Clear, concise instruction for all CFA Level I concepts and competencies for the 2017 exam The same official curricula that CFA Program candidates receive with program registration is now available publicly for purchase. CFA Program Curriculum 2017 Level I, Volumes 1-6 provides the complete Level I Curriculum for the 2017 exam, delivering the Candidate Body of Knowledge (CBOK) with expert instruction on all ten topic areas of the CFA Program. Fundamental concepts are explained with in-depth discussion and a heavily visual style, while cases and examples demonstrate how concepts apply in real-world scenarios. Coverage includes ethical and professional standards, quantitative analysis, economics, financial reporting and analysis, corporate finance, equities, fixed income, derivatives, alternative investments, and portfolio management, all organized into individual sessions with clearly defined Learning Outcome Statements. Charts, graphs, figures, diagrams, and financial statements illustrate concepts to facilitate retention, and practice questions provide the opportunity to gauge your understanding while reinforcing important concepts. The Level I Curriculum covers a large amount of information; this set breaks the CBOK down into discrete study sessions to help you stay organized and focused on learning-not just memorizing-important CFA concepts. Learning Outcome Statement checklists guide readers to important concepts to derive from the readings Embedded case studies and examples throughout demonstrate practical application of concepts Figures, diagrams, and additional commentary make difficult concepts accessible Practice problems support learning and retention CFA Institute promotes the highest standards of ethics, education, and professional excellence among investment professionals. The CFA Program Curriculum guides you through the breadth of knowledge required to uphold these standards. The three levels of the program build on each other. Level I provides foundational knowledge and teaches the use of investment tools; Level II focuses on application of concepts and analysis, particularly in the valuation of assets; and Level III builds toward synthesis across topics with an emphasis on portfolio management.

Table of Contents:
How to Use the CFA Program Curriculum ix Curriculum Development Process ix Organization of the Curriculum x Features of the Curriculum x Designing Your Personal Study Program xi Feedback xiii Ethical and Professional Standards Study Session 1 Ethical and Professional Standards 3 Reading 1 Ethics and Trust in the Investment Profession 5 Introduction 5 Ethics 6 Ethics and Professionalism 9 Challenges to Ethical Conduct 11 The Importance of Ethical Conduct in the Investment Industry 15 Ethical vs. Legal Standards 17 Ethical Decision-Making Frameworks 20 Applying the Framework 22 Conclusion 27 Summary 28 Reading 2 Code of Ethics and Standards of Professional Conduct 29 Preface 29 Evolution of the CFA Institute Code of Ethics and Standards of Professional Conduct 30 Standards of Practice Handbook 30 Summary of Changes in the Eleventh Edition 31 CFA Institute Professional Conduct Program 33 Adoption of the Code and Standards 34 Acknowledgments 34 Ethics and the Investment Industry 35 Why Ethics Matters 35 CFA Institute Code of Ethics and Standards of Professional Conduct 39 Preamble 39 The Code of Ethics 40 Standards of Professional Conduct 40 Reading 3 Guidance for Standards I–VII 45 Standard I: Professionalism 45 Standard I(A) Knowledge of the Law 45 Guidance 45 Recommended Procedures for Compliance 50 Application of the Standard 51 Standard I(B) Independence and Objectivity 54 Guidance 54 Recommended Procedures for Compliance 59 Application of the Standard 60 Standard I(C) Misrepresentation 67 Guidance 67 Recommended Procedures for Compliance 70 Application of the Standard 72 Standard I(D) Misconduct 77 Guidance 77 Recommended Procedures for Compliance 78 Application of the Standard 78 Standard II: Integrity of Capital Markets 80 Standard II(A) Material Nonpublic Information 80 Guidance 80 Recommended Procedures for Compliance 84 Application of the Standard 87 Standard II(B) Market Manipulation 92 Guidance 92 Application of the Standard 93 Standard III: Duties to Clients 97 Standard III(A) Loyalty, Prudence, and Care 97 Guidance 97 Recommended