CERTIFICATEIN FINANCE &TECHNOLOGY

EMPOWERING TECHNOLOGISTS

in finance

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INTRODUCTIONEmpowering technologists in finance

In the world of banking and finance never has there been more pressure on technology professionals to fully understand the business they support. Technologists face two major challenges: keeping up with rapid developments in technology and understanding the complexities of the financial markets. That’s where the Certificate in Finance and Technology (CFT) comes in.

The CFT is a pioneering, benchmark qualification, designed by expert industry practitioners to give technology professionals a unique opportunity to gain an in-depth understanding of the business they support and an accelerated ability to create valuable, relevant solutions.

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Benefits of the CFT

For more information, give us a call: EMEA: +44(0)207 183 7318 Americas and rest of the world: + 1 646 233 1085

or go to www.certfintech.org

For candidates

Build a strong foundationLearn the fundamentals of finance and technology following a unique syllabus that enables you to thoroughly understand the banking process, how technology interacts, the deeper company perspective, the wider industry movements and your role within these.

Become an expert Gain invaluable experience and real-life industry insight to help you innovate and meet your technology targets more accurately and efficiently. The CFT helps you make confident and intelligent decisions.

Show firms you mean businessDemonstrate your passion to excel. Your commitment of time and effort to attain the CFT will bring you credibility and acknowledgement that you’re serious about your role.

Fast track your career Accelerate your opportunities for more responsibility and leadership with the outstanding package of knowledge, skills, expertise and confidence gained from the CFT.

For employers

Attract top quality staffBy offering training for the CFT as part of their remuneration you will attract a higher calibre of candidate for new roles and show your dedication to investing in your staff.

Increased retentionOffering the CFT to employees improves their commitment to the firm both during their studies (which take from 18-36 months) and afterwards.

Higher skilled employeesPerhaps the most important benefit of having CFT qualified staff is they will perform better. They will understand the business better and how their role fits into the bigger picture. They are much more likely to offer opinions as they have a greater comprehension of the products and services you offer. They will work faster and more effectively.

Assess new applicantsIt is increasingly difficult to evaluate job candidates. Those holding the CFT qualification demonstrate a broad understanding of the industry and the technology skills required to support it.

AN OVERVIEW

We offer you unparalleled training in one of the most exciting and dynamic industries in the world.

To become a successful innovator in our age of ‘big data’, requires a very

specific set of skills and knowledge. These are essential in a world where

competition is fierce. Securing a technology job or moving up the ranks in an

existing role is becoming an increasing challenge.

The CFT addresses this problem head on with an outstanding programme

structure and content that prepares graduates and professionals to become

future leaders.

Our subject coverage

• Technology topics including software engineering, project management,

data science, payments technology and cryptocurrency

• Finance topics including debt, equity, derivatives and asset management

The CFT provides a forum for you to ask questions and gain invaluable opinions

and expertise. As a professional body, our expert instructors work to influence

the design and development of the latest technology platforms within financial

services. Their collective experience spans decades and our instructors either

currently work in global investment banks and technology firms or have

amassed years of experience working with these organisations.

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CFA accreditedThe CFT is an Approved Provider of continuing education programs for CFA Institute members. As a participant in the CFA Institute Approved-Provider Program, The Certificate in Finance and Technology program qualifies for 25 credit hours. If you are a CFA Institute member, CE credit for your participation in this program will be automatically recorded in your CE tracking tool. www.cfainstitute.org

CPD accreditedThe CFT is accredited by the CPD standards office. CPD Accreditation enables us to benchmark our training to ensure we remain one step ahead. Accreditation ensures that the professional standard of our qualifications are maintained. Taking the CFT, a CPD accredited program, is beneficial for career progression and enhancement. www.cpdstandards.com

ProctorUProctorU invigilates students taking the exams online using webcams and screen-sharing technology. The service gives candidates the convenience of taking the exam anywhere in the world and the CFT the ability to ensure academic integrity. ProctorU uses a patent-pending three-step process that confirms the candidate who registered for the exam is the candidate who is taking the exam and is following the CFT’s rigorous exam requirements. www.proctoru.com

ROI TrainingROI delivers customized technology and management training solutions to large corporations and government agencies around the world. ROI provides business professionals with the skills and knowledge necessary to increase work performance and drive greater return on investment for their global customers. www.roitraining.com

WileyWiley‘s Professional Development products and services include print and digital books, subscription content, e-Learning test prep, webinars and onlinecourseware. Wiley serves professionalsin specialized markets and consumersin selected categories, a strategy thatpermits product franchising and deepmarket penetration in such areas asbusiness, finance, accounting, workplacelearning, management, leadership andtechnology. www.wiley.com

ACCREDITATION AND AFFILIATION

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The CFT is divided into three Levels. You are required to study and pass each level in succession in order to gain your certification.

Each level comprises six modules that cover finance and

technology topics. The course is delivered online via our

learning portal where you have unrestricted access to:

• On demand video lectures

• Live webinar lectures

• 400+ question bank: a comprehensive collection of

questions that reinforce your learning, track your

progress and prepare you for the examination

• Worked Excel examples for you to download

• An online helpdesk

• eBooks for each subject covered

At the end of each level, you will be required to take a

two-part examination; one in finance and the other in

technology. In order to give you a thorough preparation,

each module contains multiple choice questions and

exercises to help you practice along the way.

You take the exam anywhere in the world using our

remote invigilation technology. All you need is internet

access, a webcam, and somewhere private to take the

exam.

THE CFT QUALIFICATION

If you pass, congratulations, you can apply to go onto the next level

5 Results provided 30 days after the examination

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Take the exam online anywhere in the world where you have an internet connection and a webcam using our remote proctoring/invigilation technology.

4 Take the examination

LEARNING JOURNEY

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Two sittings per year: A choice of March or September

Register for the exam up to 12 months in advance

2 Choose an exam date

Choose your level (you must take the three levels in order)

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1 Enroll

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Each level takes between 2 and 12 months to study, depending on your available time and current level of knowledge

Our online learning platform is hosted in the cloud and offers a suite of learning tools

Study online

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CFT - 3 LEVEL STRUCTURE

• Introduction to financial

services

• Debt

• Equity

• Project management

• Business analysis

• Software engineering

The CFT’s syllabus is constantly evolving to encompass the latest developments in the FinTech space.

As such the above structure is subject to improvements and modifications

• Asset management

• Risk and capital

• Data science

• Enterprise security

• Cloud computing

• Programming languages• Derivatives

• Foreign exchange

• Alternative investments

• Payments and cryptocurrency

• System architecture

• UX design

Level 1

Level 2

Level 3

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MODULE 1 THE FINANCIAL SERVICES INDUSTRY

A focused overview of the financial markets. Modules covers:

• The main players and the key regulators in the global

financial markets

• The roles that banks and financial institutions take in

the markets

• Microeconomics and macroeconomics

• The main central banks and the role they play in the

financial markets

• Financial mathematics

• The life cycle of a trade

MODULE 2 DEBT

A comprehensive overview of debt and fixed-income products traded and invested in by investment banks, asset managers and other institutional investors. Module covers:

• Debt market overview

• The main debt market participants

• The definition, methodology, uses and limitations of

money market rates

• Money market products

• Repos

• Fundamental features of bonds

• The main credit rating agencies

• Bond pricing and yields

• Bond issuance (DCM)

• Bond trading

• Securitization

LEVEL 1 IN DEPTH

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MODULE 3 EQUITY

From the fundamental features of equity through insurance, valuation and trading. This comprehensive module ensures delegates are fully conversant with one of the most fundamental of asset classes. Module covers:

• The fundamental features of equity

• Key participants in the equity markets

• Equity valuation

• Equity issuance

• Equity markets and trading

• Equity indices

MODULE 4 PROJECT MANAGEMENT

Project management is a core skill required for any professional working within infrastructure in finance. Being proficient in managing multiple projects, work-streams and people doesn’t just need a theoretical understanding of the principles, but a focus on all the practical elements involved. Module covers:

• Project fundamentals

• Project goals and objectives

• Project planning

• Scope

• Stakeholder management

• Team management

• Managing the plan during execution, control, and

monitor phases

• Closing the project

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MODULE 5 BUSINESS ANALYSIS

Technologists must understand the needs of their internal clients in order to build systems that expertly meet business objectives. Module covers:

• The role of a business analyst and their work process in

financial organizations

• The key skills and competencies required of a business

analyst

• Software development methodologies

• Solution requirements

• Needs analysis

• Scope of effort

• Techniques to analyse the business need and case

• Stakeholder management

• Elicitation

• Effective communication

• Verification and validation

MODULE 6 SOFTWARE ENGINEERING

This module will focus on the changing role of software engineering in financial services and examine the adaptions stemming from industry moves such as outsourcing and regulatory changes. Module covers:

• Introduction to software engineering in financial services

• Software development lifecycles

• Problem solving and algorithms

• Key data structures

• Programming languages

• Key properties of object orientation

• Interpreting a UML class diagram

• Data processing and storage

• Quality assurance

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THE CFT MANAGEMENT TEAM

Sanjay Bhandari, CEO Sanjay is a globally recognised leader in the technology space of financial companies. He runs training in finance and technology for the world’s leading organizations such as Credit Suisse, Nomura, RBS, Barclays and JP Morgan. Sanjay was head of technology at Fitch Learning where he helped develop finance and technology programmes for the worlds’ global investment banks. Before this, Sanjay was head of the eTrading platform at Bank of America and worked at Merrill Lynch London where he built and maintained trading and risk platforms for the rates desk.

Paul Fegan, Commercial DirectorAfter an early career in Banking working for Lloyds, Bank of Scotland and BZW Paul moved to BPP to deliver training courses for the Finance Division. Here he structured bespoke programmes for investment banks on swaps and derivatives as well as delivering public courses for the CISI qualifications. In 1998 he co-founded Absolutely Training, and as CEO led it to become the largest supplier of regulation and compliance training in the UK. He partnered with the BBA to become the market leader in anti-money laundering training. Having taken senior positions at Unicorn Training, Incisive Media and ILX Group he is now Commercial Director of CFT.

Rob Woods, CFO Rob is an accomplished financial trainer with 20 years of experience designing and delivering training programmes to firms across investment banking, sales and trading, wealth management and asset management; these include Credit Suisse, Barclays, Nomura, JP Morgan Asset Management and Terra Firma. Rob majored in computer science and qualified as an accountant and brings a unique combination of knowledge and experience that enables him to create tailored, focused course content and examinations that address the needs of technology staff within financial services companies. He is very excited to be part of the CFT senior management team, enabling the delivery this long overdue qualification.

CONTACTTo get in touch with us please email info@certfintech.org or give us a call:

EMEA: +44(0)207 183 7318 Kemp House, 152 City Road, London, UK

Americas and rest of the world: + 1 646 233 1085141 E 33rd st, NY, New York, US

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Dr Oliver Williams Oliver traded fixed income derivatives at JPMorgan and Credit Suisse from 1994 to 2004, as well being active in structuring, marketing and client educational events in the same area. Since then he has worked as a consultant to banks, brokers and asset managers – as a financial trainer and also developing trading tools. Oliver designs quantitative trading strategies for clients and has developed various computer models to identify relative-value trading opportunities. Oliver has an MPhil and PhD in Financial Economics and an MA in Computer Science and Management from Cambridge University, where he also lectures in economics, statistics and trading game theory.

Amber Israelsen Amber is a Microsoft Certified Trainer and Microsoft Certified Professional Developer with 14+ years of experience working with and teaching Microsoft technologies. She also works to bridge the gap between developers, designers and businesspeople with her expertise in visual communication, user experience and business/professional skills. For her work as a training leader, Amber received Training magazine’s 2013 Emerging Training Leader award.

David Oakes David has over 20 years of experience designing and delivering training programmes on fixed income markets, derivative securities and risk management for a wide range of clients, including investment banks, derivatives exchanges, financial market regulators and technology companies. After training as an economist, he worked as a lecturer in finance at the University of Exeter and Warwick Business School before becoming Director of Academic and Professional Education at the ICMA Centre at the University of Reading. For the past decade, he has run his own training consultancy. David has a passion to share his knowledge and experience of fixed income and derivative markets with CFT candidates.

THE CORE CFT FACULTY

Cate McCoy Cate has undertaken roles as a Project Manager, Business Analyst, and Programmerspecializing in leading Business Intelligence projects. Cate works on building learningmaterials for some of the leading financial firms such as Morgan Stanley, GoldmanSachs and RBS. She has steered technology projects through the complete softwaredevelopment life cycle with large private industry clients, non-profit clients, andgovernment clients. Cate’s unique niche is in bridging the gap between business peopleand technical people to achieve client goals.

Milko FilipovMilko is a payments expert in the areas of payment systems, card payments, e-banking and has a strong interest in innovative payment solutions and technology. Milko brings broad industry experience, having undertaken roles as Business Analyst, Business Architect and Consultant in global payments projects. Milko holds an MBA with focus on finance and strategic management from the Katz Graduate School of Business at the University of Pittsburgh. He enjoys helping technologists working for financial institutions better understand the success factors in the industry in order to provide a better banking environment.

Mark Nolan Mark brings more than 25 years of leadership in the banking sector. He has held senior roles in research and sales technology at JP Morgan and finance architecture at RBS. He has employed his expertise in architecture to implement innovative solutions in risk management and financial reporting. Mark prides himself on his ability to take a complex process and break it down into its core components to build exceptional, efficient and robust technology solutions. Mark shares his wealth of knowledge and insights with CFT students as our lead author and tutor of software engineering and data science.

