Don’t feel like looking at my notes any more. Here’s some fantasy booking for the exam. 1. Both FI and Equity will be easy. They’re not gonna slaughter the guinea-pigs on the first trial with the new material. 2. Ins IPS will be Endowment/Foundation. I don’t think there’s enough material on banks to justify a full question (and I’m over the gambler’s fallacy that it’ll finally happen), and DB pension plans aren’t as common in today’s world. 3. A big fat tax question on individual IPS with t* and r*, or accrual equivalent return. 4. The usual derivatives stuff. Calculate # of futures to adjust beta, effective interest rate on a put or collar (they’ve done calls), a butterfly spread max return question. 5. Asset Allocation will have a currency hedging question. 6. Behavioral Finance will be embedded in the ind IPS question. The total weight for PM went down from 40-55% to 35-40% this year, so they have less weight for the sub-sections within PM to have their own questions. 7. Big question on implementation shortfall, and choosing between VWAP/IS/ECN 8. For Econ, Grinold Kroner or Singer-Terhaar, Taylor rule, implication for fiscal/monetary policy on shape of yield curve. Could be a question identifying leading indicators and differentiating them from lagging indicators. Not expecting anything on Fed/Yardeni or Tobin’s Q - these are very old models and have been tested many times before. 9. For Risk, I have a feeling they’ll have a question on when the risk is highest in a int swap vs a currency swap. There will almost certainly be a question on VaR (probably historical method since analytical method has been tested many times). 10. Alt Investments won’t be tested in the AM.
Rather than trading, I’m betting on Performance Eval to show up on AM.
In Econ, I think Pros & Cons of valuation ratios.
I think Risk Mgmt for Individuals and an IPS will show up.
Alts might be tested.
Be prepared for the " INTERMARKET CURVE TRADE" in FI.
I also think, they might test a Pompian or BB&K in Behavioral.
I think there will be 1 question on the exam none of us have seen in any prior CFA Institute Mock,
An unconfirmed source did tell me there will be a question with inflation listed in the problem. One must decide what to do with the inflation figure…Add…Subtract…Maybe even divide taking it geometrically across years to solve for some unknown variable
Haha interesting post. Not much view on it for me. Just share some observations (Perhaps you guys know already)
Simple trend analysis from 2015 - 2018 AM past paper has been performed, there is a rotation between topics for equity, alternative investment, performance evaluation and trading and monitoring e.g. trading appear in 2016 and 2018, alternative investment appear in 2015 and 2017. And Alt investment and performance evaluation tends to occur together while equity and trading is another pairs. So my best guess (Key assumption: history repeat haha and just based on 4 data points) is alt investment and performance evaluation will appear in AM while equity and trading appear in PM.
Good luck all
not punting on GIPS?
Tactics, your exam structure is too good to be true!
Just FYI - Accrual Equivalent Return is no longer testable. They made that section optional in the errata.