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Exam IFM Syllabus – Learning Outcomes

1. – Mean-Variance Portfolio Theory 2. – Asset Pricing Models 3. – Market Efficiency and Behavioral Finance 4. – Investment Risk and Project Analysis 5. – Capital Structure 6. – Introductory Derivatives – Forward and Futures 7. – Option Greeks and Risk Management 8. – General Properties of…

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Black Scholes Option Pricing Model

After completing this chapter, the Candidate will be able to: Explain the properties of the lognormal distribution and its applicability to option pricing. Calculate lognormal based probabilities and percentiles for stock prices Calculate lognormal based means and variances of stock…

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The Binomial Models

After completing this reading, you should be able to: Explain the concept of no-arbitrage and the risk-neutral approach to valuing derivative securities Understand the concept of no-arbitrage when comparing actual and synthetic calls or when comparing actual and synthetic puts….

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General Properties of Options

After completing this reading, you should be able to: Explain the cash flow characteristics and terms relating to various options Define and recognize the following terms relating to option classification: call and put options, expiration date, strike price, moneyness, and…

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Option Greeks and Risk Management

After completing this reading, you should be able to: Explain the calculation and use of option price partial derivatives. Compute and interpret Option Greeks, including Delta, Gamma, Theta, Vega, Rho, and Psi. Compute the elasticity, Sharpe ratio, and risk premium…

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Introductory Derivatives – Forwards and Futures

After completing this reading, you should be able to: Describe the characteristics and terms of the main derivative instruments (including forwards and futures). Distinguish between long and short positions for both assets (including short selling of stocks) and derivatives on…

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Capital Structure

After completing this reading, you should be able to: Explain different methods to raise capital. Understand the two main forms of financing: equity issues and debt issues. Understand the process by which a company raises capital including venture capital, IPOs,…

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Investment Risk and Project Analysis

After completing this reading, you should be able to: Discuss the advantages and disadvantages of different measures of investment risk. Understand the properties, advantages, and disadvantages of the various measures of investment risk: Variance, Semi Variance, Value at Risk (VaR),…

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Market Efficiency and Behavioral Finance

After completing this reading, you should be able to: Explain the three forms of Market Efficiency (EMH) Understand the definition of efficient markets, and distinguish between the strong, semi-strong and weak versions of the EMH. Identify empirical evidence for or…

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Asset Pricing Models

After completing this chapter, the Candidate will be able to: Explain the Capital Asset Pricing Model (CAPM). Recognize the assumptions and properties of CAPM Calculate the required return on a particular asset, a portfolio or a project using CAPM. Explain…

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