Syllabus and Reading List


(Candidates who passed the exam for obtaining the title of an investment advisor do not have the obligation to sit for examination for the following areas: A, BI, BII, C, D and E)


I Standards of professional conduct
 1. Professionalism
 2. Integrity of Capital Markets
 3. Duties to clients
 4. Duties to employers
 5. Investment analysis, recommendations, and action
 6. Conflicts of interests

I The time value of money
 1. The future value of a single cash flow
 2. The future value of a series of cash flows
 3. The present value of a single cash flow
 4. The present value of a series of cash flows
 5. Present and future value equivalence
 6. Other applications of the time value of money
 7. Analysis of discounted cash flows
 8. Money market and interest conventions
 9. Yield measures
II Fundamental statistical concepts
 1. The nature of statistics
 2. The frequency polygon
 3. Measures of central tendency
 4. Measures of dispersion
5. Measures of asymmetry
6. Measures of skewness

III Probability and random variables

1. Probability concepts
2. Random variables and probability
3. Theorems and axioms of probability
4. Expected value, variance and covariance/ correlation
5. Standardized random variables

IV Common probability distributions

1. Discreet random variables
2. Continuous random variables
3. The lognormal distribution
4. Monte Carlo simulation

V Sampling and estimation

1. Random sampling
2. Distribution of the sample mean
3. Point and interval estimates of the population mean

VI Statistical inference and hypothesis testing

1. Stating the hypothesis
2. Hypothesis testing
3. Hypothesis tests
4. Variance test

VII Correlation analysis and linear regression

1. Correlation analysis
2. Linear regression

VIII Multiple regression

1. Multiple linear regression model
2. Using dummy variables in regression
3. Heteroskedasticity
4. Serial correlation and  Durbin-Watson test
5. Multicollinearity
6. Models with qualitative dependent variables

IX Time-series analysis

1. Linear trend
2. Challenges
3. Fundamental questions in time series analysis
4. Autoregressive time-series models
5.  Random walks and unit roots
6. Moving averages
7. Seasonality in time-series models


I The financial reporting system
1. Need for financial statement analysis
2. Financial information and capital markets
3. Fundamental accounting principles
4. International accounting standards
5. Generally accepted accounting principles in the United States
6. The importance of external audit

II Contents and structure of principal financial statements

1. The balance sheet
2. The income statement
3. Statement of cash flows
4. Statement of stockholder’s equity
5. Footnotes
6. Other sources of financial information

 III Analysis of cash flows

1. Cash flow vs. gain
 2. Direct method statement of cash flows
3. Indirect method statement of cash flows
4. Analysis of cash flow information

IV Ratio analysis of financial statements

1. Purpose and use of ratio analysis
2. Liquidity analysis
3. Solvency analysis
4. Activity analysis
5. Profitability analysis
6. Integrated analysis

V Ratios used in valuation
1. Earnings per share
2. Cash flow per share
3. EBITDA per share
4. Book value per share
5. Price-to-earnings and price-to-book-value ratios
6. Dividend payout ratio


I Fundamentals of financial management
1. Alternative forms of business organization
2. Financial management in a corporate structure
3. Corporate objectives
4. Agency relations

II Capital budgeting

1. Capital budgeting process
2. Project classifications
3. Prudent use of capital
4. Cash flow projections
5. Risk analysis
6. Comparison of projects with different duration periods
7. Real options

III The cost of capital

1. The cost of individual sources of financing
2. The weighted average cost of capital
3. Marginal cost of capital
4. Determinants of capital costs

IV Capital structure and leverage

1. Targeted capital structure
2. Business, financial and combined leverage
3. Determinants of optimum capital structure
4. Capital structure theory

V Dividend policy

1. Dividends vs. capital gains
2. Dividend irrelevance theory
3. Traditional dividend theory
4. Tax preference theory
5. Information content of dividends    
6. Dividend stability
7. Stock dividends and stock splits
8. Stock repurchases

VI Mergers and acquisitions

1. Source of value creation from mergers and acquisitions
2. Types of mergers
3. Hostile and friendly takeovers
4. Setting price targets and valuation
5. Role of investment bankers
6. Corporate (strategic) alliances
7. Leverage buyouts
8. Disinvestment



I Securities market indicators
1. Indicator construction factors
2. Share market indicator series
3. Bond market indicator series
4. Share and bond composite indicators

II Market analysis and industries and share valuation

1. Applying the DDM valuation model to the  market
2.  Estimating the growth rate of dividends
3. Estimating expected earnings per share
4. Calculation of expected rate of return on shares
5. Analysis of business cycles and industries
7. Evaluation of rate of return of an industry
8. Relative valuation and relative valuation ratios

III Company analysis and stock valuation

1. Company analysis
2. Estimating intrinsic value
3. Estimating company earnings per share
4. Estimating company earnings multipliers
5. Analysis of growth companies
6. Measures of value added
7. Global company and stock analysis

