CFA Level III case studies
CFA Level III · Put your knowledge to work in context.
The CFA Level III exam is the final of the three exams that make up the CFA Program, and it is the last exam step before the Chartered Financial Analyst designation. Where Level I asks candidates to learn and describe and Level II asks them to analyze and evaluate, Level III asks them to integrate and apply: the paper is a mix of vignette-supported constructed response (essay) questions and vignette-supported multiple choice questions, and candidates choose one of three specialized pathways. The CFA Level III case studies are 5 cases and about 3,966 words.
1Oversubscribed IPO Allocation and Underwriter Gifts
Ravensworth Advisors manages 4.2 billion for 1,150 accounts. A syndicate desk allocates 90,000 shares of an oversubscribed initial public offering to the firm; total client demand was 310,000 shares.
762 words, about 4 min2Funded-Status Risk versus a Private Credit Reallocation
The 1.8 billion Meridian Manufacturing defined benefit plan is 91% funded on a liability-driven basis: liabilities of 1.98 billion with a duration of 12.4 years. The committee proposes moving from 60% global equity / 40% core bonds to 45% equity / 35% long-dated corporate credit / 20% private credit and infrastructure.
778 words, about 4 min3Two Equity Managers, a Correlation Regime Shift, and an Active-Risk Budget
A $900 million foundation allocates 60% to equities through two managers: Manager A (active risk 4.0%, expected alpha 3.0%) and Manager B (active risk 6.5%, expected alpha 2.9%). B's trailing three-year alpha is 5.2% versus A's 1.4%, and the committee proposes shifting to 70/30 in favor of B to 'capture more alpha.' Active-return correlation between the managers was 0.15 over ten years but has been 0.55 for the last 18 months, as both built overweight positions in the same six mega-cap technology names.
706 words, about 4 min4Composite Definition, Benchmark Switch, and a Five-Year Track Record
Cedar Park Capital's 'Balanced Growth' composite contains 12 accounts and 400 million. One account, 48 million, held 22% equity for six weeks in the first quarter while its IPS was being amended.
862 words, about 4 min5Hedging a Floating-Rate Term Loan: Swap, Cap, or Zero-Cost Collar
Halcyon Foods has a 250 million term loan priced at SOFR + 200bp, amortizing 5% of original principal annually and maturing in four years. SOFR is 3.60%, so the current all-in cost is 5.60%.
858 words, about 4 min