cfa level 1 los 2016
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CFA Level 1 - LOS Changes 2015 - 2016
Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Ethics 1.1.a
describe the structure of the CFA
Institute Professional Conduct Program
and the process for the enforcement of
the Code and Standards
1.1.a
describe the structure of the CFA
Institute Professional Conduct Program
and the process for the enforcement of
the Code and Standards
Ethics 1.1.b
state the six components of the Code of
Ethics and the seven Standards of
Professional Conduct
1.1.b
state the six components of the Code of
Ethics and the seven Standards of
Professional Conduct
Ethics 1.1.c
explain the ethical responsibilities
required by the Code and Standards,
including the sub-sections of each
Standard
1.1.c
explain the ethical responsibilities
required by the Code and Standards,
including the sub-sections of each
Standard
Ethics 1.2.a
demonstrate the application of the
Code of Ethics and Standards of
Professional Conduct to situations
involving issues of professional integrity
1.2.a
demonstrate the application of the Code
of Ethics and Standards of Professional
Conduct to situations involving issues of
professional integrity
Ethics 1.2.b
distinguish between conduct thatconforms to the Code and Standards
and conduct that violates the Code and
Standards
1.2.b
distinguish between conduct thatconforms to the Code and Standards
and conduct that violates the Code and
Standards
Ethics 1.2.c
recommend practices and procedures
designed to prevent violations of the
Code of Ethics and Standards of
Professional Conduct
1.2.c
recommend practices and procedures
designed to prevent violations of the
Code of Ethics and Standards of
Professional Conduct
Ethics 1.3.a
explain why the GIPS standards were
created, what parties the GIPS
standards apply to, and who is served
by the standards
1.3.a
explain why the GIPS standards were
created, what parties the GIPS
standards apply to, and who is served
by the standards
Ethics 1.3.bexplain the construction and purpose of
composites in performance reporting1.3.b
explain the construction and purpose of
composites in performance reporting
Ethics 1.3.cexplain the requirements for
verification1.3.c
explain the requirements for verification
Ethics 1.4.a
describe the key features of the GIPS
standards and the fundamentals of
compliance
1.4.a
describe the key features of the GIPS
standards and the fundamentals of
compliance
Ethics 1.4.b
describe the scope of the GIPS
standards with respect to an
investment firm’s definition and
historical performance record
1.4.b
describe the scope of the GIPS
standards with respect to an investment
firm’s definition and historical
performance record
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Ethics 1.4.c
explain how the GIPS standards are
implemented in countries with existing
standards for performance reporting
and describe the appropriate response
when the GIPS standards and local
regulations conflict
1.4.c
explain how the GIPS standards are
implemented in countries with existing
standards for performance reporting
and describe the appropriate response
when the GIPS standards and local
regulations conflict
Ethics 1.4.ddescribe the nine major sections of the
GIPS standards1.4.d
describe the nine major sections of the
GIPS standards
Quantitative 2.5.ainterpret interest rates as requiredrates of return, discount rates, or
opportunity costs
2.5.ainterpret interest rates as required ratesof return, discount rates, or opportunity
costs
Quantitative 2.5.b
explain an interest rate as the sum of a
real risk-free rate, and premiums that
compensate investors for bearing
distinct types of risk
2.5.b
explain an interest rate as the sum of a
real risk-free rate, and premiums that
compensate investors for bearing
distinct types of risk
Quantitative 2.5.c
calculate and interpret the effective
annual rate, given the stated annual
interest rate and the frequency of
compounding
2.5.c
calculate and interpret the effective
annual rate, given the stated annual
interest rate and the frequency of
compounding
Quantitative 2.5.d solve time value of money problems for
different frequencies of compounding
2.5.d solve time value of money problems for
different frequencies of compounding
Quantitative 2.5.e
calculate and interpret the future value
(FV) and present value (PV) of a single
sum of money, an ordinary annuity, an
annuity due, a perpetuity (PV only),
and a series of unequal cash flows
2.5.e
calculate and interpret the future value
(FV) and present value (PV) of a single
sum of money, an ordinary annuity, an
annuity due, a perpetuity (PV only), and
a series of unequal cash flows
Quantitative 2.5.f
demonstrate the use of a time line in
modeling and solving time value of
money problems
2.5.f
demonstrate the use of a time line in
modeling and solving time value of
money problems
Quantitative 2.6.a calculate and interpret the net presentvalue (NPV) and the internal rate of
return (IRR) of an investment
2.6.a calculate and interpret the net presentvalue (NPV) and the internal rate of
return (IRR) of an investment
Quantitative 2.6.b
contrast the NPV rule to the IRR rule,
and identify problems associated with
the IRR rule
2.6.b
contrast the NPV rule to the IRR rule,
and identify problems associated with
the IRR rule
Quantitative 2.6.ccalculate and interpret a holding period
return (total return)2.6.c
calculate and interpret a holding period
return (total return)
Quantitative 2.6.d
calculate and compare the money-
weighted and time-weighted rates of
return of a portfolio and evaluate the
performance of portfolios based on
these measures
2.6.d
calculate and compare the money-
weighted and time-weighted rates of
return of a portfolio and evaluate the
performance of portfolios based on
these measures
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Quantitative 2.6.e
calculate and interpret the bank
discount yield, holding period yield,
effective annual yield, and money
market yield for U.S. Treasury bills and
other money market instruments
2.6.e
calculate and interpret the bank
discount yield, holding period yield,
effective annual yield, and money
market yield for U.S. Treasury bills and
other money market instruments
Quantitative 2.6.f
convert among holding period yields,
money market yields, effective annual
yields, and bond equivalent yields
2.6.f
convert among holding period yields,
money market yields, effective annual
yields, and bond equivalent yields
Quantitative 2.7.a
distinguish between descriptivestatistics and inferential statistics,
between a population and a sample,
and among the types of measurement
scales
2.7.a
distinguish between descriptivestatistics and inferential statistics,
between a population and a sample,
and among the types of measurement
scales
Quantitative 2.7.bdefine a parameter, a sample statistic,
and a frequency distribution2.7.b
define a parameter, a sample statistic,
and a frequency distribution
Quantitative 2.7.c
calculate and interpret relative
frequencies and cumulative relative
frequencies, given a frequency
distribution
2.7.c
calculate and interpret relative
frequencies and cumulative relative
frequencies, given a frequency
distribution
Quantitative 2.7.ddescribe the properties of a data setpresented as a histogram or a
frequency polygon
2.7.ddescribe the properties of a data setpresented as a histogram or a
frequency polygon
Quantitative 2.7.e
calculate and interpret measures of
central tendency, including the
population mean, sample mean,
arithmetic mean, weighted average or
mean, geometric mean, harmonic
mean, median, and mode
2.7.e
calculate and interpret measures of
central tendency, including the
population mean, sample mean,
arithmetic mean, weighted average or
mean, geometric mean, harmonic
mean, median, and mode
Quantitative 2.7.f calculate and interpret quartiles,
quintiles, deciles, and percentiles2.7.f
calculate and interpret quartiles,
quintiles, deciles, and percentiles
Quantitative 2.7.gcalculate and interpret 1) a range and amean absolute deviation and 2) the
variance and standard deviation of a
population and of a sample
2.7.gcalculate and interpret 1) a range and amean absolute deviation and 2) the
variance and standard deviation of a
population and of a sample
Quantitative 2.7.h
calculate and interpret the proportion
of observations falling within a specified
number of standard deviations of the
mean using Chebyshev’s inequality
2.7.h
calculate and interpret the proportion of
observations falling within a specified
number of standard deviations of the
mean using Chebyshev’s inequality
Quantitative 2.7.icalculate and interpret the coefficient of
variation and the Sharpe ratio2.7.i
calculate and interpret the coefficient of
variation and the Sharpe ratio
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Quantitative 2.7.j
explain skewness and the meaning of a
positively or negatively skewed return
distribution
2.7.j