CK Bhaumik CK has over 20 years of experience in software engineering and business analysis. He has delivered multiple cloud based Management Information Systems to businesses in various countries including the US, Canada and India. He has several years of experience training corporate employees in the field of Technology and Information security. He has a keen interest in new and effective coding methodologies and security.

Ali Mawji Ali has worked with global investment banks, wealth managers, fund managers and sovereign wealth funds in designing and delivering programmes for analysts, associates and more specialised courses for senior employees. Ali is a CFA charterholder and brings a wealth of experience in designing and delivering training courses on a range of professional qualifications targeted towards the banking and finance sector. He brings strong industry experience, having worked as an equity structured product derivatives salesperson at UBS Investment Bank in London. He studied Computer & Business Studies at the University of Warwick, and is looking forward to help bridge the gap between the finance and technology areas to enhance the global financial services industry.

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TESTIMONIALS

We chose CFT training because of its unique offering to combine technology and business product knowledge. The course content, training quality and the delivery method were key elements during our selection process.

Head of EMEA Finance & Risk Technology, US Investment Bank

The CFT has provided an excellent option for higher education by combining the most relevant aspects of the business. The CFT’s financial and technological applications to the industry are unparalleled. The structure of the exam allows for complete flexibility in my studies. I would recommend this exam to anyone who is looking to deepen their knowledge of finance and technology.

Product Manager, Large Financial Services Company

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LONDON Kemp House, 152 City Road, London EC1V 2NX Phone: + 44 (0)207 18 373 18

NEW YORK 444 Manhattan Ave, NY, NY, 10026 Phone: + 1 646 233 1085

GET IN TOUCH

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The Certificate in Finance and Technology

Level 1 syllabus

EFFECTIVE FROM SEPTEMBER 2015

© Certificate in Finance and Technology Ltd

Version 3.6

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ABOUT THE CFT The Certificate in Finance and Technology was created to address the need for a qualification

designed for the large number of people who work in technology roles within the financial

services sector. The flagship product, the Certificate in Finance and Technology (CFT), combines

financial and technology subjects in a syllabus designed by senior staff within the financial

services industry.

The CFT is composed of three levels.

OBJECTIVE OF THE LEVEL 1 EXAMINATION

The objective of Level 1 of the CFT is to ensure that candidates have a thorough grounding in

the workings of the financial services industry and the main debt and equity products. In

addition, the last three modules of Level 1, cover fundamental topics within the technology

space of the financial services industry.

The six modules of Level 1 provide anyone entering a technology role within financial services,

or anyone already in such a role, looking to broaden and update their skillset a targeted

solution.

The Level 1 examination consists of 210 multiple choice questions with 35 questions from each

of the six modules. Further details can be found in the Exam Structure section below. The

examination will test candidates’ knowledge and understanding of the following subject areas:

1. The financial services industry

2. Debt

3. Equity

4. Project management

5. Business analysis

6. Software engineering

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SYLLABUS STRUCTURE

The syllabus is divided into two high level subjects, finance and technology. Each one is broken

into three modules, each module into several sections and each of these into a series of

learning objectives.

Each learning objective begins with one of a number of specific words. These words enable

candidates to appreciate the level at which they will be tested.

Learning objective prefixes, with clarification:

Know - Demonstrate ability to recall a discrete fact or principle

Identify – Be able to select the most appropriate solution when presented with a number of

alternatives

Understand – Demonstrate comprehension of a fact or principle. This is a higher level of

knowledge than required for Know objectives

Apply – The highest level of comprehension, must be able to adapt facts to a scenario

Calculate – Compute the numerical answer to a problem, task or scenario, using formulae

EXAMINATION STRUCTURE

Time allowed: 4 hours total

Structure: 2 hour exam covering modules 1-3, followed by a 30 minute break and a 2 hour

exam covering module 4-6

All questions are multiple choice with four possible answers and a single correct answer

210 multiple choice questions consisting of 35 questions for each of the 6 modules detailed

above

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LEVEL 1 SYLLABUS

Module 1 - The financial services Industry

1.1 Global financial market participants

1.1.1 Understand the roles of the main players in financial markets

- Global investment banks

- Asset managers

- Hedge funds

- Insurance companies

- Private wealth managers

- Brokers

- Stock exchanges

- Regulators

1.1.2 Understand the roles that an investment bank takes in the markets

- Pricing securities

- Trading Securities

- Research

- Advice

- Prime Services

1.2 Regulation in the markets

1.2.1 Know the key regulators in the global markets

1.2.2 Understand the role of a regulator within financial markets

- market confidence

- financial stability

- consumer protection and reduction of financial crime

1.2.3 Identify the reasons for regulations and frameworks in the market place

1.2.4 Know Dodd Frank and Volcker rule

1.2.5 Know EMIR

1.2.6 Know Capital adequacy and Basel III requirements

1.3 Introduction to economics

1.3.1 Know the definition of economics

1.3.2 Understand the reasons for the study of economic data

1.4 Microeconomics

1.4.1 Understand the supply vs demand curve

1.4.2 Identify the factors that affect market equilibrium

1.4.3 Know the effect of extreme cases on the curve

1.4.4 Apply an understanding of diminishing marginal utility

1.4.5 Understand the need to maximise profits

1.4.6 Identify the key costs in a firm

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1.5 Macroeconomics

1.5.1 Know GDP as a measure of growth

1.5.2 Understand the components of GDP

- C – Consumer spending

- I – Private Domestic Investment

- G – Government Spending

- X – Exports

- M – imports

1.5.3 Identify the difference between nominal GDP and real GDP

1.5.4 Understand the terms aggregate demand and supply

1.5.5 Identify the key sources of economic growth

- Labour supply

- Human capital

- Physical capital

- Technology

- Natural resources

1.5.6 Identity the phases and terms of the business cycle:

- Peak

- Trough

- Contraction

- Expansion

- Growth

- Trend

1.5.7 Understand inflation, deflation and disinflation

1.5.8 Know how to measure inflation using price indexes such as:

- RPI

- CPI

1.5.9 Know the measures of unemployment

1.5.10 Identify the key economic indicators

1.6 Central banks

1.6.1 Know the main central banks

1.6.2 Understand the role of a central bank

1.6.3 Identify interest rates globally

1.6.4 Identify the key causes of inflation

1.6.5 Apply knowledge of interest rates as a means to controlling inflation

1.7 Financial mathematics

1.7.1 Understand the time value of money

1.7.2 Understand compounding affect

1.7.3 Calculate the Future Value of a single sum invested for a number of years at a given

rate of return

1.7.4 Calculate the Present Value of a single sum received a number of years in the future

given a discount rate

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1.7.5 Calculate the IRR/Yield/Return on an investment over a one year period given the

present value and the future value

1.8 Life cycle of a trade

1.8.1 Know the details entered for a trade

1.8.2 Identify the key roles involved in the trade life cycle

1.8.3 Know the key settlement periods for global securities

1.8.4 Understand protocols for transferring information between finance organisations

1.8.5 Understand delivery vs. payment methodology

1.8.6 Identify the key risks during the life cycle of a trade

1.8.7 Understand how to build an order book from a set of trades

1.8.8 Calculate the realised and unrealised profit and loss from a set of trades

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Module 2 – Debt

2.1 Debt market overview

2.1.1 Understand the function of debt markets

2.1.2 Know the main debt market products:

- Loans

- Bonds

- Money market instruments

2.1.3 Know the main debt market participants

- Government and public sector issuers

- Corporate issuers

- Traders

- Investors

2.1.4 Know the main debt market sectors

- Domestic bond market

- Foreign bond market

- International securities (Eurobond) market

2.2 Market rates

2.2.1 Calculate present and future values using interest rates at different compounding

frequencies

2.2.2 Calculate the effective annual rate that corresponds to a given nominal interest rate,

and vice versa

2.2.3 Know the definition of a forward interest rate

2.2.4 Understand the difference between spot and forward interest rates

2.2.5 Calculate the implied forward rate that corresponds to given spot interest rates at

different compounding frequencies

2.3 Money market instruments

2.3.1 Know the definition of a money market instruments

2.3.2 Know the main types of money market instruments and how they are used

- Cash deposits

- Certificates of deposit

- Treasury bills

- Bankers’ acceptances

- Commercial paper

- Sale and repurchase agreements (repo)

2.3.3 Calculate interest on a simple interest or money market basis

2.3.4 Calculate the redemption amount at maturity on a cash deposit

2.3.5 Understand the difference between true discount instruments and discount-to-yield

instruments

2.3.6 Calculate the settlement amount on a true discount instrument such as a Treasury

bill for a given discount rate

2.3.7 Calculate the settlement amount on a discount-to-yield instrument such as a

bankers’ acceptance or commercial paper that is trading at a given yield

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2.3.8 Calculate the yield on a true discount instrument

2.3.9 Calculate the yield that corresponds to a given discount rate and the discount rate

that corresponds to a given yield

2.3.10 Understand the definition, calculation method, uses and limitations of the following

money market interest rates

- LIBOR

- Euribor

- EONIA

- SONIA

2.4 Bond prices and accrued interest

2.4.1 Know how bond prices are quoted

2.4.2 Understand the relationship between the clean and dirty price of a bond

2.4.3 Know the main market day count conventions used to calculate accrued interest in

bonds

- Actual/Actual

- 30E/360

- 30/360

- Actual/365

2.4.4 Calculate the accrued interest and dirty price of a bond, given its clean price,

coupon rate, maturity date, settlement date and day count convention

2.4.5 Calculate the settlement amount that will be paid for a given nominal amount of a

bond, given its dirty price

2.5 Sale and repurchase agreements (repo)

2.5.1 Know the definition of a sale and repurchase agreement (repo)

2.5.2 Understand the main uses of repo

- Financing long positions in bonds

- Borrowing bonds to deliver into short positions

- Secured lending and borrowing

- Central bank use of repo in open market operations

2.5.3 Understand the nature and timing of the payments made in a repo

2.5.4 Calculate the purchase price, price differential and repurchase price in a repo used

to finance a bond, given the bond’s clean price and accrued interest and the repo

rate and term

2.5.5 Understand why a haircut or initial margin is usually applied to repo collateral

2.5.6 Calculate the purchase price in a repo, given the haircut or initial margin

2.5.7 Know the different maturity terms on which repos may be traded

- Overnight

- Term

- Open

2.5.8 Understand the difference between general collateral (GC) and special collateral

repo

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2.6 Bonds

2.6.1 Bond features

2.6.1.1 Understand the fundamental features of bonds

- Issuer

- Maturity

- Currency

- Nominal amount outstanding (issue size)

- Coupon

- Seniority and security

- Price

- Yield

2.6.1.2 Know other features of bonds

- Covenants

- Embedded options (e.g. callable, putable, convertible)

2.6.2 Bond types

2.6.2.1 Understand the main bond types:

- Fixed coupon

- Zero coupon

- Floating rate note (FRN)

- Inflation-linked

- Bonds with embedded options (e.g. callable, putable, convertible)

2.6.3 Bond price and yield

2.6.3.1 Understand why bonds of similar credit quality and remaining maturity may

trade at very different prices

2.6.3.2 Know the definition of yield to maturity

2.6.3.3 Understand the relationship between the price of a bond and its yield to

maturity

2.6.4 Credit risk and credit spreads

2.6.4.1 Know the definition of credit risk

2.6.4.2 Know the factors on which credit risk depends

2.6.4.3 Understand the relationship between credit spreads and expected loss

2.6.4.4 Know the main benchmarks relative to which credit spreads are measured

2.6.4.5 Know the main credit spread measures that are used in debt markets

- Nominal spreads

- Zero-volatility spreads (Z-spreads)

- Option-adjusted spreads (OAS)

- Asset swap margins

- Credit default swap (CDS) spreads

2.6.5 Credit analysis and credit ratings

2.6.5.1 Know the main factors considered in credit analysis

- Current and forecast macroeconomic and market environment

- Competitive situation and financial health of the company

- Special contractual features of the obligation being analyzed

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2.6.5.2 Understand how key financial ratios related to cash flow and indebtedness

(leverage) may affect credit risk

2.6.5.3 Understand how subordination affects expected recovery rates

2.6.5.4 Know the difference between affirmative and negative covenants

2.6.5.5 Understand how and why an issuer may obtain a credit rating

2.6.5.6 Know the long-term obligation ratings categories used by the main ratings

agencies

2.6.5.7 Understand the relationship between an issuer rating and an obligation rating

2.6.5.8 Know when a ratings agency may issue a ratings outlook or place a rating on

ratings watch

2.6.5.9 Know the main steps in the process by which ratings agencies assign ratings

- Analysis of risk factors relevant to the companies in the issuer’s industry

- Assigning and combining factor scores to give a preliminary rating

- Adjustments based on qualitative assessment to arrive at a final rating

2.6.5.10 Know the definition of investment grade debt

2.6.5.11 Know the main ways in which high yield debt is different from investment grade

debt

2.6.6 Convertible bonds

2.6.6.1 Understand the key convertible bond terminology

- Conversion ratio

- Conversion price

- Parity (conversion value)

- Conversion premium

- Investment value

- Investment value premium

2.6.6.2 Calculate one of the terms given in the previous learning objective when given

relevant values for the others

2.6.6.3 Understand how risk and reward in a convertible bond is affected by changes in

the stock price, interest rates and issuer credit quality

2.6.6.4 Understand why issuers issue convertible bonds

2.6.7 Securitisation

2.6.7.1 Know the motives for securitisation

2.6.7.2 Understand the elements and structure of a simple securitisation

- Originator

- Receivables to be securitised (collateral pool)

- Special Purpose Vehicle (SPV)

