Design is….

Amit Richard is a self-taught freelance graphics designer. With almost six years of experience, he has undertaken projects in several areas of design ranging from logo and corporate identity design to web interface design and print graphics. He has worked with a number of international brands directly and via third-party, some of which include Marks & Spenser, NBC Universal and Blackberry. Check out his works at RichardDesigns.

Starfall by Amit Richard

I was sitting in traffic on the way to a meeting. As I thought the meeting might include some junior designers, I decided I would ask what design meant to each one of them individually. That’s when I asked myself the same question. This is my answer to myself:

Design…Design is passion, design is creation and inspiration. Design isn’t limited to the visual representation – there’s more to it – from blueprint to final execution – it’s the entire process, the experience, design is..the solution.

It is the implementation of an idea that not only meets the expectations of clients and final users, but is an innovation that transforms wants into needs; design is..the revolution.

Design is also expression – expression of values, principles, style and taste, but most of all it is the expression of the ever creative GOD’S handiwork from beginning till date.

Design is what builds, what motivates, what procures and what endures.

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CFA Exam Preparation Tips – Acing the Ethics Section

By Andrew Jones

Andrew delivers both CFA® exam preparation courses and non exam finance training for Fitch Learning. Having passed all three levels of the exam as well as gaining a wealth of experience as an industry practitioner he understands the pressures of studying for this prestigious qualification.

Many CFA exam candidates aren’t quite sure how best to prepare for the ethics section of the test. Sometimes, this uncertainty can cause it to become more of a stumbling block than it needs to be.

But not to worry. With a few straightforward tips, it’s possible to streamline your CFA exam preparation and ensure that you’re adequately prepared for everything the ethics section has in store.

So what steps do you need to take to get ready?

1) Study the ethics section last

The ethics section builds on everything that has come before, so it will make the most sense once you’ve reviewed the other sections. Spending time here before you’ve gone over everything else simply won’t be efficient, and is likely to give you an incomplete grasp of the material.

Since this is the last section you’ll review, you can take advantage of short term memory for this section. This strategy will help you use your time as effectively as possible.

2) Know the case studies

In your CFA exam preparation materials you will have an extensive number of fictional scenarios, with in-depth ethical explorations of those situations’ implications.

Make sure that you utilize this resource to the fullest. Spend time working through case-study chapters in detail, paying careful attention to the ways ethical standards are explored and applied in each scenario.

3) Familiarize yourself with the question format – as well as the source material

In order to answer questions in the ethics section effectively, you have to know what the test is going to throw at you. That means understanding which keywords to watch out for, recognizing and anticipating common traps, and knowing when to ignore irrelevant information.

The trick here is that ethical concepts aren’t tested individually. Instead, as the CFA levels progress, more and more of these concepts will be introduced into the exam questions. This is why case studies and sample questions are so important – you have to be familiar with how these concepts are applied in a range of different contexts. Practice sample questions extensively as you study to get a feel for how the exam approaches the ethics section.

If you study with these tips in mind, and you take care to build on a solid foundation of knowledge with the other sections of the exam, you should be ready to tackle the test confidently – and to ace the ethics section. Good luck!

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3 CFA Exam Preparation Mistakes — and How to Avoid Them

by Andrew Jones

For access to over 3,000 sample CFA exam study questions and 90+ hours of instructional videos, check out our Fitch Learning CFA Exam Prep app – now available for a free 7 day trial with unlimited access.

About the author: Andrew delivers both CFA® exam preparation courses and non exam finance training for Fitch Learning. Having passed all three levels of the exam as well as gaining a wealth of experience as an industry practitioner he understands the pressures of studying for this prestigious qualification.

Many Chartered Financial Analyst (CFA) exam candidates carry serious misconceptions about both the test and the most effective ways to approach CFA exam preparation. Unfortunately, these common mistakes often trip up otherwise dedicated and qualified candidates, making the difference between a pass and a fail on the exam.

So what are these misperceptions, exactly? And how can you avoid them to make sure all your hard work pays off?

1) Don’t underestimate the test.

This one is key. All too often, candidates imagine that the exam is easier than it actually is — so they don’t put in the necessary study time. The CFA Institute guidelines call for 300 hours of preparation time, and that’s not an arbitrary suggestion. You will need to put in every one of those hours.

2) Leave yourself enough time.

Which brings us to the next mistake. Even when candidates aren’t consciously underestimating the exam, they often don’t leave themselves enough time to put in the study hours they know they need. Those 300 hours represent a major time investment — a significant sacrifice — and making them happen takes careful planning well in advance for most people, not to mention continuous motivation.