explain skewness and the meaning of a
positively or negatively skewed return
distribution
Quantitative 2.7.k
describe the relative locations of the
mean, median, and mode for a
unimodal, nonsymmetrical distribution
2.7.k
describe the relative locations of the
mean, median, and mode for a
unimodal, nonsymmetrical distribution
Quantitative 2.7.lexplain measures of sample skewness
and kurtosis2.7.l
explain measures of sample skewness
and kurtosis
Quantitative 2.7.mcompare the use of arithmetic andgeometric means when analyzing
investment returns
2.7.mcompare the use of arithmetic andgeometric means when analyzing
investment returns
Quantitative 2.8.a
define a random variable, an outcome,
an event, mutually exclusive events,
and exhaustive events
2.8.a
define a random variable, an outcome,
an event, mutually exclusive events,
and exhaustive events
Quantitative 2.8.b
state the two defining properties of
probability and distinguish among
empirical, subjective, and a priori
probabilities
2.8.b
state the two defining properties of
probability and distinguish among
empirical, subjective, and a priori
probabilities
Quantitative 2.8.c state the probability of an event interms of odds for and against the event
2.8.c state the probability of an event interms of odds for and against the event
Quantitative 2.8.ddistinguish between unconditional and
conditional probabilities2.8.d
distinguish between unconditional and
conditional probabilities
Quantitative 2.8.eexplain the multiplication, addition, and
total probability rules2.8.e
explain the multiplication, addition, and
total probability rules
Quantitative 2.8.f
calculate and interpret 1) the joint
probability of two events, 2) the
probability that at least one of two
events will occur, given the probability
of each and the joint probability of the
two events, and 3) a joint probability ofany number of independent events
2.8.f
calculate and interpret 1) the joint
probability of two events, 2) the
probability that at least one of two
events will occur, given the probability
of each and the joint probability of the
two events, and 3) a joint probability ofany number of independent events
Quantitative 2.8.gdistinguish between dependent and
independent events2.8.g
distinguish between dependent and
independent events
Quantitative 2.8.h
calculate and interpret an unconditional
probability using the total probability
rule
2.8.h
calculate and interpret an unconditional
probability using the total probability
rule
Quantitative 2.8.iexplain the use of conditional
expectation in investment applications2.8.i
explain the use of conditional
expectation in investment applications
Quantitative 2.8.jexplain the use of a tree diagram to
represent an investment problem2.8.j
explain the use of a tree diagram to
represent an investment problem
Quantitative 2.8.kcalculate and interpret covariance and
correlation 2.8.kcalculate and interpret covariance and
correlation
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Quantitative 2.8.l
calculate and interpret the expected
value, variance, and standard deviation
of a random variable and of returns on
a portfolio
2.8.l
calculate and interpret the expected
value, variance, and standard deviation
of a random variable and of returns on
a portfolio
Quantitative 2.8.mcalculate and interpret covariance given
a joint probability function2.8.m
calculate and interpret covariance given
a joint probability function
Quantitative 2.8.ncalculate and interpret an updated
probability using Bayes’ formula2.8.n
calculate and interpret an updated
probability using Bayes’ formula
Quantitative 2.8.o
identify the most appropriate methodto solve a particular counting problem,
and solve counting problems using
factorial, combination, and permutation
concepts
2.8.o
identify the most appropriate method to
solve a particular counting problem, and
solve counting problems using factorial,
combination, and permutation concepts
Quantitative 3.9.a
define a probability distribution and
distinguish between discrete and
continuous random variables and their
probability functions
3.9.a
define a probability distribution and
distinguish between discrete and
continuous random variables and their
probability functions
Quantitative 3.9.bdescribe the set of possible outcomes
of a specified discrete random variable3.9.b
describe the set of possible outcomes of
a specified discrete random variable
Quantitative 3.9.c interpret a cumulative distributionfunction
3.9.c interpret a cumulative distributionfunction
Quantitative 3.9.d
calculate and interpret probabilities for
a random variable, given its cumulative
distribution function
3.9.d
calculate and interpret probabilities for
a random variable, given its cumulative
distribution function
Quantitative 3.9.e
define a discrete uniform random
variable, a Bernoulli random variable,
and a binomial random variable
3.9.e
define a discrete uniform random
variable, a Bernoulli random variable,
and a binomial random variable
Quantitative 3.9.f
calculate and interpret probabilities
given the discrete uniform and the
binomial distribution functions
3.9.f
calculate and interpret probabilities
given the discrete uniform and the
binomial distribution functions
Quantitative 3.9.g construct a binomial tree to describestock price movement 3.9.g construct a binomial tree to describestock price movement
Quantitative 3.9.h calculate and interpret tracking error 3.9.h calculate and interpret tracking error
Quantitative 3.9.i
define the continuous uniform
distribution and calculate and interpret
probabilities, given a continuous
uniform distribution
3.9.i
define the continuous uniform
distribution and calculate and interpret
probabilities, given a continuous
uniform distribution
Quantitative 3.9.jexplain the key properties of the
normal distribution3.9.j
explain the key properties of the normal
distribution
Quantitative 3.9.k
distinguish between a univariate and a
multivariate distribution, and explain
the role of correlation in the
multivariate normal distribution
3.9.k
distinguish between a univariate and a
multivariate distribution, and explain
the role of correlation in the
multivariate normal distribution
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Quantitative 3.9.l
determine the probability that a
normally distributed random variable
lies inside a given interval
3.9.l
determine the probability that a
normally distributed random variable
lies inside a given interval
Quantitative 3.9.m
define the standard normal distribution,
explain how to standardize a random
variable, and calculate and interpret
probabilities using the standard normal
distribution
3.9.m
define the standard normal distribution,
explain how to standardize a random
variable, and calculate and interpret
probabilities using the standard normal
distribution
Quantitative 3.9.n
define shortfall risk, calculate the safetyfirst ratio, and select an optimal
portfolio using Roy’s safety-first
criterion
3.9.n
define shortfall risk, calculate the safety-first ratio, and select an optimal
portfolio using Roy’s safety-first
criterion
Quantitative 3.9.o
explain the relationship between
normal and lognormal distributions and
why the lognormal distribution is used
to model asset prices
3.9.o
explain the relationship between normal
and lognormal distributions and why the
lognormal distribution is used to model
asset prices
Quantitative 3.9.p
distinguish between discretely and
continuously compounded rates of
return, and calculate and interpret a
continuously compounded rate ofreturn, given a specific holding period
return
3.9.p
distinguish between discretely and
continuously compounded rates of
return, and calculate and interpret a
continuously compounded rate ofreturn, given a specific holding period
return
Quantitative 3.9.qexplain Monte Carlo simulation and
describe its applications and limitations3.9.q
explain Monte Carlo simulation and
describe its applications and limitations
Quantitative 3.9.rcompare Monte Carlo simulation and
historical simulation3.9.r
compare Monte Carlo simulation and
historical simulation
Quantitative 3.10.adefine simple random sampling and a
sampling distribution3.10.a
define simple random sampling and a
sampling distribution
Quantitative 3.10.b explain sampling error 3.10.b explain sampling error
Quantitative 3.10.cdistinguish between simple random and
stratified random sampling
3.10.cdistinguish between simple random and
stratified random samplingQuantitative 3.10.d
distinguish between time-series and
cross-sectional data3.10.d
distinguish between time-series and
cross-sectional data
Quantitative 3.10.eexplain the central limit theorem and
its importance3.10.e
explain the central limit theorem and its
importance
Quantitative 3.10.f calculate and interpret the standard
error of the sample mean3.10.f
calculate and interpret the standard
error of the sample mean
Quantitative 3.10.gidentify and describe desirable
properties of an estimator3.10.g
identify and describe desirable