- Investors

2.6.7.3 Understand how economic interest in the collateral is transferred to the SPV and

why the SPV must be insolvency remote

2.6.7.4 Know the main credit enhancement techniques used in securitisation

- Over-collateralization

- Retained spread

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- Insurance

- Tranching

2.6.7.5 Know the main asset classes that may be securitised

- Mortgage loans

- Automobile loans and leases

- Credit card receivables

- Student loans

2.6.7.6 Know the difference between a whole business securitisation and a standard

securitization

2.6.8 Bond issuance

2.6.8.1 Know the definition of a primary market

2.6.8.2 Understand the key stages in the auction process by which sovereign debt is

typically issued

- Announcement

- Non-competitive and competitive bids

- Pricing

- Issuance

2.6.8.3 Understand the difference between a single-price auction and a multiple-price

auction

2.6.8.4 Know the difference between a private placement and a public issue

2.6.8.5 Understand how medium-term note (MTN) programmes are used to issue debt

securities

2.6.8.6 Know the definition of underwriting

2.6.8.7 Understand the structure of a traditional underwriting syndicate

- Lead manager(s)/Bookrunner(s)

- Co-lead manager(s)/Co-manager(s)

- Selling group

2.6.8.8 Understand the main distribution methods used in syndication

- Retention

- Pot system

2.6.8.9 Know the definition of a bought deal

2.6.8.10 Understand the purpose of a fixed price re-offer agreement

2.6.8.11 Understand the key stages in the underwriting and issuance of debt securities

based on a fully negotiated price

- Mandate

- Roadshow

- Launch date

- Closing

2.6.9 Bond trading

2.6.9.1 Understand the operation of the bond secondary market

2.6.9.2 Understand why secondary market liquidity is important

2.6.9.3 Understand why bonds have traditionally been traded in an over-the-counter

(OTC) market in which dealers quote bid and offer prices at which they are

willing to buy and sell securities

13

2.6.9.4 Know the definitions of pre-trade transparency and post-trade transparency

2.6.9.5 Understand why some market participants may prefer less transparency

2.6.9.6 Understand the factors underlying the migration of bond trading to multi-user

electronic trading platforms

14

Module 3 – Equity

3.1 Equity market overview

3.1.1 Understand the fundamental features of equity

- Nominal Value

- Issued share capital

- Ownership

- Dividends

- Voting rights

- Market value

3.1.2 Calculate the market capitalization for a company from the number of shares and

current share price

3.1.3 Calculate the return on an equity investment

3.1.4 Know the key parties in the equity markets

- Issuers

- Investors

- Brokers

- Dealers

- Market makers/Specialists

- Exchanges

- Settlement organisations

3.1.5 Understand the differences between the main equity types

- Ordinary/Common

- Preferred

- Depositary receipts

3.1.6 Depositary receipts

3.1.6.1 Know the key features of the depositary receipt structure

3.1.6.2 Understand the benefits of using depositary receipts as opposed to common

equity for both the issuer and investor

3.1.6.3 Know the difference between sponsored and unsponsored depositary receipts

3.1.6.4 Know the major markets in which depositary receipts are issued and traded

3.2 Equity valuation

3.2.1 Understand the difference between book, market and fair value of an equity

3.2.2 Know the main absolute and relative methods of equity valuation

- Dividend discount models

- Discounted free cash flow (DCF) models

- Multiple valuation methods (comparables)

- Asset based valuation methods

3.2.3 Calculate the equity value of a company given the enterprise value and other

relevant information

3.2.4 Understand the steps in undertaking a DCF valuation

- Forecast cash flows for the initial period

- Calculate the terminal value for cash flows after the initial period

15

- Calculate the weighted average cost of capital (WACC)

- Value the equity

3.2.5 Understand the steps in undertaking a comparable company valuation

- Identify the comparable companies

- Collect comparable data

- Select multiple(s)

- Value the equity

3.3 Equity issuance

3.3.1 Know the role of ECM in an initial public offer (IPO)

3.3.2 Understand the main reasons a company may go public

- Raise capital

- Allow investors to exit

- Motivate employees

- Facilitate acquisitions with stock

3.3.3 Know key reasons against going public

- Loss of control

- Increased disclosure

- Increased compliance costs

3.3.4 Understand each of the stages involved in an IPO

- The pitch

- Bank(s) selected by company as book runner(s)

- Co-manager banks selected

- Kick-off meeting

- Develop equity story

- Due diligence

- Pre-marketing

- Roadshow

- Bookbuild

- Pricing

- Allocation

- Aftermarket support including Greenshoe

3.3.5 Calculate the total number of shares issued given a market scenario using a

Greenshoe

3.4 Follow on equity issuance

3.4.1 Rights issue

3.4.1.1 Understand the key features of a rights issue

- Right subscription ratio

- Rights issue discount

3.4.1.2 Know the alternatives for an investor whose stock holding is subject to a rights

issue

3.4.1.3 Know why a company would use a rights issue as a follow on offering

16

3.4.1.4 Calculate the following for a rights issue

- Theoretical ex-rights price (TERP)

- Nil-paid price

- Discount to TERP

- Dilution under various investor decisions

3.4.1.5 Know there are a variety of different national requirements for a rights issue

3.4.2 Understand the features, limitations (including geographical) and benefits of the

following alternative follow on equity issue methods

- Accelerated book build

- Block trade

- Open offer

- Placing

- Cash box

3.5 Equity markets

3.5.1 Exchanges

3.5.1.1 Understand the purpose and function of a stock exchange

3.5.1.2 Know the major stock exchanges in the following countries

- United States

- Japan

- Europe

- United Kingdom

- Hong Kong

- China

- Canada

- India

3.5.1.3 Understand the differences between order and quote driven markets

3.5.1.4 Understand the relative advantages of open outcry versus electronic exchange

trading

3.5.1.5 Understand the growth in alternatives trading venues such as dark pools and

competing exchanges and the impact this has had on the global equity market

3.5.1.6 Understand the process of algorithmic trading including high frequency trading

and the impact it has had on the global equity market

3.5.2 Indices

3.5.2.1 Know the main uses of equity indices

3.5.2.2 Understand the difference between market, price and equal weighted indices

3.5.2.3 Understand the mechanics of an equity index in terms or rebalancing and stock

splits

3.5.2.4 Know which markets are represented by the following stock indices

- MSCI World

- S&P Global 100

- S&P 500

- EURO STOXX 50

- FTSE 100

17

- CNX Nifty

- Hang Seng

- SSE Composite Index

- Nikkei 225

18

Module 4 - Project Management

4.1 Project fundamentals

4.1.1 Understand the various natures of a project

- Time based

- Product based

4.1.2 Understand the benefits of using project management techniques

- Quantitative benefits

- Qualitative benefits

4.1.3 Understand the goal types of a project

- Project goals

- Product goals

4.1.4 Understand the difference between top down and bottom up approaches to setting

product goals

4.1.5 Understand the key documents used in project management and the purpose of each

document

- Project charter

- Business case

- Market requirements

- Product requirements

- Project plan

4.1.6 Understand the elements present in a project plan

4.2 Project and development frameworks

4.2.1 Know the key features and differences of the following popular project management

frameworks

- PMP

- PRINCE2

- Hybrid

4.2.2 Understand the value of a project management framework

4.2.3 Know the processes associated with traditional Software Development Life Cycles

(SDLCs)

- Waterfall

- V Model

4.2.4 Know the processes associated with agile SDLCs

- Scrum

- eXtreme Programming

4.2.5 Understand how SDLCs integrate with project management frameworks

4.3 Scope, stakeholders, and project teams

4.3.1 Understand the development process of project scope

4.3.2 Know the five steps in formally defining the business problem

4.3.3 Understand the structure of the scope statement

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4.3.4 Understand product scope

- Features and functionality

- Use cases

4.3.5 Know the types of project constraints

4.3.6 Understand the process of stakeholder analysis

- Defining a project stakeholder

- Setting and managing stakeholder goals and expectations

- Identify stakeholders

- Producing a stakeholder matrix

4.3.7 Understand the impact of missed stakeholders

4.3.8 Understand the project team as a stakeholder

4.3.9 Know the characteristics of a team

4.3.10 Understand the importance of effective communication

4.3.11 Calculate the number of communication channels for a project with a given number of

stakeholders.

4.3.12 Understand the different types of project communication

4.3.13 Know the importance of creating a communication plan

4.4 Creating the project plan

4.4.1 Know the tasks for the work breakdown structure (WBS)

- Three step process

- Organizing the WBS

4.4.2 Estimating work effort

4.4.2.1 Understand the process of a Fermi estimate

4.4.2.2 Calculate an estimated value using a simple three point estimation

4.4.2.3 Know the main causes of unreliable estimates

4.4.3 Network dependencies

4.4.3.1 Understand the purpose of a network precedence diagram

4.4.3.2 Know how to move from a WBS to a network diagram

4.4.3.3 Understand critical path analysis

4.4.3.4 Understand the four different dependency relationships

4.4.4 Understand the challenges of resource allocation

4.4.5 Understand the need for, and structure of, test plans

4.4.6 Understand the difference between white box vs. black box testing

4.4.7 Understand different methods of testing

- Unit testing

- Integration testing

- System testing

- Regression testing

- User acceptance testing

4.5 Managing to the plan

4.5.1 Understand the role of a project manager during execution

20

4.5.2 Understand the important monitoring points during project execution

- Scope

- Change management

- Milestones

- Releases

- Risks

4.5.3 Know the importance of monitoring risks, assumptions, issues, and dependencies

(RAID) during execution

4.5.4 Know the main risk mitigation strategies

4.5.5 Managing and motivating a team during project execution

4.5.5.1 Understand team roles and responsibilities

4.5.5.2 Understand the five stages in team development

4.6 Closing the project

4.6.1 Know when to close a project

4.6.2 Identify the 8 steps involved in closing a project

4.6.3 Know key post implementation metrics

4.6.4 Understand the importance of documenting lessons learned from the project

4.6.5 Understand the factors behind the success or failure of a project

- Project success factors

- Project challenged factors

- Project impaired factors

21

Module 5 - Business Analysis

5.1 The Business analysis framework

5.1.1 Understand the role of the business analyst

- Features and functionality

- Job titles and skills

- Project manager and project team roles

- Business analysis flow chart

5.1.2 Understand the components of requirements

5.1.3 Understand the knowledge areas within the requirements processes

- Elicit

- Analyze

- Specify

- Validate

5.1.4 Understand the roles of the BA in Software Development Life Cycles (SDLCs)

5.1.5 Know the different standards for requirement types

5.1.6 Know the four requirement categories

5.1.7 Know the nine requirement types

5.2 Requirements elicitation

5.2.1 Know the techniques used in stakeholder analysis

5.2.2 Know how to prepare for elicitation activities

5.2.3 Know the key questions used in elicitation

5.2.4 Identify the techniques of information gathering

5.2.5 Understand how to conduct elicitation interviews

5.2.6 Know how to manage stakeholder concerns

5.3 Analysis and modelling

5.3.1 Understand the analysis and modelling role of BAs

5.3.2 Know the tools used in scope analysis

- Business Context Diagrams

- Functional Decomposition Diagrams

5.3.3 Identify types of flow analysis

- Flow charts

- Process maps

5.3.4 Understand types of use case analysis

- Use cases

- Use case diagrams

5.3.5 Identify types of data analysis

- Data flow diagrams

- Entity relationship diagrams

5.3.6 Identify types of prototype analysis

- Paper prototypes

- System created prototypes

22

5.4 Specifying, user stories and use cases

5.4.1 Know the multiple styles of requirement structures

5.4.2 Understand how to write text based requirements

5.4.3 Understand how to create user stories

5.4.4 Understand how to write use case narrative descriptions

5.4.5 Know how to link requirement types to specifications

5.5 Verifying and validating

5.5.1 Know the difference between verify and validate

5.5.2 Identify standards of quality against which requirements are measured

- Standards of quality checklist

- Requirements checklist

- Peer Review

5.5.3 Understand the process of validation testing

- Testing stages

- User acceptance test

- Test case template

23

Module 6 – Software engineering

6.1 Software Development Lifecycle

6.1.1 Understand the role of Software Engineering in Financial Services

6.1.2 Understand different types of SDLC

- Waterfall

- Iterative, RAD

- Agile

6.1.3 Understand the main stages of a project lifecycle

- Initiation

- Requirements

- Design

- Development

- Testing

- Maintenance

6.1.4 Know the key roles in the SDLC

- Architect

- Business Analyst

- Developer (or Programmer)

- Operations (or Support)

- Program (or Programme) Manager

- Project Manager

- Quality Management

- Stakeholder

6.2 Problem Solving and Algorithms

6.2.1 Understand the key steps & techniques in Problem Solving

- Understand the problem

- Devise a plan

- Carry out the plan

- Check results

- Reflection and revision

6.2.2 Apply core programming concepts

- Statements, Blocks

- Variables, Constants, Assignments

- Conditions

- Loops

- Methods, Functions, Subroutines

- Comments

6.2.3 Understand key data structures

- Array

- List

- Stack, Queue

- Map, Hash Table

- Set

- Tree

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- Graph

6.2.4 Know how to evaluate algorithms using Big O notation

6.3 Programming Languages

6.3.1 Understand the key properties of object orientation

- Classes

- Encapsulation, scope

- Inheritance

- Sub-type polymorphism

- Coupling

- Composition & aggregation

- Delegation

- Abstract classes & Interfaces

6.3.2 Know how to interpret a UML class diagram

- Classes

- Associations

6.3.3 Understand the SOLID principles of Object Oriented Design

- Single Responsibility Principle

- Open Close Principle

- Liskov Substitution Principle

- Interface Segregation Principle

- Dependency Inversion Principle

6.3.4 Know the key features of Functional Programming

- First class functions

- Lambdas, closures

6.3.5 Understand the characteristics of mainstream computer languages

- Translation

- Declarative vs Imperative

- Domain-specific languages

- Type systems

- Scope

6.4 Data Processing & Storage

6.4.1 Understand the Relational Model

- Types, Columns, Rows, Tables (Domains, Attributes, Tuples, Relations)

