{"id":253,"date":"2019-10-10T20:02:00","date_gmt":"2019-10-10T20:02:00","guid":{"rendered":"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=253"},"modified":"2025-01-18T19:51:23","modified_gmt":"2025-01-18T19:51:23","slug":"learning-sessions-curriculum-equity","status":"publish","type":"post","link":"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/learning-sessions-curriculum-equity\/","title":{"rendered":"CFA Level 1 Study Notes &#8211; Equity Investments"},"content":{"rendered":"<h2><strong>Study Session 12<\/strong><\/h2>\n<h2><strong>Reading 36 &#8211; Market Organization and Structure<\/strong><\/h2>\n<p>&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/main-functions-financial-system\/\">LOS 36a: explain the main functions of the financial system<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/classifications-assets-markets\/\">LOS 36b: describe classifications of assets and markets<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/assets-traded-organized-markets\">LOS 36c: describe the major types of securities, currencies, contracts, commodities, and real assets that trade in organized markets, including their distinguishing characteristics and major subtypes<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/types-financial-intermediaries\/\">LOS 36d: describe types of financial intermediaries and services that they provide<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/positions-investor-can-take-asset\/\">LOS 36e: compare positions an investor can take in an asset<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/margin-transactions\/\">LOS 36f: calculate and interpret the leverage ratio, the rate of return on a margin transaction, and the security price at which the investor would receive a margin call<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/execution-validity-clearing-instructions\/\">LOS 36g: compare execution, validity, and clearing instructions<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-orders-vs-limit-orders\/\">LOS 36h: compare market orders with limit orders<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/primary-secondary-markets\/\">LOS 36i: define primary and secondary markets and explain how secondary markets support primary markets<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/quote-driven-order-driven-brokered-markets\/\">LOS 36j: describe how securities, contracts, and currencies are traded in quote-driven, order-driven, and brokered markets<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/characteristics-well-functioning-financial-system\/\">LOS 36k: describe characteristics of a well-functioning financial system<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/objectives-market-regulation\/\">LOS 36l: describe objectives of market regulation<\/a><\/p>\n<h2><strong>Reading 37 &#8211; Security Market Indices<\/strong><\/h2>\n<p>&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/security-market-index\/\">LOS 37a: describe a security market index<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/price-return-total-return-index\/\">LOS 37b: calculate and interpret the value, price return, and total return of an index<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/issues-index-construction\/\">LOS 37c: describe the choices and issues in index construction and management<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/different-weighting-methods-used-index-construction\/\">LOS 37d: compare the different weighting methods used in index construction<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/value-return-index-given-weighting-method\/\">LOS 37e: calculate and analyze the value and return of an index given its weighting method<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/rebalancing-reconstitution-index\/\">LOS 37f: describe rebalancing and reconstitution of an index<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/security-market-indices\/\">LOS 37g: describe uses of security market indices<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/types-equity-indices\/\">LOS 37h: describe types of equity indices<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/fixed-income-indices\/\">LOS 37i: describe types of fixed-income indices<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/indices-representing-alternative-investments\/\">LOS 37j: describe indices representing alternative investments<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/types-security-market-indices\/\">LOS 37k: compare types of security market indices<\/a><\/p>\n<h2><strong>Reading 38 &#8211; Market Efficiency<\/strong><\/h2>\n<p>&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-efficiency\/\">LOS 38a: describe market efficiency and related concepts, including their importance to investment practitioners<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/distinguishing-market-value-intrinsic-value\/\">LOS 38b: distinguish between market value and intrinsic value<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/factors-affect-markets-efficiency\/\">LOS 38c: explain