Investment Tools: Economics: Macroeconomic Analysis
1.A: Preliminary Reading: Taking the Nation's Economic Pulse
a: Explain the two approaches to measuring gross domestic product (GDP) and calculate GDP
using each approach.
The expenditure approach is a
Asset Valuation: Debt Investments: Basic Concepts
1.A: Features of Fixed Income Securities
a: Describe the basic features of a bond (maturity, coupon rate, par value, provisions for paying off
bonds, currency denomination, and options granted to issuer o
Asset Valuation: Derivative Investments
a: Define derivative instrument, arbitrage opportunity, forward contract, futures contract, option
(both a put and a call), option on futures, and swap.
A financial derivative is a financial instr
Portfolio Management: Capital Market Theory: Basic Concepts
1.A: The Investment Setting
a: Explain the concept of required rate of return and discuss the three components of an investor's
required rate of return.
Determinants of the required rate of retu
Asset Valuation: Debt Investments: Analysis and Valuation
1.A: Introduction to the Valuation of Fixed Income Securities
a: Describe the fundamental principles of bond valuation.
Bond investors are basically entitled to two distinct types of cash flows: 1
Asset Valuation: Market and Instruments
1: Preliminary Reading Selecting Investments in Global Market
a: Discuss the characteristics of fixed-income securities available to investors, including US
Treasury securities, corporate bonds, and Eurobonds.
Asset Valuation: Equity Investments
1.A: An Introduction to Security Valuation
a: Explain the top-down approach and its underlying logic to the security valuation process.
Step 1 General economic influences: fiscal policy: tax cuts encourage spending and
Asset Valuation: Alternative Investments
1: Real Estate and Other Tangible Investments
a: Describe how real estate investment objectives are set.
Setting investment objectives involves two steps: Consider the differences in the investment
Corporate Finance: Corporate Investing and Financing
1. A: An Overview of Financial Management
a: Discuss potential agency problems of stockholders versus 1) managers and 2)
An agency relationship is created when decision-making auth
Investment Tools: Financial Statement Analysis: Liabilities
1.A: Analysis of Income Taxes
a: Define the key terms used in accounting for income taxes.
Tax return terminology:
1. Taxable income: Income based upon IRS rules that determine taxes due.
Investment Tools: Economics: Global Economic Analysis
1.A: Gaining from International Trade
a: State the conditions under which a nation can gain from international trade.
Comparative advantage is the ability to produce a good at a lower opportunity cost
Investment Tools: Financial Statement Analysis: Financial Ratios
and Earnings per Share
1: Analysis of Financial Statements
a: Calculate, interpret, and discuss the uses of measures of a company's internal
liquidity, operating performance, risk profile,
Investment Tools: Economics: Microeconomic Analysis
1.A: Preliminary Reading: Supply, Demand, and the Market Process
a: Explain the laws of supply and demand.
All else held constant, a higher price will increase the supply of goods produced and offered
Investment Tools: Quantitative Methods
1.A.: Time Value of Money
a: Calculate the future value (FV) and present value (PV) of a single sum of money.
FV = PV(1 + I/Y)N
Where PV = the amount of money invested today, I/Y = the rate of return, a
Investment Tools: Financial Statement Analysis: Assets
1.A: Analysis of Inventories
a: Compute ending inventory balances and cost of goods sold using the LIFO,
FIFO, and average cost methods to account for product inventory.
Example: Given the following
Investment Tools: Quantitative Methods
1.A: Sampling and Estimation
a: Define simple random sampling.
Simple random sampling is a method of selecting a sample in such a way that each item or
person in the population begin studied has the same (non-zero)
Investment Tools: Financial Statement Analysis: Basic Concepts
1.A: Preliminary Reading Measuring Business Income
a: Explain why financial statements are prepared at the end of the regular accounting period, why
accounts must be adjusted at the end of ea
Ethical and Professional Standards
1.: Code of Ethics
A.: State the four components of the Code of Ethics.
Members of AIMR shall:
1. Act with integrity, competence, dignity, and in an ethical manner when dealing with
the public, clients, prospects, employ