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Paper 14: Strategic Financial Management (SFM) 100 Marks

The document outlines the syllabus for the CMA exam's Paper 14 on Strategic Financial Management. It covers 4 main sections - Investment Decisions, Security Analysis and Portfolio Management, Financial Risk Management, and International Financial Management. It also includes a section on Digital Finance. Each section lists the relevant modules and module descriptions.

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163 views4 pages

Paper 14: Strategic Financial Management (SFM) 100 Marks

The document outlines the syllabus for the CMA exam's Paper 14 on Strategic Financial Management. It covers 4 main sections - Investment Decisions, Security Analysis and Portfolio Management, Financial Risk Management, and International Financial Management. It also includes a section on Digital Finance. Each section lists the relevant modules and module descriptions.

Uploaded by

Sridhanyas kitchen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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CMA Syllabus 2022

Paper 14

STRATEGIC FINANCIAL MANAGEMENT (SFM) 100 Marks

Module No. Module Description  Weight


Section A: Investment Decisions 25%
1 Investment Decisions, Project Planning and Control 10%
2 Evaluation of Risky Proposal for Investment Decisions 10%
3 Leasing Decisions
5%
4 Securitization
Section B: Security Analysis and Portfolio Management 35%
5 Introduction 5%
Equity and Bond Valuation and Evaluation of
6
Performance 15%
7 Mutual Funds
8 Portfolio Theory and Practice
9 Asset Pricing Theories
Portfolio Performance Evaluation and Portfolio 15%
10
Revision
11 Efficient Market Hypothesis

Section C: Financial Risk Management 20%

12 Risks in Financial Market


Financial Derivatives - Instruments for Risk 20%
13
Management

Section D: International Financial Management 15%

14 The International Financial Environment 5%

15 Foreign Exchange Market


10%
16 Foreign Exchange Risk Management

Section E: Digital Finance 5%

17 Digital Finance 5%

The Institute of Cost Accountants of India


CMA Syllabus 2022

SECTION A: INVESTMENT DECISIONS

1. Investment Decisions, Project Planning and Control


1.1 Measuring Cash Flows, Discounted Cash Flow Technique for Project Evaluation
1.2 NPV and IRR - Conflict and Resolution, The Modified Internal Rate of Return (MIRR),
Comparing Projects with Unequal Lives, The Concept of Abandonment Value, Modified
Accelerated Cost Recovery System (MACRS)
1.3 Inflation Adjusted Cash Flow Forecasting in Capital Budgeting
1.4 Capital Rationing for Divisible and Non – divisible Projects (with Application of Integer
Programming)
1.5 Social Cost Benefit Analysis
2. Evaluation of Risky Proposals for Investment Decisions
2.1 Risk Analysis in Capital Budgeting - Certainty Equivalent Approach, Risk Adjusted
Discount Rate, Expected NPV, Standard Deviation of NPV and Use of Normal Distribution,
Decision Tree Analysis, Options in Capital Budgeting
2.2 Sensitivity Analysis
2.3 Scenario Analysis
2.4 Monte Carlo Simulation
3. Leasing Decisions
3.1 Lease Financing – Evaluation of Lease vs. Buy Options
3.2 Break-Even Lease Rental Determination and Implicit Rate
3.3 Cross Border Leasing, Sale and Lease Back
4. Securitization
4.1 Definition and Concept and Benefits of Securitization
4.2 Participants in Securitization
4.3 Mechanism and Problems of Securitization
4.4 Securitization Instruments

SECTION B: SECURITY ANALYSIS & PORTFOLIO MANAGEMENT



5. Introduction
5.1 Fundamental Analysis
5.2 Technical Analysis
6. Equity and Bond Valuation and Evaluation of Performance
6.1 Equity Valuation - Discounted Cash Flow Based Valuation, Relative Valuation using
Multiples and Weights
6.2 Bond Valuation - Prices & Yields
7. Mutual Funds
7.1 Meaning, Advantages and Disadvantages, Structure and Types

