## CFA L-1

## CFA L-2

## CFA L-3

## FRM P-1

## FRM P-2

- 2022-23
- 2023-24

13. Introduction to Geopolitics (2023)

**a:** Describe geopolitics from a cooperation versus competition perspective.

**b:** Describe geopolitics and its relationship with globalization.

**c:** Describe tools of geopolitics and their impact on regions and economies.

**d:** Describe geopolitical risk and its impact on investments.

28. Corporate Structures and Ownership (2023)

**a:** Compare business structures and describe key features of corporate issuers.

**b:** Compare public and private companies.

**c:** Compare the financial claims and motivations of lenders and owners.

30. Business Models & Risks (2023)

**a:** Describe key features and types of business models.

**b:** Describe expected relations between a company’s external environment, business model, and financing needs.

**c:** Explain and classify types of business and financial risks for a company.

1. The Time Value of Money (2023)

**Los c (2022) is Los f (2023): **Calculate and interpret the effective annual rate, given the stated annual interest rate and the frequency of compounding.

**Los d (2022) is Los e (2023): **Calculate the solution for time value of money problems with different frequencies of compounding. (Content is los c of 2022 after solving tvm)

**Los e (2022) is Los c (2023):** Calculate and interpret the future value (FV) and present value (PV) of a single sum of money, an ordinary annuity, an annuity due, a perpetuity (PV only), and a series of unequal cash flows.(delete from “Solving Time Value of Money Problems When Compounding Periods Are Other Than Annual” of 2022.)

**Los f (2022) is Los d (2023): **Demonstrate the use of a time line in modeling and solving time value of money problems.

2. Organizing, Visualizing, And Describing Data (2023)

**Los c (2022) is Los c (2023): ** Interpret frequency and related distributions. (include last figure)

3. Probability Concepts (2023)

**Los e (2022) is Los e (2023):** Demonstrate the application of the multiplication and addition rules for probability.(first 2 lines are deleted)

9. The Firm and Market Structures (2023)

**Los e (2022) is Los f (2023): **Explain factors affecting long-run equilibrium under each market structure.

**Los f (2022) is los e (2023): **Describe pricing strategy under each market structure.

12. Monetary and Fiscal Policy (2023)

**Los j (2022) is Los k (2023):**Describe qualities of effective central banks.

**Los k of (2022) is Los j (2023):** Explain the relationships between monetary policy and economic growth, inflation, interest, and exchange rates.

**Los p (2022) is los q (2023): **Describe tools of fiscal policy, including their advantages and disadvantages.

**Los q (2022) is Los p (2023): **Describe the arguments about whether the size of a national debt relative to GDP matters.

15. Currency Exchange Rates (2023)

**Los a (2022) is Los a (2023): **Define an exchange rate and distinguish between nominal and real exchange rates and spot and forward exchange rates.(some content changed)

**Los b (2022) is Los c (2023): **Describe functions of and participants in the foreign exchange market.

**Los c (2022) is Los b (2023):** Calculate and interpret the percentage change in a currency relative to another currency.

23. Long-Lived Assets (2023)

**Los c (2022) is Los c (2023):** Explain and evaluate how capitalising versus expensing costs in the period in which they are incurred affects. (Fig 23.1. Table is different.)

**Los f (2022) is Los g (2023): **Describe the different amortisation methods for intangible assets with finite lives and calculate amortisation expense.

**Los g (2022) is Los h (2023): **Describe how the choice of amortisation method and assumptions concerning useful life and residual value affect amortisation expense, financial statements and ratios.

**Los h (2022) is Los i (2023): **Describe the revaluation model.

**Los i (2022) is Los j (2023): **Explain the impairment of property, plant, and equipment and intangible assets.

**Los j (2022) is Los k (2023): **Explain the derecognition of property, plant, and equipment and intangible assets.

**Los k (2022) is Los f (2023): **Explain and evaluate how impairment, revaluation, and derecognition of property, plant, and equipment and intangible assets affect.

24. Income Taxes (2023)

1. los c of 2022 has been changed as los d of 2023.

2. los d of 2022 has been changed as los c of 2023.

3. los g of 2022 has been changed as los h of 2023.

4. los h of 2022 has been changed as los g of 2023.

31. Capital Investments (2023)

1. los a is added.

2. los a of 2022 has been changed as los b of 2023.

3. los b of 2022 has been changed as los c of 2023.

4. los c of 2022 has been changed as los e of 2023.

5. los d of 2022 has been changed as los f of 2023.

33. Cost Of Capital-Foundational Topics (2023)

1. los g of 2022 has been changed as los g of 2023 with some different content in”Correct Treatment of Flotation Costs”.

37. Security Market Indexes (2023)

1. los k of 2022 has been changed as los i of 2023.

41. Equity Valuation: Concepts and Basic Tools (2022)

1. los f of 2022 has been changed as los g of 2023.

2. los g of 2022 has been changed as los h of 2023.

3. los h of 2022 has been changed as los i of 2023.

4. los i of 2022 has been changed as los j of 2023.

5. los j of 2022 has been changed as los k of 2023.

6. los k of 2022 has been changed as los l of 2023.

7. los l of 2022 has been changed as los m of 2023.

8. los m of 2022 has been changed as los f of 2023.

44. Introduction to Fixed-Income Valuation (2023)

1. los h of 2022 has been changed as los h of 2023 with different content.

62. Portfolio Risk and Return: Part I (2023)

1. los a,b,c of 2022 has been changed as los a,b,c of 2023.

2. los d of 2022 has been changed as los f of 2023.

3. los e of 2022 has been changed as los d of 2023.

4. los i of 2022 has been changed as los e of 2023.

5. los f of 2022 has been changed as los g of 2023.

6. los g, h of 2022 has been changed as los h, i of 2023.

71. Guidance For Standards I–VII (2023)

1. los b of 2022 has been changed as los c of 2023.

2. los c of 2022 has been changed as los b of 2023.

How are the changes related to the course shared?

All the changes in the syllabus, any extra practice done in the current live batch, any additional lectures are shared via google drive with the video students. All Guidance provided to the Live batches is shared with the Video Students as well. If you have enrolled earlier (more than a year before), generally there are minor changes in the syllabus and once the books are released, and the new chapters or changes done in the Live class, it is shared. (The syllabus is the same in a given Calendar Year) Students who defer the exam, or are unable to clear, get their validity extended and all the new chapters and changes on Drive. (No extra charges). Applicable for live students as well. They can continue attending the lectures or get the new lectures home.

1. Rates and Returns (2024)

**b:** Calculate and interpret different approaches to return measurement over time and describe their appropriate uses.

2. Time Value of Money in Finance (2024)

**a:** Calculate and interpret the present value (PV) of fixed-income and equity instruments based on expected future cash flows.

**b:** Calculate and interpret the implied return of fixed-income.

6. Simulation Methods (2024)

**c:** Describe the use of bootstrap resampling in conducting a simulation based on observed data in investment applications.

44. Introduction to Financial Statement Modeling (2024)

**a:** Demonstrate the development of a sales-based pro forma company model.

**b:** Explain how behavioral factors affect analyst forecasts and recommend remedial actions for analyst biases.

**c:** Explain how the competitive position of a company based on a Porter’s five forces analysis affects prices and costs.

**d:** Explain how to forecast industry and company sales and costs when they are subject to price inflation or deflation.

**e: **Explain considerations in the choice of an explicit forecast horizon and an analyst’s choices in developing projections beyond the short-term forecast horizon.

49. Company Analysis: Past and Present (2024)

**b:** Determine a company’s business model.

**c:** Evaluate a company’s revenue and revenue drivers, including pricing power.

**d:** Evaluate a company’s operating profitability and working capital using key measures.

**e:** Evaluate a company’s capital investments and capital structure.

50. Industry and Competitive Analysis (2024)

**a:** Describe the purposes of, and steps involved in, industry and competitive analysis.

**c:** Determine an industry’s size, growth characteristics, profitability, and market share trends.

**e:** Evaluate the competitive strategy and position of a company.

51. Company Analysis: Forecasting (2024)

**a:** Explain principles and approaches to forecasting a company’s financial results and position.

**b:** Explain approaches to forecasting a company’s revenues.

**c: **Explain approaches to forecasting a company’s operating expenses and working capital.

**d: **Explain approaches to forecasting a company’s capital investments and capital structure.

**e: **Describe the use of scenario analysis in forecasting.

55. Fixed-Income Issuance and Trading (2024)

**a:** Describe fixed-income market segments and their issuer and investor participants.

56. Fixed-Income Markets for Corporate Issuers (2024)

**c: **Contrast the long-term funding of investment-grade versus high-yield corporate issuers.

57. Fixed-Income Markets for Government Issuers (2024)

**b: **Contrast the issuance and trading of government and corporate fixed-income instruments.

70. Asset-Backed Security (ABS) Instrument and Market Features

**b: **Describe typical credit enhancement structures used in securitizations.

84. Investments in Private Capital: Equity and Debt (2024)

**c:** Describe the diversification benefits that private capital can provide.

88. Introduction to Digital Assets (2024)

**b: **Explain investment features of digital assets and contrast them with other asset classes.

**c: **Describe investment forms and vehicles used in digital asset investments.

**d: **Analyze sources of risk, return, and diversification among digital asset investments.

1. Rates and Returns (2024)

**Los 1a+1b (2023) is Los 1a (2024):** Interpret interest rates as required rates of return, discount rates, or opportunity costs and explain an interest rate as the sum of a real risk-free rate and premiums that compensate investors for bearing distinct types of risk.

**Los 4m(2023) is Los 1d (2024):** Calculate and interpret annualized return measures and continuously compounded returns, and describe their appropriate uses.

2. Time Value of Money in Finance (2024)

**Los 1d (2023) is Los 2c (2024):** Explain the cash flow additivity principle, its importance for the no-arbitrage condition, and its use in calculating implied forward interest rates, forward exchange rates, and option values.

3. Statistical Measures of Asset Returns (2024)

**Los 2g (2023) is Los 3a (2024):** Calculate, interpret, and evaluate measures of central tendency and location to address an investment problem .

**Los 2k (2023) is Los 3b (2024):** Calculate, interpret, and evaluate measures of dispersion to address an investment problem.

**Los 2m+2n (2023) is Los 3c (2024):** Interpret and evaluate measures of skewness and kurtosis to address an investment problem.

**Los 2p (2023) is Los 3d (2024):** Interpret correlation between two variables to address an investment problem.

4. Probability Trees and Conditional Expectations (2024)

**Los 3j (2023) is Los 4a (2024):** Calculate expected values, variances, and standard deviations and demonstrate their application to investment problems.

**Los 3i (2023) is Los 4b (2024):** Formulate an investment problem as a probability tree and explain the use of conditional expectations in investment application.

5. Portfolio Mathematics (2024)

**Los 3l (2023) is Los 5b (2024):** Calculate and interpret the covariance and correlation of portfolio returns using a joint probability function for returns.

6. Simulation Methods(2024)

**Los 4p(2023) is Los 6b (2024):** Describe Monte Carlo simulation and explain how it can be used in investment applications.

7. Estimation and Inference (2024)

**Los 5c (2023) is Los 7a (2024):** Compare and contrast simple random, stratified random, cluster, convenience, and judgmental sampling and their implications

for sampling error in an investment problem .

8. Hypothesis Testing (2024)

**Los 6c (2023) is Los 8a (2024):** Explain hypothesis testing and its components, including statistical significance, Type I and Type II errors, and the power of a test. .

**Los 6c (2023) is Los 8b (2024):** Construct hypothesis tests and determine their statistical significance, the associated Type I and Type II errors, and power of the test given a significance leve.

10. Simple Linear Regression (2024)

**Los 7a+7b (2023) is Los 10a (2024):** Describe a simple linear regression model, how the least squares criterion is used to estimate regression coefficients, and the interpretation of these coefficients.

**Los 7d (2023) is Los 10c (2024):** Calculate and interpret measures of fit and formulate and evaluate tests of fit and of regression coefficients in a simple linear regression.

11. Introduction to Big Data Techniques (2024)

**Los 68a (2023) is Los 11a (2024):** Describe aspects of “fintech” that are directly relevant for the gathering and analyzing of financial data.

**Los 68b+68c (2023) is Los 11c (2024):** Describe applications of Big Data and Data Science to investment management.

12. The Firm and Market Structures (2024)

**Los 8e+8f (2023) is Los 12a (2024):** Determine and interpret breakeven and shutdown points of production, as well as how economies and diseconomies of scale affect costs under perfect and imperfect competition.

**Los 9b+9c+9d+9e (2023) is Los 12c (2024):** Explain supply and demand relationships under monopolistic competition, including the optimal price and output for firms as

well as pricing strategy.

**Los 9b+9c+9d+9e (2023) is Los 12d (2024): **Explain supply and demand relationships under oligopoly, including the optimal price and output for firms as well as pricing strategy .

**Los 9g+9h (2023) is Los 12e (2024):** Identify the type of market structure within which a firm operates and describe the use and limitations of concentration measures.

13. Understanding Business Cycles (2024)

**Los 11c+11e (2023) is Los 13c (2024):** Describe how resource use, consumer and business activity, housing sector activity, and external trade sector activity vary over the business cycle and describe their measurement using economic indicators.

14. Fiscal Policy (2024)

**Los 12o+12p (2023) is Los 14b (2024): **Describe roles and objectives of fiscal policy as well as arguments as to whether the size of a national debt relative to GDP matters.

**Los 12r+12s (2023) is Los 14d (2024): **Explain the implementation of fiscal policy and difficulties of implementation as well as whether a fiscal policy is expansionary or contractionary.

15. Monetary Policy (2024)

**Los 12h+12i+12j (2023) is Los 15b (2024):** Describe tools used to implement monetary policy tools and the monetary transmission mechanism, and explain the relationships between monetary policy and economic growth, inflation, interest, and exchange rates.

**Los 12k+12l+12m+12n (2023) is Los 15c (2024): **Describe qualities of effective central banks; contrast their use of inflation, interest rate, and exchange rate targeting in expansionary or contractionary monetary policy; and describe the limitations of monetary policy.

16. Introduction to Geopolitics (2024)

**Los 13d (2023) is Los 16d (2024):** Describe geopolitical risk.

**Los 13d (2023) is Los 16f (2024): **Describe the impact of geopolitical risk on investments.

17. International Trade (2024)

**Los 14e (2023) is Los 17b (2024): **Compare types of trade restrictions, such as tariffs, quotas, and export subsidies, and their economic implications.

18. Capital Flows and the FX Market (2024)

**Los 15b (2023) is Los 18a (2024): **Describe the foreign exchange market, including its functions and participants, distinguish between nominal and real exchange rates, and calculate and interpret the percentage change in a currency relative to another currency.

**Los 15i+15j (2023) is Los 18b (2024): **Describe exchange rate regimes and explain the effects of exchange rates on countries’ international trade and capital flows.

19. Exchange Rate Calculations (2024)

**Los 15e+15f+15g (2023) is Los 19b (2024): **Explain the arbitrage relationship between spot and forward exchange rates and interest rates, calculate a forward rate using points or in percentage terms, and interpret a forward discount or premium.

26. Organizational Forms, Corporate Issuer Features, and Ownership (2024)

**Los 28a (2023) is Los 26a (2024): **Compare the organizational forms of businesses.

**Los 28a (2023) is Los 26b (2024): **Describe key features of corporate issuers.

**Los 28b (2023) is Los 26c (2024): **Compare publicly and privately owned corporate issuers.

27. Compare publicly and privately owned corporate issuers (2024)

**Los 29e+29f (2023) is Los 27c (2024): **Describe environmental, social, and governance factors of corporate issuers considered by investors.

