The Zambia Centre for Accountancy Studies (ZCAS) is delighted to announce the introduction of the Chartered Financial Analyst Course. CFA is an international professional designation offered by the American CFA Institute to financial analysts who complete a series of three examinations. CFA is a qualification for finance and investment professionals, particularly in the fields of investment management and financial analysis of stocks, bonds and their derivative assets. The program focuses on portfolio management and financial analysis, and provides generalist knowledge of other areas of finance.

How you Earn the CFA Charter

To earn a CFA Charter, you study for three exams (Levels I, II, III) using an assigned curriculum. Level I exams are held in June and December. Levels II and III are only held in June. If you pass all three exams and meet the professional and ethical requirements, you can become a regular member of CFA Institute, or "charter holder." All three levels have a strong emphasis on ethics. The material differences among the exams are:

The Level I study program emphasizes tools and inputs, and includes an introduction to asset valuation, financial reporting and analysis, and portfolio management techniques.

The Level II study program emphasizes asset valuation, and includes applications of the tools and inputs (including economics, financial reporting and analysis, and quantitative methods) in asset valuation.

The Level III study program emphasizes portfolio management, and includes strategies for applying the tools, inputs, and asset valuation models in managing equity, fixed income, and derivative investments for individuals and institutions.

Requirements

The basic requirements for participation in the CFA program include holding a business university degree or equivalent (such as ACCA, CIMA, ACA, ZICA) as assessed by CFA Institute. Those who have 4 years of qualified, professional work experience in an investment decision-making process will be considered on a case by case basis. To obtain the charter, however, a candidate must have four years of qualified, professional work experience, in addition to passing the three exams that test the academic portion of the CFA program.

The curriculum includes the following topic areas.

Ethics

The ethics section is primarily concerned with compliance and reporting rules when managing an investor's money or when issuing research reports. Some rules pertain more generally to professional behavior (such as prohibitions against plagiarism); others specifically relate to the proper use of the designation for charter holders and candidates. All of these rules are delineated in the 'Code and Standards'.

Quantitative Methods

This topic area is dominated by statistics; other topics such as the time value of money are also addressed. The topics are fairly broad, covering standard ideas such as hypothesis testing, regression analysis and time series analysis, as well as portfolio-related topics. (Some quantitative topics are covered in other sections; for example, calculating depreciation of assets is a part of financial reporting and analysis (accounting), and determining currency arbitrage is a part of international economics.)

Economics

Both micro- and macroeconomics are covered, including international economics (mainly related to currency conversions and how they are affected by international interest rates and inflation). By Level III, the focus is on applying economic analysis to portfolio management and asset allocation.

Financial Reporting and Analysis

The Curriculum includes analyzing financial reporting topics (IFRS and GAAP), and ratio and financial statement analysis. Financial reporting and analysis of accounting information is heavily tested at Levels I and II, but is not a significant part of Level III.

Security Analysis

The curriculum includes coverage of global markets, as well as analysis of the various asset types: equity (stocks), fixed income (bonds), derivatives (futures, forwards, options and swaps), and alternative investments (Real Estate, Private Equity, Hedge Funds and Commodities). The Level I exam requires familiarity with these instruments; the focus of Level II is valuation; Level III studies incorporation of these instruments into portfolios.

Portfolio Management

This section increases in importance with each of the three levels - it integrates and draws from the other topics, including ethics. It includes Modern portfolio theory (efficient frontier, Capital asset pricing model, etc.), investment practice (defining the investment policy, resultant asset allocation, order execution), and measurement of investment performance.