The Investment Advisor Body of Knowledge + Test Bank
Readings for the CIMA Certification

The complete body of knowledge for CIMA candidates and professionals

The 2015 Certified Investment Management Analyst Body of Knowledge + Test Bank will help any financial advisor prepare for and pass the CIMA exam, and includes key information and preparation for those preparing to take the test.

CIMA professionals integrate a complex body of investment knowledge, ethically contributing to prudent investment decisions by providing objective advice and guidance to individual and institutional investors. The CIMA certification program is the only credential designed specifically for financial professionals who want to attain a level of competency as an advanced investment consultant. Having the CIMA designation has led to more satisfied careers, better compensation, and management of more assets for higher-net-worth clients than other advisors. The book is laid out based on the six domains covered on the exam:

•  I. Governance
•  II. Fundamentals (statistics, finance, economics)
•  III. Portfolio Performance and Risk Measurements
•  IV. Traditional and Alternative Investments
•  V. Portfolio Theory and Behavioral Finance
• VI. Investment Consulting Process

Acknowledgments vii

Introduction xi

Chapter 1 IMCA Code of Professional Responsibility and Standards of Practice 1

Chapter 2 Regulatory Considerations 37

Chapter 3 Statistics and Methods 47

Chapter 4 Applied Finance and Economics 105

Chapter 5 Global Capital Markets: History and Valuation 235

Chapter 6 Attributes of Risk 307

Chapter 7 Risk Measurements 321

Chapter 8 Performance Measurement and Attribution 333

Chapter 9 Traditional Global Investments: Equity and Fixed Income 393

Chapter 10 Fixed-Income Vehicles 471

Chapter 11 Foreign Exchange Market 547

Chapter 12 Alternative Investments 569

Chapter 13 Options, Futures, and Other Derivatives 651

Chapter 14 Tools and Strategies Based on Technical Analysis 703

Chapter 15 Portfolio Theories and Models 759

Chapter 16 Behavioral Finance Theory 815

Chapter 17 Client Discovery 899

Chapter 18 Investment Policy Statement (IPS) 997

Chapter 19 Portfolio Risk Management Strategies 1017

Chapter 20 Manager Search, Selection, and Monitoring 1049

Chapter 21 Perform Portfolio Review and Revisions Process 1083

IMCA 1103

About the Author 1105

Index 1107

About IMCA
Established in 1985, IMCA is a nonprofit professional association and credentialing organization with more than 10,000 individual members and certificants in the United States and Canada, including 400 international affiliate members. IMCA members collectively manage more than $2.477 trillion, providing investment consulting and wealth management services to individual and institutional clients. Since 1988, IMCA has offered the Certified Investment Management Analyst^® (CIMA^®) certification, which earned accreditation by the American National Standards Institute (ANSI) in April 2011, making it the first financial services credential in the United States to meet international standards (ISO 17024) for personnel certification.
IMCA^® and Investment Management Consultants Association^® are registered trademarks of Investment Management Consultants Association Inc. CIMA®, Certified Investment Management Analyst^®, CIMC^®, CPWA^®, and Certified Private Wealth Advisor^® are registered certification marks of Investment Management Consultants Association Inc. Investment Management Consultants Association Inc. does not discriminate in educational opportunities or practices on the basis of race, color, religion, gender, national origin, age, disability, or any other characteristic protected by law.