29. Working Capital and Liquidity (2024)

**Los 32d (2023) is Los 29a (2024):** Explain the cash conversion cycle and compare issuers’ cash conversion cycles.

**Los 32c+32d(2023) is Los 29b (2024): **Explain liquidity and compare issuers’ liquidity levels.

**Los 32a (2023) is Los 29c (2024):** Describe issuers’ objectives and compare methods for managing working capital and liquidity.

30. Capital Investments and Capital Allocation (2024)

**Los 31b+31c (2023) is Los 30b (2024):** Describe the capital allocation process, calculate net present value (NPV), internal rate of return (IRR), and return on invested capital (ROIC), and contrast their use in capital allocation.

**Los 31b+31d(2023) is Los 30c (2024): **Describe principles of capital allocation and common capital allocation pitfalls.

33. Introduction to Financial Statement Analysis (2024)

**Los 16c+16d (2023) is Los 33c (2024):** Describe the importance of regulatory filings, financial statement notes and supplementary information, management’s commentary, and audit reports.

**Los 16e (2023) is Los 33e (2024): **Describe information sources that analysts use in financial statement analysis besides annual and interim financial reports.

34. Analyzing Income Statements (2024)

**Los 18b (2023) is Los 34a (2024):** Describe general principles of revenue recognition, specific revenue recognition applications, and implications of revenue recognition choices for financial analysis.

**Los 18d (2023) is Los 34b (2024): **Describe general principles of expense recognition, specific expense recognition applications, implications of expense recognition choices for financial analysis and contrast costs that are capitalized versus those that are expensed in the period in which they are incurred.

**Los 18g (2023) is Los 34d (2024): **Describe how earnings per share is calculated and calculate and interpret a company’s basic and diluted earnings per share for companies with simple and complex capital structures including those with antidilutive securities.

35. Analyzing Balance Sheets (2024)

**Los 23l+23m (2023) is Los 35a (2024):** Explain the financial reporting and disclosures related to intangible assets.

**Los 23b (2023) is Los 35b (2024): **Explain the financial reporting and disclosures related to goodwill.

**Los 19e (2023) is Los 35c (2024): **Explain the financial reporting and disclosures related to financial instruments.

**Los 19d+19e+19f (2023) is Los 35d (2024): **Explain the financial reporting and disclosures related to non-current liabilities.

**Los 19g+19h (2023) is Los 35e (2024): **Calculate and interpret common-size balance sheets and related.

38. Analysis of Inventories (2024)

**Los 22g+22h (2023) is Los 38a (2024):** Describe the measurement of inventory at the lower of cost and net realisable value and its implications for financial statements

and ratios.

**Los 22j (2023) is Los 38c (2024): **Describe the presentation and disclosures relating to inventories and explain issues that analysts should consider when examining a company’s inventory disclosures and other sources of information.

39. Long-Lived Assets (2024)

**Los 23j+23k (2023) is Los 39b (2024):** Explain and evaluate how impairment and derecognition of property, plant, and equipment and intangible assets affect the financial statements and ratios.

40. Topics in Long-Term Liabilities and Equity (2024)

**Los 25g (2023) is Los 40a (2024):** Explain the financial reporting of leases from the perspectives of lessors and lessees.

**Los 25i (2023) is Los 40b (2024): **Explain the financial reporting of leases from the perspectives of lessors and lessees.

**Los 25i (2023) is Los 40c (2024): **Describe the financial statement presentation of and disclosures relating to long-term liabilities and share-based compensation.

41. Analysis of Income Taxes (2024)

**Los 24a (2023) is Los 41a (2024):** Contrast accounting profit, taxable income, taxes payable, and income tax expense and temporary versus permanent differences between accounting profit and taxable income.

**Los 24f (2023) is Los 41c (2024): **Calculate, interpret, and contrast an issuer’s effective tax rate, statutory tax rate, and cash tax rate.

42. Financial Reporting Quality (2024)

**Los 26a (2023) is Los 42a (2024):** Compare financial reporting quality with the quality of reported results (including quality of earnings, cash flow, and balance sheet

items).

**Los 26d+26e (2023) is Los 42d (2024): **Describe motivations that might cause management to issue financial reports that are not high quality and conditions that are conducive to issuing low-quality, or even fraudulent, financial reports.

43. Financial Analysis Techniques (2024)

**Los 21b (2023) is Los 43b (2024):** Calculate and interpret activity, liquidity, solvency, and profitability ratios.

**Los 21e (2023) is Los 43e (2024): **Describe the uses of industry-specific ratios used in financial analysis.

50. Industry and Competitive Analysis (2024)

**Los 40b (2023) is Los 50b (2024):** Describe industry classification methods and compare methods by which companies can be grouped.

**Los 40h+40i (2023) is Los 50d (2024): **Analyze an industry’s structure and external influences using Porter’s Five Forces and PESTLE frameworks.

54. Fixed-Income Cash Flows and Types (2024)

**Los 42e+42f (2023) is Los 54a (2024): **Describe common cash flow structures of fixed-income instruments and contrast cash flow contingency provisions that benefit issuers and investors.

55. Fixed-Income Issuance and Trading (2024)

**Los 43c+43d (2023) is Los 55c (2024):** Compare primary and secondary fixed-income markets to equity markets.

56. Fixed-Income Markets for Corporate Issuers (2024)

**Los 43i (2023) is Los 56a (2024):** Compare short-term funding alternatives available to corporations and financial institutions.

**Los 43j (2023) is Los 56b (2024): **Describe repurchase agreements (repos), their uses, and their benefits and risks.

57. Fixed-Income Markets for Government Issuers (2024)

**Los 43f (2023) is Los 57a (2024): **Describe funding choices by sovereign and non-sovereign governments, quasi-government entities, and supranational agencies.

58. Fixed-Income Bond Valuation: Prices and Yields (2024)

**Los 44a (2023) is Los 58a (2024):** Calculate a bond’s price given a yield-to-maturity on or between coupon dates.

59. Yield and Yield Spread Measures for FixedRate Bond (2024)

**Los 44k (2023) is Los 59b (2024):** Compare, calculate, and interpret yield and yield spread measures for fixed-rate bonds.

60. Yield and Yield Spread Measures for FloatingRate Instruments (2024)

**Los 44g (2023) is Los 60a (2024):** Calculate and interpret yield spread measures for floating-rate instruments.

61. The Term Structure of Interest Rates: Spot, Par, and Forward Curves (2024)

**Los 44c (2023) is Los 61c (2024):** Define spot rates and the spot curve, and calculate the price of a bond using spot rates.

**Los 44j (2023) is Los 61d (2024):** define par and forward rates, and calculate par rates, forward rates from spot rates, spot rates from forward rates, and the price of a bond using forward rates.

**Los 44i (2023) is Los 61e (2024):** Compare the spot curve, par curve, and forward curve.

62. Interest Rate Risk and Return (2024)

**Los 46k (2023) is Los 62b (2024):** Describe the relationships among a bond’s holding period return, its Macaulay duration, and the investment horizon.

**Los 46b (2023) is Los 62c (2024):** Define, calculate, and interpret Macaulay duration.

63. Yield-Based Bond Duration Measures and Properties (2024)

**Los 46b+46g (2023) is Los 63a (2024):** Define, calculate, and interpret modified duration, money duration, and the price value of a basis point (PVBP).

64. Yield-Based Bond Convexity and Portfolio Properties (2024)

**Los 46h (2023) is Los 64a (2024):** Calculate and interpret convexity and describe the convexity adjustment.

**Los 46i (2023) is Los 64b (2024): **Calculate the percentage price change of a bond for a specified change in yield, given the bond’s duration and convexity.

**Los 46f (2023) is Los 64c (2024): **Calculate portfolio duration and convexity and explain the limitations of these measures.

65. Curve-Based and Empirical FixedIncome Risk Measures (2024)

**Los 46c (2023) is Los 65a (2024):** Explain why effective duration and effective convexity are the most appropriate measures of interest rate risk for bonds with embedded options.

**Los 46l (2023) is Los 65b (2024): **Calculate the percentage price change of a bond for a specified change in benchmark yield, given the bond’s effective duration and convexity.

**Los 46d (2023) is Los 65c (2024): **Define key rate duration and describe its use to measure price sensitivity of fixed-income instruments to benchmark yield curve changes.

66. Credit Risk (2024)

**Los 47b (2023) is Los 66a (2024):** Describe credit risk and its components, probability of default and loss given default.

**Los 47d+47e (2023) is Los 66b (2024): **Describe the uses of ratings from credit rating agencies and their limitations.

67. Credit Analysis for Government Issuers (2024)

**Los 47j (2023) is Los 67a (2024):** Explain special considerations when evaluating the credit of sovereign and non-sovereign government debt issuers and issues.

68. Credit Analysis for Corporate Issuers (2024)

**Los 47f+47h (2023) is Los 68a (2024):** Describe the qualitative and quantitative factors used to evaluate a corporate borrower’s creditworthiness.

**Los 47c (2023) is Los 68c (2024): **Describe the seniority rankings of debt, secured versus unsecured debt and the priority of claims in bankruptcy, and their impact on credit ratings.

69. Fixed-Income Securitization (2024)

**Los 45a (2023) is Los 69a (2024):** Explain benefits of securitization for issuers, investors, economies, and financial markets.

**Los 45b (2023) is Los 69b (2024): **Describe securitization, including the parties and the roles they play.

71. Mortgage-Backed Security (MBS) Instrument and Market Features (2024)

**Los 45c+45f (2023) is Los 71a (2024):** Define prepayment risk and describe time tranching structures in securitizations and their purpose.

**Los 45d (2023) is Los 71b (2024): **Describe fundamental features of residential mortgage loans that are securitized.

76. Pricing and Valuation of Forward Contracts and for an Underlying with Varying Maturities (2024)

**Los 52b (2023) is Los 76b (2024):** Explain how forward rates are determined for interest rate forward contracts and describe the uses of these forward rates.

82. Pricing and Valuation of Forward Contracts and for an Underlying with Varying Maturities (2024)

**Los 58a (2023) is Los 82a (2024):** Describe features and categories of alternative investments.

**Los 58b (2023) is Los 82b (2024): **Compare direct investment, co-investment, and fund investment methods for alternative investments.

**Los 58c (2023) is Los 82c (2024): **Describe investment ownership and compensation structures commonly used in alternative investments.

83. Alternative Investment Performance and Returns (2024)

**Los 59a (2023) is Los 83a (2024):** Describe the performance appraisal of alternative investments.

84. Investments in Private Capital: Equity and Debt (2024)

**Los 60a (2023) is Los 84a (2024):** Explain features of private equity and its investment characteristics.

**Los 60b (2023) is Los 84b (2024): **Explain features of private debt and its investment characteristics.

85. Real Estate and Infrastructure (2024)

**Los 60c (2023) is Los 85a (2024):** Explain features and characteristics of real estate.

**Los 60c (2023) is Los 85b (2024): **Explain the investment characteristics of real estate investments.

**Los 60d (2023) is Los 85c (2024): **Explain features and characteristics of infrastructure.

**Los 60d (2023) is Los 85d (2024): **Explain the investment characteristics of infrastructure investments.

86. Natural Resources (2024)

**Los 60e (2023) is Los 86a (2024):** Explain features of raw land, timberland, and farmland and their investment characteristics.

**Los 60e (2023) is Los 86b (2024): **Describe features of commodities and their investment characteristics.

**Los 60e (2023) is Los 86c (2024): **Analyze sources of risk, return, and diversification among natural resource investments.

87. Hedge Funds (2024)

**Los 60f (2023) is Los 87a (2024):** Explain investment features of hedge funds and contrast them with other asset classes.

**Los 60f (2023) is Los 87b (2024): **Describe investment forms and vehicles used in hedge fund investments.

**Los 60f (2023) is Los 87c (2024): **Analyze sources of risk, return, and diversification among hedge fund investments.

2. Time Value of Money in Finance (2024)

**Los 1c(2023):** (Calculate and interpret the future value (FV) and present value (PV) of a single sum of money, an ordinary annuity, an annuity due, a perpetuity (PV only), and a series of unequal cash flows) is deleted.

**Los 1e(2023): **(Calculate the solution for time value of money problems with different frequencies of compounding) is deleted.

**Los 1f(2023): **(Calculate and interpret the effective annual rate, given the stated annual interest rate and the frequency of compounding) is deleted.

3. Statistical Measures of Asset Returns (2024)

**Los 2a(2023):** (Identify and compare data types) is deleted.

**Los 2b(2023): (**Describe how data are organized for quantitative analysis) is deleted.

**Los 2c(2023): **(Interpret frequency and related distributions) is deleted.

**Los 2d(2023): **(Interpret a contingency table) is deleted.

**Los 2e(2023): **(Describe ways that data may be visualized and evaluate uses of specific visualizations) is deleted.

**Los 2f(2023): **(Describe how to select among visualization types) is deleted.

**Los 2h(2023): **(Evaluate alternative definitions of mean to address an investment problem) is deleted.

**Los 2i(2023):** (Calculate quantiles and interpret related visualizations) is deleted.

**Los 2l(2023):** (Calculate and interpret target downside deviation) is deleted.

4. Probability Trees and Conditional Expectations (2024)

**Los 3a(2023):** (Define a random variable, an outcome, and an event) is deleted.

**Los 3b(2023): **(Identify the two defining properties of probability, including mutually exclusive and exhaustive events, and compare and contrast empirical, subjective, and a priori probabilities) is deleted.

**Los 3c(2023): **(Describe the probability of an event in terms of odds for and against the event) is deleted

**Los 3d(2023): **(Calculate and interpret conditional probabilities) is deleted.

**Los 3e(2023): **(Demonstrate the application of the multiplication and addition rules for probability) is deleted.

**Los 3f(2023): **(Compare and contrast dependent and independent events) is deleted.

**Los 3g(2023): **(Calculate and interpret an unconditional probability using the total probability rule) is deleted.

**Los 3h(2023): **(Calculate and interpret the expected value, variance, and standard deviation of random variables) is deleted

**Los 3n(2023): **(Identify the most appropriate method to solve a particular counting problem and analyze counting problems using factorial, combination, and permutation concepts) is deleted.

6. Simulation Methods (2024)

**Los 4a(2023):** (Define a probability distribution and compare and contrast discrete and continuous random variables and their probability functions) is deleted.

**Los 4b(2023): **(Calculate and interpret probabilities for a random variable given its cumulative distribution function) is deleted.

**Los 4c(2023):** (Describe the properties of a discrete uniform random variable, and calculate and interpret probabilities given the discrete unifoem distribution function) is deleted.

**Los 4d(2023): **(Describe the properties of the continuous uniform distribution, and calculate and interpret probabilities given a continuous uniform distribution) is deleted.

**Los 4e(2023): **(Describe the properties of a Bernoulli random variable and a binomial random variable, and calculate and interpret probabilities given the binomial distribution) is deleted.

**Los 4f(2023): **(Explain the key properties of the normal distribution) is deleted.

**Los 4g(2023): **(Contrast a multivariate distribution and a univariate distribution, and explain the role of correlation in the multivariate normal distribution) is deleted.

**Los 4h(2023): **(Calculate the probability that a normally distributed random variable lies inside a given interval) is deleted.

**Los 4i(2023): **(Explain how to standardize a random variable) is deleted.

**Los 4j(2023): **(Calculate and interpret probabilities using the standard normal distribution) is deleted.

**Los 4n(2023): **(Describe the properties of the Student’s t-distribution, and calculate and interpret its degrees of freedom) is deleted.

