The candidate is expected to be able to perform the following actions:

- Identify and evaluate
the risk and return characteristics of various types of investments.

- Explain the risks
to which an investor may be exposed.

- Evaluate the relationship between risk and return in the investment
markets.

- Explain the general
design features and risk characteristics of fixed income and equity
investments.

- Evaluate the risk
and return characteristics of government and corporate debt securities.

- Evaluate the
risk and return characteristics of real estate securities.

- Evaluate the risk and return characteristics of Guaranteed Investment Contracts (GICs).

- Explain the risks
to which an investor may be exposed.
- Identify how markets
operate and explain the fundamental principles of modern portfolio theory.

- Explain how individual
securities are valued and traded.

- Evaluate the risk/return
trade-off from an investor's perspective.

- Explain the term
structure of interest rates including the yield curve and pricing of
fixed income securities and spot and forward rates of interest.

- Explain the Capital
Asset Pricing model (CAPM) and its application to portfolio management.

- Discuss the properties
of the Markowitz Portfolio Selection model.

- Evaluate the
three versions of the efficient market hypothesis and explain their
application to portfolio management.

- Discuss the impact
of investment diversification upon portfolio management.

- Explain arbitrage
pricing theory and its application to portfolio management.

- Discuss the impact of behavorial finance on asset prices and financial markets.

- Explain how individual
securities are valued and traded.
- Determine how options
are priced in financial markets.

Example annotation:

*Prof. Bob Kohn at NYU's Class Notes on Derivative Securities(I took a version of this class a few years ago... there are several separate files, so I will review them again to see which ones are of interest) show the derivations of Black-Scholes and binomial tree pricing.*- Evaluate the features
and risk/return characteristics of financial derivatives including put
and call options, swaps, forwards, interest rate caps, floors and compound
options.

- Evaluate the factors
that affect the value of an option.

- Identify the principles
and applications of no arbitrage pricing models.

- Apply binomial
option pricing techniques.

- Determine how options are priced using the Black-Scholes model.

- Evaluate the features
and risk/return characteristics of financial derivatives including put
and call options, swaps, forwards, interest rate caps, floors and compound
options.
- Determine the value
of cash flow streams with embedded options.

- Calculate option-adjusted
spreads including the impact of prepay on Mortgage-Backed Securities.

- Apply option-adjusted
pricing techniques to Mortgage-Backed Securities and other financial
instruments.

- Determine the cost and price-yield relationship of an embedded option in a series of cash flows.

- Calculate option-adjusted
spreads including the impact of prepay on Mortgage-Backed Securities.
- Apply the concepts
of interest rate risk management and effective duration.

- Explain the concepts
of immunization including modern refinements and practical limitations.

- Calculate an effective duration measure using option-adjusted spread analysis.

- Explain the concepts
of immunization including modern refinements and practical limitations.
- Explain how principles
of asset liability management (ALM) impact portfolio construction and management
for institutional investors.

- Evaluate the impact
of liquidity requirements, valuation concerns, cash flow variability,
regulatory constraints and investment management mandates in developing
investment policies and strategies for insurance and other financial
companies and pension plans.

- Apply ALM principles
to the establishment of investment policy and strategy including asset
allocation.

- Determine the
impact of interest rate risk analysis on portfolio construction.

- Apply matched funding and dedicated portfolio management strategies to control interest rate risk.

- Evaluate the impact
of liquidity requirements, valuation concerns, cash flow variability,
regulatory constraints and investment management mandates in developing
investment policies and strategies for insurance and other financial
companies and pension plans.
- Identify and apply
portfolio management techniques to the ongoing investment management of
financial institution and pension fund assets.

- Explain principles
of risk-based capital management and their impact upon portfolio management.

- Apply principles
of active and passive investment management techniques to equity and
fixed income portfolios.

- Evaluate key considerations
in developing investment policies and strategies for financial institutions
and pension plans.

- Identify key
considerations in managing surplus pension funds.

- Identify and apply
the obligations of a fiduciary in managing investment portfolios.

- Describe liquidity requirements of an investor and their impact upon portfolio management.

- Explain principles
of risk-based capital management and their impact upon portfolio management.