3) Don’t neglect what you already know.

“I’ve already learned this material — I can skip to the next topic.” Sounds reasonable, but it can spell failure. Many candidates decide they don’t need to study topics they’ve already learned, but CFA exam preparation isn’t the same as studying for a college degree. The CFA exam tests topics in specific detail, and the volume of information covered means it’s important to study what you already know.

Study Techniques

Now that we know which mistakes to avoid, how can candidates sidestep these pitfalls and achieve the best possible results on the exam?

First, start early. That means at least five months before the exam. Make sure you can dedicate 10-15 hours per week until you take the test. Otherwise, passing is simply unrealistic.

When you prepare, it’s important to blend study techniques. Don’t simply read over the material, but take a blended approach so you can think through the topics from multiple angles and keep the material fresh. Read a chapter, then watch an instructional video, then work on practice questions. Those practice questions are particularly crucial.

By applying your knowledge, investing in CFA exam preparation time regularly, and continuously shoring up your knowledge, you can give yourself the foundation you need to succeed. It’s not easy — but the reward for all the time and effort you put in is worth it.

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Global Equities Market Update

Tahsanul Hoque is working in Internal Accounts Payable in Morgan Stanley. He is a postgraduate of Ohio State University in Finance and a graduate of North South University. Even though he is a banker by profession he is also an avid investor by choice.

Tahsanul had earlier warned investors to stay away from emerging markets in his earlier post in February.


Wow what a difference three months make. US economic growth totally halting to 0.1% due to extreme cold weather, Russia forces still lingering near border of Ukraine and China showing much worse slowdown than expected. So how should your game plan change?

US Equities

It is very much clear US growth is accelerating in the near future. The recent economic data indicators point to growth recovering. However some hidden plays are already happening in the market. We are seeing growth stocks being hammered and value stocks rising up. Defensive sectors such as utilities have shown a strength. This is purely a warning sign of an impending market correction (not market crash) of 10 to 15%. We had a phenomenal bull run in 2013, possibly one of the best of all times. With Fed slowly but surely on course to end QE by August/Septembers, markets have shown weak technicals for going up now. The downside risk is getting bigger. All that liquidity that FED has pumped is now slowly crawling back and that will definitely pull back stocks.

For the next 1 or 2 months till June, I would suggest people still remain in value stocks in financial and tech sectors. I have Wells Fargo (WFC), Discover (DFS)etc in financials just to capture the positive economic growth news due to Spring rebound and tech stocks like AAPL which have lots of positive (maybe even negative) catalysts coming up in the next few months so little downward risk, MSFT (just playing their turnaround game since new CEO came in although I will sell it soon as I am unclear the impact of Nokia purchase on its financials) and YHOO (speculative proxy play based on Alibaba IPO; probably will keep on rising in entire summer). However I intend to sell my financial stocks by June and will probably short some bubble stocks like PLUG, LNKD, YELP, TWTR at that time.

After market correction ends around September or October, I will definitely add back WFC and DFS when they become cheaper. Possibly might add exposure to American Express (AXP), some good growth biotech stocks like Gilead (GILD) and Biogen(BIIB) and possibly even Facebook since I think FB might be a great growth play for 2015 and I hope it comes back to around $40 after market correction. I will keep my AAPL position till end of 2015 at least.

Emerging Markets

I clearly warned readers to avoid emerging markets in my earlier post. I still think with Fed’s QE ending near in fall, there is even higher chance of emerging markets correcting. And China is already slowing down. Either way, these are not good catalysts for emerging stocks to move up. So if you are a short-term investor, I suggest you still avoid emerging markets and wait till the smoke clears in Fall 2014. However I will say if you are a long-term investor, then definitely on valuation level, emerging stocks are getting cheaper everyday. I would suggest buying them if you are playing the long game as surely, for long run the emerging markets are undervalued. But I am sure you will get good entry point if you decide to wait 6 months more.

Europe Markets

I believe Euro is quite overvalued. And Eurozone faces the risks of clear deflation. I am not a Europe stock market expert but since ECB are clearly aware of deflation risks, they have a good chance of initiating quantitative easing within next 6 months and that will definitely push stock markets higher in the long run. I might add some index funds based on Europe since I have less stock selection expertise about that market.

Either way, I can’t wait to see what happens around August/September around the world. And I also can’t wait to see what happens with my AAPL investments. I always believed it was undervalued but I never like Tim Cook; he is too slow to realize the competitive changes. This year it will break or make the stock. Either way, I will become richer or bust surely.

