trade bodies?
4. How professions establish trust?
5. What is CFA institute mission?
6. What is overestimating one's morality?
7. What is situational influences?
8. What is money and prestige influence?
9. What is loyalty to employer, colleague influence?
10. What is compliance culture influence?
11. Example of not legal but ethical actions?
12. Example of legal but not ethical actions?
13. What are 4 steps of ethical decision-making framework?
14. What is identification step?
15. What is consideration step?
16. What is decide and act step?
17. What is reflect step?
Code and 1. What professional conduct program (PCP) and disciplinary review committee
Standards (DRC) are responsible for?
2. What is disciplinary review committee (DRC)?
3. What is CFA institute bylaws and rules of procedure for professional conduct for?
4. What is professional conduct inquiry?
5. What is self-disclosure?
6. What is written complaints?
7. What is evidence of misconduct?
8. What is report by CFA exam proctor?
9. What is investigation?
10. What are 3 possible sanctions proposed by professional conduct staff after
investigation?
11. If member is doesn’t accept charges what happens next?
12. What are 6 principles of Code of Ethics?
13. What are 7 standards of professional conduct?
Guidance 1. I (A) -
I-VII 1. follow stricter law
2. don’t knowingly participate in violations
3. dissociate from activity
4. not knowing laws doesn’t remove responsibility
5. stay informed
6. review and maintain procedures
7. seek legal counsel
2. I (B) -
1. don't compromise your independence/objectivity for gifts (that affects your
independence) or pressure
2. use flat fees and disclose everything
3. use transportation paid by firm only, or by client only if modest and no
other option
4. establish independence policy
3. I (C) -
1. it's all about trust, don't lose it by misrepresenting
2. present and disclose anything as it is
3. check third-party info for possible misrepresentation
4. ensure your analyses have reasonable basis
5. don't cherry pick (selective presentation)
6. don't plagiarize, disclose sources
4. I (D) -

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 4. I (D) -
1. don't be involved in fraud, lying
2. do background checks
3. don't drink business hours, declare bankruptcy if the reason is fraud
5. II (A) -
1. you can act on nonpublic nonmaterial info, using Mosaic theory
2. make sure that info is public
3. if you make research report, don’t have to make it public
4. disseminate material nonpublic info
5. adopt disclosure, compliance procedures
6. use press releases
7. monitor and control how info is used inside company and trading
6. II (B) -
1. don't spread false rumors
2. don't manipulate transactions
7. III (A) -
1. clients' interests come first
2. know who your final clients are
3. don't use money paid by client for services that don't benefit clients (soft
commissions, soft dollars)
4. proxy vote for the benefit of client's interests
5. update clients regularly
6. ask for clients approval
8. III (B) -
1. fairly and objectively dealing - doesn’t mean equally, because clients differ
with services
2. no selective disclosure of recommendations - everyone must have
opportunity to act
3. same commission fees, execution prices, round-lot basis where applicable,
first-in first-out basis
4. shorten the time frame between info dissemination and action
5. develop firm policies
6. disclose trade allocation procedures
7. systematic account review
9. III (C) -
1. determine suitability of investment based on client circumstances, factors
2. sell-side are not responsible for suitability
3. develop good IPS and update it at least annually
4. diversify
5. don't act on client request conflicting with IPS, educate them or update IPS
6. invest according to mandate (if applicable)
10. III (D) -
1. don't misrepresent, mislead, misstate
2. GIPS standard is recommended
11. III (E) -
1. keep all info confidential, past, present
2. comply with law for illegal activity
3. cooperate with CFA PCP if needed because they will keep it confidential
12. IV (A) -
1. work according to hours signed in contract, don’t be mentally occupied
with something else
2. don't do independent work that conflicts with the main work, get approval
from main work employer
3. you can use old clients on new job if didn't sign non-compete agreement

