The CFA Level II Series: Table of Contents

Table of Contents

The material in this series comes from notes I have taken, or in some cases references Kaplan Schweser 2019 material directly. This series is for educational purposes only.

  1. Quantitative Methods
    1. Module 7.3 LOS 7.f: Regression coefficient confidence interval
    2. Module 7.5 LOS 7.j: ANOVA Tables, R-squared (adjusted and unadjusted), SEE and F-tests
    3. Module 8.2 LOS 8.c/8.d: Hypothesis testing of regression coefficients with t-statistic and p-statistic
    4. Module 8.6 LOS 8.f: Assumptions of a multiple or simple regression model 
    5. Modules 8.6 – 8.9: Heteroskedasticity, Serial Correlation, Multicollinearity and Model Misspecification
    6. Module 8.6 -8.9 Quantitative Methods – Common Issues with Regression Testing
    7. Module 9.1 LOS 9.a: Forecasting with an AR model
    8. Module 9.2 LOS 9.e: Testing AR models for improper specifications using t-tests
    9. Module 9.2 LOS 9.f: Mean Reversion in Time Series
    10. Module 9.2 LOS 9.h (And General Times Series: Instability of Coefficients in Time Series Models
    11. Module 9.5 LOS 9.m, 9.n: Testing an AR model for ARCH, nonstationarity and cointegration
    12.  Fundamental Linear Regression Concepts
    13.  ANOVA Part I, SST = RSS + SSE
    14.  ANOVA Part II, Significance Testing
  2. Economics
    1. Module 11.1, LOS 11.b: Currency Cross Rates and Triangular Arbitrage
    2. Module 11.2, LOS 11.d: Mark to Market Value of Forward Contract
    3. Module 11.2 LOS 11.e: Purchasing Power Parity Relative PPP
    4. Module 11.2 LOS 11.e: Fischer Relation and International Fischer Relation
    5. Module 11.2, LOS 11.e: Covered Interest Rate Parity and Uncovered Interest Rate Parity
    6. Module 11.3 LOS 11.j: How flows in BOP affect exchange rates
    7. Module 11.3 LOS 11.k: Mundell-Fleming Model, Pure Monetary Model, Dornbusch Overshooting Model, Portfolio Balance Approach
    8. Module 12.1 LOS 12.a: Economic growth factors
    9. Module 12.2 LOS 12.e: Cobb-Douglas growth accounting
    10. Module 12.3 LOS 12.i: Classical growth theory, neoclassical growth theory and endogenous growth theory
    11. Module 13.1 LOS 13.a,13.b: Types of Regulators and Self-Regulation in Financial Markets
    12. Mark-to-Market Value of Currency Contracts
    13. Exchange Rate Models
    14. Growth Models
  3. Financial Reporting & Analysis
    1. Module 14.2 LOS 14.a: Reporting of Intercorporate Investments
    2. Module 14.3 LOS 14.b: Reclassification Rules for Securities Held
    3. Module 14.4 and 14.5: Investment in Associates – Equity Method and Acquisition Method
    4. Module 14.6 and 14.7: Accounting for Business Combinations
    5. Module 15.1 LOS 15.a: Defined Contribution Plan vs Defined Benefit Plan
    6. Module 15.2 15.3, LOS 15.c: Components of the Defined Benefits Plan
    7. Module 15.5, LOS 15.d: Plan Assumptions and Effects of Changes in Assumptions, Ultimate Health Care Trend
    8. Module 15.6 LOS 15.e and 15.f: Analyst Adjustments for Evaluating a Pension Plan
    9. Module 15.7 LOS 15.h: Accounting for share based compensation
    10. Defined Benefit Plan
    11.  Module 16.3, 16.4 and16.5: Multinational Operations
    12. Module 17.1 LOS 17.b: Capital Requirements of Financial Institutions
    13. Module 17.2 – 17.5: CAMELS: Capital Adequacy and Liquidity Position
    14. Module 18.2 LOS 18.e and 18.f: Indicators of earnings quality and the concept of sustainable earnings
    15. Module 18.3 LOS 18.h: Evaluate the earnings of a company
    16. Module 19.2 LOS 19.b: Sources of Earnings and Return on Equity
    17. Module 19.5 LOS 19.e: Balance Sheet Accruals Ratios
    18. Module 19.7 LOS 19.c: Restating a Balance Sheet for an Operating Lease
    19.  Reporting of Intercorporate Investments
  4. Corporate Finance