factors that affect a market\u2019s efficiency<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/forms-market-efficiency\/\">LOS 38d: contrast weak-form, semi-strong-form, and strong-form market efficiency<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-efficiency-fundamental-analysis\/\">LOS 38e: explain the implications of each form of market efficiency for fundamental analysis, technical analysis, and the choice between active and passive portfolio management<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-anomalies\/\">LOS 38f: describe market anomalies<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/behavioral-finance\/\">LOS 38g: describe behavioral finance and its potential relevance to understanding market anomalies<\/a><\/p>\n<h2><strong>Reading 39 &#8211; Overview of Equity Securities<\/strong><\/h2>\n<p>&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/types-equity-securities\/\">LOS 39a: describe characteristics of types of equity securities<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/voting-rights-ownership-characteristics\/\">LOS 39b: describe differences in voting rights and other ownership characteristics among different equity classes<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/public-vs-private-equity-securities\/\">LOS 39c: distinguish between public and private equity securities<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/methods-investing-non-domestic-equity-securities\/\">LOS 39d: describe methods for investing in non-domestic equity securities<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/risk-return-equity-securities\/\">LOS 39e: compare the risk and return characteristics of different types of equity securities<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/role-equity-securities\/\">LOS 39f: explain the role of equity securities in the financing of a company\u2019s assets<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-value-vs-book-value-equity-securities\/\">LOS 39g: distinguish between the market value and book value of equity securities<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/companys-cost-equity\/\">LOS 39h: compare a company\u2019s cost of equity, its (accounting) return on equity, and investors\u2019 required rates of return<\/a><\/p>\n<h2><strong>Reading 40 &#8211; Introduction to Industry and Company Analysis<\/strong><\/h2>\n<p>&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/industry-analysis\/\">LOS 40a: explain uses of industry analysis and the relation of industry analysis to company analysis<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/compare-methods-by-which-companies-can-be-grouped\/\">LOS 40b: compare methods by which companies can be grouped<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/factors-affect-sensitivity-business-cycles\/\">LOS 40c: explain the factors that affect the sensitivity of a company to the business cycle and the uses and limitations of industry and company descriptors such as \u201cgrowth,\u201d \u201cdefensive,\u201d and \u201ccyclical\u201d<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/industry-classification-systems\/\">LOS 40d: compare methods by which companies can be grouped, current industry classification systems, and classify a company, given a description of its activities and the classification system<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/peer-group-equity-valuation\/\">LOS 40e: explain how a company\u2019s industry classification can be used to identify a potential \u201cpeer group\u201d for equity valuation<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/elements-covered-thorough-industry-analysis\/\">LOS 40f: describe the elements that need to be covered in a thorough industry analysis<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/strategic-analysis-industry\/\">LOS 40g: describe the principles of strategic analysis of an industry<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/factors-pricing-power-price-competition\/\">LOS 40h: explain the effects of barriers to entry, industry concentration, industry capacity, and market share stability on pricing power and price competition<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/industry-life-cycle-models\/\">LOS 40i: describe industry life cycle models, classify an industry as to life cycle stage, and describe limitations of the life-cycle concept in forecasting industry performance<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/characteristics-representative-industries\/\">LOS 40j: compare characteristics of representative industries from the various economic sectors<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/factors-influence-industry-growth-profitability-risk\/\">LOS 40k: describe macroeconomic, technological, demographic, governmental, and social influences on industry growth, profitability, and risk<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/elements-thorough-company-analysis\/\">LOS 40l: describe the elements that should be covered in a thorough company analysis<\/a><\/p>\n<h2><strong>Reading 