- Keys

- Transactionality, ACID

- Conceptual Modelling

- Logical Modelling

- Physical Modelling

- Normalization

6.4.2 Understand how to interpret Entity Relationship Diagrams (ERD)

6.4.3 Understand the core SQL syntax

- Data Definition Language (DDL)

- Data Control Language (DCL)

- Data Manipulation Language (DML)

25

- Transaction Control Language

6.4.4 Apply SQL syntax to basic data processing tasks

- Simple single table queries, SELECT

- Filtering data

- Column calculations

- Multiple table queries

6.4.5 Know the principles of Object Relational Mapping (ORM)

6.4.6 Know the characteristics of different types of NoSQL data store

- Eventual Consistency

- Column

- Document

- Key-value

- Graph

- Object

- Time series

- MapReduce

6.5 Quality Management

6.5.1 Understand the parts of Software Quality Management

- Quality Control

- Quality Assurance

6.5.2 Understand the motives for having robust SQM

- Cost of change

- Maintainability

6.5.3 Understand how Software Testing fits into the SDLC

6.5.4 Understand different types of testing

- Unit Test

- Integration Test

- Acceptance Test

- Pre-release Test

- Non-functional Test

- Regression Test

6.5.5 Know common testing techniques

- Continuous Integration

- Black Box and White Box Testing

- Test doubling

- Equivalence Partitioning & Boundary Value Analysis

- User interface testing

- Test databases

The Certificate in Finance and Technology

Level 2 syllabus

EFFECTIVE FROM SEPTEMBER 2016

© Certificate in Finance and Technology Ltd

Version 2.3

ABOUT THE CFT The Certificate in Finance and Technology was created to address the need for a qualification

designed for the large number of people who work in technology roles within the financial

services sector. The flagship product, the Certificate in Finance and Technology (CFT), combines

financial and technology subjects in a syllabus designed by senior staff within the financial

services industry.

The CFT is comprised of three levels.

OBJECTIVE OF THE LEVEL 2 EXAMINATION

The objective of Level 2 of the CFT is to ensure that candidates have a thorough understanding

of financial services relating to derivatives, foreign exchange and alternative investments. In

addition, Level 2 covers the technology topics of payments and cryptocurrency, system

architecture and UX design; these are all quintessential aspects of technology present in the

financial services industry today.

The six modules of Level 2 build upon the foundation taught in Level 1 and is for those who

wish to have a comprehensive understanding of FinTech. It will benefit those who are

considering, or about to undertake, technology roles within financial services, or anyone already

in such a role, looking to broaden and update their skillset with an advanced professional

qualification solution.

The Level 2 examination consists of 210 multiple choice questions with 35 questions from each

of the six modules. Further details can be found in the Exam Structure section below. The

examination will test candidates’ knowledge and understanding of the following subject areas:

1. Derivatives

2. Foreign exchange

3. Alternative investments

4. Payments and cryptocurrency

5. System architecture

6. UX design

3

SYLLABUS STRUCTURE

The syllabus is divided into two high level subjects, finance and technology. Each one is broken

into three modules, each module into several sections and each of these into a series of

learning objectives.

Each learning objective begins with one of a number of specific words. These words enable

candidates to appreciate the level at which they will be tested.

Learning objective prefixes, with clarification:

• Know - Demonstrate ability to recall a discrete fact or principle

• Identify – Be able to select the most appropriate solution when presented with a

number of alternatives

• Understand – Demonstrate comprehension of a fact or principle. This is a higher level of

knowledge than required for Know objectives

• Apply – The highest level of comprehension, must be able to adapt facts to a scenario

• Calculate – Compute the numerical answer to a problem, task or scenario, using

formulae

EXAMINATION STRUCTURE

Time allowed: 4 hours total

Structure: 2-hour exam covering modules 1-3, followed by a 60-minute break and a 2-hour

exam covering module 4-6

All questions are multiple choice with four possible answers and a single correct answer

210 multiple choice questions in total (105 per exam paper) consisting of 35 questions for each

of the 6 modules detailed above

4

LEVEL 2 SYLLABUS

Module 1 – Derivatives

1.1 Derivative securities

1.1.1 Understand what makes a security a derivative

1.1.2 Know the main derivative security types:

- Forwards

- Futures

- Swaps

- Options

1.2 Forwards

1.2.1 Know the definition of a forward contract

1.2.2 Understand how forward prices are related to spot prices by carry

1.2.3 Know the definitions of backwardation and contango

1.2.4 Calculate a forward price for a bond, given its spot clean price and accrued interest,

the accrued interest for the forward period, and the repo rate

1.2.5 Understand how forward prices are used to calculate breakeven levels for bond trades

1.2.6 Calculate a forward exchange rate, given the spot exchange rate and money-market

interest rates in the two currencies

1.2.7 Understand how forward foreign exchange contracts are used to hedge foreign

exchange risk in international transactions and in internationally diversified portfolios

1.3 Futures

1.3.1 Know the definition of a futures contract

1.3.2 Know the main futures markets in the USA, Europe and Asia and the most important

contracts traded on them

1.3.3 Understand the role of the clearinghouse as a central counterparty in futures markets

1.3.4 Understand the functions of the following margining systems in the futures markets:

- initial and variation

- initial and maintenance

1.3.5 Calculate the forward interest rate implied by a given Eurodollar or Euribor futures

contract price

1.3.6 Calculate the initial margin, profit and loss based on daily marking to market, and

variation margin on a Eurodollar or Euribor futures position given the necessary

margin levels

1.3.7 Calculate the settlement amount in a bond futures contract, given the futures

settlement price and the conversion factor of the delivered bond

1.3.8 Understand how a bond futures price is related to the forward prices of bonds that are

deliverable into the contract

1.3.9 Understand how to identify the bond that is cheapest to deliver into a bond futures

contract and why this matters

1.3.10 Understand how bond futures are used to hedge interest rate risk

5

1.3.11 Calculate and assess the performance of strip and stack interest rate futures hedges

for a loan

1.3.12 Understand how stock index futures can be used to express views about equity prices

1.3.13 Calculate and assess the performance of a stock index futures position used as a

tactical hedge for an equity portfolio

1.3.14 Understand how physical settlement affects the pricing of commodities futures

contracts

1.3.15 Calculate and assess the performance of producer and consumer futures hedges for

commodities such as gold, copper, crude oil and natural gas

1.3.16 Understand the origin and significance of seasonality and other features of forward

commodity prices

1.4 Swaps

1.4.1 Know the payment conventions for interest rate swaps in major currencies

1.4.2 Understand why paying or receiving fixed in a swap creates exposure to interest rates

1.4.3 Understand how swap dealers use interest rate futures and bonds to hedge interest

rate risk in swaps

1.4.4 Know factors that drive swap spreads

1.4.5 Know how interest rate swaps are quoted

1.4.6 Know how payments on forward starting swaps and constant maturity swaps are

calculated and how these swaps are used

1.4.7 Know how payments on overnight index swaps (OIS) are calculated and how these

swaps are used

1.4.8 Know how tenor basis swaps and cross-currency basis swaps are quoted and how

these swaps are used

1.4.9 Understand why tenor basis swaps and cross-currency basis swaps do not trade flat

1.4.10 Know how cross-currency swaps are constructed from fixed-for-floating interest rate

swaps and cross-currency basis swaps, considering the FX basis

1.4.11 Understand how cross-currency swaps are used in swap-linked bond issuance and in

assessing cross-border relative value

1.4.12 Understand how interest rate swaps are used to manage interest rate risk in fixed-

income assets and liabilities

1.4.13 Understand how asset swap margins are calculated and used

1.4.14 Understand how swaps can be used to trade views on interest rates

1.4.15 Know how fixed-for-floating commodity swaps and commodity basis swaps are

structured and used

1.4.16 Know how zero-coupon inflation swaps are structured and used

1.4.17 Know how variance swaps are structured and

1.5 Swap Valuation: LIBOR and OIS Discounting

1.5.1 Understand why swap rates can be interpreted as LIBOR-credit-quality par yields when

swaps are priced and re-valued under LIBOR discounting

1.5.2 Calculate swap discount factors from quoted swap rates under LIBOR discounting

1.5.3 Calculate projected forward LIBORs under LIBOR discounting

6

1.5.4 Calculate the mark-to-market value of a swap position under LIBOR discounting

1.5.5 Understand why LIBOR discounting is not appropriate for derivatives positions that are

strongly collateralized, whether bilaterally or through central clearing, and why OIS

discounting is used for collateralized swaps

1.5.6 Calculate swap discount factors from OIS rates under OIS discounting

1.5.7 Calculate projected forward LIBORs under OIS discounting

1.5.8 Calculate the mark-to-market value of a swap position under OIS discounting

1.6 Option Basics

1.6.1 Know the payoffs to long and short positions in call and put options

1.6.2 Understand the implications of put-call parity

1.6.3 Calculate breakeven prices for long and short positions in call and put options

1.6.4 Understand how moneyness, volatility and time to expiry affect option values

1.6.5 Know the definitions of the option ‘Greeks’, namely

- delta

- gamma

- vega

- theta

- rho

1.6.6 Understand the role of delta in hedging options

1.6.7 Understand the relationship between option prices and expected delta hedging costs

1.6.8 Understand how the option ‘Greeks’ are affected by changes in the degree of

moneyness of the option, its time to expiry and the volatility of the underlying asset

1.6.9 Understand how the option ‘Greeks’ can be used to explain the sources of profit and

loss when using options to trade views on volatility

1.6.10 Understand how implied volatility is calculated and used

1.6.11 Understand how the implied volatility smile or skew is measured and used

1.7 Option Pricing Models

1.7.1 Understand how and why market participants use option pricing models

1.7.2 Calculate option prices implied by expected hedging costs in a one-period model

1.7.3 Understand the principles used to construct binomial option pricing models

1.7.4 Understand the basic features of the Black-Scholes option pricing model

1.8 Using Options

1.8.1 Know how payoffs to stock index options are calculated

1.8.2 Understand how stock index options can be used to construct a protective put for an

equity portfolio

1.8.3 Know how payoffs to options on single stocks are calculated

1.8.4 Understand how options on single stocks can be used to construct a covered call and

an equity collar

1.8.5 Know how payoffs to options on foreign currency are calculated

1.8.6 Understand how options on foreign currency can be used to construct contingent

hedges for foreign exchange risk

7

1.8.7 Know how payoffs to swaptions (i.e. options on forward starting interest rate swaps)

are calculated

1.8.8 Understand how swaptions can be used to construct straddles and strangles that

express views about volatility but are approximately delta neutral

1.8.9 Understand how swaptions can be used to construct risk reversals that express views

about the shape of the implied volatility smile or skew

1.9 Credit Derivatives

1.9.1 Know the counterparties and possible cash flows in a credit default swap (CDS)

1.9.2 Understand how buying or selling protection in a CDS creates exposure to credit risk

1.9.3 Know the main contractual features of CDS traded under standard documentation,

including standard maturity and coupon dates, fixed coupons, and full first coupon

1.9.4 Know the definition of par spread for a CDS

1.9.5 Understand why an upfront payment is exchanged between the protection seller and

the protection buyer in a CDS for which the par spread differs from the contractually

fixed coupon

1.9.6 Know the credit events traded in Standard North American Corporate (SNAC),

European, Standard Emerging Market (STEM) and sovereign CDS

1.9.7 Understand the cash settlement process for CDS

1.9.8 Understand how CDS on single names can be used to hedge or trade views on credit

risk

1.9.9 Understand how CDS trades are marked to market

1.9.10 Know the main credit indices on which CDS are traded

1.9.11 Understand the cash settlement and notional principle adjustment mechanisms for

CDS indices

1.9.12 Understand how CDS indices can be used to hedge or trade views on credit risk

1.10 Counterparty Risk in Derivatives

1.10.1 Know the definition of counterparty risk

1.10.2 Understand how credit limits and Credit Value Adjustment (CVA) are used to manage

counterparty risk

1.10.3 Understand how netting and collateralization are used to manage counterparty risk

1.10.4 Know the key differences between bilateral netting and collateralization under an ISDA

Master Agreement and Collateral Support Annex (CSA) and multilateral netting and

collateralization under central clearing

1.10.5 Understand why market and regulatory forces are moving much of the derivatives

market to exchange-based trading and central clearing

8

Module 2 – Foreign exchange

2.1 Foreign Exchange: An Introduction

2.1.1 Understand the concept of foreign exchange and the significance of the market

2.1.2 Know the size of the FX market and the major products

2.1.3 Understand the main players in the global foreign exchange market

2.1.4 Know the ISO codes for the major currencies

2.1.5 Know the five most active currency pairings and key global locations for FX

2.1.6 Calculate the quantity of foreign currency received in a trade give a rate and a second

currency amount

2.2 Foreign Exchange Regimes

2.2.1 Understand the types of foreign exchange regimes

2.2.2 Understand the differences between a floating and a pegged foreign exchange system

2.2.3 Understand the different types of pegged exchange rate systems

2.2.4 Understand how dollarization works as a foreign exchange regime

2.2.5 Know the role of a currency board

2.3

2.3.1 Understand transaction risk

2.3.2 Understand translation risk

2.3.3 Understand economic risk, with respect to FX

2.3.4 Understand contingent risk, with respect to FX

2.3.5 Understand how the risks can be managed or reduced

2.4 Foreign Exchange Settlement

2.4.1 Understand Herstatt Risk and the current convention of FX settlement

2.4.2 Know the role of the Continuous Linked Settlement bank

2.4.3 Know the purpose of Non-Deliverable Forwards (NDFs) and their uses

2.5 Foreign Exchange Calculations

2.5.1 Calculate a foreign currency received or paid using a bid offer spread

2.5.2 Calculate a foreign exchange quote using a cross rate

2.6 Drivers of a Foreign Exchange Quote

2.6.1 Know the fundamental macroeconomic drivers of a foreign exchange quote

2.6.2 Understand how each of the following effects the FX rate:

- Economic health of a country

- Interest rate changes

- Inflation changes

- Budget deficit

- Trade deficit

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2.6.3 Know the technical drivers of a foreign exchange quote, and explain the effect of

support and resistance lines

2.6.4 Know the features of a channel or trading range and the signal provided by a

breakout from the channel

2.6.5 Know the features of the following technical analysis tools:

- Moving averages

- MACD

- Candlestick charts

- Head and shoulders top

2.7 Foreign Exchange Forwards

2.7.1 Understand the features of an FX Forward and when it would be required

2.7.2 Calculate a forward rate using covered interest rate parity

2.7.3 Calculate a forward rate using premiums and discounts

2.7.4 Understand how an arbitrage opportunity is identified using covered interest rate

parity and forward rates

2.7.5 Understand the features of a carry trade, and the risks involved

2.7.6 Understand the mechanism of hedging through FX forwards

2.8 FX Swaps and Cross Currency Swaps

2.8.1 Know the mechanics and uses of a FX swap

2.8.2 Know the mechanics and uses of a cross currency swap

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Module 3 – Alternative investment