    1. Module 20.1 LOS 20.a: Expansion/Replacement Project Initial Cash Outlay Calculation
    2. Module 20.2 LOS 20.c: Evaluating Projects with Unequal Lives, Replicable or Not
    3. Module 20.3 LOS 20.h: Economic Income in capital budgeting
    4. Module 20.3 LOS 20.i: Economic profit, residual income, and claims valuation models
    5. Module 21.1 LOS 21.a: MM I and MM II
    6. Module 21.2 LOS 21.a: Costs That Affect Capital Structure
    7. Module 22.1 LOS 22.d: Clientele and Agency effects, tax considerations for dividend policies
    8. Module 22.2 LOS 22.g: Stable, Constant and Residual Dividend Policy
    9. Module 22.2 LOS 22.m: FCFF/FCFE Coverage Ratios
    10. Module 24.1 LOS 24.a and 24.h: Core purpose of Corporate Governance and Its Impact on Valuation
    11. Module 24.1 LOS 24. D and 24.e: Effective Corporate Governance Audits and Other Best Practices
    12. Module 25.1 LOS 20.b: Rationale for Mergers
    13. Module 25.2 LOS 20.f: Hostile Takeover Defenses
    14. Module 25.3 LOS 25.j: Estimate the value of a target company using comparable company and comparable transaction analyses
    15. Module 25.4 LOS 25.k, 25.i: Post-acquisition value created using different payment methods
    16. Module 25.4 LOS 25.n Carve outs, spin-offs and liquidations
    17. Project Selection and Risks
  5. Equity Valuation
    1. Module 27.1 – Equity Pricing Models (Ibbotsen-Chen, CAPM, Fama-French), Equity Risk Premiums & Beta Adjustments
    2. Module 29.1 LOS 29.a: Compare and understand advantages and disadvantages of dividend, free cash flow and residual income discounted cash flow models
    3. Module 29.2 LOS 29.d: Calculate implied growth rate of dividends using the Gordon Growth Model
    4. Module 29.2 LOS 29.e: The PVGO Equation
    5. Module 29.2 LOS 29.f: Justified Leading and Trailing P/E
    6. Module 29.2 LOS 29.h: Pros and Cons of the GGM
    7. Module 29.3 LOS 29.i: Understanding when multistage DDM is applicable
    8. Module 29.3 LOS 29.o: Using DuPont ROE to estimate a sustainable growth rate
    9. Module 30.1 LOS 30.n: When FCFE is Preferred, Ownership Perspective Implication of FCFE
    10. Module 30.2 LOS 30.c: Calculating FCFF and FCFE
    11. Module 30.5 LOS 30.f, 30.g, 30.i, 30.j 30.l: Firm valuation with FCFF and FCFE
    12. Module 31.1 LOS 31.c: Leading and Trailing P/E ratio
    13. Module 31.3: P/S Ratio
    14. Module 31.4, LOS 31.e: Normalizing EPS
    15. Module 31.4 LOS 31.h: Relating Justified PE to Justified PS and Justified PB
    16. Module 31.4, LOS 31.i: Predicted P/E Ratio
    17. Module 31.4, LOS 31.k: PEG ratio and its uses
    18. Module 31.4 LOS 31.n: Enterprise Value Calculation and EV ratios
    19. Module 31.4, LOS 31.p: Momentum indicators in valuation
    20. Module 32.2 LOS 32.c: Residual Income Forecasting
    21. Module 32.2 LOS 32.d: Fundamental determinants of Residual Income
    22. Module 32.4 LOS 32.h: Residual Income Forecasting with a Persistence Factor
    23. Module 33.2 LOS 33.e: Normalizing earnings for Private Companies
  6. Fixed Income
    1. Module 34.1 LOS 34.b: Calculate forward and spot prices using the forward pricing and forward rate models
    2. Module 34.1 LOS 34.c: Bootstrapping Spot Rates
    3. Module 34.3 LOS 34.f: The Swap Rate Curve
    4. Module 34.5: Traditional term structure theories
    5. Module 34.6 LOS 34.i: Overview of Fixed Income Duration Concepts
    6. Module 34.6 LOS 34.k: Modern Term Structure Theory Differences
    7. Module 35.1-35.3, 36.2 Binomial Pricing Models, including Option Bonds
    8. Module 36.1 LOS 36.a: Characteristics of bonds with embedded options
    9. Module 36.1 LOS 36.b Explain the relationships between the values of a callable or putable bond, the underlying option-free (straight) bond, and the embedded option
