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Financial Designations Aren't All Created Equal

by Mark P. Cussen,CFP®, CMFC (Contact Author | Biography)
Whether you're new to the financial services business or an experienced veteran, earning one of the many
professional designations now available will provide you with a lot of benefits. Increased marketing exposure,
credibility and compensation are just some of the advantages offered to those willing to fulfill the rigorous
requirements for certification.

However, the proliferation of designations, particularly in the financial planning field, has complicated the process for
those trying to decide which designation will benefit them the most. Over the last several years, a host of new
designations have sprung up that offers advisors specialized training in various niches of practice. However, many of
these newer credentials require far less academic coursework and training than what is demanded by the older, more
established designations. In this article, we'll go over some of the more respected designations and what they entail.

New Kids on the Block

The increase in new designations has sparked debate in the financial services industry regarding the credibility of
certain designations compared to others. While there is no black-and-white line of separation between them, a
general distinction can be made between the "old school" designations that have been around for decades and the
newer ones that continue to crop up. The designations that are most respected and recognized by the financial
industry and the media include:

1. Certified Financial Planner→ (CFP→)

This is perhaps the most widely recognized credential in the financial planning industry. The media has
promoted this designation over most others for years, primarily because of its unbiased approach to teaching
the financial planning process and the rigorous certification requirements that are administered by the CFP→
board. The academic requirement consists of five courses covering insurance, estate, retirement, education,
tax and investment planning plus ethics and the financial planning process. Once that is complete, students
must sit for the board exam. This is a 10-hour, 285-question test that spans two days and includes two
comprehensive case studies. Once a passing grade has been achieved, prospective certificants must also
complete at least three years of professional experience plus a bachelor's degree in order to obtain the CFP→
designation. (To learn more, read Is A Career In Financial Planning In Your Future and Studying For The CFP
Exam.)

2. Certified Public Accountant (CPA)

The CPA is by far the oldest and most established financial credential in America. CPAs must now have at
least 30 hours of undergraduate level accounting courses plus a master's degree in order to sit for the 19-
hour, two-day exam. This comprehensive exam covers accounting, auditing, bookkeeping, taxes and
ethics, among other topics. The CPA designation has long been widely recognized by the public as the
definitive credential of tax expertise.

3. Enrolled Agent (EA)

This is a lesser tax designation often obtained by those who focus on preparing income or estate tax returns.
The special agent exam administered by the Internal Revenue Service (IRS) is broken down into four three-
hour sessions spanning two days. The test covers personal, estate and corporate taxes, as well as ethics and
Internal Revenue Service regulations, but does not include straight accounting, auditing or bookkeeping of any
kind. It could perhaps be said that the Enrolled Agent designation allows tax preparers to roughly equate
themselves to CPAs within the specific confines of tax preparation.

4. Chartered Life Underwriter (CLU) and Chartered Financial Consultant (ChFC)

Both of these designations were originally created by the life insurance industry. The CLU designation requires
the same five core courses as the CFP→ designation, plus three additional elective courses. The ChFC
designation has the same requirements, except that it tends to embrace general financial planning issues as
opposed to the CLU, which focuses more closely on life insurance and its laws and regulations. There is no
comprehensive board exam required for either credential.

5. Certified Employee Benefit Specialist (CEBC)

As the name implies, this designation is designed specifically for those who sell or administrate employee
benefit plans. The curriculum for this designation consists solely of eight courses covering various business,

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insurance, retirement, pension and regulatory topics. No comprehensive board exam is required. Like the CLU
or ChFC, much of the material in this coursework is also covered in the CFP→ curriculum.

6. Registered Health Underwriter (RHU) and Chartered Property Casualty Consultant (CPCU)
These designations denote mastery of each of their respective lines of insurance. Each designation requires
the completion of several courses of intensive academic study, but as with the CLU, ChFC and CEBC there is
no board exam. Generally, these designations are only earned by those who intend to spend the duration of
their careers focusing on health or property-casualty insurance.

7. Chartered Financial Analyst→ (CFA→)

This designation is generally considered to be one of the most difficult and prestigious credentials in the
financial industry, at least in terms of investment management. The academic requirements for this
designation are second only to those for CPAs. Three years of coursework must be completed that covers a
range of topics and disciplines such as technical and fundamental analysis, financial accounting and portfolio
theory and analysis. Those who earn this designation often become portfolio managers or analysts for various
types of financial institutions. Holders of these credentials, like CPAs, tend to be compensated chiefly by
salary with performance-based incentives (if they take corporate jobs), or from business revenue, for those
who start their own private investment management companies. (To learn more, read What Does "CFA"
Mean? and Preparing For A Career As A Portfolio Manager.)

