CFA Level 2 Study Guide

Quantitative Methods: Regression Analysis and Time-Series

Master multiple regression, model specification, and time-series analysis essential for financial forecasting and hypothesis testing.

Economics: Currency Exchange Rates and Economic Analysis

Analyze exchange rate determinants, parity conditions, and economic growth factors affecting international investment decisions.

Financial Statement Analysis: Advanced Applications

Evaluate financial reporting quality, integrate IFRS/US GAAP differences, and analyze complex intercorporate investments and pensions.

Corporate Issuers: Capital Structure and Investments

Assess capital budgeting decisions, capital structure theories, dividend policies, and corporate governance frameworks for valuation.

Equity Valuation: Discounted Cash Flow Models

Apply DDM variants and free cash flow models to value equity securities with appropriate growth assumptions.

Equity Valuation: Market-Based and Residual Income Approaches

Utilize price multiples, enterprise value metrics, and residual income models for comprehensive equity analysis.

Fixed Income: Term Structure and Interest Rate Dynamics

Analyze yield curve theories, spot/forward rates, and interest rate volatility impacts on bond valuation.

Fixed Income: Credit Analysis and Structured Products

Evaluate credit risk models, credit default swaps, and mortgage-backed securities for fixed income portfolios.

Derivatives: Pricing and Valuation of Forwards and Futures

Price forward contracts, futures, and apply no-arbitrage principles across equity, currency, and interest rate derivatives.

Derivatives: Options and Swaps Valuation

Apply binomial models, Black-Scholes-Merton framework, and value interest rate and currency swaps strategically.

Alternative Investments: Valuation and Due Diligence

Evaluate private equity, real estate, hedge funds, and commodities using appropriate valuation methodologies.

Portfolio Management: Risk Management and Factor Models

Implement multifactor models, measure portfolio risk with VaR, and apply economic analysis to portfolio construction.