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© Neev Knowledge Management – Pristine
www.edupristine.com
CFA Level IIEquity Investments
June 2011
© Neev Knowledge Management – Pristine
Agenda
• Introduction and context• Understanding the CFA Examination Structure• Introduction to Equity Investments
– Valuation Concepts – FCFF and WACC Calculations
• Complete Offering & Registration• Contact Information
2 www.edupristine.com
Seminar MaterialNot for Sale
Understanding the CFA Examination Structure
2
Pristine has been started by professionals with diverse experience in financial services, IT and Auto who are alumnus of IITs & IIMs
Pristine
Founded with an aim of creating world class professionals in the area of finance particularly risk management and investment banking
Topic Expert Model (TEM ) – Industry professionals bring invaluable industry perspective for students. Pool of 300+ working professionals as active faculty members with the likes of CFA regional directors, Presidents of various banks
Testimonial - 53% of the students join us on the basis of referral is a testimonial of the effective training methodologies
Effective training methodologies to improve the performance of the students and enhance the employability
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Pristine has been started by professionals with diverse experience in financial services, IT and Auto who are alumnus of IITs & IIMs
PristineClassroom/ Online delivery (synchronous and asynchronous) – To increase reach and improve efficiency of learning. Conducted 15+ batches with over 300 hours of recorded content
Innovative content – To improve understanding & learning capability of students. VisualizeFRM, VisualizeCFA as one of the best selling products
Founded with an aim of creating world class professionals in the area of finance –particularly risk management and investment banking
Effective training methodologies to improve the performance of the students and enhance the employability
3
Key Authorization
CFA Institute (2010-11)Authorized Training provider – CFA
Pristine is now the authorized training provider for CFA Exam trainings . Pristine is largest training provider for CFA in India with presence across seven major cities.
FPSB India (2010-11)Authorized Training provider -CFP
An authorized Education Provider for Chartered Financial Planner Charter.
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GARP (2007-10)Authorized Training provider -FRM
Largest player in India in the area of risk management training. Trained 1000+ students in risk management
PRMIA (2009-10)Authorized Training provider – PRM/ APRMSole authorized training for PRM Training in India. Largest player in India in the area of risk management training. Trained 1000+ students in risk management
Key Associations*
Bank Of America Continuum Solutions (2010)Financial Modeling in Excel
Associates were trained on valuation and mergers and acquisitions
J. P. Morgan (2010)Financial Modeling in Excel
The Real Assets Group were trained in Excel for infrastructure and real
modeling
Franklin TempletonCFA (2010)
Students were facing a gap in the overall understanding of finance topics like corporate finance, FSA and valuation. Provided training for over 100 hours to bridge the gap
Credit-Suisse India (2009)Risk Management and Quant. AnalysisIT Professionals of Creditwere trained on risk management.
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HSBC (2008)Risk Management and Quant. AnalysisNew joinees in HSBC had a gap in knowledge of Risk Management and quantitative skills. Conducted trainings (On campus) to bridge the gap
*Indicative List
Mizuho (2010)Financial Modeling in Excel
Bankers were using excel models that they could not understand. Conducted financial modeling in Excel trainings to
bridge the gap
J. P. Morgan (2010)Financial Modeling in Excel
The Real Assets Group were trained in Excel for infrastructure and real-estate
modeling
Suisse India (2009)Risk Management and Quant. AnalysisIT Professionals of Credit-Suisse India were trained on risk management.
…Key Associations
IIM Calcutta (2010) Financial Modeling in Excel
Students about to go for internships and join jobs found a gap in their grasp of
knowledge of excel for financial modeling. Conducted training for 75+
students with an average rating of 4.5+
IIT Delhi (2009)Corporate finance
Students get placed in finance companies (UBS, GS, MS, etc) with no understanding of the subject/ Job Profile. Conducted workshop to bridge the gap
Sydenham College (2009)Financial Modeling in Excel
Students about to join jobs found a gap in their grasp of excel for financial modeling. Conducted 40+ hours of training and helped students be ready for job
FMS Delhi (2010) Financial Modeling in Excel
Final Year MBA students of Faculty of Management Studies, Delhi University were trained in financial modeling so as
to prepare them better for a job in finance.
