The CFA Program : Curriculum

GROUP A
1. Financial Accounting (3 hours: 100 marks)
Introduction to Accounting and Financial Statements:The meaning of Accounting
Attributes of Accounting The output of the Accounting Process Uses of Financial Statements
The users of output Double Entry System of FinancialAccounting Concept of Capital &
Income Generally Accepted Accounting Principles.
The Accounting Process:Basics of accounting mechanics Rules of Debit and Credit Types
of Accounts Books of Account The transactions Posting entries in Ledger Accounts
Maintenance of Cash book Maintenance of Petty Cash book The Special Journal and
Ledger maintenance Recording transactions in various books.
Trial Balance and Adjustments:Extracting the Trial balance from ledger balances Detecting
errors revealed and concealed by a Trial balance Passing adjustment entries Outstanding
Closing inventory Prepayments Depreciation Creating provision for doubtful receivables
Creating provision for Discounts.
Preparation of Financial Statements:Preparation of Trading Account Distinction between
capital and revenue expenditure Preparation of Profit and Loss Account giving double effect to
adjustments Preparation of Balance Sheet Analysis of Balance Sheet Relation between
Trial Balance, Profit & Loss A/c and Balance Sheet Limitations of Balance Sheet.
Accounting of Inventories:Inventory Pricing Raw Material Inventory Work-in-Progress
Finished Goods Inventory Inventory Relationship with Cost of Good Sold Inventory
CostFlow Methods Specific Identification method First-in-First out (FIFO) Average cost
Last-in- first-out (LIFO) Inventory Systems Costs of Inventories Cost of Acquisition Costs
of Conversions Other costs Net Realizable Value Techniques of Measurement of Inventory
Cost International inventoryaccounting methods Treatment of inventory in Interim
Reporting Business Combinations Terminated Contracts Research & Development
Construction Contracts.
Measurement and Recognition of Income & Expense:Principles of Revenue Recognition
Conservatism Concept Realization Concept Matching Concept Methods of Revenue
Recognition Percentage of Completion Method Production Method Installment Method
Delivery Method Revenue Recognition in case of Sale of Goods Rendering Services
Interest, Royalties & Dividends Effect of Uncertainties on Revenue Recognition Revenue
realization International treatment of Revenue Recognition
Accounting of Long-Lived Assets: Capitalization versus expensing Financial statement
effects of capitalization Capitalization of interest Costs Betterments Replacements
Methods of Depreciation Straight line method Written Down Value method Sum of the
years digit method Units of Production Method Changes in method of depreciation
Disposal of Fixed Assets Disclosures for Depreciation Identification of Fixed Assets
Components of costs of Fixed Assets Fixed asset disclosures Self constructed Assets
Non-monetary consideration Improvement and Repairs Revaluation Valuation of fixed
assets in Special Cases International treatment of fixed assets accounting Treatment of
Borrowing costs Borrowing costs eligible for capitalization Commencement of capitalization
Suspension of capitalization Cessation of capitalization International treatment of
Borrowing costs.
Accounting of Intangible Assets: Introduction to Intangible Assets Method of valuation of
Goodwill Simple Profits Method Super Profits Method Annuity Method Capitalization
Method International treatment of Goodwill Accounting for Patents, Trademarks, Copyrights
and Know-how Accounting for leasehold Improvements Accounting for Research and
Development Accounting for Software Development Costs International Treatment of
Research & Development Costs
Principal Financial Statements: Requirements as to annual Accounts Contents in Income

Statements Notes to Income Statement Contents in Balance Sheet Treatment of Special