Separating the Wheat from the Chaff

While these designations have long since been accepted as part of the financial services establishment, the new
wave of credentials that has since arisen has served to cloud the validity of some of these older certifications.
However, closer analysis of many of these designations quickly reveals that they only require a small fraction of the
coursework that is demanded from the traditional sources of accreditation. For example, the Accredited Asset
Management Specialist (AAMS) and Chartered Mutual Fund Counselor (CMFC) designations can certainly aid
advisors in the investment selection and management process (and will also likely sound impressive to clients and
prospects). However, the academic curriculum required for either certification barely scratches the surface of the
material covered by either the CFA→ or even the CFP→ curriculums. But while the coursework required to obtain
most other designations does not compare to that of the CFA→, a notable exception has arisen in recent years.

The Licensed International Financial Analyst→ (LIFA→) credential covers much of the same material as the CFA→
curriculum in its coursework, but is considerably more flexible in terms of administration. Unlike the CFA→ exams,
which are administered at set times in specific, approved locations, LIFA→ students can go to any Thomson-
Prometric testing site and sit for their exams, which can be administered at least 260 days out of the year. LIFA→
exams are also less expensive, and students may also petition to bypass the first two levels of the exam and sit
directly for level III. It remains to be seen how this newer designation will be compared to the traditional CFA→
certification.

Indeed, some designations that have recently been created function chiefly as "marketing" designations
(i.e.credentials that are geared toward advising senior citizens.) These certifications often focus more on training
advisors how to effectively market certain kinds of financial products and services to senior citizens. Therefore, a
substantial portion of the training is geared primarily toward exploring the mindset of the average senior citizen and
how that can be used to induce them to follow the newly credentialed advisor's recommendations.

Keeping Perspective
Certainly, not all financial professionals who earn designations with less stringent requirements are dishonest or
incompetent; merely that many of them have not received the same level of training and experience as others who
have earned one or more of the older designations. But even the lesser designations can help advisors to better
assist their clients, if only in specific areas. In terms of marketing, however, the uneducated public will have difficulty
discerning between the services that a Certified Senior Advisor and a Certified Financial Planner→ are able to
provide for them. This, of course, has fostered some resentment from advisors who have earned the more difficult
certifications. Many of them are seeking legislation that would either curtail the influx of new designations or clearly
label them as being lesser in scope. Time and legislation will ultimately determine how this issue gets resolved.

For more insight, see The Alphabet Soup Of Financial Certifications.

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CPA, CFA Or CFP® - Pick Your Abbreviation Carefully

by Daniel Myers,CFA (Contact Author | Biography)
Whether you're searching for a good career path or just curious about the different financial credentials, this article
will help guide you through three of the best known professional designations in the financial industry: Certified Public
Accountant (CPA), Chartered Financial Analyst (CFA) and Certified Financial Planner® (CFP®). Each of these three
has a core career focus, and, although their abbreviations often sound interchangeable, each designation gives you
something unique. Follow along to discover how much coursework and study each designation requires, what
careers they typically lead to and how much you could make. (For a basic breakdown on these designations and
more, check out The Alphabet Soup Of Financial Certifications.)

Certified Public Accountant (CPA)

For most people, a CPA is best known as the person who prepares tax returns. CPAs certainly do that, but they do
much more as well. A CPA license is legally required in order to do particular jobs, such as public accounting
(independent auditing). However, one does not require a CPA license in order to prepare tax returns. State laws
govern what CPAs can and cannot do with their license. (If you're looking for a good accountant, check out Crunch
The Numbers To Find The Ideal Accountant.)

Requirements: Requirements vary by state, but in general, in order to sit for the CPA exam, applicants must have a
bachelor's degree with 120 semester hours. To obtain the CPA designation, applicants must pass the Uniform CPA
Exam, gain relevant work experience and meet additional educational requirements. Overall, additional educational
requirements usually consist of 24-30 semester hours in accounting, earned through a graduate or bachelor's degree
in business. Many states also require a minimum number of one to two years accounting and/or auditing experience.

Aside from the experience requirements, a CPA license usually takes about 18 months to complete beyond the
educational requirements. Many students choose to pursue a masters degree in accounting to fulfill their educational
requirements.

Exam: Although classroom requirements are a major requirement, the CPA exam is a difficult task in its own right.
Exams are administrated by the American Institute of Certified Public Accountants, the governing body of CPAs in the
United States. The 14-hour computerized exam consists of four sections:

1. Auditing and attestation

2. Financial accounting and reporting
3. Regulation
4. Business environment and concepts

Careers: Many undergraduate accounting students receive job offers long before they graduate. Accounting is an in-
demand field and is projected to continue to be so. According to the U.S. Bureau of Labor Statistics, employment is
projected to grow 18% between 2006 and 2016; this amounts to nearly 226,000 new positions. For CPAs wishing to
advance to senior-level corporate positions, two to three years of experience at a major accounting firm is crucial.

For those seeking gainful employment but not wishing to climb the corporate ladder, there are numerous positions
available in every city for accountants at small accounting firms and practices. For more ambitious job seekers,
lucrative CPA positions are available in hedge fund accounting and Sarbanes-Oxley-related work. The chief
requirements for these positions are experience and an excellent educational background. (To learn the history of the
accounting profession, check out The Rise Of The Modern-Day Bean Counter.)