3.1 Overview of Alternative Investments

3.1.1 Know the definition of Alternative Investments

3.1.2 Understand why people invest in Alternatives

3.1.3 Know how Alternatives are traded

3.2 Hedge Funds

3.2.1 Know the definition of a hedge fund

3.2.2 Know the history of hedge funds

3.2.3 Understand key features of hedge fund trading:

- Leverage

- Short selling

- Role of a prime broker

- Directional trading versus arbitrage/relative-value

3.2.4 Know the main hedge fund service providers and understand their roles:

- Lawyers

- Platforms

- Prime broker

- Administrator

3.2.5 Know the main terms and conditions involved in hedge fund investing:

- Management and performance fees

- High watermarks

- Thresholds

- Gates

- Side-pockets

- Lock-ins

3.2.6 Understand the attractions of hedge funds as an alternative asset class

3.2.7 Understand risks and potential problems of hedge fund investing

3.2.8 Know key details of hedge fund failure case studies: LTCM, Madoff

3.3 Hedge Fund Strategies

3.3.1 Understand directional strategies:

- Global macro

- Long/short equity

- Emerging Markets

- Managed Futures/Systematic

3.3.2 Understand relative value strategies:

- Convertible Arbitrage

- Fixed Income Arbitrage

- Equity Market Neutral

3.3.3 Understand event-driven strategies:

- Merger arbitrage

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- Distressed

3.3.4 Understand issues involved in interpreting hedge fund indices

3.4 Private Equity

3.4.1 Know the definition of Private Equity

3.4.2 Understand the different stages of investment in each case:

- Venture Capital

- Growth

- LBO

- Special situations

3.4.3 Understand the LBO process:

- Requirements for an LBO

- Detailed steps from funding to exit

- Sources and uses of funds in an LBO

3.4.4 Understand how a manager creates value in an LBO:

- Increase earnings

- Multiple expansion

- Pay down debt

3.4.5 Understand the mechanics of private equity investing:

- Committed capital and drawdown

- Valuations mean little

- Low or negative IRR in early years (J curve)

- Fee structure and the importance of manager selection

3.4.6 Know key details of private equity case studies: Apple (venture capital) and TXU

Energy (LBO)

3.5 Commodities

3.5.1 Identify the broad categories of commodities (Metals, Energy, Agricultural)

3.5.2 Understand the portfolio characteristics of commodities

- Low correlation

- Potentially high volatility

- Zero income

3.5.3 Know the methods of investing in commodities:

- Physical

- Derivatives (futures, index products, structured products)

- Equities (in producers)

3.5.4 Understand the relationship between futures price and spot price

3.5.5 Identify backwardation and contango

3.5.6 Understand the decomposition of commodity futures returns:

- Total yield = collateral yield + roll yield/cost + spot return

3.5.7 Understand key drivers of commodity prices and alternative methods of analysis

3.5.8 Know the major products traded in energy markets

3.5.9 Know the major producers and consumers of crude oil globally

3.5.10 Understand price relationships between related commodities

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3.5.11 Know the major products traded in metals markets

3.5.12 Understand LME warrants and related data releases

3.5.13 Know the major products traded in agricultural and livestock markets

3.5.14 Know the major commodity data reports in the United States

3.6 Real Estate

3.6.1 Know the definition of real estate and identify key investable sectors

3.6.2 Know the key features of real estate investment

3.6.3 Understand the benefits and drawbacks of real estate investment

3.6.4 Understand the risk and return of real estate investment

3.6.5 Know the impact of the economic cycle on real estate

3.6.6 Know methods of investing in real estate and understand relative transaction costs,

liquidity, equity mkt correlation, real estate market correlation:

- Direct i.e. buy real estate

- Indirect

- Equities

- Real estate company shares

- REIT

- ETF

- Derivatives

- Funds

- Open ended

- Closed ended

- Private Equity

3.7 Other Alternatives

3.7.1 Know the definition of infrastructure investment

3.7.2 Know the key features of infrastructure investment

3.7.3 Understand the benefits and drawbacks of infrastructure investment

3.7.4 Know methods of investing in infrastructure

3.7.5 Know the definition of collectible investments

3.7.6 Identify the major categories of collectible investments

3.7.7 Understand the benefits and drawbacks of collectible investments

3.7.8 Know methods of investing in collectible investments

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Module 4 – Payment and cryptocurrency

4.1 Overview of the Payments Industry

4.1.1 Understand the importance and the impact of the payments industry

4.1.2 Understand the basic terminology used in the payments industry

- Payment

- Payment System

4.1.3 Identify the participants in a payment transaction

- Debtor

- Creditor

- Debtor Agent

- Creditor Agent

4.1.4 Understand the classification of payment systems

- Operator

- Settlement Method

- Frequency and Timing of Settlement

- Settlement Date

- Payment Value

- Settlement Asset

4.1.5 Identify the different types of payment transactions

- Push transactions

- Pull transactions

4.1.6 Identify the payment system models

- Open Loop Model

- Closed Loop Model

4.1.7 Apply knowledge about the processes in payment systems

- Payment Instruction

- Clearing

- Settlement

- Authentication

- Authorization

4.1.8 Know the types of biometrics authentication

- Facial Recognition

- Fingerprint Identification

- Retinal Pattern Recognition

- Iris-Based Identification

- Voice Recognition

4.1.9 Know the origins of settlement risk

4.1.10 Identify the different types of settlement risk

- Credit Risk

- Liquidity Risk

- Systematic Risk

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- Legal Risk

- Operational Risk

4.1.11 Understand the exposure to settlement risk

- Settlement Amount

- Time Lag

4.2 Electronic Funds Transfers

4.2.1 Know the characteristics of payment systems

- Designated-Time Net Settlement (DTNS)

- Real-Time Gross Settlement (RTGS)

- Hybrid System

- Integrated Systems

4.2.2 Identify the type and the characteristics of specific payment systems

4.2.3 Know the mechanisms of advanced payment systems

- Frequent Netting and Continuous Processing

- Partial Netting

- Offsetting

- Searching and Matching Facility

- Queue Management

- Reordering

- Prioritization

- Timed Payment

- Optimization

4.2.4 Identify the different types of electronic funds transfers

- Credit Transfer

- Direct Debit

4.2.5 Know the definition of a credit transfer

4.2.6 Know the roles in a credit transfer

- Originator

- Originator Bank

- Beneficiary

- Beneficiary Bank

- Intermediary Banks

- Clearing and Settlement Mechanisms

4.2.7 Understand the relationships between the actors in a credit transfer

4.2.8 Apply knowledge on the basic processing flow of a credit transfer transaction

4.2.9 Know the different types of exception handling of credit transfer

- Reject

- Return

- Recall

4.2.10 Apply knowledge on the basic processing flow of a credit transfer exception

4.2.11 Know the definition of a direct debit

4.2.12 Know the roles in a direct debit

- Creditor

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- Creditor Bank

- Debtor Bank

- Debtor

- Intermediary Banks

- Clearing and Settlement Mechanisms

4.2.13 Understand the relationships between the actors in a direct debit

4.2.14 Apply knowledge on the basic processing flow of a direct debit transaction

4.2.15 Know the different types of exception handling of direct debit

- Reject

- Refusal

- Returns

- Reversal

- Revocations

- Requests for cancellation

- Refund

4.2.16 Apply knowledge on the basic processing flow of a direct debit exception

4.3 Card Payments

4.3.1 Know the different types of payment cards

- Credit cards

- Debit cards

- Pre-paid cards

4.3.2 Understand the term timing of funding

4.3.3 Know the card products

- Charge Cards

- Corporate Cards/Purchasing Cards

- Cashback Card

- Co-branded Card/Loyalty Card

- Combo Card

- Companion Card

- Fleet Cards

- Premium Cards

- Private Label Cards

4.3.4 Identify the characteristics of the card products

4.3.5 Know the acceptance environments

- Card-present

- Card-not-present

4.3.6 Identify the card technologies

- Magnetic/Swipe Cards

- Chip EMV Cards

- Contactless Cards

4.3.7 Identify the card transaction participants

- Cardholder

- Merchant

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- Issuer

-Acquirer

- Card Scheme/Network

4.3.8 Apply an understanding of the card value chain

4.3.9 Identify the main components of the card industry

- Issuing

- Acquiring

4.3.10 Understand the types of value chain models

- Open loop network

- Closed loop network

4.3.11 Know the functions of the value chain participants

4.3.12 Know the expenses and revenues of the value chain participants

4.3.13 Understand the difference between tiered and stepped fees

4.3.14 Calculate the relevant rate of a tiered or a stepped fee

4.3.15 Understand the three-party-model and the four-party-model

4.3.16 Apply knowledge of the card transaction cycle

4.3.17 Understand the need of an interchange fee

4.3.18 Understand the need of assessment fees

4.3.19 Calculate the interchange fee and the discount rate

4.3.20 Calculate the effect of a transaction on the card payment participants

4.3.21 Know the transaction types

4.3.22 Understand the need of regulation

4.4 Alternative Payments

4.4.1 Know the definition of Alternative Payments

4.4.2 Understand the drivers for change in the payments industry

- Enabling Technology

- Drive for Integration

- New Entrants: Retailers

- Increased Security

4.4.3 Identify the types of Alternative Payments

- Online (Real-Time) Bank Transfers

- Offline Bank Transfers

- Direct Debits

- Preloaded Digital Wallet

- Pass-Through Digital Wallet

- Mobile Payments

- Pre-Paid Vouchers

- Post-Pay

4.4.4 Understand the success factors for Alternative Payments

- Real-Time

- Free/Low Cost

- Mobility

- Multi-Channel

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- Ease of Use

- Secure

- Anonymity

- Flexibility and Specialization

- Returns/Refunds

4.4.5 Identify the three domains of Alternative Payments

- Pre-Payment

- Payment

- Post-Payment

4.4.6 Identify the layers in the infrastructure of Alternative Payments

- Settlement

- Processing

- Instruments

- Services

4.4.7 Apply an understanding of the relationships and the processing flow of different types

of Alternative Payments

- Online Bank Transfers

- Preloaded Digital Wallets

- Pass-Through Digital Wallet

4.4.8 Apply knowledge on the categories of Mobile Payments

4.4.9 Identify the processes in Mobile Payments

4.4.10 Identify the technology used in Mobile Payments

- Radio Frequency Identification (RFID)

- Near Field Communication (NFC)

- Quick Response Codes (QR codes)

- Bluetooth Low Energy (BLE)

- Host Card Emulation (HCE)

4.5 Financial Messaging

4.5.1 Understand the need of financial messaging standards

4.5.2 Know how financial messages are structured

4.5.3 Identify different types of financial messages

4.5.4 Identify specific information in financial messages

4.5.5 Apply knowledge of the differences between standards for financial messages

4.5.6 Know the characteristics of a financial messaging standard

- Syntax

- Semantic

4.5.7 Identify the layers of the Three-Layered Approach of ISO 20022

- Business Model

- Logical Model

- Syntax

4.5.8 Know what Unified Modeling Language (UML) is used for

4.5.9 Understand the difference between business components and business elements

4.5.10 Understand the difference between message components and message elements

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4.5.11 Identify specific information in the business model

