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How Federal Reserve system & banks create money

2008-09-11T07:50:00.000-07:00

I started reading the chapter on Money and Inflation topic. In the beginning the explanation seems good and the reading is enjoyable. But when the reading hits Fed Balance Sheet and how Fed & Banks create money, that is when things started getting hazy for me. At least it can happen to people with not much financial background.

Of course the concept is easy once you know how it works. But until then you need to figure out how. So I started with a fresh mind the next morning and thankfully there are some other resources on the Internet that can help you out. Below are the two links that helped me:

http://faculty.maxwell.syr.edu/ddutkowsky/classes/ECN-481/ECN%20481%20(12),%20The%20Fed%20Balance%20Sheet.ppt - A PowerPoint presentation on "Federal reserve Balance sheet and Monetary Base determination".

http://ecedweb.unomaha.edu/ve/library/HBCM.PDF

-Nidhi

CFA exam preparation info

2008-09-07T21:04:00.000-07:00

Yay .. I signed up for the Level I exam and now I am waiting for the study material to arrive. Though I am excited about learning all the CFA stuff and reading the material, at the back of my mind I know that this is not easy. Let me give it a try anyways; if not for the exam results, I will be a better investor because of the studying for CFA exam.

In the meantime, I have been reading the cfainstitute.org website for all the material that a candidate needs to know. After reading their website, I think it might be easier to have the following list of items in one single page rather than to look for them on cfainstitute.org. Hence I just made the following notes in case I or you need to reference them later.

Candidate Preparation Toolkit - http://www.cfainstitute.org/cfaprog/resources/

CFA exam Preparation Study Tools - http://www.cfainstitute.org/cfaprog/charterholder/program/studytools.html

CFA exam preparation Tips - https://www.cfainstitute.org/cfaprog/resources/prep.html

How to study for CFA exam - https://www.cfainstitute.org/cfaprog/resources/study.html

CFA program Study sessions - http://www.cfainstitute.org/cfaprog/resources/studysessions.html

Command words used in LOS - https://www.cfainstitute.org/cfaprog/courseofstudy/commandwords.html

CFA Program Forms - http://www.cfainstitute.org/aboutus/forms/index.html

Bundled CFA program - http://www.cfainstitute.org/cfaprog/courseofstudy/bundledcurriculum.html

CFA prep providers, CFA preparation guides - http://www.cfainstitute.org/cfaprog/resources/prepcourse.html

Scholarship programs from local societies - http://www.cfainstitute.org/cfaprog/university/society_scholarship.html

CFA level I withdrawal form - http://www.cfainstitute.org/cfaprog/resources/examdetails/policies/withdrawal.html

CFA vs. MBA - Is CFA worthy?

-Nidhi

CFA or MBA - Is CFA investment worthy?

2008-07-22T22:48:00.000-07:00

Any aspiring MBA candidate trying to focus on Financial side always carries this question with him; which is worth more, MBA or CFA? or both? Is the Investment in CFA or MBA worth it?

There may not be a straight answer for everyone. Because we all have different backgrounds and we all have different focus. It all depends on where we are coming from and where we want to go.

MBA and CFA are complimentary education programs. They are not designed to be substitute for each other. MBA is a much broader program than CFA, but CFA has a specialized focus on Investment Management Business. That makes the decision easier for people with focus on finance side. That is, those who have committed to career in Finance might prefer CFA over MBA. Not everyone's situation is that clear cut. If you are still weighing your options, here are some excellent source of information to help you decide.

CFA Vs. MBA, which is best for you? A charter holder, Chad Sandstedt, has written this excellent comparison study of MBA vs. CFA. He discusses the ROI & NPV for both the programs. Yeah, better get ready with the terms if you are bracing for CFA or MBA. Definitely read through this article to distinguish both the programs.

Advantages of CFA over MBA Here is an (older but relevant) interview with Managing Director of CFA institute, Bob Johnson that has salary comparisons with and without CFA ("Our recent survey of 16,000 members of the CFA Institute showed people who have the charter typically earn 54% more than those who don’t ($180,000 vs. $116,000)." Another one is "our survey showed CFA holders with 10 years experience out-earn MBAs by 18%."

Here is another quick salary survey of CFA charter holders.

There might many more factors that you want to consider before taking the plunge, but the ones above will get you started in the right direction. I will post more as I come across them.

-Nidhi