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2. 2012 CFA Notes Level 2(SAMPLE)
by T.SMITH
Copyright 2010 T.SMITH
Smashwords Edition
Books are Available at
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3. HOW TO PASS THE CFA EXAMS AFTER STUDYING FOR TWO WEEKS
WITHOUT ANXIETY
ETHICAL AND PROFESSIONAL STANDARDS
1: Code of Ethics and Standards of Professional Conduct
2: Guidance for Standards I–VII
3: CFA Institute Soft Dollar Standards
4: CFA Institute Research Objectivity Standards
5: The Glenarm Company
6: Preston Partners
7: Super Selection
8: Trade Allocation: Fair Dealing and Disclosure
9: Changing Investment Objectives
10: Prudence in Perspective
QUANTITATIVE METHODS FOR VALUATION
11: Correlation and Regression
12: Multiple Regression and Issues in Regression Analysis
13: Time-Series Analysis
ECONOMICS FOR VALUATION
14: Economic Growth
15: Regulation and Antitrust Policy in a Globalized Economy
16: Trading with the World
17: Currency Exchange Rates
18: Foreign Exchange Parity Relations
19: Measuring Economic Activity
FINANCIAL REPORTING AND ANALYSIS:
20: Inventories: Implications for Financial Statements & Ratios
21: Long-lived Assets: Implications for Financial Statements & Ratios
22: Intercorporate Investments
23: Employee Compensation: Post-Employment & Share-Based
24: Multinational Operations
25: The Lessons We Learn
26: Evaluating Financial Reporting Quality
27: Integration of Financial Statement Analysis Techniques
CORPORATE FINANCE
28: Capital Budgeting
29: Capital Structure
30: Dividends and Share Repurchases: Analysis
31: Corporate Governance
32: Mergers and Acquisitions
EQUITY VALUATION:
33: A Note on Asset Valuation

4. 34: Equity Valuation: Applications and Processes
35: Return Concepts
36: The Five Competitive Forces That Shape Strategy
37: Industry Analysis
38: Valuation in Emerging Markets
39: Discounted Dividend Valuation
EQUITY INVESTMENTS:
40: Free Cash Flow Valuation
41: Market-Based Valuation: Price & Enterprise Value Multiples
42: Residual Income Valuation
43: Private Company Valuation
ALTERNATIVE INVESTMENTS
44: Investment Analysis
45: Income Property Analysis and Appraisal
46: Private Equity Valuation
A Note on Valuation of Venture Capital Deals
47: Investing in Hedge Funds: A Survey
FIXED INCOME:
48: General Principles of Credit Analysis
49: Term Structure and Volatility of Interest Rates
50: Valuing Bonds with Embedded Options
51: Mortgage-Backed Sector of the Bond Market
52: Asset-Backed Sector of the Bond Market
53: Valuing Mortgage-Backed and Asset-Backed Securities
DERIVATIVE INVESTMENTS:
54: Forward Markets and Contracts
55: Futures Markets and Contracts
56: Option Markets and Contracts
57: Swap Markets and Contracts
58: Interest Rate Derivative Instruments
59: Using Credit Derivatives to Enhance Return and Manage Risk
PORTFOLIO MANAGEMENT:
60: Portfolio Concepts
61: A Note on Harry M. Markowitz’s “Market Efficiency:
62: International Asset Pricing
63: The Theory of Active Portfolio Management
64: Portfolio Management Process & the Investment Policy Statement

5. The author successfully passed the CFA (Chartered Financial Analyst), CPA (Certified
Public Accountant), and FRM (Financial Risk Manager) exams "WITHOUT ANY
RETAKES".
Based on a true experience, the author also wrote how to pass the CFA exams after
studying for two weeks.
CFA 2012 Study Notes
2011 All rights reserved.
These materials may not be copied without written permission from the author.
The unauthorized duplication of these notes is a violation of global copyright laws
and the CFA Institute Code of Ethics.
Required CFA Institute disclaimer: “CFA and Chartered Financial Analyst are
trademarks owned by CFA Institute. CFA Institute (formerly the Association for
Investment Management and Research) does not endorse, promote, review, or warrant
the accuracy of the products or services.

7. ETHICAL AND PROFESSIONAL STANDARDS
1: Code of Ethics and Standards of Professional Conduct
a. describe the six components of the Code of Ethics and the seven Standards of
Professional Conduct;
b. explain the ethical responsibilities required by the Code and Standards, including the
multiple sub-sections of each standard.
The six components of the Code of Ethics.
Members and Candidates must:
Act with integrity, competence, diligence, respect, and in an ethical manner with the
public, clients, prospective clients, employers, employees, colleagues in the
investment profession, and other participants in the global capital markets.
Place the integrity of the investment profession and the interests of clients above
their own personal interests.
Use reasonable care and exercise independent professional judgment when
conducting investment analysis, making investment recommendations, taking
investment actions, and engaging in other professional activities.
Practice and encourage others to practice in a professional and ethical manner that
will reflect credit on themselves and the profession.
Promote the integrity of, and uphold the rules governing, capital markets.
Maintain and improve their professional competence and strive to maintain and
improve the competence of other investment professionals.
The Code of Ethics establishes the framework for ethical decision making in the
investment profession.
The seven Standards of Professional Conduct.
I. PROFESSIONALISM
A. Knowledge of the Law. Members and candidates must understand and comply with
all applicable laws, rules, and regulations (including the CFA Institute Code of Ethics and
Standards of Professional Conduct) of any government, regulatory organization,
licensing agency, or professional association governing their professional activities. In
the event of conflict, members and candidates must comply with the more strict law, rule,
or regulation. Members and candidates must not knowingly participate or assist in and
must dissociate from any violation of such laws, rules, or regulations.