Procedures for Compliance 101 Application of the Standard 102 Standard III(B) Fair Dealing 106 Guidance 106 Recommended Procedures for Compliance 108 Application of the Standard 110 Standard III(C) Suitability 114 Guidance 114 Recommended Procedures for Compliance 117 Application of the Standard 118 Standard III(D) Performance Presentation 121 Guidance 121 Recommended Procedures for Compliance 122 Application of the Standard 122 Standard III(E) Preservation of Confidentiality 125 Guidance 125 Recommended Procedures for Compliance 127 Application of the Standard 127 Standard IV: Duties to Employers 129 Standard IV(A) Loyalty 129 Guidance 129 Recommended Procedures for Compliance 133 Application of the Standard 133 Standard IV(B) Additional Compensation Arrangements 140 Guidance 140 Recommended Procedures for Compliance 140 Application of the Standard 140 Standard IV(C) Responsibilities of Supervisors 142 Guidance 142 Recommended Procedures for Compliance 144 Application of the Standard 146 Standard V: Investment Analysis, Recommendations, and Actions 150 Standard V(A) Diligence and Reasonable Basis 150 Guidance 150 Recommended Procedures for Compliance 154 Application of the Standard 154 Standard V(B) Communication with Clients and Prospective Clients 161 Guidance 162 Recommended Procedures for Compliance 164 Application of the Standard 165 Standard V(C) Record Retention 170 Guidance 170 Recommended Procedures for Compliance 171 Application of the Standard 172 Standard VI: Conflicts of Interest 173 Standard VI(A) Disclosure of Conflicts 173 Guidance 173 Recommended Procedures for Compliance 176 Application of the Standard 176 Standard VI(B) Priority of Transactions 181 Guidance 181 Recommended Procedures for Compliance 182 Application of the Standard 184 Standard VI(C) Referral Fees 186 Guidance 186 Recommended Procedures for Compliance 186 Application of the Standard 186 Standard VII: Responsibilities as a CFA Institute Member or CFA Candidate 189 Standard VII(A) Conduct as Participants in CFA Institute Programs 189 Guidance 189 Application of the Standard 191 Standard VII(B) Reference to CFA Institute, the CFA Designation, and the CFA Program 194 Guidance 194 Recommended Procedures for Compliance 198 Application of the Standard 198 Practice Problems 201 Solutions 211 Reading 4 Introduction to the Global Investment Performance Standards (GIPS) 219 Why Were the GIPS Standards Created? 219 Who Can Claim Compliance? 220 Who Benefits from Compliance? 220 Composites 221 Verification 221 The Structure of the GIPS Standards 222 Reading 5 The GIPS Standards 223 Preface 223 History 224 Introduction 225 Preamble—Why Is a Global Investment Performance Standard Needed? 225 Objectives 225 Overview 226 Historical Performance Record 226 Compliance 227 Effective Date 227 Implementing a Global Standard 227 Sponsors 228 Provisions of the Global Investment Performance Standards 229 Fundamentals of Compliance 231 Input Data 233 Calculation Methodology 233 Composite Construction 234 Disclosure 235 Presentation and Reporting 238 Real Estate 240 Private Equity 245 Wrap Fee/Separately Managed Account (SMA) Portfolios 248 GIPS Valuation Principles 250 Fair Value Definition 250 Valuation Requirements 251 Valuation Recommendations 252 GIPS Advertising Guidelines 254 Purpose of the GIPS Advertising Guidelines 254 Requirements of the GIPS Advertising Guidelines 254 Verification 256 Scope and Purpose of Verification 256 Required Verification Procedures 257 Performance Examinations 260 GIPS Glossary 260 Appendix A: Sample Compliant Presentations 270 Appendix B: Sample Advertisements 287 Appendix C: Sample List of Composite Descriptions 290 Practice Problems 294 Solutions 295 Quantitative Methods Study Session 2 Quantitative Methods: Basic Concepts 299 Reading 6 The Time Value of Money 301 Introduction 301 Interest Rates: Interpretation 302 The Future Value of a Single Cash Flow 304 The Frequency of Compounding 308 Continuous Compounding 310 Stated and Effective Rates 311 The Future Value of a Series of Cash Flows 312 Equal Cash Flows—Ordinary Annuity 313 Unequal Cash Flows 314 The Present Value of a Single Cash Flow 315 Finding the Present Value of a Single Cash Flow 315 The Frequency of Compounding 317 The Present Value of a Series of Cash Flows 318 The Present Value of a Series of Equal Cash Flows 318 