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IIM Calcutta (2010) Financial Modeling in Excel
Students about to go for internships and join jobs found a gap in their grasp of
knowledge of excel for financial modeling. Conducted training for 75+
students with an average rating of 4.5+
BITS Pilani (2009)Workshops on Basics of Finance
Most of the students desire a career in finance. Conducted training for 350+ students with an average rating of 4.5+
College (2009)Financial Modeling in Excel
Students about to join jobs found a gap in their grasp of excel for financial modeling. Conducted 40+ hours of training and helped students be ready
NISM (2008)Derivatives workshop for Hedging
Corporate in Ludhiana incurred huge losses because of derivative trades (for hedging). Conducted trainings for directors and CFOs for better understanding of derivative products
Trainer
• Extensive experience in the financial services, consulting and training domain. extensive knowledge of the financial services industry, where he raised growth capital for organizations and helped them improve their revenues. He has authored research papers and trained 1000s of senior people in the area of financial modeling, quantitative analysis and risk management.
•Prior to founding Pristine, Paramdeep has worked in senior management positions as an Investment Banker with Standard Chartered Capital Markets Management Consulting.
• Work experience as Industry Practitioner
• Consultant to Reliance Energy (Power), strategizing their growth and cutting down the losses in energy distribution. He has helped them formulate their business plan.
• Assisted clients in raising capital through Private Equity & IPO by analyzing & business plans, preparing IM/DRHP, ensuring regulatory compliance and marketing the issue. He has Successfully placed two IPOs worth Rs. 100 Crore & achieved subscription of 32 & 11 times.
• Experience as Trainer
• He has trained participants from America for financial modelling
• Has conducted workshops and training courses in financial modelling in Excel receiving rave reviews
• Published research papers & articles in leading news papers in the field of risk management and Basel II accords, which are now used by leading banks as reference material.
• Paramdeep is an MBA from IIM Indore, where he secured the highest CGPA in his batch. He has completed his B. Tech and M. Tech in Mathematics and Computing from
Paramdeep Singh, Director and Faculty, Pristine
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xtensive experience in the financial services, consulting and training domain. He has extensive knowledge of the financial services industry, where he raised growth capital for organizations and helped them improve their revenues. He has authored research papers and trained 1000s of senior people in the area of financial modeling, quantitative analysis and risk management.
Prior to founding Pristine, Paramdeep has worked in senior management positions as an Investment Standard Chartered Capital Markets (India) and as a consultant with Accenture
Work experience as Industry Practitioner
Consultant to Reliance Energy (Power), strategizing their growth and cutting down the losses in energy distribution. He has helped them formulate their business plan.
Assisted clients in raising capital through Private Equity & IPO by analyzing & modelling business plans, preparing IM/DRHP, ensuring regulatory compliance and marketing the issue. He has Successfully placed two IPOs worth Rs. 100 Crore & achieved subscription of
He has trained participants from HSBC, JP Morgan, Mizuho Bank , ING Vysya, Bank of modelling in excel, receiving very good rating.
Has conducted workshops and training courses in IIM Calcutta, Sydenham, Welingkar on in Excel receiving rave reviews
Published research papers & articles in leading news papers in the field of risk management and Basel II accords, which are now used by leading banks as reference material.