41 &#8211; Equity Valuation: Concepts and Basic Tools<\/strong><\/h2>\n<p>&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/overvalued-fairly-valued-undervalued-securities\/\">LOS 41a: evaluate whether security, given its current market price and a value estimate, is overvalued, fairly valued, or undervalued by the market<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/major-categories-equity-valuation-models\/\">LOS 41b: describe major categories of equity valuation models<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/portfolio-management\/describe-regular-cash-dividends-extra-dividends-stock-dividends-stock-splits-reverse-stock-splits-and-share-repurchases\/\">LOS 41c: describe regular cash dividends, extra dividends, stock dividends, stock splits, reverse stock splits, and share repurchases<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/describe-dividend-payment-chronology\/\">LOS 41d: describe dividend payment chronology<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/present-value-models-value-equity\/\">LOS 41e: explain the rationale for using present value models to value equity and describe the dividend discount and free-cash-flow-to-equity models<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/intrinsic-value-preferred-stock\/\">LOS 41f: calculate the intrinsic value of a non-callable, non-convertible preferred stock<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/gordon-constant-growth-dividend-discount-model\/\">LOS 41g: calculate and interpret the intrinsic value of an equity security based on the Gordon (constant) growth dividend discount model or a two-stage dividend discount model, as appropriate<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/multistage-dividend-discount-model\/\">LOS 41h: identify characteristics of companies for which the constant growth or a multistage dividend discount model is appropriate<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/using-price-multiples-value-equity\/\">LOS 41i: explain the rationale for using price multiples to value equity, how the price-to-earnings multiple relates to fundamentals, and the use of multiples based on comparables<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/price-multiples\/\">LOS 41j: calculate and interpret the following multiples: price to earnings, price to an estimate of operating cash flow, price to sales, and price to book value<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/enterprise-value-multiples\/\">LOS 41k: describe enterprise value multiples and their use in estimating equity value<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/asset-based-valuation-models\/\">LOS 41l: describe asset-based valuation models and their use in estimating equity value<\/a><br \/>\n&#8211; <a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/advantages-disadvantages-category-valuation-model\/\">LOS 41m: explain the advantages and disadvantages of each category of the valuation model<\/a><\/p>\n<h1>2024 Curriculum<\/h1>\n<h2><strong>Learning Module 1 &#8211; Market Organization and Structure<\/strong><\/h2>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/main-functions-financial-system\/\" target=\"_blank\" rel=\"noopener\">LOS a: explain the main functions of the financial system<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/classifications-assets-markets\/\" target=\"_blank\" rel=\"noopener\">LOS b: describe classifications of assets and markets<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/assets-traded-organized-markets\" target=\"_blank\" rel=\"noopener\">LOS c: describe the major types of securities, currencies, contracts, commodities, and real assets that trade in organized markets, including their distinguishing characteristics and major subtypes<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/types-financial-intermediaries\/\" target=\"_blank\" rel=\"noopener\">LOS d: describe types of financial intermediaries and services that they provide<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/positions-investor-can-take-asset\/\" target=\"_blank\" rel=\"noopener\">LOS e: compare positions an investor can take in an asset<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/margin-transactions\/\" target=\"_blank\" rel=\"noopener\">LOS f: calculate and interpret the leverage ratio, the rate of return on a margin transaction, and the security price at which the investor would receive a margin call<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/execution-validity-clearing-instructions\/\" target=\"_blank\" rel=\"noopener\">LOS g: compare execution, validity, and clearing instructions<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-orders-vs-limit-orders\/\" target=\"_blank\" rel=\"noopener\">LOS h: compare market orders with limit orders<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/primary-secondary-markets\/\" target=\"_blank\" rel=\"noopener\">LOS i: define primary and secondary markets and explain how secondary markets support primary