IF Course 1 Textbook

CFA Institute Investment Foundations - Course 1 Notes

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Introduction

• Course 1: Industry Overview and Structure.
• Syllabus contains information needed to complete the course.
• Each module includes introduction, learning objectives, and reading assignments.
• Assignments, exercises, and activities are available online.
• Packet for reading detailed content and taking notes.
• Online access is needed to complete the course.

Table of Contents

• Module 1: Industry Overview and Structure
• Module 2: Structure of the Investment Industry
• Module 3: Introduction to Investment Services
• Module 4: Financial Planning Services and Introduction to Fintech
• Module 5: Investment Professionalism and Regulations

Module 1: Overview of the Investment Industry

• Matches those who need money with those who have savings to invest.
• Minimises costs and facilitates financial support.
• Introduces the structure of the financial services industry and the investment industry.
• Describes types and functions of industry participants.
• Learning outcomes:
  • Describe the financial services industry
  • Explain how economies benefit from the existence of the investment industry
  • Explain how investors benefit from the existence of the investment industry
  • Describe types and functions of participants in the investment industry

Lesson 1: What Is the Financial Services Industry?

• Explores savers and spenders and their functions, as well as different forms of assets.
• Learning outcome: describe the financial services industry.
• The financial system links savers with spenders.
• The financial services industry offers products and services to savers and spenders.
• Money, cash, funds, and financial capital are used interchangeably.
• Savers: individuals, households, companies, and governments with money to invest.
• Spenders: individuals, companies, and governments needing money.
• Financial services industry: Industry that offers a range of products and services to those who have money to invest and those who need money and help channel funds between them.
• Financial capital: Money provided to individuals, companies, and governments to finance their needs.
• 'Saver' is for those with accumulated savings that are often invested.
• When savers make investments, they are typically called investors and they become providers of capital.
• If their investment is a loan, they are often referred to as lenders.
• 'Spender' is for those who need money.
• When spenders have received the money, they need and start using it, they become users of capital.
• If they are recipients of a loan, they are typically called borrowers.

Real and Financial Assets

• Savings can be invested in a wide range of assets.
• Assets: Items that have value and include real assets and financial assets.
• Real assets: Physical assets, such as land, buildings, machinery, cattle, and gold.
• A company’s production may depend on them, and they are sometimes referred to as physical capital.
• Physical capital: The means of production; tangible goods such as equipment, tools, and buildings.
• Financial assets: Claims on other assets; for example, a share of stock represents ownership in a company or a claim to some of the company’s assets and earnings.
• Financial assets are claims on real assets or other financial assets and frequently come in the form of a certificate or legal contract.
• Share of stock represents ownership in a company.
• Shareholder has a claim to some portion of the company’s assets and earnings.
• Portfolio: The group of assets in which savings are invested.
• Securities: Financial assets that can be traded, such as shares and bonds.
• Two largest categories of securities are debt and equity securities.

Debt Securities:

• Loans that lenders make to borrowers.
• Borrowers repay loans and make interest payments.
• Also called fixed-income securities because interest payments are fixed.
• Also known as bonds.
• Investors in bonds are referred to as bondholders.

Equity Securities:

• Also called stocks or shares.
• Shareholders (stockholders) have ownership in a company.
• The company has no obligation to repay the money that shareholders paid for their shares or to make regular payments to them, which are called dividends.
• Investors expect to earn a return by selling their shares at a higher price than they bought them, and possibly by receiving dividends.
• Financial markets: Places where buyers and sellers can trade securities; also called securities markets or capital markets.
• When providers and users of capital interact, the providers usually have a direct claim on the users. This is direct finance.
• Direct finance: When providers and users of capital interact, the providers usually have a direct claim on the users (e.g., right to certain assets and earnings generated by the user). See also direct investments.
• Providers and users often rely on financial intermediaries to find each other and channel funds between each other. This process is indirect finance.
• Indirect finance: The use of financial intermediaries to find and channel funds between providers and users of capital. Because financial intermediaries sit between providers and users, the former do not have direct claims on the latter. See also indirect investments.
• Financial intermediaries: Organisations that go between those who have money and those who need money.
• Many savers do not have the time or the expertise to identify and select individuals, companies, and governments to lend to or invest in.
• Matching savers and borrowers and monitoring borrowers’ behavior and financial health are functions financial intermediaries can perform better and more cheaply than most investors can do on their own.