, where he secured the highest CGPA in his batch. He has in Mathematics and Computing from IIT Delhi
, Director and Faculty, Pristine
CFA – Your Clear Interest in finance
• CFA charter provides you with a strong foundation for a variety of career choices in the investment profession– Interested in portfolio management, investment research, advisory services, or investment banking, you
will benefit from a CFA charter
My Personal Experience: Many jobs with preference for CFA + MBA(specially for Non CA background)
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CFA charter provides you with a strong foundation for a variety of career choices in the investment
Interested in portfolio management, investment research, advisory services, or investment banking, you
* CFA Institute website
My Personal Experience: Many jobs with preference for CFA + MBA(specially for Non CA background)
© Neev Knowledge Management – Pristine
Agenda
• Introduction and context• Understanding the CFA Examination Structure• Introduction to Equity Investments
– Valuation Concepts – FCFF and WACC Calculations
• Complete Offering & Registration• Contact Information
9 www.edupristine.com
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Understanding the CFA Examination Structure
9
Course Structure
Topic Area
Ethical and Professional StandardsInvestment Tools (Total) ‒ Financial Reporting and Analysis
‒ Corporate Finance
‒ Economics
‒ Quantitative Methods
Asset Classes (Total)
‒ Equity Investments
‒ Fixed Income
‒ Derivatives
‒ Alternative Investments
Portfolio Management
© Neev Knowledge Management – Pristine
Requires 200-250 Hours of studies
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Level II
1030 – 6015 – 25
5 – 15
5 - 10
5 – 10
35 – 75
20 - 30
5 – 15
5 – 15
5 - 15
5 - 15
250 Hours of studies
Way to CFA
• Each exam is six hours long and is split between morning and afternoon sessions. There is a twohour lunch break at the end of the morning session. – The Level I exam is composed of multiple-choice questions and is offered in June and December.– The Level II exam is composed of item-set questions and is offered in June only.– The Level III exam is composed of item-set and essay questions and is offered in June only.
• Score matrix provided on the exam results is an indicator of overall performance – The “<=50%” range is considered poor; – “51%–70%” is considered poor to average; – “>70%” is considered average to above average
Key to crack CFA Level II is by doing well in Equity, Ethics and FRA
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Each exam is six hours long and is split between morning and afternoon sessions. There is a two-hour lunch break at the end of the morning session.
choice questions and is offered in June and December.set questions and is offered in June only.set and essay questions and is offered in June only.
exam results is an indicator of overall performance
“>70%” is considered average to above average
Key to crack CFA Level II is by doing well in Equity, Ethics and FRA
Fees Structure Levels II - Deadlines
© Neev Knowledge Management – Pristine 12
CFA Institute now offers three options to all its candidatescurriculum in i) eBook form; ii) Print form or iii) Both
Suppose a candidate chooses to enroll by 16th Febtotal cost will be = 405 + 720 – 40 = $1085. If she405+720+20(shipping charges) = $1145
by 16 February Program Enrollment(new Level I only)Exam Registration $720 eBook + Print $50
Total $1,175
$405
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12
candidates. You can either choose to obtain theeBook and in Print
Feb and chooses the e-book version then hershe had taken the print version she will pay
by 16 February by 16 March
$970 $50
$1,175 $1,510
$490
© Neev Knowledge Management – Pristine
Agenda
• Introduction and context• Understanding the CFA Examination Structure• Introduction to Equity Investments
– Valuation Concepts – FCFF and WACC Calculations
• Complete Offering & Registration• Contact Information
13 www.edupristine.com
Seminar MaterialNot for Sale
Understanding the CFA Examination Structure
13
Concept Case
Given the following information regarding company XYZ
Company XYZ has made a net profit of $24mn in 2010. While the only non cash charge is depreciation expense which is $7.5mn. The interest expense is $4mn and the tax rate is 35%. Fixed capital expense in the year was $8.2mn while the working capital expense was $3.5mn.
© Neev Knowledge Management – Pristine 14
Beta of Company XYZ 1.4
Risk Free rate 7.1%
Market Risk Premium 4.2%
Cost of Debt 10.7%
Tax Rate 35%
Market Value of Debt $270 mn
Market Value of Equity $310 mn
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Given the following information regarding company XYZ
Company XYZ has made a net profit of $24mn in 2010. While the only non cash charge is depreciation expense which is $7.5mn. The interest expense is $4mn and the tax rate is 35%. Fixed capital expense in the year was $8.2mn while the working capital expense was $3.5mn.
