Prologue
New Standards of Practice Handbook, Updated editions for Quantitative Methods and Fabozzi.
Remains at 18 study sessions in total.
Study Session 1
Ethical and Professional Standards
Except for Study Session 1.3 (formerly Ss 2.5), everything else is entirely new. Ss 1.1 and 1.2
are based on the new Standards handbook. Ss1.4 is based on the CFA Institute Research
Objectivity Standards, which is bundled in the Candidate Readings.
The handbook is now organized into seven standards. Although this seems to be an “overhaul”
of the standards handbook, the core principals espoused in the earlier edition remains intact
here.
Study Session 2
Ethical and Professional Standards
Unlike Ss1, this Ss 2.1 - 2.3 is mostly based on previous materials (developed by AIMR from
1996 - 1999) but have been updated or adapted in 2005. Ss2.4 was previously Ss1.4.
Removed 2005's Ss 2.1 Introduction Chapter from the Case Book; 2.4 Compensation for
Trading Errors and 2.5 Case Study: Soft Dollars.
Study Session 3
Quantitative Methods for Valuation
The same chapters and almost identical Ss as 2005, but the edition of the required reading
assignment has been updated for the 2004 (2nd) edition.
3.1B b) insert "and interpret".
3.1B f) insert “and interpret ANOVA results.”
3.1C removed from 2005, LOS c) and e).
Study Session 4
Economics for Valuation
Same readings as 2005. Some materials from 2005 has been removed: Ss4.2B and 4.2C.
4.3A b) NEW LOS
4.3B b) insert “and interpret”.
4.3 Problems 18-20 are NEW.
Study Session 5
Financial Statement Analysis
No change for Ss5.1. Ss5.2 "detecting earnings management (Wiley 2004) , chapters 9 and 10
and 11 are new, featuring 12 new LOS.
Readings from 2005 that appears to be removed, but actually appears in a slightly different
form: Ch 12 Pensions and Ch 14 Business Combinations.
5.2 can be found in the Candidate Readings. (previous 5.2 was removed)
5.1A: the part on International Accounting Standards 2 has been removed
New: Problem 18
5.1B: LOS removed include b), c) d).
5.1D the short note mentioned before the LOS is new.
5.1D a) insert...and estimate the effects of changing interest rates on the market value of debt
and on financial statements and ratios.
5.1D b) is NEW
5.1D Problems 5, 9 are new
5.1E Problems 7, 8 are new. Former LOS a) removed.
5.2A New article which can be found in the Candidate Readings, but is similar to 2005's 5.1 H.
5.2 B New article which can be found in the Candidate Readings, but is similar to 2005's 5.1 F
5.2C New article which can be found in the Candidate Readings, but is similar to 2005's 5.2
Study Session 6
Financial Statement Analysis
No change in LOS for ss6.1
6.1new problems 8, 11.
Ss6.2 with 6 chapters from an article by PricewaterhouseCoopers, Oct 2004, can be found in
the Candidate Readings.
6.2 compares IFRS wit GAAP but compares different subject areas compared to 2005.
Study Session 7
Financial Statement Analysis
All readings except 7.2 are the same as 2005's. Ss7.2 can be found in the Candidate Readings.
Removed the Accrual topic from 2005.
7.3has new Errata
Study Session 8
Corporate Finance
All readings from 2005, with reading removed for 2006: Ch 14. Ch13 and 13A moved to Ss9
8.1A b) insert “and interpret cost of retained earnings in terms of an opportunity cost.”
8.21 b) is NEW
Study Session 9
Corporate Finance
Ss9.1 is totally new and can be found in the Candidate Readings. It has 8 LOS.
Ss 9.2 was the previous Ss8.1E
Ss 9.3 is new and can be found in the Candidate Readings, but has some similarities to 2005's
Ss 8.1F.
Ss 9.4 is unchanged but uses an updated edition. 9.4 b) insert “or lowered financing costs.”
2005's LOS removed: Ch23 on Warrants and Convertible (but appears in Ss13), and Ch 33 and
Mergers.
Study Session 10
Equity Investment
No change in readings from 2005.
Ch18, Valuation Outside USA has been removed.
10.2A NEW Errata page 228
10.2B highlighted 2 new “note” comments.
10.2B g) insert “and calculate and interpret a company's tangible P/E value, franchise factor,
growth factor and franchise P/E value.”
Study Session 11
Equity Investment
Same readings as before.
11.3 highlighted “note” comments, which was not mentioned in 2005.
Study Session 12
Equity Investment
No change from 2005.
Study Session 13
Equity Investment
The same as 2005, note that ss13.3B was previously from Ss9 – similar topic but different LOS.
(2 new LOS) taken from a new chapter of an existing textbook.
13.1B insert “and interpret for l) and m)
13.3 A new Errata on page 594
Study Session 14
Fixed Income Investments
New edition of Fabozzi (2004). readings from Ch7 of the previous edition has been removed.
Study Session 15
Fixed Income Investments
New edition of Fabozzi (2004). readings from Ss15.2 of 2005 of the previous edition has been
removed.
15.1A m) , n), o), p) are new
15.1 B b), e), f), g) are new
15.1 C d) is new
Study Session 16
Dervative Investments
Ss16.1 is the same and 16.1A has new Errata on Page 76 and 78 and 16.1B has new problems
8-10 and 14-18 and Errata on page 116, while Ss16.2 is new and has 2 LOS, and can be found
in the Candidate Readings.
Study Session 17
Derivative Investments
More of the same, but Ss17.2 relies on the later editon of Fabozzi.
17.1A and B Errata all new,
17.a), b), c) are NEW LOS.
Study Session 18
Portfolio Management
More of the same readings.
18.2e) insert “and discuss how the investment time horizon may influence investor's ability to
take risk and help modify investor's stratetic asset allocation.
18.2 f) is a NEW LOS.