4.5.12 Identify specific information in the logical model

4.5.13 Understand the advantages of eXtensible Markup Language (XML)

4.5.14 Apply an understanding of the business domains of ISO 20022

4.5.15 Identify the business area codes of ISO 20022

4.5.16 Know what interoperability in the context of financial messaging means

4.5.17 Apply knowledge of mapping of financial messages

4.5.18 Know the characteristics of International Bank Account Number (IBAN)

4.5.19 Know the characteristics of Business Identifier Code (BIC)

4.6 Cryptocurrencies and Blockchain

4.6.1 Know the basic characteristics of cryptocurrencies

4.6.2 Know the functions of a bitcoin client

4.6.3 Identify different types of bitcoin clients

- Full Client

- Lightweight Client

- Web Client

- Mobile Client

4.6.4 Know the functions of a bitcoin wallet

4.6.5 Identify different types of bitcoin wallets

- Desktop Wallets

- Web Wallets

- Mobile Wallets

- Hardware Wallets

- Paper Wallets

4.6.6 Know the functions of a bitcoin address

4.6.7 Know the functions of digital keys

- Private Key

- Public Key

4.6.8 Understand the relation between digital keys and bitcoin addresses

4.6.9 Know the definition of a bitcoin transaction

4.6.10 Understand the term Unspent Transaction Output

4.6.11 Apply knowledge about the cryptocurrency transaction lifecycle

4.6.12 Understand the term Digital Signature

4.6.13 Identify the different types of bitcoin transactions

4.6.14 Know the characteristics of the bitcoin network architecture

4.6.15 Understand the difference between centralized and distributed database

4.6.16 Know the characteristics of the blockchain

4.6.17 Understand the blockchain processes

4.6.18 Know the functions of mining

4.6.19 Identify the mining rewards and their importance

4.6.20 Understand the term Decentralized Consensus

4.6.21 Apply knowledge about the Proof-of-Work

4.6.22 Identify different types of consensus mechanisms

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4.6.23 Know the advantages and disadvantages of cryptocurrencies

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Module 5 – System Architecture & Design

5.1 Introduction to Architecture

5.1.1 Understand the purpose and challenges of Enterprise Architecture

5.1.2 Know how to apply Agile Values & Principles to EA

5.1.3 Know the components of TOGAF

- Architecture Development Method (ADM)

- Architecture Content Framework

- Enterprise Continuum

5.1.4 Know the structure and approach of Zachman

- Communication Interrogatives

- Reification Transformations

5.1.5 Know the components of FEAF

- 6 Architecture Sub-domains & Artifacts

- Reference Models

- Collaborative Planning Methodology (CPM)

5.1.6 Understand Business Architecture

5.1.7 Understand Data or Information Architecture

5.1.8 Understand Application Architecture

5.1.9 Know the components of a Technical Architecture

5.2 Application Types

5.2.1 Understand different characteristics of applications

- Interactive & non-interactive

- Stateful & stateless

- Transactional & non-transactional

- Concurrent user & single user

- Connected & isolated

- Synchronous & asynchronous

5.2.2 Identify different types of application

- On-line Transaction Processing (OLTP)

- On-line Analytical Processing (OLAP)

- Service

- Daemon

- Batch

- Command Line

5.3 Architectural Patterns

5.3.1 Understand the Monolithic Architecture pattern

5.3.2 Understand Layered Architectures

5.3.3 Know the difference between Layers and Tiers

5.3.4 Understand the common Web Architectures

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5.3.5 Understand Component Driven Architectures

- Pipeline

- Service Oriented Architecture & Microservices

- Event-driven Architecture

5.3.6 Understand Distributed & Shared Nothing architectures

5.3.7 Know the difference between Cluster & Grid computing

5.3.8 Know approaches to delivering a Cloud-based Architecture

- Infrastructure as a Service

- Platform as a Service

- Software as a Service

5.3.9 Know different presentation architectures

- MVC

- MVP

- MVVM

5.4 The Unified Modeling Language (UML)

5.4.1 Understand the benefits of using models

5.4.2 Know the scope and purpose of the Unified Modeling Language (UML)

5.4.3 Know the components of UML

- Metamodel

- Semantics for each concept

- Diagram notation

- Diagram interchange format

5.4.4 Know the main shared structures of UML

- Multiplicity

- Constraints

- Comments

- Instances

- Stereotypes

- Generalization

- Realization

5.4.5 Understand the UML Class Diagram

5.4.6 Understand the UML Component Diagram

5.4.7 Know the UML Composite Structure Diagram

5.4.8 Understand the UML Use Case Diagram

5.4.9 Understand the UML Sequence Diagram

5.4.10 Understand the UML Activity Diagram

5.4.11 Understand the UML State Machine Diagram

5.5 Design Patterns

5.5.1 Understand what a Design Pattern is

5.5.2 Know when to use Design Patterns

5.5.3 Understand the main creational patterns of Object Oriented programming (OOP)

- Abstract factory

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- Builder

- Factory method

- Singleton

5.5.4 Know the Prototype creational pattern

5.5.5 Understand the main structural patterns of OOP

- Adapter

- Composite

- Decorator

- Facade

5.5.6 Know the following structural patterns:

- Bridge

- Flyweight

- Front Controller

- Marker

- Proxy

5.5.7 Understand the main behavioral patterns of OOP

- Command

- Observer

- Strategy

- Template method

5.5.8 Know the following behavioral patterns

- Chain of responsibility

- Data Access Object

- Interpreter

- Iterator

- Mediator

- Memento

- Null object

- Specification

- State

- Visitor

5.5.9 Understand these Functional programming patterns

- Recursion

- Currying

- Monad

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Module 6 - User Experience

6.1 Fundamentals of User Experience

6.1.1 Understand what is meant by the term user experience

6.1.2 Understand the difference between UI and UX

6.1.3 Know that UX impacts users’ feelings and emotions

6.1.4 Identify the characteristics of a great user experience

- Value

- Usability

- Adoptability

- Desirability

6.1.5 Know how UX has evolved over the last several decades

6.1.6 Understand the importance and impact of UX in business

6.2 The Terminology of User Experience

6.2.1 Identify the difference between usable and useful

6.2.2 Understand the term user interface

6.2.3 Know the definition of graphic or visual design

6.2.4 Understand the role of user research in the UX process

6.2.5 Understand user research methods:

- Personas

- Interviews

- Contextual Interviews

- Focus Groups

- Surveys

- Card Sorting

- Wireframes

- Prototyping

- Usability Testing

- A/B testing

6.2.6 Identify the differences between UX and human-computer interaction (HCI)

6.2.7 Know the definition of interaction design

6.2.8 Know the definition of information architecture

6.2.9 Identify the key benefits of usability testing

6.2.10 Know the definition of content strategy

6.3 How User Experience Works in the Real World

6.3.1 Identify the key responsibilities of different roles within user experience

- User Researcher

- Information Architect

- Interaction Designer

- Visual/Graphic Designer

- Front-End Developer

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- Project Manager

6.3.2 Understand the key focus areas of company and industry research in the UX process

6.3.3 Identify three activities that occur during user research

- Usability tests

- Personas

- Interviews

6.3.4 Identify five activities that occur as part of defining information architecture

- Inventory of content

- Content audit

- Architecture design

- Architecture test

- Iterate and gather feedback

6.3.5 Understand the output of wireframing

6.3.6 Understand the difference between wireframing and visual design

6.3.7 Understand the iterative nature of usability testing in the design process

6.3.8 Apply knowledge of the UX process to recommend steps based on a real-world

scenario

6.4 Visual Design Tips and Tricks

6.4.1 Know that proper alignment can visually connect elements of a design

6.4.2 Identify two visually strong alignments

- Left

- Right

6.4.3 Identify four ways to effectively show contrast in design

- Color

- Shapes

- Size

- Position/orientation

6.4.4 Know what is meant by the term visual hierarchy

6.4.5 Understand that proximity implies a relationship or lack thereof

6.4.6 Understand common page layouts used in software

6.4.7 Know what the phrase “above the fold” means

6.4.8 Know the definition of whitespace

6.4.9 Understand the importance of whitespace in design

6.4.10 Identify best practices for combining colors

6.4.11 Know the differences between hues, tints and shades

6.4.12 Identify a serif and sans serif font

6.4.13 Understand the benefits of using consistency in design

6.4.14 Know the definition of data visualization

6.4.15 Understand best practices for data visualization (presenting data using graphs and

tables)

6.5 Usability Heuristics for User Interface Design

6.5.1 Know the definition of heuristic as it relates to UX

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6.5.2 Identify ways that a user knows the status of the system

6.5.3 Understand the importance of matching the system to the real world, including the

concept of shared references

6.5.4 Identify common techniques to provide user control and freedom

6.5.5 Know the importance of consistency and standards in UX design

6.5.6 Understand that error prevention is preferable to error messages

6.5.7 Identify when a design correctly supports recognition rather than recall

6.5.8 Identify how accelerators can increase flexibility and efficiency of use

6.5.9 Understand the importance of aesthetic and minimalist design, including the Pareto

Principle

6.5.10 Identify techniques to help users recognize, diagnose and recover from errors

6.5.11 Understand how help and documentation can lead to a good user experience

The Certificate in Finance and Technology

Level 3 syllabus

EFFECTIVE FROM MARCH 2017 © Certificate in Finance and Technology Ltd

Version 1.7

ABOUT THE CFT The Certificate in Finance and Technology was created to address the need for a qualification designed for the large number of people who work in technology roles within the financial services sector. The flagship product, the Certificate in Finance and Technology (CFT), combines financial and technology subjects in a syllabus designed by senior staff within the financial services industry. The CFT is comprised of three levels. OBJECTIVE OF THE LEVEL 3 EXAMINATION The objective of Level 3 of the CFT is to ensure that candidates have a thorough understanding of financial services relating to asset management and Risk & Capital. In addition, Level 3 covers the technology topics of Data Science, Enterprise Security, Cloud Computing and Programming Languages; these are all quintessential aspects of technology present in the financial services industry today. The six modules of Level 3 build upon the foundations of the previous two levels for those who wish to have a comprehensive understanding of FinTech. It will benefit those who are considering, or about to undertake, technology roles within financial services, or anyone already in such a role, looking to broaden and update their skillset with an advanced professional qualification solution. The Level 3 examination consists of 210 multiple choice questions with 35 questions from each of the six modules. Further details can be found in the Exam Structure section below. The examination will test candidates’ knowledge and understanding of the following subject areas: 1. Asset Management 2. Risk & Capital 3. Data Science 4. Enterprise Security 5. Cloud Computing 6. Programming Languages

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SYLLABUS STRUCTURE The level 3 syllabus is divided into six modules, two of which are finance related and four of which are technology. Each module is broken into several sections and each of these into a series of learning objectives. Each learning objective begins with one of a number of specific words. These words enable candidates to appreciate the level at which they will be tested. Learning objective prefixes, with clarification: Know - Demonstrate ability to recall a discrete fact or principle Identify – Be able to select the most appropriate solution when presented with a

number of alternatives Understand – Demonstrate comprehension of a fact or principle. This is a higher level of

knowledge than required for Know objectives Apply – The highest level of comprehension, must be able to adapt facts to a scenario Calculate – Compute the numerical answer to a problem, task or scenario, using

formulae EXAMINATION STRUCTURE Time allowed: 4 hours total Structure: 2-hour exam covering modules 1-3, followed by a 60-minute break and a 2-hour exam covering module 4-6 All questions are multiple choice with four possible answers and a single correct answer 210 multiple choice questions in total (105 per exam paper) consisting of 35 questions for each of the 6 modules detailed above Some questions show a diagram and the question is based on the diagram, most are text based only.

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LEVEL 3 SYLLABUS Module 1 – Asset Management

1.1 Introduction to Asset Management

1.1.1 Know the definition of Asset Management 1.1.2 Understand the three ways in which assets can be managed

- Discretionary - Advisory - Execution only

1.1.3 Know the four step Asset Management process - Investment objectives - Investment policy - Asset allocation - Measurement & evaluation

1.1.4 Understand the key roles in the Asset Management industry - Fund manager - Buy-side traders - Buy-side analysts and economists - Buy-side sales and marketing - Buy-side technology and support - Sell-side sales - Sell-side traders

1.1.5 Understand the key features of the main assets used in Asset Management - Money market instruments - Fixed income (bonds) - Equity - Futures - Options - Swaps

1.1.6 Know the benefits of using Futures for Tactical Asset Allocation 1.1.7 Understand the different types of fund investors

- Institutional - Individual

1.2 Portfolio construction

1.2.1 Know the typical fund objective and constraint categories - Income - Capital appreciation - Taxation - Liquidity - Regulatory - Investor imposed

1.2.2 Know the additional contents of an Investment Policy Statement (IPS)

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- Time horizon - Risk/return appetite - Performance monitoring and reporting

1.2.3 Know the definition of asset allocation 1.2.4 Understand the concept of asset correlation 1.2.5 Understand the meaning of a correlation coefficient between -1 and +1 1.2.6 Understand the importance of examining asset correlation when building portfolios 1.2.7 Calculate the expected return from a two asset portfolio given individual portfolio

weights and returns 1.2.8 Understand the meaning of the efficient frontier 1.2.9 Know that increasing the number of assets can shift the efficient frontier up and to the

left 1.2.10 Understand the features and differences between Top-down and Bottom-up portfolio

construction 1.2.11 Understand the process and meaning of Strategic Asset Allocation (SAA) and Tactical

Asset Allocation (TAA) 1.2.12 Understand the difference between Fundamental and Technical analysis when

selecting securities 1.2.13 Understand the importance and uses of Benchmarks in fund management 1.2.14 Know the difference between Active and Passive fund management 1.2.15 Understand the relative advantage and disadvantages of Active versus Passive fund

management 1.2.16 Understand the three methods of index tracking used by a passive fund

- Full replication - Stratified sampling - Optimisation

1.2.17 Calculate the simple Tracking Error of a passive fund one period performance versus the benchmark performance for the same period

1.3 Fund types 1.3.1 Know that the majority of fund management assets are invested in equities and fixed

income securities 1.3.2 Understand the difference between Pooled and Segregated (Separately Managed)

Accounts 1.3.3 Know that more money is invested on a Segregated (Separately Managed) basis than

Pooled 1.3.4 Know that more money is invested on and Actively Managed basis than Passively

