Hit List - Most Important Topics

What would you say the most important / most likely to be tested topics are for level 2?

I don’t mean to be a douche, but the CFAI actually posts the answer to this question on their website.

Ethics Alt Assets Quant FRA Equities Derivatives Corp Finance Fixed Income Port Mgmt Econ Good luck.

Guess you misunderstood the post - I know what percentages each book will be tested at. I am wondering what specific LOS’s people think we will likely see on the exam. Some will obviously not be tested. If you were to create a “Hit List” of LOS’s to concentrate on, which ones would they be?

They didn’t test us on temporal vs. all-current last year, so I’d bet a large sum of money that you guys and gals will see that this year. You can thank me later.

naaah…my money is on the new chapter- reading 44. Private Company Valuation. I am expecting one huge question on that.

Right - what fun would it be to write a new chapter & not test it? I’m actually expecting readings 40-44 to be hit hard. The exam theme is “valuation” and that is what these readings are. The rest of equity is fairly easy with the exception of some of the EM stuff. Not to say the valuations are difficult; certainly more tedious though.

If I were you guys, I’d do a search from right after last year’s test (in the midst of all the debate over questions, there were a few threads that listed the topics that weren’t tested - I’d obviously slightly overweight those topics in my studies if I were you).

This is what I’m banking on… Alts Maybe a real estate vignette? ATCFs, ERATs, NPVs…or Private Equity? Carried int, NAV pre/post dist, DPIs, RVPIs etc… I could easily imagine a nice vignette on either of those Quants ANOVA has to show up, right? Maybe a couple of time series q’s? Almost certainly something to do with regression problems and the tests relevant? eg. DW FSA Business combinations, where what goes etc. Adjustments needed for, say, op leases… and effects on ratios… I’m guessing a pension vignette, too…maybe what goes on the IS/BS… And some current/temporal q… Equity Got to nail down FCFF/FCFE, RI, multiples valuation techniques. All the GGM and derivations of… The advantages/disadvantages of each multiple etc, and their fundamentals… And maybe some wordy competition stuff (porter etc)… Cor Fin There’s got to be some sort of capital budgeting question, calculating CFs? Maybe a capital structure q - DOL, DFL etc Hopefully some nice easy corp governance qs! Econ Got to be some FX q’s in there. And growth… FI Binomial trees valuations for puts/calls etc…maybe key duration…yield curves… and I’m expecting some wordy ABS and credit analysis q’s, too… Derivs God knows. This area is killing me. Valuation of futures/forwards, I guess… Portfolio Management I’m guessing ICAPM will come up…some picky qs on axis etc for CML/SML…maybe some 3 asset portfolio variances… These are some of the biggies that I can easily imagine vignettes coming up on, and these are where I’m trying to focus now. Anybody’s guess!

I’m aware I’ve just written most of the curriculum there… :frowning:

Maybe everything. There I consolidated it for you Banj, haha.

I say CURRENCY CURRENCY CURRENCY. It wasn’t at all on econ last year, which seriously surprised me.

Major FRA and Equity concepts such as the different consolidation methods, pensions, FX translations, DDM, FCFF/FCFE, RI and comparable company analysis. I’m not going to speculate on whether PE valuation will be on this year’s exam, but you should probably know that too.

I’m thinking capital structure HAS to be in there; possibly mixed with a M&A vignette

I am expecting a vignette on Swaps and swaptions.

CFASniper Wrote: ------------------------------------------------------- > I am expecting a vignette on Swaps and swaptions. Did they have one last year? If they didnt then I think I will have to reverse my plan of skipping swaps… :frowning:

MMI Wrote: ------------------------------------------------------- > CFASniper Wrote: > -------------------------------------------------- > ----- > > I am expecting a vignette on Swaps and > swaptions. > > > Did they have one last year? > > If they didnt then I think I will have to reverse > my plan of skipping swaps… :frowning: I can recall at least a few swap related questions, I cant recall if it was a whole vignette.