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CFA Exam – The best time to start preparing

CFAAbdullah-Al-Rezwan is a recent graduate of IBA, University of Dhaka. He has just joined as Management Trainee of The City Bank Limited. He is a Finance enthusiast, but almost readily falls in love with anything that makes him feel a bit more knowledgeable.

As a recent graduate of IBA (Institute of Business Administration, Dhaka), I do not dare propagate futile advice to people who are far more knowledgeable and experienced than I am. So let me first define the target market for this write-up: University students or recent graduates who are planning to sit for professional exams like the CFA and the FRM exam. The reason I can dare preaching to you is that I happened to pass both CFA level 1 exam and FRM Part 1 exam while in my senior year in IBA.

Preparing for CFA exam at any point of your life will need a hell lot of dedication, perseverance and energy. I keep getting this question from many of my juniors whether it is possible to maintain both University academic requirements and CFA exam preparation. With less than a month of work experience and almost non-existent work pressure, I can still vouch for the fact that the easiest way to pass any professional exam is to sit for the exam while you are still a student. Now before you start jumping around, you should remember you can only sit for CFA level 1 exam in your senior year in University. But there is one way you can pass all three levels of CFA exam while being a student. If you join an MBA program just after graduating and pass all three levels at first attempt, you can basically pass CFA exam even before joining a workforce. (I am personally not a big fan of starting MBA right after graduation for many good reasons, so I will not follow that path)

I know it might sound a bit odd that University students hold an edge over professionals in ‘professional’ exams! But that is one absolute truth. Even if you work in Goldman Sachs, you are going to need to go through the CFA exam materials at least once as there’s hardly any school out there which covers all the things that CFA exam encompasses. You can be a fixed income analyst in J.P. Morgan, and you have a very good chance of being bright enough to not needing to go through the Fixed Income section of CFA exam. But what about 9 other topic areas in CFA exam, especially Ethics? It is almost impossible to gain first-hand understanding from work on all the topics of all three levels of CFA exam. Besides, the level of energy and dedication you need to study after returning from work at 8/9/10 pm is enormous and it inevitably results in a not-so-peaceful life. Of course, a student will probably need more study-hours than a professional to pass a particular level in CFA exam but that’s okay. Students get at least twice as much time as professionals do to prepare for the exam. In fact, there’s a general rule that you should invest 300 hours for each level of CFA. Because I had more time and literally zero intention of wasting 100,000 BDT, I think I have gone through 420 study-hours for level 1.

If you are still not convinced, let me throw another surprising benefit that students may enjoy while preparing for professional exams. Because we usually have ample time left for getting more ‘Likes’ and stalking others in Facebook, academics always take a back seat during university life. Many of us ended up suffering from a chronic disease called ‘Procrastination’! As my level 1 exam was approaching, for the first time in my life, I really had to lead a pretty disciplined life because I began to realize that an hour lost in ‘unproductive’ things might result in a grand wastage of 100,000 BDT.  Therefore, I finally stopped procrastinating in my academic requirements in IBA. The outcome was nothing short of ecstasy. I passed CFA level 1 exam in June, FRM part 1 exam in November and obtained a CGPA of 3.9 in my senior year.

So if you have made up your mind, do NOT wait; sit for the level 1 of CFA exam while you are still at the University.

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Carsharing and its implication

Ning Zhao

Ning Zhao works for IBM Germany as an  IT Specialist and Application Development Consultant,  serving the banking and insurance industry, among other industries. She started study of Computer Science in the University of Kaiserslautern in 2001 and has lived in Germany since then.

A strong interest in Artificial Intelligence grew in her during the study and she developed an intelligent multi-criteria optimization system for managing cooking plans as part of her thesis. After graduation, she served as system engineer in HaCon Ingenieurgesellschaft mbH, the biggest software service provider for railway companies in Europe for three years.

Ning has attended a number of online courses on finance on her own time. Asif and Ning were teammates in the Stanford Venture Lab (now Stanford Online) course “Finance”, where she was the team leader. The team did a good job and our performance ranked 18th among 800+ teams from all over the world.

Understanding Carsharing

Many are familiar with the car renting business. Car renting companies such as Sixt, Avis, Hertz are operating all around the world. In recent years, in Europe (especially Germany) a more flexible and efficient business model of car renting, namely carsharing, has emerged and flourished.