Items Depreciation Income Tax Dividends Managerial Remuneration Financial
Reporting Interim Reporting(AS) Segmental Reporting(AS) Related Party Disclosures
(IAS) Disclosures of accounting Policies(IAS) Fundamental Errors and changes
in Accounting Policies (IAS) Extraordinary Items(IAS) Events Occurring after Balance Sheet
Date (IAS) Contingences (IAS).
Sources of Financial Information: Boards Report Requirements as to Presentation of
Financial Statements Auditors & Audit Report Audit Report Qualification.
2. Economics (3 hours: 100 marks)
MICROECONOMICS
Market Forces of Supply and Demand: Determinants of individual demand-Determinants of
individual supply- Equilibriumprice-Analyzing changes in equilibrium-How prices allocate
resources
Elasticity:Determinants of price elasticity of demand-Determinants of price elasticity of supplyMicroeconomic government policies-Analysis- of price ceilings-Analysis of price floors-Market
efficiency
Consumer Behavior and Analysis:Utility Theory- Law of Diminishing Marginal UtilityDownward Slope of Demand Curve- Substitution Effect and Income Effect- Derivation of Market
Demand- Types of Demand, Paradox of Value- Consumer Surplus,
Consumer Equilibrium- Indifference Curves-Indifference Curve Analysis- Equilibrium Position
of Tangency- Deriving the Demand Curve through Indifference Curve- Income Consumption
Curve
The Firm and Industry Organization:Organization of the business firm-Basic types of
business firms-Costs of production-Opportunity cos- explicit cost and implicit costAccounting cost versus opportunity cost-The production function-Fixed and variable costsAverage and marginal cost-Cost curves and their shapes-Diminishing returns and cost curvesOutput and costs in the long run- Firms in competitive markets-Definition of competitionRevenue of a competitive firm-Profit maximization for the competitive firm-Accounting profit and
economic profit-The competitive firms supply curve-The supply curve in a competitive marketMonopoly-Barriers to entry (e.g., economics of scale, government licensing, patents, control of
essential resources)-How monopolies make production and pricing decisions-Public policy
and monopolies-Oligopoly Duopoly- Equilibrium for an oligopoly- Game theory and the
economics of cooperation- Monopolistic competition-Price and output in competitive markets
with differentiated products- Allocative efficiency in monopolistic competition
Supply and Demand for Productive Resources: Demand for resources-Marginal productivity
and the firms hiring decision-Supply, demand, and resource prices
MACRO ECONOMICS
Measuring National Income: Concept of national-National income-accounting- Measuring
national income and price, Gross Domestic Product (GDP)-components of GDP-Real
versusnominal GDP, -GDP deflator-Using the GDP deflator to derive real GDP- The consumer
price index-Problems with GDP as a measure of national product
Economic Growth
Main factor of economic growth-saving rate/capital- Theory of economic growth-Capital
accumulation and economic growth-Technological innovation and economic growth- Business
cycles- Theory of exogenous business cycle- Theory of endogenous business cycle- Population
growth- Human resources and economic growth- Physical capital-6.3 Human capitalTechnological progress-Institutional environment (e.g.- property rights, political stability,
competitive markets, stable money and price, an open economy, moderate marginal tax rates).
Economic Fluctuations and Unemployment: Descriptive terms in business cycle analysisIndex of leading economic indicators-Types of unemployment- Problems of measuring

unemployment
Equilibrium in the real market:Consumption-Consumption function-Investment-Investment
function-Government expenditure- Government revenue and Expenditure- Effect of government
expenditure and tax on national income- Government expenditure and crowding-out effectEquilibrium relationship in the good/service market: IS curve
Aggregate Demand and Aggregate Supply: The aggregate demand curve-Reasons for
downward sloping aggregate demand curve (e.g., wealth effect, interest rate effect, exchange
rate effect)-Shifts in the aggregate demand curve-The aggregate supply curve- Short-run
aggregate supply curve, Long-run aggregate supply curve- Shifts in the short-run aggregate
supply curve
Equilibrium in the Money Market:Demand for Money- Equilibrium relationship in the monetary
market-LM Curve- The Monetary System-Roles of Central Bank- Tools of money control-open
market operations- reserve requirements- Discount rate- Inflation: Causes and Consequences
Causes of inflation- Quantity theory of money- Fiscal/monetary policy and business cycledeflation/stagflation The influence of monetary policy on aggregate demand-Money supply and
money demand Transmission of monetary policy-Unanticipated expansionary monetary policyUnanticipated-restrictive monetary policy- Timing of monetary policy-Anticipated monetary
policy-The influence of fiscal policy on aggregate demand- fiscal/monetary policy and business
cycle- Monetary policy-Target of monetary policy-Instruments of monetary policy-Transmission
effect of monetary policy on real economy -Fiscal policy and the crowding-out effect
Open Macro Economics
Balance of payments-Current-account transactions- Capital-account transactions-Governments
intervention and money supply- Determination of equilibrium in the open economy -Open
macroeconomics model, effect of fiscal policy, effects of monetary policy.
GROUP B
3. Quantitative Methods (3 hours: 100 marks)
Basics of Mathematics, simultaneous equations, permutations and combinations. Calculus.
Interpolation and Extrapolation, Descriptive statistics. Index Numbers. Time Series. Linear
Programming - The Graphical and Simplex Methods Linear programming and applications; Role
of IT in Modern Business Enterprise - applications and Enterprise resource planning; Probability
Concepts, Rules, Unconditional and Conditional Probability, Bayes Theorem. Decision
Theory, Random variables and Probability Distribution. Sampling, Sampling Distribution, Central
Limit Theorem. Statistical Inference-Point and Interval Estimation, Hypothesis Testing; Tests of
Independence and goodness of fit, Analysis of Variance; Simple and Multiple Regression
Analysis and Applications; Quality Control: Statistical Process Control, , R & P Charts;
Simulation.
4. Financial Management (3 hours: 100 marks)
Goals of Corporate Finance, Forms of business organization, Role of financial managers,
Present Value and Future Value concepts, Required return and cost of capital, Cost of different
sources of capital, WACC & MCC, Capital Structure Theories, Dividend Policy,
Financial/Business Risk in terms of financial/ operational/combined leverage. Need for working
capital, components of working capital, Short-term Financing Decision, Cash Management,
Short-term lending and borrowing, Estimating and Discounting the Project (Investment) Cash
Flows, Capital Investment Decision and Investment Criteria, Managing foreign exchange
exposure, Foreign project appraisal, Mergers & Acquisitions, Current Developments.
GROUP C
5. Financial Markets (3 hours: 100 marks)
Financial Systems and Financial Markets Financial sector reforms (banking, insurance and
capital markets); Investment Scenario; Credit Markets (including micro credit); Globalization of
Financial Markets; Money Markets Role, Money Market Instruments and Features, Regulatory
Framework; Call Money, Treasury Bills, Commercial Paper, Certificates of Deposit, Bill