Chartered Financial Analyst (CFA)

The CFA reputation in the business community is world class, and CFA charterholders work in many countries
around the world. The CFA program is very broad, and might be more aptly described as the equivalent of a master's
degree in finance with accompanying minors in accounting, economics, statistical analysis and portfolio management.
Although the CFA designation is not a legal requirement to perform work as a financial analyst (the cornerstone CFA
job), it is a great way to get a foot in the door for one of the most difficult jobs to crack. (For more on the pros and
cons of this demanding designation, see So You Want To Earn Your CFA? and Becoming A Financial Analyst.)

By reputation, the best way to get a finance job on Wall Street is to get a Master of Business Administration degree
from one of a handful of exclusive schools including Wharton, Harvard and Stanford. The second best way is to earn

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the CFA charter and have good industry experience. In some instances a CFA designation is even held in higher
esteem than an MBA.

Requirements: The CFA designation (granted by the CFA Institute) earns its reputation mainly due to the grueling
process candidates must endure to earn the CFA charter. While the exam is very democratic and open to anyone
with a bachelor's degree, the only people with a realistic chance of passing are those who are serious about the field.
The three general requirements to earn a CFA charter are to pass three exams, have an undergraduate degree (in
any subject) and have three years related work experience in the financial area.

Exam: To earn the CFA charter, candidates must pass a six-hour exam for each of three levels. The first exam is
available twice per year (in June and December) and the next two are only available in June. The pass rates on the
three tests are slightly above 50%, so if you don't pass the second or third exam, you must wait one year to take it
again.

Each of the three tests has overlapping material such as ethics and financial analysis. Generally, though, the first test
covers broad financial principles, the second is a very intensive exam on financial analysis and accounting, and the
third exam covers portfolio management and decision making. (For more on surviving your CFA exams see, Pass
Your CFA Exams The First Time.)

Careers: According to the CFA Institute, 55% of charterholders work for institutional investors as in-house analysts,
15% work for broker-dealers, and the remaining 29% work for universities and the government. While not nearly as
numerous as CPA jobs, CFA-related jobs are perhaps more lucrative. CFA Institute's 2007 Member Compensation
Survey reports that the median compensation for an equity portfolio manager with less than five years of experience
is $495,000. With over 10 years experience, the median yearly salary went up to $555,000.

Certified Financial Planner (CFP®)

The Certified Financial Planner (CFP®) is the only designation of the three focused on investing. It provides an
extremely practical course of study for those wishing to work directly with individual investors. The focus of the CFP®
is to train financial advisors to create and implement financial plans for investors.

Requirements and Exam: The requirements for the CFP®, as specified by the CFP® Board of Standards, are a
bachelor's degree in any major, three years financial planning experience, other educational requirements (see
below) and an exam. The 10-hour exam covers the following: investments planning, insurance, estate planning, risk
management, tax and retirement planning.

In order to take the exam, one must complete a prescribed course of study - unless exempt - in relevant financial
planning areas. These six required courses take about nine months to complete and are conducted on college
campuses nationally. They are:

1. Financial planning: process and environment

2. Fundamentals of insurance planning
3. Income taxation
4. Planning for retirement needs
5. Investments
6. Fundamentals of estate planning

Careers: People who benefit the most from the CFP® designation are those who usually work directly with individual
clients. Opportunities exist nationally for people with the CFP®, but it is not necessarily a key to a high-paying job, as
opposed to the CPA designation. There is no typical salary with the CFP®, as it helps gain client credibility in what is
essentially an entrepreneurial position. Income potential is determined by the sales performance of the financial
consultant, not by a salary scale. (If you aren't sure financial planning is for you, check out the quiz in Is A Career In
Financial Planning In Your Future?)

Parting Thoughts
Of the three designations, only the CPA is governed by state laws (to protect the public interest). In choosing a
designation to pursue, ask yourself what kind of work you want to do, where you want to work, and if you want to
work as an employee with a guaranteed salary or an entrepreneur where the sky (and the basement) is the limit. No
matter which you choose, each of these three financial designations will provide ample professional opportunities for
those who spend the time and energy to earn them.

To learn the pros and cons of these designations and more, read Financial Designations Aren't All Created Equal.

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Pass Your CFA Exams The First Time

by William Artzberger,CFA (Contact Author | Biography)
Overall, the Chartered Financial Analyst (CFA) designation is a daunting challenge, and the odds of success from
start to finish are bleak, with less than 20% of those that begin this challenge reaching the end. However, as one in
five candidates has demonstrated, it is possible.

There is no secret code to navigating through the CFA program and passing the test, but an organized, disciplined
approach will help you pass each level of the program and ultimately achieve your goal. Find out what you'll need to
make the cut and pass each level on your first try.

