Transcript MSFA Information meetings 2005

University of San Francisco’s
Master of Science in
Financial Analysis
The MSFA Program Director
Professor John Veitch
• Director of the MS in Financial Analysis program
• CFA, 1999: Ph.D. Northwestern 1985, Financial Markets
• Education Director, CFA Review Program for the CFA
Society of San Francisco.
– CFA-SF Exam Review programs to 350+ candidates at
all levels each year.
• Adjunct faculty member, Berkeley Columbia Executive
MBA program, UC Berkeley, Haas School of Business.
• Current research: Econometric studies of the relationship
between currency crises and stockmarket returns in
South America and the Pacific Rim.
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University of San Francisco
• University of San Francisco, a Catholic Jesuit university,
was founded in 1855 as San Francisco's first university.
• USF has over 500 full-time and part-time faculty
members across its Schools and Colleges.
• USF is a founding member of the Western Association of
Schools and Colleges (WASC) and is accredited by
WASC.
• The USF Business School is accredited by the American
Assembly of Collegiate Schools of Business (AACSB) for
both our undergraduate and graduate Business
programs.
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Why the USF MSFA Program?
1. Practitioner-oriented with a curriculum that
covers the knowledge required by the
Chartered Financial Analyst® (CFA) exams.
2. USF’s MSFA program is an official Program
Partner of the CFA Institute.
–
We are part of a select 20 programs around the
world, joining Oxford, London Business School,
HEC, HK-UST, and UNC-Chapel Hill.
3. Taught by USF Professors and CFAcredentialed practitioners. The MSFA program
is relevant to your professional and career
needs.
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Why the USF MSFA Program?
4. Quantitative training in investment
management.
5. Students move through the program as a
group (or cohort), learning with and from one
another and developing bonds that continue
beyond the program.
6. Support for CFA® exam study with review
materials and programs with the CFA Society
of San Francisco Review programs.
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Specialist Training
• The MSFA program provides sophisticated
training in in quantitative financial analysis and
economics.
• The program is structured around the knowledge
and the tools considered necessary for the
Chartered Financial Analyst® examinations.
• In the 2-year Professional MSFA:
– First year courses emphasize topics that are important
on the Level I CFA® exam.
– Second year courses emphasize topics that are
important on the Level II CFA® exam.
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Grounded in Ethical Behavior
• The University of San Francisco, a Jesuit
University, is grounded in the importance of
ethical behavior.
• The MS in Financial Analysis program has an
explicit ethical component.
• Our CFA® charterholder instructors address
ethical issues that investment professionals
are likely to face in their careers throughout
the program.
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Which MSFA Program?
• Professional MSFA:
– Meets on Saturdays over 2 years.
– Focused on working investment professionals.
– Includes all course materials & heavily discounted
access to the CFA-SF Exam Review program.
• Accelerated MSFA:
– A 1-year, 3-consecutive semester program.
– Focused on full-time students with strong quantitative
backgrounds.
– Covers the same courses with most of the same
instructors from the Professional MSFA program.
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The Professional MSFA
Curriculum
Program meets Saturdays
August to May
For Two Years
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Professional MSFA
Curriculum
Year 1:
Semester 1
Year 1:
Semester 2
Year 2:
Semester 1
Year 2:
Semester 2
Microeconomics (3 units)
Macroeconomics
(2 units)
Financial Markets (3 units)
Corporate Finance
(2 units)
Equity Valuation
(2 units)
Fin. Statement Analysis
(2 units)
Fixed Income Valuation
(2 units)
Derivatives I
(2 units)
Computer Models for Risk
Management (2 units)
Econometrics
(2 units)
Derivatives II
(2 units)
International Finance
(2 units)
Capital Market Theory
(2 units)
Portfolio Management
(2 units)
Financial Econometrics
(2 units)
Alternative Investments
(2 units)
Finance
& Ethics I
(1 unit)
Finance &
Ethics II
(1 unit)
The Accelerated MSFA
Curriculum
Program meets week days/nights
August to August
For One Year (3 semesters)
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Accelerated MSFA Curriculum
Micro for Finance
Semester 1:
August - December Financial Markets
Semester 2:
January - April
Macro for Finance
Equity Valuation
Corporate Finance
Fixed Income Valuation I
Adv. Fin. Statements
International Finance
Econometrics
Derivatives I
Fixed Income Valuation II Computer Models for Risk
Management
Semester 3:
May - July
Capital Market Theory
Alternative Investments
Financial Econometrics
Portfolio Management
Derivatives II
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Frequently Asked
Questions about the
MSFA programs
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USF MSFA Instructors –
Knowledge & Credibility
USF Faculty
Instructor Practitioners
Prof. John Veitch, Ph.D. CFA
MSFA Program Director. Financial
Patrick Collins, Ph.D. CFA
Econometrics
Prof. John Gonzales, Ph.D.
International Finance
Prof. Man-lui Lau, Ph.D.
