Learning Outcomes

CFA 1: The Macroeconomic Environment: Inflation and Monetary Policy

- Understand the macro economic environment of a company
o Interest Rates
o Inflation
o Exchange Rates
 These all impacts a business decisions and the company’s
performance

CFA 2 and 3: The JSE and the sum of its parts: A Technical Analysis/Fundamental Analysis:
Industry, Strategy and Financial Analysis
- When valuing a company
o You need to analyse both
 Technical Analysis
 Focuses on the intrinsic or relative value of the company’s
share price
o Movements in the price of the share
o Trends in the movements
o Volatility in the share price
 All provide important information of the
company’s value
 Introduction to the JSE
 Companies listed on the JSE
 Risk and Asset allocation considerations
o For effective portfolio
management
 Technical analysis
o Charts that traders use to
perform the analysis
 Fundamental Analysis
 The top down approach of understanding the industry in
which the company operates and its business strategy
o Use tools such as
 PESTEL
 Porters 5 forces
 SWOT Analysis
o Absolute and Relative Valuations
 Focus on Financial Analysis
 Identify handful ratios most relevant
and assess these on a relative basis
o Know the industry of the
business
CFA 4, 5 and 6: EMH Anomalies: Theoretical Underpinnings and Capital Markets/ An
Analysis of Alternatives to EMH: Behavioural Accounting and Finance Theories/ Manager
and Investment Sentiment: The Role of the Irrational Behaviour
- Efficient Market Hypothesis (Finance Theory)
o Shaped many of the Capital Market theories
 Understand the right price
 Demand and Supply curves
o Alternatives to EMH
 System 1 Thinking
 System 2 Thinking

- The importance of behavioural finance and accounting

o Objectives of financial accounting
 To provide decision-useful information
 Requires the understanding of users and
o How to improve the quality of the information
o Awareness of Psychology at play in financial markets
 Which provides insight for accurate technical and fundamental
analysis
o Themes of Behavioural finance
 Heuristic Driven Biases
 Cognitive Biases
 Frame Dependencies

- Types of Biases
o Roles of the irrational behaviour

CFA 7 – 10: Presentations and Assignments

CFA 11: Financial Distress and Failure Prediction

- Identify a company in financial distress
o Be able to see the trend
 Multiple failure prediction
 Altman and Tafflers Z score
o Understand inputs which are included in the
calculation of the scores
 Assess the most relevant measure that can five
an early warning indication of failure