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1. 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).
   
   
2. 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.
   
   
3. 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.
   
   
4. 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.
   
   
5. 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.
   
   
6. 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.
   
   
7. 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.