Overview of Equity Securities for the CFA Level 1 Exam

Welcome to the exciting world of equity securities! Let’s take a fascinating trip through the land of stocks, where profits and risks go hand in hand.

Types of Equity Investments

Get ready to explore the captivating world of equity securities! We’ll start with common shares and their role in company operations, then dive into callable and putable shares. We’ll also learn about the empowerment of shareholders through voting rights and systems. Finally, we’ll delve into the world of preference shares, the unique crossbreed of equity and debt.

► Embark on your exploration of equity securities here.

Private versus Public Equity Securities

Peek into the world of private equity securities and learn how they differ from public securities. Unpack the three types of private equity investments: venture capital, leveraged buyouts, and private investments in public equity (PIPE). Also, explore the stages of venture capital investments, the mechanics of leveraged buyouts, and the reasons behind PIPE.

► Dive deeper into private equity securities here.

Investing in Non-Domestic Equity Securities

Get ready to globetrot! We’re traversing non-domestic equity securities, understanding market integration and barriers, and the role they play in global financial markets. We’ll get our hands dirty with direct and indirect methods of investing in foreign equities, exploring depository receipts (DRs), American and Global Depository Receipts (ADRs and GDRs), and even the fancy basket of listed depository receipts (BLDRs) and Global Registered Shares.

► Unpack the world of non-domestic equity securities here.

Risk and Return Characteristics of Equity Securities

Buckle up for a high-speed chase through the world of risk and return in equity securities! Get a grip on the core drivers of equity returns—capital gains, dividends, and if you’re an international hotshot, foreign exchange gains. Then, hold on tight as we steer into the hairpin turns of equity risk, understanding why preference shares might be your safe haven, and how embedded options in shares can add a twist to the tale.

► Blaze a trail through risk and return in equity securities here.

Equity Securities and Company Value

Let’s unravel the mystery of equity securities and their relation to company value! We’ll explore the role of equity in a company’s operations, dissect the difference between market value and book value of equity, get a grip on ROE, and delve into the cost of equity and investors’ required rate of return.

► Decode the language of equity and company value here.