properties of an estimator
Quantitative 3.10.h
distinguish between a point estimate
and a confidence interval estimate of a
population parameter
3.10.h
distinguish between a point estimate
and a confidence interval estimate of a
population parameter
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Quantitative 3.10.i
describe properties of Student’s t-
distribution and calculate and interpret
its degrees of freedom
3.10.i
describe properties of Student’s t-
distribution and calculate and interpret
its degrees of freedom
Quantitative 3.10.j
calculate and interpret a confidence
interval for a population mean, given a
normal distribution with 1) a known
population variance, 2) an unknown
population variance, or 3) an unknown
variance and a large sample size
3.10.j
calculate and interpret a confidence
interval for a population mean, given a
normal distribution with 1) a known
population variance, 2) an unknown
population variance, or 3) an unknown
variance and a large sample size
Quantitative 3.10.k
describe the issues regarding selection
of the appropriate sample size, data-
mining bias, sample selection bias,
survivorship bias, look-ahead bias, and
time-period bias
3.10.k
describe the issues regarding selection
of the appropriate sample size, data-
mining bias, sample selection bias,
survivorship bias, look-ahead bias, and
time-period bias
Quantitative 3.11.a
define a hypothesis, describe the steps
of hypothesis testing, and describe and
interpret the choice of the null and
alternative hypotheses
3.11.a
define a hypothesis, describe the steps
of hypothesis testing, and describe and
interpret the choice of the null and
alternative hypotheses
Quantitative 3.11.bdistinguish between one-tailed and two-
tailed tests of hypotheses
3.11.bdistinguish between one-tailed and two-
tailed tests of hypotheses
Quantitative 3.11.c
explain a test statistic, Type I and Type
II errors, a significance level, and how
significance levels are used in
hypothesis testing
3.11.c
explain a test statistic, Type I and Type
II errors, a significance level, and how
significance levels are used in
hypothesis testing
Quantitative 3.11.d
explain a decision rule, the power of a
test, and the relation between
confidence intervals and hypothesis
tests
3.11.d
explain a decision rule, the power of a
test, and the relation between
confidence intervals and hypothesis
tests
Quantitative 3.11.edistinguish between a statistical result
and an economically meaningful result3.11.e
distinguish between a statistical result
and an economically meaningful result
Quantitative 3.11.f explain and interpret the p-value as itrelates to hypothesis testing 3.11.f explain and interpret the p-value as itrelates to hypothesis testing
Quantitative 3.11.g
identify the appropriate test statistic
and interpret the results for a
hypothesis test concerning the
population mean of both large and
small samples when the population is
normally or approximately distributed
and the variance is 1) known or 2)
unknown
3.11.g
identify the appropriate test statistic
and interpret the results for a
hypothesis test concerning the
population mean of both large and small
samples when the population is
normally or approximately normally
distributed and the variance is 1) known
or 2) unknown
Wording
Change
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Quantitative 3.11.h
identify the appropriate test statistic
and interpret the results for a
hypothesis test concerning the equality
of the population means of two at least
approximately normally distributed
populations, based on independent
random samples with 1) equal or 2)
unequal assumed variances
3.11.h
identify the appropriate test statistic
and interpret the results for a
hypothesis test concerning the equality
of the population means of two at least
approximately normally distributed
populations, based on independent
random samples with 1) equal or 2)
unequal assumed variances
Quantitative 3.11.i
identify the appropriate test statisticand interpret the results for a
hypothesis test concerning the mean
difference of two normally distributed
populations
3.11.i
identify the appropriate test statisticand interpret the results for a
hypothesis test concerning the mean
difference of two normally distributed
populations
Quantitative 3.11.j
identify the appropriate test statistic
and interpret the results for a
hypothesis test concerning 1) the
variance of a normally distributed
population, and 2) the equality of the
variances of two normally distributed
populations based on two independentrandom samples
3.11.j
identify the appropriate test statistic
and interpret the results for a
hypothesis test concerning 1) the
variance of a normally distributed
population, and 2) the equality of the
variances of two normally distributed
populations based on two independentrandom samples
Quantitative 3.11.k
distinguish between parametric and
nonparametric tests and describe
situations in which the use of
nonparametric tests may be
appropriate
3.11.k
distinguish between parametric and
nonparametric tests and describe
situations in which the use of
nonparametric tests may be appropriate
Quantitative 3.12.a
explain principles of technical analysis,
its applications, and its underlying
assumptions
3.12.a
explain principles of technical analysis,
its applications, and its underlying
assumptions
Quantitative 3.12.b
describe the construction of different
types of technical analysis charts and
interpret them
3.12.b
describe the construction of different
types of technical analysis charts and
interpret them
Quantitative 3.12.cexplain uses of trend, support,
resistance lines, and change in polarity3.12.c
explain uses of trend, support,
resistance lines, and change in polarity
Quantitative 3.12.d describe common chart patterns 3.12.d describe common chart patterns
Quantitative 3.12.e
describe common technical analysis
indicators (price-based, momentum
oscillators, sentiment, and flow of
funds)
3.12.e
describe common technical analysis
indicators (price-based, momentum
oscillators, sentiment, and flow of
funds)
Quantitative 3.12.f explain how technical analysts use
cycles3.12.f
explain how technical analysts use
cycles
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Quantitative 3.12.g
describe the key tenets of Elliott Wave
Theory and the importance of Fibonacci
numbers
3.12.g
describe the key tenets of Elliott Wave
Theory and the importance of Fibonacci
numbers
Quantitative 3.12.h
describe intermarket analysis as it
relates to technical analysis and asset
allocation
3.12.h
describe intermarket analysis as it
relates to technical analysis and asset
allocation
Economics 4.13.a distinguish among types of markets 4.13.a distinguish among types of markets
Economics 4.13.bexplain the principles of demand and
supply4.13.b
explain the principles of demand and
supply
Economics 4.13.c
describe causes of shifts in and
movements along demand and supply
curves
4.13.c
describe causes of shifts in and
movements along demand and supply
curves
Economics 4.13.ddescribe the process of aggregating
demand and supply curves4.13.d
describe the process of aggregating
demand and supply curves
Economics 4.13.e
describe the concept of equilibrium
(partial and general), and mechanisms
by which markets achieve equilibrium
4.13.e
describe the concept of equilibrium
(partial and general), and mechanisms
by which markets achieve equilibrium
Economics 4.13.f
distinguish between stable and
unstable equilibria, including price
bubbles, and identify instances of suchequilibria
4.13.f distinguish between stable and unstable
equilibria, including price bubbles, andidentify instances of such equilibria
Economics 4.13.g
calculate and interpret individual and
aggregate demand, and inverse
demand and supply functions, and
interpret individual and aggregate
demand and supply curves
4.13.g
calculate and interpret individual and
aggregate demand, and inverse demand
and supply functions, and interpret
individual and aggregate demand and
supply curves
Economics 4.13.h
calculate and interpret the amount of
excess demand or excess supply
associated with a non-equilibrium price
4.13.h
calculate and interpret the amount of
excess demand or excess supply
associated with a non-equilibrium price
Economics 4.13.i describe types of auctions and calculate
the winning price(s) of an auction
4.13.i describe types of auctions and calculate
the winning price(s) of an auction
Economics 4.13.j
calculate and interpret consumer
surplus, producer surplus, and total
surplus
4.13.j
calculate and interpret consumer
surplus, producer surplus, and total
surplus
Economics 4.13.k
describe how government regulation
and intervention affect demand and
supply
4.13.k
describe how government regulation
and intervention affect demand and
supply
Economics 4.13.l
forecast the effect of the introduction
and the removal of a market
interference (e.g., a price floor or
ceiling) on price and quantity
4.13.l
