The CFA Level III Series: Table of Contents

CFA Exam

Table of Contents

The material in this series comes from notes I have taken with reference to official CFA Institute materials or Kaplan Schweser 2020 materials. This series is for educational purposes.

Topics are presented in the order recommended by the CFA study sessions.

Economics (Book 2)

  1. Capital Market Expectations
    1. Framework and Macro Considerations
      1. Framework for Developing Capital Market Expectations
      2. Challenges in Data Forecasting
      3. Analysis of Economic Growth
      4. Approaches to Economic Forecasting
      5. Business Cycle
      6. Inflation
      7. Monetary and Fiscal Policy
        1. Taylor Rule
      8. Yield Curve and the Business Cycle
      9. International Linkages
    2. Forecasting Asset Class Returns
      1. Intro and Tools
      2. Fixed Income Forecasting
        1. Emerging Market Bonds
      3. Equity Forecasting
        1. Grinold-Kroner
        2. Singer – Terhaar Model
      4. Real Estate Forecasting
      5. Exchange Rates Forecasting
      6. Volatility Forecasting

Equity Investments (Book 4)

  1. Equity Investments
    1. Equity Portfolio Management
      1. Overview of Equity Portfolio Management
        1. Role of Equity
        2. Client Considerations
        3. Equity Investment Universe
      2. Passive Equity Investing
        1. Choosing a Benchmark
          1. Index Construction Methodologies
          2. Herfindahl-Hirschman index
        2. Approaches
        3. Portfolio Construction
        4. Tracking Error Management
      3. Active Equity Investing: Strategies
        1. Types of Active Management Strategies
          1. Bottom Up
          2. Top Down
        2. Creating Active Management Strategies
          1. Creating a Fundamental Active Investment Strategy
          2. Creating a Quantitative Active Investment Strategy
      4. Active Equity Investing: Portfolio Construction
        1. Building Blocks of Active Equity Portfolio Construction
          1. Active Return
          2. Fundamental Law of Active Management
        2. Approaches to Portfolio Construction
          1. Active Share and Active Risk
        3. Risk Budgeting
        4. Well Constructed Portfolio
        5. Long/Short, Long Extension, and Market-Neutral Portfolio Construction

Fixed Income (Book 4)

  1. Fixed Income Portfolio Management
    1. Overview of Fixed-Income Portfolio Management
      1. Role of Fixed Income
      2. Fixed Income Mandates
      3. Modeling Return
      4. Leverage in FI Portfolios
    2. Liability-Driven and Index-Based Strategies
      1. Liability-Driven Investing
        1. Immunizing a Single Liability
          1. Macaulay Duration, Money Duration and Modified Duration
          2. Effects of Yield Curve Changes
          3. Interest Rate Immunization
        2. Immunizing Multiple Liabilities
      2. Bond Indexes
        1. Alternative Methods of Obtaining Passive Bond Market Exposure
      3. Laddered Portfolios
    3. Yield Curve Strategies
      1. Introduction (Yield Curve Dynamics, Convexity and Duration Review)
      2. Major Types of Yield Curve Strategies
      3. Strategies under Assumptions of a Stable Yield Curve
      4. Strategies for Changes in Market Level, Slope, or Curvature
        1. Adjusting Convexity
        2. Butterfly and Condor Trades
    4. Fixed Income Active Management: Credit Strategies
      1. Investment Grade and High Yield Bond Portfolios
      2. Credit Spreads
      3. Credit Strategy Approaches
      4. International Credit Portfolios
      5. Structured Financial Investments

Derivatives (Book 3)

  1. Derivatives
    1. Derivatives and Currency Management
      1. Options Strategies
        1. Option Basics
        2. Synthetic Positions
        3. Covered Calls and Protective Puts
        4. Spreads and Combinations
          1. Spreads
          2. Straddle
          3. Collars
        5. Option Greeks
        6. Volatility Skew and Smile
      2. Swaps, Forwards and Futures Strategies
        1. Managing Risk Exposures
          1. Managing Interest Rate Risk
          2. Managing Currency Exposures
          3. Managing Equity Risk
        2. Derivatives on Volatility
      3. Currency Management: An Introduction
        1. FX Concepts
        2. Effects of Currency on Portfolio Risk and Return
        3. Strategic Decisions
        4. Active Strategies/Tactical Decisions
        5. Tools of Currency Management
        6. Hedging Multiple Foreign Currencies
        7. Emerging Market Applications

Alternative Investments (Book 5)

