Standard III – Duties to Clients
Standard III(A) – Loyalty, Prudence, and Care Standard III(B) – Fair Dealing Standard III(C) – Suitability Standard III(D) – Performance Presentation Standard III(E) – Preservation of Confidentiality
Standard II – Integrity
Standard II (A) – Material Nonpublic Information Standard II (B) – Market Manipulation
Standard I – Professionalism
Standard I(A) – Knowledge of the Law Standard I(B) – Independence and Objectivity Standard I(C) – Misrepresentation Standard I(D) – Misconduct
Asset Class Allocation
Three Super Classes An asset class is a group of assets that all share some common elements. Asset classes help organize investment portfolios into separate components. We can start with the broadest sense of the word and divide assets into…
Approaches to Asset Allocation
Portfolio managers rely on one of three frameworks for analyzing and managing their portfolios. The three approaches below have advantages and disadvantages, which the analysts and managers must know to make prudent investment decisions. Asset-only Approach This approach considers only…
Hypothesis Testing
After completing this reading, you should be able to: Construct an appropriate null hypothesis and alternative hypothesis and distinguish between the two. Construct and apply confidence intervals for one-sided and two-sided hypothesis tests, and interpret the results of hypothesis tests…
Swaps
After completing this reading, you should be able to: Explain the mechanics of a plain vanilla interest rate swap and compute its cash flows. Explain how a plain vanilla interest rate swap can be used to transform an asset…
Liquidity and Reserves Management: Strategies and Policies
After completing this reading, you should be able to: Calculate a bank’s net liquidity position and explain factors that affect the supply and demand for liquidity at a bank. Compare the strategies that a bank can use to meet demands…
Derivatives
After completing this reading, you should be able to: Define derivatives and explain how derivative transactions create counterparty credit risk. Compare and contrast exchange-traded derivatives and over-the-counter (OTC) derivatives, and discuss the features of their markets. Describe the process of…
Introduction to Credit Risk Modeling and Assessment
After completing this reading, you should be able to: Explain the capital adequacy, asset quality, management, earnings, and liquidity (CAMEL) system used for evaluating the financial condition of a bank. Describe quantitative measurements and factors of credit risk, including probability…
