CFA Exam Complete Prep: Valuation, Ethics, and Analysis

How the income statement, balance sheet, and cash flow statement connect. Focus on the line items and relationships that matter for valuation.

How different accounting policies affect reported earnings and why analysts need to adjust for them. Covers LIFO vs. FIFO, capitalization, and depreciation methods.

Calculating and interpreting the ratios CFA Institute emphasizes most, including DuPont decomposition and how to compare firms across industries.

What EV represents, the formula components (market cap, debt, cash), and why it gives a capital-structure-neutral view of company value.

Step-by-step guide to using EV multiples for comparable company analysis. Includes calculating target multiples, finding benchmark multiples, and imputing implied value.

The conversion formula that trips up CFA candidates: going from implied EV back to equity value by adjusting for debt and cash, then dividing by shares outstanding.

Why net income never pairs with EV, when to use EBIT vs. EBITDA, how to handle preferred stock and minority interests, and other mistakes that cost exam points.

The Gordon Growth Model, multi-stage DDM, and both FCFF and FCFE approaches. Worked examples showing when each model applies and how results compare.

When to use each price multiple, how to interpret them in context, and the relationship between trailing and leading P/E ratios. Includes comparable analysis walkthrough.

NPV, IRR, and payback period decision rules. Calculating WACC from component costs of debt and equity, and why WACC matters for enterprise-level valuations.

A complete case study applying EV multiples, DCF, and P/E analysis to one company. You calculate implied values using all three methods and reconcile the results.

Calculating bond prices from spot rates, understanding yield to maturity, current yield, and yield to call. Includes the bootstrapping method for spot rate curves.

Macaulay duration, modified duration, and effective convexity. How to estimate price changes for a bond portfolio when yields shift.

Expectations theory, liquidity preference, and market segmentation. How to read yield curves and what their shape signals about the economy.

Credit ratings, structural models of default, and valuing bonds with credit spreads. Covers recovery rate assumptions and their impact on pricing.

Immunization, cash flow matching, and liability-driven investing. Includes barbell vs. bullet strategies and when each approach fits.

Building payoff diagrams for calls and puts, deriving put-call parity, and pricing options with binomial trees. Focuses on the CFA's expected calculation methods.

How forward contracts are priced using cost of carry, futures vs. forwards, and interest rate swap valuation. Includes currency swap mechanics.

Valuation approaches for illiquid assets, fee structures that affect returns, and how alternatives fit into a diversified portfolio. Covers the major hedge fund strategies.

Targeted practice on the derivative and alternative investment question types that show up most frequently, with step-by-step solution walkthroughs.

Portfolio expected return and variance calculations, the efficient frontier, and the Capital Market Line. Why diversification reduces risk without reducing expected return.

CAPM assumptions, beta estimation, and the Security Market Line. Extensions to multi-factor models including Fama-French and arbitrage pricing theory.

Information ratio, tracking error, and the active management value-added framework. How to evaluate whether active management is justified for a given asset class.

Building an asset allocation policy from investment objectives and constraints. Covers mean-variance optimization and its practical limitations.

Calculating Value at Risk using parametric, historical simulation, and Monte Carlo methods. How stress tests and scenario analysis complement VaR.

Overconfidence, anchoring, loss aversion, and other cognitive biases. How these biases show up in the CFA curriculum and in real portfolio management.

Interest rate parity, purchasing power parity, and how currency risk affects international portfolio returns. Practical hedging considerations.

Dedication strategies for pension funds and insurance companies. Cash flow matching vs. duration matching and the role of contingent immunization.

The Global Investment Performance Standards in plain language. Key provisions, composite construction rules, and the exam question patterns to expect.

A full walkthrough of creating an Investment Policy Statement for a fictional client, including return objectives, risk tolerance, constraints, and asset allocation.

Tax-efficient investing, concentrated stock positions, charitable giving vehicles, and trust structures. Heavily tested in CFA Level III constructed response.

How the investment objectives and constraints differ for defined benefit plans, foundations, endowments, and insurance companies. Includes liability-driven investing.

Time allocation across topics based on exam weights, spacing your review sessions, and avoiding the trap of spending too long on comfortable subjects.

How to pace yourself through the morning and afternoon sessions, when to skip and return, and strategies for multiple-choice questions with similar answer choices.

A timed mock exam covering all major topic areas. After completing it, detailed explanations walk through each answer and the reasoning behind it.

How Level II item sets work, strategies for reading vignettes efficiently, and the integrated thinking required to answer multi-part questions across topics.

Complex valuation scenarios requiring EV analysis, adjustments to financial statements, and multi-step calculations typical of Level II item sets.

Valuing bonds with embedded options, swap valuation under changing rates, and option strategy analysis in the item set format.

How to structure your answers for maximum points, what CFA graders look for, and how to manage time when you need to calculate and explain your reasoning in writing.

IPS questions, asset allocation justification, and rebalancing decisions presented in constructed response format. Practice writing concise, point-earning answers.

A complete Level III-style vignette covering risk assessment, return requirements, asset allocation, security selection, and performance evaluation.

The same standards tested differently at each level. From Level I recall questions to Level III scenario-based application, with examples of each format.

Essential calculator functions for TVM, bond pricing, statistics, and cash flow analysis. Keystroke sequences for the problems that appear most on the exam.

The formulas that show up year after year across all CFA levels, organized by topic. Includes which ones to memorize and which you can derive during the exam.

How the CFA curriculum translates to roles in equity research, portfolio management, risk management, and corporate finance. What hiring managers expect from charterholders.

A mixed set of 30 problems spanning ethics, valuation, fixed income, derivatives, portfolio management, and financial reporting. Designed to test connections between topics.