14
10.7%
$270 mn
$310 mn
Valuation Concepts
• Intrinsic ValueThis is the true value of an asset given a complete understanding of its investment characteristics.
• Going-concern AssumptionThe assumption that the company will continue its business into the foreseeable future.
• Liquidation ValueThis is the value if the assets were dissolved and its assets sold individually.
• Fair ValueThis is the price at which an asset will sell if both the buyer and seller are not under any compulsion to act.
© Neev Knowledge Management – Pristine 15 www.edupristine.com
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This is the true value of an asset given a complete understanding of its investment characteristics.
The assumption that the company will continue its business into the foreseeable future.
This is the value if the assets were dissolved and its assets sold individually.
This is the price at which an asset will sell if both the buyer and seller are not under any compulsion to
15
Concept Checker
1. The fair value of a firm is the price at which an asset will sell if both the buyer and seller are under no compulsion to act while the intrinsic value is the value obtained when the assets are liquidated. The two statements are most likely
© Neev Knowledge Management – Pristine 16
Fair Value Intrinsic ValueA Correct Correct
B Incorrect Correct
C Correct Incorrect
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The fair value of a firm is the price at which an asset will sell if both the buyer and seller are under no compulsion to act while the intrinsic value is the value obtained when the assets are liquidated. The
16
Valuation Process
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17
Valuation Models
Valuation
Relative Valuation
• Equity Valuation‒ P/ E Multiples
• Enterprise Valuation‒ EV / EBITDA Multiple‒ EV / Sales Multiple
Cash
Assets
Debt
Equity
Assets
• Multiples can be calculated from both trading comps or transaction comps
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Absolute Valuation
• Equity Valuation‒ Free Cash Flow to Firm (FCFF)
• Enterprise Valuation‒ Free Cash Flow to Equity (FCFE)‒ Dividend Discount Method (DDM)
AssetsNet Debt1
Equity
Enterprise Value, calculated as sum of Equity and Net Debt
Equity Value calculated as No of shares
multiplied by Share Price
• Equity Value
• Enterprise Value
• 1 Net Debt = Debt - Cash
18
Case Questions
2. An analyst reviewing Company XYZ is most likely A. The company is an acquisition targetB. The company pays dividendsC. The company is being valued from the position of a minority investor
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most likely use the free cash flow model if
The company is being valued from the position of a minority investor
19
Discounted Cash Flow Approach
© Neev Knowledge Management – Pristine 20
DCF
Cash Flow Timing
FCFF FCFE Dividend
n
ii
i
CapitalOfCostCFValueFirm
1 )1(
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20
Expectations
WACC
Re
Rf MarketPremium
β(Rm – Rf)
Weighted Average Cost of Capital (WACC)
• The WACC is the weighted average of the after tax required rate of return for equity and debt.
© Neev Knowledge Management – Pristine 21
d ratetaxrEquityMVDebtMV
DebtMVWACC 1(**)()(
)(
WACC
Market Value of Debtrd*(1-tax)
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Seminar MaterialNot for SaleWeighted Average Cost of Capital (WACC)
The WACC is the weighted average of the after tax required rate of return for equity and debt.