Around the year 2000, some carsharing companies started their business in Germany: Cars to share were available in some designated “resource pools”, which are usually some reserved slots in public parkings. From there, users can pick up and return the cars. People need to subscribe to a service plan to use shared cars. A subscriber will get an IC card, which can be used to open the doors of cars and account the mileage/rent time. Before using a car, you must do the reservation via service provider’s call centre or website. The carsharing business soon spread to many cities in Germany. Sometimes, there might not be enough cars in a certain resource pool. Such cases occur more often in small cities or villages. In big cities, cars and resource pools are ample, availability of the service is usually not a problem.

How the model works

A typical carsharing service plan usually requires an account opening fee and then monthly fee. Actual renting cost is calculated on mileage and rent time. It will be mailed to the users, in addition to the monthly base fee. The billing mode is quite similar to a mobile phone service plan.

In year 2007, my family moved to a small city in northern Germany, and used a carsharing service for a while. At that time, if I don’t remember wrong, monthly fee for a single subscriber was 6 Euros (all direct family members with drive licenses are qualified to use the service in a family plan). Each minute in use cost extra 0.27 Euro (the exact figure might be wrong, but the size should be right). If the mileage exceeds certain upper bound, such as 500km in one rent, added fee per kilometer will also occur.

So if you want to use the car for not a short while or for very long distance, carsharing can be very expensive. Renting a car for one or several days from operators such as Sixt will be more cost-effective. The fee-structure of the carsharing business encourages short-time-span, short-distance car renting, and implicitly increases the usage of the cars (less parking time) and diversified the users of a car (more people are served by a single car). I would say, this is also a good case of social engineering, where new business model helps the optimization of a variety of resources.

Big players getting in

In year 2008, Daimler launched its “car2go” business, an upgraded version of carsharing. “Upgraded” in the following senses:

* The picking-up and returning places of car2go cars are no longer restricted in designated resource pools. You can park a car in any public parking places and close a rent. Next user can use the car right from where you leave it.
* Privileged parking slots in big public places, such as airports or supermarkets. Yes Daimler has closed deals with such business entities to push the car2go business. It does offer convenience to the car2go users.
* Reservation is possible, but no longer necessary. You can use an available car nearest to you without any reservation.
* No monthly fee required. You pay only for what you use.

Success of the model

According to Wikipedia, as of February 2014, car2go operates over 10,000 vehicles, which serve eight countries and 25 cities worldwide with over 600,000 customers. As what I heard in October 2013, the car2go business in 3 of the 25 cities were already making profit. Car models in operation varies in different cities. In deepest markets such as Hamburg, Berlin, Düsseldorf, etc., both traditional gas cars and all-electric cars are in operation. In Stuttgart, where Daimler’s headquarter resides, the car2go business was introduced a bit later but with the latest generation of her all-electric Smart cars only. All car2go cars in Stuttgart are equipped with on board navigators, air conditioners and radios (Some background: the technical configuration of typical German family cars is still very conservative compared to the rest of the world. When you buy a new non-high end car in Germany, features such as air conditioner, radio, electric windows, etc., usually have to be required explicitly).

At the beginning, 300 e-Smarts were in service in Stuttgart. The figure has exceeded 500 by now. Charging stations are very easy to find. The business operator monitors real-time status data of the cars. If the power level of a not-in-use car is running low, a staff will drive it to the nearest charging station to ensure its usability.

How do they keep the cleanliness of the cars? Well, before you can start the car, you have to rate the cleanliness and tidiness of the car. If the previous renter has bad manners, the service operator will know and maybe extra fee for car maintenance will occur.

Car2go mobile apps are available on all major app stores. This app, can help user to locate available car2go cars nearby, display each car’s information such as remaining power level, technical configuration, etc. You can also reserve a car with this app. The current fee schema is like this: 0.29 Euro per minute, 0.19 Euro per minute for parking between drives. 14.90 Euro per hour, or 59 Euros per day. Mileage exceeding certain upper bound must be paid extra. Insurance included. Obviously, this schema still highly encourages short-time-span and short-distance drives.

In Germany, other players also provide services similar to car2go. BMW’s DriveNow is one of the choices. Friends from Düsseldorf told me, in his city, DriveNow is running Mini Coopers, which is an attraction to many style-aware people. BMW’s all-electric models are in the DriveNow game too. It is said that Daimler and BMW have closed a deal: without any administrative ado. A registered Car2Go member can use DriveNow’s service and vice versa.


Mathematicians must be able to construct a model to optimize the number of shared cars in a city, such that people’s logistic needs are met and at the same time, minimal cars are idle. Theoretically, such optimized carsharing model will offer many benefits to places where population is dense.

