syllabus Flashcards Preview

eff105 > syllabus > Flashcards

Flashcards in syllabus Deck (28):
1

describe assets that may be 
assumed to be risk-free in practical work.

Tbills
Safe government securities
Longer term Gov Bonds
Repo notes
Safe

2

what is meant by a risk-free rate of return

refer to
1. Rate of return
2. Markets
3. Borrowing and lending
4. Level of risk.

3

Describe the typical ways in which investment returns are taxed 


Income
Dividends
Capital
Total returns

4

the effect of 
the taxation basis

on investor behaviour.

5

describe the influences over the commercial and economic 
environment from:

1. central banks 

2. main investor classes 

3. government policy 


6

Fundamental analysis consists of

Principles with respect to the value of
1. Equities, and/or
2. bonds

7

Valuation

Apply appropriate methods of valuation
of individual investments

8

Different valuations:

What differentiates different valuation methods
in different circumstances?

9

Value:

1. fixed income products and derivatives
2. interest rate swaps
3. Interest rate 
futures 

4. arbitrage pricing and
5. the concept of hedging 

6. empirical characteristics of asset prices 

7. fixed income option pricing 

8. evaluating a securitisation
-- (including CBOs and MBSs) 

9. evaluation of a credit derivative 



10

Risk Management :

Consists of methods of
monitoring and controlling risk exposures

11

Types of risk:

1 asset-liability mismatching risk 

2 market risk 

3 credit risk 

4 operational risk 

5 liquidity risk 

6 relative performance risk 


12

explain in the context of mean-variance portfolio theory what is meant by

1. opportunity set 

2. efficient frontier 

3.  indifference curves 

4. the optimum portfolio.

13

market conduct regulatory regimes:

1. Describe the :
--Principles, &
--Aims of
Market conduct regulatory regimes.

14

Stakeholders to whom principles of regulation apply

1. Investment managers
2. Brokers
3. Market Makers
4. Banks
5. Traders

15

Areas where regulatory and legislative principles are applied:

1 trust law 

2 corporate governance 

3 role of the listings authority 

4 environmental and ethical issues 

5 competition and fair trading controls 

6 monopolies regulators 

7 investment restrictions in investment agreements 

8  provision of financial services 

9 institutional investment practices 

10 role and responsibilities of directors 

11 development of international accounting standards



16

knowledge and understanding of the theory of finance:

1. relationship between financial management and acting as an entrepreneur
2.motives for mergers and divestitures
3.key findings in behavioural finance\
4. main steps involved in financial planning

17

specialist financial instruments:

  financial instruments available for short-term lending and borrowing 

  corporate debt and credit derivatives 

  swaps and swaptions 

  private debt 

  asset-backed securities, securitisation 

venture capital 

  hedge funds 

  currency 

  infrastructure 

  commodities 

  structured products 

  new ways of investing in old asset classes 


18

main types of derivative contract :

how traded

define their payoffs.

19

actuarial techniques may be used to:

develop an appropriate
investment strategy.

20

actuarial techniques used:

1  asset pricing models 

2  asset / liability modelling 

3  asset / liability mismatch reserving 

4  credit rating an entity 

5  liability hedging 

6  dynamic liability benchmarks 


21

Investment Performance

1. analyse performance
2. Discuss limitations of analysis and performance measurement techniques

22

performance measurement techniques:

1  portfolio risk and return analysis 

2  equity price 

3  net present value 

4  net asset value 

5  return on capital

23

investment indices:

1. the construction of and
2. the principal features of major investment indices uses of investment indices. 

3. Describe the principal indices of share prices in the
South African,
United Kingdom,
United States,
Japanese,
German and
French stock markets. 

4. Describe the principal bond indices
--(South African and global). 

5. Explain the problems encountered in constructing property indices.

24

Portfolio Performance Assessment:

Discuss

1. performance of an investment portfolio
2. the limitations of such portfolio measurement.
3. Assess the performance of a portfolio relative to
1. a published market index. 

2. a predetermined bench- mark portfolio. 

4. Analyse the performance of a portfolio into components relating to
---investment sector selection and
---individual stock selection. 


5. Discuss the relative merits of assessing portfolio performance relative to published indices, other portfolios or a predetermined benchmark portfolio. 


6. Discuss the uses of risk-adjusted performance measures. 


7.  Discuss the value of portfolio performance measurement and its limitations.

25

the principal styles in portfolio management:

1. including risk control techniques.
2.  Describe and discuss the principal active management “styles”
--value,
--growth,
--momentum,
--rotational


26

Techniques and Uses of Portfolio Management

1. principal equity portfolio management techniques.

2. principal bond portfolio management techniques.
3. uses institutional investor might make of
1. financial 
futures and
2.options,
3. over the counter contracts.
4. interest 
rate swaps and
5. currency swaps. 

6. forward 
foreign exchange contracts for currency hedging
4.  usefulness of multifactor models in practical investment 
management
and risk control.
5. problems of making significant changes to the investment 
allocation
of a substantial portfolio
6. Transition management and
asset allocation techniques
(including 
overlay strategies)

27

Describe role of :

The custodian of securities.

28

Portfolio construction with attention to:

1  value at risk 

2  tracking error 

3  risk budgets 

4 Risk
Measurement,
comparison and
attribution of risk