The CFA The CFA and the GOLD STANDARDand the GOLD STANDARD

The Economist, Feb 2005The Economist, Feb 2005

Michel MajdalaniMichel MajdalaniLAU BLAU B--School FacultySchool Faculty

OUTLINEOUTLINE

Brief overviewBrief overviewWhat is the CFA?What is the CFA?Evolution of the programEvolution of the programBenefitsBenefitsLAULAU’’s philosophys philosophyWho should register?Who should register?Fee scheduleFee schedule

BRIEF OVERVIEWBRIEF OVERVIEW

The CFA program is NOT an academic programThe CFA program is NOT an academic program

CFA is a program that focuses on the global CFA is a program that focuses on the global investment profession from the standpoint of a investment profession from the standpoint of a practitioner practitioner –– a generalist program in the a generalist program in the investment professioninvestment profession

CFA is a GOLD STANDARD for the investment CFA is a GOLD STANDARD for the investment professionprofession

BRIEF OVERVIEWBRIEF OVERVIEWCFA offers a truly global educational challengeCFA offers a truly global educational challenge

CFA builds a fundamental knowledge of CFA builds a fundamental knowledge of investment principles that is relevant in every investment principles that is relevant in every market around the world market around the world –– a definite standard for a definite standard for competence and integritycompetence and integrity

Our preparatory program meets the needs of Our preparatory program meets the needs of todaytoday’’s busy professionalss busy professionals

WHAT IS THE CFA?WHAT IS THE CFA?

CFA = Chartered Financial AnalystCFA = Chartered Financial Analyst

It is a designation to a program that emphasizes It is a designation to a program that emphasizes ethical and professional standards in a global ethical and professional standards in a global context.context.

It takes a generalist approach and covers both the It takes a generalist approach and covers both the investment tools and the assets valuation.investment tools and the assets valuation.

WHAT IS THE CFA?WHAT IS THE CFA?

PURPOSE:PURPOSE:Increase learning while recognizing the Increase learning while recognizing the

constraints inherent in a generalist program constraints inherent in a generalist program designed for working professionalsdesigned for working professionals

WHAT IS THE CFA?WHAT IS THE CFA?

You obtain the CFA qualification after You obtain the CFA qualification after passing 3 level exams:passing 3 level exams:

Level 1Level 1---- LAU is offering two CFA level 1 course tracksLAU is offering two CFA level 1 course tracks

Level 2 Level 2 –– LAULAU’’ss preparatory course is expected October 2007preparatory course is expected October 2007

Level 3 Level 3 –– January 2008January 2008

The exams follow a standardized The exams follow a standardized examination to ensure a level of examination to ensure a level of competency in the field.competency in the field.

WHAT IS THE CFA?WHAT IS THE CFA?

CFA is a meaningful indicator of CFA is a meaningful indicator of professional competence with professional competence with country country neutrality.neutrality.

The process of setting the exam involves The process of setting the exam involves approximately 330 investment practitioners approximately 330 investment practitioners from 21 cities and in 13 countries.from 21 cities and in 13 countries.

Body of knowledge: Body of knowledge: 4 functional areas4 functional areas

Ethical and professional standardsEthical and professional standardsInvestment toolsInvestment tools

Quantitative methodsQuantitative methodsEconomicsEconomicsFinancial statement analysisFinancial statement analysisCorporate financeCorporate finance

Asset valuationAsset valuationAnalysis of equity investmentAnalysis of equity investmentAnalysis of fixed income investmentAnalysis of fixed income investmentAnalysis of the derivativesAnalysis of the derivativesAnalysis of alternative investmentsAnalysis of alternative investments

Portfolio management and performance measurementPortfolio management and performance measurement

WHAT IS THE CFA?WHAT IS THE CFA?

CFA examination have always focused on CFA examination have always focused on testing:testing:

Level 1: investment toolsLevel 1: investment toolsLevel 2: asset valuationLevel 2: asset valuationLevel 3: portfolio managementLevel 3: portfolio management

Practitioner needs to master investment Practitioner needs to master investment tools in order to apply those tools for tools in order to apply those tools for security valuation.security valuation.

EVOLUTION OF THE CFA EVOLUTION OF THE CFA PROGRAMPROGRAM

1942:1942: Industry giant Benjamin Graham first Industry giant Benjamin Graham first proposed the need for a rating designation proposed the need for a rating designation for financial analyst.for financial analyst.

