ECONOMICS, FINANCIAL STATEMENT ANALYSIS

How to Use the CFA Program Curriculum
	Errata
		Designing Your Personal Study Program
		CFA Institute Learning Ecosystem (LES)
		Feedback
Economics
	Learning Module 1	Topics in Demand and Supply Analysis
		Introduction
		Demand Concepts
			Demand Concepts
		Price Elasticity of Demand
			Extremes of Price Elasticity
		Predicting Demand Elasticity, Price Elasticity and Total Expenditure
			Elasticity and Total Expenditure
		Income Elasticity of Demand, Cross-Price Elasticity of Demand
			Cross-Price Elasticity of Demand
		Substitution and Income Effects; Normal Goods, Inferior Goods and Special Cases
			Normal and Inferior Goods
		Supply Analysis: Cost, Marginal Return, and Productivity
			Marginal Returns and Productivity
		Economc Profit Versus Accounting Profit
			Economic Cost vs. Accounting Cost
		Marginal Revenue, Marginal Cost and Profit Maximization; Short-Run Cost Curves: Total, Variable, Fixed, and Marginal Costs
			Understanding the Interaction between Total, Variable, Fixed, and Marginal Cost and Output
		Perfect and Imperfect Competition, Profit Maximization
			Profit-Maximization, Breakeven, and Shutdown Points of Production
		Breakeven Analysis and Shutdown Decision
			The Shutdown Decision
		Economies and Diseconomies of Scale with Short-Run and Long-Run Cost Analysis
			Short- and Long-Run Cost Curves
			Defining Economies of Scale and Diseconomies of Scale
		Summary
		Practice Problems
		Solutions
	Learning Module 2	The Firm and Market Structures
		Analysis of Market Structures
			Analysis of Market Structures
		Perfect Competition
			Demand Analysis in Perfectly Competitive Markets
		Elasticity of Demand
		Other Factors Affecting Demand
		Consumer Surplus: Value Minus Expenditure
		Supply Analysis, Optimal Price, and Output in Perfectly Competitive Markets
			Optimal Price and Output in Perfectly Competitive Markets
		Long-Run Equilibrium In Perfectly Competitive Markets
		Monopolistic Competition
			Demand Analysis in Monopolistically Competitive Markets
			Supply Analysis in Monopolistically Competitive Markets
			Optimal Price and Output in Monopolistically Competitive Markets
		Long-Run Equilibrium In Monopolistic Competition
		Oligopoly and Pricing Strategies
			Demand Analysis and Pricing Strategies in Oligopoly Markets
		The Cournot Assumption
		The Nash Equilibrium
		Oligopy Markets: Optimal Price, Output, and Long-Run Equilibrium
			Optimal Price and Output in Oligopoly Markets
			Factors Affecting Long-Run Equilibrium in Oligopoly Markets
		Monopoly Markets: Demand/Supply and Optimal Price/Output
			Demand Analysis in Monopoly Markets
			Supply Analysis in Monopoly Markets
			Optimal Price and Output in Monopoly Markets
		Price Discrimination and Consumer Surplus
		Monopoly Markets: Long-Run Equilibrium
		Identification of Market Structure
			Econometric Approaches
			Simpler Measures
		Summary
		References
		Practice Problems
		Solutions
	Learning Module 3	Aggregate Output, Prices, and Economic Growth
		Introduction
		Aggregate Output and Income
			Gross Domestic Product
			The Components of GDP
			GDP, National Income, Personal Income, and Personal Disposable Income
			Relationship among Saving, Investment, the Fiscal Balance and the Trade Balance
		Aggregate Demand and Aggregate Supply
			Aggregate Demand
			Aggregate Supply
			Shifts in the Aggregate Demand Curve
			Equilibrium GDP and Prices
		Economic Growth and Sustainability
			The Production Function and Potential GDP
			Sources of Economic Growth
			Measures of Sustainable Growth
			Measuring Sustainable Growth
		Summary
		References
		Practice Problems
		Solutions
	Learning Module 4	Understanding Business Cycles
		Introduction
		Overview of the Business Cycle
			Phases of the Business Cycle
			Leads and Lags in Business and Consumer Decision Making
			Market Conditions and Investor Behavior
		Credit Cycles and Their Relationship to Business Cycles
			Applications of Credit Cycles
			Consequences for Policy
		Business Cycle Fluctuations from a Firm’s Perspective
