Syllabus

(Last updated: April 28, 2025)

Chapter 1 - Introduction to Financial Markets and Institutions

• Overview of Financial Markets
o Types of Financial Markets
▪ Capital Markets
▪ Money Markets
▪ Derivatives Markets
▪ Foreign Exchange Markets
o Functions of Financial Markets
▪ Allocation of capital
▪ Price Discovery
▪ Liquidity Provision
▪ Risk Management
o Market Participants
▪ Investors
▪ Financial Institutions
▪ Regulators
• Financial Instruments
o Stocks
▪ Common vs. preferred stocks
▪ Stock valuation methods (e.g., dividend discount model)
o Bonds
▪ Types of bonds (government, corporate, municipal)
▪ Bond pricing and yield
o Derivatives
▪ Futures contracts
▪ Options contracts
▪ Swaps (interest rate, currency)
o Commodities
▪ Types of commodities (energy, metals, agriculture)
▪ Commodity trading and valuation
• Financial Institutions
o Role of Banks
▪ Commercial banks: deposit-taking, lending, payment services
▪ Investment banks: underwriting, advisory services
o Non-Bank Financial Institutions
▪ Insurance companies: risk pooling and underwriting
▪ Pension funds: retirement savings and investment
o Central Banks and Monetary Policy
▪ Functions of central banks (e.g., Federal Reserve, ECB)

Copyright @ International Finance Olympiad www.finance-olympiad.com

 ▪Tools of monetary policy (interest rates, open market operations)
• Regulatory Environment
o Key Financial Regulations and Bodies
▪ Securities laws (e.g., Sarbanes-Oxley Act, Dodd-Frank Act)
▪ Regulatory agencies (e.g., SEC, CFTC)
o Understanding Compliance and Ethics
▪ Regulatory compliance requirements
▪ Ethical issues and standards in finance

Chapter 2 - Financial Statements and Analysis

• Understanding Financial Statements
o Income Statement
▪ Revenues and expenses
▪ Gross profit, operating income, net income
▪ Earnings per share (EPS)
o Balance Sheet
▪ Assets
▪ Liabilities
▪ Equity
o Cash Flow Statement
▪ Operating activities
▪ Investing activities
▪ Financing activities
o Key Components and Terminology
▪ Key financial metrics (e.g., revenue, operating income, net assets)
▪ Accounting principles (e.g., GAAP, IFRS)
• Financial Ratio Analysis
o Liquidity Ratios
▪ Current ratio
▪ Quick ratio (acid-test ratio)
o Profitability Ratios
▪ Gross profit margin
▪ Net profit margin
▪ Return on assets (ROA), return on equity (ROE)
o Solvency Ratios
▪ Debt-to-equity ratio
▪ Interest coverage ratio
o Efficiency Ratios
▪ Inventory turnover ratio
▪ Receivables turnover ratio
▪ Asset turnover ratio
• Financial Statement Interpretation
o Analyzing Financial Health and Performance

Copyright @ International Finance Olympiad www.finance-olympiad.com

 ▪Assessing overall financial stability
▪ Evaluating profitability, liquidity, and solvency
o Comparative Analysis
▪ Horizontal analysis (comparison over time)
▪ Vertical analysis (comparison within a single period)
o Trend Analysis
▪ Identifying patterns and trends in financial performance
▪ Forecasting future financial performance based on historical data
• Valuation Techniques
o Discounted Cash Flow (DCF) Analysis
▪ Calculating free cash flow
▪ Determining the discount rate (e.g., WACC)
▪ Estimating the present value of future cash flows
o Price-to-Earnings (P/E) Ratio
▪ Calculating P/E ratio
▪ Interpreting P/E ratio in comparison to industry and market averages
o Other Valuation Methods
▪ Price-to-Book (P/B) ratio
▪ Dividend Discount Model (DDM)
▪ Comparable company analysis

Chapter 3 - Corporate Finance

• Capital Budgeting
o Techniques for Evaluating Investment Projects
▪ Net Present Value (NPV)
▪ Internal Rate of Return (IRR)
▪ Payback Period
▪ Profitability Index
• Capital Structure
o Debt vs. Equity Financing
▪ Types of Debt Financing
▪ Types of Equity Financing
▪ Optimal Capital Structure
o Impact on Company Valuation and Risk
▪ Effects of debt on financial leverage
▪ Impact of equity financing on ownership and control
▪ Trade-off theory and pecking order theory
• Dividend Policy
o Dividend Payout Decisions
▪ Types of dividends (cash, stock, special dividends)
▪ Factors influencing dividend decisions (e.g., profitability, cash flow)
o Theories and Practices
▪ Dividend Irrelevance Theory (Modigliani-Miller)