For individuals, they get the freedom and convenience of driving at low cost – the fixed and variable cost of owning a car is very high; For the society as a whole, more people are able to enjoy the freedom and convenience of driving while less cars must be produced, which is positive to our environment and reduces the need for parking places.

However, the other side of the coin is less demand for private cars. I don’t think every party want to see this, at least in the imminent future. The car industry is creating huge number of jobs in many places. In Germany it is a mainstay industry. In China, emotion for owning cars is still being created by mass media, as plants for building more cars are still being constructed. I have a mixed feeling for this.

Business models such as carsharing offer better economical/environmental sustainability to the society. If we look towards a further horizon, we could be braver and bolder to prepare ourselves for the structural change of the job market in the future. I may well be very wrong, but personally I do not see an extremely bright future of privately owned cars. Innovation is calling. Get ready.

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Improvement of our Financial Digital Assets

Omar_SharifOmar Sharif was the lead digital Creative Director at CNN/Sports Illustrated in NY. Currently he leads his own boutique digital User Experience agency called Congregation, Digital Simply. To learn more, go to their website. You can follow him on twitter as well.

Note: The views shared here belongs to the author.

As a Bangladeshi-American, with experience in design (how information should be displayed clearly) I would like to take a stance on how we can get attention of our financial institutions to give us a better financial digital assets to interact with. Since websites are no longer just something one views from a desktop, and its something that is gaining more and more importance with the increase in mobile internet users, any institution should see their digital presentation as an asset.

Before picking out institutions whom I will use as examples (and there are many at fault) first we need to understand what design is. It is definitely not a Western made marketing gimmick but real science (not just social and psychology) and but science of the brain.

If you receive a piece of paper from your professor or a handout at a corporate meeting, and you are told to read through, we have to assume that we are not at an English literature class. The information has to have a hierarchy, What is the most important item, the second most important item(s) the third so on and so on. If everything looks to be the same size, have the same color, and things are packed into one page, I guarantee you will be confused. It will be hard for you to pay attention to what is important and what is lesser important than that.

The regulatory bodies in Bangladesh are a big sufferer of this problem. There is so much text, it’s as if we are reading a bulletin board. It packs in as much text as possible as if somehow if you don’t hit people with everything at once, they will not stick around the website. In reality it’s just the opposite. Simplicity is the key and we need to take the user’s attention to the most relevant places. Some features also need to be responsive (needs to adapt to a mobile/tab screen) but here in Bangladesh the designs are completely static. If the texts become microscopic while viewing from a cell phone then the website is missing out a critical mass of users.

Now in the private sector, at a certain banks website, all the vertical links below each section “Corporate Banking”, “Retail Banking”, “SME Banking” etc are tiny. Most Bangladeshi users are on a tablet or mobile phone. How are they supposed to tap those links with their fingers? This problem is quite rampant across all the bank websites.

And what is up with every digital space using scrolling text? It’s the text that goes from one direction to other, that’s used for “Breaking News” on media sites. One can  simply create a section for News and that solves it. Most students on their first year in design school use this scrolling technique. Our mature institutions have to go past that.

To put everything into perspective, what I am talking about here is UX design (User Experience Design). It’s where a person with a background in graphic design and technology work with company management and web programmers to come up with the architecture of their digital asset. More importantly, they decide how other human beings will use the digital asset and make sure the experience is simple and comfortable. In developed countries companies spend millions in this field, because they understand at the end of the day, putting people first is the best financial bet.

Our culture has history of knowing how to treat guests. Just because someone comes to your digital space, doesn’t mean they stop being a human being. They are also looking for comfort in getting the information they need and moving on. I hope institutions will pay attention to this, and treat people as guests. Even at some village homes, there are still a separate living quarter for strangers who may come at night to seek shelter and comfort. We need to expand this culture of hospitality everywhere including digital space.

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Why We Should Stay Away from Emerging Markets

Tahsanul Hoque, Guest post - The Asif Khan BlogTahsanul Hoque is currently working in Internal Accounts Payable in Morgan Stanley. He is a postgraduate of Ohio State University in Finance and a graduate of North South University. Even though he is a banker by profession he is also an avid investor by choice.


Most global stock investors are now well familiar with how their investments started 2014 after a phenomenal bull market of 2013. With US Fed taper in the horizon forcing a currency crisis in some emerging economies and S&P 500 going down by nearly 6% at peak, you must be wondering what you should do with your investment portfolio. You must be wondering that the good things have to come to an end at some point, right?