1959:1959: National Federation of Financial National Federation of Financial Analysts Society (NFFAS) voted to form the Analysts Society (NFFAS) voted to form the Institute of Chartered Financial Analysts Institute of Chartered Financial Analysts (ICFA) to provide certification of (ICFA) to provide certification of competence in financial analysis.competence in financial analysis.

EVOLUTION OF THE PROGRAMEVOLUTION OF THE PROGRAM

1963:1963: GrahamGraham’’s idea was brought to fruition.s idea was brought to fruition.11stst ever CFA exam given to 284 senior analysts ever CFA exam given to 284 senior analysts after the ICFA formally merged with the NFFAS after the ICFA formally merged with the NFFAS to form what is now the CFA Instituteto form what is now the CFA Institute

2006:2006: > 83,000 candidates from 145 > 83,000 candidates from 145 countries sat for one of the 3 levels of the countries sat for one of the 3 levels of the CFA examCFA exam

EVOLUTION OF THE PROGRAMEVOLUTION OF THE PROGRAM

The CFA program has evolved with the The CFA program has evolved with the profession since 1963.profession since 1963.

CFA BENEFITSCFA BENEFITSTo candidates:To candidates:

International recognitionInternational recognitionCredibilityCredibilityRespectRespectCompetitive advantageCompetitive advantageKnowledge with a global perspectiveKnowledge with a global perspectiveConnectionsConnections

CFA BENEFITS CFA BENEFITS

Successful completion of at least one examination Successful completion of at least one examination gives an advancement opportunity to the gives an advancement opportunity to the candidatescandidates’’ career path.career path.CFA charter is an entry to several fields including:CFA charter is an entry to several fields including:

Risk managementRisk managementInvestment bankingInvestment bankingEquity analysisEquity analysisPortfolio managementPortfolio managementInvestment adviseInvestment adviseInvestment marketingInvestment marketing

CFA BENEFITSCFA BENEFITS

To corporations:To corporations:Financial organizations face increase scrutiny of Financial organizations face increase scrutiny of employeesemployees’’ ethical behaviorethical behaviorCompetition for profit and market share is Competition for profit and market share is intenseintenseHaving employees with the CFA makes it easier Having employees with the CFA makes it easier for forms to demonstrate competency, integrity for forms to demonstrate competency, integrity and efficiency.and efficiency.

CFA BENEFITSCFA BENEFITS

To the capital market:To the capital market:There is considerable evidence that the There is considerable evidence that the Lebanese Capital Market is bound to grow and Lebanese Capital Market is bound to grow and to closely integrate with regional and global to closely integrate with regional and global markets as witnessed in the latest proposal of markets as witnessed in the latest proposal of the Government Reform Program.the Government Reform Program.CFA chartered degree provide the catalyst to CFA chartered degree provide the catalyst to ““raise the barraise the bar”” for professionalism and efficiency for professionalism and efficiency in the industry. in the industry.

Article 43 and 44 of the GovernmentArticle 43 and 44 of the Government’’s Plan for the Recovery, s Plan for the Recovery, Reconstruction and Reform, January 25, 2007Reconstruction and Reform, January 25, 2007

Article 43: Article 43: ““The government plans to address the long standing issue of The government plans to address the long standing issue of underdeveloped capital markets as part of a broader strategy to underdeveloped capital markets as part of a broader strategy to modernize the nonmodernize the non--bank financial sector and stimulate investment bank financial sector and stimulate investment and growthand growth. The role of the stock market is also instrumental in the . The role of the stock market is also instrumental in the coming period as it will facilitate the corporitization and privcoming period as it will facilitate the corporitization and privatization atization drive, help attract longdrive, help attract long--term financing mainly from the regionterm financing mainly from the region----especially at times of high oil pricesespecially at times of high oil prices–– and provide the private sector and provide the private sector with working capital. with working capital. Similarly, the development of a secondary Similarly, the development of a secondary market for fixed income instruments should contribute to financimarket for fixed income instruments should contribute to financial al deepeningdeepening””

Article 44: Article 44: ““Several measures have already been taken to enhance the Several measures have already been taken to enhance the functioning of the BSE market, functioning of the BSE market, …… the principal aim of the Capital the principal aim of the Capital Markets draft law is to provide the framework for the regulationMarkets draft law is to provide the framework for the regulationand development of the capital markets in Lebanon, and hence and development of the capital markets in Lebanon, and hence build confidence in the quality of the market for both local andbuild confidence in the quality of the market for both local andregional investorsregional investors……..””

