AFM Textbook Syllabus
Chapter 1
Syllabus A. Role Of The Senior Financial Adviser
A1. The role and responsibility of senior financial executive/advisor
- A1a. Purpose of Financial Management3:48
- A1bc/A2c. Key areas of responsibility for the financial manager
A2. Financial strategy formulation
- A2a. Ratios and Strategy
- A2a. Ratio limitations
- A2b. Gearing considerations1:48
- A2b. Sources of Finance5:05
- A2d. Risk Management Process2:50
- A2e. Identifying Risk6:09
- A2e. Business Risk1:34
- A2fg. Risk mitigation, hedging and diversification strategies
- A2h. Behavioural Finance
A3. Ethical and governance issues
- A3ab. Fundamental Principles2:23
- A3cd. Ethical issues in financial management
- A3e. Agency Relationship1:32
- A3e. Transaction Cost Theory3:00
- A3f. Governance structures and policies
- A3g. Social and Environmental Issues
A4. Management of international trade and finance
- A4ab. Free trade and the management of barriers to trade
- A4c. The World Trade Organisation (WTO)
- A4c. The management of international finance
- A4d. The role of international financial institutions
- A4d. The Euromarkets
- A4e. Multinational financial planning issues
- A4f. The European Sovereign Debt crisis
- A4e. The global debt problem
- A4f. Dark Pool Trading
- A4f. Free movement of Capital
- A4g. Developments
A5. Strategic business and financial planning for multinationals
- A5a. Stock exchanges0:44
- A5aii. The mobility of capital across borders
- A5a. Sources of finance for foreign trade
A6. Dividend policy in multinationals and transfer pricing
- A6a. Dividends policy
- A6ai. The corporation’s short- and long-term reinvestment strategy
- A6a. Alternatives to a cash dividend
- A6a. The corporate tax regime within the host jurisdiction
- A6c. Transfer Pricing
Chapter 2
Syllabus B. Advanced Investment Appraisal
B1. Discounted cash flow techniques
- B1a. NPV2:39
- B1aiii. Capital rationing - Single period- Types6:29
- B1aiii. Capital rationing & divisible projects6:29
- B1aiii. Capital rationing & INdivisible projects6:29
- B1aiii. Capital rationing - Multi-period
- B1aiv. Risk & Uncertainty basics1:14
- B1aiv. Sensitivity Analysis
- B1aiv. Probability analysis2:04
- B1av/vi. Payback method3:00
- B1av/vi. Adjusted Payback3:05
- B1bi. Monte Carlo simulation
- B1bii. Project value at risk
- B1c. Internal Rate of Return2:57
- B1c. MIRR
B2. Application of option pricing theory in investment decisions
- B2a. Pricing of options
- B2a. Black-Scholes Option Pricing (BSOP) model
- B2b. Real options in decision making
- B2b. NPV and Real Options
- B2c. Option to delay or defer
- B2c. Option to abandon
- B2c. Option to expand
B3. Impact of financing on investment decisions and APV
- B3a. Debt or Equity?3:26
- Long term finance2:01
- B3a. Securitisation
- B3a. Islamic Finance - Introduction0:51
- B3a. Mudaraba (equity), Sukuk (debt) & Musharaka (JV)1:54
- B3a. Ijara (leasing) and Murabaha (credit)1:17
- B3b. Basic Idea - IF
- B3b. Advantages of Islamic finance
- B3b. Disadvantages of Islamic finance
- B3a. Initial Coin Offering
- B3e. Duration (Macauley duration)
- B3g. Credit spread
- Gearing drift
- B3h. Capital structure theories8:09
- B3h. Modigliani and Miller propositions
- B3h. Static tradeoff theory
- B3h. Agency effects
- B3i. Adjusted present value
B4. Valuation and the use of free cash flows
- B4a. Valuations - Introduction7:14
- B4a. Market Capitalisation2:01
- B4a/C2ci. Asset Based Valuations3:19
- B4a/C2c. Using PE ratio2:03
- B4a. Earnings Yield
- B4a. Dividend Valuation
- B4a/C2c. Discounted Cashflows
- B4a/C2b. Discounted Free cash flow basis
- B4bc. Free cash flows
- B4bc. Free cash flow to equity
- B4de. BSOP and default risk
B5. International investment and financing decisions
- B5a. International investment and financing decisions
- B5b. Forecast project or organisation FCF from overseas projects
- B5ce. Remission of funds
Chapter 3
Syllabus B3cd. The Cost of Capital
Cost of Capital - Intro
All subject exam questionsCost of equity
All subject exam questionsCost of debt
- Redeemable debt7:19
- Irredeemable, preference shares and Bank loans4:48
- Convertible Debt6:56
- WACC - Putting it all Together
Advanced cost of capital
All subject exam questionsChapter 4
Syllabus C. Acquisitions And Mergers
C1. Acquisitions and mergers versus other growth strategies
- C1a. Reasons for and against acquisitions, mergers and divestments
- C1b. Strategy Development
- C1c. Acquisitions and mergers as a method of corporate expansion
- C1d. High failure rate of acquisitions
- C1e. Synergy
- C1f. Reverse Takeovers
C2. Valuation for acquisitions and mergers
All subject exam questionsC3. Regulatory framework and processes
All subject exam questionsC4. Financing acquisitions and mergers
- C4ac. Forms of consideration
- C4ab. Methods of raising cash
- C4b. Cash consideration
- C4b. Share exchange
- C4b. Earn-out arrangements
Chapter 5
Syllabus D. Corporate Reconstruction And Re- Organisation
D1. Financial reconstruction
All subject exam questionsD2. Business re-organisation
- D2a. Unbundling
- D2ab. Divestment
- D2ab. Spin-offs/demergers
- D2ab. Sell-offs
- D2c. Management buy-out (MBO) and buy-in
- D2ab. Share repurchase
- D2ab. Going private
Chapter 6
Syllabus E. Treasury And Advanced Risk Management Techniques
E1. The role of the treasury function in multinationals
- E1a. The role of the treasury management function
- E1a. Protection against transaction risks
- E1b. Exchange and OTC
- E2b. Futures
- E1biv. Risks
E2. The use of financial derivatives to hedge against forex risk
- E1a/E2a/B5d. Types of foreign currency risk3:13
- E2b. Predicting Exchange Rates5:47
- E2b. Understanding Exchange Rates3:41
- E2b. Forward Rates3:14
- E2b. Money Market Hedges - payment9:23
- E2b. Money Market Hedge - Receipt6:13
- E2b. Currency Futures2:43
- E2b. Currency Futures - calculation
- E2b. Currency Swaps1:05
- E2b. Currency Options
- E2b. Options - calculations
- E2c. Netting
- E2c. Matching
E3. The use of financial derivatives to hedge against interest rate risk
- E3a. Interest Rate Risk14:17
- E3a. Interest Rate - Forwards & Futures1:20
- E3a. Interest rate futures
- LIBOR and LIBID
- E3a. Forward rate agreements (FRA)
- E3a. FRAs - calculation
- E3a. Interest Options and Swaps3:14
- E3a. Options on interest rate futures - calculation
- E3a. Interest rate swaps - examples
- E3a. Interest rate collar
- Market Value of Bonds2:47
- Market value of bonds - calculation
- Valuing bonds based on the yield curve