The Present Value of an Infinite Series of Equal Cash Flows—Perpetuity 323 Present Values Indexed at Times Other than t = 0 324 The Present Value of a Series of Unequal Cash Flows 326 Solving for Rates, Number of Periods, or Size of Annuity Payments 326 Solving for Interest Rates and Growth Rates 327 Solving for the Number of Periods 329 Solving for the Size of Annuity Payments 330 Review of Present and Future Value Equivalence 334 The Cash Flow Additivity Principle 336 Summary 337 Practice Problems 338 Solutions 343 Reading 7 Discounted Cash Flow Applications 357 Introduction 357 Net Present Value and Internal Rate of Return 358 Net Present Value and the Net Present Value Rule 358 The Internal Rate of Return and the Internal Rate of Return Rule 360 Problems with the IRR Rule 363 Portfolio Return Measurement 365 Money-Weighted Rate of Return 366 Time-Weighted Rate of Return 367 Money Market Yields 372 Summary 377 Practice Problems 379 Solutions 382 Reading 8 Statistical Concepts and Market Returns 385 Introduction 386 Some Fundamental Concepts 386 The Nature of Statistics 387 Populations and Samples 387 Measurement Scales 388 Summarizing Data Using Frequency Distributions 389 The Graphic Presentation of Data 397 The Histogram 398 The Frequency Polygon and the Cumulative Frequency Distribution 399 Measures of Central Tendency 402 The Arithmetic Mean 402 The Median 407 The Mode 410 Other Concepts of Mean 410 Other Measures of Location: Quantiles 420 Quartiles, Quintiles, Deciles, and Percentiles 420 Quantiles in Investment Practice 424 Measures of Dispersion 426 The Range 427 The Mean Absolute Deviation 427 Population Variance and Population Standard Deviation 429 Sample Variance and Sample Standard Deviation 432 Semivariance, Semideviation, and Related Concepts 436 Chebyshev’s Inequality 437 Coefficient of Variation 439 The Sharpe Ratio 441 Symmetry and Skewness in Return Distributions 444 Kurtosis in Return Distributions 450 Using Geometric and Arithmetic Means 454 Summary 456 Practice Problems 459 Solutions 466 Reading 9 Probability Concepts 471 Introduction 472 Probability, Expected Value, and Variance 472 Portfolio Expected Return and Variance of Return 494 Topics in Probability 502 Bayes’ Formula 502 Principles of Counting 506 Summary 510 Practice Problems 513 Solutions 517 Study Session 3 Quantitative Methods: Application 521 Reading 10 Common Probability Distributions 523 Introduction to Common Probability Distributions 524 Discrete Random Variables 525 The Discrete Uniform Distribution 526 The Binomial Distribution 528 Continuous Random Variables 537 Continuous Uniform Distribution 538 The Normal Distribution 541 Applications of the Normal Distribution 547 The Lognormal Distribution 549 Monte Carlo Simulation 555 Summary 561 Practice Problems 564 Solutions 569 Reading 11 Sampling and Estimation 575 Introduction 576 Sampling 576 Simple Random Sampling 576 Stratified Random Sampling 578 Time-Series and Cross-Sectional Data 579 Distribution of the Sample Mean 582 The Central Limit Theorem 582 Point and Interval Estimates of the Population Mean 585 Point Estimators 585 Confidence Intervals for the Population Mean 587 Selection of Sample Size 593 More on Sampling 595 Data-Mining Bias 595 Sample Selection Bias 598 Look-Ahead Bias 599 Time-Period Bias 599 Summary 601 Practice Problems 604 Solutions 609 Reading 12 Hypothesis Testing 615 Introduction 616 Hypothesis Testing 617 Hypothesis Tests Concerning the Mean 626 Tests Concerning a Single Mean 626 Tests Concerning Differences between Means 633 Tests Concerning Mean Differences 638 Hypothesis Tests Concerning Variance 642 Tests Concerning a Single Variance 642 Tests Concerning the Equality (Inequality) of Two Variances 644 Other Issues: Nonparametric Inference 647 Tests Concerning Correlation: The Spearman Rank Correlation Coefficient 649 Nonparametric Inference: Summary 651 Summary 652 Practice Problems 655 Solutions 661 Reading 13 Technical Analysis 669 Introduction 669 Technical Analysis: Definition and Scope 670 Principles and Assumptions 670 Technical and Fundamental Analysis 672 Technical Analysis Tools 674 Charts 674 Trend 683 Chart Patterns 686 Technical Indicators 697 Cycles 714 Elliott Wave Theory 715 Intermarket Analysis 718 Summary 720 Practice Problems 723 Solutions 728 Appendices 731 Glossary G-1 Index I-1