I have recently advised a strategy in my blog regarding why you should remain in US capital markets for now.  But what should you do if you are thinking about putting more money in emerging markets? You may think this is the good time to buy emerging stocks, since they are now very cheap. Emerging markets after all the big buzzwords on everybody’s lips. While on technical terms they are now cheaper compared to other major global stock indices, you should avoid investing in them unless you are a short term trader.

Under performance of EM even during the supposedly golden times

Let’s look at some popular Exchange Traded Funds on emerging market stocks in Wall Street and Europe and their performance over last 5 years.

 Exchange Traded Funds on emerging market stocks in Wall Street and Europe and their performance over last 5 years.
Google Finance
 Exchange Traded Funds on emerging market stocks in Wall Street and Europe and their performance over last 5 years.
Google Finance

Now you do not need a Bachelors in Finance or Economics to notice the general trend of these investment performance since 2010 (2009 was the only year where they performed well in these graphs). In most cases, the long term investor did not see any gains by investing in broad based emerging market funds. It seems to be they are in a slow bear market since middle of 2011. (Mainly due to unfavorable currency conversion issues with these investments)

Further federal reserve tapering on the cards

Remember the big picture in these graphs is that US Federal Reserve did not yet begin their tapering on full fledge. Instead the hot money from Quantitative Easing have been pouring into these investments during this timeframe. The slow tapering has just started for 2 months. Do you think the emerging market funds can manage to gain with Federal Reserve slowly withdrawing their stimulus? Think again. Your money is better invested somewhere else.

Chinese entrepreneurs diversifying outside China is a leading indicator

On the other hand, rich Chinese entrepreneurs are hastily trying to make other countries their second home. This is a subjective issue but sometimes these give some indications.

It does not take too long to notice these emerging markets have structural problems that need to be corrected by their government. So till then, it is better to avoid them.

What should we do?

Instead invest heavily more in US markets or frontier markets. Even though they also face headwinds from Fed tapering, the underlying short and medium term fundamentals are good enough to support these stocks. See these funds and their performance.

Instead invest heavily more in US markets or frontier markets. -The Asif Khan Blog
Google Finance

I still believe that over the very long run, emerging markets will be the leader in global investments. Ultimately the developed countries and their insatiable appetite for debt is not sustainable in the very long run and this will lead to major de-leveraging. However, as long as emerging economies do not increase their domestic consumption, as long as they remain export focused only with developed countries, I do not see them growing to be a major leader too soon. It will happen ultimately but not in the near future that is for sure. So for now avoid these markets. But if you are still a believer in Emerging markets for short to medium term horizon, I suggest you look at Emerging market Technology ETFs (such as CQQQ)

Disclosure: Please take your investment decision with your own knowledge and analysis. The analysis given is the author’s own independent view.

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CFA Exam – CFA Level 2 Preparation



Fahd Niaz continues with his series on CFA preparation. If you want to see his earlier post please see his guide on CFA L1 preparation





Don’t be surprised if this is your reaction when you start preparing for Level II of the CFA exam. You may get the feeling that the CFA Institute has lured you in with a relatively straightforward Level I and then dropped the hammer on Level II. There is some truth to the popular notion that Level II is the toughest of all three. Personally, I found the course of Level II to be the most demanding, however the paper of Level III was much more brutal (but we’ll get to that later). Candidates will be living in a fool’s paradise if they intend on following a similar studying tactic as Level I (or even choose to throw in an extra 20-30% effort). This can the turning point of the program and it separates the men from the boys.

An IMPORTANT DISCLAIMER before we go ahead – these study methods are based on what I followed and may not be suited for every individual. The aim is to provide an outside advice on how to approach the exams, but the final word rests with you.

To start off, I’ll reiterate my advice that candidates should try not to jump the gun in the first review. Ignorance can indeed be a bliss and sometimes it’s better not knowing what lies ahead. The item set format introduced in Level II takes some time to get used to. While the paper will still be multiple-choice, the number of questions will be half, implying that you’ll need twice the amount of time to attempt one question. I opted to study from the curriculum and in hindsight it turned out to be the right choice. While you can always use Schweser for the CFA exam, I would highly recommend that wherever possible, try leaning more towards the curriculum as Schweser may not go into the same depth as required.

Be prepared to tackle another obstacle relating to the order in which the item sets appear. Gone are the days when you knew which questions (read bazooka) would be fired at you first. The topic weights are in fact ranges, and there is no prescribed order in which the topics will be tested. So if you were planning on ignoring some lower weight areas (like you did with Derivatives or Alternative Investments in Level I), I’d suggest scrapping that idea immediately.

