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All posts by Bill Campbell III, CFA

Various interest rate derivatives are, in fact, equivalent to each other; i.e., they can be structured to generate equivalent (though not necessarily identical) cash flows.  This article will explain how these derivatives can be structured to be equivalent to each other. First note that you will not be asked on an exam to create equivalent […]

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CFA® Level I Membership, CFA® Level II Membership

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This article’s going to turn out to be fairly short, but, I hope, quite useful.  It has pictures. Floating-Rate Inflow: Rates are Expected to Decrease Here’s the situation: you own a portfolio of investments (floating-rate bonds) paying 6-month USD LIBOR + 100bp; payments are every 6 months for the next three years.  You’re concerned that interest […]

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CFA® Level I Membership

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When I was an undergraduate student in university, I was fortunate enough to have to have written only two term papers.  One was in the capstone business management class I took my last semester, and the other was in a class in mathematical modeling.  The term paper I wrote for the latter class was on […]

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CFA® Level I Membership

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When the price of a good changes, there are two effects on the demand for that good: The substitution effect, which is a relative effect (i.e., how the demand for that good, by itself, changes relative to the demand for other goods) The income effect, which is an absolute effect (i.e., how the demand for […]

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CFA® Level I Membership

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A few years ago CFA Institute added a new reading on tax regimes to the Level III curriculum, and it caused quite a stir: apparently they had a large question about taxes on that first year’s Level III exam, and few candidates were prepared for it. I want you to be prepared for it. And […]

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CFA® Level III Membership

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I was recently writing a comparison of indices and benchmarks, and it occurred to me that an article on benchmarks might be useful, so here it is.  This is an easy one. The main points of interest to Level III CFA candidates are: How are benchmarks used? What characteristics should a benchmark have? What are […]

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CFA® Level III Membership

This will give you access to this and all other articles at that membership level.

If you were to ask (a random sample of) 100 financial advisors what the term “rebalance” means, I wouldn’t be surprised if 95 of them described it as “returning the portfolio to its original weights in each asset class”, or something tantamount to that. In other words, the investing world overwhelmingly equates rebalancing with a […]

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CFA® Level III Membership

This will give you access to this and all other articles at that membership level.

Here’s a list of the articles I have planned for Level III, but haven’t written and posted yet.  There’s some good stuff coming:

  1. Alpha/beta separation
  2. Analyst forecasts
  3. AO vs. ALM
  4. Arbitrage-free commodity forward price
  5. Asset Managers’ Code
  6. Behavioral factors
  7. Bounded rationality
  8. Cognitive errors
  9. Comparison of investor types
  10. Constraints
  11. Core-satellite portfolio
  12. Credit risk
  13. Currency hedging
  14. Currency risk
  15. Decision theory
  16. Delta hedging
  17. Efficient frontier vs. resampled efficient frontier vs. Black-Litterman vs. Monte Carlo
  18. Emotional biases
  19. Equitizing cash
  20. Equity return attribution
  21. Fixed income return attribution
  22. GIPS®
  23. Global attribution
  24. Implementation shortfall
  25. Interest rate parity
  26. Leverage
  27. Market-neutral (long-short) investing
  28. Micro attribution
  29. Option strategies
    1. Short box spread
    2. Short butterfly spread
    3. Short straddle
    4. Short strangle
  30. Pension plan impacts
  31. Portable alpha
  32. Prospect theory
  33. Replication vs. sampling vs. optimization
  34. Returns-based style analysis vs. holdings-based style analysis
  35. Risk & return
  36. SAA vs. TAA
  37. Short extension
  38. Swap strategies
  39. Taylor rule
  40. Trading strategies
  41. TWAP
  42. VaR
  43. VWAP

Here’s a list of the articles I have planned for Level II, but haven’t written and posted yet.  There’s some good stuff coming:

  1. ABSs
  2. ANOVA tables
  3. CDOs
  4. CMOs
  5. Consolidation (acquisition method)
  6. Credit derivatives
  7. Delta hedging
  8. Equity method
  9. FCFE
  10. FCFF
  11. Fischer
  12. F-statistic
  13. Goodwill
  14. Greeks
  15. H-model
  16. Multiple regression
  17. Mundell-Fleming
  18. OCI
  19. Option strategies
    1. Short box spread
    2. Short butterfly spread
    3. Short straddle
    4. Short strangle
  20. PPP
  21. Present value of expected loss
  22. Pricing T-bill futures
  23. Research Objectivity Standards
  24. Residual income
  25. Riding the yield curve
  26. Simple regression
  27. Swaptions
  28. Time series
  29. Treynor-Black

Here’s a list of the articles I have planned for Level I, but haven’t written and posted yet.  There’s some good stuff coming:

  1. ABSs
  2. Binomial trees
  3. Bond amortization
  4. CDOs
  5. CFF
  6. CFI
  7. CMOs
  8. Depreciation
  9. Dividends
  10. DuPont
  11. Efficient frontier
  12. Forward discount/premium
  13. Income tax expense
  14. NPV & IRR
  15. OCI
  16. OPA
  17. Option payoffs
  18. Option strategies
  19. Pictures (in Economics)
  20. Project evaluation
  21. Ratios
  22. Revenue recognition
  23. Risk and return
  24. T-accounts