When a private equity firm is performing valuations of potential acquisitions, this effort is particularly complex because in most cases, except for publictoprivate transactions, there will be no market prices to refer to. Particularly for alternative investment uncorrelated w capital markets low beta, investors want high alpha. Exhibit 2 shows historical returns for various asset classes between. Private equity, real estate, and commodities are all considered alternative because they represent. Within alternative investments, there is a new chapter on commodities, a primer on commodity investing. Cfa level 2 book 4 alternative investments flashcards. Cfa exam testbank the most efficient and successful way to prepare for the cfa exam. To understand the risk and value prop, hedge fund investors want to use regression analysis to separate the alpha return value added and beta return market return associated with the funds return.
For practical purposes i would say there is not a difference, because deals can be structured in almost any way, and that structure doesnt always reflect the underlying economics of whats going on example. Alternative investments and portfolio management schweser, kaplan pdf 3. Learn about the nuances of the cfa level ii exam, which goes more indepth into. Alternative investments apr 25 apr 21 study sessions 2 and 3 quantitative methods 14 may 2 may 4 study session 16 portfolio management 15 may 9.
Figures exclude addons, grants, mergers, secondary stock purchases. Cfa level 1 exam advice for someone without a finance background. The cfa institute updates the program curriculum every year to ensure study materials and exams reflect the most uptodate knowledge and skills required to be successful as an investment professional. In my opinion, if you utilize these study tools, you will be very well prepared for the exam. To clear cfa you need level 1 42%, level 2 46% and for level 3 54%. Caia and chartered alternative investment analyst are registered trademarks owned by chartered alternative investment analyst association. Qualitative analysis, trading theories of alternative investments, indexation and benchmarking. Why do so many people skip or barely study alternative investments. This is referred to as the weighted average cost of capital wacc. Most pe firms spend 12 years raising funds, then funds drawn down for investment. If you have started preparing for the cfa level ii exam, youve come to the right place.
Thissectionprovidesageneralindicationofthevestructuresthatmostinuence. Cfa and chartered financial analyst are registered trademarks owned by cfa institute. As a result, caias book is a wonderful foundation of knowledge for anyone coming into the alternative. Alternative investments may encompass any nontraditional investments of financial assets such as hedge funds, private equity, venture capital, real estate. They can increase diversification and reduce volatility given low correlations to more traditional investments. Jul 05, 2012 cfa level ii alternative investments this is a short video of our cfa level ii alternative investments class recording from quartic training. Cfa level 2 course details, study material and training.
Equity portfolio management study session 11 exam focus dont be misled. The global leader in alternative investment education. Cfa level ii 2014 alternative investments quartic training. Candidates expect to see equity security valuation with lots of math and models, like level ii. I cant imagine preparing for the cfa exam without the kaplan schweser videos, qbank, and practice exams. Investment process, operations, and risk due diligence of fund managers portfolio management, alpha, and beta caia level i exam. This preparatory course is helpful for people who are looking forward to give cfa level 1 exam.
The universe of alternative investments cfa austin. Now, lets look at cfa level 2 and attempt to pass it out with a similar intensity or even more. Profit if expected increase in volatility materialises. Praise for alternative investments caia level 1 third edition by reading caias alternative investments. The reading begins with a list of market participants. What to expect on the cfa level ii exam investopedia.
However,many investmentstendtobemostheavilyinuencedbyonlyasubsetofthosestructures. The first topic test cfai under financial reporting and analysis made me feel like a first grader doing rocket science. Im coming to the end of my readings of cfai books and a thought occured to me. Level ii goes more indepth into investment management and portfolio. Start studying cfa level 2 alternative investments. Bennos concise study notes cfa level ii benno weber benno. So you can reasonably expect encounter 8 to 10 questions from this material on exam day. Whether presented as a percentage or as the number of questions, you cannot tell exactly how many questions each topic gets in your exam.