**Los 4o(2023): **(Describe the properties of the chi-square distribution and the Fdistribution, and calculate and interpret their degrees of freedom) is deleted.

7. Estimation and Inference (2024)

**Los 5a(2023):** (Compare and contrast probability samples with non-probability samples and discuss applications of each to an invesment problem) is deleted.

**Los 5b(2023): **(Explain sampling error) is deleted.

**Los 5e(2023): **(Calculate and interpret the standard error of the sample mean) is deleted.

**Los 5f(2023):** (Identify and describe desirable properties of an estimator) is deleted.

**Los 5g(2023): **(Contrast a point estimate and a confidence interval estimate of a population parameter) is deleted.

**Los 5h(2023): **(Calculate and interpret a confidence interval for a population mean, given a normal distribution with 1) a known population variance, 2) an unknown population variance, or 3) an unknownpopulation variance and a large sample size) is deleted.

**Los 5j(2023): **(Describe the issues regarding selection of the appropriate sample size, data snooping bias, sample selection bias, survivorship bias,look-ahead bias, and time -period bias) is deleted.

8. Hypothesis Testing (2024)

**Los 6a(2023):** (Define a hypothesis, describe the steps of hypothesis testing, and describe and interpret the choice of the null and alternative hypotheses) is deleted.

**Los 6b(2023): **(Compare and contrast one-tailed and two-tailed tests of hypotheses) is deleted.

**Los 6d(2023): **(Explain a decision rule and the relation between confidence intervals and hypothesis tests, and determine whether a statistically significant result is also economically meaningful) is deleted.

**Los 6e(2023):** (Explain and interpret the p-value as it relates to hypothesis testing) is deleted.

**Los 6f(2023): **(Describe how to interpret the significance of a test in the context of multiple tests) is deleted.

**Los 6g(2023): **(Identify the appropriate test statistic and interpret the results for a hypothesis test concerning the population mean of both large and small samples when the population is normally or approximately normally distributed and the variance is (1) known or (2) unknown) is deleted.

**Los 6h(2023): **(Identify the appropriate test statistic and interpret the results for a hypothesis test concerning the euality of the population means of two at least approximately normally distributed populations based on independent test concerning the equality of the population means of two at least) is deleted.

**Los 6i(2023): **(Identify the appropriate test statistic and interpret the results for a hypothesis test concerning the mean difference of two normally distributed populations) is deleted.

**Los 6j(2023): **(Identify the appropriate test statistic and interpret the results for a hypothesis test concerning (1) the variance of a normally distributed population and (2) the equality of the variances of two normally distributed populations based on two independent random samples) is deleted.

10. Simple Linear Regression (2024)

**Los 7f(2023): **(Formulate a null and an alternative hypothesis about a population value of a regression coefficient, and determine whether the null hypothesis is rejected at a given level of significance) is deleted.

12. The Firm and Market Structures (2024)

**Los 8a(2023): **(Calculate and interpret price, income, and cross-price elasticities of demand and describe factors that affect each measure) is deleted.

**Los 8b(2023): **(Compare substitution and income effects) is deleted.

**Los 8c(2023): **(Contrast normal goods with inferior goods) is deleted.

**Los 8d(2023): **(Describe the phenomenon of diminishing marginal returns) is deleted.

**Los 9f(2023): **(Explain factors affecting long-run equilibrium under each market structure) is deleted.

13. Understanding Business Cycles (2024)

**Los 11d(2023):** (Describe theories of the business cycle) is deleted.

**Los 11f(2023): **(Describe types of unemployment, and compare measures of unemployment) is deleted.

**Los 11g(2023): **(Explain inflation, hyperinflation, disinflation, and deflation) is deleted.

**Los 11h(2023): **(Explain the construction of indexes used to measure inflation) is deleted.

**Los 11i(2023): **(Compare inflation measures, including their uses and limitations) is deleted.

**Los 11j(2023): **(Contrast cost-push and demand-pull inflation) is deleted.

14. Fiscal Policy (2024)

**Los 12d(2023):** (Describe theories of the demand for and supply of money) is deleted.

**Los 12e(2023): **(Describe the Fisher effect) is deleted.

**Los 12g(2023): **(Contrast the costs of expected and unexpected inflation) is deleted.

15. Monetary Policy (2024)

**Los 12b(2023):** (Describe functions and definitions of money) is deleted.

**Los 12c(2023): **(Explain the money creation process) is deleted.

17. International Trade (2024)

**Los 14a(2023):** (Compare gross domestic product and gross national product) is deleted.

**Los 14c(2023): **(Contrast comparative advantage and absolute advantage ) is deleted.

**Los 14d(2023): **(Compare the Ricardian and Heckscher–Ohlin models of trade and the source(s) of comparative advantage in each model ) is deleted.

**Los 14h(2023): **(Describe the balance of payments accounts including their components ) is deleted.

**Los 14i(2023):** (Explain how decisions by consumers, firms, and governments affect the balance of payments) is deleted.

18. Capital Flows and the FX Market (2024)

**Los 15a(2023):** (Define an exchange rate and distinguish between nominal and real exchange rates and spot and forward exchange rates) is deleted.

**Los 15c(2023): **(Describe functions of and participants in the foreign exchange market) is deleted.

**Los 15h(2023): **(Calculate and interpret the forward rate consistent with the spot rate and the interest rate in each currency) is deleted.

29. Working Capital and Liquidity (2024)

**Los 32b(2023):** (Explain expected relations between working capital, liquidity, and short-term funding needs) is deleted.

**Los 32e(2023): **(Evaluate short-term funding choices available to a company) is deleted.

30. Capital Investments and Capital Allocation (2024)

**Los 31e(2023):** (Describe expected relations among a company’s investments, company value, and share price ) is deleted.

31. Capital Structure (2024)

**Los 33b(2023):** (Describe how taxes affect the cost of capital from different capital sources) is deleted.

**Los 34b(2023):** (Describe how a company’s capital structure may change over its life cycle) is deleted.

**Los 33c(2023):** (Calculate and interpret the cost of debt capital using the yield-tomaturity approach and the debt-rating approach) is deleted.

**Los 33d(2023):** (Calculate and interpret the cost of noncallable, nonconvertible preferred stock) is deleted.

**Los 33e(2023):** (Calculate and interpret the cost of equity capital using the capital asset pricing model approach and the bond yield plus risk premium approach) is deleted.

**Los 34e(2023):** (Describe competing stakeholder interests in capital structure decisions) is deleted.

**Los 33f(2023):** (Explain and demonstrate beta estimation for public companies, thinly traded public companies, and nonpublic companies) is deleted.

**Los 33g(2023):** (Explain and demonstrate the correct treatment of flotation costs ) is deleted.

32. Business Models (2024)

**Los 30b(2023):** (Describe expected relations between a company’s external environment, business model, and financing needs) is deleted.

**Los 30c(2023):** (Explain and classify types of business and financial risks for a company) is deleted.

33. Introduction to Financial Statement Analysis (2024)

**Los 16b(2023):** (Describe the roles of the statement of financial position, statement of comprehensive income, statement of changes in equity, and statement of cash flows in evaluating a company’s performance and financial position) is deleted.

34. Analyzing Income Statements(2024)

**Los 18a(2023):** (Describe the components of the income statement and alternative presentation formats of that statement) is deleted.

**Los 18c(2023):** (Calculate revenue given information that might influence the choice of revenue recognition method) is deleted.

**Los 18f(2023): **(Contrast operating and non-operating components of the incomestatement) is deleted.

**Los 18h(2023): **(Contrast dilutive and antidilutive securities and describe the implications of each for the earnings per share calculation) is deleted.

**Los 18i(2023): **(Formulate income statements into common-size income statements) is deleted.

**Los 18k(2023): **(Describe, calculate, and interpret comprehensive income) is deleted.

**Los 18l(2023): **(describe other comprehensive income and identify major types of items included in it) is deleted.

35. Analyzing Balance Sheets (2024)

**Los 19a(2023):** (Describe the elements of the balance sheet: assets, liabilities, and equity) is deleted.

**Los 19b(2023):** (Describe uses and limitations of the balance sheet in financial analysis) is deleted.

**Los 19c(2023): **(Describe alternative formats of balance sheet presentation) is deleted.

36. Understanding Cash Flow Statements (2024)

**Los 20a(2023):** (Compare cash flows from operating, investing, and financing activities and classify cash flow items as relating to one of those three categories given a description of the items) is deleted.

**Los 20b(2023):** (Describe how non-cash investing and financing activities are reported) is deleted.

**Los 20d(2023): **(Compare and contrast the direct and indirect methods of presenting cash from operating activities and describe arguments in favor of each method) is deleted.

38. Analysis of Inventories (2024)

**Los 22a(2023):** (Contrast costs included in inventories and costs recognised as expenses in the period in which they are incurred) is deleted.

**Los 22b(2023):** (Describe different inventory valuation methods (cost formulas)) is deleted.

**Los 22c(2023): **(Calculate and compare cost of sales, gross profit, and ending inventory using differentinventory valuation methods and using perpetual and periodic inventory systems) is deleted.

**Los 22e(2023): **(Explain LIFO reserve and LIFO liquidation and their effects on financial statements and ratios) is deleted.

**Los 22f(2023): **(Demonstrate the conversion of a company’s reported financial statements from LIFO to FIFO for purposes of comparison) is deleted.

**Los 22k(2023): **(Calculate and compare ratios of companies, including companies that use different inventory methods) is deleted.

**Los 22l(2023): **(Analyze and compare the financial statements of companies, including companies that use different inventory methods) is deleted.

39. Analysis of Long-Term Assets (2024)

**Los 23a(2023):** (Identify and contrast costs that are capitalised and costs that are expensed in the period in which they are incurred) is deleted.

**Los 23c(2023):** (Explain and evaluate how capitalising versus expensing costs in the period in which they are incurred affects financial statements and ratios) is deleted.

**Los 23d(2023): **(Describe the different depreciation methods for property, plant, and equipment and calculate depreciation expense) is deleted.

**Los 23e(2023): **(Describe how the choice of depreciation method and assumptions concerning useful life and residual value affect depreciation expense, financial statements, and ratios) is deleted.

**Los 23f(2023): **(Explain and evaluate how impairment, revaluation, and derecognition of property, plant, and equipment and intangible assets affect financial statements and ratios) is deleted.

**Los 23g(2023): **(Describe the different amortisation methods for intangible assets with finite lives and calculate amortisation expense) is deleted.

**Los 23h(2023): **(Describe how the choice of amortisation method and assumptions concerning useful life and residual value affect amortisation expense, financial statements, and ratios ) is deleted.

**Los 23i(2023): **(Describe the revaluation model ) is deleted.

**Los 23h(2023): **(Compare the financial reporting of investment property with that of property, plant, and equipment ) is deleted.

40. Topics in Long-Term Liabilities and Equity (2024)

**Los 25a(2023):** (Determine the initial recognition, initial measurement and subsequent measurement of bonds) is deleted.

**Los 25b(2023):** (Describe the effective interest method and calculate interest expense, amortisation of bond discounts/premiums, and interest payments) is deleted.

**Los 25c(2023): **(Explain the derecognition of debt) is deleted.

**Los 25d(2023): **(Describe the role of debt covenants in protecting creditors) is deleted.

**Los 25e(2023): **(Describe the financial statement presentation of and disclosures relating to debt) is deleted.

**Los 25f(2023): **(Explain motivations for leasing assets instead of purchasing them) is deleted.

**Los 25h(2023): **(Explain the financial reporting of leases from a lessor’s perspective) is deleted.

**Los 25j(2023): **(Calculate and interpret leverage and coverage ratios) is deleted.

41. Analysis of Income Taxes (2024)

**Los 24c(2023):** (Calculate income tax expense, income taxes payable, deferred tax assets, and deferred tax liabilities, and calculate and interpret the adjustment to the financial statements related to a change in the income tax rate ) is deleted.

**Los 24d(2023):** (Calculate the tax base of a company’s assets and liabilities) is deleted.

**Los 24e(2023): **(Evaluate the effect of tax rate changes on a company’s financial statements and ratios) is deleted.

**Los 24g(2023): **(Explain recognition and measurement of current and deferred tax items) is deleted.

**Los 24h(2023): **(Describe the valuation allowance for deferred tax assets—when it is required and what effect it has on financial statements) is deleted.

**Los 24j(2023): **(identify the key provisions of and differences between income tax accounting under International Financial Reporting Standards (IFRS) and US generally accepted accounting principles (GAAP)) is deleted.

42. Financial Reporting Quality (2024)

**Los 17a(2023):** (Describe the objective of financial reporting and the importance of financial reporting standards in security analysis and valuation ) is deleted.

**Los 17b(2023):** (Describe the roles of financial reporting standard-setting bodies and regulatory authorities in establishing and enforcing reporting standards) is deleted.

**Los 17c(2023): **(Describe the International Accounting Standards Board’s conceptual framework, including qualitative characteristics of financial reports, constraints on financial reports, and required reporting elements) is deleted.

**Los 17d(2023): **(Describe general requirements for financial statements under International Financial Reporting Standards (IFRS)) is deleted.

43. Financial Analysis Techniques (2024)

**Los 21f(2023):** (Explain the requirements for segment reporting and calculate and interpret segment ratios ) is deleted.

50. Industry and Competitive Analysis (2024)

**Los 40a(2023):** (Explain uses of industry analysis and the relation of industry analysis to company analysis) is deleted.

**Los 40c(2023):** (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 “growth,” “defensive,” and “cyclical”) is deleted.

**Los 40d(2023):** (Describe current industry classification systems, and identify how a company should be classified, given a description of its activities and the classification system ) is deleted.

**Los 40e(2023):** (Explain how a company’s industry classification can be used to identify a potential “peer group” for equity valuation) is deleted.

**Los 40f(2023):** (Describe the elements that need to be covered in a thorough industry analysis) is deleted.

**Los 40g(2023):** (Describe the principles of strategic analysis of an industry) is deleted.

**Los 40j(2023):** (Describe macroeconomic, technological, demographic, governmental, social, and environmental influences on industry growth, profitability, and risk) is deleted.

**Los 40k(2023):** (Compare characteristics of representative industries from the various economic sectors) is deleted.

55. Fixed-Income Issuance and Trading (2024)

**Los 43a(2023):** (Describe classifications of global fixed-income markets ) is deleted.

**Los 43b(2023):** (Describe the use of interbank offered rates as reference rates in floating-rate debt ) is deleted.

**Los 43e(2023):** (Describe securities issued by sovereign governments) is deleted.

**Los 43g(2023):** (Describe types of debt issued by corporations) is deleted.

**Los 43h(2023): **(Describe structured financial instruments) is deleted.

58. Fixed-Income Bond Valuation: Prices and Yields (2024)

**Los 44d(2023):** (Describe and calculate the flat price, accrued interest, and the full price of a bond ) is deleted.

63. Yield-Based Bond Duration Measures and Properties (2024)

**Los 46j(2023):** (Describe how the term structure of yield volatility affects the interest rate risk of a bond) is deleted.

66. Credit Risk (2024)

**Los 47a(2023):** (Describe credit risk and credit-related risks affecting corporate bonds) is deleted.

10. Aggregate Output, Prices, and Economic Growth (2023)

Chapter has been deleted.

27. Applications of Financial Statement Analysis (2023)

Chapter has been deleted.

35. Measures of Leverage (2023)

Chapter has been deleted.

67. Technical Analysis (2023)

Chapter has been deleted.