Knowledge Check Question 1

• GlobalBank credits Krause’s account for USD100,000 and makes a USD50,000 loan to a new customer. This means that GlobalBank is a:
  • a) Provider of capital
  • b) User of capital
  • c) Both
• The correct answer is b, GlobalBank’s crediting Krause’s account and loaning to another customer classifies it as both a provider of capital and a user of capital.
• Lesson Summary: The lesson expands knowledge of the financial services industry, its participants, and how it works and you should now be able to describe the financial services industry.

Lesson 2: How Economies Benefit from the Existence of the Investment Industry

• Explores the way the investment industry operates within economic systems, how resources are allocated in economic systems, and how the investment industry fosters economic growth.
• Goal of most economic systems is the efficient allocation of scarce resources to the most productive uses.
• Resources: labor, real assets, and financial capital.
• Investment industry: Subset of the financial services industry that comprises all the participants that are instrumental in helping savers invest their money and spenders raise capital in financial markets.

Economic Systems:

• Economic systems vary from pure capitalism with free markets to planned economies with centralized authorities.
• Desire for goods and services is unlimited, but resources are limited.
• Participants in economic systems must address three questions:
  1. Which goods and services should be produced?
  2. How should the goods and services be produced?
  3. Who should receive the goods and services that are produced?
• Economic planners prefer that scarce resources are applied to produce goods and services in a way that satisfies the needs of consumers.
• Capitalism: An economic system that promotes private ownership as the means of production and markets as the means of allocating scarce resources.
• Capitalism promotes private ownership and markets.
• Private owners produce goods and services, and markets allocate them based on scarcity.
• In a purely free market capitalist economy, there is no central authority, such as a government, directing economic activity.
• When well-functioning markets support the efficient allocation of scarce resources, economies can grow and society benefits.
• Pure free market capitalism exists only in theory.
• Governments play a role in all economic systems.
• In some capitalistic economies, such as in Western economies, the government’s role in business may be relatively minimal.
• In economies largely dependent on the extraction of natural resources, such as in some Middle Eastern, African, and South American countries, the government may maintain significant control over key national industries.
• In transition economies, which are moving from planned economies to market economies, the government may play a significant role in business.

How the Investment Industry Fosters Economic Growth

• The investment industry contributes to the efficient allocation of resources in the economy.
• Without the investment industry, savers would have to spend significant resources finding individuals, companies, and governments offering suitable investment opportunities.
• Resources would also be spent on the search for capital rather than on considering how best to use it, which would result in less efficiency.
• Capital that is put to more productive use fosters economic growth and boosts the willingness of savers to supply funds to those who need them.
• The investment industry helps investors collect and analyze data about economies and information about individuals, companies, and governments.
• It also assists investors in determining the value of real and financial assets.
• The investment industry offers a wide range of services and products that makes it easier for savers to invest.
• The investment industry provides liquidity, which is the state of a market’s ability to transfer its products between buyers and sellers with ease.
• High liquidity markets allow investors to complete a transaction quickly and reverse it quickly if needed.
• Liquidity: The state of a market’s ability to transfer its products between buyers and sellers with ease.
• Liquid markets give investors confidence about getting a fair price at that particular moment.

Knowledge Check Question 1

• The investment industry benefits the economy by providing:
  • a) Liquidity
  • b) Relevant financial information
  • c) Capital gains
• Both a and c are correct. Market liquidity exists when investors can buy and sell easily without impacting the trade price.
• Liquidity improves when transaction costs are low.
• The investment industry provides access to the financial data needed to evaluate investment opportunities.