The CFA Program

Before we get into the nitty gritty, it's important to understand what the whole program entails. The Chartered
Financial Analyst program, offered by the CFA Institute in Charlottesville, Virginia, is designed to teach those in the
investment profession a "candidate body of knowledge" (CBOK). The CBOK tests candidates on ethics, quantitative
analysis, financial statement analysis, economics, portfolio analysis, corporate finance, and the analysis of stocks,
bonds and alternative investments. (To learn more about this designation before jumping in with both feet, see What
Does "CFA" Mean?and Finding Your Place In The Financial Industry.)

It consists of three levels, each of which culminate in a brutal six-hour exam. The first exam is administered both in
the late spring or late fall, and level 2 and 3 exams are offered only in the late spring. After passing all three levels of
the exam, each CFA candidate who has four years of professional investment experience is eligible to receive the
Chartered Financial Analyst designation.

Are you up for the challenge? The keys to success are to get organized, develop an effective study program and
review.

Key #1: Get Organized

Once you've made the decision to sit for the upcoming CFA exam, you need to develop a course of action. Here are
some tips:

1. Start early. The CFA Institute estimates that at least 250 hours of independent study is necessary to pass
each exam. In other words, a candidate starting six months before exam day should plan to devote no less
than 10 hours a week to studying.
2. Preview the material before starting. After registering for each level, you will receive a curriculum that is
divided into about 18 study sessions. Broadly preview each session to determine your familiarity with each
topic. (Check out our Exam Prep page for a quick review of the CFA exam.)
3. Develop a game plan. Get out your calendar and determine which weeks you will be studying which sections.
Plot this on Excel, Outlook or a similar schedule-making program. Schedule your studying so that you finish
with all the sections at least one month before the exam, so you can review. Also, schedule in review days as
you go along.
4. Select a review course. In no way should a review course substitute for studying the material. However, a
good review course can augment your study program by clarifying or pinpointing concepts you may be having
trouble with. The key is to pick only one course, so that you can spend more time focusing on the CBOK.

Key #2: Develop an Effective Study Program

An effective study program will make the difference between passing and failing. To develop an effective program,
consider the following:

1. Study all "learning outcome statements" (LOS). The CFA Institute defines LOS as "knowledge, skills and
abilities that you should be able to apply after completing a reading and all associated exercises and
problems." To master each LOS, develop an outline and write down any important terms, definitions and
formulas relating to each one. You'll be more likely to remember these points later if you take time to write
them down as you come across them.
2. Use flash cards. Homemade flash cards are an effective way to master the material. Flash cards are
portable, much lighter than carrying the entire CFA curriculum with you and can be quickly reviewed while
commuting to work, during a lunch break, etc.
3. Use memory techniques. Mnemonic devices, such as taking the first letter of each word in a concept to spell

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one word, are helpful. There are other tricks, such as catchy slogans. For example, "SiP a CoKe" can be used
to remind you of option put-call parity: The prices of a Stock + the Put = those of the Call + the present value
of the striKe price.Also, don't fail to take the value of auditory memory cues into account.
4. Study quantitative and qualitative material differently. When studying quantitative material, working on
problems is important. First study the concept, then learn by doing these problems over and over again. Once
you understand how to solve a problem, return to the material for further understanding. Read qualitative
subjects, such as ethics or behavioral finance before working on any problems. Approach these readings as if
you were enjoying a good book. Many ethical problems are scenario-based and easy to read.
5. Work through as many practice questions as you can. Use the curriculum provided by the CFA Institute to
show which problems you must work on. Enhance your studying by working on additional problems from
reputable exam preparation providers.
6. Use your approved calculator. Part of the challenge in passing the CFA exams is the ability to answer
questions in a short period of time. Practicing with the calculator you will use on exam day will allow you to
achieve the greatest efficiency.
7. Stay motivated. Focus on why you are earning your CFA charter and how you will reward yourself after you
take the exam.
8. Maintain a healthy lifestyle. Eat healthy, moderately proportioned meals, sleep right; avoid excessive alcohol
or caffeine and remember to exercise. People who are healthy are better learners.

Key #3: Review

Hopefully, you've been reviewing the material as you progress. However, you will still need a solid month to review
the material again once you have gone through all the sessions. Do not take this part of the study process lightly.