21
erEquityMVDebtMVEquityMVrate *
)()()()
WACC
Market Value of Equity
re
Concept Checker
3. For the company XYZ what is the closest value of WACCA. 10.18%B. 12.45%C. 11.25%
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For the company XYZ what is the closest value of WACC
22
Absolute Valuation Technique
23© Neev Knowledge Management - Pristine
• Free Cash Flow to Firm (FCFF)• Free Cash Flow to Firm represents the cash flows to the enterprise, which includes cash
flows to both debt and equity investors• FCFF is calculated as:• FCFF = EBIT X (1 – Tax Rate) + Depreciation • FCFF has to be discounted by the Weighted Average Cost of Capital (WACC)
company, to arrive at the enterprise value
• Free Cash Flow to Equity (FCFE)• Free Cash Flow to Equity represents the cash flows to the equity investors only, after
servicing obligations towards debt investors• FCFE is calculated as:• FCFE = PAT + Depreciation – Capex – Increase in Working Capital + New Debt Issues
Principal Payment on Debt• FCFE has to be discounted by the Cost of Equity
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23
Free Cash Flow to Firm represents the cash flows to the enterprise, which includes cash
Tax Rate) + Depreciation – Capex – Increase in Working CapitalWeighted Average Cost of Capital (WACC) of the
Free Cash Flow to Equity represents the cash flows to the equity investors only, after
Increase in Working Capital + New Debt Issues –
discounted by the Cost of Equity to arrive at the equity value
23
Free Cash Flow to Firm (FCFF)
• Free Cash Flow to the Firm is the cash flow available to the company’s suppliers of capital after all operating expenses and investments in working capital and fixed capital has been made.
© Neev Knowledge Management – Pristine 24
Net Income
Non Cash Charges
Int * ( 1- tax)
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Free Cash Flow to the Firm is the cash flow available to the company’s suppliers of capital after all operating expenses and investments in working capital and fixed capital has been made.
24
tax) FC Investment
WC Investment
FCFF
Case Questions
4. The free cash flow to the firm for Company XYZ is A. $10.8 mnB. $22.4 mnC. $21.2 mn
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The free cash flow to the firm for Company XYZ is closest to
25
Free Cash Flow to Equity (FCFE)
• Free Cash Flow to Equity is the cash flow available after all the obligations to other investors has been met.
© Neev Knowledge Management – Pristine 26
Int * ( 1- tax)
FCFF
Net Borrowing
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Free Cash Flow to Equity is the cash flow available after all the obligations to other investors has
26
Borrowing
FCFE
Case Questions
5. Assuming that the net borrowings during the year is $15mn. The free cash flow to equity is A. $34.8 mnB. $39.7 mnC. $42.2 mn
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Assuming that the net borrowings during the year is $15mn. The free cash flow to equity is closest to
27
Value of the Firm
• Value of the firm is then calculated as the present value of future free cash flow to the firm discounted at the weighted average cost of capital.
© Neev Knowledge Management – Pristine 28
gWACCgFCFF
WACCFCFFValueFirm
n
ii
i
)1(*)1(
0
1
FCFF0 FCFF1 FCFF2 FCFF3
DebtNetValueFirmValueEquity
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Value of the firm is then calculated as the present value of future free cash flow to the firm discounted
28
FCFF4 FCFFn………..
Case Questions
6. Assuming that the FCFF is expected to grow at a constant 4% rate for infinity. The firm value is closest to (Assume that the WACC is 10.2%)A. $107.8 mnB. $225.4 mnC. $375.7 mn
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Assuming that the FCFF is expected to grow at a constant 4% rate for infinity. The firm value is
29
© Neev Knowledge Management – Pristine
Agenda
• Introduction and context• Understanding the CFA Examination Structure• Introduction to Equity Investments
– Valuation Concepts – FCFF and WACC Calculations
• Complete Offering & Registration• Contact Information
30 www.edupristine.com
Seminar MaterialNot for Sale
Understanding the CFA Examination Structure
30
About CFA Prep School
School for CFA Prep
a 100 Hrs extensive training program*
that can enable you
to prepare for and crack CFA Level II Examination
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School for CFA Prep is
a 100 Hrs extensive training program*
that can enable you
to prepare for and crack CFA Level II Examination
About CFA Prep School
School for CFA Prep is
a 100 Hrs extensive training program*
that can enable you
to prepare for and crack CFA Level II Exam
=
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• Extensive 100 Hours coverage
• 16 days 5 hrs of regular classes
• 3 days 5 hrs of revision classes
• 2 Mock tests
• Extensive Question Bank to
prepare and Practice
• 2 Hrs of one-to-one doubt
clearing sessions*
• Qualified faculty with extensive
industry and teaching experience
=
About CFA Prep School
=School for CFA Prep is
a 100 Hrs extensive training program*
that can enable you
to prepare for and crack CFA Level II Exam
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• Proven credentials in successfully
training CFA aspirants
• Actionable and Innovative Material
• Complete Slide Pack
• Each Session followed by Quiz
• Adaptive feedback based on Quiz
• Mock tests and feedback
• Individual doubt solving session
• CFA Visualized Formula Charts
• Summarized Recordings for
revision
=
Tentative Schedule for CFA Level II – Online
Date Day26-Feb-11 Sat
27-Feb-11 Sun
05-Mar-11 Sat Financial Reporting & Analysis
06-Mar-11 Sun Financial Reporting & Analysis
12-Mar-11 Sat Financial Reporting & Analysis
13-Mar-11 Sun
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* Indicative list – Subject to Change
TopicQuant
Economics
Financial Reporting & Analysis -I
Financial Reporting & Analysis -II
Financial Reporting & Analysis -III
Corporate Finance-I
Tentative Schedule for CFA Level II – Online (cont…..)
