Quant- assumptions/issues with multiple regression (error term issues/heteroskedasticity, etc), ANOVA formulas, model misspecification, autoregressive models in time series (stationarity, mean reversion, unit root, seasonality, ARCH)
Econ- forex. Triangular arb, parity relations, fwd/carry trade, taylor rule, cobb-Douglas, growth theories (classical/neoclassical/endogenous), and then reading 14 is 7 pages in schweser, it deals w regulation, if it comes up it will likely be 1 question but so short it’s prob worth skimming
Alts- [first a general comment abt how im handling alts. As a likely 5% topic IMO, I’m trying to understand concepts on a high level and I’m memorizing formulas. There’s a lot here but i think the exam questions wont be too bad and if they are, few ppl will score well anyway. Youll practice through mocks that contain Alts vignettes.] Reading 38 (Private Real Estate Investments) seems very testable. Valuation approaches (cost/sales comparison/income - income being the most important), debt service coverage and loan to value ratios. R39 (Publicly Traded Real Estste Securities) REITs REOCs RMBS CMBS - know basics, ie which are equity vs debt and some advantages/disadvantages of investing in RE through publicly traded securities. NAVPS/REIT Valuation and the diffrrent approaches (P/FFO, P/AFFO, DCF). R40 (PE Valuation)- Valuation issues for and differences btwn venture capital and buyout investments, costs of PE investing, PE performance metrics (IRR recommended, but know multiples too e.g. PIC, DPI, RVPI, TVPI), Pre and post money valuation in single financing round for VC. R41 (Commodity Investing) is. Theory of storage/convenience yield/backwardation vs contango, roll return etc.
PM- very conceptual and lots of key formulae to know. R53 (portfolio concepts)- big one. Variance for 3 assets, efficient frontier, variance for equally weighted portfolio, CML, CAL, SML, systematic vs unsystematic risk, beta/adjusted beta, multifactor models (macroeconomic, microeconomic/fundamental), arbitrage pricing model, active risk/return, factor/tracking portfolios. R54 (residual risk and return-information ratio) is a lot of easy formulae. Memorize them. Alpha, IR, value added, optimal level of residual risk. R55 (fundamental law of active management) more formulae. IC, BR, market timer. R56 (PM process and the IPS) I think is covered in depth at L3 but its very important to CFAI and ties in with Ethics so maybe their way of adding ethics to the L2 exam (ethics bumped from 10% to 10-15% this year) is to have 2 ethics vignettes and 2 PM vignettes, one of which focuses on IPS. Investment objectives (risk/return) important here, along w investment constraints. Lots of this material comes secojd nature to me, so just skim it and focus on formulae in PM.