Here are some helpful tips for your review stage:

1. Finish early. Finish covering all materials at least one month before the exam.
2. Use practice tools. Tools like CDs or online exams are available to assess your strengths and weaknesses.
Find out where you need to build on your strengths and practice in areas where you are weak.
3. Work problems offline. Do your work like you would on the day of the exam – with a calculator and pencil in
hand.
4. Take practice exams. Take these beginning on a Saturday several weeks before exam day and try to
replicate the actual testing environment as much as possible. Time yourself and allow no interruptions. This
will allow you to become used to writing two three-hour exams in one day. You might also want to invest in a
set of good ear plugs, these will come in handy during the actual exam.
5. Do a test run. The Saturday before the exam, drive down to where you will be taking the test and check out
the site. Determine where you will park and the quickest way to get from there to the exam room.
6. Make time for yourself. If possible, take off the week before the exam. This will allow time for your final
review, and reduce stress levels before the exam. Stay at home, study the material and allow no interruptions.
7. Sleep tight. Take it easy the night before. Lightly review the material, brush up on weak spots and eat a nice
dinner. Pack a sack lunch for the next day to eat during your two-hour break. Also, remember to pack your
calculator, pencils, erasers, required medications, exam ticket, photo ID and ear plugs. Get to bed at a decent
time.
8. EXAM DAY. Wake up early and eat a good breakfast. Go over some broad concepts. Start with ones that are
easy for you; then work a few problems. Don't go into the exam cold. Leave the house in plenty of time to get
to the exam.
9. Take (and pass) the exam. Relax and take a few deep breaths. Avoid talking with others about the exam. If
you see someone you want to talk to, try not to talk about the exam. This will only stress you out and hurt your
performance.

Conclusion
If you're a candidate in the CFA program or are planning to register, you need to plan in order to succeed. Organize
your material, study effectively and review. In this way, you should be well on your way to passing each level of the
CFA program on your first try.

Where do you go once you've passed this prestigious exam? Check out Trying On Potential Employers.

by William Artzberger (Contact Author | Biography)

Bill Artzberger, CFA, is an entrepreneur and investor in Houston, Texas. Before striking out on his own, Bill worked
for more than five years at a privately held trust company. He has an MBA from Rice University and undergraduate
degrees in marketing and journalism from Southern Methodist University.

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A method of evaluating a security by attempting to measure its intrinsic value by examining related Trading
economic, financial and other qualitative and quantitative factors. Fundamental analysts attempt to study
everything that can affect the security's value, including macroeconomic factors (like the overall • Try 4 Risk-Free Issues of
Acronyms economy and industry conditions) and individually specific factors (like the financial condition and The Economist
management of companies).
Bonds

Buzzwords The end goal of performing fundamental analysis is to produce a value that an investor can
compare with the security's current price in hopes of figuring out what sort of position to take with that
FOREX security (underpriced = buy, overpriced = sell or short).
Mutual Funds
This method of security analysis is considered to be the opposite of technical analysis.
Options & Futures
Retirement Fundamental analysis is about using real data to evaluate a security's value. Although most analysts use
fundamental analysis to value stocks, this method of valuation can be used for just about any type of
Stocks security.
Taxes
For example, an investor can perform fundamental analysis on a bond's value by looking at economic
Tech Analysis factors, such as interest rates and the overall state of the economy, and information about the bond
issuer, such as potential changes in credit ratings. For assessing stocks, this method uses revenues,
Trading earnings, future growth, return on equity, profit margins and other data to determine a company's
underlying value and potential for future growth. In terms of stocks, fundamental analysis focuses on the
financial statements of a the company being evaluated.

One of the most famous and successful users of fundamental analysis is the Oracle of Omaha, Warren
Buffett, who has been well known for successfully employing fundamental analysis to pick securities. His
abilities have turned him into a billionaire.

Annual Report
Asset Valuation
Balance Sheet
Horizontal Analysis
Income Statement
Intrinsic Value
Quantitative Analysis
Security Analyst
Technical Analysis
Valuation

Introduction To Fundamental Analysis - Learn this easy-to-understand technique of analyzing a company's financial
statements and reports.

Stock-Picking Strategies: Fundamental Analysis - Choose a stock by determining its intrinsic value.

Blending Technical And Fundamental Analysis - Find out how you can combine the best of both strategies to better
understand the markets.

What Are Fundamentals? - The investing world loves to talk about fundamentals, but what does the term really mean?

Fundamental Analysis For Traders - Find out how this method can be applied strategically to increase profit.

Advanced Financial Statement Analysis - Learn what it means to do your homework on a company's performance and
reporting practices before investing.

Trader's Corner: Finding The Magic Mix Of Fundamentals And Technicals - For a record-holding stock trader,
CANSLIM is the formula that identifies this magic mix.

Forex Tutorial: The Forex Market - In this online tutorial, beginners and experts alike can learn the ins and outs of the retail
forex market.

Mad Money ... Mad Market? - Jim Cramer's spirited recommendations are a case study in irrational market behavior.

Working Through The Efficient Market Hypothesis - Deciding whether it's possible to attain above average returns
requires an understanding of this concept.

Forbes Stock Market Course - An indispensable and easy-to-read guide to building wealth. Includes valuable information
on fundamental stock analysis.

Trading Is Timing - Learn how to make gains even if you don't get in at the right time.