Lesson 3: How Investors Benefit from the Existence of the Investment Industry

• Explores the characteristics of a well-functioning investment industry, the benefits experienced by investors, and how finance professionals can help investors.
• A well-functioning investment industry depends on investor confidence.
• Such confidence arises from a feeling of trust that all parties are adhering to a code of ethics and standards for professional conduct, and that trust must be earned and verified consistently.

Characteristics of Well-Functioning Markets:

• Unfair transactions
• Shortfalls in integrity
• Unreliable advice
• Inefficient handling of trades
• A robust investment industry supports efficiency and benefits investors.
• Investors can invest in debt and equity securities, and they can invest in derivatives and alternative investments.
• Pooled investment vehicle: because groups of individual investors put their money together to invest in the same customized financial arrangement that is professionally managed.
• Participants may buy and sell real and financial assets and then package them to create new assets that suit the needs of investors better than the original assets.
• Mortgage-backed securities are an example; they represent a claim on the money generated by a large number of mortgages that have been grouped together in a process called securitization.
• Financial planning
• Information and research
• Trading support
• Competitive markets lead to fair prices, which ensure that buyers and sellers transact at a reasonable price.
• Markets are competitive markets promote production efficiency and keep the prices of goods and services down, including investment products and services
• Better liquidity lets investors easily buy or sell an asset without unwanted price effects.
• Investors benefit when financial markets are liquid and transaction costs are low.
• active market = costs incurred when a trade happens are called transaction costs. Because transaction costs reduce the return on investments, therefore, the lower the transaction costs, the better.

How Financial Professionals Help Investors

• Financial professionals benefit investors through data collection and processing.
• Timeliness of information is critical.
• A well-functioning investment industry supports society as it deals with risk, the uncertainty of future outcomes.
• Investors can rely on investment industry expertise to determine whether this risk is appropriate to their financial circumstances and justified by the expected investment return.
• It is the financial advisor’s role to explain financial risk in terms that are understandable and to propose solutions for managing it.
• The industry’s professionals provide advice on mitigating investment risk, and they can also step in to reduce risk by providing insurance.

Knowledge Check Question 1

• Investors benefit in many ways from a well-functioning investment industry. Which of the following is not a benefit?
  • a) Access to a diverse range of investment products structured to meet investor needs
  • b) Availability of investment management and advisory services
  • c) Low market volatility
  • d) Access to financial and economic data
  • e) Fair competitive pricing in liquid markets
• The correct answer is c. Market volatility is not necessarily low in a well-functioning investment industry.

Lesson 4: Investment Industry Participants

• Explores the roles of various professionals within the investment industry through a hypothetical example and learns how investment professionals are categorized and the key services they offer to assist investors and companies.
• By the end of this lesson, you will be able to describe the types of institutions, services, and functions of participants in the investment industry.

How Companies and Governments Raise Capital

• Stock exchanges are financial markets that allow buyers and sellers to trade securities.
• Investment banks: Financial intermediaries that assist companies and governments in raising capital by organizing the sale of shares and bonds; also known as merchant banks.
• Investment banks match investors with companies and governments seeking capital.
• Sell-side analysts: Analysts who work for the organizations, typically an investment bank, that sell securities. They collect and analyze information about a company and its competitors and then prepare a report that is shared with potential investors.
• Auditors evaluate a company’s internal controls and financial reporting to ensure that investors receive relevant and reliable financial information.

