Does anyone know about a 100-page extra reading on Ethics that can be printed off from the CFA official website? Anyone heard of that before? I’m relying on Schewser only which has only 40 pages’ reading on Ethics. I heard that Ethics was an important part of the exam so I am afraid these 40 pages are just not good enough for the exam.
When you order CFA level 1 texts from CFA institute, the Session 1 material (Ethics and GIPS) is availabe for download. Thats about 160 pages. I don’t think its free.
go to the following link http://www.cfainstitute.org/cfaprog/resources/studysessions.html and you will find the study session 1 reading. it is advisable to read ethics from CFAI text. even schweser makes a mention of that in its notes.
hellokitty2007 Wrote: ------------------------------------------------------- > … I heard that Ethics was an > important part of the exam so I am afraid these 40 > pages are just not good enough for the exam. I’m afraid you’re right. You probably need to learn it from the original text.
manavsachdeva Wrote: ------------------------------------------------------- > > it is advisable to read ethics from CFAI text. > even schweser makes a mention of that in its > notes. “We tried reading it and we think we have it, but we’re not sure. Better go to the source”
Joey mate, I’m unsure what is it that you’re trying to imply. Do let me know if I have misrepresented information in any way.
No - I think your comment is right on. Even Schweser doesn’t understand the intricacies of CFAI’s partially developed and inconsistent ethical principles.
Guys, How many hours on average are needed to get through Ethics?
It took me 12 hours (without taking down notes) to go through the notes, application of standard examples and doing the problems at the back.
HA!! I did it in 15 minutes. This green tea stuff…man, I tells ya.
Ok fine i’ll play nice. I’m about halfway through ethics and I’ve spent about 3-4 hours total thus far.
I did not mention the fact that I have no finance background whatsoever and thus, took me sometime to understand how brokerage/dealers work, what soft dollars are, relationships between investment banking and brokerage, etc. etc. So take out two hours for that and I’ll safely say average should be around 10 hours. Anyway, having said that, I am still having some difficulty understanding what proxy votes are and why do they feature under ethics. If someone could take out some time to explain, I will be most grateful. Cheers
manavsachdeva Wrote: ------------------------------------------------------- > I did not mention the fact that I have no finance > background whatsoever and thus, took me sometime > to understand how brokerage/dealers work, what > soft dollars are, relationships between investment > banking and brokerage, etc. etc. > > So take out two hours for that and I’ll safely say > average should be around 10 hours. > > Anyway, having said that, I am still having some > difficulty understanding what proxy votes are and > why do they feature under ethics. If someone could > take out some time to explain, I will be most > grateful. > > Cheers Yeah reading through ethics i could definitely see how it would be hard to get a full understanding about a lot of the concepts/terms. I’m starting to wonder if having the ethics portion at the very beginning is all that great of an idea, but since the CFA is generally for people who have some sort of a background in finance, I could see exactly why they’d want to reinforce ethics at the very beginning, rather than at the end of each level. The point of the program is to instill a sense of competence/trust with the investing public, and what better way to do it than to start off each level by starting with/reinforcing the ethics portion. Some of the terminology is a bit different from what I learned here in canada (ie: “firewall” vs “chinese walls”) but that’s a minor detail. how are you/other folks finding the quant section?
Oh and to answer your question, a proxy is sort of like being given a right to vote at important meetings/board meetings when it comes to certain issues. Not everyone who holds shares in a company is given the right to vote (you’ll probably read on the various types of shares as you get into equities) but the one’s that are, are given a proxy. This can be signed off by the shareholder to let someone else have the voting right for them, and in this case it happens to be members/candidates (for example, if they were an investment advisor or portfolio manager or stock broker etc). And of course we all know how important it is to vote, especially when it comes to one’s own assets (direction of the company), so naturally the importance placed on voting decisions, as far as actually voting and basing decisions on due diligence, is extremely important to the shareholder, ie: our clients. So it becomes an ethical issue as far as duty of care is concerned. We have to vote based on our clients’ best interests.
Doing the ethics section first is a big mistake. That’s stuff you just cram in during the last few weeks sometime. So CFAI will tell you that voting proxies is an important ethical issue because proxy voting has economic worth and to dissipate that by just throwing away the proxy would be unethical. Shortly afterwards they will give you an arbitrage argument about how you can create a synthetic stock position by buying a futures or forwards contract in the stock and investing in risk free paper. These are exactly the same according to CFAI so they must be priced the same. Except if you own a forward contract you get no voting rights. So what’s the deal - are proxies worth something or not? One of those things they are teaching you is wrong.
JoeyDVivre Wrote: ------------------------------------------------------- > Doing the ethics section first is a big mistake. > That’s stuff you just cram in during the last few > weeks sometime. Yeah, I wonder why CFAI makes it a point to have it as the very first study session in level 1. I could see why it might make some sense for levels 2 and 3, as people will have some background in it while reading thus gaining more out of it, but not for L1. I just don’t see how there’s a natural progression from one topic to the next, if we’re starting off reading about proxies and shares and stocks and bonds when a lot of non-finance people don’t have an understanding of what these terms really mean. Has anyone mentioned it to them?
Everyone has mentioned it to them. They do it that way because it stresses the importance of ethics not for any pedagogical reason. I have tried my best to make my opinion of this ethics stuff well-known. But what about the question above - is proxy voting worth anything so the arbitrage argument is wrong or is CFAI’s principle wrong?
I’m not sure if I see the relation between the two…I dont think a proxy has any real economic value…? Help me out here.
Nvm, a security that carries voting rights would definitely trade at a higher price, but I still don’t see the relationship in your question between the two concepts…explain please.