Math Economics, Derivatives
Instructor Practitioners
Peter Chau, CFA
Fixed Income
Brad Craig, CFA
Alternative Investments
Investment Management
Mark Fredenburg, MA, CFA
Equity Valuation
Jim Keene, CFA, CFP
Alternative Investments
Peter Lou, CFA
Computer Modeling
Satish Swamy, CFA
Fixed Income, Portfolio Mgmt
Loren Walden, CFA
Ethics
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Requirements for
International Applicants
• Minimum TOEFL score [550-paper or 213-computer] or a degree
from an English-speaking school.
– Most accepted students have 590+ or 250+ scores
• Professional MSFA
– Significant work experience in finance or investment
management.
• Accelerated MSFA
– Strong GRE or GMAT and/or strong academic
performance in MSFA fundamental areas.
• Accepted students have Quantitative section scores at
80 percentile or above.
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Scholarships & Financial Aid
• Professional MSFA
– Program for full-time working professionals.
– Students are eligible for financial aid but NO
scholarships or Tutor Assistant positions.
• Accelerated MSFA
– Program is for well-qualified full-time students.
– Students are eligible for financial aid.
– Exceptional students are considered for partial
scholarships in the form of tuition remission.
– There are NO Tutor Assistant positions due to the
short length of the program.
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How are the MSFA and an MBA
different?
• Traditional MBA in Finance:
– Involves many courses that are outside of the finance
area, often a majority of the courses!
• MSFA Program:
– Training in areas deemed essential by practicing
financial analysts and investment managers as
determined by the CFA® Institute.
• MBA Option for MSFA Students:
– Students in good standing after first year of MSFA can
apply for an MBA in Finance from USF Business School.
– Must take one extra year of coursework (24 units).
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Will the MSFA program ensure
I pass the CFA exams?
• The MSFA program is an academic degree
program.
– It is not part of the CFA® exams or CFAI® directly, nor
is it simply a CFA® Exam Review course.
• Students who complete the MSFA program will
have learned the material covered by the CFA®
exams.
• Considerable self-study is necessary for any
student to prepare adequately for the form and
specific content of any of the exams.
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The Professional MSFA
Curriculum
Program meets Saturdays
August to May
For Two Years
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Year 1 – Semester 1
Microeconomics for Finance (3 units)
•
Consumer choice under uncertainty. The microeconomics of industry
structure including perfect competition, competition with differentiated
products and monopoly.
Macroeconomics for Finance (2 units)
•
How economies perform in the long run and the short run. The structure of
macroeconomic relationships and the role of government policies in financial
market outcomes.
Financial Markets (3 units)
•
An overview of the characteristics of financial markets including their
structure and organization. Features of debt markets, including yields, credit
spreads, and term structure of interest rates. Equity markets for common and
preferred shares.
Corporate Finance (2 units)
•
The basic concepts of corporate finance: dividend discount models,
determining a firm’s cost of capital, capital investment decisions and net
present value vs. internal rates of return, overview of mergers and
acquisitions, hybrid securities.
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Year 1 – Semester 2
Equity Valuation (2 units)
•
Finance models in the valuation of firm valuation and the value of equity.
Models include relative ratio analysis such as the DuPont model, general
cash flow model for valuing assets and liabilities.
Financial Statement Analysis (2 units)
•
Treatment of advanced accounting issues including leases, mergers,
pension funds, and international transactions. Analysis of quality of financial
reports with emphasis on accounting irregularities.
Fixed Income Valuation (2 units)
•
A thorough study of the structural features of debt markets. Term structure
analysis of interest rates and bond valuation. Assessing sources of risk for
debt portfolios, including the role of duration and convexity in evaluating the
effects of interest rate changes. Credit analysis for corporate bonds.
Derivatives I (2 units)
•
An introduction to derivative markets and derivative instruments including
options markets, futures markets, and swap markets.
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Year 2 – Semester 1
Computer Models for Risk Management (2 units)
•
Excel modeling for risk analysis and management. Includes financial
statement forecasting, bond valuation, Value at Risk, and valuing
derivatives.
Econometrics (2 units)
•
Probability models for portfolio risk, Value at Risk models, and decision
making under uncertainty. Simple Regression analysis with hypothesis
tests, goodness of fit, and testing for problems with the data or the model.
Derivatives II (2 units)
•
Analysis of fixed-income derivatives including custom interest rate
agreements and analysis of interest rate and currency swaps. Analysis of
equity options and warrants, hedging and hedging strategies.
International Finance (2 units)
•
International financial systems and foreign exchange rate regimes. Foreign
exchange market calculations and arbitrage relationships. Exchange rate
forecasting methods. Study of currency strategies for international portfolio
management. International CAPM models of securities pricing.
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Year 2 – Semester 2
Capital Markets Theory (2 units)
•
Efficient financial markets theory. Asset pricing theories and models. Asset
allocation and general portfolio construction.
Portfolio Management (2 units)
•
Portfolio management policies for individual investors, mutual funds, and
institutional investors. Fixed income vs. equity portfolio management
strategies. Risk measurement and management.
Financial Econometrics (2 units)
•
Multiple regression models with and applications to portfolio management.
Time-series analysis and technical analysis of securities’ prices.
