What is the Difference Between Money- Weighted Return vs Time-Weighted Return?
Why Return Weighting Matters Investment performance is not measured in a vacuum. A portfolio may receive additional contributions, make distributions, experience withdrawals, and change in value between those cash-flow events. When those flows are large, the investor’s final wealth may…
Types of Financial Returns: Holding Period, Money-Weighted, Time- Weighted, and Log Returns
Introduction to Types of Financial Returns The previous learning module introduced the basic return framework. This learning module extends that framework by asking a more practical question: What type of return is the investor actually earning? A total return number…
Financial Returns Explained: Price Return, Income Return, Total Return, and Compounding
Introduction to Financial Returns A return measures the change in an investor’s economic position over a specified period. At first glance, the concept seems straightforward: compare the investment’s value at the end of the period with its value at the…
Data Presentation as a Histogram or a Frequency Polygon
Histogram A histogram shows the distribution of numerical data in the form of a graph. However, it is very similar to a bar chart, a histogram groups data into intervals. To construct a histogram, you need to establish all the…
Guidance for Standards I-VII
I. Professionalism Knowledge of the law Independence and objectivity Misrepresentation Misconduct Competence II. Integrity of Capital Markets Material non-public information Market manipulation III. Duties to Clients and Prospective Clients Loyalty and prudence Fair dealing Suitability Performance presentation Preservation of confidentiality IV. Duties…
Ethical Responsibilities
Code of Ethics The CFA Institute has outlined six components to its Code of Ethics. Members of the CFA Institute must: 1. Act with integrity, competence, diligence, respect, and in an ethical manner with the public, clients, prospective clients, employers,…
The Code of Ethics and the seven Standards of Professional Conduct
Code of Ethics The CFA Institute has outlined six components to its Code of Ethics. Members of the CFA Institute must: 1. Act with integrity, competence, diligence, respect, and in an ethical manner with the public, clients, prospective clients, employers,…
Professional Conduct Program and the Process for Enforcement of Code and Standards
CFA Institute Professional Conduct Program and the Process for Enforcement of Code and Standards Violations of the CFA codes and standards are reviewed through the CFA Institute’s Professional Standards and Policy Committee (PSPC). This committee is authorized to conduct investigations…
Framework for Ethical Decision-Making
Framework for Ethical Decision-Making A framework for ethical decision-making is defined as a set of principles established to aid investment professionals in conducting business with integrity. The CFA Institute has outlined six tenets of ethical behavior as outlined in LOS…
The Difference between Ethical and Legal Standards
The Difference Between Ethical and Legal Standards Often people equate ethical behavior with legal choices. However, there are numerous choices that may be legal but have no moral standing. It is important to remember that all laws stem from a…