Date Day
26-Mar-11 Sat
27-Mar-11 Sun
02-Apr-11 Sat
03-Apr-11 Sun
09-Apr-11 Sat
10-Apr-11 Sun Fixed Income Investments
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* Indicative list – Subject to Change
Topic
Corporate Finance-II
Equity Investments-I
Equity Investments-II
Equity Investments-III
Equity Investments-IV
Fixed Income Investments-I
Tentative Schedule for CFA Level II – Online (cont…..)
Date Day
16-Apr-11 Sat
17-Apr-11 Sun
23-Apr-11 Sat
24-Apr-11 Sun
30-Apr-11 Sat
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* Indicative list – Subject to Change
Topic
Fixed Income Investments-II
Derivatives-I
Derivatives-II
Alternative Investments
Portfolio Management
How it works?
1 2 3
You signup for the program by making payment of USD 1000*
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4 5
You signup for the program by making payment of USD 1000*
How it works?
1 2
Start Preparation with material and
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3 4 5
material and Live Interactive Class
How it works?
1 2 3
Work on the Problem sets/ Quizzes adapting preparation Style
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3 4 5
sets/ Quizzes adapting preparation Style
How it works?
1 2 3
Give Mock Tests/ Ask Doubts/ Revise and Complete
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3 4 5
Give Mock Tests/ Ask Doubts/ Revise and Complete Preparation
How it works?
1 2 3
Plan and Achieve Success
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3 4 5
Plan and Achieve Success in CFA Level II Exam
Methodology
Each topic will be explained
Conceptual Discussion, Examples, Tests, Quizzes, Actionable
Presentations, Visualized Charts and Q&A
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Each topic will be explained through
Conceptual Discussion, Examples, Tests, Quizzes, Actionable
Presentations, Visualized Charts and Q&A
Sample Innovative Material
© Neev Knowledge Management – Pristine 43
Probability Distributions
Normal Distribution
Normal Distribution
• Described by mean & variance• Symmetric about its mean• Standard Normal Distribution
- Mean = 0; Variance =1
Z-Score
If Z is a standard normal R.V. An event X is defined to happen if either -1< Z < 1 orZ > 1.5. What is the prob. of event X happening if N (1) =0.8413, N (0.5) = 0.6915and N (-1.5) = 0.0668, where N is the CDF of a standard normal variable?Ans. P(X)= P(-1< Z < 1) + P(Z > 1.5)
= N(1)-(1-N(1)) + N(-1.5)= 2*0.8413-1 + 0.0668= 0.7494
-1 +1 1.5
-4 -3 -2 -1 0 1 2 3 4
68% of Data
95% of Data
99.7% of Data
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43
Binomial Distribution
Score Skewness and Kurtosis
No. of σ a givenobservation is awayfrom population mean.