How the Investment Industry Helps Savers Invest their Money

• Investors can be classified as individual and institutional investors
• Individual investors: simply a person who holds investments, a Retail investors have the least investable assets and high-net-worth investors have substantial investible assets
• Retail investors: Individual investors with the least amount of investable assets.
• High-net-worth investors: Individual investors with a higher amount of investible assets relative to retail investors.
• Institutional investors: organizations that invest either for themselves or on behalf of others (e.g. Pension Plans, Endowment Funds, Foundations, Sovereign Wealth Funds)
• Brokers act as agents i.e help buyers and sellers to find and trade with each other The brokers take a commission for services
• Dealers act as principals i.e use their own accounts and their own capital to trade with buyers and sellers in proprietary trading (proprietary traders will be expanded on in Trading Services in Module 3, Introduction to Investment Services).
• Buy-side analysts: typically a type of institutional investor, that buy securities. They analyse data about companies and the markets in which they operate and review potential investments.
• Financial planners: Help clients to define their investment goals and to understand their future needs.
• Individual planning for her retirement may buy shares in a mutual fund, which is a professionally managed vehicle that invests in a range of securities.

Knowledge Check

• Question 1: Primo Company needs to raise capital by issuing stock. - Investment bank
• Question 2: Zhang Li, a retail investor, needs to invest assets now to cover future expenses. - Financial planner
• Question 3: Peter Robinson needs the latest market research - Buy-side analyst
• Question 4: Mike Smith, a high-net-worth (HNW) investor, needs various advisory
• Question 5: Anna Huber, an investor at Euro Pension Fund, needs to have her firm’s securities held with accompanying account statements for their records. Custodian and depository

Module 1 Summary

• At its best, the industry efficiently matches those who need money with those who have savings to invest, minimizing the costs to each and allowing money to support the most productive businesses and projects. The investment industry acts on behalf of savers, helping them to navigate the financial markets. When the investment industry is efficient and trustworthy, economies and individuals benefit.
• The financial services industry exists to provide a link between savers/lenders/providers of capital who have money to invest and spenders/borrowers/users of capital who need money.
• Financial intermediaries go between savers and spenders. The investment industry exists within an economic system and these systems can differ from country to country. But the goal of most economic systems is the efficient allocation of scarce resources to the most productive uses.
• Financial markets and the investment industry help allocate capital, a scarce resource, to the most productive uses, which fosters economic growth and benefits society.
  Investor confidence is key to fostering a well-functioning investment industry."
  Trust is essential to the functioning of the investment industry.Companies and governments use financial banks to help them raise capital.

Module 2: Structure of the Investment Industry

• Introduces the structure of the investment industry, including the terms sell-side, buy-side, front office, middle office, and back office, as well as the structure of banks and insurance companies.
• Learning outcomes:
  • Distinguish between buy-side and sell-side firms and front-, middle-, and back-office functions in the investment industry
  • Identify positions and responsibilities within firms in the investment industry
  • Identify types of financial institutions, including banks and insurance companies

Lesson 1: Structure of Investment Firms

• Learning outcomes: be able to distinguish between buy-side and sell-side firms and front, middle, and back office functions in the investment industry.

Buy-Side and Sell-Side Firms

• Sell-side firms: Typically, investment banks, brokers, and dealers that provide investment products and services.
• Buy-side firms: Institutional investors and investment managers who purchase investment products and services from sell-side firms.
• Buy-side participants (e.g., pension plans, endowment funds, foundations, sovereign wealth funds, and insurance companies), purchase investment products and services from sell-side firms.
• Practitioners sometimes apply the buy-side label to consultants who provide services only to buy-side firms.
• The buy-side and sell-side classifications do not apply to all firms in the investment industry.
• They are not relevant for firms providing investment information services, such as investment research providers, data vendors, or credit rating agencies.
• The classifications are somewhat arbitrary and are not easily applied to many large, integrated firms.
• Many investment banks have divisions or wholly owned subsidiaries that provide investment management, which is a buy-side activity, although investment banks are sell-side firms.

Front, Middle, and Back Offices

• Most sell-side firms organize their activities along similar lines i.e.Front office, middle office, or the back office.
  • Front Office: consist of client-facing activities that provide direct
    revenue generation :The sales, marketing, and customer service department and trading department considered to be
    a front-office activity and generate revenue from clients.
  • Middle Office: Includes the core activities of the firm. Risk management information technology (IT), corporate finance, portfolio management, and research ( departments do not interact directly with clients).
  • Back Office: Houses the administrative and support functions necessary to run the firm accounting, human resources, payroll, and operations/ responsible for clearing and settling trades and for keeping track of ownership.

