CFA Level III study guide
Every chapter of all four papers, broken into 285 topics. Each topic shows the concept, a step-by-step way to solve questions, the quickest method for the exam, the mistakes students make and worked examples.
Paper 1: Level III Core
Subjective, written · 28 chaptersCapital Market Expectations, Part 2: Forecasting Asset Class Returns
- Capital Market Expectations Framework and Challenges
- Forecasting Fixed-Income Returns and Yield Curve
- Forecasting Equity Returns: DDM and Grinold-Kroner
- Equity Risk Premium Estimation Approaches
- Forecasting Real Estate and Alternative Asset Returns
- Forecasting Exchange Rates
- Emerging Market Forecasting and Volatility Estimation
Principles of Asset Allocation
- Economic Balance Sheet and Liability-Relative Allocation
- Asset-Only, Liability-Relative and Goals-Based Approaches
- Mean-Variance Optimization and Its Limitations
- Risk Budgeting and Risk Measures in Allocation
- Strategic Asset Allocation Implementation and Asset Classes
- Tactical Asset Allocation and Behavioral Considerations
Overview of Equity Portfolio Management
- Equity Investment Universe and Role in Portfolios
- Equity Indexes and Benchmark Selection
- Passive Equity Investing and Index Replication
- Active Equity Investing: Styles and Approaches
- Active Share and Active Management Decisions
- Equity Portfolio Construction and Manager Selection
- Equity Portfolio Performance Evaluation and Attribution
An Overview of Private Wealth Management
- Private Wealth Management Overview and Client Types
- Investor Characteristics and Life Cycle Stages
- Risk Tolerance: Willingness and Ability to Take Risk
- Investment Policy Statement for Individual Investors
- Financial Planning Process and Client Needs Analysis
- Asset Allocation and Portfolio Considerations for Individuals
Portfolio Management for Institutional Investors
- Institutional Investor Types and Their Needs
- Defined Benefit Pension Plan Portfolio Management
- Defined Contribution Plans and Hybrid Plans
- Endowments and Foundations Investment Policy
- Banks and Insurance Company Portfolio Management
- Sovereign Wealth Funds and Other Institutions
- Liability-Driven and Asset-Liability Management Approaches
Swaps, Forwards, and Futures Strategies
- Interest Rate Swaps for Duration Management
- Currency Swaps and Cross-Currency Exposure
- Equity Swaps and Asset Allocation Changes
- Swaptions and Interest Rate Strategies
- Futures for Asset Allocation and Equity Overlay
- Futures for Fixed Income and Duration Adjustment
- Forwards and Futures for Currency Hedging
- Anticipating Cash Flows and Pre-Investing with Derivatives
Code of Ethics and Standards of Professional Conduct
- Code of Ethics and Preamble
- Evolution and Adoption of the Code and Standards
- Professionalism (Standard I)
- Integrity of Capital Markets (Standard II)
- Duties to Clients (Standard III)
- Duties to Employers (Standard IV)
- Investment Analysis, Recommendations and Actions (Standard V)
- Conflicts of Interest and Responsibilities as a Member (VI and VII)
Paper 2: Portfolio Management Pathway
Subjective, written · 8 chaptersActive Equity Investing: Portfolio Construction
- Active Share and Active Management Framework
- Fundamental Law of Active Management
- Equity Investment Styles and Approaches
- Portfolio Construction Approaches and Weighting
- Managing Risk Budgets and Portfolio Constraints
- Manager Selection and Combining Strategies
- Trading, Rebalancing and Implementation Costs
Paper 3: Private Markets Pathway
Subjective, written · 7 chaptersPaper 4: Private Wealth Pathway
Subjective, written · 7 chaptersWealth Planning
- Private Wealth Management Overview and Client Discovery
- Investment Policy Statement for Private Clients
- Human Capital, Financial Capital and Economic Net Worth
- Lifetime Financial Planning, Retirement and Spending Needs
- Insurance and Risk Management for Individuals
- Tax-Efficient Planning and Account Structuring
- Estate Planning and Wealth Transfer
- Concentrated Positions and Business Owner Wealth
Transferring the Wealth
- Estate Planning Basics and Estate Transfer Objectives
- Legal Systems, Forced Heirship and Marital Property Regimes
- Transfer Taxes: Estate, Inheritance, Gift and Wealth Taxes
- Lifetime Gifts vs Bequests and Freeze Strategies
- Trusts, Foundations and Other Estate Planning Vehicles
- Cross-Border Estate Planning and Tax Issues
- Family Wealth Transfer, Business Succession and Philanthropy