- 2022-23
- 2023-24

17. Cost of Capital: Advanced Topics (2023)

**a: **Explain top-down and bottom-up factors that impact the cost of capital.

**b: **Compare methods used to estimate the cost of debt.

**c: **Explain historical and forward-looking approaches to estimating an equity risk premium.

**d: **Compare methods used to estimate the required return on equity.

**e: **Estimate the cost of debt or required return on equity for a public company and a private company.

**f:** Evaluate a company’s capital structure and cost of capital relative to peers.

18. Corporate Restructuring (2023)

**a: **Explain types of corporate restructurings and issuers’ motivations for pursuing them.

**b: **Explain the initial evaluation of a corporate restructuring.

**c: **Demonstrate valuation methods for, and interpret valuations of, companies involved in corporate restructurings.

**d: **Demonstrate how corporate restructurings affect an issuer’s EPS, net debt to EBITDA ratio, and weighted average cost of capital.

**e: **Evaluate corporate investment actions, including equity investments, joint ventures, and acquisitions.

**f:** Evaluate corporate divestment actions, including sales and spin offs.

**g: **Evaluate cost and balance sheet restructurings.

1. Multiple Regression (2023)

**Los a: **(Describe the types of investment problems addressed by multiple linear regression and the regression process) is added.

**Los 2a+2b (2022) is Los 1b(2023): **Formulate a multiple linear regression model, describe the relation between the dependent variable and several independent variables, and interpret estimated regression coefficients.

**Los c:** (Explain the assumptions underlying a multiple linear regression model and interpret residual plots indicating potential violations of these assumptions) is added.

**Los 2i (2022) is Los 1d (2023): **Evaluate how well a multiple regression model explains the dependent variable by analyzing ANOVA table results and measures of goodness of fit.

**Los e: **(Formulate hypotheses on the significance of two or more coefficients in a multiple regression model and interpret the results of the joint hypothesis tests) is added.

**Los 2e (2022) is Los 1f (2023): **Calculate and interpret a predicted value for the dependent variable, given the estimated regression model and assumed values for the independent variables.

**Los 2m (2022) is Los 1g (2023):** Describe how model misspecification affects the results of a regression analysis and how to avoid common forms of misspecification.

**Los 2k (2022) is Los 1h (2023):** Explain the types of heteroskedasticity and how it affects statistical inference.

**Los i: **(Explain serial correlation and how it affects statistical inference) is added.

**Los 2l (2022) is Los 1j (2023):** Explain multicollinearity and how it affects regression analysis.

**Los k: **(Describe influence analysis and methods of detecting influential data point) is added.

**Los 2j (2022) is Los 1l (2023):** Formulate and interpret a multiple regression model that includes qualitative independent variables.

**Los 2n (2022) is Los 1m (2023):** Formulate and interpret a logistic regression model.

**Los 2a (2022):** (Formulate a multiple regression equation to describe the relation between a dependent variable and several independent variables, and determine the statistical significance of each independent variable) is deleted.

**Los 2b (2022): **(Interpret estimated regression coefficients and their p-values) is deleted.

**Los 2c (2022): **(Formulate a null and an alternative hypothesis about the population value of a regression coefficient, calculate the value of the test statistic, and determine whether to reject the null hypothesis at a given level of significance) is deleted.

**Los 2d (2022): **(Interpret the results of hypothesis tests of regression coefficients) is deleted.

**Los 2f (2022): **(Explain the assumptions of a multiple regression model) is deleted.

**Los 2g (2022):** (Calculate and interpret the F-statistic, and describe how it is used in regression analysis) is deleted.

**Los 2h (2022): **(Contrast and interpret the R2 and adjusted R2 in multiple regression) is deleted.

**Los 2o (2022): **(Evaluate and interpret a multiple regression model and its results) is deleted.

5. Currency Exchange Rates: Understanding Equilibrium Value (2023)

**Los 6a (2022) is Los 5a (2023):** Calculate and interpret the bid–offer spread on a spot or forward currency quotation and describe the factors that affect the bid–offer spread.

**Los 6b (2022) is Los 5b (2023):** Identify a triangular arbitrage opportunity and calculate its profit, given the bid–offer quotations for three currencies.

**Los 6c (2022) is Los 5c (2023):** Explain spot and forward rates and calculate the forward premium/discount for a given currency.

**Los 6d (2022) is Los 5d (2023):** Calculate the mark-to-market value of a forward contract.

**Los 6e (2022) is Los 5e (2023):** Explain international parity conditions (covered and uncovered interest rate parity, forward rate parity, purchasing power parity, and the international Fisher effect).

**Los 6f (2022) is Los 5f (2023):** Describe relations among the international parity conditions.

**Los 6g (2022) is Los 5g (2023):** Evaluate the use of the current spot rate, the forward rate, purchasing power parity, and uncovered interest parity to forecast future spot exchange rates.

**Los 6h (2022) is Los 5h (2023):** Explain approaches to assessing the long-run fair value of an exchange rate.

**Los 6i (2022) is Los 5i (2023):** Describe the carry trade and its relation to uncovered interest rate parity and calculate the profit from a carry trade.

**Los 6j (2022) is Los 5j (2023):** Explain how flows in the balance of payment accounts affect currency exchange rates.

**Los 6k (2022) is Los 5k (2023): **Explain the potential effects of monetary and fiscal policy on exchange rates.

**Los 6l (2022) is Los 5l (2023):** Describe objectives of central bank or government intervention and capital controls and describe the effectiveness of intervention and capital controls.

**Los 6m (2022) is Los 5m (2023):** Describe warning signs of a currency crisis.

14. Financial Statement Modeling (2023)

**Los 22a (2022) is Los 14a (2023):** Compare top-down, bottom-up, and hybrid approaches for developing inputs to equity valuation models.

**Los 22b (2022) is Los 14b (2023):** Compare “growth relative to GDP growth” and “market growth and market share” approaches to forecasting revenue.

**Los 22c (2022) is Los 14c (2023):** Evaluate whether economies of scale are present in an industry by analyzing operating margins and sales levels.

**Los 22d (2022) is Los 14d(2023): **Demonstrate methods to forecast cost of goods sold and operating expenses.

**Los 22d (2022) is Los 14e (2023):** Demonstrate methods to forecast non-operating items, financing costs, and income taxes.

**Los 22e (2022) is Los 14f (2023):** Describe approaches to balance sheet modeling.

**Los 22m (2022) is Los 14g (2023):** Demonstrate the development of a sales-based pro forma company model.

**Los h: **(Explain how behavioral factors affect analyst forecasts and recommend remedial actions for analyst biases) is added.

**Los 22g (2022) is Los 14i (2023):** Explain how competitive factors affect prices and costs.

**Los 22h (2022) is Los 14j (2023):** Evaluate the competitive position of a company based on a Porter’s five forces analysis.

**Los 22i (2022) is Los 14k (2023):** Explain how to forecast industry and company sales and costs when they are subject to price inflation or deflation.

**Los 22j (2022) is Los 14l (2023):** Evaluate the effects of technological developments on demand, selling prices, costs, and margins.

**Los 22k (2022) is Los 14m (2023):** Explain considerations in the choice of an explicit forecast horizon.

**Los 22l (2022) is Los 14n (2023):** Explain an analyst’s choices in developing projections beyond the short-term forecast horizon.

**Los 22f (2022):** (Describe the relationship between return on invested capital and competitive advantage) is deleted.

23. Residual Income Valuation (2023)

**Los 26a (2022) is Los 23a (2023):** Calculate and interpret residual income, economic value added, and market value added.

**Los 26b (2022) is Los 23b (2023):** Describe the uses of residual income models.

**Los 26c (2022) is Los 23c (2023):** Calculate the intrinsic value of a common stock using the residual income model and compare value recognition in residual income and other present value models.

**Los 26d (2022) is Los 23d (2023):** Explain fundamental determinants of residual income.

**Los 26e (2022) is Los 23e (2023):** Explain the relation between residual income valuation and the justified price-to-book ratio based on forecasted fundamentals.

**Los 26f (2022) is Los 23f (2023):** Calculate and interpret the intrinsic value of a common stock using single-stage (constant-growth) and multistage residual income models.

**Los 26g (2022) is Los 23g (2023):** Calculate the implied growth rate in residual income, given the market price-to-book ratio and an estimate of the required rate of return on equity.

**Los 26h (2022) is Los 23h (2023):** Explain continuing residual income and justify an estimate of continuing residual income at the forecast horizon, given company and industry prospects.

**Los 26i (2022) is Los 23i (2023):** Compare residual income models to dividend discount and free cash flow models.

**Los 26j (2022) is Los 23j (2023):** Explain strengths and weaknesses of residual income models and justify the selection of a residual income model to value a company’s common stock.

**Los 26k (2022) is Los 23k (2023):** Describe accounting issues in applying residual income models.

**Los 26l (2022):** (Evaluate whether a stock is overvalued, fairly valued, or undervalued based on a residual income model) is deleted.

32. Real Estate Investments (2023)

**Los 35a (2022) is Los 32a (2023): **Compare the characteristics, classifications, principal risks, and basic forms of public and private real estate investments.**Los 35b (2022) is Los 32b (2023): **Explain portfolio roles and economic value determinants of real estate investments.**Los 35c (2022) is Los 32c (2023): **Discuss commercial property types, including their distinctive investment characteristics.**Los 35d (2022) is Los 32d (2023): **Explain the due diligence process for both private and public equity real estate investments.**Los 35e(2022) is Los 32e (2023): **Discuss real estate investment indexes, including their construction and potential biases.

**Los 35f (2022) is Los 32f (2023):** Discuss the income, cost, and sales comparison approaches to valuing real estate properties.**Los 35g (2022) is Los 32g (2023): **Compare the direct capitalization and discounted cash flow valuation methods.**Los 35h (2022) is Los 32h (2023): **Estimate and interpret the inputs (for example, net operating income, capitalization rate, and discount rate) to the direct capitalization and discounted cash flow valuation methods.**Los 35i (2022) is Los 32i (2023): **Calculate the value of a property using the direct capitalization and discounted cash flow valuation methods.**Los 35j (2022) is Los 32j (2023): **Calculate and interpret financial ratios used to analyze and evaluate private real estate investments.**Los 35k (2022) is Los 32k (2023): **Discuss types of REITs.**Los 35l (2022) is Los 32l (2023): **Justify the use of net asset value per share (NAVPS) in REIT valuation and estimate NAVPS based on forecasted cash net operating income.**Los 35m (2022) is Los 32m (2023): **Describe the use of funds from operations (FFO) and adjusted funds from operations (AFFO) in REIT valuation.**Los 35n (2022) is Los 32n (2023): **Calculate and interpret the value of a REIT share using the net asset value, relative value (price-to-FFO and price-to-AFFO), and discounted cash flow approaches.**Los 35o (2022) is Los 32o (2023): **Explain advantages and disadvantages of investing in real estate through publicly traded securities compared to private vehicles.

39. Economics and Investment Markets (2023)

**Los 42a (2022) is Los 39a (2023): **Explain the notion that to affect market values, economic factors must affect one or more of the following: 1) default-free interest rates across maturities, 2) the timing and/or magnitude of expected cash flows, and 3) risk premiums.**Los 42b (2022) is Los 39b (2023): **Explain the role of expectations and changes in expectations in market valuation.**Los 42c (2022) is Los 39c (2023): **Explain the relationship between the long-term growth rate of the economy, the volatility of the growth rate, and the average level of real short-term interest rates.**Los 42d (2022) is Los 39d (2023): **Explain how the phase of the business cycle affects policy and short-term interest rates, the slope of the term structure of interest rates, and the relative performance of bonds of differing maturities.**Los 42e (2022) is Los 39e (2023): **Describe the factors that affect yield spreads between non-inflation-adjusted and inflation-indexed bonds.**Los 42f (2022) is Los 39f (2023): **Explain how the phase of the business cycle affects credit spreads and the performance of credit-sensitive fixed-income instruments.**Los 42g (2022) is Los 39g (2023): **Explain how the characteristics of the markets for a company’s products affect the company’s credit quality.**Los 42i (2022) is Los 39h (2023): **Explain the relationship between the consumption hedging properties of equity and the equity risk premium.**Los 42h (2022)is Los 39i (2023): **Explain how the phase of the business cycle affects short-term and long-term earnings growth expectations.**Los 42j (2022) is Los 39j (2023): **Describe cyclical effects on valuation multiples.**Los 42l (2022) is Los 39k (2023): **Describe the economic factors affecting investment in commercial real estate.

**Los 42k (2022): **(Describe how economic analysis is used in sector rotation strategies) is deleted.

1. Introduction to Linear Regression (2022)

Chapter has been deleted.

15. Capital Structure (2022)

Chapter has been deleted.

19. Capital Budgeting (2022)

Chapter has been deleted.

21. Return Concepts (2022)

Chapter has been deleted.

38.Hedge Fund Strategies (2024)

**a: **Discuss how hedge fund strategies may be classified.

**b: **Discuss investment characteristics, strategy implementation, and role in a portfolio of equity-related hedge fund strategies.

**c: **Discuss investment characteristics, strategy implementation, androle in a portfolio of event-driven hedge fund strategies.

**d: **Discuss investment characteristics, strategy implementation, and role in a portfolio of relative value hedge fund strategies

**e: **Discuss investment characteristics, strategy implementation, and role in a portfolio of opportunistic hedge fund strategies.

**f:** Discuss investment characteristics, strategy implementation, and role in a portfolio of specialist hedge fund strategies.

**g: **Discuss investment characteristics, strategy implementation, and role in a portfolio of multi-manager hedge fund strategies.

**h: **Describe how factor models may be used to understand hedge fund risk exposures.

**i: **Evaluate the impact of an allocation to a hedge fund strategy in a traditional investment portfolio.

12. Employee Compensation: PostEmployment and Share-Based (2024)

**Los 9a (2023) is Los 12a (2024):** Contrast types of employee compensation.

**Los 9a (2023) is Los 12b (2024):** Explain how share-based compensation affects the financial statements.

**Los 9g (2023) is Los 12c (2024):** Explain how to forecast share-based compensation expense and shares outstanding in a financial statement model and their use in

valuation.

**Los 9e, f (2023) is Los 12d (2024):** Explain how post-employment benefits affect the financial statements.

**Los 9h(2023) is Los 12e (2024): **Explain financial modeling and valuation considerations for post-employment benefits.

27. Private Company Valuation (2024)

**Los 24a (2023) is Los 27a (2024):** Contrast important public and private company features for valuation purposes.

**Los 24b (2023) is Los 27b (2024):** Describe uses of private business valuation and explain key areas of focus for financial analysts.

**Los 24g (2023) is Los 27h (2024):** Calculate the value of a private company using income-based methods.

**Los 24g (2023) is Los 27i (2024):** Calculate the value of a private company using market-based methods and describe the advantages and disadvantages of each method.

37. Investments in Real Estate through Publicly Traded Securities (2024)

**Los 32k (2023) is Los 37a (2024): **Discuss types of publicly traded real estate securities.

**Los 32l (2023) is Los 37b (2024): **Justify the use of net asset value per share (NAVPS) in valuation of publicly traded real estate securities and estimate NAVPS based on forecasted cash net operating income.

12. Employee Compensation: Post-Employment and Share-Based (2024)

**Los 9b(2023):** (Explain and calculate measures of a defined benefit pension obligation (i.e., present value of the defined benefit obligation and projected benefit obligation) and net pension liability (or asset)) is deleted.

**Los 9c(2023):** (Describe the components of a company’s defined benefit pension costs) is deleted.

**Los 9d(2023):** (Explain and calculate the effect of a defined benefit plan’s assumptions on the defined benefit obligation and periodic pension cost) is deleted.