			The Workforce and Company Costs
			Fluctuations in Capital Spending
			Fluctuations in Inventory Levels
		Consumer Behavior
			Consumer Confidence
			Measures of Consumption
			Income Growth
			Saving Rates
		Housing Sector Behavior
			Available Statistics
			Sensitivity to Interest Rates and Relationship to Credit Cycle
			The Role of Demographics
			Impact on the Economic Cycle
		External Trade Sector Behavior
			Cyclical Fluctuations of Imports and Exports
			The Role of the Exchange Rate
			Overall Effect on Exports and Imports
		Theoretical Considerations
			Historical Context
			Neoclassical Economics
			The Austrian School
			Monetarism
			Keynesianism
			Modern Approach to Business Cycles
		Economic Indicators
			Types of Indicators
			Composite Indicators
			Leading Indicators
			Using Economic Indicators
			Other Composite Leading Indicators
			Surveys
			The Use of Big Data in Economic Indicators
			Nowcasting
			GDPNow
		Unemployment
			Unemployment
		Inflation
			Deflation, Hyperinflation, and Disinflation
			Measuring Inflation: The Construction of Price Indexes
			Price Indexes and Their Usage
			Explaining Inflation
		Summary
		References
		Practice Problems
		Solutions
	Learning Module 5	Monetary and Fiscal Policy
		Introduction to Monetary and Fiscal Policy
			Monetary Policy
		Money: Functions, Creation, and Definition
			The Functions of Money
			Paper Money and the Money Creation Process
			Definitions of Money
		Money: Quantity Theory, Supply and Demand, Fisher Effect
			The Demand for Money
			The Supply and Demand for Money
			The Fisher Effect
		Roles of Central Banks & Objectives of Monetary Policy
			The Objectives of Monetary Policy
		The Costs of Inflation
		Monetary Policy Tools
			Open Market Operations
			The Central Bank’s Policy Rate
			Reserve Requirements
			The Transmission Mechanism
		Inflation Targeting
			Central Bank Independence 
			Credibility
			Transparency
		Exchange Rate Targeting
		Monetary Policies: Contractionary, Expansionary, Limitations
			What’s the Source of the Shock to the Inflation Rate?
			Limitations of Monetary Policy
		Roles and Objectives of Fiscal Policy
			Roles and Objectives of Fiscal Policy
		Deficits and the National Debt
		Fiscal Policy Tools
			The Advantages and Disadvantages of Using the Different Tools of Fiscal Policy
			Modeling the Impact of Taxes and Government Spending: The Fiscal Multiplier
			The Balanced Budget Multiplier
		Fiscal Policy Implementation
			Deficits and the Fiscal Stance
			Difficulties in Executing Fiscal Policy
		The Relationship between Monetary and Fiscal Policy
			Factors Influencing the Mix of Fiscal and Monetary Policy
			Quantitative Easing and Policy Interaction
			The Importance of Credibility and Commitment
		Summary
		References
		Practice Problems
		Solutions
	Learning Module 6	Introduction to Geopolitics
		Introduction
		National Governments and Political Cooperation
			Features of Political Cooperation
			Motivations for Cooperation
			Resource Endowment, Standardization, and Soft Power
			The Role of Institutions
			Hierarchy of Interests and Costs of Cooperation
			Power of the Decision Maker
			Political Non-Cooperation
		Non-State Actors and the Forces of Globalization
			Features of Globalization
			Motivations for Globalization
			Costs of Globalization and Threats of Rollback
		Assessing Geopolitical Actors and Risk
			Autarky
			Hegemony
			Multilateralism
			Bilateralism
		The Tools of Geopolitics
			National Security Tools
			Economic Tools
			Financial Tools
			Multi-Tool Approaches
			Geopolitical Risk and Comparative Advantage
		Incorporating Geopolitical Risk into the Investment Process
			Types of Geopolitical Risk
			Assessing Geopolitical Threats
			Tracking risks according to signposts
			Manifestations of Geopolitical Risk
			Acting on Geopolitical Risk
		Summary
		Practice Problems
		Solutions
	Learning Module 7	International Trade and Capital Flows
		Introduction & International Trade-Basic Terminology
			International Trade
		Patterns and Trends in International Trade and Capital Flows