Copyright @ International Finance Olympiad www.finance-olympiad.com

 ▪ Dividend Signaling Theory
▪ Dividend Policy Models (e.g., stable dividend policy, residual dividend
policy)
• Financial Planning and Forecasting
o Budgeting Processes
▪ Types of budgets (operating, capital, cash)
▪ Budget preparation and approval process
▪ Variance analysis and budget control
o Financial Modeling and Forecasting
▪ Building financial models (assumptions, projections)
▪ Forecasting methods (trend analysis, regression analysis)
▪ Scenario analysis and sensitivity analysis

Chapter 4 - Investment Analysis and Portfolio Management

• Investment Basics
o Types of Investments
▪ Stocks
▪ Bonds
▪ Mutual Funds
o Risk and Return Concepts
▪ Risk Types
▪ Return Measurement
• Portfolio Theory
o Diversification and Asset Allocation
▪ Benefits of Diversification
▪ Asset Allocation Strategies
o Modern Portfolio Theory (MPT)
▪ Efficient Frontier
▪ Capital Market Line (CML)
▪ Sharpe Ratio
• Investment Strategies
o Active vs. Passive Management
▪ Active Management
▪ Passive Management
o Fundamental and Technical Analysis
▪ Fundamental Analysis
▪ Technical Analysis
• Performance Evaluation
o Measuring Investment Performance
▪ Total return calculation
▪ Performance metrics (e.g., alpha, beta)
o Risk-Adjusted Returns and Benchmarks
▪ Risk-Adjusted Performance Measures

Copyright @ International Finance Olympiad www.finance-olympiad.com

 ▪ Benchmarking

Chapter 5 - Economic Principles and Applications

• Microeconomics
o Supply and Demand
▪ Law of Supply and Demand
▪ Shifts in Supply and Demand
▪ Elasticity
o Market Structures and Competition
▪ Perfect Competition
▪ Monopoly
▪ Oligopoly
▪ Monopolistic Competition
• Macroeconomics
o Economic Indicators
▪ Gross Domestic Product (GDP)
▪ Inflation
▪ Unemployment
o Fiscal and Monetary Policy
▪ Fiscal Policy
▪ Monetary Policy
▪ Policy Effects
• International Economics
o Trade Theories and Policies
▪ Comparative Advantage
▪ Trade Policies
▪ Globalization and Trade
o Exchange Rates and International Finance
▪ Exchange Rate Mechanisms
▪ Exchange Rate Determination
▪ International Financial Markets
• Economic Development
o Growth Theories
▪ Classical Growth Theory
▪ Endogenous Growth Theory
▪ Development Economics
o Sustainable Development and Emerging Markets
▪ Sustainable Development Goals (SDGs)
▪ Emerging Markets

Chapter 6 - Financial Risk Management

• Types of Financial Risks

Copyright @ International Finance Olympiad www.finance-olympiad.com

 o Market Risk
o Credit Risk
o Operational Risk
o Liquidity Risk
• Risk Measurement and Management
o Risk Assessment Techniques
▪ Quantitative Techniques
▪ Qualitative Techniques
o Hedging Strategies and Instruments
▪ Hedging Techniques
▪ Risk Management Instruments
• Regulatory and Compliance Issues
o Risk Management Frameworks
▪ International Standards
▪ Internal Risk Management Policies
o Impact of Regulations on Financial Risk
▪ Regulatory Requirements
▪ Effects on Risk Management Practices

Chapter 7 - Behavioral Finance and Ethics

• Behavioral Finance
o Psychological Factors Influencing Financial Decisions
▪ Cognitive Biases
▪ Emotional Influences
▪ Decision-Making Heuristics
o Common Biases and Anomalies
▪ Market Anomalies
▪ Investor Behavior
• Financial Decision-Making
o Impact of Behavior on Investment Choices
▪ Risk Perception
▪ Investment Strategies
o Strategies to Mitigate Behavioral Biases
▪ Behavioral Interventions
▪ Education and Awareness
• Ethics in Finance
o Ethical Considerations and Dilemmas
▪ Conflicts of Interest
▪ Ethical Decision-Making
o Importance of Integrity and Professionalism in Finance
▪ Professional Standards
▪ Building Trust

Copyright @ International Finance Olympiad www.finance-olympiad.com