forecast the effect of the introduction
and the removal of a market
interference (e.g., a price floor or
ceiling) on price and quantity
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Economics 4.13.m
calculate and interpret price, income,
and cross-price elasticities of demand
and describe factors that affect each
measure
4.13.m
calculate and interpret price, income,
and cross-price elasticities of demand
and describe factors that affect each
measure
Economics 4.14.adescribe consumer choice theory and
utility theory4.14.a
describe consumer choice theory and
utility theory
Economics 4.14.b
describe the use of indifference curves,
opportunity sets, and budget
constraints in decision making
4.14.b
describe the use of indifference curves,
opportunity sets, and budget constraints
in decision making
Economics 4.14.ccalculate and interpret a budget
constraint4.14.c
calculate and interpret a budget
constraint
Economics 4.14.d
determine a consumer’s equilibrium
bundle of goods based on utility
analysis
4.14.d
determine a consumer’s equilibrium
bundle of goods based on utility
analysis
Economics 4.14.ecompare substitution and income
effects4.14.e
compare substitution and income effects
Economics 4.14.f
distinguish between normal goods and
inferior goods, and explain Giffen goods
and Veblen goods in this context
4.14.f
distinguish between normal goods and
inferior goods, and explain Giffen goods
and Veblen goods in this context
Economics 4.15.acalculate, interpret, and compareaccounting profit, economic profit,
normal profit, and economic rent
4.15.acalculate, interpret, and compareaccounting profit, economic profit,
normal profit, and economic rent
Economics 4.15.bcalculate and interpret and compare
total, average, and marginal revenue4.15.b
calculate and interpret and compare
total, average, and marginal revenue
Economics 4.15.c describe a firm’s factors of production 4.15.c describe a firm’s factors of production
Economics 4.15.dcalculate and interpret total, average,
marginal, fixed, and variable costs4.15.d
calculate and interpret total, average,
marginal, fixed, and variable costs
Economics 4.15.edetermine and describe breakeven and
shutdown points of production4.15.e
determine and describe breakeven and
shutdown points of production
Economics 4.15.f describe approaches to determining the
profit-maximizing level of output4.15.f
describe approaches to determining the
profit-maximizing level of output
Economics 4.15.gdescribe how economies of scale and
diseconomies of scale affect costs4.15.g
describe how economies of scale and
diseconomies of scale affect costs
Economics 4.15.hdistinguish between short-run and long-
run profit maximization4.15.h
distinguish between short-run and long-
run profit maximization
Economics 4.15.i
distinguish among decreasing-cost,
constant-cost, and increasing-cost
industries and describe the long-run
supply of each
4.15.i
distinguish among decreasing-cost,
constant-cost, and increasing-cost
industries and describe the long-run
supply of each
Economics 4.15.jcalculate and interpret total, marginal,
and average product of labor4.15.j
calculate and interpret total, marginal,
and average product of labor
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Economics 4.15.k
describe the phenomenon of
diminishing marginal returns and
calculate and interpret the profit-
maximizing utilization level of an input
4.15.k
describe the phenomenon of diminishing
marginal returns and calculate and
interpret the profit-maximizing
utilization level of an input
Economics 4.15.ldetermine the optimal combination of
resources that minimizes cost4.15.l
determine the optimal combination of
resources that minimizes cost
Economics 4.16.a
describe characteristics of perfect
competition, monopolistic competition,
oligopoly, and pure monopoly
4.16.a
describe characteristics of perfect
competition, monopolistic competition,
oligopoly, and pure monopoly
Economics 4.16.b
explain relationships between price,
marginal revenue, marginal cost,
economic profit, and the elasticity of
demand under each market structure
4.16.b
explain relationships between price,
marginal revenue, marginal cost,
economic profit, and the elasticity of
demand under each market structure
Economics 4.16.cdescribe a firm’s supply function under
each market structure4.16.c
describe a firm’s supply function under
each market structure
Economics 4.16.d
describe and determine the optimal
price and output for firms under each
market structure
4.16.d
describe and determine the optimal
price and output for firms under each
market structure
Economics 4.16.e
explain factors affecting long-run
equilibrium under each marketstructure
4.16.e explain factors affecting long-runequilibrium under each market structure
Economics 4.16.f describe pricing strategy under each
market structure4.16.f
describe pricing strategy under each
market structure
Economics 4.16.g
describe the use and limitations of
concentration measures in identifying
market structure
4.16.g
describe the use and limitations of
concentration measures in identifying
market structure
Economics 4.16.hidentify the type of market structure
within which a firm operates4.16.h
identify the type of market structure
within which a firm operates
Economics 5.17.a
calculate and explain gross domestic
product (GDP) using expenditure and
income approaches
5.17.a
calculate and explain gross domestic
product (GDP) using expenditure and
income approaches
Economics 5.17.b
compare the sum-of-value-added and
value-of-final-output methods of
calculating GDP
5.17.b
compare the sum-of-value-added and
value-of-final-output methods of
calculating GDP
Economics 5.17.c compare nominal and real GDP and
calculate and interpret the GDP deflator
5.17.c compare nominal and real GDP and
calculate and interpret the GDP deflator
Economics 5.17.d
compare GDP, national income,
personal income, and personal
disposable income
5.17.d compare GDP, national income, personal
income, and personal disposable income
Economics 5.17.e
explain the fundamental relationship
among saving, investment, the fiscal
balance, and the trade balance
5.17.e
explain the fundamental relationship
among saving, investment, the fiscal
balance, and the trade balance
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Economics 5.17.f
explain the IS and LM curves and how
they combine to generate the
aggregate demand curve
5.17.f
explain the IS and LM curves and how
they combine to generate the aggregate
demand curve
Economics 5.17.gexplain the aggregate supply curve in
the short run and long run5.17.g
explain the aggregate supply curve in
the short run and long run
Economics 5.17.h
explain causes of movements along and
shifts in aggregate demand and supply
curves
5.17.h
explain causes of movements along and
shifts in aggregate demand and supply
curves
Economics 5.17.i
describe how fluctuations in aggregatedemand and aggregate supply cause
short-run changes in the economy and
the business cycle
5.17.i
describe how fluctuations in aggregatedemand and aggregate supply cause
short-run changes in the economy and
the business cycle
Economics 5.17.j
distinguish between the following types
of macroeconomic equilibria: long-run
full employment, short-run
recessionary gap, short-run inflationary
gap, and short-run stagflation
5.17.j
distinguish between the following types
of macroeconomic equilibria: long-run
full employment, short-run recessionary
gap, short-run inflationary gap, and
short-run stagflation
Economics 5.17.k
explain how a short-run
macroeconomic equilibrium may occur
at a level above or below fullemployment
5.17.kexplain how a short-run macroeconomic
equilibrium may occur at a level aboveor below full employment
Economics 5.17.l
analyze the effect of combined changes
in aggregate supply and demand on the
economy
5.17.l
analyze the effect of combined changes
in aggregate supply and demand on the
economy
Economics 5.17.mdescribe sources, measurement, and
sustainability of economic growth5.17.m
describe sources, measurement, and
sustainability of economic growth
Economics 5.17.n
describe the production function
approach to analyzing the sources of
economic growth
5.17.n
describe the production function
approach to analyzing the sources of
economic growth
Economics 5.17.o
distinguish between input growth and
growth of total factor productivity as
components of economic growth
5.17.o
distinguish between input growth and
growth of total factor productivity as
components of economic growth
Economics 5.18.adescribe the business cycle and its
phases5.18.a
describe the business cycle and its
phases
Economics 5.18.b
describe how resource use, housing
sector activity, and external trade
sector activity vary as an economy
moves through the business cycle
5.18.b
describe how resource use, housing
sector activity, and external trade sector
activity vary as an economy moves
through the business cycle
Economics 5.18.c describe theories of the business cycle 5.18.c describe theories of the business cycle