Typically 2 % of committed capital could be nav investment banker fees deducted from management fees. There will be no new cfa program curriculum in 2021. By november, i understand that i almost forgot the things i studied. Ethical and professional standards, investment tools, asset classes. In terms of learning, the level ii exam focuses on the application and analysis of concepts learned in level i. I would understand that choice if that section had been relatively big compared to its weight. Online, 20hour, selfpaced course earns ce hours for the cima, cimc, cpwa, cfp designations understand the core concepts in alternative investments gain confidence in discussing and. Quantitative concepts chapter that diversification is the practice of combining different. Topics include alpha and beta drivers, real estate, hedge funds, commodities, managed funds, private equity, derivatives, funds of funds, and risk management. Cfa level ii alternative investments and fixed income schweser 2012 editor on. Jan 21, 2015 cfa level 2 training on alternate investments by vamsidhar ambatipudiiim alumnus at pacegurus. You will get to know private real estate investments, publicly traded real estate securities, private equity valuation standards, commodity derivatives etc. What to expect on the cfa level i exam investopedia. Alternative investments and portfolio management schweser, kaplan pdf cancel reply your email address will not be published.
Alternative investments, derivatives and portfolio management also increase slightly. Caia level i, 3rd edition by donald chambers, mark anson, keith black, and hossein kazemi established for caia level 1. I would argue that this strategy was far from optimal. In this article, we will talk a little about the cfa level 2 exam, and then proceed to how you can access the summary notes. To hedge, according to websters dictionary, is a means of.
Cfa level ii alternative investments and fixed income. Future of finance develops cfa institute thought leadership to help shape a more trustworthy, forwardthinking investment profession that better serves society. Cfa institute does not endorse, promote or warrant the accuracy or quality of this website. Begin your journey to becoming a successful caia candidate kaplan schweser has developed this exclusive ebook for new and aspiring caia candidates. Da4399 cfa level ii quick dd wiley efficient learning. Cfa level 2 exam weights, study plan, tips, pass rates, fees. Many alternative investments use a partnership structure. It means that the 2020 curriculum will apply to all cfa exams taking place at all 2021 exam dates cfa institute made this decision because of the covid19 pandemic and postponed june 2020 exams. Perhaps because of its coverage or simply because it is the final level, many cfa candidates consider level iii the most enjoyable of the three levels. In each cheat sheet article, we will cover the basics of what you need to know before diving into the material what its about in a nutshell, how significant is it in the cfa exams, reallife applications, and tips for the cfa exams. Please find below an analysis of cfa level 2 vs level 1, curriculum, exam grading and pass rate trend. The topics should be familiar to level 1 candidate. Im also going to merge loss 26e and 26f in with 26f for each alternative investment class because this is a better way to organize the things you need to.
Cfa exam, cfa exam level 2, investment management this lesson is part 1 of 9 in the course alternative assets alterative assets are a major theme in the investing world, so cfai expects candidates to have general knowledge about assets classes that are beyond the traditional categories of equitystock and debtfixed income. Level 2 cfa exam topic weights given in ranges arent very helpful, are they. Jan 24, 2017 alternative investments portfolio management important points. The curriculum consists of 10 topics that are grouped into four areas. Despite unique risks and considerations, alternative investments can be useful tools to improve the riskreturn characteristics of an investment portfolio. For instance, if the section was 10% of the reading and only counted as 3% on the test, that would be a reasonable choice. This chapter includes a glossary of terms defining the facets and complexities that make up the alternative investment space. First of all, congratulations and good luck for cfa level 2. Level ii assesses application of the knowledge and analytics. Start studying cfa level 2 book 4 alternative investments.
Cfa level 2 publicly traded real estate securities. Explain alternative methods of calculating the weights used in the wacc. By marc the cheat sheet articles are a series of articles, each focusing on one specific topic of the cfa exam for one specific cfa level. This study session covers investments in other companies, post employment benefits. Alternative investments portfolio management cfa materials. Recently, they have covered the material on private equity valuation. Buy cfa 2019 schweser level 2 schwesernotes book 5. For this article, we will look at alternative investments for cfa level i.
Given that it is the cost that a company incurs to raise. Cfa level 2 alternative investments flashcards quizlet. Financer trading practice exams books are the perfect complement to the official curriculum alternative investments. Due to the postponement of the june 2020 exam, cfa institute has made the decision to freeze the 2020 cfa program curriculum for two exam cycles.