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1. Stock Picking • Buy Stocks for $4 -

2. Forex
3. Options Trading
Off-Balance-Sheet Financing ShareBuilder

4. ETFs • Pick Stocks That Win

A form of financing in which large capital expenditures are kept off of a company's balance sheet through
various classification methods. Companies will often use off-balance-sheet financing to keep their debt • China: 77 Reasons Why Now
to equity (D/E) and leverage ratios low, especially if the inclusion of a large expenditure would break – Free Report
Acronyms
negative debt covenants.
Bonds

Buzzwords Contrast to loans, debt and equity, which do appear on the balance sheet. Examples of off-balance-
sheet financing include joint ventures, research and development partnerships, and operating leases
FOREX
(rather than purchases of capital equipment).
Mutual Funds
Operating leases are one of the most common forms of off-balance-sheet financing. In these cases, the
Options & Futures asset itself is kept on the lessor's balance sheet, and the lessee reports only the required rental expense
Retirement for use of the asset. Generally Accepted Accounting Principles in the U.S. have set numerous rules for
companies to follow in determining whether a lease should be capitalized (included on the balance
Stocks sheet) or expensed.
Taxes This term came into popular use during the Enron bankruptcy. Many of the energy traders' problems
Tech Analysis stemmed from setting up inappropriate off-balance-sheet entities.

Trading

Balance Sheet
Capital Expenditure - CAPEX
Capital Lease
Debt/Equity Ratio
FASB 157
Generally Accepted Accounting Principles - GAAP
Negative Covenant
Operating Lease
Project Finance
Special Purpose Vehicle/Entity - SPV/SPE

Off-Balance-Sheet Entities: The Good, The Bad And The Ugly - This article defines some typical off-balance-sheet items
and discusses when they are justified and when they are misleading.

Uncovering Hidden Debt - Understand how financing through operating leases, synthetic leases, and securitizations affects
companies' image of performance.

Show and Tell: The Importance of Transparency - Clear and honest financial statements not only reflect value, they also
help ensure it.

Evaluating A Company's Capital Structure - Learn to use the composition of debt and equity to evaluate balance sheet
strength.

Playing The Sleuth In A Scandal Stock - Learn the legwork involved in finding out whether your investment can weather a
storm.

EVA: Calculating NOPAT - Learn this essential step to calculating economic value.

Fundamental Analysis: The Balance Sheet - Find out how to analyze the financial condition of a company.

Hot Energy Stocks

Oil & Gas, Green Energy Solar, Ethanol, Wind, Biofuels.
www.TopEnergyStocks.com

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1. Stock Picking
2. Forex
3. Options Trading
4. ETFs How long does an IRA beneficiary have to take an
RMD after the IRA holder dies? (view answer)

This is the second of three exams offered by the CFA Institute (formerly the Association for
Investment Management and Research (AIMR)). This exam (in addition to other requirements) What are the advantages of using a mini forex
must be passed for an individual to become a CFA chartholder. The CFA Program is a globally account for trading? (view answer)
Investing Basics recognized standard for measuring the competence and integrity of financial analysts. Level II
Stocks deals mainly with asset valuation. You must be able to apply the tools and concepts If I pay for a course to learn about trading can I
emphasized in Level I to analyze and value investments, and should also have a thorough write some of it off? (view answer)
Mutual Funds understanding of capital market theory and industry and company analysis.
FOREX What are managed futures? (view answer)

ETFs
Active Trading
Bonds
Economics
Financial Careers
Financial Theory
Fundamental Analysis
Options & Futures
Personal Finance
Professional Education
Real Estate &
Mortgages
What are the tax consequences of a Roth IRA
distribution if the IRA holder is less than 59.5?
Time Limit: 6 Hours
(view answer)
Passing Score: Determined each year by the CFA Institute.
Passing Rates: As of August 2004, 32% passed Level II. What are defensive stocks? (view answer)
Format: Multiple Choice
Prerequisites: Passing grade on CFA Level I exam, and a U.S. Bachelor's How are the interest charges calculated on my
degree or equivalent. margin account? (view answer)
Corequisites: Three years of qualifying work experience must be obtained.
Exam Date(s): June
Exam Results: Usually provided within 90 days.
Official Exam Website: CFAInstitute.org
(Click Here for CFA Level I and III exam information)

Retirement

Taxes
Young Investors
The multiple choice portion of the Level II exam consists of item-set type questions. For these
FAQs
item sets, a series of six multiple choice questions are asked on a short case.

To register for the exam, see AIMR's Registration and Enrollment form.

• Benchmark • Market Maker

• Credit Rating • Pension Shortfall

• Fundamental Analysis • Technical Analysis

• Leveraged Lease • Time Value

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1. Stock Picking
2. Forex
Market Maker
3. Options Trading
4. ETFs A broker-dealer firm that accepts the risk of holding a certain number of shares of a particular security in
order to facilitate trading in that security. Each market maker competes for customer order flow by
displaying buy and sell quotations for a guaranteed number of shares. Once an order is received, the
market maker immediately sells from its own inventory or seeks an offsetting order. This process takes
Acronyms place in mere seconds.
Bonds

Buzzwords The Nasdaq is the prime example of an operation of market makers. There are more than 500 member
FOREX firms that act as Nasdaq market makers, keeping the financial markets running efficiently because they
are willing to quote both bid and offer prices for an asset.
Mutual Funds

Options & Futures

Retirement

Stocks Broker-Dealer
Dealer Market
Taxes Electronic Communication Network - ECN
Ghosting
Tech Analysis
Market Depth
Trading Market Maker Spread
Mismatch Risk
One-Way Market
Redemption Mechanism
Specialist

Electronic Trading: The Role of a Market Maker - Learn how the Nasdaq''s market makers enter orders and maintain a
two-sided market.