Managed 1.3.5 Know the key ways in which a Fixed Income fund can achieve diversification

- Geography - Credit quality - Issuer type (e.g. Government) - Maturity - Duration

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- Type (e.g. Convertibles) 1.3.6 Know the two axes of the Morningstar style matrix for Fixed Income funds 1.3.7 Know the two axes of the Morningstar style matrix for Equity funds 1.3.8 Understand the common fund structure features

- Legal status (e.g. Corporation or Trust) - Investment unit (e.g. Stock or Unit) - Open or Closed ended - Purchase method (e.g. On exchange or from manager) - Valuation (e.g. NAV or supply and demand)

1.3.9 Understand the main features of an Exchange Traded Fund (ETF) - Usually track an index or benchmark - Exchange traded - Unit of investment is a stock - Trades near NAV because of designated sponsor system

1.3.10 Know the two largest fund types by Assets Under Management - Pension funds - Insurance company funds

1.3.11 Understand the two types of pension fund - Defined contribution - Defined benefit

1.3.12 Know the main allocation of pension fund assets is, usually, to domestic government bonds

1.3.13 Know the two sources of profit for an insurance company - Underwriting - Investment returns

1.3.14 Know that Insurance companies invest mainly in lower risk assets such as bonds versus equity

1.3.15 Understand the mechanism of insurance and the three components - Exposure - Loss - Claim

1.3.16 Know the four requirements for a loss to be insurable - Homogenous group - Quantifiable loss - Independent, non-catastrophic loss - Loss is accidental

1.3.17 Understand the main categories of insurance - Property and Casualty - Life - Health

1.3.18 Understand three key methods of managing insurance risk - Risk pooling - Diversification - Reinsurance

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1.3.19 Know that generally the major technology spend in an insurance company is in front, middle and back office integration followed by data security

1.3.20 Understand the following Auto insurance technology changes and innovations - Telematics - Sharing economy - Autonomous vehicles

1.3.21 Understand the following Home insurance technology changes and innovations - Connected devices - Drones

1.3.22 Understand the following Health insurance technology changes and innovations - Medical grade wearables - Telemedicine

1.4 Measuring return 1.4.1 Calculate basic return from an investment, income received and a value at the end of a

period ignoring cash flow timings 1.4.2 Calculate a compounded rate from a maximum of four consecutive rates of return 1.4.3 Calculate an annualized return from a regular return for a smaller period 1.4.4 Understand with the arithmetic method for combining returns would be used 1.4.5 Understand the impact of withdrawals and deposits on returns 1.4.6 Know that the Money Weighted Rate of Return (MWRR) calculates the Internal Rate of

Return (IRR) for a series of cash flows 1.4.7 Calculate the Standard Time Weighted Rate of Return (TWRR) for a portfolio with a

maximum of two additional cash flows during the period 1.4.8 Know that the difficulty with Standard TWRR is the need to value the fund at the point

of every cash flow 1.4.9 Know that the Modified Dietz method weights cash flows for the amount of time they

had an impact on the portfolio 1.4.10 Calculate the Modified Dietz TWRR given all cash flows and the adjusted cash flow

number 1.4.11 Know that the Original Dietz method uses a mid-month assumption 1.4.12 Calculate the Original Dietz TWRR given all cash flows 1.4.13 Know that Peer Group comparison is an alternative method of judging performance

1.5 Measuring Risk

1.5.1 Know the following methods of measuring risk - Range - Mean Absolute Deviation (MAD) - Standard deviation - VaR - Beta

1.5.2 Calculate the Mean Absolute Deviation for a maximum of four return values 1.5.3 Understand the method of calculation Standard Deviation and what it shows

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1.5.4 Understand the Normal Distribution and the significance of one (68%), two (95%) and three (99.7%) Standard Deviations either side of the mean

1.5.5 Calculate the expected range of returns given an average return, the Standard Deviation and the level of confidence (or number of Standard Deviations)

1.5.6 Understand the terms Skewness and Kurtosis 1.5.7 Understand the features of a positively and negatively skewed distribution 1.5.8 Understand the features of a Leptokurtic and Platykurtic distribution 1.5.9 Understand Value at Risk (VaR) 1.5.10 Calculate the VaR for a fund given the mean and Standard Deviation with either 84%,

97.5% or 99.85% confidence 1.5.11 Understand the difference between Systematic risk and Unsystematic risk 1.5.12 Know the alternative names for Systematic risk

- Non-specific - Market - Business

1.5.13 Know the alternative names for Unsystematic risk - Specific - Idiosyncratic - Unique

1.5.14 Understand how Beta is calculated and what it represents 1.5.15 Know the dangers of using a non-correlated Beta

1.6 Performance Attribution

1.6.1 Understand the reasons for undertaking a Performance Attribution analysis 1.6.2 Know that the Mix variance shows the impact of the asset allocation deviations from

the benchmark at either the asset class or sector level 1.6.3 Know the Selection variance shows the impact of the security selection within asset

classes or sectors 1.6.4 Apply performance attribution variances to a scenario to show correct interpretation

of all variances 1.6.5 Calculate the Mix variance (maximum two asset classes) given benchmark weights,

actual weights, benchmark returns by asset class and total benchmark return 1.6.6 Calculate the Selection variance (maximum two asset classes) given actual return,

benchmark return and actual weights

1.7 Risk adjusted performance and analysis 1.7.1 Know the following risk adjusted performance measures

- Sharpe - Alpha - Treynor - Information ratio

1.7.2 Calculate the Sharpe Ratio given return on a portfolio, risk free rate of return and Standard Deviation of the portfolio

1.7.3 Understand the meaning of a Sharpe ratio

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1.7.4 Calculate the expected return under the Capital Asset Pricing Model (CAPM) given the risk free rate of return, the Beta of the portfolio and the return on the market

1.7.5 Know the Market Risk Premium is the return on the market minus the risk free rate of return

1.7.6 Calculate the Alpha for a portfolio given the return on the portfolio, the risk free rate of return, the Beta of the portfolio and the return on the market

1.7.7 Calculate the Alpha given the portfolio return and the CAPM expected rate of return 1.7.8 Understand the meaning of an Alpha number 1.7.9 Calculate the Treynor measure given return on a portfolio, risk free rate of return and

the Beta of the portfolio 1.7.10 Understand the meaning of a Treynor ratio 1.7.11 Calculate the Information ratio given the average excess returns and the Standard

Deviation of those excess returns 1.7.12 Understand what each of the four possible outcomes for Information ratio tell us

- High positive - Low positive - High negative - Low negative

1.7.13 Understand the method of building and running a Monte Carlo simulation and that it forecasts a large number of possible futures

1.7.14 Know what a Monte Carlo simulation shows us 1.7.15 Understand the process behind Backtesting and that is uses real historical scenarios 1.7.16 Know the two sources of data that can be used in Backtesting

- All historical data from a period of time - A certain number of specific events selected from a large period of history

1.7.17 Understand that Monte Carlo simulation and Backtesting do not predict the future but highlight possible outcomes

1.8 Behavioral finance 1.8.1 Understand the concept of Behavioral finance and how it differs from traditional

analysis 1.8.2 Know why the study of Behavioral finance may be useful 1.8.3 Know the difference between Cognitive errors and Emotional Biases 1.8.4 Understand Horizon Bias 1.8.5 Understand Herd behavior and why it occurs 1.8.6 Understand Overconfidence and the consequences of it in finance

- Overtrading - Early decision making - Attributing success to yourself, failure to others - Misrepresenting profits mentally

1.8.7 Understand the impact of reliance on forecasts without adequate independent research

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1.8.8 Understand the Framing effect - Framing the positives leads to a lower risk approach - Framing the negatives leads to a high risk approach

1.8.9 Understand that Prospect theory states that one unit of loss has a greater psychological impact than one unit of gain

1.8.10 Understand the concept of Magical thinking or Superstitions 1.8.11 Understand each of the following common behavioral finance biases

- Hindsight bias - Confirmation bias - Availability Heuristic - Anchoring bias

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Module 2 – Risk and Capital Adequacy 2.1. Overview of Risk and Bank Capital

2.1.1. Know the major sources of risk faced by financial firms: market risk, credit risk, liquidity risk, operational risk

2.1.2. Know other types of risk which arise in the industry: reputational risk, systemic risk 2.1.3. Understand the concept of maturity transformation as the fundamental business

model of a commercial bank 2.1.4. Understand how/why banks become exposed to risk as part of their business 2.1.5. Understand why regulations have been devised to influence the amount of risk which

banks can take 2.1.6. Know the concepts of macroprudential and microprudential regulation 2.1.7. Know the function of the BCBS and the general aims of the Basel rules 2.1.8. Understand the 3 pillars of Basel regulation 2.1.9. Understand the use of stress tests in addition to Basel rules

2.2. Market Risk

2.2.1. Know the definition of market risk 2.2.2. Understand the elementary statistical concepts of a probability distribution, random

variable, expected value, mean, variance, standard deviation, percentile, correlation 2.2.3. Understand how statistical concepts can be used to model the random nature of

financial market prices 2.2.4. Understand the use of the natural logarithm and exponential function when modelling

financial market prices 2.2.5. Know the shape of the normal distribution and the lognormal distribution 2.2.6. Understand the concept of Value-at-Risk 2.2.7. Understand the concept of Expected Shortfall 2.2.8. Understand the concept of normal linear VaR 2.2.9. Understand the concept of historical simulation VaR 2.2.10. Calculate the Value-at-Risk of a long position in a single security using normal linear

VaR 2.2.11. Calculate the Value-at-Risk of a long position in a single security using historical

simulation 2.2.12. Understand how correlations can be used to calculate Value-at-Risk of a portfolio

consisting of more than one security 2.2.13. Understand the drawbacks of using correlation 2.2.14. Understand how Monte-Carlo simulation methods can be used to calculate VaR (e.g.

for the case of option positions) 2.2.15. Understand the strengths and weaknesses of Value-at-Risk 2.2.16. Know the concept of Stressed Value-at-Risk

2.3. Credit Risk

2.3.1. Know the definition of credit risk

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2.3.2. Understand the concepts of default probability, Loss Given Default (LGD), Recovery Rate (RR) and Exposure at Default (EAD)

2.3.3. Understand the concept of Expected Loss 2.3.4. Understand the function of Credit Rating Agencies 2.3.5. Know how to find historical data about default probabilities and Recovery Rates from

information published by Credit Rating Agencies 2.3.6. Calculate Expected Loss for a loan, given information about the borrower and the

amount of money involved 2.3.7. Know the definition of a credit spread 2.3.8. Understand how credit spreads relate to expected losses 2.3.9. Know the definition of a copula 2.3.10. Understand how a copula can be used to calculate default probability of a portfolio

consisting of more than one security 2.3.11. Understand the drawbacks of using a copula 2.3.12. Know the definition of counterparty credit risk and understand why this arises in OTC

derivative trades 2.3.13. Understand the concepts of Potential Future Exposure (PFE) and Expected Positive

Exposure (EPE) in OTC derivative positions 2.3.14. Know the definition of Credit Valuation Adjustment (CVA) 2.3.15. Know the definition of Wrong-Way Risk 2.3.16. Understand the use of collateral to reduce credit risk on OTC derivatives 2.3.17. Understand the use of a Central Counterparty (CCP) in the OTC markets

2.4. Operational Risk

2.4.1. Know the definition of operational risk 2.4.2. Know the definition of rogue trader risk as a specific example of operational risk 2.4.3. Know case studies of rogue traders: Nick Leeson and Jerome Kerviel 2.4.4. Know the key aspects of the BCBS 11 Principles for the Management of Operational

Risk 2.4.5. Understand the Basel II Advanced Measurement Approach (AMA) to quantifying

operational risk 2.4.6. Understand how insurance can be used to mitigate operational risk

2.5. Bank Balance Sheet

2.5.1. Know the key components of a bank’s balance sheet at high level: assets, liabilities and capital

2.5.2. Know the main alternative sources of bank funding: equity capital, preferred stock, convertibles, bond issues, interbank borrowing, cash from depositors

2.5.3. Understand the strengths and weaknesses of each of the sources of funding 2.5.4. Know the concepts of Net Interest Margin (NIM) and Non Performing Loans (NPL) 2.5.5. Understand the concept of Risk Weighted Assets (RWA) 2.5.6. Calculate the RWA of a loan using the Basel II Standardised Approach, given the type

of borrower and their credit rating 2.5.7. Understand the concept of the Internal Models Approach for calculation of RWA

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2.5.8. Understand the difference between the banking book and trading book 2.5.9. Understand how RWA can be computed for market risk, credit risk and operational risk

2.6. Basel III: Bank Solvency and Leverage Ratios

2.6.1. Know the key minimum Capital Adequacy Ratios (CAR) specified under Basel III 2.6.2. Understand how these differ from the previous minimum ratios of Basel II 2.6.3. Understand the Capital Conservation Buffer 2.6.4. Understand the Countercyclical Buffer 2.6.5. Know the concept of a Systemically Important Financial Institution (SIFI) and related

implications for minimum capital ratios 2.6.6. Know the Leverage Ratio and Supplementary Leverage Ratio 2.6.7. Calculate Capital Adequacy Ratios given a bank balance sheet and enough information

to compute the amount of RWA 2.6.8. Calculate Leverage Ratio given a bank balance sheet 2.6.9. Calculate the capital required to support a loan, given information about the risk-

weighting of the counterparty 2.6.10. Calculate the return on equity (ROE) of a loan, given information about the risk-

weighting of the counterparty and details of the interest rates involved 2.6.11. Know the major elements contained in a Pillar 3 report