markets<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/quote-driven-order-driven-brokered-markets\/\" target=\"_blank\" rel=\"noopener\">LOS j: describe how securities, contracts, and currencies are traded in quote-driven, order-driven, and brokered markets<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/characteristics-well-functioning-financial-system\/\" target=\"_blank\" rel=\"noopener\">LOS k: describe characteristics of a well-functioning financial system<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/objectives-market-regulation\/\" target=\"_blank\" rel=\"noopener\">LOS l: describe objectives of market regulation<\/a><\/p>\n<h2><strong>Learning Module 2<\/strong><strong>\u00a0&#8211; Security Market Indices<\/strong><\/h2>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/security-market-index\/\" target=\"_blank\" rel=\"noopener\">LOS a: describe a security market index<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/price-return-total-return-index\/\" target=\"_blank\" rel=\"noopener\">LOS b: calculate and interpret the value, price return, and total return of an index<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/issues-index-construction\/\" target=\"_blank\" rel=\"noopener\">LOS c: describe the choices and issues in index construction and management<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/different-weighting-methods-used-index-construction\/\" target=\"_blank\" rel=\"noopener\">LOS d: compare the different weighting methods used in index construction<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/value-return-index-given-weighting-method\/\" target=\"_blank\" rel=\"noopener\">LOS e: calculate and analyze the value and return of an index given its weighting method<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/rebalancing-reconstitution-index\/\" target=\"_blank\" rel=\"noopener\">LOS f: describe rebalancing and reconstitution of an index<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/security-market-indices\/\" target=\"_blank\" rel=\"noopener\">LOS g: describe uses of security market indices<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/types-equity-indices\/\" target=\"_blank\" rel=\"noopener\">LOS h: describe types of equity indices<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/fixed-income-indices\/\" target=\"_blank\" rel=\"noopener\">LOS i: describe types of fixed-income indices<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/indices-representing-alternative-investments\/\" target=\"_blank\" rel=\"noopener\">LOS j: describe indices representing alternative investments<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/types-security-market-indices\/\" target=\"_blank\" rel=\"noopener\">LOS k: compare types of security market indices<\/a><\/p>\n<h2><strong>Learning Module 3<\/strong><strong> &#8211; Market Efficiency<\/strong><\/h2>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-efficiency\/\" target=\"_blank\" rel=\"noopener\">LOS a: describe market efficiency and related concepts, including their importance to investment practitioners<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/distinguishing-market-value-intrinsic-value\/\" target=\"_blank\" rel=\"noopener\">LOS b: distinguish between market value and intrinsic value<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/factors-affect-markets-efficiency\/\" target=\"_blank\" rel=\"noopener\">LOS c: explain factors that affect a market\u2019s efficiency<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/forms-market-efficiency\/\" target=\"_blank\" rel=\"noopener\">LOS d: contrast weak-form, semi-strong-form, and strong-form market efficiency<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-efficiency-fundamental-analysis\/\" target=\"_blank\" rel=\"noopener\">LOS e: explain the implications of each form of market efficiency for fundamental analysis, technical analysis, and the choice between active and passive portfolio management<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-anomalies\/\" target=\"_blank\" rel=\"noopener\">LOS f: describe market anomalies<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/behavioral-finance\/\" target=\"_blank\" rel=\"noopener\">LOS g: describe behavioral finance and its potential relevance to understanding market anomalies<\/a><\/p>\n<h2><strong>Learning Module 4<\/strong><strong>\u00a0&#8211; Overview of Equity Securities<\/strong><\/h2>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/types-equity-securities\/\" target=\"_blank\" rel=\"noopener\">LOS a: describe characteristics of types of equity securities<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/voting-rights-ownership-characteristics\/\" target=\"_blank\" rel=\"noopener\">LOS b: describe differences in voting rights and other ownership characteristics among different equity classes<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/public-vs-private-equity-securities\/\" target=\"_blank\" rel=\"noopener\">LOS c: distinguish between public and private equity securities<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/methods-investing-non-domestic-equity-securities\/\" target=\"_blank\" rel=\"noopener\">LOS