Economics 5.18.ddescribe types of unemployment and
measures of unemployment5.18.d
describe types of unemployment and
measures of unemployment
Economics 5.18.e
explain inflation, hyperinflation,
disinflation, and deflation 5.18.e
explain inflation, hyperinflation,
disinflation, and deflation
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Economics 5.18.f explain the construction of indices used
to measure inflation5.18.f
explain the construction of indices used
to measure inflation
Economics 5.18.gcompare inflation measures, including
their uses and limitations5.18.g
compare inflation measures, including
their uses and limitations
Economics 5.18.hdistinguish between cost-push and
demand-pull inflation5.18.h
distinguish between cost-push and
demand-pull inflation
Economics 5.18.idescribe economic indicators, including
their uses and limitations5.18.i
describe economic indicators, including
their uses and limitations
Economics 5.19.a compare monetary and fiscal policy 5.19.a compare monetary and fiscal policy
Economics 5.19.bdescribe functions and definitions of
money5.19.b
describe functions and definitions of
money
Economics 5.19.c explain the money creation process 5.19.c explain the money creation process
Economics 5.19.ddescribe theories of the demand for
and supply of money5.19.d
describe theories of the demand for and
supply of money
Economics 5.19.e describe the Fisher effect 5.19.e describe the Fisher effect
Economics 5.19.f describe roles and objectives of central
banks5.19.f
describe roles and objectives of central
banks
Economics 5.19.gcontrast the costs of expected and
unexpected inflation5.19.g
contrast the costs of expected and
unexpected inflation
Economics 5.19.h describe tools used to implementmonetary policy 5.19.h describe tools used to implementmonetary policy
Economics 5.19.idescribe the monetary transmission
mechanism5.19.i
describe the monetary transmission
mechanism
Economics 5.19.jdescribe qualities of effective central
banks5.19.j
describe qualities of effective central
banks
Economics 5.19.k
explain the relationships between
monetary policy and economic growth,
inflation, interest, and exchange rates
5.19.k
explain the relationships between
monetary policy and economic growth,
inflation, interest, and exchange rates
Economics 5.19.l
contrast the use of inflation, interest
rate, and exchange rate targeting by
central banks
5.19.l
contrast the use of inflation, interest
rate, and exchange rate targeting by
central banks
Economics 5.19.mdetermine whether a monetary policy is
expansionary or contractionary5.19.m
determine whether a monetary policy is
expansionary or contractionary
Economics 5.19.n describe limitations of monetary policy 5.19.n describe limitations of monetary policy
Economics 5.19.odescribe roles and objectives of fiscal
policy5.19.o
describe roles and objectives of fiscal
policy
Economics 5.19.pdescribe tools of fiscal policy, including
their advantages and disadvantages5.19.p
describe tools of fiscal policy, including
their advantages and disadvantages
Economics 5.19.q
describe the arguments about whether
the size of a national debt relative to
GDP matters
5.19.q
describe the arguments about whether
the size of a national debt relative to
GDP matters
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Economics 5.19.r explain the implementation of fiscal
policy and difficulties of implementation
5.19.r explain the implementation of fiscal
policy and difficulties of implementation
Economics 5.19.sdetermine whether a fiscal policy is
expansionary or contractionary5.19.s
determine whether a fiscal policy is
expansionary or contractionary
Economics 5.19.texplain the interaction of monetary and
fiscal policy5.19.t
explain the interaction of monetary and
fiscal policy
Economics 6.20.acompare gross domestic product and
gross national product
6.20.acompare gross domestic product and
gross national product
Economics 6.20.bdescribe benefits and costs of
international trade6.20.b
describe benefits and costs of
international trade
Economics 6.20.cdistinguish between comparative
advantage and absolute advantage6.20.c
distinguish between comparative
advantage and absolute advantage
Economics 6.20.d
explain the Ricardian and
Heckscher–Ohlin models of trade and
the source(s) of comparative advantage
in each model
6.20.d
explain the Ricardian and
Heckscher–Ohlin models of trade and
the source(s) of comparative advantage
in each model
Economics 6.20.e
compare types of trade and capital
restrictions and their economic
implications
6.20.e
compare types of trade and capital
restrictions and their economic
implications
Economics 6.20.f
explain motivations for and advantages
of trading blocs, common markets, and
economic unions
6.20.f
explain motivations for and advantages
of trading blocs, common markets, and
economic unions
Economics 6.20.gdescribe common objectives of capital
restrictions imposed by governments6.20.g
describe common objectives of capital
restrictions imposed by governments
Economics 6.20.hdescribe the balance of payments
accounts including their components6.20.h
describe the balance of payments
accounts including their components
Economics 6.20.i
explain how decisions by consumers,
firms, and governments affect the
balance of payments
6.20.i
explain how decisions by consumers,
firms, and governments affect the
balance of payments
Economics 6.20.j
describe functions and objectives of the
international organizations that
facilitate trade, including the World
Bank, the International Monetary Fund,
and the World Trade Organization
6.20.j
describe functions and objectives of the
international organizations that facilitate
trade, including the World Bank, the
International Monetary Fund, and the
World Trade Organization
Economics 6.21.a
define an exchange rate, and
distinguish between nominal and real
exchange rates and spot and forward
exchange rates
6.21.a
define an exchange rate, and
distinguish between nominal and real
exchange rates and spot and forward
exchange rates
Economics 6.21.bdescribe functions of and participants in
the foreign exchange market6.21.b
describe functions of and participants in
the foreign exchange market
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Economics 6.21.c
calculate and interpret the percentage
change in a currency relative to
another currency
6.21.c
calculate and interpret the percentage
change in a currency relative to another
currency
Economics 6.21.dcalculate and interpret currency cross-
rates6.21.d
calculate and interpret currency cross-
rates
Economics 6.21.e
convert forward quotations expressed
on a points basis or in percentage
terms into an outright forward
quotation
6.21.econvert forward quotations expressed
on a points basis or in percentage terms
into an outright forward quotation
Economics 6.21.f
explain the arbitrage relationship
between spot rates, forward rates, and
interest rates
6.21.f
explain the arbitrage relationship
between spot rates, forward rates, and
interest rates
Economics 6.21.gcalculate and interpret a forward
discount or premium6.21.g
calculate and interpret a forward
discount or premium
Economics 6.21.h
calculate and interpret the forward rate
consistent with the spot rate and the
interest rate in each currency
6.21.h
calculate and interpret the forward rate
consistent with the spot rate and the
interest rate in each currency
Economics 6.21.i describe exchange rate regimes 6.21.i describe exchange rate regimes
Economics 6.21.j
explain the effects of exchange rates on
countries’ international trade andcapital flows 6.21.j
explain the effects of exchange rates on
countries’ international trade and capitalflows
Financial
Reporting7.22.a
describe the roles of financial reporting
and financial statement analysis7.22.a
describe the roles of financial reporting
and financial statement analysis
Financial
Reporting7.22.b
describe the roles of the key financial
statements (statement of financial
position, statement of comprehensive
income, statement of changes in
equity, and statement of cash flows) in
evaluating a company’s performance
and financial position
7.22.b
describe the roles of the statement of
financial position, statement of
comprehensive income, statement of
changes in equity, and statement of
cash flows in evaluating a company’s
performance and financial position
Wording
Change
Financial
Reporting7.22.c
describe the importance of financial
statement notes and supplementary
information—including disclosures of
accounting policies, methods, and
estimates— and management’s
commentary
7.22.c
describe the importance of financial
statement notes and supplementary
information—including disclosures of
accounting policies, methods, and
estimates— and management’s
commentary
Financial
Reporting7.22.d
describe the objective of audits of
financial statements, the types of audit
reports, and the importance of effective
internal controls
7.22.d
