Direct and Indirect Methods – Cash from Operating Activities
Cash flow from Operating Activities may be reported in either presentation format: the direct method and the indirect method. Both IFRS and US GAAP encourage the use of the direct method but will allow either method to be used. Under…
NPV as a Capital Budgeting Evaluation Method
Projects which have a positive NPV should, in theory, increase the value of a company as well as the value of its stock. This could help explain the popularity of NPV as a capital budgeting evaluation method. Relationship Among NPV,…
Yield Conversion Based on Periodicity
An annualized and compounded yield on a fixed rate bond depends on the number of periods in a year, called the periodicity of the annual rate, which typically matches the frequency of coupon payments. For instance, the annual yield-to-maturity on…
Professionalism in Investment Management
Investment management is an upcoming profession. This is evidenced by the following: However, some critical elements of investment management have developed over the years. Investment management just like any other profession meets a large proportion of the profession expectations. Moreover,…
Ethics and Profession
A profession can be defined as the occupational group that is based on the unique education, specialist knowledge, and framework of practice and behavior that establishes community trust, respect, and recognition. A large proportion of professions outlines the importance of…
Hypothesis Test on Correlation
Intuitively, if the correlation coefficient between two variables is zero, then there is no linear relationship between the variables. Otherwise, if we use the test of significance to determine whether there is a linear relationship, we will be inclined to…
Value at Expiration and Profit for Call and Put Options
In an options contract, two parties transact simultaneously. The buyer of a call or a put option is the long position in the contract, while the seller of the option, also known as the writer of the option, is the…
ESG Considerations in Portfolio Planning and Construction
Environmental, social, and governance factors are collectively referred to by the acronym “ESG”. ESG integration is the practice of considering environmental, social, and governance factors in the investment process. The integration can be implemented across all asset classes, including equities,…
The Asset Management Industry
Buy-Side vs. Sell-side Asset managers are typically deemed to be on the buy-side. This ideally means that they buy the products of sell-side firms. Buy-side firms include asset managers, hedge funds, institutional investors, and retail investors. On the other hand,…
CFA Level 1 Study Notes – Economics
Older Curriculums 2024/2025, 2025/2026 Curriculums Learning Module 1 – The Firm and Market Structures LOS a: determine and interpret breakeven and shutdown points of production, as well as how economies and diseconomies of scale affect costs under perfect and imperfect…