2.7. Basel III: Bank Liquidity Ratios

2.7.1. Know the definition of liquidity risk 2.7.2. Know the definition of the Liquidity Coverage Ratio (LCR) 2.7.3. Know the definition of HQLA (High Quality Liquid Assets) 2.7.4. Know the definition of Required Stable Funding (RSF) 2.7.5. Know the definition of Available Stable Funding (ASF) 2.7.6. Know the definition of the Net Stable Funding Ratio (NSFR) 2.7.7. Understand the purpose of the LCR 2.7.8. Understand the purpose of the NSFR 2.7.9. Calculate LCR given HQLA and information about estimated net cash outflows in

stressed conditions 2.7.10. Calculate NSFR given ASF and RSF

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Module 3 – Data Science

3.1 Data Science in Finance 3.1.1 Know the reasons for data science within finance 3.1.2 Identify the various data sources within finance 3.1.3 Apply the relevant data analysis questions

- Descriptive - Exploratory - Inferential - Predictive - Causal - Mechanistic

3.1.4 Know the 3V’s of ‘Big data’ - Volume - Variety - Velocity

3.1.5 Know the common mistakes made in data analysis - Correlation vs Causality - Overfitting - Small sample size 3.1.6 Know the features of common data sources in finance 3.1.7 Apply principles of tidy data to ensure data is ready for analysis 3.2 Big data

3.2.1 Understand the impact of the 3Vs on big data - Volume - Variety - Velocity

3.2.2 Know the challenges of big data in finance 3.2.3 Identify the difference between the structure of data

- Structured - Unstructured - Semi-structured

3.2.4 Know the principles of big data - Business integration - Analysis - Visualization - System optimization - Security - Governance

3.2.5 Know the key differences between SQL and NoSQL - Storage - Capacity - Technology

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3.2.6 Understand the Hadoop HDFS framework 3.2.7 Apply NoSQL storage methodologies

- Document pairs - Key value pairs - Column family data store

3.2.8 Know the elements of the Hadoop ecosystem - MapReduce - Impala - HBase - Pig - Hive - Hue

3.2.9 Know the key features of tick database using MongoDB - Real-time market data - Historical data - News storage and analysis - Speed - Signals

3.3 Machine Learning 3.3.1 Know the definition of machine learning (ML) 3.3.2 Understand the process of building a machine learning model 3.3.3 Know the key uses of ML within finance - Fraud detection - Advice - Investment recommendation - SPAM detection - Asset allocation - Price prediction 3.3.4 Understand the types of machine Learning - Unsupervised - Supervised 3.3.5 Apply a scatter graph to compare features of a data set 3.3.6 Identify suitable features of a given data set 3.3.7 Know the key unsupervised ML algorithms - Naïve Bayes (NB) - Support Vector Machine (SVM) - Decision tree 3.3.8 Calculate classifications using Bayes theorem 3.3.9 Apply a decision tree to a set of training data 3.3.10 Identify the correct decision surface for a set of data 3.3.11 Identify features and labels of a data set 3.3.12 Understand the key principles in unsupervised learning - Clustering - Dimensionality reduction

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3.4 R programming 3.4.1 Know the main uses for R in financial data analysis - Statistics - Machine learning - Visualisation - High performance computing - Complex financial analysis 3.4.2 Know how to navigate through RStudio 3.4.3 Understand how to create and assign variable 3.4.4 Apply basic arithmetic and logical operations - Addition - Subtraction - Multiplication - Division - Value comparisons 3.4.5 Know how to create data frames 3.4.6 Know how to set a working directory 3.4.7 Understand how to import data into R 3.4.8 Calculate a comparison table of features 3.4.9 Know how to create a decision tree on a set of data 3.4.10 Calculate a ML model given a set of training data 3.4.11 Understand how to export data from R

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Module 4 – Enterprise Security 4.1 Introduction to Enterprise Security

4.1.1 Understand what is Enterprise security 4.1.2 Identify the seven areas of Enterprise security

4.2 Access Control

4.2.1 Identify the elements of access control 4.2.2 Understand implementation of access control 4.2.3 Know the types of authentication 4.2.4 Identify the goals of secure access control 4.2.5 Understand enterprise authentication 4.2.6 Understand the elements of remote access authentication 4.2.7 Understand concepts of password management 4.2.8 Know the types of access control policies 4.2.9 Know the features of access control

- Methodologies - Models - Object management

4.3 Administration

4.3.1 Understand the principles of administration 4.3.2 Know the objectives of enterprise security 4.3.3 Identify the lifecycle of information security 4.3.4 Know terms used in enterprise security 4.3.5 Understand security in quality testing 4.3.6 Identify separation of duties 4.3.7 Understand the steps in risk assessment 4.3.8 Understand security in change control 4.3.9 Know the change control tools 4.3.10 Understand the hiring process 4.3.11 Understand the importance of security awareness

4.4 Monitoring and audit

4.4.1 Understand concepts of security audit 4.4.2 Know the role of auditors 4.4.3 Understand the process of security audit 4.4.4 Know the methods of security audit 4.4.5 Identify the various security audit data sources 4.4.6 Know the different methods of risk monitoring

4.5 Response & Recovery

4.5.1 Identify approach to risk management

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4.5.2 Understand risk management cycle 4.5.3 Understand various risks and threats 4.5.4 Identify types of risks and threats 4.5.5 Understand risk mitigation 4.5.6 Identify risks to be mitigated 4.5.7 Understand how to analyse risk mitigation 4.5.8 Identify business continuity plans (BCP) 4.5.9 Understand impact assessment of BCP 4.5.10 Know how to plan for disaster recovery 4.5.11 Understand the process of disaster recovery 4.5.12 Know the goals, tools and steps of incident investigation 4.5.13 Understand concepts and process of computer forensics

4.6 Cryptography

4.6.1 Know the meaning and history of cryptography 4.6.2 Understand the objectives of cryptography 4.6.3 Know the types of encryption algorithms

4.6.3.1 Asymmetric 4.6.3.2 Symmetric

4.6.4 Understand the concept of hashing 4.6.5 Know various methods of encryption 4.6.6 Identify different types of keys 4.6.7 Know how to manage keys 4.6.8 Understand the process of key selection 4.6.9 Know what is public key infrastructure 4.6.10 Understand the elements of a digital certificate

- Standard - Policies - Revocation - Trust models - Protocols

4.6.11 Understand certificate management concepts 4.6.12 Know and identify cryptographic attacks

4.7 Communication & Networking

4.7.1 Understand the OSI model 4.7.2 Understand the concepts in local area networks (LAN) 4.7.3 Identify LAN topologies 4.7.4 Understand how ethernet works 4.7.5 Know the features of wide area networks (WAN) 4.7.6 Understand various networking protocols 4.7.7 Identify various types of network devices 4.7.8 Know the features of a virtual private network 4.7.9 Identify common attacks against a network

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4.8 Threats

4.8.1 Understand what is malware 4.8.2 Identify viruses and types of viruses 4.8.3 Identify malware and its types 4.8.4 Understand how to protect from malware 4.8.5 Know the classification of hackers 4.8.6 Understand various types of malicious attacks 4.8.7 Understand different network based attacks 4.8.8 Identify enterprise security threats in the cloud

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Module 5 - Cloud Computing Fundamentals 5.1 Introduction to Cloud Computing

5.1.1 Understand the term “cloud computing” 5.1.2 Know how cloud computing relates to the real world

5.1.2.1 Understand cloud computing payment models 5.1.3 Know the evolution of cloud computing 5.1.4 Identify the features of leading cloud providers

5.2 Important Terminology and Concepts

5.2.1 Understand the term cloud computing 5.2.2 Know that “cloud” can be thought of as an abstraction layer 5.2.3 Understand redundancy and scalability in cloud computing 5.2.4 Know the definition of virtualization 5.2.5 Understand that virtualization is a powerful enabler of cloud computing 5.2.6 Apply knowledge of virtualization to a real-world scenario 5.2.7 Identify four components of cloud computing architecture

- Front end platforms - Back end platforms - Cloud-based delivery model - Network

5.2.8 Identify four common cloud deployment models - Public - Private - Hybrid - Community

5.2.9 Understand three common service models - Software as a Service (SaaS) - Platform as a Service (PaaS) - Infrastructure as a Service (IaaS)

5.2.10 Understand the five key characteristics of cloud computing - On-demand self-service - Ubiquitous network access - Resource pooling - Rapid elasticity - Pay-per use

5.2.11 Understand common advantages and disadvantages of cloud computing 5.2.12 Know the most common challenges companies face when operating in the cloud

5.3 Core Services: Security, Compute, Storage, and Database

5.3.1 Understand the four components of security in the cloud - Identity management - Physical security

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- Personnel security - Privacy

5.3.2 Understand the difference between authentication and authorization 5.3.3 Know what protections fall under the category of physical security 5.3.4 Know some of the activities that take place to ensure security of personnel 5.3.5 Know that privacy is concerned with security of data 5.3.6 Understand the shared responsibility model in the cloud 5.3.7 Understand general best practices for using different account types in AWS and Azure 5.3.8 Know what the term “compute” refers to in the context of cloud service models 5.3.9 Identify two cloud storage solutions for either personal or business use 5.3.10 Know that SQL and NoSQL database options are available from the major cloud

providers

5.4 Creating Your First Cloud Application 5.4.1 Know how to navigate to frequently-used features in the AWS Management Console 5.4.2 Know how to navigate to frequently-used features in the Microsoft Azure Portal 5.4.3 Know how to navigate the “Getting Started” section of AWS 5.4.4 Know how to navigate the “Getting Started” section of Azure 5.4.5 Identify at least one option for creating and deploying your first app in AWS 5.4.6 Identify at least one option for creating and deploying your first app in Azure 5.4.7 Identify two development tools for creating and deploying applications to the cloud

5.5 Summarizing and Looking Forward

5.5.1 Know that cloud best practices fall into three categories: technology, people and process

5.5.2 Identify at least one best practice in the area of technology 5.5.3 Identify at least one best practice in the area of people 5.5.4 Identify at least one best practice in the area of process 5.5.5 Apply your knowledge of cloud best practices to make a recommendation for moving

to the cloud 5.5.6 Know that the cloud market is expected to grow for the foreseeable future 5.5.7 Identify at least two factors driving the growth of cloud computing in the future

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Module 6 – Programming Languages

6.1 Introduction to programming languages 6.1.1 Understand the importance of programming for an enterprise

6.2 Java

6.2.1 Know a brief history of Java 6.2.2 Know the different editions of Java 6.2.3 Understand application tiers 6.2.4 Identify different aspects of Java Enterprise Edition (Java EE) 6.2.5 Know about Java EE Server and Container 6.2.6 Understand about Java EE components 6.2.7 Understand various features of Java EE

6.3 .net

6.3.1 Know about the history of dot net 6.3.2 Understand the features of dot net core 6.3.3 Know about the asp.net core stack 6.3.4 Identify the advantages of asp.net core 6.3.5 Understand the fundamentals of asp.net core 6.3.6 Understand security provided by asp.net core 6.3.7 Know about the C# language

6.4 JavaScript

6.4.1 Know about the history of JavaScript and get an overview of JavaScript 6.4.2 Understand the language paradigms 6.4.3 Identify the nature of asynchronous programming 6.4.4 Know about AJAX application 6.4.5 Understand the commonJS specification 6.4.6 Know about NodeJS 6.4.7 Identify asynchronous nature of NodeJS 6.4.8 Know the features of NodeJS 6.4.9 Know about NodeJS package manager 6.4.10 Identify frameworks in NodeJS 6.4.11 Understand the use of MongoDB as a database 6.4.12 Know about JavaScript frontend frameworks 6.4.13 Know about JavaScript test frameworks

6.5 Ruby and Rails

6.5.1 Know the history of the Ruby language 6.5.2 Understand the paradigms of Ruby 6.5.3 Understand objects in Ruby 6.5.4 Identify the aspects of functional programming in Ruby 6.5.5 Know the features of Ruby

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6.5.6 Understand how to setup Ruby 6.5.7 Know about Ruby Gems 6.5.8 Understand various tools used in Ruby 6.5.9 Understand the application of the Rails framework 6.5.10 Know the conventions used in Rails 6.5.11 Understand the use of DRY code in Rails 6.5.12 Identify the Rails stack 6.5.13 Understand the use of MVC in Rails 6.5.14 Know aspects of testing in Rails

6.6 Python

6.6.1 Understand the use of Python and get an overview of the language 6.6.2 Know the features of Python 6.6.3 Know about Python’s history 6.6.4 Identify python tools and libraries 6.6.5 Identify the different implementation of Python 6.6.6 Know of packages in python for financial applications 6.6.7 Understand the use of python for data analysis 6.6.8 Identify the advantages of python for finance

6.7 Infrastructure as code

6.7.1 Know the definition of infrastructure as code (IAC) 6.7.2 Know the features of infrastructure as code 6.7.3 Understand the drawbacks of traditional infrastructure 6.7.4 Identify the process 6.7.5 Understand the values added by Infrastructure as code 6.7.6 Identify the advantages of Infrastructure as code 6.7.7 Know the various approaches and methods of Infrastructure as code 6.7.8 Identify the capabilities and features of the tools used in Infrastructure as code 6.7.9 Know about the tools Chef and Saltstack 6.7.10 Identify the general specifications of Infrastructure as code 6.7.11 Know the use of virtual machines 6.7.12 Identify the uses of Vagrant 6.7.13 Know the functions of Docker 6.7.14 Understand the process and use of Docker 6.7.15 Know about Docker registry 6.7.16 Identify Docker images 6.7.17 Know the use of a Dockerfile 6.7.18 Understand the essence of Infrastructure as code