Financing; Debt Markets - Gilt-edged Securities Market, Repurchase Agreements, Public

Deposits, Capital Markets - Primary and Secondary Markets, Trading Mechanism, Clearing and
Settlement Procedures, Regulation of capital Markets. Bonds with Warrants and Embedded
Options - Convertible Bonds, Callable Bonds, Floating Rate Notes, Dual Currency Bonds;
Derivative Markets Forward Rate Agreements, Futures, Options, Swaps, Commodities,
Clearing & Settlement Mechanisms, Regulatory frame work; Globalization of Financial Markets,
Foreign currency Markets - Option Forwards, Swaps, Exchange Control in India, Dealing Room
Operations; Real Assets, Mutual Funds, Pension funds, Hedge funds, Integration of financial
markets and Inter-linkages among various markets. Current Developments.
6. Financial Statement Analysis (3 hours: 100 marks)
Introduction to Financial Statements, Framework of Financial Statement Analysis, Introduction
to USGAAP, IAS , AS and Sarbanes Oxley Act, Ratios, Common size statements, Time series,
Quality of Earnings, Earnings Management, Analysis of Income Taxes, Impact of changes in tax
rates Analysis of Financing Liabilities, Changes in Interest Rates on the Market Value of Debt
Analysis of Leases & Off Balance Sheet Assets & Liabilities, Analysis of Pensions and Other
Employee Benefits, Employee stock compensation plans Analysis of Inter-Corporate
Investments, Analysis of marketable securities, Analysis of Business Combinations, Methods for
Inter corporate investments, Methods and procedures for consolidation, Accounting for Special
Purpose Entities, Accounting Analysis of Multinational Operations, Foreign currency translation,
Analysis of foreign currency disclosures.
GROUP D
7. Equity Valuation & Analysis (3 hours: 100 marks)
Equity Securities and Markets, Types of equity securities, International investing, Equity Risk
Definition and Measurement including Single factor models and Multi-factor models,
Organization and Functioning of Securities Markets, Buying and selling securities, Security
Market Indices and Benchmarks. Fundamental Analysis, Analysis of world security markets,
Industry analysis and Company analysis, Theory of valuation, Valuation of stock market series,
Approaches to equity valuation, Special Applications of Fundamental Analysis. Technical
Analysis. Current Developments.
8. Fixed Income Valuation & Analysis (3 hours: 100 marks)
Debt Securities - Provisions for paying off bonds, Valuation and duration; Risks Associated with
Investing in Bonds; Global Bond Sectors and Instruments - Municipal securities, Corporate debt
instruments; Yield Spreads - Treasury yield curve, Measuring yield spreads, Effect of issue
size/liquidity on spreads; Introduction to the Valuation of Debt Securities, Arbitrage-free
valuation approach; Yield Measures, Spot Rates, and Forward Rates; Measurement of Interest
Rate Risk. The Term Structure and Volatility of Interest Rates - Yield curve shifts, Measuring
yield curve risk; Valuing Bonds with Embedded Options - The Binomial Model; MortgageBacked Securities - Securitization, Non-agency and Commercial mortgage-backed securities;
Asset-Backed Securities - Valuing Mortgage-Backed and Asset-Backed Securities - Cash flow
yield analysis, Zero-volatility spread, Monte Carlo simulation model and option-adjusted spread;
Assessing Trading Strategies; Principles of Credit Analysis; Fixed income portfolio management
strategies. Current Developments
GROUP E
9. Derivative Valuation & Analysis (3 hours: 100 marks)
Derivative Markets and Instruments- Purposes of derivative markets, Elementary pricing
principles, Sources of risk; Forward Markets and Instruments- Structure of global forward
markets, Credit risk in forward contracting, Types and characteristics and, Valuing forward
contracts, Forward contract strategies; Futures Markets - Structure of global futures markets,
Contract types and characteristics, trading mechanics, Valuation and Applications of futures.
Options Markets- Structure of global options markets, Valuing options, Option pricing models,
Volatility and related topics; Managing an option portfolio, Option trading strategies, Exotic