d: describe methods for investing in non-domestic equity securities<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/risk-return-equity-securities\/\" target=\"_blank\" rel=\"noopener\">LOS e: compare the risk and return characteristics of different types of equity securities<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/role-equity-securities\/\" target=\"_blank\" rel=\"noopener\">LOS f: explain the role of equity securities in the financing of a company\u2019s assets<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-value-vs-book-value-equity-securities\/\" target=\"_blank\" rel=\"noopener\">LOS g: distinguish between the market value and book value of equity securities<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/companys-cost-equity\/\" target=\"_blank\" rel=\"noopener\">LOS h: compare a company\u2019s cost of equity, its (accounting) return on equity, and investors\u2019 required rates of return<\/a><\/p>\n<h2><strong>Learning Module 5 &#8211; Company Analysis: Past and Present<\/strong><\/h2>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46269\" target=\"_blank\" rel=\"noopener\">LOS a: describe the elements that should be covered in a thorough company research report<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46333\" target=\"_blank\" rel=\"noopener\">LOS b: determine a company&#8217;s business model<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46325\" target=\"_blank\" rel=\"noopener\">LOS c: evaluate a company\u2019s revenue and revenue drivers, including pricing power<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46378\" target=\"_blank\" rel=\"noopener\">LOS d: evaluate a company\u2019s operating profitability and working capital using key measures<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46329\" target=\"_blank\" rel=\"noopener\">LOS e: evaluate a company\u2019s capital investments and capital structure<\/a><\/p>\n<h2><strong>Learning Module 6 &#8211; <span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Industry and Competitive Analysis&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:31699,&quot;3&quot;:{&quot;1&quot;:0},&quot;4&quot;:{&quot;1&quot;:3,&quot;3&quot;:2},&quot;7&quot;:{&quot;1&quot;:[{&quot;1&quot;:2,&quot;2&quot;:0,&quot;5&quot;:{&quot;1&quot;:2,&quot;2&quot;:0}},{&quot;1&quot;:0,&quot;2&quot;:0,&quot;3&quot;:3},{&quot;1&quot;:1,&quot;2&quot;:0,&quot;4&quot;:1}]},&quot;9&quot;:0,&quot;10&quot;:2,&quot;11&quot;:0,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:16711680},&quot;15&quot;:&quot;Calibri, sans-serif&quot;,&quot;16&quot;:8,&quot;17&quot;:1}\">Industry and Competitive Analysis<\/span><\/strong><\/h2>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46708\" target=\"_blank\" rel=\"noopener\">LOS a: describe the purposes of, and steps involved in, industry and competitive analysis<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46714\" target=\"_blank\" rel=\"noopener\">LOS b: describe industry classification methods and compare methods by which companies can be grouped<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46717\" target=\"_blank\" rel=\"noopener\">LOS c: determine an industry\u2019s size, growth characteristics, profitability, and market share trends<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46720\" target=\"_blank\" rel=\"noopener\">LOS d: analyze an industry\u2019s structure and external influences using Porter\u2019s Five Forces and PESTLE frameworks<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46722\" target=\"_blank\" rel=\"noopener\">LOS e: evaluate the competitive strategy and position of a company<\/a><\/p>\n<h2><strong>Learning Module 7 &#8211; Company Analysis: Forecasting<\/strong><\/h2>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46725\" target=\"_blank\" rel=\"noopener\">LOS a: explain principles and approaches to forecasting a company\u2019s financial results and position<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46728\" target=\"_blank\" rel=\"noopener\">LOS b: explain approaches to forecasting a company\u2019s revenues<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46730\" target=\"_blank\" rel=\"noopener\">LOS c: explain approaches to forecasting a company\u2019s operating expenses and working capital<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46732\" target=\"_blank\" rel=\"noopener\">LOS d: explain approaches to forecasting a company\u2019s capital investments and capital structure<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46734\" target=\"_blank\" rel=\"noopener\">LOS e: describe the use of scenario analysis in forecasting<\/a><\/p>\n<h2><strong>Learning Module 8 &#8211; Equity Valuation: Concepts and Basic Tools<\/strong><\/h2>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/overvalued-fairly-valued-undervalued-securities\/\" target=\"_blank\" rel=\"noopener\">LOS a: evaluate whether security, given its current market price and a value estimate, is overvalued, fairly valued, or undervalued by the