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#### Flashcard 1429115112716

Tags
#sister-miriam-joseph #trivium
Question
Understanding is the [...]. (For example, of contradictory statements, one must be true, the other false.)
Answer
intuitive grasp of first principles

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Understanding is the intuitive grasp of first principles. (For example, of contradictory statements, one must be true, the other false.)

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#### Flashcard 1429226786060

Tags
#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
Question
In a perfectly competitive market (wheat market), at the current market price of wheat, if a farmer could helds out for a price above market price, he would not be able to sell any at all because all other farmers’ wheat is a perfect substitute for his, so no one would be willing to buy any of his at a higher price.

In this case, we would say that the demand curve facing a perfectly competitive seller is [...]
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e to sell any at all because all other farmers’ wheat is a perfect substitute for hers, so no one would be willing to buy any of hers at a higher price. In this case, we would say that the demand curve facing a perfectly competitive seller is <span>perfectly elastic .<span><body><html>

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4.1. Own-Price Elasticity of Demand
Perhaps an individual’s demand for, say, mustard might obey this description. Obviously, in that price range, quantity demanded is not at all sensitive to price and we would say that demand is perfectly inelastic in that range. <span>In the second case, the demand is horizontal at some price. Clearly, for an individual consumer, this situation could not occur because it implies that at even an infinitesimally higher price the consumer would buy nothing, whereas at that particular price, the consumer would buy an indeterminately large amount. This situation is not at all an unreasonable description of the demand curve facing a single seller in a perfectly competitive market, such as the wheat market. At the current market price of wheat, an individual farmer could sell all she has. If, however, she held out for a price above market price, it is reasonable that she would not be able to sell any at all because all other farmers’ wheat is a perfect substitute for hers, so no one would be willing to buy any of hers at a higher price. In this case, we would say that the demand curve facing a perfectly competitive seller is perfectly elastic . Exhibit 21. The Extremes of Price Elasticity Own-price elasticity of demand is our measure of how sensitive the quantity demanded is to c

#### Flashcard 1438376135948

Tags
#analyst-notes #cfa-level-1 #corporate-finance #reading-35-capital-budgeting #study-session-10
Question
The firm's capital budget and [...] must be determined simultaneously to best allocate the firm's capital.
Answer

cost of capital

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hen management places a constraint on the size of the firm's capital budget during a particular period. In such situations, capital is scarce and should be allocated to the projects most likely to maximize the firm's aggregate NPV. The firm's <span>capital budget and cost of capital must be determined simultaneously to best allocate the firm's capital. On the other hand, a firm can raise the funds it wants for all profitable projects simply by p

#### Original toplevel document

Subject 2. Basic Principles of Capital Budgeting
In a non-conventional cash flow pattern, the initial outflow can be followed by inflows and/or outflows. <span>Some project interactions: Independent versus mutually exclusive projects. Mutually exclusive projects are investments that compete in some way for a company's resources - a firm can select one or another but not both. Independent projects, on the other hand, do not compete for the firm's resources. A company can select one or the other or both, so long as minimum profitability thresholds are met. Project sequencing. How does one sequence multiple projects over time, since investing in project B may depend on the result of investing in project A? Unlimited funds versus capital rationing. Capital rationing occurs when management places a constraint on the size of the firm's capital budget during a particular period. In such situations, capital is scarce and should be allocated to the projects most likely to maximize the firm's aggregate NPV. The firm's capital budget and cost of capital must be determined simultaneously to best allocate the firm's capital. On the other hand, a firm can raise the funds it wants for all profitable projects simply by paying the required rate of return. Learning Outcome Statements b. describe the basic principles of capital budgeting; c. explain how the evaluat

#### Flashcard 1447240797452

Tags
#sister-miriam-joseph #trivium
Question
A proper name or an empirical description must symbolize an [...] or an [...] existing in fact (past or present) or in fiction
Answer
individual

aggregate

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A proper name or an empirical description must symbolize an individual or an aggregate existing in fact (past or present) or in fiction (wherein are characters, places, etc. created by the imagination). Otherwise, it is devoid of meaning, as are the presen

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#### Flashcard 1451415178508

Tags
#cfa-level-1 #factors-that-determine-market-structures #microeconomics #porter-5-forces #reading-16-the-firm-and-market-structures #section-2-analysis-of-mkt-structures #study-session-4
Question
PORTER’S FIVE FORCES

• [...]

• Power of suppliers;
• Power of buyers (customers);
• Threat of substitutes;

• [...]

Answer

Threat of entry;

Rivalry among existing competitors.