The buzzword for the Level II course is ‘Valuation’. You will be learning to apply many valuation techniques across different asset classes. Equity & Financial Reporting can potentially make up 55% of your total marks. Needless to say that these, along with Ethics, deserve greatest attention. The Code & Standards reappear here, so if you’ve aced them at Level I, that should boost your confidence. Few readings in Financial Reporting & Derivatives may seem repetitive, but they are in much more detail. Fixed Income can be tricky, particularly structured products and their various categories and characteristics. Portfolio Management will start to offer you a glimpse for what awaits you at Level III.

I would suggest writing out the calculations rather than performing them in your head. This will not only train your fingers on the calculator but also save you precious time on the paper as formulas can be complex (particularly Derivatives & Equity). So be ready for some serious number crunching. For remembering the formulas, flash cards always come in handy.

Befriend the practice exams as simple reading is not going to cut it. The volume of content is huge and the only way to retain so much is to constantly exercise your brain muscles to do exactly what you want it to do on exam day. If you’re attempting practice exams in April or so, the score should not worry you as there’s still a window for improvement. The point of attempting ten item-sets over three hours gets you in the groove of having to recall the entire course in one sitting.

There’s a plus point here as well – the more you practice, you can start to visualize a pattern while reading the vignette. You can end up anticipating which type of question will be asked, before reading the question.

Candidates can have a common (and genuine concern) over whether to read the item set first or the questions? Unfortunately, no one can help you there. It’s best to try both ways and see what works for you.

My approach in the last two weeks stays the same – start wrapping up and reduce the study hours as each day progresses. Don’t worry, your brain will not magically forget how to attempt the questions! One final piece of advice – under NO circumstances should you try to GAME the exam. This means that you should not waste your time pondering over which topics/questions can be tested based on some fancy regression model that you may have run or through an in-depth analysis of mock and sample exam patterns. Please refrain from calculating the chances of whether a newly included reading will be tested this year or not.

On exam day, you already know what to expect. I went into the paper blind and came out even more dumbfounded. Majority of the candidates can feel that way, so don’t beat yourself up if you’re in that list.

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Neoliberalism and Economic Freedom in Bangladesh

Daphne Chen on "Neoliberalism and Economic Freedom in Bangladesh"

Daphne graduated out of Princeton in 2010 after which she completed IBM’s prestigious 2 year strategy consulting rotation program. Following that she decided to work with developing countries and luckily for us she chose to come to Bangladesh on a Fulbright Fellowship where she studied the socioeconomic consequences of violence against women and worked for an impact investment firm in Dhaka.

She has recently been accepted to many top MBA programs for the class of 2016 (including Yale and Oxford) and she is looking for a summer internship at IFC (Any IFC people reading this should not miss this opportunity to hire her) before she matriculates in the fall.

Whenever I hear someone use the word economic freedom, my brain shuts down for a second and I lose track of the conversation. I hear the term so often these days, in so many unrelated contexts and applications, that it has become all but meaningless. “Economic freedom” has become a baffling concept, at once intuitive and slippery; instinctively, I want to accept the broadest definition possible, that of an individual’s freedom to take part in the economy without undue external restrictions and with control over his or her labor and property. But then, Neoliberals like David Harvey have co-opted the term as a means of rhetorical association so that every time I hear Economic Freedom I think “free market economy.” Harvey and his cohort tell us that

“human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade. The role of the state is to create and keep an appropriate framework to such practices.”

The role of government, then, is to create a healthy environment for entrepreneurialism than to withdraw managing it, allowing labor, capital, and goods to move freely.

The argument for “smaller government” always makes me somewhat suspicious, particularly when I think about how to preserve and promote economic freedom in Bangladesh. Despite Bangladesh’s adherence since the 1980s to a mostly neoliberal economic ideal, I don’t think its future will be about less government at all; if anything, I think it should be more better government. I agree with what neoliberalism says about private markets maximizing the collective wealth of a society, but who will ensure that wealth will be fairly distributed, or that corruption will minimized? Furthermore, are free market economies really better at increasing quality of life for its people? From where Bangladesh stands today, in the midst of political and social instability, it’s hard to ignore how such thinking has been responsible for major missteps in its social progress.

To understand how economic freedom is defined and practiced by countries all over the world, I looked to the 2014 Index of Economic Freedom (IEF) put out by the Heritage Foundation / Wall Street Journal. The Index measures economic freedom based on 10 factors grouped into 4 categories:

  • Rule of Law (property rights, freedom from corruption)
  • Limited Government (fiscal freedom, government spending)
  • Regulatory Efficiency (business freedom, labor freedom, monetary freedom)
  • Open Markets (trade freedom, investment freedom, financial freedom)

Each of these subcategories is graded on a scale of 0-100 and the overall score averages these subcategory scores giving equal weight to each.