Z=(x-µ)/σ
Q. At a particular time, the market valueof assets of the firm is $100 Mn and themarket value of debt is $80 Mn. Thestandard deviation of assets is $ 10 Mn.What is the distance to default?Ans. z = (A-K) / σA
= (100-80)/10= 2
Q. Which of the following is likely to be a probability distributionfunction?For X=[1,2,3,4,5], Prob[Xi]= 49/(75-Xi
2)For X=[0,5,10,15], Prob[Xi]= Xi/30For X=[1,4,9,16,25], Prob[Xi]= [(X i)1/2 – 1]/5
Ans. The correct answer is For X=[0,5,10,15], Prob[Xi]= Xi/30For all values of X, probability lies within [0,1] and sum of all theprobabilities is equal to 1.
Sample Innovative Material
© Neev Knowledge Management – Pristine 44
H0: σ2 = cHA: σ2 ≠ c
Inference Based on
Sample Data
Real State of Affairs
H0 is True H0 is False
H0 is True Correct decision Confidence level = 1-
Type II error
P (Type II error) =
H0 is False Type I error Significance level = *
Correct decision
Power = 1-
*Term represents the maximum probability of committing a Type I error
Null HYPOTHESIS:H0
Alternative Hypothesis: Ha
Hypothesis thatthe researcherwants to reject
Concluded if there issignificant evidenceto reject H0
Type 1 error: rejection of H0 when itis actually true
Type 2 error :Fail to reject H0 whenit is actually false
Q. Co. ABC would give bonus to employees, if they get arating higher than 7/10 from customers. A random sampleof 30 customers is conducted with rating of 7.1/10.Formulate Hypothesis?• Null Hypothesis: H0: Mean<=7• Alternate Hypothesis : H1: Mean>7• Statistic to be measured: t-statistic, with 29 DoF
Range of values within whichH0 Cannot be rejected (say90% or 95%).Known variance, 2 Tailed test,CI is: X”± zα/2(σ/√t)
Confidence Intervals (CI)
Do not reject H0 Reject H0
2
H0: σ2
HA: σ2
Upper tail test:
2
22
σ1)s(n
Hypothesis Tests
Tests for a SinglePopulation Variances
Chi-Square test
Hypothesis Testing
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44
One tailed Test Two Tailed test
Test if the value is greaterthan or less than KH0; µ<=K vs. Ha: µ>K
Test if the value isdifferent from KH0; µ=0 vs. Ha: µ≠ 0
2
≤ σ02
> σ02
Upper tail test:
F
/2
F/2Reject H0Do not
reject H0
H0: σ12 – σ2
2 = 0HA: σ1
2 – σ22 ≠ 0
Hypothesis Testsfor Variances
Population VariancesTests for a two
Population Variances
F test
H0: σ12 – σ2
2 = 0HA: σ1
2 – σ22 ≠ 0
22
21
ssF
Q. If standard deviation of anormal population is known to be10 & the mean is hypothesizedto be 8. Suppose a sample sizeof 100 is considered. What is therange of sample means in whichhypothesis can be accepted atsignificance level of 0.05?Ans: SE = = 10/√100 =1
z = (x-µ)/ SE= (x-8)/1
At 95% -1.96<z<1.96Therefore 6.04<x<9.96
n
0
0.05
0.1
0.15
0.2
-5 0 5Z=0 Z=2.5
Do not Reject H0Reject H0
α= 0.05
Z=0
Do not Reject H0
Reject H0
α= 0.025
0
0.05
0.1
0.15
0.2
-5
α= 0.025
Reject H0
Hypothesis
What to expect at the end?
Towards the end of School for CFA Prep*You will be able to learn the topics related to CFA Level II Exam
You will know how to solve the questions asked in CFA Level II Exam
You will get an industry perspective of the topics
You will get a certificate of participation
*assuming you follow the program and practice
www.edupristine.com
Seminar MaterialNot for Sale
Towards the end of School for CFA Prep*You will be able to learn the topics related to CFA Level II Exam
You will know how to solve the questions asked in CFA Level II Exam
You will get an industry perspective of the topics
You will get a certificate of participation
assuming you follow the program and practice
Cost of the Program
USD 795For individual registrations
www.edupristine.com
Seminar MaterialNot for Sale
USD 650For participants joining in groups of 5 or more
Contact Details
Questions & Doubts?