describe the objective of audits of
financial statements, the types of audit
reports, and the importance of effective
internal controls
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Financial
Reporting7.22.e
identify and describe information
sources that analysts use in financial
statement analysis besides annual
financial statements and supplementary
information
7.22.e
identify and describe information
sources that analysts use in financial
statement analysis besides annual
financial statements and supplementary
information
Financial
Reporting7.22.f
describe the steps in the financial
statement analysis framework7.22.f
describe the steps in the financial
statement analysis framework
Financial
Reporting 7.23.a
describe how business activities are
classified for financial reportingpurposes
New
Financial
Reporting7.23.a
explain the relationship of financial
statement elements and accounts, and
classify accounts into the financial
statement elements
7.23.b
explain the relationship of financial
statement elements and accounts, and
classify accounts into the financial
statement elements
Financial
Reporting7.23.b
explain the accounting equation in its
basic and expanded forms7.23.c
explain the accounting equation in its
basic and expanded forms
Financial
Reporting7.23.c
describe the process of recording
business transactions using an
accounting system based on the
accounting equation
7.23.d
describe the process of recording
business transactions using an
accounting system based on the
accounting equationFinancial
Reporting7.23.d
describe the need for accruals and
other adjustments in preparing
financial statements
7.23.e
describe the need for accruals and
valuation adjustments in preparing
financial statements
Wording
Change
Financial
Reporting7.23.e
describe the relationships among the
income statement, balance sheet,
statement of cash flows, and statement
of owners’ equity
7.23.f
describe the relationships among the
income statement, balance sheet,
statement of cash flows, and statement
of owners’ equity
Financial
Reporting7.23.f
describe the flow of information in an
accounting system7.23.g
describe the flow of information in an
accounting system
Financial
Reporting7.23.g
describe the use of the results of the
accounting process in security analysis7.23.h
describe the use of the results of the
accounting process in security analysis
Financial
Reporting7.24.a
describe the objective of financial
statements and the importance of
financial reporting standards in security
analysis and valuation
7.24.a
describe the objective of financial
statements and the importance of
financial reporting standards in security
analysis and valuation
Financial
Reporting7.24.b
describe roles and desirable attributes
of financial reporting standard-setting
bodies and regulatory authorities in
establishing and enforcing reporting
standards, and describe the role of the
International Organization of Securities
Commissions
7.24.b
describe roles and desirable attributes
of financial reporting standard-setting
bodies and regulatory authorities in
establishing and enforcing reporting
standards, and describe the role of the
International Organization of Securities
Commissions
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Financial
Reporting7.24.c
describe the status of global
convergence of accounting standards
and ongoing barriers to developing one
universally accepted set of financial
reporting standards
7.24.c
describe the status of global
convergence of accounting standards
and ongoing barriers to developing one
universally accepted set of financial
reporting standards
FinancialReporting
7.24.d
describe the International Accounting
Standards Board’s conceptual
framework, including the objective and
qualitative characteristics of financialstatements, required reporting
elements, and constraints and
assumptions in preparing financial
statements
7.24.d
describe the International Accounting
Standards Board’s conceptual
framework, including the objective and
qualitative characteristics of financialstatements, required reporting
elements, and constraints and
assumptions in preparing financial
statements
Financial
Reporting7.24.e
describe general requirements for
financial statements under
International Financial Reporting
Standards (IFRS)
7.24.edescribe general requirements for
financial statements under International
Financial Reporting Standards (IFRS)
Financial
Reporting 7.24.f
compare key concepts of financial
reporting standards under IFRS and USgenerally accepted accounting
principles (US GAAP) reporting systems
7.24.f
compare key concepts of financial
reporting standards under IFRS and USgenerally accepted accounting principles
(US GAAP) reporting systems
Financial
Reporting7.24.g
identify characteristics of a coherent
financial reporting framework and the
barriers to creating such a framework
7.24.g
identify characteristics of a coherent
financial reporting framework and the
barriers to creating such a framework
Financial
Reporting7.24.h
describe implications for financial
analysis of differing financial reporting
systems and the importance of
monitoring developments in financial
reporting standards
7.24.h
describe implications for financial
analysis of differing financial reporting
systems and the importance of
monitoring developments in financial
reporting standards
Financial
Reporting 7.24.ianalyze company disclosures of
significant accounting policies 7.24.ianalyze company disclosures of
significant accounting policies
Financial
Reporting8.25.a
describe the components of the income
statement and alternative presentation
formats of that statement
8.25.a
describe the components of the income
statement and alternative presentation
formats of that statement
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Financial
Reporting8.25.b
describe general principles of revenue
recognition and accrual accounting,
specific revenue recognition
applications (including accounting for
long-term contracts, installment sales,
barter transactions, gross and net
reporting of revenue), and implications
of revenue recognition principles for
financial analysis
8.25.b
describe general principles of revenue
recognition and accrual accounting,
specific revenue recognition applications
(including accounting for long-term
contracts, installment sales, barter
transactions, gross and net reporting of
revenue), and implications of revenue
recognition principles for financial
analysisFinancial
Reporting8.25.c
calculate revenue given information
that might influence the choice of
revenue recognition method
8.25.c
calculate revenue given information that
might influence the choice of revenue
recognition method
Financial
Reporting8.25.d
describe key aspects of the converged
accounting standards issued by the
International Accounting Standards
Board and Financial Accounting
Standards Board in May 2014
New
Financial
Reporting 8.25.d
describe general principles of expense
recognition, specific expense
recognition applications, andimplications of expense recognition
choices for financial analysis
8.25.e
describe general principles of expense
recognition, specific expense recognition
applications, and implications ofexpense recognition choices for financial
analysis
Financial
Reporting8.25.e
describe the financial reporting
treatment and analysis of non-recurring
items (including discontinued
operations, extraordinary items,
unusual or infrequent items) and
changes in accounting standards
8.25.f
describe the financial reporting
treatment and analysis of non-recurring
items (including discontinued
operations, extraordinary items,
unusual or infrequent items) and
changes in accounting policies
Wording
Change
Financial
Reporting8.25.f
distinguish between the operating and
non-operating components of the
income statement
8.25.g
distinguish between the operating and
non-operating components of the
income statement
Financial
Reporting8.25.g
describe how earnings per share is
calculated and calculate and interpret a
company’s earnings per share (both
basic and diluted earnings per share)
for both simple and complex capital
structures
8.25.h
describe how earnings per share is
calculated and calculate and interpret a
company’s earnings per share (both
basic and diluted earnings per share)
for both simple and complex capital
structures
Financial
Reporting8.25.h
distinguish between dilutive and
antidilutive securities, and describe the
implications of each for the earnings
per share calculation
8.25.i
distinguish between dilutive and
antidilutive securities, and describe the
implications of each for the earnings per
share calculation
Financial
Reporting 8.25.i
convert income statements to common-
size income statements 8.25.j
convert income statements to common-
size income statements
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Financial
Reporting8.25.j
evaluate a company’s financial
performance using common-size
income statements and financial ratios