27. Private Company Valuation (2024)

**Los 24h (2023):** (Calculate the value of a private company based on market approach methods and describe advantages and disadvantages of each) is deleted.

**Los 24i (2023):** (Describe the asset-based approach to private company valuation) is deleted.

33. Private Equity Investments (2023)

Chapter has been deleted.

37. Investments in Real Estate through Publicly Traded Securities (2024)

**Los 32f (2023):** (Discuss the income, cost, and sales comparison approaches to valuing real estate properties) is deleted.

**Los 32g (2023):**(Compare the direct capitalization and discounted cash flow valuation methods) is deleted.

**Los 32h (2023):** (Estimate and interpret the inputs (for example, net operating income, capitalization rate, and discount rate) to the direct capitalization and discounted cash flow valuation methods) is deleted.

**Los 32i (2023):**(Calculate the value of a property using the direct capitalization and discounted cash flow valuation methods) is deleted.

**Los 32j (2023):**(Calculate and interpret financial ratios used to analyze and evaluate private real estate investments) is deleted.

41. Private Equity Investments (2023)

Chapter has been deleted.

- 2022-23
- 2023-24

There are no changes in 2023 Curriculum.

26. Case Study in Portfolio Management: Institutional (2024)

**g: **Discuss ESG considerations in managing long-term institutional portfolios.

26. Case Study in Portfolio Management : Institutional (2024)

**Los 28b (2023) is Los 26b (2024):** Discuss capture of the illiquidity premium as a long-term investment strategy.

**Los 28d (2023) is Los 26d (2024):** Demonstrate the application of the Code of Ethics and Standards of Professional Conduct regarding the actions of individuals involved in manager selection.

27. Case Study in Risk Management: Private Wealth (2024)

**Los 29h (2023) is Los 27h (2024):** Recommend and justify a plan to manage risks associated with an individual’s retirement lifestyle goals.

1. The Behavioral Biases Of Individuals (2023)

Chapter has been deleted.

2. Behavioral Finance And Investment Processes (2023)

Chapter has been deleted.

17. Hedge Fund Strategies (2024)

**Los h(2023):** (Describe how factor models may be used to understand hedge fund risk exposures is deleted.

21. Risk Management for Individuals (2024)

**Los c(2023):** (Discuss the financial stages of life for an individual) is deleted.

**Los j(2023):** (Analyze and evaluate an insurance program) is deleted.

22. Portfolio Management for Institutional Investors (2024))

**Los f(2023):** (Prepare the investment objectives section of an institutional investor’s investment policy statement) is deleted.

26. Case Study in Portfolio Management: Institutional (2024)

**Los d(2023):** (Analyze actions in asset manager selection with respect to the Code of Ethics and Standards of Professional Conduct) is deleted.

33. Overview of the Global Investment Performance Standards (2024)

**Los b(2023):** (Explain the fundamentals of compliance with the GIPS standards, including the definition of the firm and the firm’s definition of discretion) is deleted.

- 2021-22
- 2022-23

No chapter is added.

27. Fund Management (2022)

**Los 27a (2021) is Los 27a (2022):** Differentiate among open-end mutual funds, closed-end mutual funds, and exchange-traded funds (ETFs).

**Los 27b (2021) is Los 27b (2022):** Identify and describe potential undesirable trading behaviors at mutual funds.

**Los 27c (2021) is Los 27c (2022):** Explain the concept of net asset value (NAV) of an open-end mutual fund and how it relates to share price.

**Los 27d (2021) is Los 27d (2022):** Explain the key differences between hedge funds and mutual funds.

**Los 27e (2021) is Los 27e (2022):** Calculate the return on a hedge fund investment and explain the incentive fee structure of a hedge fund, including the terms hurdle rate, high-water mark, and clawback.

**Los 27f (2021) is Los 27f (2022):** Describe various hedge fund strategies including long/short equity, dedicated short, distressed securities, merger arbitrage, convertible arbitrage, fixed-income arbitrage, emerging markets, global macro, and managed futures, and identify the risks faced by hedge funds.

**Los 27g (2021) is Los 27g (2022):** Describe characteristics of mutual fund and hedge fund performance and explain the effect of measurement biases on performance measurement.

28. Introduction to Derivatives (2022)

**Los 28a (2021) is Los 28a (2022):** Define derivatives, describe the features and uses of derivatives, and compare linear and nonlinear derivatives.

**Los 28b (2021) is Los 28b (2022):** Describe the specifics of exchange-traded and over-the-counter markets, and evaluate the advantages and disadvantages of each.

**Los 28c (2021) is Los 28c (2022):** Differentiate between options, forwards, and futures contracts.

**Los 28d (2021) is Los 28d (2022):** Identify and calculate option and forward contract payoffs.

**Los 28e (2021) is Los 28e (2022): **Differentiate among the broad categories of traders: hedgers, speculators, and arbitrageurs.

**Los 28f (2021) is Los 28f (2022): **Calculate and compare the payoffs from hedging strategies involving forward contracts and options.

**Los 28g (2021) is Los 28g (2022):** Calculate and compare the payoffs from speculative strategies involving futures and options.

**Los 28h (2021) is Los 28h (2022): **Describe arbitrageurs’ strategy and calculate an arbitrage payoff.

**Los 28i (2021) is Los 28i (2022): **Describe some of the risks that can arise from the use of derivatives.

29. Exchanges and OTC Markets (2022)

**Los 29a (2021) is Los 29a (2022):** Describe how exchanges can be used to alleviate counterparty risk.

**Los 29b (2021) is Los 29b (2022):** Explain the developments in clearing that reduce risk.

**Los 29c (2021) is Los 29c (2022):** Define netting and describe a netting process.

**Los 29d (2021) is Los 29d (2022):** Describe the implementation of a margining process; by central counterparty (CCP); explain the determinants of and calculate initial and variation margin requirements.

**Los 29e (2021) is Los 29f (2022): **Compare exchange-traded and OTC markets and describe their uses.

**Los 29g (2021) is Los 29g (2022): **Identify risks associated with OTC markets and explain how these risks can be mitigated.

**Los 29h (2021) is Los 29h (2022):** Describe the role of collateralization in the OTC market and compare it to the margining system.

**Los 29i (2021) is Los 29i (2022): **Explain the use of special purpose vehicles (SPVs) in the OTC derivatives market.

**Los 29e: **(Describe process of buying stock on margin without using CCP and calculate margin requirements) is added.

30. Central Clearing (2022)

**Los 30a (2021) is Los 30a (2022):** Provide examples of the mechanics of a CCP.

**Los 30b (2021) is Los 30b (2022):** Describe the role of CCPs and distinguish between bilateral and centralized clearing.

**Los 30c (2021) is Los 30c (2022):** Describe advantages and disadvantages of central clearing of OTC derivatives.

**Los 30d (2021) is Los 30d (2022):** Explain regulatory initiatives for the OTC derivatives market and their impact on central clearing.

**Los 30e (2021) is Los 30e (2022):** Compare margin requirements in centrally cleared and bilateral markets, and explain how margin can mitigate risk.

**Los 30f (2021) is Los 30f (2022):** Compare netting in bilateral markets vs centrally cleared.

**Los 30g (2021) is Los 30g (2022):** Assess the impact of central clearing on the broader financial markets.

**Los 30h (2021) is Los 30h (2022):** Identify and explain the types of risks faced by CCPs.

**Los 30i (2021) is Los 30i (2022):** Identify and distinguish between the risks to clearing members and to non-members.

34. Pricing Financial Forwards and Futures (2022)

**Los 34a (2021) is Los 34a (2022):** Define and describe financial assets.

**Los 34b (2021) is Los 34b (2022):** Define short-selling and calculate the net profit of a short sale of a dividend-paying stock.

**Los 34c (2021) is Los 34c (2022):** Describe the differences between forward and futures contracts and explain the relationship between forward and spot prices.

**Los 34d (2021) is Los 34d (2022): **Calculate the forward price given the underlying asset’s spot price and describe an arbitrage argument between spot and forward prices.

**Los 34e (2021) is Los 34e (2022):** Distinguish between the forward price and the value of a forward contract.

**Los 34f (2021) is Los 34f (2022):** Calculate the value of a forward contract on a financial asset that does or does not provide income or yield.

**Los 34g (2021) is Los 34g (2022):** Explain the relationship between forward and futures prices.

**Los 34i (2021) is Los 34h (2022):** Calculate the value of a stock index futures contract and explain the concept of index arbitrage.

35. Commodity Forwards and Futures (2022)

**Los 35a (2021) is Los 35a (2022): **Explain the key differences between commodities and financial assets.

**Los 35b (2021) is Los 35b (2022): **Define and apply commodity concepts such as storage costs, carry markets, lease rate, and convenience yield.

**Los 35c (2021) is Los 35c (2022): **Identify factors that impact prices on agricultural commodities, metals, energy, and weather derivatives.

**Los 35d (2021) is Los 35d (2022): **Explain the formula for pricing commodity forwards.

**Los 35e (2021) is Los 35e (2022): **Describe an arbitrage transaction in commodity forwards and compute the potential arbitrage profit.

**Los 35f (2021) is Los 35f (2022): **Define the lease rate and explain how it determines the no-arbitrage values for commodity forwards and futures.

**Los 35g (2021) is Los 35g (2022): **Describe the cost of carry model and determine the impact of storage costs and convenience yields on commodity forward prices and no-arbitrage bounds.

**Los 35h (2021) is Los 35h (2022): **Compute the forward price of a commodity with storage costs.

**Los 35j (2021) is Los 35i (2022): **Explain how to create a synthetic commodity position and use it to explain the relationship between the forward price and the expected future spot price.

**Los 35k (2021) is Los 35j (2022): **Explain the impact of systematic and nonsystematic risk on current futures prices and expected future spot prices.

**Los 35l (2021) is Los 35k (2022): **Define and interpret normal backwardation and contango.

36. Options Markets (2022)

**Los 36a (2021) is Los 36a (2022): **Describe the various types and uses of options; define moneyness.

**Los 36b (2021) is Los 36b (2022): **Explain the payoff function and calculate the profit and loss from an options position.

**Los 36c (2021) is Los 36c (2022): **Explain the specification of exchange-traded stock option contracts, including that of nonstandard products.

**Los 36d (2021) is Los 36d (2022): **Explain how dividends and stock splits can impact the terms of a stock option.

**Los e (2021) is Los e (2022): **Describe the application of commissions, margin requirements, and exercise procedures to exchange-traded options and explain the trading characteristics of these options.

**Los f (2021) is Los f (2022): **Define and describe warrants, convertible bonds, and employee stock options.

42. Mortgages and Mortgage Backed Securities (2022)

**Los 42a (2021) is Los 42a (2022): **Describe the various types of residential mortgage products.

**Los 42b (2021) is Los 42b (2022): **Calculate a fixed-rate mortgage payment and its principal and interest components.

**Los 42d (2021) is Los 42c (2022): **Summarize the securitization process of mortgage-backed securities (MBS), particularly the formation of mortgage pools, including specific pools and to-be-announceds (TBAs).

**Los 42e (2021) is Los 42d (2022): **Calculate the weighted average coupon, weighted average maturity, single monthly mortality rate (SMM), and conditional prepayment rate (CPR) for a mortgage pool.

**Los 42f (2021) is Los 42e (2022): **Describe the process of trading pass-through agency MBS.

**Los 42g (2021) is Los 42f (2022): **Explain the mechanics of different types of agency MBS products, including collateralized mortgage obligations (CMOs), interest-only securities (IOs), and principal-only securities (POs).

**Los 42h (2021) is Los 42g (2022): **Describe a dollar roll transaction and how to value a dollar roll.

**Los 42i (2021) is Los 42h (2022): **Describe the mortgage prepayment option and factors that affect it; explain prepayment modeling and its four components: refinancing, turnover, defaults, and curtailments.

**Los 42j (2021) is Los 42i (2022): **Describe the steps in valuing an MBS using Monte Carlo simulation.

**Los 42k (2021) is Los 42j (2022): **Define Option-Adjusted Spread (OAS) and explain its challenges and its uses.

43. Interest Rate Futures (2022)

**Los 43a (2021) is Los 43a (2022): **Identify the most commonly used day count conventions, describe the markets that each one is typically used in, and apply each to an interest calculation.

**Los 43b (2021) is Los 43b (2022): **Calculate the conversion of a discount rate to a price for a U.S. Treasury bill.

**Los 43c (2021) is Los 43c (2022): **Differentiate between the clean and dirty price for a U.S. Treasury bond; calculate the accrued interest and dirty price on a US Treasury bond.

**Los 43d (2021) is Los 43d (2022): **Explain and calculate a US Treasury bond futures contract conversion factor.

**Los 43e (2021) is Los 43e (2022): **Calculate the cost of delivering a bond into a Treasury bond futures contract.

**Los 43f (2021) is Los 43f (2022): **Describe the impact of the level and shape of the yield curve on the cheapest-to-deliver Treasury bond decision.

**Los 43g (2021) is Los 43g (2022): **Calculate the theoretical futures price for a Treasury bond futures contract.

**Los 43h (2021) is Los 43h (2022): **Calculate the final contract price on a Eurodollar futures contract and compare Eurodollar futuresto FRAs.

**Los 43i (2021) is Los 43i (2022): **Describe and compute the Eurodollar futures contract convexity adjustment.

**Los 43k (2021) is Los 43j (2022): **Calculate the duration-based hedge ratio and create a duration-based hedging strategy using interest rate futures.

**Los43 l (2021) is Los 43k (2022): **Explain the limitations of using a duration-based hedging strategy.

45. Measures of Financial Risk (2022)

**Los 45a (2021) is Los 45a (2022): **Describe the mean-variance framework and the efficient frontier.

**Los 45c (2021) is Los 45b (2022): **Compare the normal distribution with the typical distribution of returns of risky financial assets such as equities.

**Los 45d (2021) is Los 45c (2022): **Define the VaR measure of risk, describe assumptions about return distributions and holding periods, and explain the limitations of VaR.

**Los 45e (2021) is Los 45d (2022): **Explain and calculate ES and compare and contrast VaR and ES.

**Los 45f (2021) is Los 45e (2022): **Define the properties of a coherent risk measure and explain the meaning of each property.

**Los 45g (2021) is Los 45f (2022): **Explain why VaR is not a coherent risk measure.

47. Measuring and Monitoring Volatility (2022)

**Los 47a (2021) is Los 47a (2022): **Explain how asset return distributions tend to deviate from the normal distribution.

**Los 47b (2021) is Los 47b (2022): **Explain reasons for fat tails in a return distribution and describe their implications.

**Los 47c,d (2021) is Los 47c (2022): **Distinguish between conditional and unconditional distributions, and describe the implications of regime switching on quantifying volatility.

**Los 47e (2021) is Los 47d (2022): **Compare and contrast different approaches for estimating conditional volatility.

**Los 47g (2021) is Los 47h (2022): **Evaluate implied volatility as a predictor of future volatility and its shortcomings.

**Los 47h (2021) is Los 47e (2022): **Apply the exponentially weighted moving average (EWMA) approach and the GARCH (1,1) model to estimate volatility, and describe alternative approaches to weighting historical return data.

**Los 47i (2021) is Los 47g (2022): **Explain and apply approaches to estimate long horizon volatility/VaR and describe the process of mean reversion according to a GARCH (1,1) model.

**Los 47l (2021) is Los 47i (2022): **Describe an example of updating correlation estimates.

**Los 47f (2022): **(Apply the GARCH (1,1) model to estimate volatility) is added.

48. External and Internal Credit Ratings (2022)

**Los 48a (2021) is Los 48a (2022): **Describe external rating scales, the rating process, and the link between ratings and default.