IV Technical analysis

1. Underlying assumptions and definition
2. Advantages of technical analysis
3. Challenges to technical analysis
4. Technical trading rules
5. Indicators of technical analysis


I Debt Securities

1. Debt securities characteristics
2. Securing bonds
3. Debt market structure

II Bond investment risks
1. Interest rate risk
2. Yield curve risk
3. Call and prepayment risk
4. Reinvestment risk
5. Credit  risk
6. Liquidity risk
7. Currency risk
8. Inflation or purchasing power risk
9. Volatility risk
10. Event risk (e.g., natural catastrophe, corporate takeover/restructuring, regulatory risk, and political risk )

III Sectors of the bond markets and financial instruments

1. Government bonds
2. Municipal securities
3. Corporate bonds
4. MBS and other securities backed with assets
5. International bonds

IV Interest spreads

1. Forming of interest rate spreads
2. Government bond yield curve
3. Yield spread measure (absolute spreads, relative spreads, return ratio)
4. Impact of volume and liquidity on spread
5. Interest rate swap and swap spread

V valuation of debt securities

1. Basic principles of valuation
2. Traditional approach to valuation
3. The arbitrage-free valuation approach
4. Valuation models

VI Interest rate risk measurement
1. Full valuation approach
2. Price volatility characteristics of bonds
3. Duration
4. Convexity
5. Price value of a basis point (including its connection to duration)


I Derivative markets and instruments

1. Overview of derivative markets
2. The nature of investing in derivative instruments
3. Forwards vs. options
4. Fundamentals of using options in portfolio management

II Forward and futures markets and instruments

1. Overview of forward and futures markets
2. Hedging
3. Basic principles of valuation
4. Forwards application and strategies
5. Futures application and strategies

III Options markets

1. The structure of global option market
2. The fundamentals of option valuation
3. Valuation of US options
4. Exotic options
5. Option trading strategies

IV Swap contracts and other derivatives

1. The structure of global swap market
2. Basic swap definitions
3. Types and characteristics of swaps
4. Warrants and convertible securities
5. Other derivatives


I Valuing bonds with embedded options

1. The binomial option pricing model
2. Valuing and analyzing callable bonds
3. Valuing putable bonds
4. Analysis of convertible bonds

II Valuation of mortgage-backed securities (MBS) and asset-backed securities

1. Static cash flow yield
2. Zero-volatility spread
3. Monte Carlo simulation model and option-adjusted spread (OAS)
4. Measuring interest rate risk MBS (including duration measures: Effective duration, cash flow duration, coupon curve duration, empirical duration)
5. Valuing asset-backed securities.


1. Valuing investment company shares
2. Closed-end versus open-end investment companies (including exchange-traded funds - ETFs)
3. Fund management fees
4. Investment strategies
5. Characteristics of a hedge fund (characteristics, structure of fees, leverage, long vs. short)
6. Closed-end funds and illiquid securities


I Modern portfolio theory – Markowitz model

1. The characteristics of the opportunity set under risk
2. General characteristics of portfolios
3. Combinations of two risky assets
4. The shape of the portfolio possibilities curve
5. The efficient frontier with riskless lending and borrowing  
6. The efficient frontier with riskless assets
7. Calculating efficient frontier with and without constraints

II Simplifying the portfolio selection process

1. Single-index models (Sharpe)
2. Beta
3. Multi-index model
4. Security selection with a purchasable index
5. Bayesian portfolio selection (Black-Litterman approach)
6. Other simplifying portfolio selection techniques


1. Standard capital asset pricing model
2. Non-standard forms of CAPM
3. Capital asset pricing model testing
4. APT

IV Efficient markets theory

1. Tests of return predictability

2. Announcement and price return
3. Methodology of  event studies
4. Strong from efficiency

V Managing stock portfolios

1. Active management
2. Passive management (indexing etc.)
3. Semi-active strategies
4. International diversification
5. Derivative strategies

VI Portfolio management strategies with debt instruments

1. Active management
2. Passive management
3. Semi-active strategies  
4. Immunization strategies
5. Derivative strategies
6. Bond portfolio management (delta, gamma, vega)
7. International strategies (currency and country risk management)

VII Measuring performance

1. Return measures
2. Risk-adjusted measures
3. Benchmark selection

VIII International diversification

1. Portfolio diversified internationally
2. Calculation of expected rate of return on international investments
3. Foreign securities risks
4. Currency risk effects
5. Managing an internationally diversified portfolio - models