based on the income statement
8.25.k
evaluate a company’s financial
performance using common-size income
statements and financial ratios based on
the income statement
Financial
Reporting8.25.k
describe, calculate, and interpret
comprehensive income8.25.l
describe, calculate, and interpret
comprehensive income
Financial
Reporting8.25.l
describe other comprehensive income,
and identify major types of items
included in it
8.25.m
describe other comprehensive income,
and identify major types of items
included in itFinancial
Reporting8.26.a
describe the elements of the balance
sheet: assets, liabilities, and equity8.26.a
describe the elements of the balance
sheet: assets, liabilities, and equity
Financial
Reporting8.26.b
describe uses and limitations of the
balance sheet in financial analysis8.26.b
describe uses and limitations of the
balance sheet in financial analysis
Financial
Reporting8.26.c
describe alternative formats of balance
sheet presentation8.26.c
describe alternative formats of balance
sheet presentation
Financial
Reporting8.26.d
distinguish between current and non-
current assets, and current and non-
current liabilities
8.26.d
distinguish between current and non-
current assets, and current and non-
current liabilities
Financial
Reporting 8.26.e
describe different types of assets and
liabilities and the measurement basesof each 8.26.e
describe different types of assets and
liabilities and the measurement bases ofeach
Financial
Reporting8.26.f
describe the components of
shareholders’ equity8.26.f
describe the components of
shareholders’ equity
Financial
Reporting8.26.g
convert balance sheets to common-size
balance sheets and interpret common-
size balance sheets
8.26.g
convert balance sheets to common-size
balance sheets and interpret common-
size balance sheets
Financial
Reporting8.26.h
calculate and interpret liquidity and
solvency ratios8.26.h
calculate and interpret liquidity and
solvency ratios
Financial
Reporting8.27.a
compare cash flows from operating,
investing, and financing activities and
classify cash flow items as relating to
one of those three categories given a
description of the items
8.27.a
compare cash flows from operating,
investing, and financing activities and
classify cash flow items as relating to
one of those three categories given a
description of the items
Financial
Reporting8.27.b
describe how non-cash investing and
financing activities are reported8.27.b
describe how non-cash investing and
financing activities are reported
Financial
Reporting8.27.c
contrast cash flow statements prepared
under International Financial Reporting
Standards (IFRS) and U.S. generally
accepted accounting principles (U.S.
GAAP)
8.27.c
contrast cash flow statements prepared
under International Financial Reporting
Standards (IFRS) and U.S. generally
accepted accounting principles (U.S.
GAAP)
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Financial
Reporting8.27.d
distinguish between the direct and
indirect methods of presenting cash
from operating activities and describe
arguments in favor of each method
8.27.d
distinguish between the direct and
indirect methods of presenting cash
from operating activities and describe
arguments in favor of each method
Financial
Reporting8.27.e
describe how the cash flow statement
is linked to the income statement and
the balance sheet
8.27.e
describe how the cash flow statement is
linked to the income statement and the
balance sheet
FinancialReporting
8.27.f
describe the steps in the preparation of
direct and indirect cash flowstatements, including how cash flows
can be computed using income
statement and balance sheet data
8.27.f
describe the steps in the preparation of
direct and indirect cash flowstatements, including how cash flows
can be computed using income
statement and balance sheet data
Financial
Reporting8.27.g
convert cash flows from the indirect to
direct method8.27.g
convert cash flows from the indirect to
direct method
Financial
Reporting8.27.h
analyze and interpret both reported
and common-size cash flow statements8.27.h
analyze and interpret both reported and
common-size cash flow statements
Financial
Reporting8.27.i
calculate and interpret free cash flow to
the firm, free cash flow to equity, and
performance and coverage cash flow
ratios
8.27.i
calculate and interpret free cash flow to
the firm, free cash flow to equity, and
performance and coverage cash flow
ratiosFinancial
Reporting8.28.a
describe tools and techniques used in
financial analysis, including their uses
and limitations
8.28.a
describe tools and techniques used in
financial analysis, including their uses
and limitations
Financial
Reporting8.28.b
classify, calculate, and interpret
activity, liquidity, solvency, profitability,
and valuation ratios
8.28.b
classify, calculate, and interpret activity,
liquidity, solvency, profitability, and
valuation ratios
Financial
Reporting8.28.c describe relationships among ratios and
evaluate a company using ratio analysis
8.28.c describe relationships among ratios and
evaluate a company using ratio analysis
Financial
Reporting 8.28.d
demonstrate the application of DuPont
analysis of return on equity, and
calculate and interpret effects of
changes in its components
8.28.d
demonstrate the application of DuPont
analysis of return on equity, and
calculate and interpret effects of
changes in its components
Financial
Reporting8.28.e
calculate and interpret ratios used in
equity analysis and credit analysis8.28.e
calculate and interpret ratios used in
equity analysis and credit analysis
Financial
Reporting8.28.f
explain the requirements for segment
reporting, and calculate and interpret
segment ratios
8.28.f
explain the requirements for segment
reporting, and calculate and interpret
segment ratios
Financial
Reporting8.28.g
describe how ratio analysis and other
techniques can be used to model and
forecast earnings
8.28.g
describe how ratio analysis and other
techniques can be used to model and
forecast earnings
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Financial
Reporting9.29.a
distinguish between costs included in
inventories and costs recognised as
expenses in the period in which they
are incurred
9.29.a
distinguish between costs included in
inventories and costs recognised as
expenses in the period in which they are
incurred
Financial
Reporting9.29.b
describe different inventory valuation
methods (cost formulas)9.29.b
describe different inventory valuation
methods (cost formulas)
Financial
Reporting 9.29.c
calculate cost of sales and ending
inventory using different inventory
valuation methods and explain theeffect of the inventory valuation
method choice on gross profit
Removed
Financial
Reporting9.29.d
calculate and compare cost of sales,
gross profit, and ending inventory using
perpetual and periodic inventory
systems
9.29.c
calculate and compare cost of sales,
gross profit, and ending inventory using
different inventory valuation methods
and using perpetual and periodic
inventory systems
Combined
Financial
Reporting9.29.e
compare cost of sales, ending
inventory, and gross profit using
different inventory valuation methods
Combined
Financial
Reporting9.29.d
calculate and explain how inflation and
deflation of inventory costs affect the
financial statements and ratios of
companies that use different inventory
valuation methods
New
Financial
Reporting9.29.e
explain LIFO reserve and LIFO
liquidation and their effects on financial
statements and ratios
New
Financial
Reporting9.29.f
convert a company’s reported financial
statements from LIFO to FIFO for
purposes of comparison
New
FinancialReporting
9.29.f
describe the measurement of inventory
at the lower of cost and net realisable
value
9.29.g
describe the measurement of inventory
at the lower of cost and net realisable
value
Financial
Reporting9.29.h
describe implications of valuing
inventory at net realisable value for
financial statements and ratios
New
Financial
Reporting9.29.g
describe the financial statement
presentation of and disclosures relating
to inventories
9.29.i
describe the financial statement
presentation of and disclosures relating
to inventories
Financial
Reporting9.29.j
explain issues that analysts should
consider when examining a company’s
inventory disclosures and other sources
of information
New
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Financial
Reporting9.29.h calculate and interpret ratios used to
evaluate inventory management
9.29.k
calculate and compare ratios of
companies, including companies that
use different inventory methods
Wording
Change
Financial
Reporting9.29.l
analyze and compare the financial
statements of companies, including
companies that use different inventory
methods
New
Financial
Reporting 9.30.a
distinguish between costs that are
capitalized and costs that are expensedin the period in which they are incurred
9.30.a
distinguish between costs that are
capitalised and costs that are expensedin the period in which they are incurred
