This article is originally from 300Hours.com. You can read the full article here.

Ever feel that the CFA curriculum is a bit incomprehensible at times?

Every topic makes sense when you're going through it, but for me, it's difficult to recall at short notice what each topic is about. 

10 main topics, each fairly different yet connected. How does one sum each topic up in a succinct way?

To help you along, we present to you the 10 CFA topics summarized using a two-cow analogy (ahem). Feel free to share and pass it on, or put it up on your wall while studying. Enjoy!

You have two cows. You receive a farmer's rulebook on cow treatment. If your cows produce extra milk in a given day, you're not allowed to tell your friends and family first, instead, you must announce it in the town square so that everyone knows at the same time. But you can paint your cows magenta because who cares.

Quantitative Methods
You have two cows. Each cow gives 5 pints of milk daily, and gives birth to another milk-producing cow every 10 years. You try to figure out how much is your cow worth if paid today, in milk, all at once.

You have two cows. You shoot every other cow in the county. You're now the sole provider of milk. Your farm can now maximize its profit at the cost of market inefficiencies. Enjoy the rising milk prices, bitches.

Financial Reporting & Analysis
For the purposes of milk volume record retention, the Farmers' Agricultural Standards for Bovines (FASB) currently recognizes US-GALLON as the authoritative measure for milk. However, as of 2005, the Society for Ethical Cattle (SEC) prefer the standardized LITER measurement. Be sure to know the differences.

corporate finance
You name your cows Project 1 and Project 2. Using NPV and IRR methods, you try and determine which is the better cow and therefore your favourite. Then someone teaches you about sunk costs and you realize none of the calculations matter as you've already paid for the cows.

portfolio management
It's not just about the milk. You have to consider your cows' likelihood of dying of old age, getting eaten by rabid hyenas, deciding they've had enough and running away, or overthrowing the government. Only then can you know what your cow is worth.

You have two cows. Given that you know how much milk your cows produce, you calculate and value your cows' sale price. You update these prices daily on the big cork board in the middle of the town market in case anyone's interested.

Fixed Income
You should find out if your cows produce milk at a fixed volume, produce milk at variable volumes depending on weather, or do not produce milk at all. This last category of cows are known as zero-coupon cows or bullet cows, probably because it's just best to shoot them and sell them for beef at this point.

You agree to sell your cows to Farmer John one year from now for $4,000. At the time of sale, you find out the current market price of 2 cows is $3,500. You rub your hands in glee and start planning on how to spend the $500 you made from your dumbass buyer.

Alternative Investments
You sell your cows and buy a bull. Forget milk - breeding is where it's at.

Have you got any good examples to share? Let us know below!

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Comments (16)


Great way to put it. Would +SB if I had


"But you can paint your cows magenta because who cares" I laughed...SB for you.


Damn I wish I could throw an SB, saved the image to my desktop.


I am glad I recently past level 2 of the CFA program. It is so time consuming.



To the starving man, beans are caviar


Hahaha. I'm not sure now whether to be more excited for when I take the CFA Level 1 next summer or more worried. All in all though it is a great comical breakdown of a not so comical topic. Have a SB.

"Successful investing is anticipating the anticipation of others". - John Maynard Keynes


You know what's missing? The massive amounts of drinking that go with studying for the CFA.

********"Babies don't cost money, they MAKE money." - Jerri Blank********


It's been a long time since i've read an material that's straight foward and funny as this


This is clever, I lol'ed + SB.

In reply to eriginal

Awesome post. I laughed my ass off.


great bashing dude..\m/


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