Alternative Investments (2 units)
•
An overview of alternative investments including REIT’s, commodity trading
advisors, hedge funds, distressed debt and leveraged buyouts.
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Ethics Courses in the MSFA
Year 1, Semester 2
Ethics and Finance I (1 unit)
•
Applicable laws and regulations including professional standards of
practice, ethical conduct and professional obligations. Topics include
conflicts of interest, insider trading, and an overview of presentation
standards for portfolio results. Focus is on global regulatory differences and
ethical obligations across countries.
Year 2, Semester 2
Ethics and Finance II (1 unit)
•
Professional standards of practice regarding Performance Presentation
standards and associated ethical obligations. Ethical and practical issues in
constructing and maintaining portfolio returns and appropriate benchmark
portfolios.
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The CFA Designation,
Exams, and Study Program
The CFA® designation has become
harder to get and why self-study may
not be the best approach any longer
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CFA Institute
• Founded in 1990. Has over 90,000 members and 135
societies/chapters worldwide. www.cfainstitute.org
• Mission is to advance the interests of the global investment
community by establishing and maintaining the highest standards
of professional excellence and integrity.
• Administers the Chartered Financial Analyst Program (CFA®).
–
–
–
–
•
Curriculum develops & reinforces knowledge of investment principles.
Three levels of examination measure candidate ability.
CFA® exam is given annually in more than 141 nations worldwide.
Over 140,000 enrolled candidates from 160 countries around the
globe
Other benefits include membership, access to timely conferences
and publications, network of societies and chapters.
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®
CFA
Program Benefits
International Recognition
– Employers and media around the world praise the CFA designation
Credibility
– Clients & colleagues regard you with a presumption of expertise
Respect
– Your efforts connect you with the prestige of existing charterholders
Competitive Advantage
– Employers & clients require professionals who demonstrate
competence in implementing international investment strategies
Knowledge with a Global Perspective
– Practice analysis is conducted every five years to determine a globally
relevant, broad-based curriculum.
Connections
– 78,000+ charterholders & 100,000+ candidates around the world who
are active investment professionals with senior responsibility
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Where CFA® Charterholders
Work
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CFA® Charterholder Job
Functions
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Top Employers of CFA® Charterholders
Western Region USA
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What is the CFA® Program?
Three Levels & Three Exams
• Level I
Knowledge & Comprehension of Fundamental
Investment Tools and Concepts
• Level II
Application & Analysis focused on Asset Valuation
• Level III
Synthesis & Evaluation of Client Needs and
Portfolio Management Issues
• Ethical & Professional Standards
Emphasized at every Level!!!!!
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The CFA® Course of Study
Body of Knowledge
• Ethical & Professional
Standards
• Quantitative Methods
• Economics
• Financial Statement
Analysis
• Corporate Finance
• Analysis of Debt
Instruments
• Analysis of Equity
Investments
• Analysis of Derivatives
• Analysis of Alternative
Investments
• Portfolio Management
• Performance Measurement &
Portfolio Attribution Analysis
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The CFA® Examinations
Historic Pass Rates
CFA® Exam Pass Rates
Level I
Level II
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P
a
s
s
R
a
t
e
45
35
25
pre2002
Jun03
Jun04
Jun05
Exam Date
Jun06
Jun07
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The CFA Institute Response
Bob Johnson, CFA
Executive VP in charge of CFA® program
•
•
Successful candidates indicate they spent 250+ hours
studying for the exam.
Exam difficulty is unchanged over past 5 years.
– Sample exam on website is same difficulty as actual exams.
– Top 1% candidate scores have remained constant.
•
Falling pass rates due primarily to:
– Candidates fail to spend enough time preparing for the exam.
– Candidates do not study correctly, study questions rather than
studying the material.
– Candidates over-reliance on prep notes rather than texts and
readings.
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Schweser Response
•
CFA Institute survey shows 57% studied less than 200
hours for 2004 CFA® exams.
1.
Agree that candidates study too little and start too late. Stress of
everyday life makes 250+ hours difficult to dedicate.
2.
Candidates try guaranteed “shortcuts” and rely overly on studying
test banks instead of learning the material. Unprepared for the
unexpected.
3.
Partly due to exam day stress, exams increasingly becoming tests of
reading comprehension, and need for test-taking skills.
4.
Changes in candidate pool have led to more marginal, less qualified
candidates who lack basic economics and accounting.
5.
Curriculum itself has become more challenging each year, despite
CFA Institute’s claim about similar levels of difficulty.
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Academic Programs?
•
•
Very difficult to pass all three levels of the CFA® exam
without advanced academic training.
Academic programs can be structured to address
several requirements for CFA® exam success:
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–
–
–
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Conceptual frameworks and “big picture” of results in a field
taught by experts; both academics and practitioners.
Sustained exposure to the quantitative, economic, finance and
accounting results in financial analysis study areas.
Exposure to academic exam situations, time management,
and study discipline; especially important for practitioners.
Integration of increasingly sophisticated tools and results over
the course of the academic program.
Cohort program, where students move through a program
together, provide opportunities for study groups and support.
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