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CFA: Chartered Financial Analyst

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To become a CFA Charterholder candidates must pass each of three six-hour exams, possess a bachelor’s degree (or equivalent, as assessed by CFA institute) and have 4 years of work experience in an investment decision-making position.

The CFA is a qualification for finance and investment professionals, particularly in the fields of investment management and financial analysis of stocks, bonds and their derivative assets. The program focuses on portfolio management and financial analysis, and provides a generalist knowledge of other areas of finance.

Fees as of December 2009 for all three exams range from $710 to $955, depending on the date on which the candidate registers to take the exam, plus an additional $400 to $480 for program enrollment for new members.

* The Level I study program emphasizes tools and inputs, and includes an introduction to asset valuation, financial reporting and analysis, and portfolio management techniques.
* The Level II study program emphasizes asset valuation, and includes applications of the tools and inputs (including economics, financial reporting and analysis, and quantitative methods) in asset valuation.
* The Level III study program emphasizes portfolio management, and includes strategies for applying the tools, inputs, and asset valuation models in managing equity, fixed income, and derivative investments for individuals and institutions.
All three exams are administered on paper on a single day; the Level I exam is administered twice a year (usually the first weekend of June and December). The Level II and III exams are administered once a year, usually the first weekend of June.

The curriculum includes these topic areas:
* Ethical and Professional Standards
* Quantitative Methods (such as the time value of money, and statistical inference)
* Economics
* Financial Reporting and Analysis
* Corporate Finance
* Analysis of Investments (stocks, bonds, derivatives, venture capital, real estate, etc.)
* Portfolio Management and Analysis (asset allocation, portfolio risk, performance measurement, etc.)

Unlike many postgraduate programs, the self-directed study format allows you to continue working while you progress.


If you are more mathematically inclined and want to develop a career in Risk Management, then FRM would be useful. If someone wants to get into financial planning, then CFP is an alternative to Graduate degrees. For a financial analyst or investment management career, a CFA is very important. CFA has evolved to a point where you are better off with a CFA certification than an MBA degree.

You can do a PhD in Mathematical Finance or Financial Economics but if I were to hire someone in my finance firm, I will choose someone who understands financial economics.

More efficient use of Information Technology is required for implementing financial solutions for people with moderate means. The middle class need retirement security but are not able to afford personalized services. The internet can handle the routine tasks and reduce the costs.

Business schools should take a cue from other professional schools particularly medicine. There is a much tighter link between the practice and study of medicine. The clinical practice is built into the curriculum. Some MBA students spend their summer in corporate internships. However more practical experience can be acquired by doing a series of internships.

One of the major use of financial engineering is wealthy people avoid taxes and get around the restrictions and regulations. So no social purpose is served. The structured products are used for speculating. However there are many socially valuable ways of applying this technology.

Blogger Note: Zvi Bodie is the Norman and Adele Barron Professor of Management at Boston University. He holds a PhD from the Massachusetts Institute of Technology and has served on the finance faculty at the Harvard Business School and MIT’s Sloan School of Management.
His textbook, Investments, coauthored by Alex Kane and Alan Marcus is the market leader and is used in the certification programs of the CFA Institute and the Society of Actuaries. His textbook Financial Economics is coauthored by Nobel Prize winning economist, Robert C. Merton.
Therefore, I think that there is additional personal incentive for Professor Bodie to promote the CFA and financial economics. I am sorry if my thinking is too narrow.

From the CFA website
In September 2001, Ashley Khoo was living in New York City. In the wake of the 9/11 attacks, she made a decision: to take advantage of every opportunity because life is unpredictable.

CFA will take longer than all to finish and not as versatle as an MBA but is the absolute best for Portfolio Management, security analysis and investment research. MBA is best for I Banking etc, but also is a great compliment to CFA. Master Finance is probably best for Corp.

Written by blueroselady

January 2, 2012 at 2:24 am

Posted in finance

Tagged with ,

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