CFA BENEFITSCFA BENEFITS

The CFA designation is recognized by The CFA designation is recognized by regulators outside of the US.regulators outside of the US.The monetary authority of Singapore has The monetary authority of Singapore has recognized the CFA designation as meeting recognized the CFA designation as meeting certain qualifications and licensing certain qualifications and licensing requirements.requirements.Regulators in Greece, Turkey and Hong Kong, Regulators in Greece, Turkey and Hong Kong, Thailand, the UK and Canada have also Thailand, the UK and Canada have also recognized the CFA as meeting qualifications recognized the CFA as meeting qualifications and licensing requirements.and licensing requirements.

CFA BENEFITSCFA BENEFITS

To the Academic curriculumTo the Academic curriculumProviding a testament to the quality of the CFA Providing a testament to the quality of the CFA

curriculum, many academic institutions have designed curriculum, many academic institutions have designed programs around the CFA Program curriculum, adopted programs around the CFA Program curriculum, adopted CFA Program curriculum materials or embedded the entire CFA Program curriculum materials or embedded the entire CFA curriculum into their programs.CFA curriculum into their programs.

Examples include HEC, Boston University, University of Examples include HEC, Boston University, University of Exeter, Singapore Management University, Concordia Exeter, Singapore Management University, Concordia University, the University of North Carolina and many moreUniversity, the University of North Carolina and many more

LAULAU’’s Philosophys PhilosophyLeveraging on the highly skilled and professional Leveraging on the highly skilled and professional LAU topical specialist faculty with proper followLAU topical specialist faculty with proper follow--up on delivery.up on delivery.Well acclaimed resources used as support Well acclaimed resources used as support material for the course.material for the course.Small sized classrooms with direct interaction Small sized classrooms with direct interaction with the students.with the students.4 day camp including live exam simulations and 4 day camp including live exam simulations and intensive preparation.intensive preparation.Effective study notes, practice problems and Effective study notes, practice problems and questions.questions.

LAULAU’’s Philosophys Philosophy

LAU CFA training program provides experts for LAU CFA training program provides experts for training, advising and guidance:training, advising and guidance:

Learn the material thoroughly in a professional, effective Learn the material thoroughly in a professional, effective environmentenvironmentBring things together, distinguishing what is relevant Bring things together, distinguishing what is relevant from what is not.from what is not.Get answers to your questions.Get answers to your questions.LAU is offering two tracks: 1 for the June 2007 exam LAU is offering two tracks: 1 for the June 2007 exam and one for the December 2007 examand one for the December 2007 examThousands of candidates fail the exam each year: focus Thousands of candidates fail the exam each year: focus is on passing the exam.is on passing the exam.

LAU preparatory CFA course:LAU preparatory CFA course:WHO SHOULD REGISTER?WHO SHOULD REGISTER?

Current graduating senior BA studentsCurrent graduating senior BA studentsMBA studentsMBA studentsBanking professionalsBanking professionals

Risk managers, analysts, researchers, advisors, Risk managers, analysts, researchers, advisors, bankers at different levels, marketing bankers at different levels, marketing professionals.professionals.

Investment professionalsInvestment professionalsHolder of other professional qualifications Holder of other professional qualifications (CMA, CPA, CIA,(CMA, CPA, CIA,……))

FEE SCHEDULEFEE SCHEDULE

Level 1 LAU preparatory course = Level 1 LAU preparatory course = 1,575 $:1,575 $:4 day review camp4 day review campTextbooksTextbooksRefreshmentsRefreshments15% corporate group discount15% corporate group discount10% LAU student discount10% LAU student discount10% LAU alumni discount10% LAU alumni discount

Fee schedule to sit for exam: Fee schedule to sit for exam: Initial one time registration fee = Initial one time registration fee = 390 $390 $Level 1 exam fee = Level 1 exam fee = 455 $455 $

The CFA The CFA and theand the GOLD STANDARD GOLD STANDARD (The Economist)(The Economist)

Is within your reachIs within your reach

GO FOR IT ! GO FOR IT ! You Can do it with You Can do it with LAULAU’’ssCFA preparatory coursesCFA preparatory courses