market<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/major-categories-equity-valuation-models\/\" target=\"_blank\" rel=\"noopener\">LOS b: describe major categories of equity valuation models<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/portfolio-management\/describe-regular-cash-dividends-extra-dividends-stock-dividends-stock-splits-reverse-stock-splits-and-share-repurchases\/\" target=\"_blank\" rel=\"noopener\">LOS c: describe regular cash dividends, extra dividends, stock dividends, stock splits, reverse stock splits, and share repurchases<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/describe-dividend-payment-chronology\/\" target=\"_blank\" rel=\"noopener\">LOS d: describe dividend payment chronology<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/present-value-models-value-equity\/\" target=\"_blank\" rel=\"noopener\">LOS e: explain the rationale for using present value models to value equity and describe the dividend discount and free-cash-flow-to-equity models<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/intrinsic-value-preferred-stock\/\" target=\"_blank\" rel=\"noopener\">LOS f: calculate the intrinsic value of a non-callable, non-convertible preferred stock<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/gordon-constant-growth-dividend-discount-model\/\" target=\"_blank\" rel=\"noopener\">LOS g: calculate and interpret the intrinsic value of an equity security based on the Gordon (constant) growth dividend discount model or a two-stage dividend discount model, as appropriate<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/multistage-dividend-discount-model\/\" target=\"_blank\" rel=\"noopener\">LOS h: identify characteristics of companies for which the constant growth or a multistage dividend discount model is appropriate<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/using-price-multiples-value-equity\/\" target=\"_blank\" rel=\"noopener\">LOS i: explain the rationale for using price multiples to value equity, how the price-to-earnings multiple relates to fundamentals, and the use of multiples based on comparables<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/price-multiples\/\" target=\"_blank\" rel=\"noopener\">LOS j: calculate and interpret the following multiples: price to earnings, price to an estimate of operating cash flow, price to sales, and price to book value<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/enterprise-value-multiples\/\" target=\"_blank\" rel=\"noopener\">LOS k: describe enterprise value multiples and their use in estimating equity value<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/asset-based-valuation-models\/\" target=\"_blank\" rel=\"noopener\">LOS l: describe asset-based valuation models and their use in estimating equity value<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/advantages-disadvantages-category-valuation-model\/\" target=\"_blank\" rel=\"noopener\">LOS m: explain the advantages and disadvantages of each category of the valuation model<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Study Session 12 Reading 36 &#8211; Market Organization and Structure &#8211; LOS 36a: explain the main functions of the financial system &#8211; LOS 36b: describe classifications of assets and markets &#8211; LOS 36c: describe the major types of securities, currencies,&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-253","post","type-post","status-publish","format-standard","hentry","category-equity","blog-post","no-post-thumbnail","animate"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Equity Investments Study Notes | CFA Level 1<\/title>\n<meta name=\"description\" content=\"CFA Level 1 Equity Investments notes cover valuation techniques, market analysis, and key concepts to excel in equity analysis and investment strategies.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/learning-sessions-curriculum-equity\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Equity Investments Study Notes | CFA Level 1\" \/>\n<meta property=\"og:description\" content=\"CFA Level 1 Equity Investments notes cover valuation techniques, market analysis, and key concepts to excel in equity analysis and investment strategies.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/learning-sessions-curriculum-equity\/\" \/>\n<meta property=\"og:site_name\" content=\"AnalystPrep | CFA\u00ae Exam Study Notes\" \/>\n<meta property=\"article:published_time\" content=\"2019-10-10T20:02:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-01-18T19:51:23+00:00\" \/>\n<meta name=\"author\" content=\"Simon\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Simon\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"9 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/learning-sessions-curriculum-equity\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/learning-sessions-curriculum-equity\/\"},\"author\":{\"name\":\"Simon\",\"@id\":\"https:\/\/analystprep.com\/cfa-level-1-exam\/#\/schema\/person\/8d6352b658ba58a707920fba950b3687\"},\"headline\":\"CFA Level 1 Study Notes &#8211; 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