The ecology of alternative investments alternative investments are supported by a host of service providers and governed by regulations, which differ by location. Equity investments principles designed to address the learning outcome statements set forth by cpa institute. Cfa 2020 level 1 volume 6 alternative investments and portfolio managment. Ethics case content for 2020 in levels ii and iii is almost entirely fresh. Futures markets and contracts page 36 stu d y session 17 reading assignments. Cfa level 2 sample questions, alternative investments. The proportion of equity investments increases greatly from 10% to 1525%. Alternative investments study notes cfa level 1 exam. Our focus is on opportunities for change, and our goal is to motivate and empower the world of finance to become an environment where investor interests come first, markets function at. Study session 11 reading assignments corporate finance, cfa program 20 curriculum, volume 4 cfa institute, 2012 36. If we wanted to present current level 2 topic weights as single values like for level 1 topics, we could use the arithmetic mean. This is also one of the major parts of cfa level 2 course materials.
See updates to the 2018 level ii cfa program curriculum. Cfa level 2 training on alternate investments by vamsidhar ambatipudiiim alumnus at pacegurus. Alternative investments level 2 cfa builds on the skills of the previous module in level 1 by the same name, focusing on alternative investments such as hedge funds, venture capital, private equity and more, whilst focusing more on valuation. Online, 20hour, selfpaced course earns ce hours for the cima, cimc, cpwa, cpa, and cfp designations understand the core concepts in alternative investments gain confidence in. Derivatives and alternative investments by cfa institute. By contrast, you can expect 24 questions on each of the core asset classes, equity and fixedincome. Cfa and chartered financial analyst are registered. Cfa institute does not endorse, promote or warrant the accuracy or quality of 300 hours. Test on alternative investments for cfa level 1 proprofs. This means that all candidates who take the exam in december 2020, or any exam dates offered in 2021, will be tested using the current 2020 cfa program curriculum. The purpose of this text is to show you what a past textbook covered on the topic of quantitative analysis so you get an idea of what the current book is like. Cfa level 1 study materials question bank, mock exams. In section 2, we primarily take the perspective of the private equity firm that is evaluating potential investments.
They decided to study together in order to be better prepared for the exam. Cfa level 2 exam weights, study plan, tips, pass rates, fees if youre looking at cfa level 2 exam prep tips, it can be assumed that you have already completed your cfa level 1 course. We continue our discussion of new level ii readings. Fundamentals fills a critical education gap for those who need to understand the evolving landscape of alternative investments. There are 10 questions in this test from the alternative investments section of the cfa level 1 syllabus.
Two of the important topics like corporate finance and alternative investments are explained in this course in great detail with the help of relevant examples and references. Alternative investments cfa level 2 flashcards quizlet. These topics are divided into 59 readings and take from 100 to 200 hours to read. Wiley caia level 2 alternative investments 3rd editon. If a history graduate passes the cfa level 2 exam, how would he fare against a finance graduate in terms of knowledge. Only 42% of candidates passed the dec 2019 level 1 cfa exam. The term hedge fund includes a multitude of skill based investment strategies. After each reading, they both prepare a truefalse test.
Cfa level ii alternative investments this is a short video of our cfa level ii alternative investments class recording from quartic training. The study session on alternative investments has a 4% weighting on the level 1 cfa exam. Topics that are covered on the cfa level 1 exam include ethical and professional standards, quantitative methods, economics, financial reporting and analysis, corporate finance, portfolio management, equity, fixed income, derivatives, and alternative investments. Methods for valuing some types of alternative investments are quite distinct. Corporate finance and alternate investments for cfa level 1. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Caia level i free ebook pdf download kaplan schweser. See updates to the 2019 level ii cfa program curriculum.
State of alternative investment 2 about caia association the global leader in alternative investment education nonprofit established in 2002, based in amherst, ma, with offices in hong kong, singapore, geneva, and london over 8,700 current charterholders in more than 85 countries. Curriculum overview established in 2002, the chartered alternative investment analyst association is the world leader in alternative investment education. Common features of alternative investments and their markets, and how alternative investments may be. Caia level i, an aspiring investment analyst can quickly get up to speed on all foundational concepts of alternative investments. It then breaks down commodities into the various sectors. Cfa level ii alternative investments and fixed income schweser 2012. December 2020 cfa level 1 exam preparation with analystnotes. Choice a is incorrect because merger arbitrage is an eventdriven strategy. Common elements and differences among the alternative investments available benchmarks and measurement challenges strategies and role in the portfolio due dilligence issues. However, there is the risk that the merger may fall though.