**Los 48c (2021) is Los 48c (2022): **Define and use the hazard rate to calculate the unconditional default probability of a credit asset.

**Los 48d (2021) is Los 48d (2022): **Define recovery rate and calculate the expected loss from a loan.

**Los 48e (2021) is Los 48e (2022): **Explain and compare the through-the-cycle and point-in-time internal ratings approaches.

**Los 48f (2021) is Los 48f (2022): **Describe alternative methods to credit ratings produced by rating agencies.

**Los 48g (2021) is Los 48g (2022): **Compare external and internal ratings approaches.

**Los 48h (2021) is Los 48h (2022): **Describe and interpret a ratings transition matrix and explain its uses.

**Los 48i (2021) is Los 48i (2022): **Describe the relationships between changes in credit ratings and changes in stock prices, bond prices, and credit default swap spreads.

**Los 48j (2021) is Los 48j (2022): **Explain historical failures and potential challenges to the use of credit ratings in making investment decisions.

**Los 48b (2022): **(Define conditional and unconditional default probabilities and explain the distinction between the two) is added.

49. Country Risk - Determinants, Measures And Implications (2022)

**Los 49b (2021) is Los 49a (2022):** Explain how a country’s position in the economic growth life cycle, political risk, legal risk, and economic structure affects its risk exposure.

**Los 49c (2021) is Los 49b (2022):** Evaluate composite measures of risk that incorporate all major types of country risk.

**Los 49d (2021) is Los 49c (2022):** Compare instances of sovereign default in both foreign currency debt and local currency debt and explain common causes of sovereign defaults.

**Los 49e (2021) is Los 49d (2022):** Describe the consequences of sovereign default.

**Los 49f (2021) is Los 49e (2022):** Describe factors that influence the level of sovereign default risk; explain and assess how rating agencies measure sovereign default risks.

**Los 49g (2021) is Los 49f (2022):** Describe the characteristics of sovereign credit spreads and sovereign credit default swaps (CDS) and compare the use of sovereign spreads to credit ratings.

50. Measuring Credit Risk (2022)

**Los 50b (2021) is Los 50a (2022):** Explain the distinctions between economic capital and regulatory capital and describe how economic capital is derived.

**Los 50d (2021) is Los 50c (2022):** Define and calculate expected loss (EL).

**Los 50e (2021) is Los 50d (2022):** Define and explain unexpected loss (UL).

**Los 50f (2021) is Los 50e (2022):** Estimate the mean and standard deviation of credit losses assuming a binomial distribution.

**Los 50g (2021) is 50f (2022):** Describe the Gaussian copula model and its application.

**Los 50h (2021) is 50g (2022):** Describe and apply the Vasicek model to estimate default rate and credit risk capital for a bank.

**Los 50i (2021) is Los 50h (2022):** Describe the CreditMetrics model and explain how it is applied in estimating economic capital.

**Los 50j (2021) is Los 50i (2022):** Describe and use Euler’s theorem to determine the contribution of a loan to the overall risk of a portfolio.

**Los 50k (2021) is Los 50j (2022):** Explain why it is more difficult to calculate credit risk capital for derivatives than for loans.

**Los 50l (2021) is Los 50k (2022):** Describe challenges to quantifying credit risk.

**Los 50b (2022):** (Describe the degree of dependence typically observed among the loan defaults in a bank’s loan portfolio, and explain the implications for the portfolio’s default rate) is added.

52. Stress Testing (2022)

**Los 52a (2021) is Los 52a (2022):** Describe the rationale for the use of stress testing as a risk management tool.

**Los 52b (2021) is Los 52b (2022):** Explain key considerations and challenges related to stress testing, including choice of scenarios, regulatory specifications, model building, and reverse stress testing.

**Los 52c (2021) is Los 52c (2022):** Describe the relationship between stress testing and other risk measures, particularly in enterprise-wide stress testing.

**Los 52d (2021) is Los 52d (2022):** Describe stressed VaR and stressed ES, including their advantages and disadvantages, and compare the process of determining stressed VaR and ES to that of traditional VaR and ES.

**Los 52f (2021) is Los 52f (2022):** Describe the role of policies and procedures, validation, and independent review in stress testing governance.

**Los 52i (2021) is Los 52g (2022):** Describe the Basel stress testing principles for banks regarding the implementation of stress testing.

**Los 52e (2022):** (Describe the responsibilities of the board of directors, senior management, and the internal audit function in stress testing governance) is added.

60. Options Sensitivity Measures - The Greeks (2022)

**Los 60a (2021) is Los 60a (2022):** Describe and assess the risks associated with naked and covered option positions.

**Los 60b (2021) is Los 60b (2022):** Describe the use of a stop loss hedging strategy, including its advantages and disadvantages, and explain how this strategy can generate naked and covered option positions.

**Los 60c (2021) is Los 60c (2022):** Describe delta hedging for options as well as for forward and futures contracts.

**Los 60d (2021) is Los 60d (2022):** Compute the delta of an option.

**Los 60e (2021) is Los 60e (2022):** Describe the dynamic aspects of delta hedging and distinguish between dynamic hedging and hedge-and-forget strategies.

**Los 60f (2021) is Los 60f (2022):** Define and calculate the delta of a portfolio.

**Los 60g (2021) is Los 60g (2022):** Define and describe theta, gamma, vega, and rho for option positions and calculate the gamma and vega for a portfolio.

**Los 60h (2021) is Los 60h (2022):** Explain how to implement and maintain a delta-neutral and a gamma-neutral position.

**Los 60i (2021) is Los 60i (2022):** Describe the relationship between delta, theta, gamma, and vega.

**Los 60j (2021) is Los 60j (2022):** Describe how to implement portfolio insurance and how this strategy compares with delta hedging.

No chapter is deleted.

25. Machine-Learning Methods (2023)

**a: **Discuss the philosophical and practical differences between machine-learning techniques and classical econometrics.

**b: **Explain the differences among the training, validation, and test data sub-samples, and how each is used.

**c: **Understand the differences between and consequences of underfitting and overfitting, and propose potential remedies for each.

**d: **Use principal components analysis to reduce the dimensionality of a set of features.

**e: **Describe how the K-means algorithm separates a sample into clusters.

**f: **Be aware of natural language processing and how it is used.

**g****:** Differentiate among unsupervised, supervised, and reinforcement learning models.

**h: **Explain how reinforcement learning operates and how it is used in decision-making.

26. Machine Learning and Prediction (2023)

**a: **Explain the role of linear regression and logistic regression in prediction.

**b: **Understand how to encode categorical variables.

**c: **Discuss why regularization is useful, and distinguish between the ridge regression and LASSO approaches.

**d: **Show how a decision tree is constructed and interpreted.

**e: **Describe how ensembles of learners are built.

**f: **Outline the intuition behind the K nearest neighbors and support vector machine methods for classification.

**g: **Understand how neural networks are constructed and how their weights are determined.

**h: **Evaluate the predictive performance of logistic regression models and neural network models using a confusion matrix.

18. Linear Regression (2023)

**Los a (2022) is Los a (2023):** Describe the models which can be estimated using linear regression and differentiate them from those which cannot.

**Los b (2022) is Los b (2023):** Interpret the results of an ordinary least squares (OLS) regression with a single explanatory variable.

**Los c (2022) is Los c (2023):** Describe the key assumptions of OLS parameter estimation.

**Los d (2022) is Los d (2023):** Characterize the properties of OLS estimators and their sampling distributions.

**Los e (2022) is Los e (2023):** Construct, apply, and interpret hypothesis tests and confidence intervals for a single regression coefficient in a regression.

**Los f (2022) is Los f (2023):** Explain the steps needed to perform a hypothesis test in a linear regression.

**Los g (2022) is Los g (2023):** Describe the relationship among a t-statistic, its p-value, and a confidence interval.

**Los h (2023):** (Estimate the correlation coefficient from the R2 measure obtained in linear regressions with a single explanatory variable) is added.

19. Regression with Multiple Explanatory Variables (2023)

**Los a (2022) is Los a (2023):** Distinguish between the relative assumptions of single and multiple regression.

**Los b (2022) is Los b (2023):** Interpret regression coefficients in a multiple regression.

**Los c (2022) is Los c (2023):** Interpret goodness-of-fit measures for single and multiple regressions, including R2 and adjusted – R2.

**Los d (2022) is Los d (2023):** Construct, apply, and interpret joint hypothesis tests and confidence intervals for multiple coefficients in a regression.

**Los e : **(Calculate the regression R2 using the three components of the decomposed variation of the dependent variable data: the explained sum of squares, the total sum of squares, and the residual sum of squares) is added.

23. Measuring Returns, Volatility, and Correlation (2023)

**Los a (2022) is Los a (2023):** Calculate, distinguish, and convert between simple and continuously compounded returns.

**Los b (2022) is Los b (2023):** Define and distinguish between volatility, variance rate, and implied volatility.

**Los c (2022) is Los c (2023):** Describe how the first two moments may be insufficient to describe non – normal distributions.

**Los d (2022) is Los d (2023):** Explain how the Jarque – Bera test is used to determine whether returns are normally distributed.

**Los e (2022) is Los e (2023):** Describe the power law and its use for non-normal distributions.

**Los f (2022) is Los f (2023): **Define correlation and covariance and differentiate between correlation and dependence.

**Los g (2022) is Los g (2023): **Describe properties of correlations between normally distributed variables when using a one-factor model.

**Los h: **(Compare and contrast the different measures of correlation used to assess dependence) is added.

31. Exchanges and OTC Markets (2023)

**Los 29a (2022) is Los 31a (2023):** Describe how exchanges can be used to alleviate counterparty risk.

**Los 29b (2022) is Los 31b (2023):** Explain the developments in clearing that reduce risk.

**Los 29c (2022) is Los 31c (2023):** Define netting and describe a netting process.

**Los 29d (2022) is Los 31d (2023):** Describe the implementation of a margining process; explain the determinants of and calculate initial and variation margin requirements.

**Los 29e (2022) is Los 31e (2023):** Describe the process of buying stock on margin without using CCP and calculate margin requirements.

**Los 29f (2022) is Los 31f (2023):** Compare exchange-traded and OTC markets and describe their uses.

**Los 29g (2022) is Los 31g (2023):** Identify risks associated with OTC markets and explain how these risks can be mitigated.

**Los 29h (2022) is Los 31h (2023):** Describe the role of collateralization in the OTC market and compare it to the margining system.

**Los 29i (2022) is Los 31i (2023):** Explain the use of special purpose vehicles (SPVs) in the OTC derivatives market.

49. Measuring and Monitoring Volatility (2023)

**Los 47a (2022) is Los 49a (2023):** Explain how asset return distributions tend to deviate from the normal

distribution.

**Los 47b (2022) is Los 49b (2023):** Explain reasons for fat tails in a return distribution and describe their implications.

**Los 47c (2022) is Los 49c (2023):** Distinguish between conditional and unconditional distributions, and describe the implications of regime switching on quantifying volatility.

**Los 47d (2022):** (Compare and contrast different approaches for estimating conditional volatility) is deleted.

**Los 47e (2022) is Los 49e (2023):** Apply the exponentially weighted moving average (EWMA) approach to estimate volatility, and describe alternative approaches to weighting historical return data.

**Los 47f (2022) is Los 49f (2023):** Apply the GARCH (1,1) model to estimate volatility.

**Los 47g (2022) is Los 49g (2023):** Explain and apply approaches to estimate long horizon volatility/VaR and describe the process of mean reversion according to a GARCH (1,1) model.

**Los 47h (2022) is Los 49h (2023):** Evaluate implied volatility as a predictor of future volatility and its shortcomings.

**Los 47i (2022) is Los 49i (2023):** Describe an example of updating correlation estimates.

**Los 49d (2023):** (Compare and contrast different parametric and non-parametric approaches for estimating conditional volatility) is added.

62. Option Sensitivity Measures: The Greeks (2023)

**Los 60a (2022) is Los 62a (2023): **Describe and assess the risks associated with naked and covered option positions.

**Los 60b (2022) is Los 62b (2023): **Describe the use of a stop loss hedging strategy, including its advantages and disadvantages, and explain how this strategy can generate naked and covered option positions.

**Los 60c (2022) is Los 62c (2023): **Describe delta hedging for an option.

**Los 60d (2022) is Los 62d (2023): **Compute the delta of an option.

**Los 60e (2022) is Los 62e (2023):** Describe the dynamic aspects of delta hedging and distinguish between dynamic hedging and hedge-and-forget strategies.

**Los 60f (2022) is Los 62f (2023): **Define and calculate the delta of a portfolio.

**Los 60g (2022) is Los 62g (2023): **Define and describe theta, gamma, vega, and rho for option positions and calculate the gamma and vega for a portfolio.

**Los 60h (2022) is Los 62h (2023): **Explain how to implement and maintain a delta-neutral and a gamma-neutral position.

**Los 60i (2022) is Los 62i (2023): **Describe the relationship between delta, theta, gamma, and vega.

**Los 60j (2022) is Los 62j (2023): **Describe how to implement portfolio insurance and how this strategy compares with delta hedging.

No chapter has been deleted.

- 2021-22
- 2022-23

59. Operational resilience: Impact tolerance for important business services (2022)

**a: **Describe an impact tolerance; explain best practices and potential benefits for establishing the impact tolerance for a business service.

**b: **Provide examples of important business services and explain criteria that firms should use to determine their important business services.

**c: **Explain tools and processes, including mapping and scenario testing, that financial institutions should use to improve their operational resilience and remain within their impact tolerance.

**d: **Describe the governance of an operational resilience policy, including the relationships between operational resilience and a firm’s risk appetite, impact tolerance, continuity planning, andoutsourcing to third-party providers.

60. Principles for Operational Resilience (2022)

**a: **Define and describe operational resilience and explain essential elements of operational resilience.

**b: **Explain recommended principles that banks should follow to implement an effective operational resilience approach.

92. Machine Learning and AI for Risk Management (2022)

**a: **Explain the distinctions between the two broad categories of machine learning and describe the techniques used within each category.

**b: **Analyze and discuss the application of AI and machine learning techniques in the following areas:

**c: **Describe the role and potential benefits of AI and machine learning techniques in risk management.

**d: **Identify and describe the limitations and challenges of using AI and machine learning techniques in risk management.

93. Artificial Intelligence Risk & Governance (2022)

**a: **Identify and discuss the categories of potential risks associated with the use of AI by financial firms and describe the risks that are considered under each category.

**b: **Describe the four core components of AI governance and recommended practices related to each.

**c: **Explain how issues related to interpretability and discrimination can arise from the use of AI by financial firms.

**d: **Describe practices financial firms can adopt to mitigate AI risks.

94. Covid-19 and cyber risk in the financial sector (2022)

**a: **Define cyber risk and describe the elements that constitute it.

**b: **Describe and compare causes of cyber risks and methods of enacting cyber attacks.

**c: **Identify and explain the effect COVID-19 has had on the level of cyber threat.

**d: **Assess how the financial sector in particular has been threatened by cyber risk during the pandemic.

**e: **Identify changes in cyber risk landscape and ways to mitigate risks to financial stability.

95. Holistic Review of the March Market Turmoil (2022)

**a: **Identify the key market developments that took place during the March 2020 COVID-19 market turmoil, conditions that were prevalent, and their effects on the financial markets and its participants.

**b: **Describe how financial participants sought safety and the stages by which stress spread through the financial system as the pandemic unfolded.