Please e-mail me at paramdeep@edupristine.com
or visit http://www.edupristine.com
or call +91 989 298 0608
www.edupristine.com
Seminar MaterialNot for Sale
Questions & Doubts?
paramdeep@edupristine.com
http://www.edupristine.com
+91 989 298 0608
To Register
• Wire Transfer– Bank Name: HDFC Bank– Country: India– Swift Code: HDFCINBB– Account Name: Neev Knowledge Management Pvt Ltd– Account Number: 00602560008449
• PayPal to PayPal (Preferred)– Create a Personal PayPal account (it is free)– After Logging in, click on tab "My Account" and then on "Profile". Link PayPal account with your credit
card or bank account– Click on the tab "Send Money"– In the "To" tab enter the email id - pristinecareers@eneev.com– Pay the fees as per package required.
• Credit Card to PayPal– You can make the payment from your credit card to PayPal account.– Please make the payment to email id - pristinecareers@eneev.com
© Neev Knowledge Management – Pristine www.edupristine.com
Seminar MaterialNot for Sale
Account Name: Neev Knowledge Management Pvt Ltd
After Logging in, click on tab "My Account" and then on "Profile". Link PayPal account with your credit
pristinecareers@eneev.com
You can make the payment from your credit card to PayPal account.pristinecareers@eneev.com
Course Classroom Trainings
Online Trainings
Content
CFA Level I All* + Singapore**
Yes Original
CFA Level II Mumbai, Delhi From 2010 Original
FRM Level I All + Singapore
Yes Original
FRM Level II Mumbai, Delhi Yes Original
PRM All + Singapore
Yes Original
APRM Corporate From 2010 Original
Financial Modeling
Mumbai, Delhi, Bangalore
Yes Original
Finance for Lawyers
Mumbai No Original
CFP Mumbai, Delhi Yes Original
Placement Oriented Training
Colleges No Original
*All cities include Mumbai, Delhi, Kolkata, Chennai, Bangalore, Pune and Hyderabad ; ** Singapore class room trainings to comJune 2010
Other Pristine Offerings
© Neev Knowledge Management – Pristine www.edupristine.com
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Crash Course/Mock Test
Hours of Training
Accreditation Price
Yes 100 Under Process USD 1000;INR 17,950
From 2010 80 Under Process USD 1000;INR 16,950
Yes 75 GARP USD 495; INR 12,950
Yes 60 GARP USD 495,INR 9,950
Yes 135 PRMIA USD 795, INR 20,000
Yes 80 PRMIA INR 10,000
NA 50 - INR 18,000
NA 50 - INR 45,000
NA 120 Under Process INR 20,000
NA 150 Not Required INR 12,000
*All cities include Mumbai, Delhi, Kolkata, Chennai, Bangalore, Pune and Hyderabad ; ** Singapore class room trainings to commence from June 2010
© Neev Knowledge Management – Pristine
Agenda
• Introduction and context• Understanding the CFA Examination Structure• Introduction to Equity Investments
– Valuation Concepts – FCFF and WACC Calculations
• Complete Offering & Registration• Contact Information
50 www.edupristine.com
Seminar MaterialNot for Sale
Understanding the CFA Examination Structure
50
Contact
Contact Phone
Unmesha Tawde +91 982 043 2652
Paramdeep Singh +91 989 298 0608
Atul Kumar +91 932 2194 932
© Neev Knowledge Management – Pristine www.edupristine.com
Seminar MaterialNot for Sale
+91 982 043 2652 unmesha@edupristine.com
+91 989 298 0608 paramdeep@edupristine.com
+91 932 2194 932 atul@edupristine.com
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