    10. Module 36.3 LOS 36.d and 36.e: How changes in the yield curve and interest rate volatility affect the value of a call/put bond
    11. Module 36.4 LOS 36.g: Calculation and use of OAS
    12. Module 36.4 LOS 36.h: Effect of interest rate volatility on OAS
    13. Module 36.5 LOS 36.i: Calculate and interpret effective duration of a callable or putable bond
    14. Module 36.5 LOS 36.i: Compare the effective durations of callable, putable and straight bonds
    15. Module 36.6 LOS 36.k and 36.i: One-sided durations and convexity of option bonds
    16. Module 37.1 LOS 37.a: Explain expected exposure, the loss given default, the probability of default, and the credit valuation adjustment
    17. Module 37.3 LOS 37.c: Expected return on bond given transition in its credit rating
    18. Module 36.8 LOS 36.o: Calculate and interpret the components of a convertible bond’s value
    19. Module 37.4 LOS 37.d: Option Analogy of Structural Models of Debt and Reduced Form Models
    20. Module 38.1: CDS Features and Terms
    21. Module 38.2 LOS 38.c: Valuing a CDS after Inception
    22. Module 38.3 LOS 38.e: CDS Use Cases
    23. Forward Rates, Spreads and Interest Rate Structure Models
    24. Structural and Reduced Form Credit Risk Models
  7. Derivatives
    1. Module 39.5: Valuing FRAs
    2. Module 39.7 LOS 39.c and 39.d; Module 39.9: Swap fixed rate calculation and calculating the market value of a swap using SFR, pricing an equity swap
    3. Module 40.1-40.2: Option Binomial Trees
    4. Module 40.2: Put-Call Parity
    5. Module 40.4 & 40.7 LOS 40.k, 40.i: Option Greeks, Synthetic Position, Delta Hedges, Hedge ratio arbitrage
    6. Module 40.6: The Black Scholes Merton Model
    7. Module 40.6 LOS 40.j: Equivalencies in Interest Rate Derivative Contracts & Swaps
    8. Module 40.7 LOS 40.m: Role of Gamma Risk in the BSM model
    9. Module 41.2 LOS 41.c: Characteristics of a covered call
    10.  Option Strategies
  8. Alternative Investments
    1. Module 42.2 LOS 42.g: Direct Capitalization Approach
    2. Module 42.4 LOS 42.i: Valuing Real Estate Using the Cost and Sales Comparison Approach
    3. Module 42.4 LOS 42.i: Calculate the value of a property using the cost approach
    4. Module 42.5 LOS 42.m: Financial ratios used to analyze private real estate investments
    5. Module 43.1 LOS 43.a and 43.b: Advantages and Disadvantages of REOCs and REITs
    6. Module 44.1 LOS 44.a: How Private Equity Creates Value
    7. Module 44.1 LOS 44.b: Private Equity Control Mechanisms
    8. Module 44.1 LOS 44.d: Appropriate Valuation Methods for Venture Capital
    9. Module 44.2 LOS 44.f: Economic terms of a private equity fund
    10. Module 44.2 LOS 44.g: Risks and Costs of Investing in Private Equity
    11. Module 44.4 LOS 44.j and Module 44.5: Calculate Venture Capital Ownership Fractions, Including Over Multiple Rounds
    12. Module 45.1 LOS 45.a: Characteristics of Commodity Sectors
    13. Module 45.1 LOS 45.f: Theories of commodity future’s returns
    14. Module 45.1 LOS 45.i: Commodity swaps characteristics
    15. Module 45.2 LOS 45.h: Contrast roll return in markets in contango and markets in backwardation
  9. Portfolio Management
    1. Module 47.1 LOS 47.a and 47.b: The Arbitrage Pricing Theory (APT) and Recognizing Arbitrage Opportunities by Combining Portfolios
    2. Module 47.2 LOS 47.d: Understanding Factor Models
    3. Module 47.3 LOS 47.e: Components of Active Risk and Active return
    4. Module 47.3 LOS 47.f: Uses of Multifactor models, tracking vs factor portfolios
    5. Module 47.3 LOS 47.f: Active risk squared
    6. Module 49.1 LOS 49.c: Covariance, Risky Cash Flows and Risk Premiums
    7. Module 49.1 LOS 49.f: Effects of Business Cycle on Credit Spreads
    8. Module 50.2 LOS 50.b: The information ratio vs the Sharpe ratio and the optimal risk amount

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *