cfa level 1 - los changes 2014 - 2015

Upload: dong-woo-kang

Post on 02-Jun-2018

217 views

Category:

Documents


0 download

TRANSCRIPT

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    1/44

    www.passingscore.net 1

    CFA Level 1 - LOS Changes 2014 - 2015

    Topic LOS Level I - 2014 (532 LOS) LOS Level I - 2015 (529 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 that

    conforms to the Code and Standards

    and conduct that violates the Code and

    Standards

    1.2.b

    distinguish between conduct that

    conforms 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.c explain the requirements for verification 1.3.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

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    2/44

    www.passingscore.net 2

    Ethics 1.4.b

    describe the scope of the GIPS

    standards with respect to an investment

    firms definition and historical

    performance record

    1.4.b

    describe the scope of the GIPS

    standards with respect to an investment

    firms definition and historical

    performance record

    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.a

    interpret interest rates as required rates

    of return, discount rates, or opportunity

    costs

    2.5.a

    interpret interest rates as required rates

    of 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.dsolve time value of money problems for

    different frequencies of compounding2.5.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 present

    value (NPV) and the internal rate of

    return (IRR) of an investment

    2.6.a

    calculate and interpret the net present

    value (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.ccalculate and interpret a holding period

    return (total return)

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    3/44

    www.passingscore.net 3

    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

    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 descriptive

    statistics and inferential statistics,

    between a population and a sample,

    and among the types of measurement

    scales

    2.7.a

    distinguish between descriptive

    statistics 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.d

    describe the properties of a data set

    presented as a histogram or a

    frequency polygon

    2.7.d

    describe the properties of a data set

    presented 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.fcalculate and interpret quartiles,

    quintiles, deciles, and percentiles2.7.f

    calculate and interpret quartiles,

    quintiles, deciles, and percentiles

    Quantitative 2.7.g

    calculate and interpret 1) a range and a

    mean absolute deviation and 2) the

    variance and standard deviation of a

    population and of a sample

    2.7.g

    calculate and interpret 1) a range and a

    mean absolute deviation and 2) the

    variance and standard deviation of a

    population and of a sample

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    4/44

    www.passingscore.net 4

    Quantitative 2.7.h

    calculate and interpret the proportion of

    observations falling within a specified

    number of standard deviations of the

    mean using Chebyshevs inequality

    2.7.h

    calculate and interpret the proportion of

    observations falling within a specified

    number of standard deviations of the

    mean using Chebyshevs 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

    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.m

    compare the use of arithmetic and

    geometric means when analyzing

    investment returns

    2.7.m

    compare the use of arithmetic and

    geometric 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.cstate the probability of an event in

    terms of odds for and against the event2.8.c

    state the probability of an event in

    terms 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 rules 2.8.eexplain 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 of

    any 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 of

    any number of independent events

    Quantitative 2.8.gdistinguish between dependent and

    independent events2.8.g

    distinguish between dependent and

    independent events

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    5/44

    www.passingscore.net 5

    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

    correlation2.8.k

    calculate and interpret covariance and

    correlation

    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 method to

    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.cinterpret a cumulative distribution

    function 3.9.cinterpret a cumulative distribution

    function

    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.gconstruct a binomial tree to describe

    stock price movement 3.9.gconstruct a binomial tree to describe

    stock price movement

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    6/44

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    7/44

    www.passingscore.net 7

    Quantitative 3.10.cdistinguish between simple random and

    stratified random sampling3.10.c

    distinguish between simple random and

    stratified random sampling

    Quantitative 3.10.ddistinguish 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 mean 3.10.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

    Quantitative 3.10.i

    describe properties of Students t-

    distribution and calculate and interpret

    its degrees of freedom

    3.10.i

    describe properties of Students 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 hypotheses3.11.b

    distinguish 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

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    8/44

    www.passingscore.net 8

    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.fexplain and interpret the p-value as it

    relates to hypothesis testing3.11.f

    explain and interpret the p-value as it

    relates 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 smallsamples 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 smallsamples when the population is

    normally or approximately distributed

    and the variance is 1) known or 2)

    unknown

    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 statistic

    and interpret the results for a

    hypothesis test concerning the mean

    difference of two normally distributed

    populations

    3.11.i

    identify the appropriate test statistic

    and 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 independent

    random 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 independent

    random 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

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    9/44

    www.passingscore.net 9

    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, momentumoscillators, sentiment, and flow of

    funds)

    3.12.e

    describe common technical analysis

    indicators (price-based, momentumoscillators, sentiment, and flow of

    funds)

    Quantitative 3.12.fexplain how technical analysts use

    cycles3.12.f

    explain how technical analysts use

    cycles

    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 such equilibria

    4.13.f

    distinguish between stable and unstable

    equilibria, including price bubbles, and

    identify 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

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    10/44

    www.passingscore.net 10

    Economics 4.13.idescribe types of auctions and calculate

    the winning price(s) of an auction4.13.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

    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.bdescribe the use of indifference curves,opportunity sets, and budget constraints

    in decision making

    4.14.bdescribe 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 consumers equilibrium

    bundle of goods based on utility

    analysis

    4.14.d

    determine a consumers equilibrium

    bundle of goods based on utility

    analysis

    Economics 4.14.ecompare substitution and income effects

    4.14.ecompare 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.a

    calculate, interpret, and compare

    accounting profit, economic profit,

    normal profit, and economic rent

    4.15.a

    calculate, interpret, and compare

    accounting 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 firms factors of production 4.15.c describe a firms 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.e

    determine and describe breakeven and

    shutdown points of production 4.15.e

    determine and describe breakeven and

    shutdown points of production

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    11/44

    www.passingscore.net 11

    Economics 4.15.fdescribe 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-costindustries and describe the long-run

    supply of each

    4.15.i

    distinguish among decreasing-cost,

    constant-cost, and increasing-costindustries 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

    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.adescribe characteristics of perfectcompetition, monopolistic competition,

    oligopoly, and pure monopoly

    4.16.adescribe characteristics of perfectcompetition, 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 firms supply function under

    each market structure4.16.c

    describe a firms 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 market structure

    4.16.e explain factors affecting long-run

    equilibrium under each market structure

    Economics 4.16.fdescribe 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

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    12/44

    www.passingscore.net 12

    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

    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.g

    explain the aggregate supply curve in

    the short run and long run 5.17.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 aggregate

    demand and aggregate supply cause

    short-run changes in the economy and

    the business cycle

    5.17.i

    describe how fluctuations in aggregate

    demand 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

    New

    Economics 5.17.j

    explain how a short-run macroeconomic

    equilibrium may occur at a level above

    or below full employment

    5.17.k

    explain how a short-run macroeconomic

    equilibrium may occur at a level above

    or below full employment

    Economics 5.17.k

    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.ldescribe sources, measurement, and

    sustainability of economic growth5.17.m

    describe sources, measurement, and

    sustainability of economic growth

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    13/44

    www.passingscore.net 13

    Economics 5.17.m

    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.n

    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.a

    describe the business cycle and its

    phases 5.18.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.eexplain inflation, hyperinflation,

    disinflation, and deflation5.18.e

    explain inflation, hyperinflation,

    disinflation, and deflation

    Economics 5.18.f

    explain the construction of indices used

    to measure inflation 5.18.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.fdescribe 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.hdescribe tools used to implement

    monetary policy5.19.h

    describe tools used to implement

    monetary policy

    Economics 5.19.idescribe the monetary transmission

    mechanism New

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    14/44

    www.passingscore.net 14

    Economics 5.19.idescribe qualities of effective central

    banks5.19.j

    describe qualities of effective central

    banks

    Economics 5.19.j

    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.k

    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.ldetermine whether a monetary policy is

    expansionary or contractionary5.19.m

    determine whether a monetary policy is

    expansionary or contractionary

    Economics 5.19.m describe limitations of monetary policy 5.19.n describe limitations of monetary policy

    Economics 5.19.ndescribe roles and objectives of fiscal

    policy5.19.o

    describe roles and objectives of fiscal

    policy

    Economics 5.19.odescribe tools of fiscal policy, including

    their advantages and disadvantages5.19.p

    describe tools of fiscal policy, including

    their advantages and disadvantages

    Economics 5.19.p

    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

    Economics 5.19.qexplain the implementation of fiscalpolicy and difficulties of implementation

    5.19.rexplain the implementation of fiscalpolicy and difficulties of implementation

    Economics 5.19.rdetermine whether a fiscal policy is

    expansionary or contractionary5.19.s

    determine whether a fiscal policy is

    expansionary or contractionary

    Economics 5.19.sexplain 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 product6.20.a

    compare 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.c

    distinguish between comparative

    advantage and absolute advantage 6.20.c

    distinguish between comparative

    advantage and absolute advantage

    Economics 6.20.d

    explain the Ricardian and

    HeckscherOhlin models of trade and

    the source(s) of comparative advantage

    in each model

    6.20.d

    explain the Ricardian and

    HeckscherOhlin 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

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    15/44

    www.passingscore.net 15

    Economics 6.20.gdescribe common objectives of capital

    restrictions imposed by governments New

    Economics 6.20.gdescribe the balance of payments

    accounts including their components6.20.h

    describe the balance of payments

    accounts including their components

    Economics 6.20.h

    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.i

    describe functions and objectives of theinternational 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 theinternational 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

    Economics 6.21.ccalculate and interpret the percentagechange in a currency relative to another

    currency

    6.21.ccalculate and interpret the percentagechange 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.econvert 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 and capital

    flows

    6.21.j

    explain the effects of exchange rates on

    countries international trade and capital

    flows

    Financial

    Reporting 7.22.a

    describe the roles of financial reporting

    and financial statement analysis 7.22.a

    describe the roles of financial reporting

    and financial statement analysis

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    16/44

    www.passingscore.net 16

    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 companys performance

    and financial position

    7.22.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 companys performance

    and financial position

    Financial

    Reporting7.22.c

    describe the importance of financialstatement notes and supplementary

    informationincluding disclosures of

    accounting policies, methods, and

    estimates and managements

    commentary

    7.22.c

    describe the importance of financialstatement notes and supplementary

    informationincluding disclosures of

    accounting policies, methods, and

    estimates and managements

    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

    Financial

    Reporting7.22.e

    identify and describe information

    sources that analysts use in financialstatement analysis besides annual

    financial statements and supplementary

    information

    7.22.e

    identify and describe information

    sources that analysts use in financialstatement 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

    Reporting7.23.a

    explain the relationship of financial

    statement elements and accounts, and

    classify accounts into the financial

    statement elements

    7.23.a

    explain the relationship of financial

    statement elements and accounts, and

    classify accounts into the financial

    statement elements

    Financial

    Reporting 7.23.b

    explain the accounting equation in its

    basic and expanded forms 7.23.b

    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.c

    describe the process of recording

    business transactions using an

    accounting system based on the

    accounting equation

    Financial

    Reporting7.23.d

    describe the need for accruals and other

    adjustments in preparing financial

    statements

    7.23.d

    describe the need for accruals and other

    adjustments in preparing financial

    statements

    Financial

    Reporting7.23.e

    describe the relationships among the

    income statement, balance sheet,

    statement of cash flows, and statement

    of owners equity

    7.23.e

    describe the relationships among the

    income statement, balance sheet,

    statement of cash flows, and statement

    of owners equity

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    17/44

    www.passingscore.net 17

    Financial

    Reporting7.23.f

    describe the flow of information in an

    accounting system7.23.f

    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.g

    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

    Financial

    Reporting

    7.24.c

    describe the status of global

    convergence of accounting standards

    and ongoing barriers to developing one

    universally accepted set of financialreporting standards

    7.24.c

    describe the status of global

    convergence of accounting standards

    and ongoing barriers to developing one

    universally accepted set of financialreporting standards

    Financial

    Reporting7.24.d

    describe the International Accounting

    Standards Boards conceptual

    framework, including the objective and

    qualitative characteristics of financial

    statements, required reporting

    elements, and constraints and

    assumptions in preparing financial

    statements

    7.24.d

    describe the International Accounting

    Standards Boards conceptual

    framework, including the objective and

    qualitative characteristics of financial

    statements, required reporting

    elements, and constraints and

    assumptions in preparing financial

    statements

    FinancialReporting

    7.24.e describe general requirements forfinancial statements under IFRS

    7.24.e

    describe general requirements for

    financial statements under InternationalFinancial Reporting Standards (IFRS)

    WordingChange

    Financial

    Reporting7.24.f

    compare key concepts of financial

    reporting standards under IFRS and

    U.S. GAAP reporting systems

    7.24.f

    compare key concepts of financial

    reporting standards under IFRS and US

    generally accepted accounting principles

    (US GAAP) reporting systems

    Wording

    Change

    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

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    18/44

    www.passingscore.net 18

    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

    Reporting7.24.i

    analyze company disclosures of

    significant accounting policies7.24.i

    analyze company disclosures of

    significant accounting policies

    Financial

    Reporting8.25.a

    describe the components of the incomestatement and alternative presentation

    formats of that statement

    8.25.adescribe the components of the incomestatement and alternative presentation

    formats of that statement

    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

    analysis

    Financial

    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 general principles of expense

    recognition, specific expense recognition

    applications, and implications of

    expense recognition choices for financial

    analysis

    8.25.d

    describe general principles of expense

    recognition, specific expense recognition

    applications, and implications of

    expense recognition choices for financial

    analysis

    FinancialReporting

    8.25.e

    describe the financial reporting

    treatment and analysis of non-recurring

    items (including discontinuedoperations, extraordinary items,

    unusual or infrequent items) and

    changes in accounting standards

    8.25.e

    describe the financial reporting

    treatment and analysis of non-recurring

    items (including discontinuedoperations, extraordinary items,

    unusual or infrequent items) and

    changes in accounting standards

    Financial

    Reporting8.25.f

    distinguish between the operating and

    non-operating components of the

    income statement

    8.25.f

    distinguish between the operating and

    non-operating components of the

    income statement

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    19/44

    www.passingscore.net 19

    Financial

    Reporting8.25.g

    describe how earnings per share is

    calculated and calculate and interpret a

    companys earnings per share (both

    basic and diluted earnings per share)

    for both simple and complex capital

    structures

    8.25.g

    describe how earnings per share is

    calculated and calculate and interpret a

    companys earnings per share (both

    basic and diluted earnings per share)

    for both simple and complex capital

    structures

    FinancialReporting

    8.25.h

    distinguish between dilutive and

    antidilutive securities, and describe theimplications of each for the earnings per

    share calculation

    8.25.h

    distinguish between dilutive and

    antidilutive securities, and describe theimplications of each for the earnings per

    share calculation

    Financial

    Reporting8.25.i

    convert income statements to common-

    size income statements8.25.i

    convert income statements to common-

    size income statements

    Financial

    Reporting8.25.j

    evaluate a companys financial

    performance using common-size income

    statements and financial ratios based on

    the income statement

    8.25.j

    evaluate a companys 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.k

    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.ldescribe other comprehensive income,and identify major types of items

    included in it

    Financial

    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

    Reporting

    8.26.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

    Reporting8.26.e

    describe different types of assets and

    liabilities and the measurement bases of

    each

    8.26.e

    describe different types of assets and

    liabilities and the measurement bases of

    each

    Financial

    Reporting8.26.f

    describe the components of

    shareholders equity8.26.f

    describe the components of

    shareholders equity

    Financial

    Reporting8.26.g analyze balance sheets and statements

    of changes in equity

    8.26.g

    convert balance sheets to common-size

    balance sheets and interpret common-

    size balance sheets

    Separation

    Financial

    Reporting

    8.26.h

    convert balance sheets to common-size

    balance sheets and interpret common-

    size balance sheets

    Separation

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    20/44

    www.passingscore.net 20

    Financial

    Reporting8.26.i

    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

    FinancialReporting

    8.27.b describe how non-cash investing andfinancing activities are reported

    8.27.b describe how non-cash investing andfinancing 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)

    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 islinked to the income statement and the

    balance sheet

    8.27.edescribe how the cash flow statement islinked to the income statement and the

    balance sheet

    Financial

    Reporting8.27.f

    describe the steps in the preparation of

    direct and indirect cash flow

    statements, 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 flow

    statements, 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

    Reporting 8.27.h

    analyze and interpret both reported and

    common-size cash flow statements 8.27.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

    ratios

    Financial

    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

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    21/44

    www.passingscore.net 21

    Financial

    Reporting8.28.c

    describe relationships among ratios and

    evaluate a company using ratio analysis8.28.c

    describe relationships among ratios and

    evaluate a company using ratio analysis

    Financial

    Reporting8.28.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

    Financial

    Reporting9.29.a

    distinguish between costs included in

    inventories and costs recognized 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

    sp

    FinancialReporting

    9.29.b describe different inventory valuationmethods (cost formulas)

    9.29.b describe different inventory valuationmethods (cost formulas)

    Financial

    Reporting9.29.c

    calculate cost of sales and ending

    inventory using different inventory

    valuation methods and explain the

    effect of the inventory valuation method

    choice on gross profit

    9.29.c

    calculate cost of sales and ending

    inventory using different inventory

    valuation methods and explain the

    effect of the inventory valuation method

    choice on gross profit

    Financial

    Reporting9.29.d

    calculate and compare cost of sales,

    gross profit, and ending inventory using

    perpetual and periodic inventory

    systems

    9.29.d

    calculate and compare cost of sales,

    gross profit, and ending inventory using

    perpetual and periodic inventory

    systems

    Financial

    Reporting9.29.e

    compare cost of sales, ending inventory,and gross profit using different

    inventory valuation methods

    9.29.ecompare cost of sales, ending inventory,and gross profit using different

    inventory valuation methods

    Financial

    Reporting9.29.f

    describe the measurement of inventory

    at the lower of cost and net realisable

    value

    9.29.f

    describe the measurement of inventory

    at the lower of cost and net realisable

    value

    Financial

    Reporting9.29.g

    describe the financial statement

    presentation of and disclosures relating

    to inventories

    9.29.g

    describe the financial statement

    presentation of and disclosures relating

    to inventories

    Financial

    Reporting9.29.h

    calculate and interpret ratios used to

    evaluate inventory management9.29.h

    calculate and interpret ratios used to

    evaluate inventory management

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    22/44

    www.passingscore.net 22

    Financial

    Reporting9.30.a

    distinguish between costs that are

    capitalized and costs that are expensed

    in the period in which they are incurred

    9.30.a

    distinguish between costs that are

    capitalized and costs that are expensed

    in the period in which they are incurred

    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

    describe the different depreciationmethods 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.c

    describe the different depreciationmethods 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

    Financial

    Reporting9.30.d

    calculate depreciation expense9.30.d

    calculate depreciation expense

    Financial

    Reporting9.30.e

    describe the different amortization

    methods for intangible assets with finite

    lives, the effect of the choice ofamortization method on the financial

    statements, and the effects of

    assumptions concerning useful life and

    residual value on amortization expense

    9.30.e

    describe the different amortization

    methods for intangible assets with finite

    lives, the effect of the choice ofamortization method on the financial

    statements, and the effects of

    assumptions concerning useful life and

    residual value on amortization expense

    Financial

    Reporting9.30.f

    calculate amortization expense9.30.f

    calculate amortization expense

    Financial

    Reporting9.30.g

    describe the revaluation model9.30.g

    describe the revaluation model

    Financial

    Reporting

    9.30.h

    explain the imparment of property,

    plant, and equipment and intangible

    assets

    9.30.h

    explain the impairment of property,

    plant, and equipment and intangible

    assets

    Financial

    Reporting9.30.i

    explain the derecognition of property,

    plant, and equipment and intangible

    assets

    9.30.i

    explain the derecognition of property,

    plant, and equipment and intangible

    assets

    Financial

    Reporting9.30.j

    describe the financial statement

    presentation of and disclosures relating

    to property, plant, and equipment and

    intangible assets

    9.30.j

    describe the financial statement

    presentation of and disclosures relating

    to property, plant, and equipment and

    intangible assets

    Financial

    Reporting9.30.k

    compare the financial reporting of

    investment property with that of

    property, plant, and equipment

    9.30.k

    compare the financial reporting of

    investment property with that of

    property, plant, and equipment

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    23/44

    www.passingscore.net 23

    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

    Financial

    Reporting9.31.b

    explain how deferred tax liabilities and

    assets are created and the factors thatdetermine how a companys 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 thatdetermine how a companys deferred

    tax liabilities and assets should be

    treated for the purposes of financial

    analysis

    Financial

    Reporting9.31.c

    calculate the tax base of a companys

    assets and liabilities9.31.c

    calculate the tax base of a companys

    assets and liabilities

    Financial

    Reporting9.31.d

    calculate income tax expense, income

    taxes payable, deferred tax assets, and

    deferred tax liabilities, and calculate and

    interpret the adjustment to the financial

    statements related to a change in theincome tax rate

    9.31.d

    calculate income tax expense, income

    taxes payable, deferred tax assets, and

    deferred tax liabilities, and calculate and

    interpret the adjustment to the financial

    statements related to a change in theincome 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 companys 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 assetswhen it is required

    and what impact it has on financial

    statements

    9.31.g

    describe the valuation allowance for

    deferred tax assetswhen it is required

    and what impact it has on financial

    statementsFinancial

    Reporting9.31.h

    compare a companys deferred tax

    items9.31.h

    compare a companys deferred tax

    items

    Financial

    Reporting9.31.i

    analyze disclosures relating to deferred

    tax items and the effective tax rate

    reconciliation, and explain how

    information included in these

    disclosures affects a companys financial

    statements and financial ratios

    9.31.i

    analyze disclosures relating to deferred

    tax items and the effective tax rate

    reconciliation, and explain how

    information included in these

    disclosures affects a companys financial

    statements and financial ratios

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    24/44

    www.passingscore.net 24

    Financial

    Reporting9.31.j

    identify the key provisions of and

    differences between income tax

    accounting under IFRS and U.S. 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)

    Wording

    Change

    Financial

    Reporting 9.32.a

    determine the initial recognition, initial

    measurement and subsequentmeasurement of bonds

    9.32.a

    determine the initial recognition, initial

    measurement and subsequentmeasurement 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

    Financial

    Reporting9.32.c

    explain the derecognition of debt9.32.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 statementpresentation of and disclosures relating

    to debt

    9.32.edescribe the financial statementpresentation of and disclosures relating

    to debt

    Financial

    Reporting9.32.f

    explain the motivations for leasing

    assets instead of purchasing them9.32.f

    explain motivations for leasing assets

    instead of purchasing them

    Wording

    Change

    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

    Reporting

    9.32.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 leasesFinancial

    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

    describe defined contribution and

    defined benefit pension plansRemoved

    Financial

    Reporting9.32.k

    compare the presentation and

    disclosure of defined contribution and

    defined benefit pension plans

    9.32.j

    compare the presentation and

    disclosure of defined contribution and

    defined benefit pension plans

    Financial

    Reporting9.32.l

    calculate and interpret leverage and

    coverage ratios9.32.k

    calculate and interpret leverage and

    coverage ratios

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    25/44

    www.passingscore.net 25

    Financial

    Reporting10.33.a

    distinguish between financial reporting

    quality and quality of reported results

    (including quality of earnings, cash flow,

    and balance sheet items)

    New

    Financial

    Reporting10.33.b

    describe a spectrum for assessing

    financial reporting quality New

    Financial

    Reporting10.33.c

    distinguish between conservative and

    aggressive accounting New

    Financial

    Reporting10.33.a

    describe incentives that might induce a

    companys executives to manage

    reported earnings, financial positions,

    and cash flows

    10.33.ddescribe motivations that might cause

    management to issue financial reports

    that are not high quality

    Wording

    Change

    Financial

    Reporting10.33.b

    describe activities that will result in a

    low quality of earnings Separation

    Financial

    Reporting10.33.c

    describe the three conditions that are

    generally present when fraud occurs,

    including the risk factors related to

    these conditions

    10.33.edescribe conditions that are conducive

    to issuing low-quality, or even

    fraudulent, financial reports

    Separation

    Financial

    Reporting10.33.f

    describe mechanisms that disciplinefinancial reporting quality and the

    potential limitations of those

    mechanisms

    New

    Financial

    Reporting10.33.g

    describe presentation choices, including

    non-GAAP measures, that could be used

    to influence an analysts opinion

    New

    Financial

    Reporting10.33.h

    describe accounting methods (choices

    and estimates) that could be used to

    manage earnings, cash flow, and

    balance sheet items

    New

    Financial

    Reporting10.33.d describe common accounting warning

    signs and methods for detecting each

    10.33.idescribe accounting warning signs andmethods for detecting manipulation of

    information in financial reports

    Wording

    Change

    Financial

    Reporting10.34.a

    describe reasons for investors to assess

    the quality of cash flow statements Removed

    Financial

    Reporting10.34.b

    analyze and describe the following ways

    to manage or manipulate the cash flow

    statement: stretching out payables,

    financing of payables, securitization of

    receivables, issuing stock options, and

    using stock buybacks

    Removed

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    26/44

    www.passingscore.net 26

    Financial

    Reporting10.35.a

    evaluate a companys past financial

    performance and explain how a

    companys strategy is reflected in past

    financial performance

    10.34.a

    evaluate a companys past financial

    performance and explain how a

    companys strategy is reflected in past

    financial performance

    Financial

    Reporting10.35.b

    forecast a companys future net income

    and cash flow10.34.b

    forecast a companys future net income

    and cash flow

    Financial

    Reporting 10.35.c

    describe the role of financial statement

    analysis in assessing the credit qualityof a potential debt investment

    10.34.c

    describe the role of financial statement

    analysis in assessing the credit qualityof a potential debt investment

    Financial

    Reporting10.35.d

    describe the use of financial statement

    analysis in screening for potential equity

    investments

    10.34.d

    describe the use of financial statement

    analysis in screening for potential equity

    investments

    Financial

    Reporting10.35.e

    explain appropriate analyst adjustments

    to a companys financial statements to

    facilitate comparison with another

    company

    10.34.e

    explain appropriate analyst adjustments

    to a companys financial statements to

    facilitate comparison with another

    company

    Corporate

    Finance11.36.a

    describe the capital budgeting process,

    including the typical steps of the

    process, and distinguish among thevarious categories of capital projects

    11.35.adescribe the capital budgeting process

    and distinguish among the variouscategories of capital projects

    Wording

    Change

    Corporate

    Finance11.36.b

    describe the basic principles of capital

    budgeting, including cash flow

    estimation

    11.35.b describe the basic principles of capital

    budgeting

    Wording

    Change

    Corporate

    Finance11.36.c

    explain how the evaluation and

    selection of capital projects is affected

    by mutually exclusive projects, project

    sequencing, and capital rationing

    11.35.c

    explain how the evaluation and

    selection of capital projects is affected

    by mutually exclusive projects, project

    sequencing, and capital rationing

    Corporate

    Finance11.36.d

    calculate and interpret the results using

    each of the following methods to

    evaluate a single capital project: netpresent value (NPV), internal rate of

    return (IRR), payback period,

    discounted payback period, and

    profitability index (PI)

    11.35.dcalculate and interpret net presentvalue (NPV), internal rate of return

    (IRR), payback period, discounted

    payback period, and profitability index

    (PI) of a single capital project

    Wording

    Change

    Corporate

    Finance11.36.e

    explain the NPV profile, compare the

    NPV and IRR methods when evaluating

    independent and mutually exclusive

    projects, and describe the problems

    associated with each of the evaluation

    methods

    11.35.e

    explain the NPV profile, compare the

    NPV and IRR methods when evaluating

    independent and mutually exclusive

    projects, and describe the problems

    associated with each of the evaluation

    methods

  • 8/10/2019 CFA Level 1 - LOS Changes 2014 - 2015

    27/44

    www.passingscore.net 27

    Corporate

    Finance11.36.f

    describe expected relations among an

    investments NPV, company value, and

    share price

    11.35.f

    describe expected relations among an

    investments NPV, company value, and

    share price

    Corporate

    Finance11.37.a

    calculate and interpret the weighted

    average cost of capital (WACC) of a

    company

    11.36.a

    calculate and interpret the weighted

    average cost of capital (WACC) of a

    company

    Corporate

    Finance11.37.b

    describe how taxes affect the cost of

    capital from different capital sources11.36.b

    describe how taxes affect the cost of

    capital from different capital sources

    Corporate

    Finance11.37.c

    explain alternative methods of

    calculating the weights used in the

    WACC, including the use of the

    companys target capital structure

    11.36.c

    describe the use of target capital

    structure in estimating WACC and how

    target capital structure weights may be

    determined

    Wording

    Change

    Corporate

    Finance11.37.d

    explain how the marginal cost of capital

    and the investment opportunity

    schedule are used to determine the

    optimal capital budget

    11.36.d

    explain how the marginal cost of capital

    and the investment opportunity

    schedule are used to determine the

    optimal capital budget

    Corporate

    Finance11.37.e

    explain the marginal cost of capitals

    role in determining the net present

    value of a project

    11.36.e

    explain the marginal cost of capitals

    role in determining the net present

    value of a project

    Corporate

    Finance11.37.f

    calculate and interpret the cost of debt

    capital using the yield-to-maturity

    approach and the debt-rating approach

    11.36.f

    calculate and interpret the cost of debt

    capital using the yield-to-maturity

    approach and the debt-rating approach

    Corporate

    Finance11.37.g

    calculate and interpret the cost of

    noncallable, nonconvertible preferred

    stock

    11.36.g

    calculate and interpret the cost of

    noncallable, nonconvertible preferred

    stock

    Corporate

    Finance11.37.h

    calculate and interpret the cost of

    equity capital using the capital asset

    pricing model approach, the dividend

    discount model approach, and the bond-

    yield-plus risk-premium approach

    11.36.h

    calculate and interpret the cost of

    equity capital using the capital asset

    pricing