CFA Level 1 exam questions could ask you to (1) identify where we are in the business cycle based on certain facts, (2) to identify what happens to GDP, prices, employment, investment, or inventories during a given stage, or (3) discuss the theories of the business cycle.
For the CFA Level 1 exam you’ll need a clear understanding of supply and demand (the curves) and the concept of equilibrium as well as what causes deviations from equilibrium. Pay particular attention to the calculations of producer and consumer surplus as well as the elasticity calculations as they will all be tested.
Adding international investments can provide both return enhancement and diversification benefits, but these benefits are not without challenges. This post breaks down the advantages and costs of international investing as they will be tested on the CFA L3 exam.
If asset allocation is all about determining the amount you invest in each asset class then it’s probably important to know what makes up an asset class. After all, before you can determine which assets to invest in it’s often necessary to specify what the overall universe of different classes actually consists of.
A break down of portfolio rebalancing strategies including calendar and portfolio percentage rebalancing as well as buy and hold, constant mix, and CPPI and how they perform in different types of markets.
Fixed income is a MAJOR section of Level 1 (and L2/L3). This post runs through all the basics presented in SS 15, Reading 51 in the CFA curriculum including the basic structure of a bond, a bond's components and what they all represent, the types of issuers, and highly testable material around tranches and special bond provisions.
When risk management questions come up on the CFA Level 3 exam, they tend to ask about Value at Risk (VAR)--how to calculate it using any of the three common methods, its drawbacks, etc. But there are three other testable areas you shouldn't overlook which are covered in this post.