Portfolio Management activities

• Investment managers: Investment professionals who receive authority from their clients to trade securities and assets on their behalf. Also called asset managers.
• Front-Office: encompass varieties such activities, clients changes in their financial goals or circumstances, review past performance, tax discussions, presentations made to prospective clients speaking on investment topics.
• Meeting, clients with her clients; budgeting needs and financial planning strategies with clients. Risk Measurements
• Back Office: Jenna does not routinely interact with the back office but gets involved to fix client dissatisfaction.

Knowledge Check

• Question 1 - Which of the below are considered sell-side firms? Choose all that apply. - Front office brokers, Investment banks
• Question 2 - Categorize the following activities as taking place in the front office, middle office, or back office: The account manager discusses a tax issue with a client’s tax accountant (who works for another firm). Front Office
• Question 3 - The firm’s risk manager prepares a quarterly assessment of the client’s exposure to risk factors- Middle Office
  Thanks to Question 4 - to efficient administrative and operational controls the firm experiences very few losses due to errors Back Office

Lesson 2: Investment Firm Staff and Leadership

• Learning outcome: Able to identify positions and responsibilities within firms in the investment industry.

Leadership Titles and Responsibilities

• Chief Executive Officer (CEO): Manages the firm
• Chief Financial Officer (CFO): Responsible for arranging financing for the firm and for financial reporting
• Chief Operating Officer (COO): Responsible for the day-to-day management of the firm
• Chief Investment Officer (CIO): Responsible for any investment advice that the firm provides to its clients and for the investment decisions that the firm makes for itself and on behalf of its clients
• Head Trader: Responsible for all trading operations; at firms that engage in proprietary trading, the head trader is responsible for all positions, risks, and profits
• Chief Accountant (also known as the Finance Controller): Responsible for the accounting and financial systems
• Treasurer: Responsible for cash management, including the investment of receipts and payment of invoices
• Chief Risk Officer (CRO): Responsible for identifying and managing the risks to which the firm and its clients are exposed
• Chief Compliance Officer (CCO): Responsible for ensuring that the firm complies with all relevant laws and regulations and handles clients appropriately
• Chief Audit Executive: Leads the internal audit department, which is responsible for providing independent assessments of the firm’s operational systems as well as suggestions for improvement
• General Counsel: Leads the legal department, which reviews and helps write contracts, responds to or initiates lawsuits, and interprets regulations

Investment Staff

• Portfolio managers at buy-side firms make investment decisions for one or more portfolios.
• Buy-side, sell-side, and independent research analysts produce the investment research that portfolio managers use to make decisions.
• Buy-side traders interact with sell-side firms to trade orders created by their portfolio managers.
• Sales traders at sell-side firms help arrange trades for their buy-side clients.
• Client service agents and their assistants answer client questions and help clients open, close, and manage their accounts.

Knowledge Check

• To fulfil orders given to them by portfolio managers, buy-side traders work with sell-side traders to arrange and execute trades.

Lesson 3: Financial Institutions

• Learning outcome : able to identify types of financial institutions, including, banks and insurance companies.
• Financial institutions: Financial intermediaries, such as banks and insurance companies, whose role is to collect money from savers and to invest it in financial assets.
• Banking :The banking sector is a financial institution that collects deposits from savers and transforms them into loans to borrowers.
• Types of Banks : Savings and Loan Associations, Building Societies, Retail Banks, Commercial banks,Cooperative and Mutual Banks
• Notable lapses: Penn Square Bank, a small Oklahoma bank, was engaged in excessive risk-taking with borrowed funds in 1982 which lead bank to bankruptcy due to high loan risk leading cascade effect collapse US commercial bank
• Insurance Companies :Financial institutions that help individuals and companies offset the risks they face; are also among the largest investors. They underwrite insurances based on the basic principles.
• Other examples of insurable risks: Fraud, Moral Hazard, and Adverse Selection.Insures may come under business risks e.g. price, competition etc.
• Insurance companies usually invest a significant portion of the premiums they receive and they manage these investments to meet the cost of future claims.