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 3. you can use old clients on new job if didn't sign non-compete agreement
before
4. you can use previous job knowledge and skill but not records/work in
paper/electronic format
5. don't harm employer including usage of social media
6. know all applicable policies - competition, termination, incident-reporting,
etc
13. IV (B) -
1. get written permission for accepting additional compensations from all
parties
2. small, mini gifts are ok
14. IV (C) -
1. monitor for compliance everyone under your supervision
2. have trainings, check compliance procedures and decline supervisory
responsibility in compliance procedures are inadequate
3. know how to detect misconduct and report it and make sure it doesn’t
happen again
4. it's all about good compliance procedures
5. put ethics before compliance rules
15. V (A) -
1. define diligence and reasonable basis
2. check any third-party info, advisor used
3. make sure everything is correct especially if you develop something
4. dissociate from group consensus if you believe it doesn’t have reasonable
and adequate basis
5. develop written guidance and measurable criteria
16. V (B) -
1. communicate clearly and frequently with clients
2. inform clients on investment process
3. disclose risks and limitations, important elements, third-party info
4. distinguish between facts and opinions
17. V (C) -
1. record anything to support analysis, including any media
2. can't use firm's records after you leave
3. can't reuse reports if supporting docs are not available
4. CFA recommends to retain records for 7 years
5. firm is mainly responsible for records
18. VI (A) -
1. disclose any conflicts of interest to employer, to clients
2. disclose any conflicts of interest/pressure from other departments (sell-
side, buy-side)
3. disclose any material stock ownership
4. dissociate from activities that don’t permit disclosure of conflicts of
interests
19. VI (B) -
1. avoid potential conflicts - client shouldn’t be at disadvantage by trade, you
shouldn’t benefit personally from clients' trades
2. trade execution order is clients first, then employers, then your personal
account
3. close family member should be treated as usual client, unless you benefit
directly
4. be careful with IPOs, private placements, have blackout/restricted period
to prevent front-running
5. have reporting/disclosure procedures for investment personnel

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 5. have reporting/disclosure procedures for investment personnel
20. VI (C) -
1. disclose any referral fees before any agreement
2. disclose details of compensation for reference
3. encourage procedures
21. VII (A) -
1. can't discuss any confidential CFA info
2. don't do what's not allowed, including on exam
3. you can express opinion on anything, without telling specific details on CFA
info
22. VII (B) -
1. can't make false statements - like CFA will make get you superior
performance
2. CFA members are those who update professional conduct statement and
pay annual fee, passed all exams and have necessary experience
3. don't misrepresent you relationship to CFA (member, candidate)
GIPS 1. Why GIPS were created? Is it voluntary?
2. What is representative accounts misleading practice?
3. What is survivorship bias practice of presentation?
4. What is varying time periods misleading practice?
5. Who can claim compliance with GIPS?
6. Can investment firm partially comply with GIPS?
7. How GIPS benefits investment management firms?
8. How GIPS benefits investors?
9. Does GIPS eliminate need for due-diligence?
10. What is composite? Examples of composites?
11. What does it mean to include only actual, fee-paying, discretionary portfolios in
composite?
12. When determination of portfolios in composite should be done?
13. Who is responsible for compliance with GIPS?
14. Verification is performed with respect to what? Is it voluntary?
15. Who can perform verification?
16. What are 2 tests of verification?
17. What are 9 section of GIPS?
GIPS 1. What are the goals of GIPS executive committee?
Standards 2. What are key features GIPS?
3. How many minimum years of historical performance firm is required to show
initially?
4. What is the minimum historical performance later?
5. What year is latest edition of GIPS?
6. When laws/regulations conflict with GIPS standards - which firm must choose to
comply with? What disclosure need to make?
7. What is requirements and recommendations? Example? What need to be
implemented to claim compliance?
8. What is fundamentals of compliance section? What is definition of the firm?
What is firm's definition of discretion?
9. Are firms allowed to claim partial compliance?
10. Which statements about calculation methodology are prohibited?
11. Can firms choose to whom the present compliant presentation?
12. Which period is meeting requirement for presentation?
13. How many years firm should include terminated composites?
14. What is compliant presentation?
15. What is possible entity form for firm under GIPS?

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15. What is possible entity form for firm under GIPS?
16. What total firm assets must include (don’t confuse with composite)? What about
assets assigned to sub-advisor?
17. Can changes in firm's organization affect historical composite?
18. What is input data section?
19. What is calculation methodology section?
20. What is composite construction section?
21. What is disclosure section? What is claim of compliance?
22. What is presentation and reporting section?
23. What is real estate section? Do all 0-5 sections apply to real estate section?
24. What is private equity section? Do all 0-5 sections apply to private equity section?
25. Do all 0-5 sections apply to wrap fee/separately managed account (SMA)
portfolios?

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