**c: **Describe the origins and backdrop of the March 2020 COVID-19 market stress and the systemic weaknesses existing prior to the pandemic that contributed to systemic fragility.

**d: **Describe the role that non-bank financial institutions’ (NBFIs) reliance on U.S. dollar funding, and the demand for liquidity and credit risk held outside the banking sector had on the resilience of the global financial system during the pandemic.

**e: **Describe the impact of the pandemic and its propagation on the financial markets, including money market funds (MMFs), CCPs, margin, open-ended funds, ETFs, short-term funding markets, repos,and the government and corporate bond markets.

**f: **Describe the public sector policy responses to restore financial market functioning during the COVID-19 market turmoil.

**g: **Describe the lessons learned from the March 2020 COVID-19 market turmoil.

96. LIBOR transition Case studies for navigating conduct risks (2022)

**a: **Discuss regulatory expectations on LIBOR transition and how these expectations can help market participants in their management of conduct risk arising from the transition.

**b: **Analyze the risks of LIBOR transition from both sell-side and buy-side perspectives and give examples of good practice observations.

98. Climate-related risk drivers and their transmission channels (2022)

**a: **Describe climate-related risk drivers and explain how those drivers give rise to different types of risks for banks.

**b: **Compare physical and transition risk drivers related to climate change.

**c: **Assess the potential impact of different microeconomic and macroeconomic drivers of climate risk.

**d: **Describe and assess factors that can amplify the impact of climate-related risks on banks as well as potential mitigants for these risks.

99. The Rise of digital money (2022)

**a: **Describe and compare different attributes of means of payment.

**b:** Describe the risks faced by the banking sector as e-money adoption increases and identify means of mitigating those risks.

**c: **Explain reasons for and characteristics contributing to rapid global adoption of e-money.

**d: **Evaluate effects of different scenarios of e-money adoption on the banking sector.

**e: **Discuss regulatory and policy actions that could be implemented in response to risks arising from increased adoption of e-money.

28. Future Value and Exposure (2022)

**Los 28a (2021) is Los 28a (2022):** Describe and calculate the following metrics for credit exposure: expected mark-to-market, expected exposure, potential future exposure, expected positive exposure and negative exposure, effective expected positive exposure, and maximum exposure.

**Los 28b (2021) is Los 28b (2022):** Compare the characterization of credit exposure to VaR methods and describe additional considerations used in the determination of credit exposure.

**Los 28c (2021) is Los 28c (2022):** Identify factors that affect the calculation of the credit exposure profile and summarize the impact of collateral on exposure.

**Los 28d (2021) is Los 28d (2022):** Identify typical credit exposure profiles for various derivative contracts.

**Los 28e (2021) is Los 28e (2022):** Explain how payment frequencies and exercise dates affect the exposure profile of various securities.

**Los 28f (2021) is Los 28f (2022): **Explain the general impact of aggregation on exposure, and the impact of aggregation on exposure when there is correlation between transaction values.

**Los 28g (2021) is Los 28g (2022): **Describe the differences between funding exposure and credit exposure.

**Los 28h (2021) is Los 28h (2022): **Explain the impact of collateralization on exposure and assess the risk associated with the remargining period, threshold, and minimum transfer amount.

**Los 28i (2021) is Los 28i (2022):** Assess the impact of collateral on counterparty risk and funding, with and without segregation.

31. Credit Scoring and Retail Credit Risk Management (2022)

**Los 31a (2021) is Los 31b (2022):** Explain the differences between retail credit risk and corporate credit risk.

**Los 31b (2021) is Los 31c (2022):** Discuss the “dark side” of retail credit risk and the measures that attempt to address the problem.

**Los 31c (2021) is Los 31d (2022):** Define and describe credit risk scoring model types, key variables, and applications.

**Los 31d (2021) is Los 31e (2022):** Discuss the key variables in a mortgage credit assessment and describe the use of cutoff scores, default rates, and loss rates in a credit scoring model.

**Los 31e (2021) is Los 31f (2022):** Discuss the measurement and monitoring of a scorecard performance including the use of cumulative accuracy profile (CAP) and the accuracy ratio techniques.

**Los 31f (2021) is Los 31g (2022):** Describe the customer relationship cycle and discuss the trade off between creditworthiness and profitability.

**Los 31g (2021) is Los 31h (2022):** Discuss the benefits of risk-based pricing of financial services.

**Los 31a (2022):** (Analyze the credit risks and other risks generated by retail banking) is added.

33. An Introduction to Securitisation (2022)

**Los 33a (2021) is Los 33a (2022):** Define securitization, describe the securitization process, and explain the role of participants in the process.

**Los 33b (2021) is Los 33b (2022):** Explain the terms over-collateralization, first-loss piece, equity piece, and cash waterfall within the securitization process.

**Los 33c (2021) is Los 33c (2022):** Analyze the differences in the mechanics of issuing securitized products using a trust versus a special purpose vehicle (SPV) and distinguish between the three main SPV structures: amortizing, revolving, and master trust.

**Los 33d (2021) is Los 33d (2022):** Explain the reasons for and the benefits of undertaking securitization.

**Los 33e (2021) is Los 33e (2022) : **Describe and assess the various types of credit enhancements.

**Los 33f (2021) is Los 33f (2022):** Explain the various performance analysis tools for securitized structures

and Identify the asset classes they are most applicable to.

**Los 33g (2021) is Los 33g (2022):** Define and calculate the delinquency ratio, default ratio, monthly payment rate (MPR), debt service coverage ratio (DSCR), the weighted average coupon (WAC), the weighted average maturity (WAM),and the weighted average life (WAL) for relevant securitized structures.

**Los 33h (2021) is Los 33i (2022):** Explain the prepayment forecasting methodologies and calculate the constant prepayment rate (CPR) and the Public Securities Association (PSA) rate.

**Los 33h (2022):** (Determine the notional value of the net contract resulting from trade compression and identify the counterparty with the net contract) is added.

39. Banking Conduct and Culture (2022)

**Los 39a (2021) is Los 39a (2022):** Describe challenges faced by banks with respect to conduct and culture and explain motivations for banks to improve their conduct and culture.

**Los 39b (2021) is Los 39b (2022): **Explain methods by which a bank can improve its corporate culture and assess the progress made by banks in this area**.**

**Los 39e (2021) is Los 39d (2022):** Describe best practices and lessons learned in managing a bank’s corporate culture.

**Los 39c (2022):** Assess the role of regulators in encouraging strong conduct and culture at banks, and provide examples of regulatory initiatives in this area.

47. Range of Practices and Issues in Economic Capital Frameworks (2022)

**Los 47c (2021) is Los 47a (2022):** Explain benefits and impacts of using an economic capital framework within the following areas:

– Credit portfolio management

– Risk-based pricing

– Customer profitability analysis

– Management incentives

**Los 47d (2021) is Los 47b (2022):** Describe best practices and assess key concerns for the governance of an economic capital framework.

59. Building the UK financial sector’s operational resilience (2021)

Chapter has been deleted.

92. Machine Learning: A Revolution in Risk Management and Compliance? (2021)

Chapter has been deleted.

93. Artificial intelligence and machine learning in financial services (2021)

Chapter has been deleted.

94. Climate Change: Physical Risk and Equity, Global Financial Stability Report (2021)

Chapter has been deleted.

95. The Green Swan – Central Banking and Financial Stability in the Age of Climate Change (2021)

Chapter has been deleted.

96. When Selling Becomes Viral: Disruptions in Debt Markets in the COVID-19 Crisis and the Fed’s Response (2021)

Chapter has been deleted.

97. Global Financial Stability Report: Markets in the Time of COVID-19 (2021)

Chapter has been deleted.

98. Financial Crime in Times of COVID-19 – AML and Cyber Resilience Measures (2021)

Chapter has been deleted.

99. Replacing LIBOR (2021)

Chapter has been deleted.

100. Cyber Risk and the U.S. Financial System: A Pre-Mortem Analysis (2021)

Chapter has been deleted.

35. Introduction to Operational Risk and Resilience (2023)

**a: **Describe an operational risk management framework and assess the types of risks that can fall within the scope of such a framework.

**Los 41a (2022) is Los 35b (2023): **Describe the seven Basel II event risk categories and identify examples of operational risk events in each category.

**c: **Explain characteristics of operational risk exposures and operational loss events, and challenges that can arise in managing operational risk due to these characteristics.

**d: **Describe operational resilience, identify the elements of an operational resilience framework, and summarize regulatory expectations for operational resilience.

36. Risk Governance (2023)

**a: **Explain the Basel regulatory expectations for the governance of an operational risk management framework.

**b: **Describe and compare the roles of different committees and the board of directors in operational risk governance.

**c: **Describe the “three lines of defense” model for operational risk governance and compare roles and responsibilities for each line of defense.

**d: **Explain best practices and regulatory expectations for the development of a risk appetite for operational risk and for a strong risk culture.

37. Risk Identification (2023)

**a: **Compare different top-down and bottom-up approaches and tools for identifying operational risks.

**b: **Describe best practices in the process of scenario analysis for operational risk.

**c: **Describe and apply an operational risk taxonomy and give examples of different taxonomies of operational risks.

**d: **Describe and apply the Level 1, 2, and 3 categories in the Basel operational risk taxonomy.

38. Risk Measurement and Assessment (2023)

**a: **Explain best practices for the collection of operational loss data and reporting of operational loss incidents, including regulatory expectations.

**b: **Explain operational risk-assessment processes and tools, including risk control self-assessments (RCSAs), likelihood assessment scales, and heatmaps.

**c: **Describe the differences among key risk indicators (KRIs), key performance indicators (KPIs), and key control indicators (KCIs).

**d: **Describe and distinguish between the different quantitative approaches and models used to analyze operational risk.

**e: **Estimate operational risk exposures based on the fault tree model given probability assumptions.

**f: **Describe approaches used to determine the level of operational risk capital for economic capital purposes, including their application and limitations.

**g: **Describe and explain the steps to ensure a strong level of operational resilience, and to test the operational resilience of important business services.

39. Risk Mitigation (2023)

**a: **Explain different ways firms address their operational risk exposures.

**b: **Describe and provide examples of different types of internal controls, and explain the process of internal control design and control testing.

**c: **Describe methods to improve the quality of an operational process and reduce the potential for human error.

**d: **Explain how operational risk can arise with new products, new business initiatives, or mergers and acquisitions, and describe ways to mitigate these risks.

**e: **Identify and describe approaches firms should use to mitigate the impact of operational risk events.

**f: **Describe methods for the transfer of operational risks and the management of reputational risk, and assess their effectiveness in different situations.

41. Integrated Risk Management (2023)

**a: **Describe the role of risk governance, risk appetite, and risk culture in the context of an enterprise risk management (ERM) framework.

**b: **Summarize the role of Basel regulatory capital and the process of determining internal economic capital.

**c: **Describe elements of a stress-testing framework for financial institutions and explain best practices for stress testing.

**d: **Explain challenges and considerations when developing and implementing.

43. Case Study: Cyberthreats and Information (2023)

**a: **Provide examples of cyber threats and information security risks, and describe frameworks and best practices for managing cyber risks.

**b: **Describe lessons learned from the Equifax case study.

45. Case Study: Financial Crime and Fraud (2023)

**a: **Describe elements of a control framework to manage financial fraud risk and money laundering risk.

**b: **Summarize the regulatory findings and describe the lessons learned from the USAA case study.

47. Case Study: Third-Party Risk Management (2023)

**a: **Explain how risks related to the use of third parties can arise and describe characteristics of an effective third-party risk management framework.

**b: **Describe the lessons learned from the case study involving a data breach caused by a third-party vendor employee.

48. Case Study: Investor Protection and Compliance Risks in Investment Activities (2023)

**a: **Summarize important regulations designed to protect investors in financial instruments, including MiFiD, MiFiD II, and Dodd-Frank.

**b: **Describe and provide lessons learned from the case studies involving violations of investor protection or compliance regulations.

50. Case Study: Model Risk and Model Validation (2023)

**a: **Define a model and describe different ways that financial institutions can become exposed to model risk.

**b: **Describe the role of the model risk management function and explain best practices in the model risk management and validation processes.

**c: **Describe lessons learned from the three case studies involving model risk.

92. Climate-related financial risks – measurement methodologies (2023)

**a: **Describe main issues in identifying and measuring climate-related financial risks.

**b: **Identify unique data needs inherent in the climate-related risks and describe candidate methodologies that could be used to analyze these types of data.

**c: **Describe current and developing methodologies for measuring climate-related financial risks employed by banks and supervisors.

**d:** Compare and contrast climate-measuring methodologies utilized by banks, regulators, and third- party providers.

**e: **Identify strengths and weaknesses of the main types of measurement approaches.

**f: **Assess gaps and challenges in designing a modelling framework to capture climate-related financial risk.

93. Principles for the effective management and supervision of climate-related financial risks (2023)

**a: **Describe the principles for the management of climate-related financial risks related to corporate governance and internal control framework.

**b: **Describe the principles for the management of climate-related financial risks related to capital and liquidity adequacy and risk management process.

**c: **Describe the principles for the management of climate-related financial risks related to management monitoring and reporting, comprehensive management of credit risk and other risks, and scenario analysis.

**d: **Describe the principles for the supervision of climate-related financial risks related to prudential regulatory and supervisory requirements for banks and responsibilities, powers, and functions of supervisors.

94. Inflation: a look under the hood (2023)

**a: **Describe how the dynamics of inflation differ between a low-inflation regime and a high-inflation regime.

**b: **Explain the process of wage and price formation, the role inflation plays in this process, and vice versa.

**c: **Describe the various channels through which inflation expectations manifest in financial markets and discuss the inference of inflation expectations from financial markets.

**d: **Describe the operation of a central bank’s monetary policy in a low-inflation regime and evaluate indicators a central bank can use for timely detection of transitions to a high-inflation regime.

95. The Blockchain Revolution: Decoding Digital Currencies (2023)

**a: **Explain how a blockchain-based cryptocurrency system works and compare cryptocurrencies to conventional money and payment systems.

**b:** Describe elements of a decentralized finance structure, including smart contracts, tokenized assets, decentralized autonomous organizations, and decentralized exchanges.

**c: **Define stablecoins and assess their advantages and disadvantages, including their potential contribution to systemic risk and regulatory considerations.

**d: **Explain the advantages, disadvantages, and potential applications of a central bank digital currency.

96. The future monetary system (2023)

**a: **Identify and describe the benefits and limitations of crypto and decentralized finance (DeFi) innovations.

**b: **Describe the role of stablecoins in DeFi ecosystems and differentiate among the types of stablecoins.

**c: **Discuss possible advantages and disadvantages of a monetary system based on CBDCs.

**d: **Understand the risks posed by the centralization that occurs in DeFi ecosystems and crypto exchanges (CEX).

**e: **Outline the regulatory actions recommended by the BIS to manage risks in the crypto monetary system.

1. Estimating Market Risk Measures: An Introduction and Overview (2023)

**Los 1a (2022) is Los 1a (2023):** Estimate VaR using a historical simulation approach.

**Los 1b (2022) is Los 1b (2023):** Estimate VaR using a parametric approach for both normal and lognormal return distributions.

**Los 1c (2022) is Los 1c (2023): **Estimate the expected shortfall given profit and loss (P/L) or return data.

**Los 1e (2022) is Los 1d (2023): **Estimate risk measures by estimating quantiles.

**Los 1f (2022) is Los 1e (2023): **Evaluate estimators of risk measures by estimating their standard errors.

**Los 1g (2022) is Los 1f (2023):** Interpret quantile-quantile (QQ) plots to identify the characteristics of a distribution.