The Institute of Cost Accountants of India


CMA Syllabus 2022

7.2 Regulations
7.3 Computation of NAV
7.4 Evaluation of Performance and Movements in Security Values and NAVs of Mutual Funds
for Investment Decisions: Perspective of AUM Managers and Individual Investors
7.5 ETF, REIT, InvIT
8. Portfolio Theory and Practice
8.1 Portfolio Return and Risk, Systematic and Unsystematic Risk, Diversification strategies
(Naïve vs the Markowitz Model)
8.2 Optimal Portfolio, Efficient Frontier, Capital Market Line
8.3 Principles of Asset Allocation, Active and Passive Asset Allocation
9. Asset Pricing Theories
9.1 Single Factor and Multifactor Asset Pricing Theories: CAPM and APT
9.2 Concepts and Applications (including Levered Beta and Unlevered Beta)
10. Portfolio Performance Evaluation and Portfolio Revision
10.1 Conventional Performance Evaluation
10.2 Market Timing and Style Analysis
11. Efficient Market Hypothesis
11.1 Definition
11.2 Forms of Market Efficiency
11.3 Implications

SECTION C: FINANCIAL RISK MANAGEMENT



12. Risks in Financial Market
13. Financial Derivatives – Instruments for Risk Management
13.1 Introduction to Financial Derivatives
13.2 Forward and Futures – Meaning and Difference, Pricing, Stock Futures, Index based
Futures, Hedging through Futures
13.3 Options
13.3.1 Meaning, Features and Types of Options, Option vs. Forward and Futures,
Profitability of Option, Profit Profile of Buyer and Seller, Value of Option,
Determination of Option Premium
13.3.2 Option Strategies
13.3.3 Put-Call Parity Relationship, Valuation of Options using Binomial Tree Approach
and Black-Scholes Model, The Greeks
13.4 Swaps
13.4.1 Meaning, Features, Types, Benefits of Swaps
13.4.2 Interest Rate Swaps, Credit Default Swaps
The Institute of Cost Accountants of India
CMA Syllabus 2022

13.5 Interest Rate Derivatives – Forward Rate Agreement, Interest Rate Futures and Options,
Caps, Floors and Collars

SECTION D: INTERNATIONAL FINANCIAL MANAGEMENT



14. The International Financial Environment
14.1 International Financial Institutions and Markets
14.2 Sources of Foreign Currency
15. Foreign Exchange Market
15.1 Introduction – Structure of Foreign Exchange Market
15.2 Foreign Exchange Rate – Meaning, Determinants, Equilibrium Exchange Rate, Exchange
Rate Quotations – Meaning, Direct vs. Indirect Quote, American vs. European Quote,
Bid-Ask Rate and Spread, Cross Rates
15.3 Segments of Foreign Exchange Market – Spot Market (including two and three-point
Arbitrage), Forward Market
15.4 Foreign Currency Derivatives
15.4.1 Currency Forwards
15.4.2 Currency Futures
15.4.3 Currency Options
15.4.4 Currency Swaps
15.5 Parity Relationships
16. Foreign Exchange Risk Management
16.1 Transaction Exposure
16.2 Translation Exposure
16.3 Operating Exposure

SECTION E: DIGITAL FINANCE

17. Digital Finance


17.1 Meaning, Traditional Finance vs. Digital Finance
17.2 Digital Finance Ecosystem –
17.2.1 Digital Infrastructure
17.2.2 Digital Money – Cards, Central Bank Digital Currency
17.2.3 Digital Assets – Non-Fungible Tokens, Private Cryptocurrency, Stablecoins
17.2.4 Digital Financial Services – Wallets, UPI, Neo-Banks, FinTech
17.3 Regulation and Governance in a Digital Finance Environment

The Institute of Cost Accountants of India

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