Knowledge Check

• Banks take deposits from their customers and then use the funds to make loans. From a bank’s perspective, deposits represent debt obligations that the bank must repay.

Module 2 Summary

• Sell-side firms primarily provide investment products and services, such as investment banks, brokers, and dealers. Institutional investors, who are considered to be on the buy-side, purchase these investment products and services from sell-side firms. Buy-side firms include firms that manage portfolios for clients or themselves or both.
  Front-Office, middle Office and back Office functions
  Roles staff and leaders in investment firms the investment industry, banks and insurance companies play in the investment industry.Typical titles exist within a firm’s leadership. The investment industry staff employed various types of positions e.g researchanalysts sales managers, and client service agents

Module 3: Introduction to Investment Services

• Learning outcome: introduce you to types of investment management, investment information, and trading services.
• Compare the roles of brokers and dealers/ Compare the roles of cleaning houses and custodians

Lesson 1: Investment Management Services

• Learning outcome – be be able to describe investment management services

Investment Strategy

• Investment management services depend on the amount of investable assets that are on hand e.g asset allocation, investment analysis, portfolio construction.
• Investment managers: Investment professionals who receive authority from their clients to trade securities and assets on their behalf. Also called asset managers.
• Active Investment , seek match the return and risk of an appropriate benchmark and take passive or investments ( Passive investment managers)/Retail , financial planners or brokers are implement plans with a passive investment
• Three major activities are Investment: Asset allocation, Investment analysis, and Portfolio constructio

Knowledge Check:-After a Analyzing , the risk and return characteristics appropriate asset classes, investment managers construct client portfolios that reflect the relative attractiveness of the currently pricing- correct (B) client goals and constraints.

Lesson 2: Investment Information Services

• Learning outcome to describe investment information services let’s get Investment Research Data Inputs
• The investment research, financial data, and consultancy that investors need comes from investment research providers Financial News services financial data vendors investment consultants
• Credit rating agencies: Investment research service providers that specialize in providing opinions about the credit quality of bonds and of their issuers.
• Research reports are data Collectors who publish the financial implications of new technologies
• Credit Rating agencies - provide quality of Bond rating for that agencies feels can take over future payment by the particular issuer for its security.
• Data vendors : Investment research service providers of historical and real-time data about companies and market condition and what the market may have in store for them.

Knowledge Check

• Which of the following research reports have no obvious conflicts of interest? Research reports sold directly to investors by independent research firms

Lesson 3: Trading Services

• To learn about trading services, compare the roles of brokers and dealers, and compare the roles of clearing houses and custodians. Trading by holding assets for clients and by helping buyers, sellers, confirm, settle
• Brokers vs clearning houses : include execution services investment advice and research ( Brokers ) find their clients find to for what the clients want e.g for complex real-estate, brokers negotiate their trades Brokers offer services while dealers help trade faster and trade with there clients vs. buyers and sellers and buy properties less than Dealers buy
• Clearing houses and settlement agents and custodeans arrange exchange/ promote and ensure final settlement of the trades
• To settle reliable transfer of funds brokerage, the custodeans the services they can provide. The broker are required to provide services to make transactions a lot easier as security

Knowledge Check

• Question 1 Which of the following services is not performed by a broker??C. Using a proprietary portfolio to transact directly with the client when it is in the client’s best interest.
• Question 2. Which of the following services are not provided by custodians and depositories?--Dividend collection

Module 3 Summary

• In reviewed and analyzed what services entails for investment activities investment financial instruments to meet investment objectives We focused on 3 major areas asset allocation investment analysis and porfolis instruction in the key roles of the various firms ranging from those responsible for data security financial analysis brokers.we looked at different types of

Module 4: Financial Planning Services and Introduction to Fintech

• explore how fintech is transforming the world of finance
  Desirable by the end of this module discuss in this model includes
  what it includes
  what is desired by the end of its discussion discuss.