1. Standards of practice Handbook, 9th edition, CFA Institute, 2005., p. 7-133
2. Richard A. DeFusco, Dennis W. McLeavey, Jerald E. Pinto and David E. Runkle, Quantitative Methods for Investment Analyses, 2nd edition, CFA Institute, 2004 (Ch. I, III, IV,V, VI, VII, VIII, IX i X) OR
Richard A. DeFusco, Dennis W. McLeavey, Jerald E. Pinto and David E. Runkle, Quantitative Investment analysis, 2nd edition, John Wiley & Sons, 2007 (Ch. I, III, IV,V, VI, VII, VIII, IX i X)
3. White, J., Sondhy, A., Fried, D., The analyses and use of financial statements, 3rd edition, Wiley, 2003. (Ch. I, III i IV)
4. Eugene F. Brigham i Joel F. Houston, Fundamentals of Financial Management, 10th edition, Thomson, 2004. (Ch. I, IX, X, XI, XII, XIII, XIV and XXI) OR
Eugen F. Brigham i Michael C. Ehrhardt, Financial Management, 12th edition, Thompson (Ch. I, X, XI, XII, XIII, XVI, XVIII, XXV) OR
Eugen F. Brigham i Michael C. Ehrhardt, Financial Management, 11th edition, Thompson (Ch.  I, IX, X, XI, XII, XVI, XVIII, XXV)

5. Frank K. Reilly and Keith C. Brown, Investment Analyses and Portfolio Management, 7 th edition, South-Western, 2003. (Ch. V, XIII, XIV, XV, XVI, XVII, XX, XXI, XXII, XXIII, XXIV, XXV and XXVI) OR
Frank K. Reilly and Keith C. Brown, Investment Analyses and Portfolio Management, 8 th edition, South-Western, 2006. (Ch. V, XII, XIII, XIV, XV, XVI, XIX, XX, XXI, XXII, XXIII, XXIV and XXV)
6. Frank J. Fabozzi, Fixed Income Analyses for the Charted Financial Analyst Program, 2nd edition, Fabozzi Associates, 2004, (Ch.  I, II, III, IV, V, VII, IX and XII) OR
Frank J. Fabozzi, Fixed Income Analysis, 2nd edition, John Wiley & Sons, 2007, (Ch. I, II, III, IV, V, VII, IX and XII)
7. Edwin J. Elton, Martin J. Gruber, Modern Portfolio Theory and Investment Analysis, 5th edition, John Wiley & Sons, 1995. (Ch. IV, V, VI, VII, VIII, IX, XII, XIII, XIV, XV, XVI, XVII) OR
Edwin J. Elton, Martin J. Gruber, Stephen J. Brown, William N. Goetzmann, Modern Portfolio Theory and Investment Analysis, 6th edition, John Wiley & Sons, 2003. (Ch. IV, V, VI, VII, VIII, IX, XII, XIII, XIV, XV, XVI, XVII) OR
Edwin J. Elton, Martin J. Gruber, Stephen J. Brown, William N. Goetzmann, Modern Portfolio Theory and Investment Analysis, 7th edition, John Wiley & Sons, 2007. (Ch. IV, V, VI, VII, VIII, IX, XII, XIII, XIV, XV, XVI, XVII)


1. James D.Gwartney, Richard L. Stroup, Russell S. Sobel, and David A. Macphearson, Economics: Private and Public Choice, 10th edition, South-Western, 2003.
2. Bruno Solnik and Dennis McLeavey, International investments, 5th edition, Addison Wesley, 2004.
3. Sharpe,W. F., Alexander, G. J., Bailey, J V., Investments, Prentice Hall International, 1999.
4. Don Chance, Analyses of Derivatives for the CFA Program, AIMR, 2003.
5. Howard Schilit, Financial Shenanigans, second edition, McGraw Hill, 2002.
6. Solnik i McLeavey, International investments, 5th Edition, AIMR, 2003,
7. Managing Assets for Individual Investors, AIMR, 1995.
8. Managing Endowment and Foundation Funds, AIMR, 1996.
9. The Financial Services Industry, AIMR, 1992.
10. Improving the Investment process through Risk Management, CFA Institute, 2003.
11. Real Estate Investing in 1990s, CFA Institute, 1995.
12.  The Law on Companies
13. The Law on the Capital Market
14. Takeover Law
15. Voluntary Pension Funds Law  
16. The Law on Investment Funds
17. The Law on NBS
18. The Law on Banks  
19. The Law on insurance, The Law on insurance of persons and property - provisions on mandatory insurance (articles 73-108, articles 111 and 112) and provisions from articles 143-146).  
20. The Accounting Law
21. The Auditing Law
22. The international financial reporting standards (IFRS) Framework for the preparation and presentation of financial statements  IAS 12, IAS 16, IAS 17, IAS 36, IAS 38
23. Rulebook on Forms and Contents of Items in Financial Statement Forms for companies, cooperatives and entrepreneurs    24. The Law on corporate profit  
25. The Law on general administrative procedure   
26. The Law on contracts and torts  
27. OECD ( Corporate Governance Principles
28. IOSCO, Objectives and Principles of Securities Regulation (   
29. XIII EU Directive,