**Los 1d (2022):** (Describe coherent risk measures) is deleted.

3. Parametric Approaches (II): Extreme Value (2023)

**Los 3a (2022) is Los 3a (2023):** Explain the importance and challenges of extreme values in risk management.

**Los 3b (2022) is Los 3b (2023):** Describe extreme value theory (EVT) and its use in risk management.

**Los 3c (2022) is Los 3c (2023):** Describe the peaks-over-threshold (POT) approach.

**Los 3d (2022) is Los 3d (2023):** Compare and contrast the generalized extreme value and POT approaches to estimating extreme risks.

**Los 3f (2022) is Los 3f (2023):** Explain the multivariate EVT for risk management.

**Los 3e (2023):** (Discuss the application of the generalized Pareto (GP) distribution in the POT approach) is added.

5. VaR Mapping (2023)

**Los 5a (2022) is Los 5a (2023):** Explain the principles underlying VaR mapping and describe the mapping process.

**Los 5c (2022) is Los 5c (2023): **Differentiate among the three methods of mapping portfolios of fixed income securities.

**Los 5d (2022) is Los 5d (2023):** Summarize how to map a fixed income portfolio into positions of standard instruments.

**Los 5e (2022) is Los 5e (2023):** Describe how mapping of risk factors can support stress testing.

**Los 5f (2022) is Los 5f (2023): **Explain how VaR can be computed and used relative to a performance

benchmark.

**Los 5g (2022) is Los 5g (2023): **Describe the method of mapping forwards, forward rate agreements, interest

rate swaps, and options.

**Los 5b (2023):** (Explain and demonstrate how the mapping process captures general and specific risks) is added.

9. Financial Correlation Modeling (2023)

**Los 9a (2022) is Los 9a (2023):** Explain the purpose of copula functions and how they are applied in finance.

**Los 9b (2022) is Los 9b (2023):** Describe the Gaussian copula and explain how to use it to derive the joint probability of default of two assets.

**Los 9c (2022) is Los 9c (2023):** Summarize the process of finding the default time of an asset correlated to all other assets in a portfolio using the Gaussian copula.

17. The Credit Decision (2023)

**Los 17a (2022) is Los 17a (2023):** Define credit risk and explain how it arises using examples.

**Los 17b (2022) is Los 17b (2023):** Explain the components of credit risk evaluation.

**Los 17c (2022) is Los 17c (2023):** Describe, compare, and contrast various credit risk mitigants and their role in credit analysis.

**Los 17d (2022) is Los 17d (2023):** Compare and contrast quantitative and qualitative techniques of credit risk evaluation.

**Los 17e (2022) is Los 17e (2023):** Compare the credit analysis of consumers, corporations, financial institutions, and sovereigns.

**Los 17f (2022) is Los 17g (2023):** Compare bank failure and bank insolvency.

**Los 17f (2023):** (Describe quantitative measurements and factors of credit risk, including probability of default, loss given default, exposure at default, expected loss, and time horizon) is added.

24. Structured Credit Risk (2023)

**Los 24a (2022) is Los 24a (2023):** Describe common types of structured products.

**Los 24b (2022) is Los 24b (2023): **Describe tranching and the distribution of credit losses in a securitization.

**Los 24c (2022) is Los 24c (2023):** Describe a waterfall structure in a securitization.

**Los 24d (2022) is Los 24d (2023):** Identify the key participants in the securitization process and describe conflicts of interest that can arise in the process.

**Los 24e (2022) is Los 24e (2023):** Compute and evaluate one or two iterations of interim cashflows in a three-tiered securitization structure.

**Los 24f (2022) is Los 24g (2023):** Describe a simulation approach to calculating credit losses for different tranches in a securitization.

**Los 24g is (2022) is Los 24h** **(2023):** Explain how the default probabilities and default correlations affect the credit risk in a securitization.

**Los 24h (2022) is Los 24i (2023):** Explain how default sensitivities for tranches are measured.

**Los 24i (2022) is Los 24j (2023):** Describe risk factors that impact structured products.

**Los 24j (2022) is Los 24k (2023):** Define implied correlation and describe how it can be measured.

**Los 24k (2022) is Los 24l (2023):** Identify the motivations for using structured credit products.

**Los 24f (2023):** (Describe the treatment of excess spread in a securitization structure and estimate the value of the overcollateralization account at the end of each year) is added.

26. Netting, Close-out and Related Aspects (2023)

**Los 26a (2022) is Los 26a (2023): **Explain the purpose of an International Swaps and Derivatives Association (ISDA) master agreement.

**Los 26b (2022) is Los 26b (2023):** Summarize netting and close-out procedures (including multilateral netting), explain their advantages and disadvantages, and describe how they fit into the framework of the ISDA master agreement.

**Los 26c (2022) is Los 26c (2023):** Describe the effectiveness of netting in reducing credit exposure under various scenarios.

**Los 26d (2022) is Los 26d (2023):** Describe the mechanics of termination provisions and trade compressions and explain their advantages and disadvantages.

**Los 26e (2022) is Los 26f (2023):** Identify and describe termination events and discuss their potential effects on parties to a transaction.

**Los 26e (2023):** (Provide examples of trade compression of derivative positions, calculate net notional exposure amount, and identify the party holding the net contract position in a trade compression) is added.

27. Margin (Collateral) and Settlement (2023)

**Los 27a (2022) is Los 27a (2023):** Describe the rationale for collateral management.

**Los 27b (2022) is Los 27b (2023): **Describe the terms of a collateral agreement and features of a credit support annex (CSA) within the ISDA Master Agreement including threshold, initial margin, minimum transfer amount and rounding, haircuts, credit quality, and credit support amount.

**Los 27c (2022) is Los 27d (2023):** Describe the role of a valuation agent.

**Los 27d (2022) is Los 27e (2023):** Describe the mechanics of collateral and the types of collateral that are typically used.

**Los 27e (2022) is Los 27f (2023):** Explain the process for the reconciliation of collateral disputes.

**Los 27f (2022) is Los 27g (2023):** Explain the features of a collateralization agreement.

**Los 27g (2022) is Los 27h (2023):** Differentiate between a two-way and one-way CSA agreement and describe how collateral parameters can be linked to credit quality.

**Los 27h (2022) is Los 27i (2023):** Explain aspects of collateral including funding, rehypothecation, and segregation.

**Los 27i (2022) is Los 27j (2023):** Explain how market risk, operational risk, and liquidity risk (including funding liquidity risk) can arise through collateralization.

**Los 27j (2022) is Los 27k (2023):** Describe the various regulatory capital requirements.

**Los 27c (2023):** (Calculate the credit support amount (margin) under various scenarios) is added.

29. CVA (2023)

**Los 29a (2022) is Los 29a (2023):** Explain the motivation for and the challenges of pricing counterparty risk.

**Los 29b (2022) is Los 29b (2023):** Describe credit value adjustment (CVA).

**Los 29c (2022) is Los 29c (2023):** Calculate CVA and CVA as a spread with no wrong-way risk, netting, or collateralization.

**Los 29d (2022) is Los 29d (2023):** Evaluate the impact of changes in the credit spread and recovery rate assumptions on CVA.

**Los 29h (2022) is Los 29e (2023):** Describe debt value adjustment (DVA) and bilateral CVA (BCVA).

**Los 29i (2022) is Los 29g (2023):** Calculate DVA, BCVA, and BCVA as a spread.

**Los 29e (2022) is Los 29h (2023):** Explain how netting can be incorporated into the CVA calculation.

**Los 29f (2022) is Los 29i (2023):** Define and calculate incremental CVA and marginal CVA and explain how to convert CVA into a running spread.

**Los 29g (2022) is Los 29j (2023):** Explain the impact of incorporating collateralization into the CVA calculation, including the impact of margin period of risk, thresholds, and initial margins.

**Los 29j (2022) is Los 29k (2023):** Describe wrong-way risk and contrast it with right-way risk.

**Los 29k (2022) is Los 29l (2023):** Identify examples of wrong-way risk and examples of right-way risk.

**Los 29l (2022) is Los 29m (2023): **Discuss the impact of collateral on wrong-way risk.

**Los 29m (2022) is Los 29n (2023):** Identify examples of wrong-way collateral.

**Los 29n (2022) is Los 29o (2023):** Discuss the impact of wrong-way risk on central counterparties (CCPs).

**Los 29o (2022) is Los 29p (2023):** Describe the various wrong-way modeling methods including hazard rate approaches, structural approaches, parametric approaches, and jump approaches.

**Los 29p (2022) is Los 29q (2023):** Explain the implications of central clearing on wrong-way risk.

**Los 29f (2023):** (Explain the distinctions between unilateral CVA (UCVA) and BCVA, and between unilateral DVA (UDVA) and BCVA) is added.

33. An Introduction to Securitisation (2023)

**Los 33a (2022) is Los 33a (2023):** Define securitization, describe the securitization process, and explain the role of participants in the process.

**Los 33b (2022) is Los 33b (2023):** Explain the terms over-collateralization, first-loss piece, equity piece, and cash waterfall within the securitization process.

**Los 33c (2022) is Los 33c (2023):** Analyze the differences in the mechanics of issuing securitized products using a trust versus a special purpose vehicle (SPV) and distinguish between the three main SPV structures: amortizing, revolving, and master trust.

**Los 33d (2022) is Los 33d (2023):** Explain the reasons for and the benefits of undertaking securitization.

**Los 33e (2022) is Los 33e (2023):** Describe and assess the various types of credit enhancements.

**Los 33f (2022) is Los 33f (2023):** Explain the various performance analysis tools for securitized structures and identify the asset classes they are most applicable to.

** Los 33g (2022) is Los 33g (2023):** Define and calculate the delinquency ratio, default ratio, monthly payment rate (MPR), debt service coverage ratio (DSCR), the weighted average coupon (WAC), the weighted average maturity (WAM), and the weighted average life (WAL) for relevant securitized structures.

**Los 33i (2022) is Los 33h (2023):** Explain the prepayment forecasting methodologies and calculate the constant prepayment rate (CPR) and the Public Securities Association (PSA) rate.

34. Understanding the Securitization of Subprime Mortgage Credit (2023)

**Los 34a (2022) is Los 34a (2023):** Explain the subprime mortgage credit securitization process in the United States.

**Los 34b (2022) is Los 34b (2023):** Identify and describe key frictions in subprime mortgage securitization and assess the relative contribution of each factor to the subprime mortgage problems.

**Los 34c (2022) is Los 34c (2023):** Compare predatory lending and borrowing.

**Los 34d (2023):** (Describe the various features of subprime MBS and explain how these features are designed to protect investors from losses on the underlying mortgage loans) is added.

**Los 34e (2023):** (Distinguish between corporate credit ratings and asset-backed securities (ABS) credit ratings) is added.

**Los 34f (2023):** (Explain how through-the-cycle ABS rating can amplify the housing cycle) is added.

44. Sound Management of Risks related to Money Laundering and Financing of Terrorism (2023)

**Los 51a (2022) is Los 44a (2023):** Explain best practices recommended by the Basel committee for the assessment, management, mitigation, and monitoring of money laundering and financing of terrorism (ML/FT) risks.

**Los 44b (2023):** (Describe recommended practices for the acceptance, verification, and identification of customers at a bank) is added.

**Los 44c (2023):** (Explain practices for managing ML/FT risks in a group-wide and cross-border context) is added.

56. Solvency, Liquidity and Other Regulation After the Global Financial Crisis (2023)

**Los 54a (2022) is Los 56a (2023):** Describe and calculate the stressed VaR introduced in Basel 2.5 and calculate the market risk capital charge.

**Los 54b (2022) is Los 56b (2023):** Explain the process of calculating the incremental risk capital charge for positions held in a bank’s trading book.

**Los 54c (2022) is Los 56c (2023):** Describe the comprehensive risk (CR) capital charge for portfolios of positions that are sensitive to correlations between default risks.

**Los 54d (2022) is Los 56d (2023):** Define in the context of Basel III and calculate where appropriate:

– Tier 1 capital and its components

– Tier 2 capital and its components

– Required Tier 1 equity capital, total Tier 1 capital, and total capital.

**Los 54e (2023) is Los 56e (2023):** Describe the motivations for and calculate the capital conservation buffer and the countercyclical buffer, including special rules for globally systemically important banks (G-SIBs).

**Los 54f (2022) is Los 56f (2023):** Describe and calculate ratios intended to improve the management of liquidity risk, including the required leverage ratio, the liquidity coverage ratio, and the net stable funding ratio.

**Los 54g (2022) is Los 56g (2023):** Describe the mechanics of contingent convertible bonds (CoCos) and explain the motivations for banks to issue them.

**Los 54h (2022) is Los 56h (2023):** Provide examples of legislative and regulatory reforms that were introduced after the 2007-2009 financial crisis.

75. Covered Interest Parity Lost: Understanding the CrossCurrency Basi (2023)

**Los 78a (2022) is Los 75a (2023):** Differentiate between the mechanics of foreign exchange (FX) swaps and cross-currency swaps.

**Los 78b (2022) is Los 75b (2023):** Identify key factors that affect the cross-currency swap basis.

**Los 78c (2022) is Los 75c (2023):** Assess the causes of covered interest rate parity violations after the financial crisis of 2008.

82. Portfolio Risk: Analytical Methods (2023)

**Los 85a (2022) is Los 82a (2023):** Define, calculate, and distinguish between the following portfolio VaR measures: diversified and undiversified portfolio VaR, individual VaR, incremental VaR, marginal VaR, and component VaR.

**Los 85b (2022) is Los 82b (2023):** Explain the impact of correlation on portfolio risk.

**Los 85c (2022) is Los 82c (2023):** Apply the concept of marginal VaR in making portfolio management decisions.

**Los 85d (2022) is Los 82d (2023):** Explain the risk-minimizing position and the risk and return-optimizing position of a portfolio.

**Los 85e (2022) is Los 82e (2023):** Explain the difference between risk management and portfolio management and describe how to use marginal VaR in portfolio management.

35. Revisions to the Principles for the Sound Management of Operational Risk (2022)

Chapter has been deleted.

36. Enterprise Risk Management (2022)

Chapter has been deleted.

37. What Is ERM (2022)

Chapter has been deleted.

38. Implementing Robust Risk Appetite Frameworks to Strengthen Financial Institutions (2022)

Chapter has been deleted.

39. Banking Conduct and Culture (2022)

Chapter has been deleted.

40. Risk Culture (2022)

Chapter has been deleted.

41. OpRisk Data and Governance (2022)

Chapter has been deleted.

43. Information Risk and Data Quality Management (2022)

Chapter has been deleted.

44. Validating Rating Models (2022)

Chapter has been deleted.

45. Assessing the Quality of Risk Measures (2022)

Chapter has been deleted.

52. Regulation of the OTC Derivatives Market (2022)

Chapter has been deleted.

57. The Cyber-Resilient Organization (2022)

Chapter has been deleted.

59. Operational resilience: Impact tolerance for important business services (2022)

Chapter has been deleted.

60. Principles for Operational Resilience (2022)

Chapter has been deleted.

61. Striving for Operational Resilience: The Questions Boards and Senior Management Should Ask (2022)

Chapter has been deleted.

94. Covid-19 and cyber risk in the financial sector (2022)

Chapter has been deleted.

95. Holistic Review of the March Market Turmoil(2022)

Chapter has been deleted.

96. LIBOR transition Case studies for navigating conduct risks (2022)

Chapter has been deleted.

97. Beyond LIBOR: a primer on the new benchmark rates (2022)

Chapter has been deleted.

99. The Rise of digital money (2022)

Chapter has been deleted.

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