Level III

Access to all Level III articles until the next Level III exam date

The best way to learn the Code of Ethics and the Standards of Professional Conduct (the Code and Standards, or C&S), honestly, is to read the CFA curriculum.  They do a great job on Ethics.  Sufficiently great that there’s little of value that prep providers can offer. That said, in the interest of completeness, I’ll […]

This article is for members only.  You can become a member now by purchasing a

CFA® Ethics Membership, CFA® Level I Membership, CFA® Level II Membership, CFA® Level III Membership

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

As a gift to the candidates studying for the Level III exam in 2019, CFA Institute replaced the existing Level III Fixed Income readings with new Fixed Income readings.  Amongst the new readings was one entitled Yield Curve Strategies, and included in that reading was a section on Inter-Market Curve Strategies, including, in particular, inter-market […]

This article is for members only.  You can become a member now by purchasing a

CFA® Level III Membership

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

So . . . you woke up this morning and said to yourself, “I feel like estimating the risk premium for an equity market.  But not just any old equity market.  I want to estimate the risk premium for an equity market that is only partially integrated with global markets.”  Deep down, you’re a thrill […]

This article is for members only.  You can become a member now by purchasing a

CFA® Level III Membership

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

There are two applications of delta hedging presented in the CFA curriculum: You have an existing position in the underlying security and you want to hedge that position with options. You have an existing position in options and you want to hedge that position either with the underlying security or with options. I’ll cover both […]

This article is for members only.  You can become a member now by purchasing a

CFA® Level II Membership, CFA® Level II Derivatives Membership, CFA® Level III Membership

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

I recently wrote a question for a mock exam about implementation shortfall, and it occurred to me that an article on the subject was long overdue. Implementation shortfall has been the bane of Level III CFA candidates for a few decades now, and for good reason: in the curriculum, there isn’t a straightforward, comprehensive example […]

This article is for members only.  You can become a member now by purchasing a

CFA® Level III Membership

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

The idea of interest rate parity (IRP) is pretty simple.  In a nutshell, it says that if you hold a particular currency – say, GBP – and you want to to make a risk-free investment of that currency, you should earn the risk-free interest rate for that currency for the length of time of your […]

This article is for members only.  You can become a member now by purchasing a

CFA® Level I Membership, CFA® Level I Economics Membership, CFA® Level I Financial Reporting and Analysis (FRA) Membership, CFA® Level II Membership, CFA® Level III Membership

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

The idea of roll yield – or roll return, same thing – is relatively straightforward: it’s part of the increase or decrease in the value of your portfolio that arises specifically when you roll over an expiring futures or forward contract into a new contract.  The other parts of that increase or decrease is the […]

This article is for members only.  You can become a member now by purchasing a

CFA® Level I Membership, CFA® Level II Membership, CFA® Level II Derivatives Membership, CFA® Level III Membership

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

As a mathematician, I’ve been trained to write and speak (and, consequently, to think) using precise, accurate terminology.  There are, of course, occasions when even mathematicians abbreviate the things that they write or say, but on those occasions: We know that we’re abbreviating, and All mathematicians have agreed to the abbreviations used. As an educator, […]

This article is for members only.  You can become a member now by purchasing a

CFA® Level I Membership, CFA® Level II Membership, CFA® Level III Membership

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

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 […]

This article is for members only.  You can become a member now by purchasing a

CFA® Level III Membership

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

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 […]

This article is for members only.  You can become a member now by purchasing a

CFA® Level III Membership

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