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usiness School professor Michael E. Porter. His book, Competitive Strategy, presented a systematic analysis of the practice of market strategy. Porter (2008) identified the five forces as: Threat of entry; <span>Power of suppliers; Power of buyers (customers); Threat of substitutes; and Rivalry among existing competitors. It is easy to note the p

#### Original toplevel document

2. ANALYSIS OF MARKET STRUCTURES
d monopoly is the local electrical power provider. In most cases, the monopoly power provider is allowed to earn a normal return on its investment and prices are set by the regulatory authority to allow that return. <span>2.2. Factors That Determine Market Structure Five factors determine market structure: The number and relative size of firms supplying the product; The degree of product differentiation; The power of the seller over pricing decisions; The relative strength of the barriers to market entry and exit; and The degree of non-price competition. The number and relative size of firms in a market influence market structure. If there are many firms, the degree of competition increases. With fewer firms supplying a good or service, consumers are limited in their market choices. One extreme case is the monopoly market structure, with only one firm supplying a unique good or service. Another extreme is perfect competition, with many firms supplying a similar product. Finally, an example of relative size is the automobile industry, in which a small number of large international producers (e.g., Ford and Toyota) are the leaders in the global market, and a number of small companies either have market power because they are niche players (e.g., Ferrari) or have little market power because of their narrow range of models or limited geographical presence (e.g., Škoda). In the case of monopolistic competition, there are many firms providing products to the market, as with perfect competition. However, one firm’s product is differentiated in some way that makes it appear better than similar products from other firms. If a firm is successful in differentiating its product, the differentiation will provide pricing leverage. The more dissimilar the product appears, the more the market will resemble the monopoly market structure. A firm can differentiate its product through aggressive advertising campaigns; frequent styling changes; the linking of its product with other, complementary products; or a host of other methods. When the market dictates the price based on aggregate supply and demand conditions, the individual firm has no control over pricing. The typical hog farmer in Nebraska and the milk producer in Bavaria are price takers . That is, they must accept whatever price the market dictates. This is the case under the market structure of perfect competition. In the case of monopolistic competition, the success of product differentiation determines the degree with which the firm can influence price. In the case of oligopoly, there are so few firms in the market that price control becomes possible. However, the small number of firms in an oligopoly market invites complex pricing strategies. Collusion, price leadership by dominant firms, and other pricing strategies can result. The degree to which one market structure can evolve into another and the difference between potential short-run outcomes and long-run equilibrium conditions depend on the strength of the barriers to entry and the possibility that firms fail to recoup their original costs or lose money for an extended period of time and are therefore forced to exit the market. Barriers to entry can result from very large capital investment requirements, as in the case of petroleum refining. Barriers may also result from patents, as in the case of some electronic products and drug formulas. Another entry consideration is the possibility of high exit costs. For example, plants that are specific to a special line of products, such as aluminum smelting plants, are non-redeployable, and exit costs would be high without a liquid market for the firm’s assets. High exit costs deter entry and are therefore also considered barriers to entry. In the case of farming, the barriers to entry are low. Production of corn, soybeans, wheat, tomatoes, and other produce is an easy process to replicate; therefore, those are highly competitive markets. Non-price competition dominates those market structures where product differentiation is critical. Therefore, monopolistic competition relies on competitive strategies that may not include pricing changes. An example of non-price competition is product differentiation through marketing. In other circumstances, non-price competition may occur because the few firms in the market feel dependent on each other. Each firm fears retaliatory price changes that would reduce total revenue for all of the firms in the market. Because oligopoly industries have so few firms, each firm feels dependent on the pricing strategies of the others. Therefore, non-price competition becomes a dominant strategy. Exhibit 1. Characteristics of Market Structure Market Structure Number of Sellers Degree of Product Differentiation Barriers to Entry Pricing Power of Firm Non-price Competition Perfect competition Many Homogeneous/ Standardized Very Low None None Monopolistic competition Many Differentiated Low Some Advertising and Product Differentiation Oligopoly Few Homogeneous/ Standardized High Some or Considerable Advertising and Product Differentiation Monopoly One Unique Product Very High Considerable Advertising From the perspective of the owners of the firm, the most desirable market structure is that with the most control over price, because this control can lead to large profits. Monopoly and oligopoly markets offer the greatest potential control over price; monopolistic competition offers less control. Firms operating under perfectly competitive market conditions have no control over price. From the consumers’ perspective, the most desirable market structure is that with the greatest degree of competition, because prices are generally lower. Thus, consumers would prefer as many goods and services as possible to be offered in competitive markets. As often happens in economics, there is a trade-off. While perfect competition gives the largest quantity of a good at the lowest price, other market forms may spur more innovation. Specifically, there may be high costs in researching a new product, and firms will incur such costs only if they expect to earn an attractive return on their research investment. This is the case often made for medical innovations, for example—the cost of clinical trials and experiments to create new medicines would bankrupt perfectly competitive firms but may be acceptable in an oligopoly market structure. Therefore, consumers can benefit from less-than-perfectly-competitive markets. PORTER’S FIVE FORCES AND MARKET STRUCTURE A financial analyst aiming to establish market conditions and consequent profitability of incumbent firms should start with the questions framed by Exhibit 1: How many sellers are there? Is the product differentiated? and so on. Moreover, in the case of monopolies and quasi monopolies, the analyst should evaluate the legislative and regulatory framework: Can the company set prices freely, or are there governmental controls? Finally, the analyst should consider the threat of competition from potential entrants. This analysis is often summarized by students of corporate strategy as “Porter’s five forces,” named after Harvard Business School professor Michael E. Porter. His book, Competitive Strategy, presented a systematic analysis of the practice of market strategy. Porter (2008) identified the five forces as: Threat of entry; Power of suppliers; Power of buyers (customers); Threat of substitutes; and Rivalry among existing competitors. It is easy to note the parallels between four of these five forces and the columns in Exhibit 1. The only “orphan” is the power of suppliers, which is not at the core of the theoretical economic analysis of competition, but which has substantial weight in the practical analysis of competition and profitability. Some stock analysts (e.g., Dorsey 2004) use the term “economic moat” to suggest that there are factors protecting the profitability of a firm that are similar to the moats (ditches full of water) that used to protect some medieval castles. A deep moat means that there is little or no threat of entry by invaders, i.e. competitors. It also means that customers are locked in because of high switching costs. <span><body><html>