		Benefits and Costs of International Trade
		Comparative Advantage and the Gains from Trade: Absolute and Comparative Advantage
			Gains from Trade: Absolute and Comparative Advantage
		Ricardian and Heckscher–Ohlin Models of Comparative Advantage
		Trade and Capital Flows: Restrictions & Agreements- Tariffs, Quotas and Export Subsidies
			Tariffs
			Quotas
			Export Subsidies
		Trading Blocs, Common Markets, and Economic Unions
		Capital Restrictions
		Balance of Payments- Accounts and Components
			Balance of Payments Accounts
			Balance of Payment Components
		Paired Transactions in the BOP Bookkeeping System
			Commercial Exports: Transactions (ia) and (ib)
			Commercial Imports: Transaction (ii)
			Loans to Borrowers Abroad: Transaction (iii)
			Purchases of Home-Country Currency by Foreign Central Banks: Transaction (iv)
			Receipts of Income from Foreign Investments: Transaction (v)
			Purchase of Non-financial Assets: Transaction (vi)
		National Economic Accounts and the Balance of Payments
		Trade Organizations
			International Monetary Fund
			World Bank Group
			World Trade Organization
		Summary
		References
		Practice Problems
		Solutions
	Learning Module 8	Currency Exchange Rates
		Introduction & The Foreign Exchange Market
			The Foreign Exchange Market
		Market Functions
		Market Participants, Size and Composition
			Market Size and Composition
		Exchange Rate Quotations
			Exchange Rate Quotations
		Cross-Rate Calculations
		Forward Calculations
		Exchange Rate Regimes- Ideals and Historical Perspective
			The Ideal Currency Regime
			Historical Perspective on Currency Regimes
		A Taxonomy of Currency Regimes
			Arrangements with No Separate Legal Tender
			Currency Board System
			Fixed Parity
			Target Zone
			Active and Passive Crawling Pegs
			Fixed Parity with Crawling Bands
			Managed Float
			Independently Floating Rates
		Exchange Rates and the Trade Balance: Introduction
		Exchange Rates and the Trade Balance: The Elasticities Approach
		Exchange Rates and the Trade Balance: The Absorption Approach
		Summary
		References
		Practice Problems
		Solutions
Financial Statement Analysis
	Learning Module 1	Introduction to Financial Statement Analysis
		Introduction
		Scope of Financial Statement Analysis
		Major Financial Statements - Balance Sheet
			Financial Statements and Supplementary Information
		Statement of Comprehensive Income
			Income Statement
			Other Comprehensive Income
		Statement of Changes in Equity and Cash Flow Statement
			Cash Flow Statement
		Financial Notes, Supplementary Schedules, and Management Commentary
			Management Commentary or Management’s Discussion and Analysis
		Auditor's Reports
		Other Sources of Information
		Financial Statement Analysis Framework
			Articulate the Purpose and Context of Analysis
			Collect Data
			Process Data
			Analyze/Interpret the Processed Data
			Develop and Communicate Conclusions/Recommendations
			Follow-Up
		Summary
		References
		Practice Problems
		Solutions
	Learning Module 2	Financial Reporting Standards
		Introduction
		The Objective of Financial Reporting
		Accounting Standards Boards
			Accounting Standards Boards
		Regulatory Authorities
			International Organization of Securities Commissions
			The Securities and Exchange Commission (US)
			Capital Markets Regulation in Europe
		The International Financial Reporting Standards Framework
			Qualitative Characteristics of Financial Reports
			Constraints on Financial Reports
		The Elements of Financial Statements
			Underlying Assumptions in Financial Statements
			Recognition of Financial Statement Elements
			Measurement of Financial Statement Elements
		General Requirements for Financial Statements
			Required Financial Statements
			General Features of Financial Statements
			Structure and Content Requirements
		Comparison of IFRS with Alternative Reporting Systems
		Monitoring Developments in Financial Reporting Standards
			New Products or Types of Transactions
			Evolving Standards and the Role of CFA Institute
		Summary
		Practice Problems
		Solutions