The 2014 IEF report shows that Bangladesh increased its overall freedom score by 1.5 points to a total score of 54.1, placing it at 131 out of 178 nations. For context, Hong Kong ranks number 1, but other countries that we don’t often consider libertarian, like Singapore, also rank very high (#2). Once the poster child of free market economies, the US ranks 12th, behind Estonia (#11) and Mauritius (#8). This is kind of strange as Singapore is, after all, the land where there is a federal ban on chewing gum and the government has a monopoly on land sales that heavily distorts the property market, and former Soviet-controlled Estonia’s per capita GDP is less than half of what it is in the US. Other strange rankings include Colombia (#34) above France (#70) and Italy (#86).

The IEF rankings start to make even less sense once you go deeper into their methodology (e.g. how it applies a negative rating to increased government spending, regardless of context), and examining the component categories actually confounds the Heritage Foundation’s thesis that “free (market) economies” do a better job of increasing well being for their citizens. For instance, if we look at the IEF’s data on corruption, we see that welfare-state countries like Denmark, Sweden, Norway, and Finland exhibit the highest correlation with low corruption. The same holds true when we consider the IEF’s ratings with respect to protection of property rights across the world; countries with more government oversight like Ireland outrank free market economies like the USA. Even weirder, looking closely at the criteria for Limited Government reveals that minimum-wage laws, environmental regulations, and requirements for transparency in corporate accounting cause a country to be categorized as “less free”, whereas little or no regulation of occupational health and safety make a country “more free.”

Despite its shortcomings, the IEF did give me an overall economic picture of Bangladesh and correctly diagnosed its major weaknesses. It shows a track record of economic growth (GDP shows consistent increases about 6% year over year) but describes Bangladesh as “mostly unfree” due to persistent lack of progress in promoting effective rule of law, minimizing corruption, closing a porous border between politics and the judicial system, and improving weak property rights protection. The reform regime remains unbalanced and ineffective.  These are all obvious areas for improvement, but would further pushes toward a free-market economy solve these weaknesses? I’m not so sure.

In many key ways, Bangladesh has adhered to its path of neoliberal economic development. In the 1980s, it pushed a focus on exports, increasing foreign investment exposure, and using its abundance of cheap labor and advantageous demographic dividend to enter the global marketplace. The promised prosperity of economic freedom has come in some forms, but has utterly failed in others, and it is hard to know if this growth would have been better or worse if Bangladesh had adopted a different economic policy. It is true that there have been some measurable social improvements over the last 10 years, including life expectancy has increased by 10 years, infant mortality rates have dropped by nearly 67%, and female literacy has doubled.

But recent history showcases a 2013 that was messy and violent, with regular riot protests over the war crimes tribunal set up by PM Sheikh Hasina to investigate war crimes committed during the War for Independence in 1971, increasing religious turmoil, and a contentious national election. Not to mention that there are still over 50M Bangladeshis living in poverty, and domestic violence rates are on the rise, as is sexual harassment in the workplace. Furthermore, it would be impossible to talk about the state of economic freedom in 2014 Bangladesh without some discussion of the garment industry and its recent troubles. Last year, Bangladesh experienced some of the worst disasters ever to befall the garment industry, with the Tazreen Fashions fire killing 112 workers and the Rana Plaza building collapse killing over 1000. Many see these events as a direct failure of the neoliberal economic model in Bangladesh and it’s easy to see why. In recent years, the ready-made garment (RMG) industry has grown quickly in the country and accounts for about 75% of the country’s exports; despite this growth, wages remain barely higher than they were in the 1980s. The focus on profit maximization superseded labor regulations, leading eventually to disaster. The fall-out has seen the industry take the enormous burden of a mandatory 77% wage hike, necessitating mass layoffs, factory closures, and ensuring continued disruption for years to come. If there had been better enforcement of labor laws (and better laws), it’s hard to see how things could have escalated to such an extent.

This political volatility and social unrest must be reconciled in the context of undeniable economic and social gains. The economy has grown despite structural and institutional failures, but significant bureaucratic obstacles to entrepreneurial activity and economic advancement persist. The labor market remains woefully undereducated, and labor issues are still a big problem. With such a balance of good and bad effects, it’s really hard to know if economic freedom is even the right word to use to describe the mixed-bag progress of Bangladesh in the last 10 years.

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