How To Work Around A Market Maker's Tricks - Ensure that you and your clients are getting the best deal by avoiding
these three pitfalls.

Evaluating Your Broker - Make sure you're getting the best service by staying informed and involved.

The Market Participant Playbook - Find out what effect institutional investors have on the stock market and individual
traders.

Markets Demystified - Knowing how the primary and secondary markets work is key to understanding how stocks trade.

Understanding Order Execution - Find out the various ways in which a broker can fill an order, which can affect costs.

The Foreign Exchange Interbank Market - Can your forex broker offer you the most competitive pricing? Learn how the
market's biggest players affect you.

The Global Electronic Stock Market - The way trading is conducted is changing rapidly as exchanges turn toward
automation.

Introduction To Level II Quotes - Find out what's happening in a given stock with this service showing Nasdaq market
makers' best bid and ask prices.

Traders And Investors' Roles In The Marketplace - Discover how these two groups work together to keep the market
functioning properly.

What's the difference between a Nasdaq market maker and a NYSE specialist?

How do I buy an over-the-counter stock?

What are the steps to get a company listed on the OTCBB?

What is the difference between a broker and a market maker?

Is an earnings surprise priced into the opening value by market makers?

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1. Stock Picking
2. Forex
Pension Shortfall
3. Options Trading
4. ETFs
A situation in which a company offering employees a defined benefit plan does not have enough money
set aside to meet the pension obligations to employees who will be retired in the future.
Acronyms
Bonds
With a defined benefit plan, the employer bears the risk of the investments in the plan. Therefore, when
Buzzwords investments such as stocks perform poorly, a shortfall occurs, meaning there isn't enough money in the
FOREX pension plan to meet the needs of people about to retire. A company can rectify a pension shortfall by
increasing investment returns (usually an unlikely course of occurrence) or putting aside more money
Mutual Funds into the pension plan, thereby reducing the company's net income.
Options & Futures As an example, in August 2002, UBS Warburg reported that General Motors had a pension shortfall of
Retirement $22.2 billion, equal to 83% of the company's market value. This means that $4 of the first $5 that GM
earns per share each year stands to get eaten up by pension obligations.
Stocks
Taxes

Tech Analysis
Cash Balance Pension Plan
Trading Defined Benefit Pension Plan
Defined Contribution Plan
Employee Retirement Income Security Act - ERISA
Legacy Costs
Liability Driven Investment - LDI
Longevity Risk
Pension Plan
Pension Protection Act Of 2006 - PPA
Shortfall

Special Feature: Individual Retirement Accounts (IRAs) - If planning for your retirement has you confused, you''re not
alone! Our IRA feature is your one-stop shop for everything you need to know about IRAs.

Analyzing Pension Risk - Determine the risk to a company's EPS and financial condition resulting from an underfunded
defined-benefit pension plan.

Retire In Style - Set your sights on the golden years and get there sooner.

Pension Plans: Pain Or Pleasure? - Employees have a love/hate relationship with this retirement option.

How To Evaluate Pension Risk By Analyzing Annual Costs - Learn how to assess whether a company's pension plan is
posing more risks than what the footnotes indicate.

Cooking The Books 101 - To spot the signs of earnings manipulation, you need to know the different ways companies can
inflate their figures.

Lady Godiva Accounting Principles - Find out how and why these rules can help companies "come clean" in post-Enron
Wall Street.

Introductory Tour through Retirement Plans - Here you will find tutorials that are each devoted to one the most common
retirement plans, explaining how to establish, fund, and then take distributions from it.

Explosive Gains In Forex – Learn what makes the currency markets move with your exclusive free report!

Investopedia's Advisor Finder - Find high quality, pre-screened and qualified financial advisors in your area that match
your retirement goals. Best of all - it's completely FREE!