#### Flashcard 1478093835532

Tags
#cfa-level-1 #reading-23-financial-reporting-mechanics
Question
Journal entries—recorded in journals—are dated, show the [...], and the amounts.
Answer
accounts affected

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Journal entries—recorded in journals—are dated, show the accounts affected, and the amounts. If necessary, the entry will include an explanation of the transaction and documented authorization to record the entry. As the initial step in converting business tra

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ved and the corresponding liability to deliver newsletters) and, subsequently, 12 future adjusting entries, the first one of which was illustrated as Transaction 12. Each adjusting entry reduces the liability and records revenue. <span>In practice, a large amount of unearned revenue may cause some concern about a company’s ability to deliver on this future commitment. Conversely, a positive aspect is that increases in unearned revenue are an indicator of future revenues. For example, a large liability on the balance sheet of an airline relates to cash received for future airline travel. Revenue will be recognized as the travel occurs, so an increase in this liability is an indicator of future increases in revenue. <span><body><html>

#### Flashcard 1598465379596

Tags
#cfa-level-1 #financial-reporting-and-analysis #non-recurring-non-operating-items #understanding-income-statement
Question
Does Net income include only recurring items?
Answer
Fuck no

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Net income includes the impact of non-recurring items, which are transitory or random in nature.

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Subject 6. Non-Recurring Items and Non-Operating Items
The goal of analyzing an income statement is to derive an effective indicator to predict future earnings and cash flows. Net income includes the impact of non-recurring items, which are transitory or random in nature. Therefore, net income is not the best indicator of future income. Recurring pre-tax income from continuing operations represents the company's sustainable income and therefore should be

#### Flashcard 1604202663180

Question

Strings can also be created using the String global object directly:

 [...]
Answer
String(" ");

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String - JavaScript | MDN
or for strings, or a sequence of characters. SyntaxEdit String literals take the forms: 'string text' "string text" "中文 español deutsch English हिन्दी العربية português বাংলা русский 日本語 ਪੰਜਾਬੀ 한국어 தமிழ் עברית" <span>Strings can also be created using the String global object directly: String(thing) Parameters thing Anything to be converted to a string. Template literals Starting with ECMAScript 2015, string literals can also be so-called Template literals: hello wo

Question

### What can be converted to a string?

Answer
Any value putted between qoutes

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String - JavaScript | MDN
s: 'string text' "string text" "中文 español deutsch English हिन्दी العربية português বাংলা русский 日本語 ਪੰਜਾਬੀ 한국어 தமிழ் עברית" Strings can also be created using the String global object directly: String(thing) <span>Parameters thing Anything to be converted to a string. Template literals Starting with ECMAScript 2015, string literals can also be so-called Template literals: hello world hello! world! hello \${who} escape <span><a

#### Flashcard 1609586576652

Question
Craig [...] (born December 6, 1952) is an American Internet entrepreneur best known for being the founder of the San Francisco-based international website Craigslist .
Answer
Alexander Newmark

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Craig Newmark - Wikipedia
ecember 6, 1952 (age 64) Morristown, New Jersey, United States Residence San Francisco Alma mater Case Western Reserve University Occupation Computer programmer Known for Founder of the website Craigslist Spouse(s) Eileen Whelpley (m. 2012) <span>Craig Alexander Newmark (born December 6, 1952) is an American Internet entrepreneur best known for being the founder of the San Francisco-based international website Craigslist. Contents [hide] 1 Early life 2 Career 3 Personal life 4 References 5 Further reading 6 External links Early life Newmark was born in Morristown, New Jersey, the