sp
Financial
Reporting9.30.b
compare the financial reporting of the
following types of intangible assets:
purchased, internally developed,
acquired in a business combination
9.30.b
compare the financial reporting of the
following types of intangible assets:
purchased, internally developed,
acquired in a business combination
Financial
Reporting9.30.c
explain and evaluate how capitalising
versus expensing costs in the period in
which they are incurred affects financial
statements and ratios
Financial
Reporting9.30.c
describe the different depreciation
methods for property, plant, and
equipment, the effect of the choice of
depreciation method on the financial
statements, and the effects of
assumptions concerning useful life and
residual value on depreciation expense
9.30.d describe the different depreciation
methods for property, plant, and
equipment and calculate depreciation
expense
Separation
Financial
Reporting9.30.d
calculate depreciation expense
9.30.e
describe how the choice of depreciation
method and assumptions concerning
useful life and residual value affect
depreciation expense, financial
statements, and ratios
Separation
Financial
Reporting9.30.e
describe the different amortization
methods for intangible assets with
finite lives, the effect of the choice of
amortization method on the financial
statements, and the effects of
assumptions concerning useful life and
residual value on amortization expense
9.30.f
describe the different amortisation
methods for intangible assets with finite
lives and calculate amortisation expense
Separation
Financial
Reporting9.30.g
describe how the choice of amortisation
method and assumptions concerning
useful life and residual value affect
amortisation expense, financial
statements, and ratios
Separation
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Financial
Reporting9.30.f
calculate amortization expense Removed
Financial
Reporting9.30.g
describe the revaluation model9.30.h
describe the revaluation model
Financial
Reporting9.30.h
explain the impairment of property,
plant, and equipment and intangible
assets
9.30.i
explain the impairment of property,
plant, and equipment and intangible
assets
Financial
Reporting 9.30.i
explain the derecognition of property,
plant, and equipment and intangibleassets
9.30.j
explain the derecognition of property,
plant, and equipment and intangibleassets
Financial
Reporting9.30.k
explain and evaluate how impairment,
revaluation, and derecognition of
property, plant, and equipment and
intangible assets affect financial
statements and ratios
New
Financial
Reporting9.30.j
describe the financial statement
presentation of and disclosures relating
to property, plant, and equipment and
intangible assets
9.30.l
describe the financial statement
presentation of and disclosures relating
to property, plant, and equipment and
intangible assets
Financial
Reporting9.30.m
analyze and interpret financial
statement disclosures regarding
property, plant, and equipment and
intangible assets
New
Financial
Reporting9.30.k
compare the financial reporting of
investment property with that of
property, plant, and equipment
9.30.n
compare the financial reporting of
investment property with that of
property, plant, and equipment
Financial
Reporting9.30.o
explain and evaluate how leasing rather
than purchasing assets affects financial
statements and ratios
New
FinancialReporting
9.30.p
explain and evaluate how finance leases
and operating leases affect financial
statements and ratios from the
perspective of both the lessor and the
lessee
New
Financial
Reporting9.31.a
describe the differences between
accounting profit and taxable income,
and define key terms, including
deferred tax assets, deferred tax
liabilities, valuation allowance, taxes
payable, and income tax expense
9.31.a
describe the differences between
accounting profit and taxable income,
and define key terms, including deferred
tax assets, deferred tax liabilities,
valuation allowance, taxes payable, and
income tax expense
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Financial
Reporting9.31.b
explain how deferred tax liabilities and
assets are created and the factors that
determine how a company’s deferred
tax liabilities and assets should be
treated for the purposes of financial
analysis
9.31.b
explain how deferred tax liabilities and
assets are created and the factors that
determine how a company’s deferred
tax liabilities and assets should be
treated for the purposes of financial
analysis
Financial
Reporting9.31.c
calculate the tax base of a company’s
assets and liabilities9.31.c
calculate the tax base of a company’s
assets and liabilities
Financial
Reporting9.31.d
calculate income tax expense, incometaxes payable, deferred tax assets, and
deferred tax liabilities, and calculate
and interpret the adjustment to the
financial statements related to a
change in the income tax rate
9.31.d
calculate income tax expense, incometaxes payable, deferred tax assets, and
deferred tax liabilities, and calculate and
interpret the adjustment to the financial
statements related to a change in the
income tax rate
Financial
Reporting9.31.e
evaluate the impact of tax rate changes
on a company’s financial statements
and ratios
9.31.e
evaluate the impact of tax rate changes
on a company’s financial statements
and ratios
Financial
Reporting9.31.f
distinguish between temporary and
permanent differences in pre-tax
accounting income and taxable income
9.31.f
distinguish between temporary and
permanent differences in pre-tax
accounting income and taxable income
Financial
Reporting9.31.g
describe the valuation allowance for
deferred tax assets—when it is required
and what impact it has on financial
statements
9.31.g
describe the valuation allowance for
deferred tax assets—when it is required
and what impact it has on financial
statements
Financial
Reporting9.31.h
explain recognition and measurement of
current and deferred tax items New
Financial
Reporting9.31.h
compare a company’s deferred tax
items Removed
FinancialReporting
9.31.i
analyze disclosures relating to deferred
tax items and the effective tax ratereconciliation, and explain how
information included in these
disclosures affects a company’s
financial statements and financial ratios
9.31.i
analyze disclosures relating to deferred
tax items and the effective tax ratereconciliation, and explain how
information included in these
disclosures affects a company’s financial
statements and financial ratios
Financial
Reporting9.31.j
identify the key provisions of and
differences between income tax
accounting under International
Financial Reporting Standards (IFRS)
and US generally accepted accounting
principles (GAAP)
9.31.j
identify the key provisions of and
differences between income tax
accounting under International Financial
Reporting Standards (IFRS) and US
generally accepted accounting principles
(GAAP)
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Topic LOS Level I - 2015 (529 LOS) LOS Level I - 2016 (549 LOS) Compared
Financial
Reporting9.32.a
determine the initial recognition, initial
measurement and subsequent
measurement of bonds
9.32.a
determine the initial recognition, initial
measurement and subsequent
measurement of bonds
Financial
Reporting9.32.b
describe the effective interest method
and calculate interest expense,
amortisation of bond
discounts/premiums, and interest
payments
9.32.b
describe the effective interest method
and calculate interest expense,
amortisation of bond
discounts/premiums, and interest
payments
FinancialReporting 9.32.c explain the derecognition of debt 9.32.c explain the derecognition of debt
Financial
Reporting9.32.d
describe the role of debt covenants in
protecting creditors9.32.d
describe the role of debt covenants in
protecting creditors
Financial
Reporting9.32.e
describe the financial statement
presentation of and disclosures relating
to debt
9.32.e
describe the financial statement
presentation of and disclosures relating
to debt
Financial
Reporting9.32.f
explain motivations for leasing assets
instead of purchasing them9.32.f
explain motivations for leasing assets
instead of purchasing them
Financial
Reporting9.32.g
distinguish between a finance lease and
an operating lease from the
perspectives of the lessor and the
lessee
9.32.g
distinguish between a finance lease and
an operating lease from the
perspectives of the lessor and the
lessee
Financial
Reporting9.32.h
determine the initial recognition, initial
measurement, and subsequent
measurement of finance leases
9.32.h
determine the initial recognition, initial
measurement, and subsequent
measurement of finance leases
Financial
Reporting9.32.i
compare the disclosures relating to
finance and operating leases9.32.i
compare the disclosures relating to
finance and operating leases
Financial
Reporting9.32.j
compare the presentation and
disclosure of defined contribution and
defined benefit pension plans
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