options; Swaps Markets- Structure of global swaps markets, Types and characteristics of
swaps, Valuing swaps, Swap strategies, Managing swap credit risk, Forward swaps and
swaptions; Asset-based securities - Types of underlying assets, Cash flow characteristics,
Credit enhancement, Valuation methodologies. Current Developments
10. Portfolio Management (3 hours: 100 marks)
Introduction to Portfolio Management, Investment Policy, Objectives, Models of Individual
Investors Capital Market Expectations, Key macroeconomic factors, Macro valuation model of
Asset Allocation, Asset allocation Techniques, practice and performance Capital Market Theory,
Markowitz Portfolio Theory , CAPM Application of CML and CAPM Portfolio Analysis, Risk of a
portfolio , Measures of risk Value at Risk, Calculation of VaR Optimal Portfolio Selection,
Efficient Set Theorem , Feasible Set Other Models, Portfolio Revision Techniques, Measuring
Portfolio Performance. Equity Portfolio Management, Alternative hypothesis, Passive
management, Active Management, Styles, Strategies, High E/P ratio effect, Debt Portfolio
Management Strategies, Derivatives in Portfolio Management, Managing a Property Portfolio,
Management of Individual Investor Portfolios, Management of Institutional Investor Portfolios,
Pension Plan and Employee Benefit Funds, Endowment Funds and Foundations, Real Estate
and Alternative Investments in Portfolio Management, Firm wide risk management. Current
Developments.
GROUP F
11. Mutual and other funds (3 hours: 100 marks)
The Concept and Role of Mutual Funds, Fund Structure and Constituents, Rights and
responsibilities of AMC directors, trustees, Legal and Regulatory Environment, Offer Document,
Fund Distribution and Sales Practices,Investor Services, Investment Management, Measuring
and Evaluating Mutual Fund Performance, Helping Investors With Financial Planning,
Recommending Financial Planning Strategies To Investors, Selecting the Right Investment
Products for Investors, Helping Investors Understand Risks In Fund Investing, Recommending
Model Portfolio and Develop a Model Portfolio-Fund Selection, Business Ethics for Mutual
Funds, Investment Strategies of Mutual Funds Investors, Future Scenario of Mutual Funds
Industry with special reference to India.
Types of Other Funds:- Hedge Funds, Pension Funds, Venture Funds, Endowment Funds,
Private Equity Funds, Insurance Funds, Employee retirement Funds. Measuring and evaluating
performance of other funds with special reference to India, Current Developments.
12. Professional Ethics and Integrated Case Studies (3 hours: 100 marks)
Introduction, Code of Ethics, Knowledge of the Law, Independence and Objectivity, Integrity of
Capital Markets, Duties to Clients,Duties to Employers, Investment Analysis,
Recommendations, and Actions, Conflicts of Interest, Disciplinary sanctions for violations, Soft
Dollar Standards, Research Objectivity Standards, Standards and guidelines for various
professionals in Financial Markets. Various Scams in Financial Markets.
Integrated Case Studies: For assessing the conceptual clarity and application skills of the
candidates in the subjects they studied in this program. A sample list of cases includes: Unit
Trust of India: Building the Trust, Steel Authority of India Limited, Tata Consultancy Services,
Financial Restructuring at GSK India, BPL Communications, Associated Cement Companies
Limited