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professionals on their path to financial success. Learn how our disciplined approach succeeds even in economic uncertainty.
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1. Stock Picking
2. Forex
3. Options Trading
4. ETFs How long does an IRA beneficiary have to take an
RMD after the IRA holder dies? (view answer)
This is the last of three exams offered by the CFA Institute (formerly the Association for
Investment Management and Research (AIMR)). This exam (in addition to other requirements)
must be passed for an individual to become a CFA chartholder. The CFA Program is a globally What are the advantages of using a mini forex
recognized standard for measuring the competence and integrity of financial analysts. Level III account for trading? (view answer)
Investing Basics explores portfolio management in great depth. You must demonstrate a working knowledge of
the portfolio management process, from calculating investor constraints, objectives, and capital- If I pay for a course to learn about trading can I
Stocks
market expectations to making asset-allocation decisions. write some of it off? (view answer)
Mutual Funds

FOREX What are managed futures? (view answer)

ETFs
Active Trading
Bonds
Economics
Financial Careers
Financial Theory
Fundamental Analysis
Options & Futures
Personal Finance
Professional Education
Real Estate &
Mortgages
Time Limit: 6 Hours What are the tax consequences of a Roth IRA
distribution if the IRA holder is less than 59.5?
Number of Questions: Approximately 120, plus an essay. (view answer)
Minimum Passing Score: Determined each year by the AIMR.
Passing Rates: As of August 2004, 64% passed Level III. What are defensive stocks? (view answer)
Format: 50% Multiple Choice/50% Essay
Prerequisites: Passing grade on CFA Level II exam, and a U.S. Bachelor's How are the interest charges calculated on my
degree or equivalent. margin account? (view answer)
Corequisites Three years of qualifying work experience must be obtained.
Exam Date(s): June
Exam Results: Usually provided within 90 days.
Official Exam Website: CFAInstitute.org
(Click Here for CFA Level I and II exam information)

Retirement

Taxes
Young Investors

FAQs

To register for the exam, see AIMR's Registration and Enrollment form.

• Acquisition • Merger

• Derivative • Modern Portfolio Theory

• Fixed-Income Security • Portfolio Manager

• Hedge • Real Estate Investment Trust - REIT

1. When must the required three years of qualifying work experience be completed in order to
become a CFA chartholder? View Answer

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2. Forex
3. Options Trading
Real Estate Investment Trust - REIT • Buy Stocks for $4 -
4. ETFs ShareBuilder
A security that sells like a stock on the major exchanges and invests in real estate directly, either through
properties or mortgages. • Options Trading is Easy as
1-2-3
Acronyms REITs receive special tax considerations and typically offer investors high yields, as well as a highly
Bonds liquid method of investing in real estate.

Buzzwords Equity REITs: Equity REITs invest in and own properties (thus responsible for the equity or value of their
real estate assets). Their revenues come principally from their properties' rents.
FOREX
Mutual Funds Mortgage REITs: Mortgage REITs deal in investment and ownership of property mortgages. These
REITs loan money for mortgages to owners of real estate, or purchase existing mortgages or mortgage-
Options & Futures backed securities. Their revenues are generated primarily by the interest that they earn on the mortgage
loans.
Retirement

Stocks Hybrid REITs: Hybrid REITs combine the investment strategies of equity REITs and mortgage REITs by
investing in both properties and mortgages.
Taxes

Tech Analysis Individuals can invest in REITs either by purchasing their shares directly on an open exchange or by
investing in a mutual fund that specializes in public real estate. An additional benefit to investing in
Trading REITs is the fact that many are accompanied by dividend reinvestment plans (DRIPs). Among other
things, REITs invest in shopping malls, office buildings, apartments, warehouses and hotels. Some
REITs will invest specifically in one area of real estate - shopping malls, for example - or in one specific
region, state or country. Investing in REITs is a liquid, dividend-paying means of participating in the real
estate market.

Distribution Reinvestment
Dividend
Dividend Reinvestment Plan - DRIP
Investment Real Estate
Mortgage-Backed Securities - MBS
National Association Of Real Estate Investment Trusts - NAREIT
Property Derivative
Real Estate
Real Estate Limited Partnership - RELP
Real Estate Operating Company - REOC

What Are REITs? - Looking for an income security that rivals small-cap stocks? It may be time to learn about real estate
investment trusts.

Basic Valuation Of A Real Estate Investment Trust (REIT) - Find out why funds from operations is a superior measure of
REIT performance.

Investing In Real Estate - Owning property isn't simple, but there are plenty of perks. Find out how to buy in.

The Emergence Of Global Real Estate - Find out how this sector can occupy a unique role in a diversified investment
portfolio.

Find Fortune In Commercial Real Estate - Investing in big buildings means big money - and bigger risks.

The Basics Of REIT Taxation - The unique tax advantages offered by these investments can translate into superior yields.

Get A Round-Trip Investment With International REITs - Avoid being left behind as REITs expand beyond U.S. borders.

The REIT Way - Ever considered investing in real estate? Read about the REIT and see if it's the investment for you.

The Impact of Interest Rates on Real Estate Investment Trusts - REITs are high-yield investments, but do they have an
inverse relationship with interest rates? Find out.

Exploring Real Estate Investments - Discover how owning properties can give you a roof over your head or a check in
your pocket.

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Price of Oil Rises and the Dollar Falls

Will the Dollar Continue to Fall? Will Oil Prices Collapse? Learn the Truth - Get Your Free
Report!
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