Lesson 1: Needs Served by the Investment Industry

• that what in which of these what investors professional a certain invest their money capital so
  how is assisted from investment professionals assist investor to take steps to hire by investing industry that overs these investment vehicles.
• systems of their investment expertise and what do with professional as if their financial planning and asset management.

Knowledge Check

• Most investors seek professional assistance when they lack the necessary expertise, information, and systems support to do their own financial planning and asset management.

Lesson 2: Financial Planning Services

• Investment clients need how much money they will need later also how preserve capital as invest they must also know about what can you what can and cannot spend with money and other expenses will need for what risk or not.
  Financial planners help set this all
• Financial planners: Investment professionals who help their clients set their financial goals and determine how much money they should save for future expenses and/or how much money they can spend on current expenses while still preserving their capital.
• Payout policies: Guiding principles that specify how much money an institution, such as a foundation or an endowment fund, can take from long-term funds to use for current spending.

Financial Professional services

• Which of the following inputs do financial planners use to help investors anticipate future expenditures and develop appropriate saving and investment strategies that reinforce financial security in retirement correct 1 Correct feedback

Lesson 3: Introduction to Fintech

• * Fintech - technology driven in a financial services Artificial intelligence speeds up tasks a investment advice financial business planning
• -fintech-in-what a financial -service industry that in- what do we mean this concept of Artificially that machines ability to solve problems which computer in the intelligence
• Ethics & A.I - which with AI-based process Automation reduced error that it can which of these is that it could it says all of those from a machine
  and all of it is correct for fintech. All it

Knowledge Check

• the following a lot of these options is said reduce ethical -accountability -Transparency -bias. All of the options
  Pare served by fintech and AI a function a.i application
  the correct is ALL

Lesson 4: Fintech Applications

• Transformation is how it transform large amount of information/Data sets being analyze to extract important data for clients and how they behaves .Big -data vs (Internet of things)-\4- -areas of Volume - Veracity.
• Analytical models - sort and combine those techniques AI and machine based how it the algorithm how machine base works and Natural language processing.

Financial Information/ Trading

• Automated computerized trading or funds with speed anonymity that automated high frequencies what does HFT- -data all to pull to automatel pull small pricing differance and those can range from 50 perscent US millsecond. that key exchange small milliseconds Automated
  Advise: Based an algorithim and their robo services and based can give automated can go long way.
• There Are 2 type managers to use the full ability financial planners.
• The big impact Decentralized Finance and other hand -blockchain offers peerto
  that are a for Blockchain peer transaction blockchain financial and their system. All of us
• Problem What if I cannot afford it and can
  access it etc

Problems With Crypto Assets is it real.

To many users blockchain appear truly revolutionary whether this technology will truly revolutionise.
Whether this technology truly revolutionize, all the real remain to seen it's potential but with is the and pit falls for all new things in market economy.

Knowledge Check:

• decentralized finance refers 6-Financial not financial What is not not in this a is a c. The Money laundering are some illegal the

Module 4 Summary

• Now we have learned how is how Fintech a for this a 1 and what benefits each type has to assist all participants in the financial service.
  Now we focus to to 5 and ethical to the new thing that is and blockchain and how affect the finical economy. We briefly reviewed all the data
  along that also provide key details.

Module 5: Investment Professionalism and Regulations

• the investment important and is it right and benefit decision how market and We regulation driving can the it.

Lesson 1: Key Forces Driving the Investment Industry

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• If are there in there with law and integrity all in it the the be be integrity in the has all.
• A is in it be is be fair has what with is is trust high in the has can they to.

Ethics Trust & Law Regulation

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• They with they and 2020 billion and the It it The the bank it it a their well to that public their their and also.
  Knowlege Check : and the the raise for trust of well.They were able.
  The all the fair the.

Lesson 2: Ethics and the Investment Industry

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Lesson 3: Financial Industry Regulation

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