  1. Alternative Investments
    1. Alternative Investments for Portfolio Management
      1. Hedge Fund Strategies
        1. Overview of Hedge Fund Strategies
          1. Equity Strategies
          2. Event Driven Strategies
          3. Relative Value Strategies
          4. Opportunistic Strategies
          5. Specialist Strategies
          6. Multi-manager Strategies
        2. Analysis of Hedge Fund Strategies
        3. Portfolio Contribution of Hedge Fund Strategies
      2. Asset Allocation to Alternative Investments
        1. Role of Alternative Investments
        2. The Investment Opportunity Set
        3. Asset Allocation Approaches

Portfolio Management

  1. Portfolio Management
    1. Behavioral Finance (Book 2)
      1. Behavioral Finance Perspective
        1. Behavioral Finance vs Traditional Finance Overview
        2. Decision Making
        3. Market Behavior and Portfolio Construction
      2. The Behavioral Biases of Individuals
        1. Categorization of Behavioral Biases
          1. Cognitive Errors
          2. Emotional Biases
        2. Investment Policy and Asset Allocation
      3. Behavioral Finance and Investment Processes
        1. Uses and Limitations of Classifying Investors
        2. Adviser-Client Relationship Implications
        3. Portfolio Construction Implication
        4. Analyst Forecasting Implications
        5. Committee Decision Making Implications
        6. Influence on Market Behavior
    2. Asset Allocation and Related Decisions in Portfolio Management (Book 3)
      1. Overview of Asset Allocation
        1. Economic Balance Sheet
        2. Approaches to Asset Allocation
        3. Strategic Asset Allocation
      2. Principles of Asset Allocation
        1. Asset-Only Asset Allocations
          1. Mean Variance Optimization
          2. Monte Carlo Simulations and Addressing Criticisms of MVO
          3. Risk Budgeting Approach
          4. Factor Based Asset Allocation
        2. Liability Relative Asset Allocations
        3. Goals-Based and Miscellaneous Approaches
      3. Asset Allocation with Real-World Constraints
        1. Constraints in Asset Allocation
        2. Asset Allocation for Taxable Investor
        3. Adjusting Strategic Asset Allocation
        4. Behavioral Biases in Asset Allocation
    3. Private Wealth Management (5)
      1. Overview of Private Wealth Management
        1. Understanding Private Clients
        2. Investment Planning
        3. Investment Policy Statement
        4. Portfolio Construction and Monitoring
      2. Taxes and Private Wealth Management in a Global Context
        1. Global Income Tax Structures
        2. After Tax Accumulations and Returns for Taxable Accounts
        3. Types of Investment Accounts
        4. Taxes and Investment Risk, Implications for Wealth Management
      3. Estate Planning in a Global Context
        1. Domestic Estate Planning
        2. Core Capital and Excess Capital
        3. Transferring Excess Capital
        4. Estate Planning Tools
        5. Cross Border Estate Planning
      4. Concentrated Single-Asset Positions
        1. General Principles for Managing Concentrated Single-Asset positions
        2. Managing Risk of Single Stock Positions
          1. Equity Monetization
          2. Hedging
          3. Yield Enhancements and Other Strategies
        3. Managing Risk of Private Business Equity
        4. Managing Risk of Investment Real Estate
      5. Risk Management for Individuals
        1. Human Capital and Financial Capital
        2. Framework for Individual Risk Management
        3. Insurance
          1. Life Insurance Pricing Example
        4. Annuities
    4. Portfolio Management for Institutional Investors (6)
      1. Portfolio Management for Institutional
        1. Overview
        2. Pension Funds
        3. Sovereign Wealth Funds
        4. University Endowments
        5. Private Foundations
        6. Banks and Insurers
          1. Balance Sheet Management and Asset Allocation
    5. Trading, Performance Evaluation and Manager Selection (Book 6)
      1. Trade Strategy and Execution
        1. Trading Strategies and Strategy Selection
        2. Trade Execution
        3. Evaluating Trade Execution
      2. Portfolio Performance Evaluation
        1. Components of Performance Evaluation
        2. Performance Attribution
          1. Approaches to Return Attribution
          2. Risk Attribution
          3. Return Attribution Analysis at Multiple Levels
        3. Benchmarking Investments and Managers
          1. Benchmarking Alternative Investments
        4. Performance Appraisal
      3. Investment Manager Selection
        1. Manager Selection Framework
        2. Quantitative Elements
        3. Qualitative Elements

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